Results of Operations for the First Half of the Fiscal
Year Ending March 31, 2022 (Fiscal 2022)

November 18, 2021
DAIKEN CORPORATION(Security code:7905)

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Contents
1. First Half of Fiscal 2022 Financial Results■1H Fiscal 2022 Market Environment・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・■1H Fiscal 2022 Financial Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・■1H Fiscal 2022 Business Segment Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・■1H Fiscal 2022 Changes in Operating Profit・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・■1H Fiscal 2022 Market Category Sales・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・■1H Fiscal 2022 Business Segment Performance in Three Priority Markets・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

4
5
6
7
8
9

2. Fiscal 2022 Full-year Forecast (Revised on Nov. 12)■Fiscal 2022 Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 11■Shareholder Returns and Dividends・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 12■Fiscal 2022 Forecast of Changes in Operating Profit・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 13■Fiscal 2022 Business Segment Results Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 14■Fiscal 2022 Market Category Sales Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 15■Fiscal 2022 Forecast for Business Segment Performance in Three Priority Markets・・・・・・・・・・・・・・・・・・・・・・ 16

３． ESG Information■Formulation of the DAIKEN Global Environmental Vision 2050・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 18■Mitigation of climate change — Initiatives for net zero greenhouse gas emissions ・・・・・・・・・・・・・・・・・・・・・・ 19■Reduction of the load on the natural environment — Initiatives ending the use of lauan wood・・・・・・・・・・・・ 20

４． Financial Information■1H Fiscal 2022 Consolidated Balance Sheet・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 22■1H Fiscal 2022 Consolidated Statement of Income･・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 23■1H Fiscal 2022 Consolidated Statement of Cash Flows・・・・・・・・・・・・・・・・・・・・・・・・・・・・･･･・・・･・・・・・・・・・ 24■Initiatives for Reduction of Cross-Shareholdings・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 25

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First Half of Fiscal 2022
Financial Results

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1H Fiscal 2022 Market Environment
Domestic home market◆ Demand for products for new home and renovation markets remained strong thanks to an increase in consumer demand for more comfortableliving environments as a result of spending more time at home due to recommendations to stay at home and the ubiquitization of telecommuting
in addition to a recovery from the COVID-19 pandemic in the first quarter of the previous fiscal year.
Housing starts in Japan(Unit: 10,000)

2019
YoY change
44.9
-0.2%
14.4
+8.6%
16.7
-11.3%
7.2+5.9%

Housing starts (total)
Owner-built homes
Rental properties
Built-for sale homes

January to June2020
YoY change
39.9-11.2%
12.4-13.7%
14.9-10.8%
6.7
-7.4%

2021
YoY change
41.2
+3.3%
13.4
+7.7%
15.3
+2.6%
6.8
+1.4%

2019
YoY change
46.7
-5.0%
15.3
+4.4%
17.5
-15.7%
7.5+4.0%

April to September
2020
YoY change
41.4-11.3%
13.1-14.2%
15.7-10.8%
6.4-14.5%

2021
YoY change
44.6
+7.6%
14.9
+13.3%
17.0
+8.6%
7.2
+11.8%

Public and commercial buildings (non-housing sector)◆ A decrease in commercial building and hotel construction due to foreign tourists being shut out of the market and the recommendations thatpeople stay at home had a prolonged impact. Construction mainly in the Tokyo metropolitan area was temporarily suspended during the Tokyo
Olympics and Paralympics. Demand for construction is expected to recover in or after the latter half of the second half of the fiscal year underreview.
MDF market◆ Harsh market conditions in which profit was reduced by an increase in the prices of raw materials such as petrochemical products and woodmaterials, energy costs, and sea shipping costs were aggravated despite an increase in inquiries due to growth in demand for products used for
furniture and building materials based on a recovery of the economy, particularly in the U.S., and demand for substitutes for tropical plywood
due to short supply.
U.S. home market◆ Housing starts remained strong. The market prices of wood material products that affect the selling price of LVL, a structural material for
housing, remained high.
(0,000 units)

180
160

165.0
151.7

154.6
124.1

128.1

126.5

100
80

155.4

158.0
138.8

140
120

168.0

93.4
Apr

149.2

155.5

121.5

Jun

Jul

157.8
162.6

145.9

138.6

122.0

152.8

126.6

132.3

Aug

Sep

173.3
156.4

158.4
145.7

137.5

127.6

Fiscal 2020
Fiscal 2021
Fiscal 2022

101.1
May

162.4

Oct

Nov

Dec

Jan

Feb

Mar

4
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1H Fiscal 2022 Financial Results
Net sales

Net sales increased thanks to growth in sales of building materials for the domestic new home and renovation markets,
condominium renovation in the Tokyo metropolitan area, overseas sales of MDF, and sales of LVL for the U.S. home market,
which more than offset a decrease caused by the sale of a domestic MDF sales subsidiary at the end of the previous fiscal
year. (There was an increase of 22.2% when excluding the impact of the sale of the domestic MDF sales subsidiary.)

Operating profit

Operating profit increased due to the effects of sales growth, streamlining and cost reduction in response to an increase in
the cost of raw materials and other goods, and the transfer of a portion of the increased costs not absorbed through selfhelp efforts to selling prices.

Comparison with theforecast published in
the 1Q (Aug. 6)

Both net sales and profit exceeded the revised forecasts as of August 6.
Results from the North American business in the global market and results from the sale of building materials and therenovation of condominiums in the Tokyo metropolitan area in the domestic market were better than expected.

1H Fiscal 2020
(Unit: million yen)(Result)

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

YoY change
AmountYoY change

1H Fiscal 2022
Rate of progress(Forecast on Aug. 6) (vs. forecast on Aug. 6)

Net sales

97,54892,671

Recordhigh

109,002+16,330+17.6%

106,000

102.8%

Operating profit

3,790

2,857

Recordhigh

8,736+5,878+205.7%8,300

105.3%

Operating profit
ratio

3.9%

3.1%

8.0%

+4.9pt-7.8%-

Ordinary profit

4,197

3,371

Recordhigh

9,399+6,027+178.8%8,700

108.0%

Profitattributable toowners of parent

2,087

1,986

Recordhigh

4,935+2,948+148.5%4,600

107.3%

Earning per share
(yen)

80.21

76.29

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1H Fiscal 2022 Business Segment Results
Industrial Materials Sales increased due to growth in overseas sales of MDF, sales of LVL for the U.S. home market, and sales of tatami materials for domestic new
Businesshome and renovation markets, which more than offset a decrease due to the sale of domestic MDF sales subsidiary. Earnings increased as aresult primarily of streamlining and cost reduction in response to an increase in the cost of raw materials and other goods, the transfer of
additional costs to selling prices, and the increase of the composition ratio of high value-added products in the U.S., in addition to the effectsof sales growth. (There was an increase of 43.8% when excluding the impact of the sale of the domestic MDF sales subsidiary.)
Building Materials
Business

Sales increased mainly owing to an increase in sales of flooring, doors, and soundproofing products for new home, the renovation market, andpublic and commercial buildings.
Earnings increased as a result of streamlining and cost reduction in response to an increase in the cost of raw materials and other goods andthe transfer of additional costs to selling prices, in addition to the effects of sales growth.

Engineering
Business

Sales and earnings increased due to strong results in condominium renovation in the Tokyo metropolitan area, coupled with the recovery of
demand for renovation work which has been severely affected by delays and the postponement of construction due to COVID-19 in theprevious fiscal year.

1H Fiscal 2020
(Result)(Unit: million yen)

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

Net sales

OperatingprofitNet sales

OperatingprofitNet sales

YoY change
YoY
AmountchangeOperatingprofitIndustrial Materials
Business

36,3651,129

36,660889

47,684

Building Materials
Business

46,6522,226

42,3091,497

Engineering Business

10,152329

9,415

Others

4,376

104

Total

97,5483,790

YoY change
YoY
Amountchange+11,024+30.1%

5,499+4,610+518.2%

46,602+4,292+10.1%

2,512+1,015+67.8%

253

9,997

+581

+6.2%

391

+138

+54.6%

4,285

217

4,717

+431

+10.1%

331

114+52.6%

92,671

2,857

109,002+16,330+17.6%

8,736+5,878+205.7%

6
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1H Fiscal 2022 Changes in Operating Profit(1) Higher costs:

Increase in the cost of wood raw materials, adhesives, and other petrochemical products andenergy(2) Higher expense of logistics: Increased cost of sea shipping mainly due to the shortage of containers(3) Streamlining/cost reduction: Facilitation of a shift to in-house production, reexamination of all categories of items to bepurchased, etc.
(4) Selling prices:
Higher selling prices mainly of products in the Industrial Materials Business to reflect a steep rise in
the market prices of wood, which continues in the U.S.
(5) Change in sales/composition: The effect of sales growth due to a recovery from the COVID-19 pandemic(6) Other expenses:
Increase in expenses due to resumption of activities in comparison to the previous fiscal year
YoY change(Unit: million yen)

+5,878+1,750-162

8,736+8,1502,857

1H Fiscal
2021 (Result)-4,100Higher
costs
(1)

-280

+520

Higher expenseof logistics(2)

Streamlining/
cost reduction(3)

Selling
prices(4)

Change in sales/
composition
(5)

Other
expenses(6)

1H Fiscal
2022 (Result)

7
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1H Fiscal 2022 Market Category Sales(Unit: million yen)
Upper: sales Lower: composition

1H Fiscal 2020
(Result)

Global markets
Public and commercial
buildings
Industrial materials

Home renovation market

Domestic new home market

OthersDomestic market

Total

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

YoY change
AmountYoY change

16,255

19,59333,539+13,946+71.2%

16.7%

21.1%

30.8%

+9.7pt-11,024

10,897

11,152

+255

+2.3%

11.3%

11.8%

10.2%

-1.6pt-14,174

12,201

9,383-2,818-23.1% *

14.5%

13.2%

8.6%

-4.6pt-16,24914,27017,510+3,241+22.7%

16.7%

15.4%

16.1%

+0.7pt-39,44735,502

36,991+1,489

+4.2%

40.4%

38.3%

33.9%

-4.4pt

-

400

209

428

219

+104.8%

0.4%

0.2%

0.4%

+0.2pt-81,29373,07875,463+2,385

+3.3%

83.3%

78.9%

69.2%

-9.7pt-97,54892,671109,002+16,330+17.6%

100.0%

100.0%

100.0%--* +7.8% excluding the impact of the sale of a domestic MDF sales subsidiary8
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1H Fiscal 2022 Business Segment Performance in Three Priority Markets(Unit: million yen)+344

Global markets+13,002

19,593Higher sales as a resultof the sales growth of
LVL for the U.S. homemarket, the sales
growth of MDF, and theeffect of foreignexchange

0+601+13,946

Higher sales due to arecovery from the
COVID-19 pandemic inorders received inIndonesia

33,539Public and commercial
buildings

YoY change-35
10,897

Home renovation
market+328
14,270

1H Fiscal 2021 (Result)

YoY change

Higher sales due to arecovery in demand
for tatami
replacement work

Industrial Materials
Business

+615

-398

Higher sales primarily
due to the sales growthof doors forkindergartens,
childcare facilities, andmedical facilities andthe sales growth ofsoundproof products
for offices

Lower sales because of
decrease in demand forinterior finishing work at
office and otherbuildings+1,538+72+255

11,152

YoY change+1,428Higher sales owing to
the sales growth ofcabinets andsoundproof products
catering totelecommuters, inaddition to flooringmaterials and doors

Higher sales due to arecovery of renovation
work and strong resultsin condominium
renovation in theTokyo metropolitan
area

Building Materials
BusinessEngineering
Business-53+3,241

17,510

Others1H Fiscal 2022 (Result)

9
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Fiscal 2022 Full-year Forecast(Revised on Nov. 12)

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Fiscal 2022 Forecast (Revised on Nov. 12)
Forecasts for both net sales and profit were revised upward from the August 6 revised forecasts based on the expectation that the market prices of woodmaterial products would be higher than initially assumed due to strong demand for housing in the U.S. despite some concerns such as a steep rise in raw
material prices.
As in the August 6 revised forecasts, net sales, operating profit, ordinary profit, and profit attributable to owners of parent are expected to be record highs.

Fiscal 2022
(Forecast on Nov. 12)

YoY change

Fiscal 2020
(Result)

Fiscal 2021
(Result)

Fiscal 2022
(Forecast on Aug. 6)

Net sales

202,481

199,210210,000

Record highOperating profit

8,384

8,779

13,300Record highOperating profit
ratio

4.1%

4.4%

6.3%

Ordinary profit

9,108

9,935

13,900Record high

5,447

5,620

7,500

Record high209.32215.83287.8670
Interim: 35
Year-end: 35

70
Interim: 30
Year-end: 40

90
Interim: 45
Year-end: 45

Dividend payout
ratio

33.4%

32.4%

31.3%

30.9%

-1.5pt

-

ROE

9.5%

9.1%

10.7%

11.4%

+2.3pt-(Unit: million yen)

Profit attributableto owners of parent
Earning per share(yen)
Dividend per share(yen)[Amount of the revision]

217,000[+7,000]
15,000[+1,700]
6.9%[+0.6pt]
15,900[+2,000]
8,000[+500]
307.0595
Interim: 45
Year-end: 50[Dividend increase of
5 yen]

AmountYoY change+17,789+8.9%+6,220+70.9%+2.5pt-+5,964+60.0%+2,379+42.3%+91.22-+25
Interim: +15
Year-end: +10-

11
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Shareholder Returns and Dividends (Revised Forecasts on Nov. 12)| Basic Capital Policy |◆ To improve its corporate value, Daiken strives for efficient management that emphasizes ROE, the improvement of shareholder return, and the
optimization of its balancing of financial soundness and strategic investment.
◆ Regarding shareholder returns, Daiken seeks to achieve a dividend payout ratio of at least 30%. In addition, it strives to maintain stable dividend
payments while considering the distribution of earnings linked to the results of operations.
◆ Daiken makes decisions about the purchase of treasury shares comprehensively based on its current level of capital, the market environment and otherconsiderations.
◆ Daiken effectively uses shareholders’ equity to establish and reinforce its production, sales and construction systems, and to facilitate new businesses,
global operations, and other activities, with an eye toward the achievement of medium-and long-term growth and the establishment of a solid
foundation that supports this growth.
Dividend increase of
25 yen from theprevious fiscal year

| Changes in the Dividend and Payout Ratio |
(Yen)

100

80

Dividend

60

40

50

Pay out Ratio

42.4

37.0
33.6
30.4

30.1

33.4

30.3

40

34.7
32.4

31.3

30.9
30

Daiken has been providing shareholder
returns based on its shareholder
return policy of maintaining a payout
ratio of at least 30%.

64.00
20

74.00

74.00

70.00

70.00

80.00

95.00

90.00

20

50.00
37.50

37.50

2014

2015

（%）

10

0

0
2016

2017

2018

GP25 1st Stage

2019

2020

2021

2022

(Forecast on
May 14)

2022

2022

(Forecast on
Aug. 6)(Forecast on
Nov. 12)

GP25 2nd Stage(FY)(Note) On October 1, 2016, Daiken conducted a one-for-five reverse stock split. Figures prior to the reverse stock split are calculated retroactively for the ease of comparison.

12
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Fiscal 2022 Forecast of Changes in Operating Profit (Forecast on Nov. 12)
等(1) Higher costs: Increase in the cost of wood raw materials, adhesives, and other petrochemical products and energy(2) Higher expense of logistics: Increased cost of sea shipping mainly due to the shortage of containers(3) Streamlining/cost reduction: Facilitation of a shift to in-house production and reexamination of all categories of items to be purchased(4) Selling prices: Reflects a rise in the market prices of wood-material products in the U.S. Increased costs for raw materials and sea shipping thatcannot be absorbed internally will be reflected in selling prices(5) Change in sales/composition: The effect of sales growth due to a recovery from the COVID-19 pandemic(6) Other expenses: Expenses will increase due to the restart of activities although efforts for a thorough review of expenses will continue

YoY change(Unit: million yen)

+6,220+2,500-279+10,300

15,000-6,100
8,779

Fiscal 2021
(Result)

Highercosts(1)-1,200+1,000Higher expenseof logistics(2)

Streamlining/
cost reduction(3)

Selling
prices(4)

Change in sales/
composition
(5)

Other
expenses(6)

Fiscal 2022
(Forecast)13
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Fiscal 2022 Business Segment Results Forecast (Forecast on Nov. 12)
Industrial Materials
Business

Sales are expected to grow 12.0% year on year due to growth in overseas sales of MDF and sales of LVL in the U.S. home market,
which continues to be strong, despite the impact of the sale of a domestic MDF sales subsidiary at the end of the previous fiscal
year.
(There will be an increase of 23.5% year on year when excluding the impact of the sale of the domestic MDF sales subsidiary.)

Building Materials
Business

Year-on-year sales growth of 6.3% is expected as a result of work to expand business in the new home, renovation, and public andcommercial buildings markets by strengthening proposals for functional building materials that meet consumer demand for more
comfortable living spaces amid the COVID-19 pandemic.

Engineering BusinessYear-on-year sales growth of 14.4% is expected as a result of a recovery in demand for interior work from the latter half of thesecond half of the fiscal year under review in addition to the steady demand for renovation work and the expansion of
condominium renovation that continues to be strong in the Tokyo metropolitan area.

(Unit: million yen)

Fiscal 2020
(Result)

Fiscal 2021
(Result)

Fiscal 2022
(Forecast on Aug. 6)

Fiscal 2022
(Forecast on Nov. 12)[Amount of the revision]YoY change
AmountYoY change

Industrial Materials
Business

76,58980,69285,40090,400[+5,000]+9,707+12.0% *Building Materials
Business

94,93888,69792,30094,300[+2,000]+5,602+6.3%

Engineering Business

21,713

20,542

23,50023,500+2,957+14.4%

Others

9,240

9,277

8,800

8,800

-477

-5.1%

Total

202,481

199,210210,000

217,000[+7,000]+17,789+8.9%

14
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Fiscal 2022 Market Category Sales Forecast (Forecast on Nov. 12)(Unit: million yen)
Upper: sales Lower: composition

Global markets

Public and commercial
buildings
Industrial materials

Home renovation market

Domestic new home market

OthersDomestic market

Total

Fiscal 2020
(Result)

Fiscal 2021
(Result)

Fiscal 2022
(Forecast on Aug. 6)

Fiscal 2022
(Forecast on Nov. 12)
61,200[Amount of the revision]YoY change
AmountYoY change+14,946+32.3%

28.2%+5.0pt-26,40026,400+2,691+11.3%

11.9%

12.6%

12.2%

+0.3pt-28,48324,622

18,70018,700-5,922-24.1%

14.1%

12.4%

8.9%

8.6%

-3.8pt-31,77731,26633,200+2,934

+9.4%

15.7%

15.7%

15.8%

+0.1pt

-78,63073,00875,500+3,492

+4.8%

38.8%

36.6%

36.0%

35.3%

-1.3pt

-

783

351

0

0

-351

-

0.4%

0.2%

0.0%

0.0%

-0.2pt-165,965

152,956

153,800+2,843

+1.9%

82.0%

76.8%

73.2%

-5.0pt-202,481

199,210210,000+17,789+8.9%

100.0%

100.0%

100.0%--

36,516

46,25456,200

18.0%

23.2%

26.8%

26,292

23,70913.0%[+5,000]

34,200[+1,000]
15.8%

76,500[+1,000]

155,800[+2,000]
71.8%

217,000[+7,000]
100.0%* +9.2% excluding the impact of the sale of a domestic MDF sales subsidiary15
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*

Fiscal 2022 Forecast for Business Segment Performance in Three Priority
Markets (Forecast on Nov. 12)
Global markets

46,254+562+14,333

0+51

Higher sales thanks to recovery
in orders received in Indonesia

61,200Higher sales due to sales
growth of LVL in the U.S.
home market, sales growthof MDF, and the effect offoreign exchange

YoY change+71+1,566Higher sales primarily due tothe sales growth of doors forkindergartens, childcare
facilities, and medical
facilities and the sales growthof soundproof products foroffices

23,709+1,276-222

Increase of sales due to therecovery of demand forinterior finishing work foroffices in the second half.

Home renovation
market+2,691

26,400YoY change+517

Fiscal 2021 (Result)

YoY change+14,946

Public and commercial
buildings

31,266(Unit: million yen)

Recovery of tatami
replacement work.

Industrial Materials
Business+1,752Higher sales due to thegrowth of sales of cabinets,
soundproof products, andother products catering totelecommuters, in addition
to flooring materials anddoors

Building Materials
Business

+732

-67

Higher sales due to arecovery in demand forrenovation work andcontinued strong
performance ofcondominium renovation in
the Tokyo metropolitan area

Engineering
Business+2,93434,200

OthersFiscal 2022 (Forecast)16
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ESG Information

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Formulation of the DAIKEN Global Environmental Vision 2050
In October 2021, DAIKEN formulated the DAIKEN Global Environmental Vision 2050 to set out its long-term initiatives, policies andtargets in conjunction with the environmental issues faced by the Group. The Group, as one, will seek to resolve social issues,
including environmental issues, with the goal of contributing to the realization of a sustainable society from three perspectives:
the promotion of resource recycling, the mitigation of climate change and coexistence with nature.

18
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Mitigation of climate change — Initiatives for net zero greenhouse gas emissions —In FY2020, the Group achieved a 35% reduction from the level in FY2013 through the proactive use of woody biomass energy.
The Group will accelerate its efforts to achieve its long-term targets and to achieve net zero greenhouse emissions as set out in the DAIKEN
Global Environmental Vision.
(thousand tons)

140.0

Results of the initiatives that have been undertaken(Changes in domestic greenhouse gas emissions)

127.1

120.0
35%
reduction

100.0

Target set out in the current
Medium-Term Management Plan
26%
Initial reduction target of 26% for FY2030 established by the government (from the level in FY2013)
reduction

94.0

80.0

82.5

New target set out in the next Medium-Term Management Plan
(reduction targets for FY2025 and FY2030)
New reduction target of 46% for FY2030 established by the government(from the level in FY2013)

60.0
40.0

・Consideration of the introduction ofinternal carbon pricing for investment
decisions・Consideration of changing fuels, negativeemissions (carbon capture and storage)
and other initiatives, taking into
consideration a range of factors such as
the development of technology and pricetrendsGoal of the DAIKEN Global Environmental Vision 2050

20.0
Concept for future reductions

0.0

Rough plan for reduction initiatives
・Efforts to improve the productivity andefficiency of production bases,
consideration of the expanded use ofrenewable energy and the purchasing ofgreen electric power, etc.

Net zero greenhouse emissions(Realization of carbon neutrality)

20262026 2027 2028 2029 2031
2014 2014 2015 2016 2017 2018 20192021(FY)2045 2046 2047 2048 2049 2050 2051 2052 2053
2013
2020 2021 2022 2023 2024 2025
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042
2050
2043 2044
2022

MSCI ESG Ratings

Announcement of support for TCFD initiatives

DAIKEN received the A rating in MSCI's ESG Rating scheme, which was newly includedin evaluations in June 2021, in recognition of the initiatives it implemented torespond to climate change.

DAIKEN announced its support for the TCFD (Task Force on Climate-related Financial
Disclosures) in October 2021. It will conduct a scenario analysis in accordance with
the TCFD recommendations and reflect the results of this analysis in its management
strategies going forward, while also seeking to properly disclose information.

19
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Reduction of the load on the natural environment— Initiatives ending the use of lauan wood —Efforts are being made to change base flooring materials from natural lauan timber to planted trees, MDF or domestic timber from theperspectives of price stability and exchange rate fluctuation risk mitigation, as well as the reduction of environmental load. By increasing
efforts to develop technology, DAIKEN aims to end the use of lauan timber.
Cross-sectional image of flooringmaterials made of domestic timber

Building materials business: Changes in use ofbase flooring materials
100%
90%
32.2%

80%

40.3%

zation
i
l
i
t
u
tive
Proac

42.8%
70%
60%
50%

27.7%

4.3%

11.2%

23.8%

27.9%

25.9%

30.4%

Reductionof lauan
23.0%

22.5%

20.4%

33.5%

40.9%

46.6%

Special MDF developedby the Company
Plywood made of domestic timber

18.8%

17.2%

15.4%

20%
10%

Domestic timber
51.1%

timber use20.7%

Surface withpaint finishing
Decorative laminates,
specially processed
decorative sheets, etc.

ber
tic tim
s
e
m
of do

40%
30%

27.1%

Planted trees(imported)
16.8%

Lauan (imported)
14.7%

21.5%

21.7%

20.7%

20.8%

20.0%

19.1%

17.4%

MDF
17.2%

2015

2016

2017

2018

2019

2020

2021

2022 2Q

Goal of the DAIKEN Global Environmental
Vision 2050

Ending theuse of lauantimber by
2050.

0%
MDF

Lauan (imported)

Domestic timber

Planted trees (imported)

2050

(FY)

Others20
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Financial Information

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1H Fiscal 2022 Consolidated Balance Sheet (Major components)
Fiscal 2020
(Result)
16,839Fiscal 2021
(Result)
17,433

1H Fiscal 2022
(Result)
17,708YoY change
Amount+275

42,09238,45440,949+2,49527,01029,52530,014+489

Other current assets

1,990

2,333

3,603

+1,270Total current assets
Property, plant andequipment
Intangible assets
Investments and otherassetsTotal assets

87,93487,74892,276+4,52851,42650,91549,821-1,094

14,83415,002

14,225-777

16,351

18,835

16,829-2,006

170,638

172,553

173,192+638

26,84623,435

24,103+668

43,87635,50831,586-3,922(Unit: million yen)
Cash and deposits
Notes and accounts
receivable - trade
Inventories

Notes and accounts payable- tradeInterest-bearing debt
Other current/non-current
liabilities
Total liabilities

36,94036,83835,953-858

107,662

95,781

92,642-3,139Total shareholders' equity

57,05960,87764,630+3,753

Total net assets
Total liabilities and net
assets62,97576,77180,549+3,778

170,638

172,553

173,192+638

Shareholders' equity ratio

32.7%

39.4%

40.7%

+1.3ptDebt-equity ratio (multiple)
Net debt-equity ratio(multiple)

0.79

0.52

0.45

+0.07

0.48

0.27

0.20

-0.07

◆ Inventories<Major factors>
Merchandise/Work in process
Raw materials/Supplies
Partly-finished work+489
+1,216+705-1,432◆ Property, plant and equipment<Major factors>
Depreciation
Acquisition/Construction in progress
Exchange rate changes, etc.

-1,094◆ Interest-bearing debt
<Major factors>
Decrease in long- and short-term borrowings-3,922-2,488+1,519-125- 3,922◆ Total net assets+3,778<Major factors>
Increase in retained earnings+3,727
Non-controlling interests+1,316
Foreign currency translation adjustment-136
Deferred gains or losses on hedges-257
Valuation difference on available-for-sale securities -852

22
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1H Fiscal 2022 Consolidated Statement of Income(Information about non-operating profit (expenses) and extraordinary income (losses))
1H Fiscal 2020
(Result)

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

Net sales

97,54892,671109,002+16,330

Gross profit

24,28923,16930,523+7,353

SG&A expenses

20,49920,311

21,786+1,475

Operating profit

3,790

2,857

8,736

+5,878Non-operating profit(expenses)

+407

+514

+664

+150

Ordinary profit

4,197

3,371

9,399

+6,027Extraordinary income(losses)

-433

+235

+958

+723

Profit before income taxes

3,764

3,607

10,357+6,749Total income taxes

1,223

1,025

3,103

+2,077

Profit

2,541

2,581

7,253

+4,672

Profit attributable to noncontrolling interests

453

595

2,318

+1,723

Profit attributable toowners of parent

2,087

1,986

4,935

+2,948Exchange rate (yen)1H Fiscal 2020
(Result)

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

USD

107.29106.82109.76

+2.94

CAD

81.25

78.62

88.20

+9.58

NZD

71.20

68.32

77.63

+9.31

MYR

26.12

25.06

26.35

+1.29

(Unit: million yen)

YoY change
Amount◆ Non-operating profit (expenses)<Major factors>
Income on emission rights
Foreign exchange gains
Reduction of sales discounts (change inaccounting processing)
Decrease in dividend income
Decrease in COVID-19 subsidies

+150
+204
+100
+61
-59
-167

◆ Extraordinary income (losses)+958<Major factors>
Gain on sale of investment securities+1,190Loss on retirement of non-current assets-56
Impairment losses-67
Loss on disaster-109

YoY change
Amount23
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1H Fiscal 2022 Consolidated Statement of Cash Flows (Major components)
1H Fiscal 2020
(Result)(Unit: million yen)

1H Fiscal 2021
(Result)

1H Fiscal 2022
(Result)

Operating cash flow

+7,435+3,640+6,085Investing cash flow

-15,612-1,827-2,871

Free cash flow

-8,177+1,813+3,214

Financing cash flow

+5,490+217-6,084

Cash and cash equivalents at end of
period13,95519,011

14,546

Capital expenditures

2,353

1,571

1,277

Depreciation

2,353

2,744

2,800

10,000+7,435

5,490

5,000

+6,085+3,6401,813-1,827-5,000-10,000

3,214

217

0

-2,871-8,177◆ Operating cash flow
<Major factors>
Profit before income taxes
Depreciation
Amortization of goodwill
Gain on sale of investment securities
Changes in trade receivables/payables
Changes in inventories
Income taxes paid
◆ Investing cash flow
<Major factors>
Increase in time deposits exceeding
three months
Purchase of property, plant and equipment
Sales of investment securities◆ Financing cash flow
<Major factors>
Dividends paid
Dividends paid (to non-controllingshareholders)
Repayments of long- and short-termborrowings+6,085+10,357+2,800+842-1,190-2,259-1,167-3,188-2,871-3,178-1,416+2,025-6,084-1,041-977-3,971-6,084-15,000-20,000-15,612
1H Fiscal 2020 (Result)Operating cash flow

1H Fiscal 2021 (Result)Investing cash flow

1H Fiscal 2022 (Result)Financing cash flow

Free cash flow24
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Initiatives for Reduction of Cross-Shareholdings
Changes in cross-shareholdings(Unit: billion yen)
ListedBalance sheet Unlistedbalances
Total

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021■■ Balance sheet balances

1H Fiscal
2022(billion yen)

183

154

112

129

108

1

1

1

1

1

184

155

114

130

-

-4

-11

-24

-20

Acquisition price

0

0

0

0

0

Reduction

0

-4

-11

-24

-20

Listed

25

24

19

18

17

Unlisted

25

24

24

22

23

Total

50

48

43

40

40

Decrease

0

-2

-6

-3

-1

Increase

1

0

1

0

1

Reduction

1

-2

-5

-3

20.0

16.0

0

Reduction-4

40%
Reduction-24

Reduction

-11

32.4%

11.0
20%

17.0%

0.0

7.6%

6.7%

Fiscal 2 018 Fiscal 2 019 Fiscal 2 020 Fiscal 2 021(Number of companies whose stocks Daiken holds )

-2

50

1,731

40

Ratio to total assets

13.1%

9.7%

6.7%

7.6%

6.4%

30

569

617

629

767

805

32.4%

25.2%

18.1%

17.0%

13.7%

0%

1H Fiscal
20 22

Reduction

50

1,725

6.4%

■■ Total number of companies
whose stocks Daiken holds

60

1,706

10%

13.7%

13.1%
9.7%

1,601

30%

-20

11.4

18.1%
4.0

Reduction

13.0

25.2%

8.0

1,407

Ratio to net assets

18.4

15.5
12.0

Total assets

Net assets

50%

110

Sale price

Number ofcompanies
whose stocks
Daiken holds

Ratio to total assets

Ratio to net assets

48

Reduction-5

Reduction

-3

43

40

40

20
10
0
Fiscal 2 018

Fiscal 2 019

Fiscal 2 020

Fiscal 2 021 1H Fiscal 202 2

25
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This presentation is intended to provide information and does not solicit an action of any kind.
This presentation (including forecasts) was created by Daiken based on information that was currently available.
This presentation includes risks and uncertainties and Daiken provides no guarantee that information is reliable orcomplete.
Please use this information based on your own judgment.
Daiken is not responsible for any losses that may result from investment decisions that rely completely on theforecasts, targets and other information in this presentation.

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