Construction Revolution

Third Quarter of FY2023 (September 2022 to May 2023)

GIKEN LTD.
Financial Results
Overview
July 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 theThird Quarter of FY2023

2

3-Year Trend of the Third Quarter Financial Results
Unit: Millions of JPY

FY2021
3Q ActualFY2022
3Q Actual

FY2023YoY

3Q ActualYoY

Net Sales

19,611

20,768+5.9%

21,196+2.1%

Operating Profit

2,988

3,174+6.2%

2,176-31.4%

Ordinary Profit

3,108

3,315

+6.7%

2,253

-32.0%

Profit*2

2,084

2,200+5.5%

223-89.9%

Profit Per Share(JPY)

76.15

80.05

+5.1%

8.11

-89.9%*1*1 An extraordinary losses of 1,367 million yen for loss on liquidation of subsidiaries and associates wasrecorded for the third quarter of the fiscal year ending August 31, 2023.
*2 Profit attributable to owners of GIKEN LTD.

3

Sales and Operating Profit: Year-on-Year Comparison of Third
Quarter Results
2021.82022.820,7682023.8

Unit: Millions of JPY

21,196

19,611

2,988

FY2021Net Sales[Factors in sales changes]• Growth of replacement of general purpose machines has been steadilystrong.
•

Sales of “Flywheel-Type Pile Auger” which
enhances excavating capability and work
efficiency of an auger when pressing-in steel
sheet piles into hard ground remained strong.

•The new “Silent PilerⓇ F112” model with aflywheel-type pile auger as standard
equipment was introduced to the market.

[Factors in operating profit changes]• Amid soaring steel prices, material costs
represent a larger proportion of public works
expenditures, and the resulting downward
2,176
trend in construction volume has affectedsales of products and parts used inDown 31.4% permanent structures.

3,174

FY2022Up 2.1%

FY2023Operating Profit•

Selling, general and administrative expenses,
including experimentation and researchexpenses, increased.
4By Segment: Year-on-Year Comparison of Third Quarter Results
Construction Machinery Segment

Press-in Work SegmentUnit: Millions of JPY
16,00014,00015,245
14,513

14,426

Internal Sales 655726

Unit: Millions of JPY
8,000

6,784

116

7,000

6,000
12,000

2,000

7,185

597

6,000

1,800

235

5,896

1,600

Internal Sales 142
1,400

10,000

5,000
1,200

8,000
6,000
4,000
2,000

4,000

3,592
(24.8%)
External
Customer
Sales

13,8583,917(27.2%)

3,317(21.8%)

14,648862(14.6%)
2,000

1,000

External
Customer
Sales

946(13.2%)

800

831(12.3%)

0FY2022

External Customer Sales

FY2023
Internal Sales

Operating Profit

600
400

6,548

7,069

5,753

0FY2021

1,000

3,000

2,000

13,6994,00002000

FY2021

FY2022External Customer Sales

FY2023
Internal Sales

Operating Profit() is Operating Profit Margin[Factors in operating profit changes]• The sales of high gross margin products and parts
decreased.
• Selling, general and administrative expenses, including
experimentation and research expenses, increased.

() is Operating Profit Margin[Factors in operating profit changes]• High gross margin projects decreased.

5

Domestic and Overseas Sales Trend: Year-on-Year Comparisonof Third Quarter Results
Unit: Millions of JPY

30,00018.9%

17.2%

25,00020,000

18.0%

14.9%

20,768

19,611

3,934

21,196
3,151

16.0%

14.0%

12.0%

3,368
10.0%

15,0008.0%
10,00016,834

16,24318,044

6.0%

4.0%
5,000
2.0%

00.0%

FY2021

FY2022
Domestic Sales

Overseas Sales

FY2023
Overseas Ratio
6

Full-Year Forecast for FY2023

7

Full-Year Forecast
Unit: Millions of JPY

FY2021

FY2022

FY2023

Forecast
ActualActual(Announced onMay 19)

YoY

Net Sales

27,61830,37828,400-6.5%

Operating Profit

3,997

4,613

3,200-30.6%

Ordinary Profit

4,161

4,8323,250-32.7%

Profit*3,073

3,234670-79.3%

Profit Per Share(JPY)112.22117.6524.36-79.3%*Profit attributable to owners of GIKEN LTD.
8Forecast by Segment
Construction Machinery Segment
Unit: Millions of JPY

21,694
Internal Sales 842

20,000Press-in Work Segment
12,00010,00021,244
844

9,000

9,656

Unit: Millions of JPY
1,400

Internal Sales 129

8,271

10,000

8,000
8,000

15,000

1,200

271

7,000
1,000

6,000
6,000

10,000

5,000

0

6,068
(28.0%)

ExternalCustomer
Sales

20,851
FY2022 Actual
External Customer Sales
Operating Profit

5,191(24.4%)

5,000948(9.8%)800

4,000600604(7.3%)

4,000

3,000
2,000

20,4002,000
1,0000

FY2023 Forecast
Internal Sales() is Operating Profit Margin[Factors in operating profit changes]• The sales of high gross margin products and parts
decreased.
• Selling, general and administrative expenses, including
experimentation and research expenses, increased.

0

ExternalCustomer
Sales

8,000

9,526
FY2022 Actual
External Customer Sales
Operating Profit

4002000

FY2023 Forecast
Internal Sales() is Operating Profit Margin[Factors in operating profit changes]• High gross margin projects decreased.

9

Progress of Overseas Projects

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

Regions where we aredeveloping a market■ Europe✓In the Netherlands, we are steadily forming amarket through our project of repairing thebanks of the World Heritage canal and otherprojects.
✓We are receiving more inquiries fromGermany and other neighboring countries.

■ North and South America and Oceania✓We are still struggling to form a press-in
work market, compared to Europe and Asia.
We will analyze our issues andachievements and rebuild our strategy.

■ Asia✓The press-in work markets in Singapore andThailand are expanding.

[Action in 3Q]✓In Oceania, we dissolved the joint venture
relationship with J Steel Group Pty Limited,a consolidated subsidiary.

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 the World Heritage
canal in the Netherlands has been completed.
The city of Amsterdam, the project owner, gave good feedback. Discussion started for the commercialization phase.
Our work was recognized by MLIT* under the Action Plan for the Overseas
Development of Infrastructure System as a major project by a Japanese company
targeting orders from overseas. *Ministry of Land, Infrastructure, Transport and Tourism
The project has received an award in the Pioneering Activity Category of the 6thJapan Construction International Award from MLIT.

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

12

Progress of Overseas Projects
GIKEN, along with Mitsui & Co., will formulate a Joint Planto develop business in Brazil with JICA support (Announcedon June 28)
Joint Plan with partners with strong networks and know-how in global bushiness.

Press-in technologies that
address social issues

Familiarity with global businessand the local situation

Business development aimed at addressing issues in Brazil

Co-creation of Value

Networking with the government
and expertise

Aim to jointly develop a sustainable market and create businessstructures based in the local market.
(News release: https://www.giken.com/en/release/28_jun_2023/)

13Construction Revolution

Implant method change the Worldwide Construction