Dkk Co.,ltd. · TSE:6706
Dkk Co.,ltd — H1 FY2021 Earnings Presentation
39 slides from Dkk Co.,ltd's earnings presentation, Dec 1, 2021
Slide 1: First Half Results for the Fiscal Year Ending March 31, 2022
First Half Results for the Fiscal Year Ending March 31, 2022 December 1, 2021 DKK Co., Ltd.
Slide 2: Table of contents
Table of contents 1. First Half Highlights 2. Segment Results (Nonconsolidated) 3. Full-Year Outlook 4. New Initiatives 5. Toward Higher Corporate Value 1
Slide 3: 1. First Half Highlights
1. FIRST HALF HIGHLIGHTS = ADdkKK Co.Ltd
Slide 4: Consolidated Net Sales
Consolidated Net Sales Consolidated net sales fell 5% year on year. Net sales for Telecommunication Business decreased 13.6% affected by the impact of the COVID-19 pandemic and as demand fell temporarily for the Fixed Wireless segment. Net sales increased 29.9% for Radio Frequency Business as
Slide 5: Consolidated Operating Income
Consolidated Operating Income Consolidated operating income increased 0.12 billion yen year on year, helped by a cost- cutting drive and an improved operating margin for the Radio Frequency Business. (100 million yen) Consolidated Operating Income * The red line indicates operating margin. Consoli
Slide 6: Segment Income (Consolidated)
Segment Income (Consolidated) Profit of the Telecommunication Business fell slightly as demand for administrative radio broadcast systems dipped temporarily, although there are signs that demand for 5G antennas may grow in earnest. Profit increased 0.37 billion yen for the Radio Frequency Busine
Slide 7: Overview of Consolidated First Half Results
Overview of Consolidated First Half Results Ordinary income increased about 0.2 billion yen year on year as operating income grew. Quarterly net income rose 0.48 billion yen as operating income improved and tax expenses decreased. (Millions of yen) FY9/20 FY9/21 YoY change results results Amount
Slide 8: 2. Segment Results (Nonconsolidated)
2. SEGMENT RESULTS (NONCONSOLIDATED) 7
Slide 9: Mobile Communications: Net Sales (Nonconsolidated)
Mobile Communications: Net Sales (Nonconsolidated) Net sales rose about 1.0 billion yen from a year ago as demand for 5G antennas showed signs for full-blown growth and demand from mobile carriers’ capital expenditures increased earlier than expected. As we expect mobile carriers’ moves to insta
Slide 10: Fixed Wireless: Net Sales (Nonconsolidated)
Fixed Wireless: Net Sales (Nonconsolidated) First-half net sales dropped about 49% year on year to 2.1 billion yen as demand related to administrative radio systems for disaster prevention use, which had been driven by local governments’ moves to strengthen disaster-prevention systems and digitali
Slide 11: Broadcasting: Net Sales (Nonconsolidated)
Broadcasting: Net Sales (Nonconsolidated) First-half net sales for the Broadcasting segment dropped about 32% year on year to 1.1 billion yen as demand from broadcasters’ moves to update or service equipment has been delayed, affected by the impact from the COVID-19 pandemic. Although we aim to
Slide 12: Other: Net Sales (Nonconsolidated)
Other: Net Sales (Nonconsolidated) First-half net sales came to 0.4 billion yen, unchanged from the year-earlier level, as we worked to stimulate demand for LED aviation obstacle lights and thermal camera systems. We expect full-year net sales to come to 1.0 billion yen, largely unchanged from a
Slide 13: Radio Frequency: Net Sales (Nonconsolidated)
Radio Frequency: Net Sales (Nonconsolidated) First-half net sales rose 17% to 2.2 billion yen, as demand from capital spending has shown some signs of coming back after a sharp drop due to the impact from the COVID-19 pandemic. Despite some signs of recovery are seen in the business environment
Slide 14: Business Situations and Full-Year Outlook (Summary)
Business Situations and Full-Year Outlook (Summary) Segment Full-year outlook Mobile We think mobile carriers’ investments could slow down as investments Communi- were moved forward in the first half. We thus believe the current situation cations calls for cautious judgment. Local governments have p
Slide 15: 3. Full-Year Outlook
3. FULL-YEAR OUTLOOK = A DdKK Co. Lt
Slide 16: Consolidated Net Sales and Operating Income
Consolidated Net Sales and Operating Income We expect net sales to fall below the level in the previous year as demand from customers’ capital spending has been delayed mainly in the Fixed Wireless and Broadcasting segments due mainly to the impact of the COVID- 19 pandemic. We expect operating
Slide 17: Segment Results (Consolidated)
Segment Results (Consolidated) We estimate net sales will drop 17.5% in the Telecommunication segment and rise about 21.1% in the Radio Frequency segment. Profit is estimated to decrease 34.2% in the Telecommunication Business but increase 14.8% in the Radio Frequency Business. (100 million yen)
Slide 18: Overview of Consolidated Full-Year Outlook
Overview of Consolidated Full-Year Outlook Ordinary income is expected to drop about 61% from the year-earlier level due to a drop in operating income. Net income is expected to fall just 0.15 billion yen as we expect to book extraordinary income from the sale of shareholdings as part of effort
Slide 19: Corporate Reform Initiatives
Corporate Reform Initiatives We expect to incur increased costs going forward, as we aim to aggressively carry out reforms, including governance reforms, aiming to reinforce corporate strengths and ensure the Company’s growth and development in the future. Governance reforms Reforms for future gro
Slide 20: Shareholder Return
Shareholder Return Dividend policy changed as announced in news release dated November 10, 2021 Year-end payout increased to 60 yen from 45 yen per share in accordance with changed dividend policy Our policy on shareholder return Targeting payout ratio of 40% while setting lower limit of 1.5% in
Slide 21: 4. New Initiatives
4. NEW INITIATIVES = A DdKK Co. Lt
Slide 22: Completion of Sub6 band system interoperability testing
Completion of Sub6 band system interoperability Local 5G testing Interoperability testing (IOT) and its significance • Interoperability testing is a test to find out if devices equipped with communication functions can connect with each other under a variety of communication standards. • In a joint
Slide 23: Making Smart Factory Out of Kanuma Plant
Making Smart Factory Out of Kanuma Plant Local 5G Acquisition of local 5G license and examples of planned use case • Radio license for Sub6 band (4.8GHz- 4.9GHz) obtained on November 11, Improve product quality by introduce AI judgment using images captured 2021; following measures to be Auto part o
Slide 24: Participation in 5G/IoT Network Expo
Participation in 5G/IoT Network Expo Local 5G Participation in 4th 5G/IoT Network Expo • We ran a booth at the 5G/IoT Network Expo in October 27 to 29, 2021, aiming to develop demand in the local 5G market. • We showcased DKK’s technological strengths to visitors by exhibiting not just antennas but
Slide 25: Delivery 5G-Use DAS Begins
Mobile Delivery 5G-Use DAS Begins Communications Developing radio equipment market that is new business area • DAS refers to distributed antenna systems for indoor use. • It is an effective solution to ensure radio waves can reach every corner in a structure, such as a shopping mall or a building. •
Slide 26: Launch into Food-Related Industry
Radio Launch into Food-Related Industry Frequency In addition to processing of rice bran, we developed an automatic rotary oven system that uses superheated steam to roast coffee beans. Sample photo: coffee beans Superheated steam rotational roaster • We found beans roasted using DKK’s induction hea
Slide 27: Business Investment for realizing DKK's growth strategy
Radio Business Investment Frequency Aggressively making investments in Radio Frequency business for realizing DKK’s growth strategy Launch of Future Research Center Capital boost to Mexican subsidiary • Strengthen R&D function to develop a new • Strengthen products targeting Europe and business area
Slide 28: 5. Toward Higher Corporate Value
5. TOWARD HIGHER CORPORATE VALUE 27
Slide 29: DKK's Sustainability Management
DKK’s Sustainability Management Sustainability We established a Sustainability Basic Policy and set up a Sustainability Committee to promote to realize sustainable society. Role of Sustainability Committee To identify materiality (material issues) for sustainability management, set initiatives and g
Slide 30: Towards DKK sustainability
Towards DKK sustainability Sustainability Sustainability Committee decides materiality (material issues) for the Group DKK Group Materiality Materiality Priorities SDGs - Respecting human rights of employees (including those of cooperating companies) Workplace culture and - Eliminating harassment wo
Slide 31: Compliance Declaration
Compliance Declaration Sustainability We have issued Compliance Declaration to raise awareness about compliance. Compliance Declaration We, the DKK Group, position compliance as the top management priority in our endeavor to increase corporate value over a medium to long term to realize our ideal of
Slide 32: Human Rights Initiatives
Human Rights Initiatives Sustainability Developing and maintaining a work environment where human rights of all employees, including those of group companies, are respected Toward maintaining harassment-free work environment Issuance of declaration by top management Raising awareness about complianc
Slide 33: Reinforcing Risk Management
Reinforcing Risk Management Sustainability Establish Risk Management Committee to enhance the Group’s risk-readiness Outline of Risk Management Committee As risks surrounding businesses vary widely, the Risk Management Committee conducts cross-sectional measures, Audit Office conducts appropriate au
Slide 34: Profit Distribution Policy
Profit Distribution Policy Sustainability Realize reinforced shareholder returns as part of capital strategy called for in Medium- and Long-Term Management Strategy We aim to achieve dividend levels of 2.0% in dividend on equity ratio (DOE) over a medium to long term. The DOE level of 2.0% was calcu
Slide 35: Policy to Reduce Cross-Held Shares
Policy to Reduce Cross-Held Shares Sustainability We established a policy to reduce cross-held shares and decided to not hold the shares that do not justify holding. Targets for reducing cross-held shares We aim to reduce the number of issues by at least 25% by the end of March 2023 and at least 50%
Slide 36: Application for Prime Market Listing
Application for Prime Market Listing TOPICS We received compatibility results regarding the compatibility situation for the Prime Market from the Tokyo Stock Exchange, and applied for Prime Market listing. Responsibility associated with listing Corporate advantages of Prime on Prime Market Market li
Slide 37: Appendix
APPENDIX = A DdKK Co. Lt
Slide 38: Breakdown of Nonconsolidated Net Sales
Breakdown of Nonconsolidated Net Sales (Millions of yen) FY3/21 FY3/22 YoY change 1H 2H Full year 1H 2H Full year 1H 2H Full year (Actual) (Actual) (Actual) (Actual) (Forecast) (Forecast) Amount Percentage Amount Percentage Amount Percentage Net sales 12,697 21,611 34,308 11,515 17,484 29,000 -1,182
Slide 39: Notes on Earnings Forecasts
Notes on Earnings Forecasts Figures included in this document that are related to descriptions, including plans and policies and not past facts, are forecasts regarding future earnings. They are all calculated based on management assumptions and views based on information grasped by the company at t