Consolidated Financial
Results 1Q FY2024

August 9, 2024

Index• Results Highlights• 1Q FY2024 Results• 1Q FY2024 Results by Segment• FY2024 Outlook• Appendix

1Company ProfileCompany NameHIRANO TECSEED Co., Ltd.

Representative

Kaoru Okada, President

Paid-in Capital¥1,847,821,000 (as of end-June 2024)

Headquarters

101-1, Kawai, Kawai-cho, Kitakatsuragi-gun, Nara Pref. 636-0051, Japan

Group Companies（wholly-owned）• HIRANO GIKENKOGYO Co., Ltd. • HIRANO K&E Co., Ltd., HIRANO AMERICA, INC.

Number of Employees

Consolidated 421 (Parent: 321), (as of end-June 2024)

Securities Code6245 (Industry: Machinery)2

Results Highlights

Results Highlights
1Q FY2024 results

FY2024 earnings forecasts(Unit: ¥million)(Unit: ¥million)

1Q FY2024

Net Sales¥12,099

Operating Income
Operating Income
Margin

¥292
2.4%

YoY
-¥485

FY2024 forecast

Net Sales

-3.9％

-¥336
-53.5％-2.6pts¥44,000

YoY-¥2,946-6.3％-¥336

Operating Income¥2,900-10.4％

Operating Income
Margin6.6%-0.3pts

Topics1Q
FY2024 results✓ Net sales trending down on change in capex plans due to slower growth in the EV sector, but still comparatively firm thanks to expansion inscope of installation work in North America✓ Operating income margin falls due to stubbornly high materials prices for medium- and long-term orders received in earlier fiscal years andsharp increase in outsourcing costs

FY2024 earnings
forecasts✓ Forecast lower YoY net sales and profit due to change in customers’ capex behavior, particularly for lithium-ion batteries✓ Commitment to raise ROE throughout the life of the next medium-term plan via initiatives focused on key plan themes despite expecting a fallin capital efficiency as market price changes are likely to produce a YoY decline earnings in FY2025
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1Q FY2024 Results

Overview of 1Q FY2024 Results
Overview of 1Q FY2024 Results(Unit: ¥million)

1Q FY2024 results overview

1Q FY2023 1Q FY2024

ChangeYoY✓ Orders rise in 1Q on increase orders on expansion in scope of installation work inNorth America and despite sluggish demand for lithium-ion battery-use anode
coating equipment owing to slower momentum in the EV sectorabb-a(b-a)/aOrders

1,812

7,210

5,397

297.7％Net Sales

12,584

12,099-485-3.9％Operating
Income629292-336-53.5％

Operating
Income Margin

5.0％

2.4％

-2.6pts-Ordinary Income

675

427-247-36.7％

Ordinary
Income Margin

5.4％

3.5％

-1.8pts-

Net Income

467328-139-29.8％Net Income
Margin3.7％

2.7％-1.0pts-✓ Net sales comparatively firm, mostly for lithium-ion battery-use anode coating
equipment in the Coating and Laminating Machinery Segment✓ Operating income margin falls on sharply higher CoGS (mainly outsourcing andpersonnel costs) as well as rise in costs from changes in delivery schedules andlocations

Initiatives to improve orders and profitability from 2Q FY2024✓✓

Strengthen order acquisition for installation work in North America
Strengthen efforts for a wide range of existing markets, such as electronics andoptical films, while responding to demand for EV-use lithium-ion battery
applications•
Renegotiate order prices and reduce costs via the sharing andstandardization of components and equipment•
Initiatives including raising value added by increasing equipment
functionality61Q FY2024 Results by Segment(Unit: ¥million)

Consolidated total

YoYabb-a(b-a)/a

7,210

5,397

+297.7%

Net Sales

12,584

12,099

-485

-3.9％

Operating Income*1

629*1
5.0％

292*1
2.4％

-336
-2.6pts-53.5％
-849

5,555

4,706

+554.2％

10,441
650
6.2％
626
1,720
287
16.7％
337
422
20

10,332
584
5.7％
1,299
1,260
-10
-0.8％
355
506
67

-109
-66
-0.6pts
672
-460
-298
-17.6pts
1883
47

-1.0％
-10.2％
107.3％-26.8％+5.5％+19.9％+235.2％4.7％

13.3％

8.5pts-Net Sales
Operating Income*2
Operating Income Margin
OrdersNet Sales
Operating Income*2
Operating Income Margin
OrdersNet Sales

Others, Adjustments

Change1,812Orders

Industrial MachinerySegment

1Q FY2024

OrdersOperating Income Margin

Coating and Laminating
Machinery Segment

1Q FY2023

Operating Income*2
Operating Income Margin*１：After adjustment for SG&A not assignable to any reporting segment*２：Operating income equivalent to segment profit in the quarterly results report7Factors for Change in 1Q FY2024 Operating Income(Unit: ¥million)

Fall in operating
income due tochange in delivery
schedules

Fall in operating
income due tolower sales

SG&A, etc. not
attributable to any othersegment*

Coating and Laminating Segment

Industrial Machinery Segment

Others8

1Q FY2024 Balance Sheet
Assets(Unit: ¥million)

End-FY2023
Value

Current Assets

1Q FY2024
Value

ChangeCurrent Assets

49,63950,529+889

Fixed Assets
Tangible FixedAssets
Intangible FixedAssets
Investments andOther Assets
Total Assets

13,29013,672+382

7,511

7,552＋41560

522

-37

5,218

5,596＋378

62,92964,201＋1,272Up ¥889mn✓ Accounts receivable and contract assets up ¥4,525mn, advance payments up¥106mn✓ Cash and deposits down ¥4,214mn

Fixed Assets Up ¥382mn✓Tangible fixed asset up ¥41mn, investments and other assets up ¥378mn,intangible fixed assets down ¥37mn

Liabilities
Current Liabilities Up ¥1,514mn

Current Liabilities

22,96524,480+1,514

Fixed Liabilities

1,401

1,442+41Net Assets

38,562

38,279-283

61.3

59.6

-1.7pts

Equity Ratio (%)✓ Procurement liabilities up ¥378mn, short-term borrowings up ¥2,200mn✓ Advances collected down ¥941mn, tax and other liabilities down ¥476mn

Fixed Liabilities Up ¥41mn

Net Assets
Net Assets Down ¥283mn

9Change in Notes and Accounts Receivable - Trade, and Contract
Assets, and Electronically Recorded Monetary Claims - Operating(Unit: ¥million),,,,,,

Notes receivable +Electronicallyrecorded monetaryclaims

Delivery completed
at the beginning of
the term +translation
adjustment

Accounts receivable

Contract assets

10

1Q FY2024 Results by Segment

Order Backlog, Net Sales, and Orders in the Coating and Laminating
Machinery Segment
Order backlog, net sales, and orders in the Coating andLaminating Machinery Segment

Highlights in the Coating and Laminating Machinery Segment(Unit: ¥million)
Net sales

OrdersOrder backlog (RHS)

30,00090,00025,00075,00020,00060,00015,00045,00010,00030,000Marketconditions

Orders✓ Expect medium-to-long-term growth in the lithiumion battery market (EV market), but demand is fallingas market approaches a temporary plateau✓ Orders for coating and laminating machinery weresluggish owing to changes in design plans for EV-use
lithium-ion batteries, but segment orders rose
overall on orders for installation work in North
America✓ Target order acquisition in high value-added areas

5,000015,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
FY2021

FY2022

FY2023

1Q0Net Sales✓ We are working through order projects at around thesame pace as last year, mainly in energy-related
areas

FY202412

Order Backlog, Net Sales, and Orders in the Industrial Machinery
Segment
Order backlog, net sales, and orders in the Industrial Machinery
Segment

Highlights in the Industrial Machinery Segment(Unit: ¥million)
Net salesOrders

Order backlog (RHS)

5,000

18,0004,500

Marketconditions✓ Expect demand for industrial materials applications,particularly film making systems for semiconductormaterials applications such as MLCC

Orders✓ Orders coming in from clients in regions such as
Japan and Southeast Asia, but volume is sluggish

Net Sales✓ Net sales down YoY as film making systems forelectronic materials applications become the mainfocus

15,000

4,000
3,500

12,000

3,000
2,500

9,000

2,000
6,000

1,500
1,000

3,000

500
00
1Q

2Q

3Q

FY2021

4Q

1Q

2Q

3Q

FY20224Q

1Q

2Q

3Q

FY2023

4Q

1Q

FY202413

FY2024 Outlook

Our View on Business Conditions in Main Business Areas
Overall Conditions✓ Aim to strengthen orders in new demand areas, especially to make sure no opportunities are overlooked, while monitoring clients’ capex trends formedium- and long-term growth✓ Despite an improvement in the trend toward longer delivery times, such as for electrification products, as delivery times for some components continue togrow, we target further reduction in delivery times via strict process control to reduce adjustments and rework between processes✓ Greater operational efficiency via the introduction of new systems✓ Aim to develop new markets by cooperation initiatives with academia and sharing of cutting-edge research insights

Coating and Laminating Segment✓ Despite an approaching temporary demand plateau for lithium-ion batteries, we expect continued growth in the medium- and long-term. In particular, we haveestablished a North American base to respond to market demand in the region. We are continuing to strengthen turnkey contract and after-sales maintenance services.
✓ We have strong technical expertise for lithium-ion battery-use anode coating machinery that is well regarded by leading global battery manufacturers, so we aim to
make further progress on shortening design periods by sharing and standardizing components and on increasing production capacity via development of business
partners

Industrial Machinery Segment✓ Earnings growth is being driven by film making systems for semiconductor materials applications, such as MLCC (multi-layer ceramic capacitors) andpolyimide films✓ Policy is focused on maintaining and expanding our share of the MLCC market, where market growth is expected to continue

15FY2024 Earnings Forecasts(Unit: ¥million)

FY2023

FY2024 Forecastab

YoY
Change b-a

YoY % (b-a)/aNet Sales

46,94644,000-2,946-6.3%

Operating Income

3,236

2,900-336-10.4%

Operating Income Margin

6.9％

6.6%

-0.3pts-

Ordinary Income

3,394

3,000-394-11.6％

Ordinary Income Margin

7.2%

6.8%-0.4pts-Net Income

2,438

2,100-338-13.9%Net Income Margin

5.2%

4.8%

-0.4pts

-ROE

6.5%

5.5%-1.0pts

Dividends Per Share

88円

90円

+2円

16FY2024 R&D Expenditure, Capex, and Depreciation Expenses
for growth investment
R&D expenditure

Capex and depreciation expenditure (consolidated)(Unit: ¥million)(Unit: ¥million)
TotalCapex

Industrial Machinery Segment

Depreciation expenditure

1,500

Coating and Laminating Machinery Segment
500
1,000

400
145

300
144

150

118

1,175
500

200
100

171

184

240

250

0551

624

FY2021

FY2022
Actual

580

676

754

850
7000
FY2021

FY2022
ActualFY2023

FY2024
Forecast

FY2023

FY2024
Forecast17

Appendix

By Application ① Net Sales (quarterly)(Unit: ¥million)
14,00012,00010,000
8,000
6,000
4,000
2,00001Q FY2022

2Q FY2022

Display-related

3Q FY2022

4Q FY2022

Electoronic materials-related

1Q FY2023

2Q FY2023

Household product-related

3Q FY2023

4Q FY2023

Energy-related

1Q FY2024
Others19

By Application ② Orders (quarterly)(Unit: ¥million)
30,00025,00020,00015,00010,0005,00001Q FY2022

2Q FY2022

Display-related

3Q FY2022

4Q FY2022

Electoronic materials-related

1Q FY2023

2Q FY2023

Household product-related

3Q FY2023

4Q FY2023

Energy-related

1Q FY2024
Others20By Application ③ Order Backlog (quarterly)(Unit: ¥million)
120,000
100,000
80,00060,00040,00020,0000
1Q FY2022

2Q FY2022

Display-related

3Q FY2022

4Q FY2022

Electoronic materials-related

1Q FY2023

2Q FY2023

Household product-related

3Q FY2023

4Q FY2023

Energy-related

1Q FY2024
Others21

Disclaimer

This document provides information intended solely to help readers’ understanding of HIRANO TECSEED CO., LTD.
Thus, we have no intention to solicit or encourage investment for securities or financial products mentioned in this document. Also, readers are advised that thisdocument is not a disclosure document or statement of financial performance as required by Japan’s Financial Instruments and Exchange Act, Act on Investment Trusts
and Investment Corporations, related cabinet orders, cabinet office ordinances or rules, the rules governing companies listed on the Tokyo Stock Exchange, or any
other applicable rules.
This document contains forward-looking statements, including forecasts of financial position, results of operations, and business-related matters, as well as statementsrelated to the plans and goals of the management of HIRANO TECSEED CO., LTD. There are a number of known and unknown risks and uncertainties that can cause its
actual results or performance to differ materially from any explicit or implicit forecasts contained herein. These forward-looking statements also rest on a number ofassumptions with regard to our present and future management strategies, as well as the political and economical environments in which we will conduct its futurebusiness operations.
Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy, certainty,validity or fairness of this information and we are not responsible for any error or inaccuracy in the information or data contained herein.
The content of this document can be modified or withdrawn without prior notice.

9 August, 2024
Contact:
General Affairs Division HIRANO TECSEED Co., Ltd .
https://www.hirano-tec.co.jp/en/contact/
Tel: +81-745-57-0681

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