Briefing on Results for the First Half of the
Fiscal Year ending March 31, 2024

November 9, 2023

Photo: Service Center Kanto

Contents

I. Overview of Results for the First Half of FY2024/3

II. Outlook for FY2024/3

All Rights Reserved. Copyright Denyo Co.,Ltd. 1

Overview of Results for
the First Half of FY2024/3

All Rights Reserved. Copyright Denyo Co.,Ltd. 2

Highlights of Results for the First Half of FY2024/3 (Consolidated)
Key Point

Both Net sales and profits exceeded those of the same period of the previous year.
(million yen)First half of
FY2023/3

First half of
FY2024/3

Rate ofchange (YoY)

Change(YoY)

Net sales

28,271

100%

34,201

100%

5,930

21.0%

Operating profit

1,083

3.8%

2,167

6.3%

1,083

100.0%

Ordinary profit

1,157

4.1%

2,305

6.7%

1,148

99.3%

Profit attributable toowners of parent

800

2.8%

1,598

4.7%

797

99.6%

Capital investment

967

554

△ 413

△ 42.7%

Depreciation

606

613

7

1.6%

Earnings per share

38.64yen

77.46yen

38.84yen

100.5%

ROE

2.6%

Interim dividends per
share

23.0yenAnnualized

4.8%

Annualized

24.0yen
All Rights Reserved. Copyright Denyo Co.,Ltd. 3

Sales Trends by Product (Consolidated)
Overview

1. Sales of generators increased by 5,917 million yen (25.4%).
2. Sales of welders decreased by 15 million yen (0.7%).
3. Sales of compressors decreased by 21 million yen (5.5%).
(million yen)

By productFirst half of
FY2023/3

First half of
FY2024/3

Rate ofchange (YoY)

Change(YoY)

Net sales

28,271

100%

34,201 100%

5,930

21.0%

Generators

23,284 82.4%

29,201 85.4%

5,917

25.4%

Welders

2,138

7.6%

2,122

6.2%

△ 15

△ 0.7%

Compressors

385

1.4%

364

1.1%

△ 21

△ 5.5%

Others

2,461

8.7%

2,512

7.3%

50

2.1%

All Rights Reserved. Copyright Denyo Co.,Ltd. 4

Engine Generators (Consolidated)
First half of
FY2023/3

Generators

23,284

million yen• In Japan, shipment of the large mobile-type generators
increased. Stand-by generating sets for disasterprevention equipment remain robust.

First half of
FY2024/3

29,201

Rate of change(YoY)

million yen

%

25.4

70%

• Overseas, shipment to America remain strong.
Domestic market share of*According to aengine generators (mobile-type) Company survey(5-year average)

Manufacturing engine-driven generators withcapacity from 1kVA to 1100kVA

Soundless generator“Mālie”

Generator with operational
data recording function⚫Mobile-type generators
Power source on a construction site and for civil engineering workand disaster recovery/restoration, etc.
⚫Stand-by generating sets (stationary type)Back-up power source for disaster prevention equipment
and offices, etc.
⚫Power-supply vehicles, etc.
All Rights Reserved. Copyright Denyo Co.,Ltd. 5

Engine Welders (Consolidated)

Welders

First half of
FY2023/3

First half of
FY2024/3

2,138million yen

2,122million yen

Rate of change(YoY)△ 0.7%• Due to parts shortages slightly decreased.

55%
Domestic market share ofengine welders*According to a
Company survey(5-year average)

The Company developed the first engine-driven welder for outdoor work inJapan.
Ranging from 135A for welding light-gauge steel to a 500A engine-driven
welder for heavy-gauge steel, a TIG welder and a CO2 welder, etc.
⚫Welding of steel construction for buildings, condominiums and bridges.
⚫Welding of important structures such as petroleum storage tanks and pipelines.
CO2 welder

All Rights Reserved. Copyright Denyo Co.,Ltd. 6

Engine Compressors (Consolidated)
First half of
FY2023/3

385

Compressors

million yen

First half of
FY2024/3

364

Rate of change(YoY)

million yen

%

△ 5.5

• The shipment to the domestic market decreased.

15%

Domestic market share of *According to aengine compressors Company survey(5-year average)

Manufacturing compressors with air discharge
amounts from 1.7㎥/min to 45.3㎥/min.
⚫ Breaking-up of roads and ground improvement workof roads⚫ Mortar spraying work for preventing landslides ofmountain roads.
⚫ For artificial snow machines on ski slopes, etc.
Engine compressor

Motor compressor

All Rights Reserved. Copyright Denyo Co.,Ltd. 7

Others (Consolidated)

OthersFirst half of
FY2023/3

First half of
FY2024/3

2,461million yen

2,512million yen

Rate of change
(YoY)

2.1%

• Parts associated with products and maintenance increased.

Sales of other products⚫Self-propelled lifters⚫Load testing equipment⚫Parts⚫Secondhand equipment and purchased
merchandise⚫Repair sales, etc.
Self-propelled lifters

Load testing equipment

All Rights Reserved. Copyright Denyo Co.,Ltd. 8

Sales Trends by Region (Consolidated)(million yen)First half of
FY2023/3

First half of
FY2024/3

Rate ofchange(YoY)

Change(YoY)

28,271

100%

34,201

100%

5,930

21.0%

Domestic sales

14,16450.1%

15,589

45.6%

1,424

10.1%

Overseas sales

14,10649.9%

18,612

54.4%

4,506

31.9%

America

9,551

33.8%

13,714

40.1%

4,163

43.6%

Asia

3,258

11.5%

3,281

9.6%

23

0.7%

Others

1,296

4.6%

1,616

4.7%

319

24.6%

North/Central
AmericaAsia

By region

Net salesFirst half of FY2023/3

Japan

First half of FY2024/3

North/Central
America

Japan

0

5,000

10,00015,00020,00025,000

OthersAsia

30,000

Others35,00040,000All Rights Reserved. Copyright Denyo Co.,Ltd. 9

Factor Analysis of Changes in Operating Income
Increase in Operating Income

Despite the impact of higher purchase prices for key
components, the cost of sales ratio decreased due to asignificant increase in sales.
(million yen)First half of
FY2023/3

First half of
FY2024/3

Change (YoY)

Operating income

1,083

2,167

1,083

Operating income margin (%)

3.8%

6.3%

2.5percentage points

First half of
FY2023/3
Gross profit marginFirst half of
FY2024/3

Change (YoY)

Ratio of SG&A to sales

19.2%
15.3%

19.4%
13.1%

0.2percentage points△ 2.2percentage points

Ratio of operating income to sales

3.8%

6.3%

2.5percentage points••

The gross profit margin improved only slightly due to price increases for key components.
The ratio of SG&A to sales declined due to higher sales, despite an increase in personnel and other expenses.

All Rights Reserved. Copyright Denyo Co.,Ltd. 10

Consolidated Balance Sheets
Overview

1. Current assets increased by 3,175 million yen mainly due to increases in cash
and deposits and trade receivables.
2. Current liabilities increased by 1,071 million yen mainly due to an increase intrade and other payable.
(million yen)

At the end of
FY2023/3

Current assets
Non-current assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Total net assets
Total liabilities and net assets

First half of
FY2024/3

Change from theend of FY2023/3

61,51728,22764,69230,224

3,175
1,997

89,744
17,7003,385
21,085

94,916
18,772
3,968
22,740

5,172
1,071
583
1,654

68,65889,744

72,176
94,916

3,517
5,172

All Rights Reserved. Copyright Denyo Co.,Ltd. 11

Changes in Consolidated Cash Flows
Overview

1. Cash flow from operating activities was 2,894 million yen, mainly due toincome before income taxes and minority interests.
2. Balance of cash and cash equivalents increased by 1,698 million yen fromthe end of the previous fiscal year.
(million yen)First half of
FY2023/3

First half of
FY2024/3

I Cash flow from operating activities

2,536

2,894

II Cash flow from investing activities△ 1,030

△ 692

1,506

2,202

△ 399

△ 658

IV Foreign currency translation adjustments
on cash and cash equivalents

83

155

V Net increase or decrease in cash and cash
equivalents

1,190

1,698

VI Cash and cash equivalents, end ofquarterly period

24,54824,029I + II Free cash flows
III Cash flow from financing activities

All Rights Reserved. Copyright Denyo Co.,Ltd. 12

Outlook for FY2024/3

All Rights Reserved. Copyright Denyo Co.,Ltd. 13

Outlook for FY2024/3: Consolidated Income and Loss
Key points

1. Net sales are expected to be 69.5 billion yen.
2. Assumed exchange rate is 135 yen/dollar.
(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Rate of change(YoY)

Net sales

64,311

100%

69,500

100%

5,189

8.1%

Operating profit

4,874

7.6%

5,300

7.6%

426

8.7%

Ordinary profit

5,180

8.1%

5,600

8.1%

420

8.1%

Profit attributable toowners of parent

3,633

5.7%

3,800

5.5%

167

4.6%

Capital investment

4,213

1,800

Depreciation

1,266

1,300

Earnings per share

ROE

175.6yen
5.7%

184.1yen*5.8%

Interim dividends per
share

50.0yen

53.0yen△ 2,413 △ 57.3%
34
2.7%
8.5yen* Equity is calculated by using the amount of money at the end of FY2022/3.
All Rights Reserved. Copyright Denyo Co.,Ltd. 14

Outlook for Sales by Product (Consolidated)
Overview

・ In Japan, sales are expected to grow steadily on the back of solid construction
demand.
・ Overseas, sales are expected to remain robust, especially in the U.S. market.
(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Rate of change(YoY)

64,311

100%

69,500

100%

5,189

8.1%

Generators

53,70083.5%

58,700

84.5%

5,000

9.3%

Welders

4,401

6.8%

4,500

6.5%

99

2.2%

Compressors

727

1.1%

700

1.0%

△ 27

△ 3.7%

Others

5,482

8.5%

5,600

8.1%

118

2.2%

By productConsolidated sales

All Rights Reserved. Copyright Denyo Co.,Ltd. 15

Outlook for Sales by Region (Consolidated)(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Rate of change(YoY)

64,311

100%

69,500

100%

5,189

8.1%

Domestic sales

34,24453.2%

36,100

51.9%

1,856

5.4%

Overseas sales

30,06646.8%

33,400

48.1%

3,334

11.1%

America

21,61733.6%

24,000

34.5%

2,383

11.0%

Asia

5,902

9.2%

6,200

8.9%

298

5.0%

Others

2,547

4.0%

3,200

4.6%

653

25.6%

By region

Consolidated sales

FY2023/3

Japan

FY2024/3(forecast)

Japan

0

10,00020,000

North/Central
America
North/Central
America

30,00040,00050,000Asia Others

Asia

60,000

Others

70,00080,000All Rights Reserved. Copyright Denyo Co.,Ltd. 16

Details of the Operating Income Forecast
Increase in operating income

Operating income is expected to increase due to a lower
expense ratio resulting from a significant increase in sales.
(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Operating income

4,874

5,300

426

Operating income margin

7.6%

7.6%

0.0 percentage point

FY2023/3
Gross profit margin
Ratio of SG&A to sales
Ratio of operating income to
sales
•
•

21.2%
13.6%
7.6%

FY2024/3 (forecast)

Change (YoY)

20.5% △ 0.7 percentage point
12.9% △ 0.7 percentage point
7.6%
0.0 percentage point

The Gross profit margin is expected to decrease from the previous year, although the effect of raw material pricehikes will be reflected in selling prices.
The ratio of SG&A to sales is expected to decrease due to higher sales.

All Rights Reserved. Copyright Denyo Co.,Ltd. 17

Changes in the Amount of Capital Investment(million yen)

End of March
2021

End of March2022

End of March2023

End of March 2024
(plan)

Cost ofequipment

1,918

839

4,213

1,800

Main uses

・Machinery of Fukui plant,
etc.
1450
・Nishihatsu
110
・U.S. Plant
30
・Vietnam Plant
20
・Others
300

・Machinery of Fukui plant,etc.
290
・Nishihatsu
50
・U.S. Plant
20
・Vietnam Plant
20
・Others
460

・Machinery of Fukui plant,etc.
360
・Nishihatsu
2500
・U.S. Plant
20
・Vietnam Plant
70
・Others
1,260

・Machinery of Fukui plant,etc.
800
・Nishihatsu
150
・U.S. Plant
200
・Vietnam Plant
200
・Others
450

million yen

Amount of capital investment

4,500

4,000
3,500
3,000

2,500
2,000
1,500

1,000
500
0

New plant under construction (NISHIHATSU,
Karatsu City, Saga Prefecture)

End of
March
2021

End of
March
2022

End of
March
2023

End ofMarch2024(plan)

All Rights Reserved. Copyright Denyo Co.,Ltd. 18

Profit Distribution Policy
・ Progressive dividends was introduced from the fiscal year ending March 31, 2024. （Dividend policy of maintaining or increasing
dividends without reducing dividends in principle）→ From the fiscal year ending March 31, 2011, through the fiscal year ending March 31, 2023, we have not reduced the dividend in 13
years and have increased the dividend 10 times in those 13 years. It was introduced to demonstrate a commitment to continue thistrack record.
・ Denyo recognizes the importance of increasing the return of profits to our shareholders while striving to improve our earning powerand strengthen our financial position. Comprehensive consideration of business performance, dividend payout ratio, etc. with theassumption that progressive dividends will continue.
・ Denyo has increased the year end dividend forecast by 2 yen from 27 yen per share to 29 yen per share(annual dividend of 53 yen per
share)

Annual dividend per share

40 42

18

22 24

28 30 3025

53
50
46 47 4729
25 25 2724
22

16 16 15
13
13
10 12
20 22 22 22 23 24
7
15
15
14
12
8 10 116

Year-end
dividends
Interimdividends

All Rights Reserved. Copyright Denyo Co.,Ltd. 19

Future Business Strategy（Overview of the Second Medium-term Management Plan）
2023 ～Powering up for the future～
Basic
PolicyEstablish a profit structure that is resistant to changes in the environment, by increasing the ratios of nonconstruction-related products as well as products for overseas markets, while firmly maintaining our position as theleading provider of high-quality power sources in the construction-related sector.

Our SDGs（ESG）Commitment

Business Objectives/FY2023
Consolidated
Net Sales
Ordinary Income

ROE

Ｅ：Help protect
the environment•

6.2

Ｓ：Realize
a sustainable society•

6.5% or more

Ｇ：The Long-term enhancementof corporate value•

billion yen

61 +αbillion yen

Strategies in the Domestic Market【Construction-related sector】
Aim to maintain and increase share of thedomestic market focusing on top brand products
such as engine-driven generators and welders① Strive to increase market share and expand market②

by launching new products which meet customer
needs
Aim for more efficient, more sophisticated sales
activities【Non-construction-related sector 】
Focus on laying the foundations for further
expanding sales of stand-by generating sets①②③

Enhance training structure to improve specialist
knowledge
Strengthen cooperation among group companies
Enhance product maintenance structure

•

•

•

Development and provision of products with the highest environmental
performance.
Reduction and recycling of waste, and reduction of GHG emissions, etc.
Contribution to the prosperity of society through the development of
infrastructure and disaster management and disaster mitigation products.
Provision of safe and secure products, etc.
Compliance with laws and regulations, social norms, ethics, internal
regulations and other relevant rules.
Promotion of fair business activities, etc.

Strategies in the Overseas Market【Overseas Sector】
Aim to increase presence in targeted high quality
market①

Aim to develop new markets by seeking to enhance
product lineup through market research andenhancement of functions and other features② Seek to increase sales capabilities by strengthening
sales network in each country and enhancing
training structure③

Strengthen marketing capabilities and increase
contact with customers④

Continue to develop markets through the release ofa series of stationary generators

Reinforcing the Operating Foundation【Development】
Develop market-leading products as the pioneerof high-quality power sources①②

Identify market needs accurately and seek to speed
up development
Step up action for the development of innovative
products【Production】
Build a globally competitive production system①②

Establish a flexible and highly efficient production
structure by strengthening production site
capabilities and promoting the use of IT
Seek to develop more sophisticated production
sites in Japan【Organization】
Create a structure which enables the careeradvancement of diverse human resources①

Aim to achieve both job satisfaction and ease ofworking through further enhancement of the
training structure and a review of personnel
systems② Pursue computerization in every process

All Rights Reserved. Copyright Denyo Co.,Ltd. 20

Efforts toward carbon neutrality
Denyo regards global environmental problems as a key management issue, and engages
proactively in environmental initiatives. We consider initiatives aimed at creating a hydrogenbased society (such as through the use of hydrogen fuel cells) to be one effective means of
reducing CO2 emissions and preventing atmospheric pollution, with the aim of preventing global
warming.

Hydrogen-light oil mixed combustion Generator• Started sales and delivered the first machine to Komatsu Oyama Plant.
• Power can be generated with up to 50% hydrogen mixed in with the fuel• 50% reduction in CO2 emissions compared to using only light oil as fuel• Successfully commercialized through technology licensing by Komatsu Ltd. and Hitachi, Ltd.
• Expand sales as a key product for building a hydrogen supply chain
Intended use• Private consumption using byproduct hydrogen• Back-up power source in a power outage, etc.

■Specifications of this generator

Hydrogen-light oil mixed combustion Generator
delivered Komatsu Oyama Plant.

Generation output

250kW

Output voltage

200/400V

Frequency

50Hz

Hydrogen Fuel
Consumption
Diesel fuelconsumption
Power generation
efficiency
Hydrogen mixing
ratio range

115Nm3/h(50% hydrogen mixed)
34L/h(50% hydrogen mixed）
35～40％
0%～50％(Can be operated with diesel oil only)
All Rights Reserved. Copyright Denyo Co.,Ltd. 21

Efforts toward carbon neutrality
Fuel-cell Portable Generator
Selected by Japan’s Ministry of the Environment as a “Low Carbon Technology
Research and Development Program”•
Developed a new power conditioner especially for fuel cells, and installed it in thegenerators•
Demonstration operation will start in June 2021
Intended use•
Civil engineering and construction sites•
Houses without power after a disasters•
Location where TV reporters are reporting, and event sites, etc.
•

Dedicated Hydrogen Generator•••

Uses only hydrogen as fuel and does not emit CO2
Starting with the development of the 45kVA class , which is the volume zone
Aiming for market launch after 2025

Intended use•
Civil engineering, construction sites , harbor construction•
TV broadcasting, various events, leisure, etc.

Mobile Battery LED floodlights•••

Quiet and no CO2 emissions
Uses a detachable cartridge-type lithium-ion battery
Long operation possible

Intended use•
Night construction, events, etc.

All Rights Reserved. Copyright Denyo Co.,Ltd. 22

Notes on Our Outlook

This material contains assumptions and outlooks for the future and forecasts
based on plans as November 9, 2023.
Actual results may differ materially from projected values due to future
economic changes and competition.
This material is prepared for the purpose of providing information and is notmeant to solicit investment in securities issued by the Company.
Investors are responsible for making their own final investment decision.

All Rights Reserved. Copyright Denyo Co.,Ltd. 23

Reference Materials

All Rights Reserved. Copyright Denyo Co.,Ltd. 24Overview of the Company
The leading manufacturer of outdoor power sources such as engine generators and engine welders
History:

July 2,1948

Established as Japan Power Welding Machine Co., Ltd.

1959

Developed and launched Japan’s first high-speed engine-driven welders.

1961

Began to manufacture and sell engine-driven generators.

1966

Developed soundproof engine-driven generators.
Changed its corporate name to Denyo Co., Ltd.

1983

Listed on the Second Section of the Tokyo Stock Exchange.

2000

Listed on the First Section of the Tokyo Stock Exchange.

2022

Transited to Prime Market in Tokyo Stock Exchange.

Company size, etc. (FY2023/3 on a consolidated basis) (million yen)
Net sales

64,311

Overseas sales

30,066

Ordinary income

5,180

Profit attributable to owners of parent

3,633

Total assets

89,774

Net assets

68,658Market capitalization (as of March 31)

38,884

Number of employees

1,381persons
Head Office (Nihonbashi-Horidomecho,Tokyo)

All Rights Reserved. Copyright Denyo Co.,Ltd. 25

The Group Companies
100%

100%

( Nishihatsu Co., Ltd. )

100%

80%

100%

100%

100%

76%

51%

100%

*1. Other than the above, the New Japan Machinery Corporation is an equity-method affiliate (investment ratio 15.7%).
2. Underlined companies are manufacturers.

All Rights Reserved. Copyright Denyo Co.,Ltd. 26

Trends and Forecasts by Product Sales
Sales by product
Generators

Welders

Compressors

Others80,00070,00060,00050,00040,000

5,525
1,083
4,919

5,719
1,059
5,115

6,365
1,012
5,072

5,482
727
4,401
5,845
755
4,386

5,856
727
4,829

30,00058,70053,70050,43620,000

5,600
700
4,500

43,66044,02043,754FY2021/3

FY2022/3

38,653

10,0000FY2018/3

FY2019/3

FY2020/3

FY2023/3

FY2024/3(Forecast)

All Rights Reserved. Copyright Denyo Co.,Ltd. 27

Changes in Sales by Region and Forecasts

Sales by region
Japan

North/Central America

Asia

Europe and others

80,00070,00060,00050,00040,000

2,648
5,938

2,252
5,527

2,547
5,902

2,216
5,197
2,423
3,948
18,43014,0802,886
4,596
21,617

10,897

13,052

3,200
6,200

24,00010,38230,00020,00031,211

33,69337,04337,737

34,632

34,244

36,100FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3(forecast)

10,0000

All Rights Reserved. Copyright Denyo Co.,Ltd. 28

Changes in Results for the Last 30 YearsJapan

Net sales,100 milion yen

Overseas

Ordinary income

800

Ordinary income, 100 million yen

70

700

Great East Japan
Earthquake

600

60
50

Lehman shock

500

Y2K boom

40
400
30
300
200

20

100

10

0

0

Fiscal Year

All Rights Reserved. Copyright Denyo Co.,Ltd. 29

2-8-5, Nihonbashi-horidomecho, Chuo-ku, Tokyo 1038566, Japan
Phone: +81-3-6861-1111, Facsimile: +81-3-6861-1181
https://www.denyo.co.jp/english/