August 9, 2024
HIRATA Corporation

Q&A Summary for FY2024 1Q Financial Results（Held on August 9, 2024）【Our company explanators】
Director, Executive Officer, Division Director,

Hideki Ninomiya

Administration Division Finance & Accounting, Legal,Intellectual Property
General Manager, Corporate Communication Department,

Tatsuya Matsuzono

Administration Division【Explanation contents】
・FY2024 1Q Results (consolidated)
・FY2024 Full Year Forecasts (consolidated)【Question-and-Answer session】
Q1

How does HIRATA Corporation evaluate the progress of sales andoperating profit against the full-year performance forecast (sales of
100 billion yen, operating profit of 7.5 billion yen)?

AWe evaluate the progress rate against the full year forecast to be around
20% for sales and 16% for operating profit, which is within ourexpectations. We aim to achieve the full-year performance forecast by
ensuring the solid consumption of order backlog and accumulating
projects for current orders and sales.

Q2

What are the factors causing a deterioration in operating profit
margin? And will those factors continue in the future (or are theytemporary)?

AThe cost ratio has deteriorated due to an increase in development
elements in some projects. This is temporary, and we would like toimprove the cost ratio by strengthening our ability to respond to eachproject. We will continue to implement cost transfer requests forincreases in labor costs, raw material and component prices, and other1/4

factors.
Q3

The ratings from EcoVadis and FTSE have improved compared tobefore. Has the expenditure on ESG-related matters increased
compared to the same period last year?

AIn the previous period, expenses such as ESG-related consulting fees
were incurred, but in the current period, we are in a self-driving phaseand have budgeted for a decrease in expenses.

Q4

I would like to inquire about the market outlook and order outlook
for each segment.

AWe have not disclosed the forecast for received order in any segment.
While there is a sense of partial recovery in the semiconductor market,
we are anticipating a full recovery starting from the second half of theyear.
The demand for automobiles, both electric vehicles (EVs) and internal
combustion engines, is strong. However, we would like to monitor thesituation closely as there could be certain impacts depending on theresults of the U.S. presidential election.
We believe it would be difficult to expect large-scale orders for OLED,
which is classified as other automatic labor-saving equipment, as wehave experienced in the past.

Q5

I would like to know your company's marginal profit ratio.

A

We currently do not disclose the marginal profit ratio on a segment orcompany-wide basis, as the business characteristics vary significantly
across segments.

Q6

I would like to hear more details about the expansion of production
space in Yamaga City, Kumamoto Prefecture.

ATo meet the growing demand, we have secured production space inYamaga City through a lease agreement. We have already carried out
renovations and have started using a portion of the space.

Q7

I would like to know the number of career hires for this fiscal year
and the number of new graduate hires expected to join in April
2025.
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A

We are expecting to hire a similar number of candidates for both careerand new graduate positions compared to the previous year.

Q8

I would like to hear your thoughts on the expansion of futurebusiness areas, including the development of new businesses.

ADeveloping new pillars of business is an urgent task for us. In the field of
medical/chemical and physics devices, we are jointly developing an"ultrasound-guided, focused ultrasound therapy device" with SONIRE
Therapeutics Inc.. We consider this to be one of the businesses thatshould be expanded. The device is currently in the clinical trial stage, andwe are working towards its development for future mass production.

Q9I would like to know the background behind the decision to hold a
1Q financial results briefing starting from this fiscal year.

A

We have decided to hold earnings briefing sessions for the 1Q and 3Q
financial results, which were not conducted in the past, with the aim ofenhancing constructive dialogue with investors and analysts. If you haveany opinions or requests regarding the implementation method orcontent of these sessions, we would appreciate it if you could share themwith us.

Q10

I would like to confirm whether the company plans to continue withcapital investments in the next medium-term management plan, orif it is understood that we are entering a phase of recovering past
capital investments.

AWe have been successfully reaping the benefits of various investments
made up until the previous period. However, for future businessexpansion and profitability improvement, new investments will benecessary. We intend to outline the specific approach to capital allocationin the next medium-term management plan, aiming to continue withgrowth investments while enhancing shareholder returns.

Q11I would like to know what the differences are between yourcompany, which manufactures wafer handling equipment, andRORZE Corporation, which is believed to be a strong competitor in
the semiconductor industry, particularly in China.
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AIn the semiconductor equipment industry, it is common to receive a highnumber of repeat orders from the same customers. In our company, weare currently working on entering the Chinese market and expanding
local production. We recognize that our products have excellent
robustness and throughput.

Q12

I would like to know how HIRATA Corporation perceives the impactof narrowing the interest rate differential between Japan and theUnited States on performance?

AWe recognize that the current level of yen appreciation, driven by thenarrowing of the interest rate differential between Japan and the UnitedStates, does not have a significant impact on our business. However, if a
rapid yen appreciation continues in the future, it could lead to a decreasein price competitiveness against overseas competitors, among othereffects. In such a case, we would need to take measures to addressthese challenges. On the other hand, we can also expect a decrease in
the effective prices of imported goods due to the yen appreciation.

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