Construction Revolution

First Half of FY2023 (September 2022 to February 2023)

GIKEN LTD.
Financial Results
Overview
April 7, 2023
<stock code: 6289>

Forward-Looking Statements Disclaimer

Except for historical facts, certain information provided in this document, such as
our and our group’s current policies and management strategies, contains“forward-looking statements” based on currently available information, including
statements about the future. These statements, which are based on estimates,
projections, or risky assumptions, involve uncertainties that could cause results
to differ materially from those anticipated in the statements.

Such risks and uncertainties include general domestic and international
economic conditions, such as national economic conditions, industrial andmarket conditions, interest rates, commodity prices, and exchange rate
fluctuations.
We are not obligated to update or revise “forward-looking statements” provided inthis document, even in the event of new information or future developments.

1

Financial Results Overview
for the First Half of FY2023

2

3-Year Trend of First Half Financial Results
Unit: Millions of JPY

FY2021
FH Actual

FY2022FH Actual

FY2023YoY

FH Actual

YoYNet Sales

13,293

14,218+7.0%

14,933+5.0%

Operating Profit

2,169

2,786+28.4%

2,146-23.0%

Ordinary Profit

2,220

2,864+29.0%

2,194-23.4%

Profit*

1,446

1,893

+30.9%

1,374-27.4%

52.85 yen

68.91 yen

+30.4%

49.98 yen

-27.5%

Profit Per Share(JPY)*Profit attributable to owners of GIKEN LTD.
3

Sales and Operating Profit:Year-on-Year Comparison ofFirst Half Results
Original Forecast
FY2022

ActualFY2023
Unit: Millions of JPY

14,933
14,218Up 5.0%[Factors in sales changes]• General-purpose machinery and“Flywheel Pile Auger” capable of digging
super hard ground remained strong brisksales.
• Projects employing our solutions,
including disaster recovery,
reconstruction, prevention, and disastermitigation, increased and showed steadyprogress.

2,786

Down 23.0%

2,146
Net sales[Factors in operating profit changes]• The sales of high gross margin products
and parts decreased.
• Raw material prices soared.

Operating profit
4

Operating Profit by Segment: Year-on-Year Comparison ofFirst Half Results
Press-in Work Segment

Construction Machinery Segment
Unit: Millions of JPY
16,000

Unit: Millions of JPY
18.0%
16.4%

8,000

31.0%
30.0%

16.0%

14.6%
14,000
24.4%

25.0%

14.0%

6,000

12,000Net Sales 10,464

Net Sales 5,063

Net Sales 10,583
20.0%

10,0003,243

Net Sales 4,270

2,582
4,000

8,000

831

8.0%

6.0%

10.0%

7,221

2,000

8,001

10.0%

624

15.0%

6,000
4,000

12.0%

4,231

3,646

4.0%

5.0%

2,000

2.0%

00.0%

FY2022
Operating Expense

FY2023Operating profit

Operating Profit Margin[Factors in profit margin changes]• The sales of high gross margin products and parts
decreased.
• Raw material prices soared.

00.0%

FY2022

FY2023Operating Expense

Operating profit

Operating Profit Margin[Factors in profit margin changes]• High gross margin projects increased.
* The operating profit of each segment includes
that of transactions between the segments.

5

Full-Year Forecast for FY2023

6

Full-Year Forecast
Unit: Millions of JPY

FY2022
ActualFY2023
OriginalForecast

FY2023
YoY

Revised
Forecast

YoY

Net Sales

30,37832,000+5.3%

29,000-4.5%

Operating Profit

4,613

5,000+8.4%

3,200-30.6%Ordinary Profit

4,832

5,050+4.5%

3,250-32.7%

Profit*3,234

3,500+8.2%

2,000-38.2%

117.65 yen

127.26 yen+8.2%

72.72 yen-38.2%

Profit Per Share(JPY)*Profit attributable to owners of GIKEN LTD.
7

Sales and Operating Profit: Comparison between Original
Forecasts and Revised Forecasts
Original
OriginalForecast
Forecast

Revised
Forecast
ActualUnit: Millions of JPY

32,00029,000

Down 9.4%[Factors in revision of sales]• Orders from overseas markets, including
Oceania and North and South America,
fell below expectations.
• The sales of products and parts
decreased because of shrinking projectscale caused by soaring domestic steel
prices.
[Factors in revision of operating profit]

5,000
Down 36.0%

3,200
Net sales

Operating profit• The sales of the highly-profitable
construction machinery segment
decreased.
• Sales and general administration costs
increased partially because we raised thebasic pay of all our employees as part ofour efforts to increase investment in“human capital”.

8Operating Profit by Segment: Comparison between Original
Forecasts and Revised Forecasts
Press-in Work SegmentConstruction Machinery Segment
Unit: Millions of JPY

30,000Net Sales 24,498

10.0%

9.3%

27.1%
25,000

Unit: Millions of JPY

30.0% 16,000

24.4%

9.0%

14,00025.0%

8.0%

20,000

6,648

12,000Net Sales 21,244

6.8%
7.0%

20.0%

5,191
15,00010,000Net Sales 8,561
15.0%

8,000

Net Sales 8,871

604793

5.0%
4.0%

6,000
10,000

6.0%

10.0%

17,8493.0%

16,053

5,000

4,000

8,266

7,767

2.0%

5.0%

2,000
00.0%

Original Forecast
Operating Expense

1.0%

00.0%

Revised Forecast

Original Forecast

Revised Forecast

Operating profit

Operating Expense

Operating profit

Operating Profit Margin[Factors in profit margin changes]• The sales of high gross margin products and parts
decreased.
• The burden of sales and general administration andother fixed costs increased due to the sales decrease.

Operating Profit Margin[Factors in profit margin changes]• High gross margin projects decreased.
* The operating profit of each segment includes
that of transactions between the segments. 9

Progress of Overseas Projects10

Progress of Overseas Projects
Regions where we are steadily
forming a market

Regions where we are facing
difficulty in forming a market■ Europe✓ In the Netherlands, we are steadily
forming a market through our project ofrepairing the banks of the World
Heritage canal and other projects.
✓ We are confident in winning contracts inGermany and the U.K.
■ Asia✓ The press-in work markets in Singapore,
Thailand, and Taiwan are expanding.

■ North and South America andOceania✓ We are still struggling to form a press-inwork market, compared to Europe andAsia. We will analyze our issues andachievements and rebuild our strategy.

We will focus on establishing a steadily growing
market centered on Europe and Asia.
11Progress of Overseas Projects
Our pilot work for the project of repairing the banks of theWorld Heritage canal in the Netherlands made progress.
It started in November and introduced our “GRB® System” in January, receiving high praise from the client.

Performing work while saving
space and avoiding cutting of trees.

We have moved closer to “standardizing our solutions”. We also havemade steady progress in preparing for expanding business locally. 12

Construction Revolution

Implant method change the Worldwide Construction