FinancialResults
Briefing

First Half of the Fiscal YearEnding March 31, 2021

November 2020

Sales Breakdown/Market Share (End of March 2020)
Market Share (Auxiliary Engines forLarge Ocean-going Vessels)

Sales Breakdown

BusinessSection

Internal combustion
engines

Application

Land-use

5％

17％

56%
Domestic 44％

Auxiliary powergenerators

Other

83％

Marine-use(Breakdown)

95％

Export80％〈Share in Japan〉〈Overseas market share〉

DAIHATSUDIESELDAIHATSUDIESEL50%

Main
propulsion systems

23%

20％

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Remarks on Earnings
POINT
Sales by Horsepower(10,000 hp)

Stable capture ofearnings over lifecycle (30 years)▶Post-voyage maintenanceservices are key.
▶Cumulative total of engine
units (number of ships
carrying our engines) isdecisive.
March March March March March March March March March March March March March March March March March
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

*Does not include technological partners in China

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Strengthening Business in the After-sales-service
Market/Overseas Strategy (Licensing)
15 yearsago

Sales approx. ¥15.0 billion

Now

Holding the line
Business focus was selling engines to builders ofnew vessels.
Sales for the after-sales-service did not really exist.

Issues forthe future

Major
increase

Sales approx. ¥26.0 billion

Shifting to the offensive
Creation of sales teams specializing in parts
Launch of strategic sales targeting ship-owners
and ship-managers in the after-sales-service
marketGenuine parts usage ratio is approx. 50%.
Scope exists for increasing this rate.
▶Strategic deployment of CMAXS system.

Licensing (in China)
Contract partner since 1982
Granting of rights for Manufacture and marketingof certain classes of internal combustion engine
Expand market share of DAIHATSU brandAnqing CSSC Diesel Engine Co., Ltd.
Anqing Diesel
Anhui Province, China (Yangtze River Basin, 600 km from Shanghai)

SHAANXI DIESEL ENGINE HEAVY
INDUSTRY CO., LTD.
Shaanxi Diesel
Shaanxi Province, China(50 km from Xi’an)

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Market Trend for Marine Cargo
Global shipping capacity

Global ocean cargo volumes, by product(Unit: Billiontons)

12Iron ore
Grain
Crude oil
Other

CoalContainers
Petroleum products(Unit: Milliontons)

1,600

Other (cargo vessels, etc.)
Tankers

Compared to2006
94% increase

Bulk carriers

1,400

10The averageincrease rate of+ 3.1% / year

8

1,200
1,000

6800
600

4400

2200002006

2009

2012

2015

2018

2021

2006

2009

2012

2015

2018

(Estimate)

Source: The Shipbuilders’ Association of Japan

Increasing trend in shipping capacity in line with increase in ocean cargo volume→ stable increase in maintenance demand expected
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Market Trends for Newbuild Vessels
Volume of work in hand, by country

Volume of orders received, by country
JapanSouth Korea
China
European countries total
Other countries total
22千(Unit: Million tons)

60

50

40

30

3
3

13221515

1710140120
100South Korea
European countries total

5457

50

80

40

81035

45
41

19100160

Japan
China
Other countries total
911111060

2320(Unit: Million tons)

3
2017

20
830

31

2017

2018

2302018

2019

2019

Source: The Shipbuilders’ Association of Japan

Volume of orders received and volume of work in hand both have been on a gradual recovery trend
since around 2016 after the downturn in the marine cargo market, but the future outlook is
uncertain due to the COVID-19 crisis.
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

First Half of the Fiscal Year Ending March 31,2021

Summary of Earnings

Summary(Unit: Million yen)

September
2018
Results

September
2019
Results

September
2020
Results

YoY difference
Increase/decrease

Net sales

26,72927,321

25,131(2,189)Operatingincome625646(51)

Ordinary
income752

852

Net
income483

Basicearnings pershare

March 2021(%)

Progress(%)

Forecast*(8.0)% 単位：百万円
56,000

44.9%

(697)

－0－

(19)

(871)

－0－

511(210)

(722)

－0－

15.18

16.10(6.64)(22.74)－0.00－

Total assets

79,57883,42280,980(2,442)(2.9)％－－

Equity ratio

47.8％

46.9％

49.4％

2.5％

－－－

POINT

Both sales and earnings deteriorated due to deferment of delivery dates of engine sales andmaintenance-related movement restrictions (people and goods) in the COVID-19 crisis
Profitability in engines remains bleak

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Net Sales and Earnings for the Internal
Combustion Engine Section* including maintenance-Net sales(Unit: Million yen)

Marine-use (Japan)
Land-use (Japan)

30,00025,12925,000683

Marine-use (Over seas)
Land-use (Over seas)

25,813469

2,059

Internal combustion * including maintenancerelated
engine section earnings

related(Unit: Million yen)

2,000

1,725

23,576

2,134

163
1,178

12,906

11,407

1,690

1,500

20,00015,00012,131

10,0005,000

500
10,303

10,255

10,82800
1H FY2019

POINT947

1,0001H FY2020

1H FY2021

1H FY2019

1H FY2020

1H FY2021

Sales declined due to struggling sales of overseas marine-use engines and land-use engines
despite the contribution of engine sales to the Ministry of Defense
Profitability deterioration for sales of diesel engine units continued, and earnings decreased due
to a decline in maintenance-related sales

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Unit Sales and Maintenance-related Net Sales
Maintenance-related net sales

Units sold(Unit: Units)

450Marine-use (Japan)
Land-use (Japan)

3924005350

141300Marine-use (Over seas)
Land-use (Overseas)

414
11132250

349(Unit: Million yen)

14,00012,0001410,000

131

8,000

200

11,83812,767
11,200

6,000

150

245

100

267
204

4,000
2,000

5000
1H FY2019POINT

1H FY2020

1H FY2021

1H FY2019

1H FY2020

1H FY2021

Total units sold decreased due to deferment of delivery dates, etc.
Maintenance-related sales declined due to stagnation of business meetings and shipments

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Earnings Forecasts(Unit: Million yen)March 2020Results

March 2021
Forecast

Increase/decrease(%)

Net sales

60,08756,000(6.8)

Operating income

2,6740(100.0)

Ordinary income

2,9150(100.0)

Net income

1,9960(100.0)

Basic earnings per share

62.80

0.00

―

*Exchange rates: March 2020 (Results): ¥107.96, 1H 2021 (Results): ¥106.02, 2H 2021 (Estimate): ¥100.00

Forecast

Sales of diesel engine units and maintenance-related sales are projected to remain sluggish
due to the COVID-19 crisis
Engine sales profitability stays bleak

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedDAIHATSU DIESEL MFG. CO., LTD.

APRIL 1, 2020 – MARCH 31, 2023

2020 MID-TERM MANAGEMENT PLAN
TARGETS (FROM APRIL 1, 2020 TO MARCH 31, 2023)

Vision１２３４Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

１．Expand Sales Domains and Increase our Share Strategicallyby Introducing New Products to the Market

Equip a ship with anengine at a shipyard

World share

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２．World-class Technology Developmentwith a View to the Next-generation EnergyLong-term goalPhase out GHG emissions from international shipping assoon as possible in this century※ The world’s first global agreement in a specific sector

Base year

40%
improvement inefficiency*

50% reduction
in totalemissions

Phase out GHG*Emissions pertransport workhydrogenammonia

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２．World-class Technology Developmentwith a View to the Next-generation Energy
Technology Development Center

Ministry of Land,
Infrastructure,
Transport and Tourism

Research and Development Center

University laboratory

Joint research

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３．Improve Production Efficiency
through Synergic Effects among Group Production Bases

Order lead time
designProcurement

Moriyama Factory

Manufacturing

testshipment

Himeji Factory
Constant
improvement

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４．Establish a Solid Earnings Basewith an Awareness of ESG

Funds

GrowthInvestment

Protect cities from disasters

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2020 MID-TERM MANAGEMENT PLAN TARGETS(FROM APRIL 1, 2020 TO MARCH 31, 2023)

Net sales¥75.0 billion

Operating margin

１０％

Equity ratio

５０％

ＲＯＥ

１０％

Payout ratio

３０％
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedUpdate on Recent Major Progress
Launching ceremony of an ocean surveillance ship "Aki” for the Ministry of Defense(at Mitsui E&S Shipbuilding Tamano Shipyard on January 15, 2020)

Order and delivery of MTU engines for new escort vessels of the Ministry of Defense

Ocean surveillance ship "Aki”

Completion of a large-scale pure car and truck carrier "SAKURA LEADER“Allowing for the switching between two types of fuels, liquid fuel and LNG (liquefiednatural gas), according to conditions

Pure car and truck carrier "SAKURA LEADER"

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These materials contain statements relating to future earnings and businessstrategy, etc. Inherent in these statements are risk and uncertainty; they
form no guarantee of future performance.
Please be aware that actual results may differ significantly from forecasts,
due to changes in the business environment, etc.
Furthermore, information relating to companies other than the Company or
the Company group, etc., contained here has been taken from publicly
available information, etc. No verification of any kind has been undertakenby the Company, and no guarantee is offered regarding the accuracy orappropriateness of such information.
The information contained in these materials is intended only for purposes ofprovision of information, and not for solicitation to purchase securities.

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