Results of Operations
for the Fiscal Year Ended March 31, 2021 (Fiscal 2021)

May 20, 2021
DAIKEN CORPORATION(Security Code: 7905)
1
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Contents
1. Impact of the Spread of COVID-19 Infections and Status of Our Response■ Impact of the Spread of COVID-19 Infections and Status of Our Response ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4
2. Fiscal 2021 Financial Results■ Fiscal 2021 Market Environment・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6■ Fiscal 2021 Financial Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・7■ Fiscal 2021 Business Segment Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 8■ Fiscal 2021 Changes in Operating Profit・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・9■ Fiscal 2021 Market Category Sales ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10■ Fiscal 2021 Business Segment Performance in Three Priority Markets・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・11
3. Fiscal 2022 Forecast■ Fiscal 2022 Market Environment Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・13■ Fiscal 2022 Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 14■ Shareholder Returns and Dividends・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・15■ Fiscal 2022 Forecast of Changes in Operating Profit・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 16■ Fiscal 2022 Business Segment Results Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・17■ Fiscal 2022 Market Category Sales Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 18■ Fiscal 2022 Forecast for Business Segment Performance in Three Priority Markets・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・19■ Medium-Term Management Plan: Differences between Targets and Results Forecasts・・・・・・・・・・・・・・・・・・・・・・・・・・ 20
4. ESG: Contribution to Carbon Neutrality■ Contribution to Carbon Neutrality Through Effective Use of Wood Resources・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・22
5. Financial Information■ Fiscal 2021 Consolidated Balance Sheet・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 24■ Fiscal 2021 Consolidated Statement of Income･・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・25■ Fiscal 2021 Consolidated Statement of Cash Flows・・・・・・・・・・・・・・・・・・・・・・・・・・・・･････・・・・・・・・・・・・・・・・・・・・・・ 26■ Initiatives for Reduction of Cross-Shareholdings・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 27

2
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Impact of the Spread of COVID-19 Infections
and Status of Our Response

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3

Impact of the Spread of COVID-19 Infections and Status of Our Response
Fiscal 2021
1Q
◆ All activities at Daiken involving the COVID-19 crisis are overseen by the New
Coronavirus Response Headquarters, which is supervised by the president of
Daiken.
Corporate ◆ Since April (state of emergency in Japan): Used teleworking to reduce bylevel
80% people working at Daiken business sites. After the end of the state of
emergency, this ratio was about 50% at the Tokyo, Osaka and other businesssites. Operations returned to almost normal at business sites other than in
major metropolitan areas. After the end of the state of emergency,
showrooms reopened but require reservations.
Domestic ◆ Okayama plant, Takahagi plant, Mie plant, Inami plant, other groupproduction
factories - Continuing operations after production adjustments at somebases
locations.

Overseas
production
bases

2Q-4Q
Continued these activities

Continued these activities

Continued these activities◆ Malaysia: Operated two MDF plants with 50% workforce reduction; since
mid-May, operating consistently with about 90% of the workforce.

Normal operations◆ New Zealand: Two MDF plants are operating normally following the April
lockdown.

Normal operations◆ North America: The Canada veneer plant is continuing to operate normally;
the U.S. LVL plant cut output 60% in April-May but then slowly raised output
and has been operating normally since July.

Normal operations◆ China: Suspended operations after the spring festival until Feb. 17; resumed
operations with 70% capacity utilization and returned to normal operations
in June.

Normal operations◆ Indonesia: Suspended operations in May and resumed operation in early
June after the Lebaran holidays.

Normal operations◆ Capital expenditure freeze: Stopped investments based on the outlook forsales growth.
Response to ◆ Thorough review and careful selection of expenses.
risks◆ Increased cash and deposits (liquidity) because of the uncertain outlook formarket conditions.

Fiscal 2022
to May 20

Operations suspended fromFebruary 1 to 6 due to new
COVID-19 infections.

Continued these activities
As of March 31, 2021
Liquidity: ¥22.4 billion
Cash and deposits: ¥17.4 billion
Committed credit line: ¥5.0 billion (unused)
Improved financial soundness indicators as well.

4
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Fiscal 2021
Financial Results

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5

Fiscal 2021 Market Environment
Domestic home market◆ Both housing starts and renovations remained sluggish, reflecting weak demand that continued up to the second quarter in reaction to the
October 2019 consumption tax hike and coupled with the impact of the COVID-19 pandemic.
Fiscal 2021 (April 2020 - March 2021) housing starts in Japan(Unit: 10,000)
Housing starts (total)
Owner-built homes
Rental properties
Built-for sale homes

January to June
April to September
January to December
April to MarchFiscal 2020 Fiscal 2021 YoY change Fiscal 2020 Fiscal 2021 YoY change Fiscal 2020 Fiscal 2021 YoY change Fiscal 2020 Fiscal 2021 YoY change
44.9
39.8
-11.4%
46.7
41.4-11.3%
90.5
81.5
-9.9%
88.4
81.2
-8.1%
14.4
12.4
-13.7%
15.3
13.1-14.2%
28.9
26.1
-9.6%
28.3
26.3
-7.1%
16.7
14.9
-11.0%
17.5
15.7-10.8%
34.2
30.7-10.4%
33.5
30.3
-9.4%
7.2
6.7
-7.4%
7.5
6.4
-14.5%
14.8
13.1-11.4%
14.6
12.9-11.5%

Public and commercial buildings (non-housing sector)◆ Shutout of foreign tourists and people voluntarily refraining from going out had a major negative impact due to commercial building andhotel construction suspensions and postponements.
◆ Overall construction demand is low because the Tokyo Olympics/Paralympics were scheduled for 2020.
Cost of raw materials and logistics◆ Prices of imported plywood and those for energy and plastics and other chemical products rose around the end of the fiscal year although
they had been declining until that point. The impact of logistics expenses, which continued to rise until the previous year, was mostly
alleviated although the cost of sea shipping increased around the end of the year due to the shortage of containers.
The MDF market◆ The recovery of lowered sale prices was delayed, affecting earnings. The decline reflected a fall in demand for raw materials for furnitureand building materials due to the impact of the COVID-19 pandemic, as well as worsening market conditions, mainly in Asia, mainly
attributable to the U.S.-China trade friction that has continued from the previous year.
Recent U.S. home market◆ In the 1Q, a big negative impact of the drop in demand caused by construction suspensions due to COVID-19. In the 2Q and afterward,
housing starts recovered rapidly.
The market remained strong after the 2Q, primarily aided by brisk DIY demand from consumers staying at home due to the pandemic.
Fiscal 2021 (April 2020 - March 2021) housing starts in the United States.
Fiscal 2020 Annualized/10,000
Fiscal 2021 Annualized/10,000
YoY change

Apr
128.1
93.4
-27.1%

May
126.5
101.1
-20.1%

Jun
124.1
122.0
-1.7%

Jul
121.5
149.2
+22.8%

Aug
138.6
138.8
+0.1%

Sep
126.6
145.9
+15.2%

Oct
132.3
152.8
+15.5%

Nov
137.5
154.7
+12.5%

Dec
162.6
168.0
+3.3%

Jan
162.4
158.4
-2.5%

Feb
156.4
145.7
-6.8%

Mar
127.6
173.3
+35.8%

6
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Fiscal 2021 Financial Results
Net sales
Net sales decreased 1.6% year on year due to a decline in sales of products in existing businesses, despite the impact of the consolidationof four subsidiaries in the 2Q of the previous year and increased sales of LVL in the United States in the 2Q and subsequent quarters in thefiscal year under review. (Net sales decreased 4.3% year on year, excluding the impact of the consolidation of the four subsidiaries in theprevious year)
Operating profit
Operating profit increased 4.7% year on year, reflecting efforts made to increase sales in the United States, streamline operations andreduce costs and SG&A expenses, which more than offset the impact of a decline in profits due to reduced sales of products in existing
businesses.
Comparison with the forecast published in the 3Q
Sales and earnings increased from the full-year forecast included in the announcement of the results of operations for the 3Q of the fiscal
year under review.
Results from the North American business in the global market and results from the renovation of condominiums in the Tokyo
metropolitan area in the domestic market were better than expected.

202,481
8,384

199,210
8,779-3,270
+394

-1.6%
+4.7%

Fiscal 2021
(Forecast on
Feb. 10)
197,000
8,600

Operating profit ratio

4.1%

4.4%

+0.3pt

-

4.4%

±0pt

Ordinary profit
Profit attributable toowners of parent
Earning per share (yen)

9,108

9,935

+826

+9.1%

9,500

+435

5,447

5,620

+172

+3.2%

5,500

+120

209.32215.83

+6.51

+3.1%

211.21+4.62

Dividend per share (yen)

70

70

±0

-

70

±0

Dividend payout ratio

33.4%

32.4%

-1.0pt-36.4%-4.0pt

ROE

9.5%

9.1%

-0.4pt-8.5%+0.6pt(Unit: million yen)
Net sales
Operating profit

Fiscal 2020
(Result)

YoY change

Fiscal 2021
(Result)

Amount%Vs. results+2,210+179

7
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Fiscal 2021 Business Segment Results
Industrial Materials Business
Sales and earnings increased due to an increase in sales of LVL in the United States in the 2Q and subsequent quarters in the fiscal year
under review, coupled with the impact of the consolidation of the North American business in the 2Q of the previous fiscal year, offsetting
the continued decline of sales of products in existing businesses, such as MDF and tatami.
Building Materials Business
Sales and earnings decreased, reflecting weak demand that continued up to the 2Q of the fiscal year under review in reaction to the
October 2019 consumption tax hike and the significant impact of a decline in sales for new homes and renovations due to the COVID-19
pandemic, which more than offset an increase in sales for public and commercial buildings.
Engineering Business
Sales and earnings decreased due to a fall in demand for interior finishing work for offices and other properties, despite the impact of theconsolidation in the 2Q of the previous year and an increase in sales and an improvement in profitability in condominium renovations.
Fiscal 2020 (Result)(Unit: million yen)
Net sales

Fiscal 2021 (Result)OperatingprofitNet sales

OperatingprofitYoY change
Amount%YoY change
Amount%Industrial Materials
Business

76,5892,503

80,692+4,103

+5.4%

3,732

+1,228+49.1%

Building Materials
Business

94,938

4,955

88,697-6,241

-6.6%

4,076

-878

-17.7%Engineering Business

21,713613

20,542-1,170

-5.4%

508

-104

-17.1%

Others

9,240

312

9,277

+36

+0.4%

461

+149

+47.8%

202,481

8,384

199,210-3,270

-1.6%

8,779

+394

+4.7%

Total

8
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Fiscal 2021 Changes in Operating Profit(1) Higher costs: Increase in the cost of raw materials around the end of the fiscal year, offsetting the limited impact of the declining trend that
had continued to that point(2) Higher expense of logistics: Increase in the cost of sea shipping around the end of the fiscal year under review, offsetting the peaking oflogistics expenses that had been increasing during the previous fiscal year(3) Streamlining/cost reduction: Reduction of fixed manufacturing costs and a reexamination of all categories of items purchased, coupled witha declining trend in imported plywood prices during the fiscal year under review(4) Higher selling prices to reflect higher costs: A revenue-increasing effect was generated by higher-than-expected sales, reflecting themeasures implemented late in the 1Q of the previous fiscal year in response to a surge in logistics expenses(5) Change in sales/composition: A smaller decline in earnings, reflecting the higher-than-expected sales of housing units in the domestic
market and strong results in the United States, despite the continued impact of a decline in sales of products in existing businesses(6) Other expenses: Continued cost reduction through limited activities during the COVID-19 pandemic, as well as careful selection andthorough inspection of expenses(Unit: million yen)+660
-2,450+2,070

-450

+884

-320

8,779

8,384
YoY change+394
Fiscal 2020
(Result)

Higher costs(1)

Higher expense oflogistics(2)

Streamlining/
cost reduction(3)

Higher selling prices
to reflect higher
costs
(4)

Change in sales/
composition(5)

Other expenses(6)

Fiscal 2021
(Result)

9
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Fiscal 2021 Market Category Sales(Unit: million yen)
Upper: sales
Lower: composition

Fiscal 2020 (Result)

YoY change

Fiscal 2021 (Result)Amount%36,516

46,254+9,738+26.7%

18.0%

23.2%

+5.2pt-26,292

23,709-2,583

-9.8%

13.0%

11.9%

-1.1pt-28,48324,622-3,862-13.6%

14.1%

12.4%

-1.7pt-31,77731,266

-511

-1.6%

15.7%

15.7%

±0pt

-

78,63073,008-5,621

-7.1%

38.8%

36.6%

-2.2pt

-

783

351

-432

-55.2%

0.4%

0.2%-0.2pt-165,965

152,956-13,009

-8.0%

82.0%

76.8%

-5.2pt-202,481

199,210-3,270-1.6%

100.0%

100.00%--Global markets

Public and commercial
buildings

Industrial materials

Home renovation market

Domestic new homemarketOthersDomestic market

Total

10
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Fiscal 2021 Business Segment Performance in Three Priority Markets(Unit: million yen)

Global markets

36,516-86+9,0730+750+9,738Lower sales in China andIndonesia due to COVID-19

Higher sales, reflecting theimpact of the consolidationof the North Americanbusiness in the 2Q of theprevious fiscal year andhigher LVL sales in the
United States where
market recovered in the 2Qof the fiscal year underreview

46,254

Public and commercial
buildings

26,292-853+413

Decline in commercial
building/hotel tatami
orders brought down sales

Higher sales due to increased
sales of doors for elderly andmedical facilities as well assoundproofing products-2,139-4

Lower sales because of
decrease in demand forinterior finishing work at
office and other buildings-2,58323,709Home renovation
market-218-1,106+769

31,777

Sales down as the volume oftatami replacement work
decreased

Lower sales in building
materials for interior
finishing such as flooringmaterials and doors due tothe significant impact of
the COVID-19 pandemic in
1H

Higher sales, reflecting a
steady increase of demandfor condominium
renovations in the Tokyo
metropolitan area due to arecovery of renovation
work demand in the 3Q.

Fiscal 2020 (Result)Industrial Materials
Business

Building Materials
BusinessEngineering Business

+44

-511

31,266

OthersFiscal 2021 (Result)11
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Fiscal 2022
Forecast

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12

Fiscal 2022 Market Environment Forecast
Domestic home market◆ Demand for more comfortable living conditions is growing among consumers because people spend more time at home due to theirvoluntarily refraining from going out and more people are working from home.
The government will continue to implement incentive programs such as Green Jutaku Points. These government policies are expected tounderpin demand for new homes and renovations.
There is concern that the construction of many new housing units will be rescheduled due to a surge in prices for wood products against
the backdrop of tightening supply conditions (the Wood Shock).
Public and commercial buildings (non-housing sector)◆ Demand from commercial buildings and hotels will continue to decline due to the disappearance of in-bound demand and people
voluntarily refraining from going out.
◆ No substantial demand is expected to be created until late in the second half because of the temporary suspension of construction mainlyin the Tokyo metropolitan area during the scheduled period of the Tokyo Olympics/Paralympics.
Cost of raw materials and logistics◆ The cost of wood raw materials such as imported plywood and wood chips will increase due to the Wood Shock. The cost of chemical
products such as adhesives will also increase.
In addition, the cost of sea shipping will increase mainly due to the global shortage of containers.
MDF market◆ The recovery of selling prices will be delayed, offsetting the correction of the oversupply conditions that arose due to a decline in demandfor MDF for furniture and building materials during the COVID-19 pandemic, coupled with the deterioration of market conditions mainly in
Asia caused by the U.S.-China trade friction that has continued until the previous fiscal year.
Selling prices will be raised to reflect the increase of costs for raw materials and sea shipping.
U.S. home market◆ The market will continue to be strong against the backdrop of a relocation to suburban housing units due to more people teleworking, arise in DIY demand and low interest rates, among other factors.
The surge in costs for wood products during the previous fiscal year is expected to continue. In this situation, the increased costs will bereflected in selling prices while ensuring stable procurement.

13
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Fiscal 2022 Forecast
Impact of the adoption of the Accounting Standard for Revenue Recognition
Daiken has decided to apply the Accounting Standard for Revenue Recognition for forecast for the fiscal year ending March 31,
2022. However, due to the minor impact that its application has had, no adjustments have been made to the results for theprevious fiscal year to indicate the change.

(Unit: million yen)

Fiscal 2021
(Result)

Net sales

YoY change

Fiscal 2022
(Forecast)Amount%199,210204,000+4,789+2.4%

Operating profit

8,779

10,000+1,220+13.9%

Operating profit ratio

4.4%

4.9%

+0.5pt-Ordinary profit

9,935

10,400

+464

+4.7%

Profit attributable to ownersof parent

5,620

6,000

+379

+6.8%

Earnings per share (yen)215.83230.37+14.54

-

70

80

+10

(Interim 30, Year-end 40)(Interim 40, Year-end 40)(Interim +10, Year-end ±0)-

Dividend payout ratio

32.4%

34.7%

+2.3pt

-

ROE

9.1%

8.6%

-0.5pt-Dividend per share (yen)14
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Shareholder Returns and Dividends| Basic policies for capital and shareholder distributions|◆ By striving for efficient management that places emphasis on ROE, improving shareholder return, and optimizing the balance between
financial soundness and strategic investment, improve corporate value.
◆ For shareholder distributions, the goal is a dividend payout ratio of at least 30% while maintaining a stable dividend and aiming for the
distribution of earnings linked with results of operations.
◆ Decisions about the repurchase of stock will be made based on the current level of capital, the market environment and other applicableconsiderations.
◆ Shareholders’ equity will be effectively used for the improvement of production, sales and construction systems as well as for new
businesses, global operations and other activities in order to achieve medium- and long-term growth and build a solid foundation forbusiness operations.

| Trends in the Dividend and Payout Ratio |

(Yen)

100
80

Dividend

50

Payout Ratio

42.4

37.0
33.6

33.4
30.4

60
40

30.1

30.3

34.7

30

74.00

74.00

70.00

80.00

70.00

50.00
37.50

37.50

2013

2014

40

32.4

We continued shareholder returns based on
the policy of the dividend payout ratio at 30%
or more

64.00
20

(%)

20
10

0

0
2015

2016

2017

2018

2019

2020

2021
(Forecast)

GP25 1st Stage(FY)

GP25 2nd Stage(Note) The company consolidated shares at a rate of one share per five as of October 1, 2016. The past figures were also consolidated retrospectively for ease of comparison.

15
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Fiscal 2022 Forecast of Changes in Operating Profit(1) Higher costs: Increase of costs for chemical products and wood raw materials against the backdrop of global materials price inflation(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) Higher selling prices to reflect higher costs: Increased costs for raw materials and sea shipping that cannot be absorbed internally will bereflected in selling prices(5) Change in sales/composition: Effects from the recovery of domestic demand and the increase of both sales and earnings in the UnitedStates where strong market conditions continue.
(6) Other expenses: Expenses will increase due to the restart of activities although efforts for a thorough review of expenses will continue(Unit: million yen)-279
+2,500-2,800+2,000-1,2008,779

10,000+1,000+1,221
YoY change
Fiscal 2021
(Result)

Higher costs(1)

Higher expense oflogistics(2)

Streamlining/
cost reduction(3)

Higher selling prices toreflect higher costs(4)

Change in sales/
composition(5)

Other expenses(6)

Fiscal 2022
(Forecast)16
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Fiscal 2022 Business Segment Results Forecast
Industrial Materials Business
Sales are expected to decline 1.6% year on year, reflecting the impact of the sale of a domestic MDF sales subsidiary at the end of theprevious fiscal year, despite an increase in sales chiefly due to higher LVL sales in the United States where strong market conditions
continue and the recovery of the MDF business whose operations were suspended for one month because of lockdowns in the previous
fiscal year. (Sales will increase by 8.5% year on year excluding the impact of the sale of a domestic MDF sales subsidiary*)
Building Materials Business
Sales are projected to increase 4.1% year on year, reflecting growth in the Housing sector and the Public and Commercial sector throughthe recovery of market conditions in the first half of the previous year, and efforts to strengthen proposals for functional building materials
in response to demand for more comfortable living spaces during the COVID-19 pandemic.
Engineering Business
Sales are projected to climb 14.4% year on year, reflecting the recovery of demand for interior finishing work late in the second half,
coupled with the recovery of renovation work and an increase in condominium renovations in the Tokyo metropolitan area.

(Unit: million yen)

Fiscal 2021
(Result)

YoY change

Fiscal 2022
(Forecast)Amount%Industrial Materials Business

80,692

79,400-1,292-1.6% *

Building Materials Business

88,69792,300+3,602+4.1%

Engineering Business

20,542

23,500+2,957

14.4%

Others

9,277

8,800

-477

-5.1%

199,210204,000+4,789

+2.4%

Total

17
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Fiscal 2022 Market Category Sales Forecast(Unit: million yen)
Upper: sales Lower: composition

Fiscal 2021
(Result)

YoY change

Fiscal 2022
(Forecast)Amount%46,25450,200+3,946

+8.5%

23.2%

24.6%

+1.4pt-23,70926,400+2,691+11.3%

11.9%

12.9%

+1.0pt-24,622

18,700-5,922

12.4%

9.2%

-3.2pt-31,26633,200+1,934

+6.2%

15.7%

16.3%

+0.6pt-73,00875,500+2,492

+3.4%

36.6%

37.0%

+0.4pt

-

351

0

-351

-

0.2%

0.0%

-0.2pt-152,956

153,800

+844

+0.6%

76.8%

75.4%

-1.4pt-199,210204,000+4,789+2.4%

100.00%100.00%--Global markets

Public and commercial buildings-24.1% *Industrial materials

Home renovation market

Domestic new home market

OthersDomestic market

Total* + 9.2% excluding the impact of the sale of a domestic MDF sales subsidiary18
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Fiscal 2022 Forecast for Business Segment Performance inThree Priority Markets(Unit: million yen)

Global markets

46,254+562+3,333
Increase of sales of LVL in
the United States and arecovery of the MDF
business from the impactof the month-longsuspension of operations
due to a lockdown in theprevious fiscal year

+1,566
Increase in sales reflecting
higher sales of flooringmaterials for educational
facilities, doors for elderly
and medical facilities andother products.

23,709+3,94650,200+1,276-222

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

Home renovation
market+2,691

26,400+1,934+517+752

Recovery of tatami
replacement work.

Increase in sales ofbuilding materials forinterior finishing in
general, such as flooringmaterials, doors andteleworking-friendly
cabinets, reflecting
recovery of renovation
demandIndustrial Materials
Business

Building Materials
Business

31,266

Fiscal 2021 (Result)+51

Recovery of sales due toincreasing demand for
products for China and arecovery of sales inIndonesia

Public and commercial
buildings

+71

0

+732

-67

Recovery in demand forrenovation work andincrease in condominium
renovations in the Tokyo
metropolitan area

Engineering Business

33,200

OthersFiscal 2022 (Forecast)19
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Differences between the Targets in the Medium-Term Management Plan andthe Results Forecasts
The basic strategies presented in the GP25 2nd Stage (fiscal 2020 - fiscal 2022) medium-term management plan will remain unchanged despite
the impact of changes in the external environment, such as the COVID-19 pandemic.
There will be proactive investment to strengthen proposals regarding market demand during the new normal created by the COVID-19
pandemic and to enhance competitiveness on a medium- to long-term basis, with an eye toward the achievement of the 2025 long-term vision.
Differences between
targets and forecasts(Unit: billion yen)

Net sales: Fiscal 2022 target 225.0 → Forecast 204.0

-21.0

225.0
202.5

199.2

204.0
Global markets
52.0

183.0
168.1

168.8

46.3

19.2

10.2

11.0

12.3

16.6

16.8

19.8

(6.1%)

(23%)

36.5

170.6

(23.2%)(10.5%)

21.2

28.7

28.8

29.0

34.4

35.6

33.5

(24.6%)

Public andcommercial buildings
31.2

26.4

31.8
31.3

35.7

-4.8

50.2

26.3
23.7

28.4

-1.8

33.2

28.5
24.6

18.7

-4.4
Home renovation
market37.6-16.8

Industrial
materials,
35.5

+8.0
75.6

76.8

FY2016 Result

FY2017 Result

BM

75.0

77.5

FY2018 Result

FY2019 Result

GP25 1st Stage

78.6

FY2020 Result

73.0

75.5

Domestic newhome market
67.5

FY2021 Result FY2022 Forecast FY2022 Target

GP25 2nd Stage
Operating profit: Fiscal 2022 target 12.0 → Forecast 10.0

-2.0

Major factors

Impact of the COVID-19
pandemic
Disappearance of in-bound demand
Postponement of the Tokyo
Olympics/Paralympics
M&A involving construction companies
yet to be implemented

Impact of U.S.-China trade
friction
Delayed recovery of selling prices dueto the deterioration of MDF market
conditions

Review of MDF transactions
Sale of a domestic MDF sales
subsidiary
Increase of use of MDF within theGroup

Strengthening of proposals regarding
demand during the new normal created by
the COVID-19 pandemic
Investments strengthening managementfoundations through DX and othermeasures
Investments that facilitate continued
expansion in global markets and enhancecompetitiveness on a medium- to long-term
basis

20
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ESG
Contribution to Carbon Neutrality

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21

Contributing to Carbon Neutrality Through Effective Use of Wood Resources
DAIKEN's priority issues (Materiality):

In pursuit of sustainable use of wood resources

Our business of effectively using wood resources since our establishment contributes to carbon neutrality, by storing and fixing carbon.
We continue to create social and economic value that contributes to solving social issues, and thereby sustainably enhance ourcorporate value.

22
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Financial Information

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23

Fiscal 2021 Consolidated Balance Sheet (Major components)(Unit: million yen)

Fiscal 2019
(Result)

Fiscal 2020
(Result)

Fiscal 2021
(Result)

YoY change
AmountCash and deposits
Notes and accounts
receivable-trade
Inventories

16,865

16,83917,433+594

50,51142,09238,454-3,63821,36327,01029,525+2,515

Other current assets

2,810

1,990

2,333

+343

Total current assets
Property, plant andequipment
Intangible assets
Investments and otherassetsTotal assets

91,55387,93487,748-186

41,321

51,42650,915

-511

6,375

14,83415,002+168

20,831

16,351

18,835+2,484160,158

170,638

172,553+1,91530,573

26,84623,435-3,41130,682

43,87635,508-8,367

37,15336,94036,838-102

98,416

107,662

95,781-11,881

Total shareholders’ equity

53,46057,05960,877+3,818

Total net assets
Total liabilities and net
assets61,741

62,97576,771+13,796

160,158

170,638

172,553+1,915

ROA

4.5%

5.5%

5.8%

+0.3ptShareholders' equity ratio

36.8%

32.7%

39.4%

+6.7ptDebt-equity ratio (multiple)

0.52

0.79

0.52

-0.27

Net debt-equity ratio(multiple)

0.52

0.48

0.27

-0.21

Notes and accounts
payable-trade
Interest-bearing debt
Other current/non-current
liabilities
Total liabilities◆Cash and deposits<Major factors>
Increased liquidity+594* Separate unused credit facility

5,000◆ Inventories<Major factors>
Merchandise/Work in process
Raw materials/Supplies+2,515+594+253+2,262◆ Property, plant and equipment -511
<Major factors>
Acquisition/Construction in progress+2,897
Depreciation-4,767
Exchange rate changes, etc.
+1,359◆ Interest-bearing debt
<Major factors>
Redemption of bonds
Decrease in borrowings-8,367-7,000-1,367◆ Total net assets+13,796<Major factors>
Foreign currency translation adjustment+4,286
Increase in retained earnings+3,928Valuation difference on available-for-salesecurities+2,174Non-controlling interests+1,531

24
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Fiscal 2021 Consolidated Statement of

Income (Information about non-operating profit (expenses) and extraordinary income (losses))(Unit: million yen)

Fiscal 2019
(Result)

Fiscal 2020
(Result)

Fiscal 2021
(Result)

YoY change
AmountNet sales

182,962

202,481

199,210-3,270Gross profit

43,67351,03850,881-156

SG&A expenses

37,94042,653

42,102-550

Operating profit

5,733

8,384

8,779

+394

Non-operating profit(expenses)+1,105+724+1,156+432

Ordinary profit

6,838

9,108

9,935

+826

Extraordinary income(losses)

+463

-237

+1,035+1,272

Profit before income taxes

7,301

8,871

10,970+2,098

Total income taxes

2,703

2,359

3,687

+1,327

Profit

4,597

6,512

7,283

+770

195

1,064

1,662

+598

4,402

5,447

5,620

+172

Profit attributable to noncontrolling interests
Profit attributable toowners of parent
Exchange rate (yen)Fiscal 2019
(Result)

Fiscal 2020
(Result)

Fiscal 2021
(Result)◆ Non-operating profit (expenses) +432
<Major factors>
COVID-19 subsidies+171
Foreign exchange gains+144
Decrease in interest expenses+29
Decrease in interest income-21◆ Extraordinary income (losses) +1,035<Major factors>
Gain on sale of investment securities+991
Gain on sale of non-current assets +390
Provision for loss on litigation-153
Loss on retirement of non-current assets-107
Loss on disaster-65
Loss on sale of shares of subsidiaries -20

YoY change
AmountUSD-

108.29106.02

-2.27

CAD

-

81.57

80.24

-1.33

NZD

75.45

70.39

71.09

+0.70

MYR

27.18

26.10

25.39

-0.71

25
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Fiscal 2021 Consolidated Statement of Cash Flows (Major components)
Fiscal 2019
(Result)(Unit: million yen)

Fiscal 2020
(Result)

Fiscal 2021
(Result)

Operating cash flow

+10,052+16,807+12,245

Investing cash flow

-15,079-17,863-910

Free cash flow

-5,027-1,056+11,344

Financing cash flow

+11,165+1,468-11,369

Cash and cash equivalents
at end of period

16,865

16,83917,433

Capital expenditures

6,586

5,490

3,170

Depreciation

4,134

5,079

5,563

20,000+16,807

15,000+12,245

11,165+10,052

11,34410,000
5,000

1,468

0
-5,000-1,056-901◆ Operating cash flow
+12,245<Major factors>
Profit before income taxes+10,970
Depreciation+5,563
Amortization of goodwill+1,544
Changes in trade receivables/payables-653
Changes in inventories-1,642
Income taxes paid
-3,838◆ Investing cash flow
<Major factors>
Purchase of property, plant andequipment
Sales of investment securities-910-3,230+2,479◆ Financing cash flow
-11,369<Major factors>
Redemption of bonds-7,000Decrease in long- and short-termborrowings-1,811Dividends paid
-1,692-5,027-10,000-11,369-15,000-15,079-20,000-17,863

Fiscal 2019 (Result)Fiscal 2020 (Result)Fiscal 2021 (Result)Operating cash flow
Investing cash flow
Financing cash flow
Free cash flow

26
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Initiatives for Reduction of Cross-Shareholdings
Daiken seeks to achieve balance sheet conditions that satisfy the financial indictors set out in its medium-term management plan by
improving asset efficiency, while at the same time investing proactively for growth on a medium- to long-term basis. As part of these efforts,
it is moving forward with its reduction of cross-shareholdings. In fiscal 2021, it sold shares in seven companies amounting to 2.5 billion yen in
total (including partial sales of its holdings in certain companies). It sold shares worth 4.1 billion yen during the three-year period startingfrom fiscal 2019.
(Unit: billion yen)

Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021

(billion yen)
200
20

Balance sheet
balances

Listed

18.3

15.4

11.3

12.9

Unlisted

0.1

0.1

0.1

0.1

Total
Sale price

18.5

15.6

11.4

13.0

-

0.5

1.1

2.5

160
16
120
12

0.0

0.0

0.0

18.5

0.0

0.0

-0.5

-1.1

-2.5

Listed

2.5

2.4

1.9

1.8

Number ofcompanies
whose stocks
Daiken holds

Unlisted

2.5

2.4

2.4

2.2

Total

5.0

4.8

4.3

4.0

60

Decrease

0.0

-0.2

-0.6

-0.3

50

Increase

0.1

0.0

0.1

0.0

Reduction

0.1

-0.2

-0.5

-0.3

Total assets

140.7

160.1

170.6

172.5

Ratio to total assets

13.1%

9.7%

6.7%

7.6%

57.0

61.7

63.0

76.7

32.2%

25.0%

17.9%

17.0%

Net assets

40%

Reduction

32.2%

Reduction

-2.5

-1.1

11.4

30%

13.0

20%

25.0%
13.1%

0

Reduction

-0.5

15.6

80
8
4
40

Acquisition price

50%
Reduction

9.7%

17.9%

17.0%

6.7%

7.6%

Fiscal 2018
Fiscal 2019
Fiscal 2020
Balance sheet balances
Ratio to total assets

10%0%
Fiscal 2021
Ratio to net assets(Number ofcompanies whose
stocks Daiken holds )Reduction

-2

50
40

48

■■ Total number of companies
whose stocks Daiken holds
Reduction-5

Reduction

-3

43

40

30
20
10
0

Ratio to net assets

Fiscal 2018

Fiscal 2019

Fiscal 2020

Fiscal 2021

27
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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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