Briefing on Results for the Fiscal Yearending March 31, 2021

May 13, 2021
Photo: Denyo Europe B.V.

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ContentsⅠ. Overview of Results for FY2021/3
II. Outlook for FY2022/3

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Overview of Results for
FY2021/3

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Highlights of Results for FY2021/3 (Consolidated)
Key Point

Both Net sales and profits decreased from the previous fiscal year.
(million yen)

FY2020/3

FY2021/3

Change(YoY)

Rate of change(YoY)Net sales

62,887100%

55,006

100% △ 7,880 △ 12.5%

Operating income

6,057

9.6%

5,332

9.7%

Ordinary income

6,202

9.9%

5,645 10.3%△ 557△ 9.0%

Profit attributable toowners of parent

4,071

6.5%

3,860

7.0%

△ 211

△ 5.2%

Capital investment

1,201

1,918

717

59.7%

Depreciation

1,162

1,167

50.4%

194.3yen185.1yen△ 9.2yen△ 4.7%

7.4%

6.7%

46.0yen

47.0yen

Net income per share

ROE
Cash dividends per share△ 725 △ 12.0%

All Rights Reserved. Copyright Denyo Co.,Ltd. 3Sales Trends by Product (Consolidated)
Overview

1. Sales of generators decreased by 6,416 million yen (12.7%).
2. Sales of welders decreased by 686 million yen (13.5%).
3. Sales of compressors decreased by 257 million yen (25.4%).
(million yen)

By product

FY2020/3

Change(YoY)

FY2021/3

Rate of change(YoY)

Net sales

62,887100%

55,006

100% △ 7,880 △ 12.5%

Generators

50,43680.2%

44,02080.0% △ 6,416 △ 12.7%

Welders

5,072

8.1%

4,386

8.0%

△ 686 △ 13.5%

Compressors

1,012

1.6%

755

1.4%

△ 257 △ 25.4%

Others

6,365

10.1%

5,845

10.6%

△ 520

△ 8.2%All Rights Reserved. Copyright Denyo Co.,Ltd. 4

Engine Generators (Consolidated)

Generators

Rate of change(YoY)

FY2020/3

FY2021/3

50,436million yen

44,020million yen △ 12.7%• In Japan, shipment to the rental industry decreased,
but shipment of the back-up power source increased.

65%• Overseas, shipment to America and Asia decreased
significantly due to the impact of COVID-19.
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.
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Engine Welders (Consolidated)

Welders

FY2020/3

FY2021/3

Rate of change(YoY)

5,072million yen

4,386million yen△ 13.5%• In Japan, sales decreased due to the impact of thecancellation of product exhibitions, etc.

55%

• Overseas, shipment to America and Asia were sluggish.
Domestic market share ofengine welders*According to aCompany 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)
FY2020/3

1,012million yenCompressors• The shipment remained sluggish both in Japan andoverseas.

Rate of change(YoY)

FY2021/3

755million yen△ 25.4%20%

Domestic market share ofengine compressors

Engine compressor

Motor compressor*According to aCompany 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

FY2020/3

FY2021/3

6,365million yen

5,845million yen

Rate of change(YoY)△ 8.2%• Sales of self-propelled lifters and parts, etc. decreased.

Sales of other products
Self-propelled lifters
Load testing equipment
PartsSecondhand equipment and purchasedmerchandiseRepair sales, etc.
Self-propelled lifters

Load testing equipment

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Sales Trends by Region (Consolidated)(million yen)

FY2020/3

Change(YoY)

FY2021/3

Rate of change(YoY)

Domestic sales

37,043 58.9%

37,737 68.6%△ 7,880 △ 12.5%
694
1.9%

Overseas sales

25,844 41.1%

17,269 31.4%△ 8,574 △ 33.2%

North/Central
America

18,430 29.3%

10,897 19.8%△ 7,532 △ 40.9%△ 1,249 △ 24.0%
2079.4%

By region

Net sales

62,887100%

55,006

100%

Asia

5,197

8.3%3,948

7.2%

Others

2,216

3.5%

2,423

4.4%

FY2020/3

Japan

FY2021/3

Japan
0

10,00020,000

North/Central
America

North/Central
America
30,00040,000Asia Others

Asia Others
50,00060,00070,000All Rights Reserved. Copyright Denyo Co.,Ltd. 9

Factor Analysis of Changes in Operating Income
Decrease in Operating Income

The operating income decreased mainly due to a decrease of the netsales.
(million yen)

FY2020/3

FY2021/3

Change (YoY)

Operating income

6,057

5,332

Operating income margin (%)

9.6%

9.7%

FY2020/3
Gross profit margin
Ratio of SG&A to sales
Ratio of operating income to sales

••

23.2%
13.6%
9.6%

FY2021/3△ 725
0.1percentage points
Change (YoY)

24.2%
14.5%
9.7%

1.0percentage points
0.9percentage points
0.1percentage points

The gross profit margin was improved by an increase in the sales of relatively high profitable products although the netsales significantly decreased.
The ratio of SG&A to sales was worsened by significant decrease of the net sales although the SG&A decreased due torestriction on sales activities, etc.
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Consolidated Balance Sheets
Overview

1. Current assets increased by 1,511 million yen mainly due to an increase in cash anddeposits, etc.
2. Current liabilities increased by 1,181 million yen mainly due to the transfer of long-termloan receivable to short-term loan receivable.
(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 ofFY2020/3

At the end ofFY2021/3

52,932
22,69475,626
14,252
3,019
17,27258,35475,62654,443
24,61379,057
15,434
2,058
17,49361,56479,057

Change from theend of FY2020/3

1,511
1,919
3,431
1,181
△ 960
220
3,210
3,431

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Changes in Consolidated Cash Flows
Overview

1. Cash flow from operating activities was 4,941 million yen, mainly due to the recording of
the income before income taxes, etc.
2. Balance of cash and cash equivalents increased by 1,859 million yen from the end of theprevious fiscal year.
(million yen)

FY2020/3

FY2021/3

I Cash flow from operating activities

7,272

4,941

II Cash flow from investing activities△ 874△ 1,748

6,3983,193△ 1,528△ 1,086

13△ 246

V Net increase or decrease in cash and cashequivalents

4,883

1,859

VI Cash and cash equivalents, end of period

21,05422,913

I + II Free cash flow
III Cash flow from financing activities
IV Foreign currency translation adjustments on
cash and cash equivalents

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Outlook for FY2022/3

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Outlook for FY2022/3: Consolidated Income and Loss
Key points

1. Net sales are expected to be 56.0 billion yen.
2. Assumed exchange rate is 105 yen/dollar.
(million yen)

FY2021/3

FY2022/3(forecast)

Net sales

55,006 100%

56,000 100%

Operating income

5,332

9.7%

4,700

8.4%

△ 632 △ 11.9%

Ordinary income

5,645 10.3%

5,000

8.9%

△ 645 △ 11.4%

Profit attributable toowners of parent

3,860

7.0%

3,300

5.9%

△ 560 △ 14.5%

Capital investment

1,918

1,150

Depreciation

1,167

1,400

185.1yen6.7%
47.0yen158.2yen* 5.6%
47.0yen

Net income per share

ROE
Cash dividends per share

Change (YoY)

Rate of change(YoY)

994

1.8%

△ 768 △ 40.0%
233
20.0%
△ 26.9yen* Equity is calculated by using the amount of money at the end of FY2021/3.
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Outlook for Sales by Product (Consolidated)
Overview

1. Sales to the domestic rental market and overseas are expected to some degree of recovery.
2. Sales of emergency generators, which were strong in the previous fiscal year are anticipated
to decline in reaction.
(million yen)

FY2021/3

FY2022/3 (forecast)

Change (YoY)

Rate of change(YoY)

55,006100%

56,000

100%

994

1.8%

Generators

44,02080.0%44,700

79.8%

680

1.5%

Welders

4,386

8.0%

4,600

8.2%

214

4.9%

Compressors

755

1.4%

800

1.4%

45

6.0%

Others

5,845

10.6%

5,900

10.5%

55

0.9%

By productConsolidated sales

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

Change (YoY)

Rate of change
(YoY)

100%

9941.8%Domestic sales

37,737 68.6% 37,300 66.6%△ 437△ 1.2%

Overseas sales

17,269 31.4% 18,700 33.4%

1,431

8.3%

10,897 19.8% 12,100 21.6%

1,203

11.0%

FY2021/3
Consolidated sales

By region

FY2022/3(forecast)

North/ CentralAmerica

100% 56,000

55,006

Asia

3,948

7.2%

4,100

7.3%

152

3.9%

Others

2,423

4.4%

2,500

4.5%

77

3.2%

FY2021/3

Japan

North/CentralAmerica

FY2022/3(forecast)

Japan

North/CentralAmerica

010,000

20,00030,00040,000Asia Others

Asia Others
50,00060,000All Rights Reserved. Copyright Denyo Co.,Ltd. 16

Details of the Operating Income Forecast
Decrease in operating income

With the decrease of the gross profit margin, operating income is expected todecrease by 632 million yen.
(million yen)

FY2021/3

FY2022/3 (forecast)

Change (YoY)

Operating income

5,332

4,700

△ 632

Operating income margin

9.7%

8.4%

△ 1.3percentage point

FY2021/3

FY2022/3 (forecast)

Change (YoY)

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

•
•

24.2%
14.5%
9.7%

23.1% △ 1.1percentage point14.7%
0.2percentage point
8.4% △ 1.3percentage point

The gross profit margin is expected to be worsened by the shipment of the relatively profitable products areexpected to be decreased.
The ratio of SG&A to sales are expected to be worsen due to increased expenses associated with the recovery ofsales activities.

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Changes in the Amount of Capital Investment(million yen)

End of March2019
Cost ofequipment
Main uses

End of March
2020

End of March2021

End of March 2022
(plan)

1,499

1,201

1,9181,150

・Machinery of Fukui plant,
etc.
730
・Nishihatsu
50
・U.S. Plant
670
・Others
40

・Machinery of Fukui plant,
etc.
810
・Nishihatsu
20・U.S. Plant
290
・Vietnam Plant
10・Others
70・Machinery of Fukui plant,
etc.
1450
・Nishihatsu
110
・U.S. Plant
30
・Vietnam Plant
20・Others
300

・Machinery of Fukui plant,etc.
350
・Nishihatsu
50
・U.S. Plant
50
・Vietnam Plant
100
・Others600

Production Sites:
Amount of capital investment

million yen
2,500
2,000

・Fukui Plant
・Shiga Sub-Plant
・Nishihatsu

1,500

・America Plant・Vietnam Plant

1,000

・Indonesia Plant
5000
End ofMarch2019

End ofMarch2020

End ofMarch
2021

End ofMarch2022(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:
46 yen in FY2020/3 ⇒ 47 yen in FY2021/3 ⇒ 47 yen (forecast) in FY2022/350403022242525201020222222

FY2019/3

FY2020/3

FY2021/3

FY2022/3(forecast)Year-end dividends
Interim dividends

0All Rights Reserved. Copyright Denyo Co.,Ltd. 19

Notes on Our Outlook

This material contains assumptions and outlooks for the future andforecasts based on plans as May 13, 2021.
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 isnot meant to solicit investment in securities issued by the Company.
Investors are responsible for making their own final investment decision.

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Reference Materials

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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.

1966Developed 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.

● Company size, etc. (FY2021/3 on a consolidated basis)(million yen)

Net sales

55,006

Overseas sales

17,269Ordinary income

5,645

Profit attributable to owners of parent

3,860

Total assets

79,057

Net assets

61,564Market capitalization (as of March 31)

47,822

Number of employees

1,334persons
Head Office (Nihonbashi-Horidomecho,Tokyo)

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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.

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Trends and Forecasts by Product Sales
Sales by product
Generators

Welders

Compressors

Others

70,00060,000

6,365
5,719

50,0005,919

40,000

1,104
5,100

5,720
1,440
4,832

5,525

1,012
5,072

1,059
5,115

5,845

5,9007554,386

800
4,600

44,02044,700

FY2021/3

FY2022/3(Forecast)

1,083
4,919

30,00050,43620,00043,66038,29436,85738,653

FY2016/3

FY2017/3

FY2018/3

10,0000FY2019/3

FY2020/3

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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

3,606

2,808

6,921

6,479

9,776

10,31040,000

2,648
5,938

2,423
3,948

2,500
4,100

10,897

12,10037,04337,73737,300

FY2020/3

FY2021/3

FY2022/3(forecast)

2,252
5,527
18,43014,08010,38230,00020,00030,155FY2016/3

29,252

31,211

33,693

FY2017/3

FY2018/3

FY2019/3

10,0000

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Changes in Results for the Last 30 YearsJapan

Net sales,100 milion yen

Overseas

Ordinary income

700
600
500

Ordinary income, 100 million yen

Great East Japan
Earthquake

7060

Bubble period
Lehman shock

Y2K boom

50

400

40300

30200

20

100

1000
Fiscal Year

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