YAMAZEN CORPORATION

FY3/24(Q1)

Supplementary
Materials for
Financial Results
Stock Code: 8051

AGENDA

I. FY3/24 (Q1) Financial Highlights
II. Earnings Forecast for FY3/24 (Full Year), Medium-Term Management Plan
III. Shareholder Returns

2

AGENDA

I. FY3/24 (Q1) Financial Highlights
II. Earnings Forecast for FY3/24 (Full Year), Medium-Term Management Plan
III. Shareholder Returns

3FY3/24 (Q1) Consolidated Profit and Loss Results(Million yen)

FY3/23(Q1)

FY3/24(Q1)

Percentagechange YoY

Full Year Plan

Progress Rate

Net sales

126,863

119,957-5.4%

550,000

21.8%

Gross profit

18,07918,485

+2.2%

-

-

14.3%

15.4%

+1.2ppt--

SG&A expenses

14,67816,032

+9.2%

-

-

Operating profit

3,400

2,452

-27.9%

15,00016.4%(Operating profit
margin)

2.7%

2.0%

-0.6ppt

2.7%-

Non-operating
profit/loss

133

196

+47.3%--

Ordinary profit

3,534

2,649

-25.0%

15,00017.7%

Extraordinary
gain/loss

0

-4

－

-

-

2,263

1,569

-30.7%

10,00015.7%(Gross profit margin)

Profit attributable toowners of parent

Net sales decreased -5.4% YoY due to slowing in domestic and overseas capital investment trends, whilegross profit increased 2.2% YoY due to the sales mix effect and other factors, but operating profit
decreased -27.9% YoY due to an increase in depreciation and amortization, etc. associated with theintroduction of SAP ERP as a growth investment as stated in the Medium-Term Management Plan, as wellas an increase in personnel expenses, etc. as an investment in human capital.

4Quarterly Trend in Consolidated Net Sales

FY3/21(Million yen)

FY3/22

FY3/23

FY3/24160,000

119,957

140,000

126,863
120,000

134,954

129,747

132,174

133,572

133,271

121,983

116,569

116,067

114,310
105,640

100,000

98,72580,00060,00040,00020,000
0
Q1

Q2

Q3

Q4

5

Outline of Business Segments
Suppliers

YAMAZEN

Production equipment(domestic and overseas)

Machine Tools
Division H.Q.
(Machine tools, etc.),

Engineering andmaintenance services

Net sales: 76.4 billion yen(accounting for 63.7% of total
sales)
Segment profit
1.8 billion yen
Margin: 2.4%
Overseas sales ratio: 24.2%

Domestic
Machine Tools

17.0 billion yen

Overseas
Machine Tools

12.2 billion yen

Domestic
Industrial
Solutions21.2 billion yen

Domestic T&E

19.6 billion yen

Overseas
Industrial
Solutions +T&E

16 overseas
subsidiaries
and 65overseas
offices

6.1 billion yen

Home products

Consumer goods (domestic)

Building materials

Overseas
manufacturers

About 2,900

companies
Housebuilders

Building Materials
Division H.Q.
(Building materials andequipment)

Makers of kitchen, airconditioning
equipment, and otherhousing equipment

Small and large-sizedhouse-builders,renovation
contractors, etc.
around Japan

FY3/24 1Q

About 400 companies

About 600

Makers offurniture, Home
appliances, etc.

Manufacturers
in JapanIndustrial Solution
Division H.Q.,
Tool & Engineering
Division H.Q.

Exportcompanies

FY3/24 1Q

Machine Tool
Sellers, Machinery
Tool Trading
Companies, etc.
around Japan(Peripheral equipment for
production lines, etc.)

About 900
companies

Users

About 5,000
companies

About 3,000
companies

Makers of factoryequipment, devices,
industrial tools, etc.

Clients

Home Products Division
H.Q.
(Home appliances, interior, exterior andleisure products, etc.)*Our private brand (PB) products
account for about 60% of sales.

DIY home centers, large
retailers of electricalappliances, mass retailers ofhome appliances, online
shops, TV-based mail-orderfirms, etc.

Generalcustomers

Net sales: 42.2 billion yen(accounting for 35.2% of total
sales)
Segment profit
2.0 billion yen
Margin: 4.9%

Building
materials
Home
products

15.8 billion yen

26.3 billion yen

E-commerce/B2C

6

FY3/24 (Q1) Net Sales by Business Segment(Million yen)

FY3/23(Q1)

FY3/24(Q1)

Percentage change
YoY

Machine Tools Division

33,486

29,378-12.3%

Industrial Solution Division

24,555

21,813-11.2%

Tool & Engineering Division

25,402

25,223-0.7%(Total for Production Equipment
Business)

83,44476,416-8.4%

Building Materials Division

15,656

15,847

1.2%

Home Products Division

26,80826,395-1.5%(Total for Consumer Goods Business)

42,46442,242

-0.5%

954

1,299

36.1%

126,863

119,957-5.4%

Other Business
Total

7

Net Sales Composition by Business (YoY Comparison)

Domestic production equipment: 46.9% → 48.3% (+1.4pt)
Overseas production equipment: 18.8% → 15.4% (-3.4pt).................................
Production equipment total: 65.8% → 63.7% (-2.1pt)

Building Materials Business: 12.3% → 13.2% (+0.9pt)
Home Products Business: 21.1% → 22.0% (+0.9pt).................................
Consumer goods total: 33.5% → 35.2% (+1.7pt)

1.1%

FY3/24
1Q

14.3%

17.7%

16.4%

Domestic production
equipment

FY3/23
1Q

15.0%

16.2%

10.2%

5.2%

Overseas production
equipment

15.7%

11.4%

7.5%

22.0%

13.2%

Building
materials

12.3%

Home
products

21.1%

0.8%
Domestic Machine Tools
Overseas Industrial Solutions + T&E

Domestic Industrial Solution
Building Materials

Domestic T&E
Home Products

Overseas Machine Tools
Other

8

Production Equipment Segment Overview (Domestic/Overseas)
Domestic Production Equipment Business: Sales of machine tools, etc. were weak, reflecting the lack of new investment activity in the semiconductor

and automobile industries in the second half of the previous fiscal year, but sales of infrastructure-related equipment, etc. were
firm, reflecting rising capital investment demand in the construction machinery industry. Overall, sales of consumables forindustrial tools, etc. were on par with the same period of the previous year.
Overseas Production Equipment Business: In the North America Regional Headquarters, capital investment was firm in some areas such as EVs,
medical, and aviation, but results were lower YoY, reflecting the order situation in the second half of the previous fiscal year. In
Taiwan Regional Headquarters, the sale to EMS enterprises continued to decline. In the China Regional Headquarters, sales inexport-oriented industries were weak due to the structural changes in international trade. In the ASEAN Regional Headquarters,
Thailand, Indonesia, and India performed well, but the overall results were lower YoY.

Net sales (Millions of yen)

Production equipment

Domestic

FY3/24(Q1)

Percentage change
YoY

Machine Tools Business

19,066

17,099-10.3%

Industrial Solutions + T&E Business Total

40,477

40,843+0.9%

Industrial Solution Business

20,605

21,220+3.0%

Tool & Engineering Business

19,872

19,622

-1.3%

Total

59,54457,943-2.7%

Machine Tools Business

14,41912,278-14.8%

9,480

6,194

-34.7%

Total

23,89918,473-22.7%Net sales

83,44476,416-8.4%

Segment profit

2,836

1,828

-35.6%

Segment profit margin

3.4％

2.4％

-1.0ppt

Overseas Industrial Solutions + T&E Businesses Total

Total

FY3/23(Q1)

9

Production Equipment Segment Quarterly Sales Trend(Domestic/Overseas)(Million yen)Domestic Machine Tools

Domestic Industrial Solutions

Domestice T&E

80,00070,00060,00050,00040,00030,00020,00010,0000

1Q

2Q
3Q
FY3/21

4Q

1Q

2Q
3Q
FY3/22

4Q

1Q

2Q
3Q
FY3/23

4Q

1Q
FY3/24

4Q

1Q(Million yen)Overseas Machine Tools

30,000Overseas Industrial Solutions + T&E

25,00020,00015,00010,000
5,000
0

1Q

2Q

3Q

FY3/21

4Q

1Q

2Q

3Q

FY3/22

4Q

1Q

2Q

3Q

FY3/23

FY3/2410

Consumer Goods Segment Overview (Building Materials/Home
Products)
・Building Materials Business: Amid stagnant demand, sales of bathroom appliances, solar power generation systems, storage batteries, etc.
remained strong due to proposals of high-value-added products in response to consumers' desire to reduce spending due tosoaring utility costs. Proposals for facility renovations that combine environmental products and installation were also
successful in helping SMEs respond to carbon neutrality. In particular, we are aggressively developing proposals for sets ofsolar power generation and storage batteries for self-consumption.
・Home Products Business: Results are down YoY as the demand arising from “staying home” due to refraining from going out and the
expansion of remote working having run its course, soaring prices of raw materials, electricity, and gas, as well as the weakyen, has reduced consumer appetite for durable consumer goods, although sales of electric fans, circulators, airconditioners, and other private-brand products with unique value-added features that meet consumer needs remained
strong.
FY3/23(Q1)(Million yen)
Net sales

Consumer goods

Building Materials
Division

Segment profit
Segment profit margin
Net sales

Home Products
Division

Segment profit
Segment profit margin
Net sales

Total for Consumer
Goods Business

Segment profit
Segment profit margin

15,656275
1.8%
26,8081,344
5.0%
42,4641,619
3.8%

FY3/24(Q1)

15,847230
1.5%
26,3951,830
6.9%
42,2422,060
4.9%

Percentage change
YoY

+1.2%
-16.4%-0.3ppt-1.5%+36.2%+1.9ppt-0.5%+27.2%+1.1ppt11

Consumer Goods Segment Quarterly Sales Trend (Building
Materials/Home Products)(Million yen)

Building materials

20,00018,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000
0

1Q

2Q

3Q

4Q

1Q

2Q

FY3/21

3Q

4Q

1Q

2Q

FY3/22(Million yen)

3Q

4Q

FY3/23

1Q
FY3/24Home products

35,00030,00025,00020,00015,00010,000
5,000
0

1Q

2Q

3Q
FY3/21

4Q

1Q

2Q

3Q
FY3/22

4Q

1Q

2Q

3Q
FY3/23

4Q

1Q
FY3/2412

Factors for Changes in Operating Profit(Million yen)

Increase in gross profit

Increase in SG&A
expenses

406

1,354

Operating profit

Operating profit

3,400

FY3/23
Q1

Production equipment-290

Personnel expenses

Building Materials Business+21

Commission paid

Home Products+518

Depreciation and amortization

Other

+157

Other

YoY: -947

+346

2,452

+454
+544
+10

FY3/24Q1
13

Consolidated Total Assets

Assets(End of Mar. 2023)

Liabilities and Total Assets(End of Jun. 2023)(End of Jun. 2023)

Current liabilities

2,385

-46

Current assets

2,339

1,367
Long-term liabilities

225

503

+26

Noncurrent assets andNet assets

deferred tax assets

1,276

530

Total assets

2,869(End of Mar. 2023)

-74

1,441

+15

209

+39

1,237

-19

2,888

End of Mar. 2023

Item

End of Jun. 2023

10.6%

ROE

1.3%

(Unit: 100 million yen)

44.2%

*ROE, shareholders’ equity ratio and net assets per share are taken from thefinancial results summary.

1,383.65 yen

Shareholders’equity ratio
Net assets per
share

90.3 billion yen

Market cap

98.1 billion yen

14.4 billion yen

Basic operating
cash flow

0.9 billion yen

42.6%

1,426.44 yen*Market capitalization is calculated by multiplying the closing price at the end of the
fiscal year by the number of shares outstanding (excluding treasury shares) on thesame date.
*Basic operating cash flow is calculated by deducting the increase/decrease inworking capital from operating cash flow.
*Amounts less than 100 million yen have been rounded.

14

AGENDA

I. FY3/24 (Q1) Financial Highlights
II. Earnings Forecast for FY3/24 (Full Year), Medium-Term Management Plan
III. Shareholder Returns

15

FY3/24 Disclosed Full-year Plan

(Million yen)

FY3/2377th term results

FY3/2478th term initial plan

PercentagechangeYoY

Net sales

527,263550,000+4.3%

Operating profit

16,56315,000-9.4%

Operating profit
margin3.1%

2.7%-0.4ppt

Ordinary profit

17,28015,000-13.2%

Profit attributable to owners

12,527

10,000-20.2%of parent

Net sales grew. Profit is projected to decline, because depreciation and amortization
will be posted due to the acceleration of investment for growth.
16

FY3/24 Forecasts for the Production Equipment Business(Million yen)

Production Equipment
Business Total

Net sales plan

Full-year

373,000

Percentagechange YoY

Operating profit plan

+5.6%

14,500Percentagechange YoY

Operatingprofit margin

+3.8%

3.9%

Production Equipment Business: 3-year sales trends and full-year forecasts✓

400,000
330,942350,000
300,000
250,000

200,000
150,000

027,369265,059

64,942

19,544
43,621

141,885

100,000
50,000373,000

353,203

60,007needs in production sites, such as“automation and labor saving” and“decarbonization” at an accelerated

65,00062,715

pace.

86,00080,337
FormerIndustrial
Tools &
Equipment
Business(Domestic)

and provide solutions to meet the

31,00033,650✓Approach to new domains ofsemiconductors, logistics, three
product industry (food, medicine, and160,416

97,00088,001cosmetics), etc.

✓

78,214Each division will brush up expertise,

94,00088,498Outside Japan, we will
geographically expand andrestructure target markets, andenhance borderless marketing and

FY3/21

Domestic Machne Tools
Overseas Machine Tools

FY3/22

FY3/23

Domestic Industrial Solutions
Overseas Industrial Solutions +T&E

FY3/24 (plan)

initiatives in growing industries.

Domestic T&E*Ogaki Kiko Co., Ltd., which had been classified as “Other Business,” has been included in “Production Equipment Business” since the 1Q of FY3/23 due to the revision of the performance management
segment of our group. The above performance in FY3/21 is based on the reportable segments before the revision.

17

FY3/24 Forecasts for the Consumer Goods Business(Million yen)

Percentage change

Net sales plan

YoY

Operating profit plan

Percentage change
YoY

Operating profit
marginBuilding Materials Division
Headquarters

Full-year

71,000

+4.4%

2,400

+2.5%

3.4%

Home Products Division
Headquarters

Full-year

105,000

+4.3%

5,800

+16.9％

5.5%

Consumer Goods Business: 3-year sales trends and full-year forecasts

175,000

162,121167,036

168,742

104,866

100,711

176,000■Building Materials Division
Headquarters✓ Continue proposal-based salesof high-value-added products✓

Expand sales of new energy
equipment for decarbonization(solar power generation,
storage batteries, etc.)✓

Strengthen the system for
managing orders andconstruction for facility
renovation projects in nonresidential sector.

150,000
125,000
100,000

103,379

105,000

75,00050,00025,000058,741

62,16968,031

71,000■Home Products Division
Headquarters✓ Develop new products thatmeet consumer needs andpopularize own brands✓

FY3/21

FY3/22

FY3/23

Building materials

Home products

FY3/24 (plan)

Expand the online shop
(YAMAZEN Bizcom)

18

Toward the Realization of the Vision for 2030
Vision for 2030:
Leading worldwide manufacturing and enriched lives

Vision for 2030
2025 - 2027
FY3/25Net sales: 600 billion yen
Operating profit: 21.0 billion yen(Margin: 3.5%)2022 - 2024
Pioneering a new future, with you all

Leading worldwide manufacturing and enriched lives

Strategies for realizing our corporate vision

FY3/22
Net sales: 501.8 billion yen
Operating profit: 17.1 billion yen(Margin: 3.4%)

Digital convergencestrategy

Transformation strategy

Client closenessstrategy

Talent management strategy

19Medium-term Management Plan (CROSSING YAMAZEN 2024)-To establish the company-wide base for improving profitability -Seeking new value created by
CROSSING values.
20Medium-Term Management Plan: Disclosed Plan for
Sales/Profit/Management Indicators(Million yen)

FY3/23

FY3/22th(76 term results)th(77 term results)

FY3/24th(78 term plan)

FY3/25(Final-year plan)

501,872
17,133527,263
16,563550,000
15,000600,000
21,000

3.4%

3.1%

2.7％

3.5%

Ordinary profit

17,093

17,28015,00021,000

Profit12,023

12,527

10,00014,000FY3/23

FY3/24

FY3/25Net sales
Operating profit
Operating profit margin

Indicators(Million yen)

FY3/22th(76 term results)th(77 term results)th(78 term plan)(Final-year plan)

Return on equity (ROE)

10.9%

10.6%

7.9％

10.0%

Basic operating
cash flow
Shareholders’ equity
ratio

12,052

14,427

14,50018,000

39.9%

42.6%

40～45%

40～45%
21

AGENDA

I. FY3/24 (Q1) Financial Highlights
II. Earnings Forecast for FY3/24 (Full Year), Medium-Term Management Plan
III. Shareholder Returns

22Notice of Change in Shareholder Returns Policy
Reason for change:
The shareholder returns policy is specified in terms of the consolidated payout ratio, however, because the current Medium-Term Management
Plan incorporates an increase in depreciation and amortization due to business investments and capital expenditures, and there is a possibility
that shareholder returns will be at an inadequate level based on the progress of the investment plan and a short-term downturn in earnings, wehave therefore revised our shareholder return policy as follows to ensure stable and continuous shareholder returns.

BeforechangeAfter change

The basic policy is to return profits to shareholders in consideration of profit levels, with the aim of establishing a stablefinancial base and improving profitability, and to maintain a stable dividend payout ratio of approximately 30%.
As we place returning profits to our shareholders as an important management issue, and taking into consideration thebalance between investment for sustainable growth and enhancement of corporate value, and financial soundness as
preparation for various risks, our basic policy is to distribute profits in accordance with business performance, and theamount of dividends for each fiscal year shall be the higher of either a consolidated dividend payout ratio of 40% (theindicator for performance-based profit distribution) or a dividend on equity ratio (DOE) of 3.5% (the indicator forstable profit distribution).
Furthermore, the acquisition of treasury shares will be carried out flexibly, depending on timing and financial conditions, inorder to provide additional shareholder returns and improve capital efficiency.

Applicable period: FY3/24 and FY3/25(During the period of the Medium-Term Management Plan “CROSSING YAMAZEN 2024”)(Yen)

Profit per share
１株当たり当期純利益

１株当たり配当金
Dividend per share(%)
Consolidated
連結配当性向（％）
payout ratio
45.00

140.0040.00

120.00

40.00

80.00
60.00

40.00
20.00
0.00

25.51
22.51

32.06

30.61

35.00

1,000.00

3.0

33.03

26.17
30.15 27.95

DOE ratio
純資産配当率（%）

500.003.9 3.8 3.9

(%)

4.0

3.1
2.6

30.00

28.37

Net
assets per share
１株当たり純資産

4.5

4.3

100.0035.05

Dividend per share
１株当たり配当金(Yen)

1,500.00

2.9

3.0

3.0

3.2

1.9

25.00

3.5
3.0
2.5

2.0

24.92

15.00 15.00 20.00 30.00 30.00 32.50 36.00 30.00 20.00 35.00 40.00 45.00

20.00

0.00

1.5

23

Shareholder Returns➢➢

FY3/23: Paid an interim and year-end dividend of 20 yen per share each, for an annual dividend of 40 yen per share.
FY3/24: Plan to pay an interim dividend of 20 yen per share and a year-end dividend of 25 yen per share, for an annual dividendof 45 yen per share.

140.0050
Profit per share

120.0040.0

Consolidated payout ratio

40

35.0
33.0

100.00
80.00

28.0

30.2

28.4

26.2

30

24.9
30.6
128.80

60.00
98.01

40.00

133.74107.79
90.82

85.60

141.0020112.56

80.25

10

20.00
0.00

0
FY3/16

FY3/17

FY3/18

FY3/19FY3/18

FY3/20FY3/19FY3/20FY3/21

FY3/21

FY3/22

FY3/22

FY3/23

Total for the last 3 years
FY3/22-FY3/24
plan

FY3/24Plan

FY3/23

FY3/24
Plan

Interim

13.0

15.0

16.0

10.0

10.0

20.0

20.0

50.0

Year-end

*19.5

*21.0

14.0

10.0

*25.0

20.0

25.0

70.0

Annual

*32.5

*36.0

30.0

20.0

35.0

40.0

45.0

120.0

Payout ratio (%)

30.2

28.0

35.0

24.9

26.2

28.4

40.0

31.0

Dividend paid (Million yen)

3,074

3,405

2,837

1,891

3,115

3,560

4,006

10,681

733

-

-

-

5,999

-

-

5,999

Dividend per share (yen)Amount of treasury share acquired(Million yen)-

*Includes special dividends and commemorative dividends

24Appendix

25

[FAQ] Competitive Advantage of YAMAZEN's Overseas Production Equipment
Business
YAMAZEN's Advantages (1)YAMAZEN's Advantages (2)Extensive global network

Localized engineering capabilities that can
support users' global strategies✓ Wide geographic coverage with 63 offices in 14 countries andregions overseas(Approx. 350 engineers out of total of approx. 1,200 overseas staff)*Figures for the production goods business only as of June 30, 2023.

✓ The scale of our global network, built up over our long history since
1965, is one of the largest among trading companies specializing
in production equipment, and the barrier to entry is high✓ Our localized sales structures and advanced engineering
funtcion* allows us to sell directly to Japanese and local users,
which achieves strong relationships of trust and high gross profit
margins✓ Strong relationships of trust with users enable us to respond tousers’ global investment strategies, which leads to further
business development

Country A

Japaneseaffiliated user

Country B- The YAMAZEN offices in eachcountry can respond when auser relocates or establishes
new production bases in adifferent country

Local users

Local
users

Japaneseaffiliated user

- YAMAZEN's head office andlocal subsidiaries constantly
share information and respondto user needs from all angles

YAMAZEN CORPORATION Head Office

China Regional Headquarters

North America Regional Headquarters

Taiwan Regional Headquarters

YAMAZENASEAN Regional Headquarters

YAMAZEN- The localized sales
structure throughnational staffs andextensiveengineering builds
relationships oftrust

Directly under the jurisdiction of the
Head Office- Centralization of information fromlocal offices and the head office forsecurity trade controls defined in theForeign Exchange and Foreign TradeAct

YAMAZENJapan*Advanced engineering function:
YAMAZEN’s engineers provide total support for manufacturing by offering a one-stop service that includes design, installation, testing, after-sales
service, and maintenance in response to user needs

26

[FAQ] Background to Restructuring of the Industrial Tools & Equipment BusinessIn addition to the trends of development of EVs in the automobile field and automation and labor saving to cope with the decrease of theworkforce, the initiatives for carbon neutrality and digitalization of business changed the flow of information. In particular, commercesites and logistics systems evolved remarkably.
In order to actualize the corporate vision for 2030, YAMAZEN will maximize “expertise,” which is demanded and recognized in the market,
and differentiate our products from competitors’. To do so, we divided Industrial Tools & Equipment Business into “Industrial Solution
Division Headquarters” and “Tools & Engineering Division Headquarters” in April 2023.
We will extract and summarize the characteristics of each product category and issues with them, conduct investment based on growthstrategies for each category, and swiftly implement business strategies while expecting profitability and potential as specializedbusiness.

Industrial Tools &Equipment Business

Divided in Apr. 2023

Industrial Solution Division Headquarters
Major product categories:
Proposing systems that contribute to automation, labor saving,
and carbon neutrality of production sites, including material
handling devices, mechatronic devices, and aids for environmental
improvement, and selling components
Priority fields:
To give comprehensive solutions to the “shortage of workers,”“decarbonization,” “digitalization,” etc. facing small and mediumsized enterprises and local users
To establish a system for giving proposals to meet needs fromindividual users
To focus on the cultivation of new industries and the direct
approach to users
To enhance the development of original products and systems

Tool & Engineering Division Headquarters
Major product categories:
Cutting tools, accessory tools, Measuring instrument, handtools, electric tools, and hydraulic and pneumatic tools
Priority fields:
To acquire a market share by enhancing the technicalmarketing capability in the peripheral field of machine tools
To receive more repeat orders from users in parallel with the
expansion of commercial distribution
To redevelop operation bases (Internet infrastructure andlogistics functions), establish a system for swiftly supplying
information and products to users, and differentiate ourbusiness from competitors’27

[FAQ] Relationship Between Net Sales of Domestic Production Equipment Businessand the Market Environment

Regarding the discrepancies between the market environment and the production status of
SME manufacturers (Machinery, Industrial Solutions and T&E Business)
The supply-demand balance for semiconductors has eased and automobile production is on the road to recovery, but the
impact on SME manufacturers that produce tertiary and quaternary components, who are our main end users, is currently
limited→ In the future, it is expected to recover in tandem with the automobile production situation

Quaternarypartsmanufacturer

Primary parts
manufacturer

Secondary parts
manufacturer

Automobile
manufacturer

Tertiary parts
manufacturerParts
inventory

Secondaryparts
production
possibleParts
inventory

Primary
parts
production
possible

Automobile
assembly
possible↓

Production
Orders are placed with tertiary andquaternary parts suppliers wheninventories at secondary parts
suppliers become tight

There is a time lag betweenchanges in automobile production
volume and the occurrence ofdemand from SME manufacturers,
who are our main end users

Production is possible
through easing ofsemiconductor supplydemand balance* The above chart is an image only.

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[Note on forward-looking information]“This document contains plans and forecasts of the Company. Future plans, forecasts and other forward-looking statements are based on plans and forecasts based on currently available information. Actual results may
differ from these plans and forecasts due to various conditions and factors in the future, and this document is not a commitment or guarantee of their realization. All amounts are rounded down to the nearest million yen
unless otherwise stated.

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