Briefing on Results for the Fiscal Yearending March 31, 2023

May 11, 2023
Photo: Service Center Kanto

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Contents

Ⅰ. Overview of Results for FY2023/3
II. Outlook for FY2024/3

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

Overview of Results for
FY2023/3

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Highlights of Results for FY2023/3 (Consolidated)
Key Point

Net sales reached a record high, operating income, ordinary income and profit
attributable to owners of parent are more than the previous fiscal year.
(million yen)

FY2022/3

FY2023/3

Change(YoY)

Rate of change(YoY)

Net sales

55,168100%

64,311

100%

9,143

16.6%

Operating income

3,653

6.6%

4,874

7.6%

1,220

33.4%

Ordinary income

4,029

7.3%

5,180

8.1%

1,151

28.6%

Profit attributable toowners of parent

2,753

5.0%

3,633

5.7%

880

32.0%

Capital investment
Depreciation
Net income per share

ROE
Cash dividends per share

839

4,213

3,374

402.1%

1,361

1,266

95

△ 7.0%

132.0yen

175.6yen

43.6yen

40.2%

4.6%

5.7%

47.0yen50.0yen
All Rights Reserved. Copyright Denyo Co.,Ltd. 3

Sales Trends by Product (Consolidated)
Overview

1. Sales of generators increased by 9,945 million yen (22.7%).
2. Sales of welders decreased by 428 million yen (8.9%).
3. Sales of compressors were on par with the previous fiscal year.
(million yen)

By product

FY2022/3

Change(YoY)

FY2023/3

Rate of change(YoY)

Net sales

55,168100%

64,311

100%

9,143

16.6%

Generators

43,75479.3%

53,700

83.5%

9,945

22.7%

Welders

4,829

8.8%

4,401

6.8%

△428

△8.9%

Compressors

727

1.3%

727

1.1%

0

0.0%

Others

5,856

10.6%

5,482

8.5%

△374

△6.4%

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Engine Generators (Consolidated)

Generators

Rate of change(YoY)

FY2022/3

FY2023/3

43,754million yen

53,700million yen• In Japan, shipment of the mobile-type generators remainrobust. Stand-by generating sets for disaster prevention
equipment decreased.

22.7%

70%

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

Manufacturing engine-driven generators with capacityfrom 1kVA to 1100kVA

Soundless generator“Mālie”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.
Generator with operational
data recording functionPower-supply vehicles, etc.
All Rights Reserved. Copyright Denyo Co.,Ltd. 5

Engine Welders (Consolidated)

Welders

Rate of change(YoY)

FY2022/3

FY2023/3

4,829million yen

4,401million yen• Due to the difficulty in procuring some parts, both
domestic and overseas sales decreased.

△8.9%

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

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Engine Compressors (Consolidated)
FY2022/3

727million yen

Compressors• The shipment to the domestic market decreased, but
the shipment to America increased.

Rate of change(YoY)

FY2023/3

727million yen

15%

Domestic market share ofengine compressors

Engine compressor

Motor compressor

0.0%*According to a
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.

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Others (Consolidated)

Others

FY2022/3

FY2023/3

5,856million yen

5,482million yen

Rate of change
(YoY)

△6.4%

• Shipment of self-propelled lifters increased, but Sales ofparts, etc. decreased.

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

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Sales Trends by Region (Consolidated)(million yen)

FY2022/3

Net sales

55,168Change(YoY)

FY2023/3

100%

64,311

Rate of change
(YoY)

100%

9,143

16.6%

34,632 62.8%

34,244 53.2%△ 387△ 1.1%

Overseas sales

20,536 37.2%

30,066 46.8%

9,530

46.4%

North/Central
America

13,052 23.7%

21,617 33.6%

8,564

65.6%
28.4%

By region

Domestic sales

Asia

4,596

8.3%

5,902

9.2%

1,306

Others

2,886

5.2%

2,547

4.0%

△ 339 △ 11.8%

FY2022/3

Japan

FY2023/3

Japan
0

10,00020,000

North/Central
America

Asia Others

North/Central
America
30,00040,00050,000Asia
60,000

Others
70,000All Rights Reserved. Copyright Denyo Co.,Ltd. 9

Factor Analysis of Changes in Operating Income
Increase in Operating Income

The operating income increased due to the significant increase in sales
and the effect of reflecting part of the cost increase in the selling price.
(million yen)

FY2022/3
Operating income
Operating income margin (%)

3,653
6.6%
FY2022/3

Gross profit margin
Ratio of SG&A to sales
Ratio of operating income to sales

•
•

21.2%
14.6%
6.6%

FY2023/3

Change (YoY)

4,874
7.6%
FY2023/3

1,220
1.0percentage points
Change (YoY)

21.2%
13.6%
7.6%

0.0percentage points△ 1.0percentage points
1.0percentage points

The gross profit margin recovered to the same level as the previous fiscal year due to the effect of reflecting part of thecost increase in selling prices, mainly in the second half.
The ratio of SG&A to sales decreased due to a significant increase in sales despite an increase in SG&A expenses due to arecovery in sales activities.

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Consolidated Balance Sheets
Overview

1. Current assets increased by 4,644 million yen mainly due to an increase in inventories, etc.
2. Non-current assets increased by 4,324 million yen mainly due to an increase in tangible
fixed assets, etc.
3. Current liabilities increased by 3,430 million yen mainly due to an increase in short-termloans payable, etc.
(million yen)

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

Total liabilities
Total net assets
Total liabilities and net assets

At the end of
FY2022/3

At the end of
FY2023/3

56,872
23,902

61,51728,227

4,644
4,324

80,774
14,2692,744
17,01389,744
17,7003,385
21,085

8,969
3,430
640
4,071

63,76080,77468,65889,744

4,898
8,969

Change from theend of FY2022/3

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Changes in Consolidated Cash Flows
Overview

1. Cash flow from operating activities was 2,031 million yen, mainly due to the recording of
the income before income taxes, etc.
2. Cash flow from investing activities was -4,116 million yen, due to the acquisition of
tangible fixed assets.
3. Balance of cash and cash equivalents decreased by 1,027 million yen from the end of theprevious fiscal year.
(million yen)

FY2022/3

FY2023/3

I Cash flow from operating activities

2,695

2,031

II Cash flow from investing activities△ 819△ 4,116

I + II Free cash flow

1,876

△ 2,085△ 1,643937

IV Foreign currency translation adjustments on
cash and cash equivalents

212

119

V Net increase or decrease in cash and cash
equivalents

445△ 1,027

VI Cash and cash equivalents, end of period

23,35822,331

III Cash flow from financing activities

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Outlook for FY2024/3

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

1. Net sales are expected to be 65 billion yen.
2. Assumed exchange rate is 130 yen/dollar.
(million yen)

FY2023/3

FY2024/3(forecast)

Net sales

64,311 100%

Operating income

4,874

7.6%

Ordinary income

5,180

Profit attributable toowners of parent

3,633

Capital investment

4,213

1,800

Depreciation

1,266

1,300

175.6yen
5.7%
50.0yen179.3yen%* 5.6
51.0yen

Net income per share

ROE
Cash dividends per share

Change (YoY)

Rate of change(YoY)

65,000 100%

689

1.1%

5,000

7.7%

126

2.6%

8.1%

5,350

8.2%

170

3.3%

5.6%

3,700

5.7%

67

1.8%

△2,413 △57.3%
34
2.7%
3.7yen* Equity is calculated by using the amount of money at the end of FY2023/3.
All Rights Reserved. Copyright Denyo Co.,Ltd. 14

Outlook for Sales by Product (Consolidated)
Overview

1. In Japan, demand for construction is expected to remain robust, and sales of products forconstruction are expected to increase. Stand-by generating sets for disaster prevention
equipment generators are also expected to recover.
2. Overseas, demand in America and Asia are expected to remain at the high level of theprevious fiscal year.
(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Rate of change(YoY)

64,311

100%

65,000

100%

689

1.1%

Generators

53,70083.5%

53,900

82.9%

200

0.4%

Welders

4,401

6.8%

4,700

7.2%

299

6.8%

Compressors

727

1.1%

800

1.2%

73

10.0%

Others

5,482

8.5%

5,600

8.6%

118

2.2%

By productConsolidated sales

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

FY2024/3(forecast)

Change (YoY)

Rate of change
(YoY)

100%

689

1.1%

Domestic sales

34,244 53.2% 34,900 53.7%

656

1.9%

Overseas sales

30,066 46.8% 30,100 46.3%

34

0.1%

21,617 33.6% 21,400 32.9%△ 217△ 1.0%FY2023/3

64,311

By region

Consolidated sales

North/ Central
America

100% 65,000

Asia

5,902

9.2%

6,000

9.2%

98

1.7%

Others

2,547

4.0%

2,700

4.2%

153

6.0%

FY2023/3

Japan

North/Central
America

Asia Others

FY2024/3(forecast)

Japan

North/Central
America

Asia Others

0

10,00020,00030,00040,00050,00060,00070,000All Rights Reserved. Copyright Denyo Co.,Ltd. 16

Details of the Operating Income Forecast
Increase in operating income

Operating income is expected to improve due to higher sales prices and cost
reduction activities.
(million yen)

FY2023/3

FY2024/3 (forecast)

Change (YoY)

Operating income

4,874

5,000

126

Operating income margin

7.6%

7.7%

0.1percentage 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)

21.9%
14.2%
7.7%

Change (YoY)

0.7percentage point
0.6percentage point
0.1percentage point

The gross profit margin is expected to improve due to the effect of reflection on selling prices and cost reduction
activities, despite price hikes for main parts.
The ratio of SG&A to sales are expected to be worsen due to increased in labor costs and expenses associated withnormalization of sales activities.

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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
・Others450

Production Sites:
Amount of capital investment
million yen

4,500
4,000

3,500

・Fukui Plant
・Shiga Sub-Plant
・Nishihatsu

3,000

2,500

・America Plant

・Vietnam Plant

2,000

・Indonesia Plant

1,500
1,000

500
0
End of
March
2021

End of
March
2022

End of
March
2023

End ofMarch
2024(plan)All Rights Reserved. Copyright Denyo Co.,Ltd. 18

Profit Distribution Policy
Profit distribution: Denyo recognizes the importance of making further efforts to return profits
to shareholders, while aiming to strengthen the company’s financial structure and profitability,
and we will implement an interim and term-end dividend payouts of distribution of results
comprehensively calculated by achievement and payout ratio.
Changes in cash dividends:
47 yen in FY2022/3 ⇒ 50 yen in FY2023/3 ⇒ 51 yen (forecast) in FY2024/3

60
50
40
30
20
10
0

27

25

25

27

22

22

23

24

FY2021/3

FY2022/3

FY2023/3

FY2024/3(forecast)Year-end dividends
Interim dividends

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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 inenvironmental initiatives. We consider initiatives aimed at creating a hydrogen-based society (such as
through the use of hydrogen fuel cells) to be one effective means of reducing CO2 emissions andpreventing atmospheric pollution, with the aim of preventing global warming.

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
the generators
Demonstration operation will start in May 2021

Intended use•••

Civil engineering and construction sites
Houses without power after a disasters
Location where TV reporters are reporting, and event sites, etc.

Hydrogen-light oil mixed combustion Generator•••

Operates with a light oil/hydrogen mixing ratio of 50%
50% reduction in CO2 emissions compared to using only light oil as fuelAiming for mass production of 250kW hydrogen-light oil mixed combustion
generator in 2023

Intended use••

Private consumption using byproduct hydrogen
Back-up power source in a power outage, etc.

All Rights Reserved. Copyright Denyo Co.,Ltd. 21

Efforts toward carbon neutrality
Dedicated Hydrogen Generator• Uses only hydrogen as fuel and does not emit CO2• Starting with the development of the 45kVA class , which isthe 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

Efforts toward carbon neutrality
Established Service Center Kanto••

As an initiative for decarbonization, we have installed solar power generation equipmenton the roof of the factory building, and it is possible to cover the power of the office andthe factory buildings.
Equipped with a 20t class crane, it is possible to maintain indoors up to a large
generator of up to 1100kVA.

＜Overview＞
１．Location
Sakura City, Chiba
２．Site area
2,999㎡
３．Total floor area
1,925㎡
４．Building structure Office building (2 stories), large machine repair factory building,small/medium machine repair factory building (2 stories)

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

Notes on Our Outlook

This material contains assumptions and outlooks for the future andforecasts based on plans as May 11, 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
not meant 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. 24Reference Materials

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

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. 26

The Group Companies
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. 27

Trends and Forecasts by Product Sales
Sales by product
Generators

Welders

Compressors

Others

70,00060,000

6,365
5,719

50,00040,000

5,525
1,083
4,919

1,012
5,072

1,059
5,115

5,845
755
4,386

5,482
727
4,401

5,600
800
4,700

53,70053,900

FY2023/3

FY2024/3(Forecast)

5,856
727
4,829

30,00050,43620,00043,66044,02043,754FY2021/3

FY2022/3

38,653

10,0000FY2018/3

FY2019/3

FY2020/3

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

Changes in Sales by Region and Forecasts
Sales by region
Japan

North/Central America

Asia

Europe and others

70,0002,216
5,197

60,00050,000

2,648
5,938

2,252
5,527

2,423
3,948
18,43014,08040,00010,897

2,547
5,902

2,700
6,000

21,617

21,4002,886
4,596
13,052

10,38230,00020,00033,69337,04337,737

31,211

34,632

34,24434,900FY2018/3

FY2019/3

FY2020/3

FY2021/3

FY2022/3

FY2023/3

FY2024/3(forecast)

10,0000

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

Changes in Results for the Last 30 YearsJapan

Net sales,100 milion yen

Overseas

Ordinary income

700

Ordinary income, 100 million yen

70Great East Japan
Earthquake

600
500

60
50

Lehman shock

Y2K boom

400

40

300

30

200

20

100

10

0

0

Fiscal Year

All Rights Reserved. Copyright Denyo Co.,Ltd. 30