Consolidated Financial Results
for the Fiscal Year Ended March 31, 2022

SAKAI HEAVY INDUSTRIES, LTD.
Stock code: 6358
URL https://www.sakainet.co.jp

May 12, 2022

１．2022年3月期 決算の概要

Summary of Consolidated Financial Results1

１． 2022年3月期 決算の概要

Highlights of Consolidated Business Performance
1. Summary of Consolidated Business Performance for the Fiscal Year Ended
March 31, 2022
(1) Consolidated net sales: ¥26,599 million, up 23.0% YoY••Amid a rapidly changing global situation, global construction machinery demand is on arecovery trend
Overseas sales rose 43.4% YoY to ¥12,306 million (overseas sales ratio 46.3%)(2) Operating profit: ¥1,383 million, up 97.3% YoY(3) Profit: ¥1,427 million (Recorded deferred tax assets of ¥381 million at a
North American subsidiary, ROE 6.3%)(4) Dividend: ¥165 per share (dividend payout ratio approx. 50%, up ¥15 fromforecast, up ¥85 YoY)

2. Net Sales by Major Region(1) Sales in Japan: ¥14,292 million, up 9.6% YoY; due to firm demand forpublic projects under the national resilience plan(2) Sales in North America: ¥5,039 million, up 55.3% YoY; reflecting rapid
demand recovery due to expanding investment in construction(3) Sales in Asia: ¥6,492 million, up 33.7% YoY; demand recovered inIndonesian market2

１． 2022年3月期 決算の概要

Highlights of Consolidated Business Performance
3. Adapting to a Changing Business Environment(1) Rising raw material prices and logistics costs
Mitigate impact of forecasted rise of costs of approximately ¥0.5 billion by revising sales
prices and improving logistics efficiency(2) Supply-chain disruptions
Strengthen ability to supply products by strengthening the procurement structure andcooperation between manufacturing and sales divisions(3) Listing on the TSE Prime Market• Submit plan for compliance with continued listing criteria (tradable share market
capitalization at end of period of ¥8.5 billion, P/B ratio of 0.6)
• Shift to a two-pillar management focused on business growth and capital policy• Formulate five-year medium-term management policy (net sales of ¥30.0 billion, operating
profit of ¥3.1 billion, ROE of 8%, DOE of 4%）(4) Building of ESG management structure• Reduce volume of CO2 emissions from domestic plants by 50%. Establish CN Committee.
Currently preparing TCFD reporting structure• Board of Directors structure with 1/3 Outside Directors, establish Nomination &Compensation Committee, elect female Directors, formulate a skill matrix• Carry out ESG briefing(5)

Becoming more agile in dealing with volatile demand
Inventories of ¥7,207 million (increase inventory turnover by 0.6 times to 3.69 times)3１．2022年3月期 決算の概要

Highlights of Consolidated Business Performance
4. Mid- to Long-Term Growth Strategy(1) Make more significant inroads into the Asian market:
Expand the ASEAN market centered on our Indonesian hub(2) Expand the scope of overseas business:
Enter the overseas market for road maintenance equipment(3) Pursue business opportunities in North America:
Increase our market share through niche marketing(4) Start developing next-generation businesses:
Focus on developing emergency brakes, compaction management systems, and autonomous vibratory rollers

5. Outlook for Business Environment(1) Japan
Firm business environment projected to continue against the backdrop of the government’s ¥15 trillion, five-year
national resilience plan to speed up measures for disaster prevention and mitigation.

(2) Overseas
Overseas construction machinery demand is also expected to follow a firm recovery trend, with infrastructure
investment totaling $1.2 trillion planned in the U.S., and ASEAN and emerging countries expanding infrastructure
investment as an economic stimulus measure, among other factors.

(3) Business risks
Amid accelerating decarbonization policies and development of global economic blocs, further increases in energy
and material prices are expected, along with increasing pressure to reorganize global supply chains.

4１．2022年3月期 決算の概要

Consolidated Business Performance（Millions of yen）

Fiscal year
ended
March 31,2021

Fiscal year
ended
March 31,2022

Net sales

21,624

26,599

4,974

23.0%

Japan

13,042

14,292

1,249

9.6%

Oversaes

8,582

12,306

3,724

43.4%

701

1,383

682

97.3%

(3.2%)(5.2%)

Ordinary profit (loss)

659

1,407

748

113.6%

Profit (loss) attributableto owners of parent

4

1,427

1,423－%(75.0%)(75.9%)

Operating profit
Operating profit rate

Cost-of-sales ratio

YoY changeAmount%5１．2022年3月期 決算の概要Consolidated Business Performance (Graph)

Net sales(Millions of yen)

Operating profit(Millions of yen)

30,00025,00020,00015,00010,0005,000

26,599Net sales

1,383

21,624（5.2%）

12,306

8,582

Overseas701（3.2%）

1,600
1,400

1,200
1,000
800
600

Operating profit(Operating profit ratio)

13,042

14,292

Japan

400

200

00

Fiscal year ended March 31,

Fiscal year ended March 31,2021

2022

6

１．2022年3月期 決算の概要

Sales by Region in Which Customers Are Located(Millions of yen)
Fiscal year
Fiscal year
ended March ended March31, 2021
31, 2022

YoY change
Amount%13,042

14,292

1,249

9.6%

8,582

12,306

3,724

43.4%

North America

3,245

5,039

1,793

55.3%

Asia

4,854

6,492

1,637

33.7%

ME and Russia/CIS

32

441135.3%

Other regions

449

731

281

62.7%

21,624

26,599

4,974

23.0%

Japan
Overseas

Total

7

１．2022年3月期 決算の概要

Sales by Region (Map)(Millions of yen)

Fiscal year ended

Fiscal year ended

March 31, 2021

March 31, 2022

Japan

13,042

14,292(+1,249、+9.6%)

Overseas

8,582

12,306(+3,724、+43.4%)

Total

21,624

26,599(+4,974、+23.0%)

YoY change

8１．2022年3月期 決算の概要

Segment Information by Region in Which Our Manufacturing Facilities and Sales Offices Are Located(Millions of yen)

(Millions of yen)

YoY change

Japan

Year ended
March 31,2021

Year ended
March 31,2022

Sales to externalcustomers

17,394

19,566

2,172

12.5%

Sales to externalcustomers

1,110

1,801

690

62.1%

Intercompany sales

18,50521,367

2,862

15.5%

Total net sales

739

884

144

19.6%

Operating profit

Intercompany sales

Total net sales
Operating profit

AmountNorth America%

Year ended
March 31,2022

3,245

5,039

1,793

55.3%

2745

1866.6%

3,272

5,085

1,812

55.4%

0328

327

－%

(Millions of yen)

YoY changeYear ended
March 31,2021

Year ended
March 31,2022

586

1,631

1,044

178.0%

Intercompany sales

2,409

3,527

1,118

Total net sales

2,996

5,158

17274

Indonesia
Sales to externalcustomers

Operating profit

YoY changeYear ended
March 31,2021

Amount%(Millions of yen)

YoY changeYear ended
March 31,2021

Year ended
March 31,2022

Sales to externalcustomers

398362

▲ 36

▲9.0%

46.4%

Intercompany sales

333611277

83.0%

2,162

72.2%

Total net sales

732

973

241

32.9%

256－%

Operating profit▲ 82▲ 792－%

Amount%China

Amount%9１．2022年3月期 決算の概要

Segment Information by Region (Graph)(Millions of yen)

North AmericaJapan
21,36718,505Intercompany sales 1,110

27

3,272
3,245

1,8010Fiscal year ended March 31, 2021

884

Indonesia

OperatingChina△ 82
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2022

5,158

3,527

Fiscal year ended March 31, 2022

732

Fiscal year ended March 31, 2021

5,039

Fiscal year ended March 31, 2021

19,566

17,394328

1,631
274739customers

45

2,996
2,409
17586

profitSales to external

5,085

333973611△ 79398362

Fiscal year ended March 31, 2021

Fiscal year ended March 31, 202210

１．2022年3月期 決算の概要

Breakdown of YoY Changes in Operating Profit•

Gross Profit increased by ¥1,244 million, in line with YoY increase in sales of ¥4,974 million.

•Against estimated cost increase of ¥0.5 billion, measures were taken such as sales price revisions
and logistics streamlining, resulting in a cost-of-sales ratio increase of 0.92%, which reduced grossprofit by ¥245 million.

•SG&A Expenses increased by ¥316 million as we came out of restricted operational conditions andresumed business activities.

•As a result, Operating Profit rose by ¥682 million YoY to ¥1,383 million.
(Millions of yen)
Fiscal year
Fiscal year
ended March 31, ended March 31,2021
2022

YoY
changeImpact onNote
operating profit

Net sales

21,624

26,5994,974+1,244

4,974 x (1 - 75.0%)

Cost-of-sales ratio

75.0%

75.9%

0.92%

▲ 24526,599 x 0.92%

Gross profit

5,408

6,407998

SG&A expenses

4,707

5,023

316

Operating profit

701

1,383

Payroll: up 83; Transportation costs: up 85; Technical▲ 316 research expenses: up 76; Other SG&A: up 73+682

11

１．2022年3月期 決算の概要

Breakdown of YoY Changes in Operating Profit (Graph)(Millions of yen)
Impact ofincrease incost-of-sales
ratio
▲245

Increase in
net sales
Operatingprofit for thefiscal year
ended March
31, 2021

Increase in
payroll▲83

Increase intransportationcosts▲85

Increase intechnicalresearchexpenses▲76+1,244
SG&A expenses ▲316

Increase inother SG&A▲73
Operatingprofit for thefiscal year
ended March
31, 2022

701

1,383

Operating profit ratio
3.2%

Operating profit ratio
5.2%

12

１．2022年3月期 決算の概要

Net Working Capital (Trade Receivables + Inventories – Trade Payables)•Net working capital invested in sales activities decreased¥542 million YoY to ¥9,779 million.

•Inventories were ¥7,207 million, the increase containedto ¥157 million YoY despite a 23% increase in net sales.

•Inventory/Sales turnover was improved by 0.62 times
YoY to 3.69 times for the year.

(Millions of yen)

26,044

26,59924,44823,14821,624(Millions of yen)

As of March As of March
31, 2021
31, 2022
Annualized
consolidated netsales

Trade receivables

21,624

26,5998,538

YoY change
Trade receivables

Amount

4,974%

23.0%

7,959

Net working capital

10,321

7,959

8,538

579

9,061

Trade payables

7,050

7,207

157

2.2%

▲4,688▲5,966▲1,27827.3%

10,321

9,779

▲542

7,207

Trade payables▲ 5,966▲5.3%
As of Mar.
31, 2021

Inventory turnover

3.07 times

3.69 times 0.62 times

9,779

7,050

▲ 4,688
Net working capital

8,868

7.3%
Inventories

Inventories

8,576

As of Jun.
30, 2021

As of Sep. As of Dec. As of Mar.
30, 2021
31, 2021
31, 202213

１．2022年3月期 決算の概要

Consolidated Business Forecast•

Firm recovery trend in global construction machinery demand amid global infrastructure investment
growth•Further increase in material prices and pressure to revise supply chains•

Promote profit structure reform through sales price revision, cost cuts, and increased productsupply capacity•

Profit to reflect the absence of temporary boost from deferred tax assets of ¥381 million(Millions of yen)

YoY change

Fiscal year ended
March 31, 2021
(results)

Fiscal year ended
March 31, 2022
(results)

Fiscal year ending
March 31, 2023
(forecast)

21,624

26,59929,300

2,700

10.2%

Operating profit

701

1,383

1,500

116

8.4%

Ordinary profit

659

1,407

1,450

42

3.0%

4

1,427

950

▲ 477ー¥0.93¥336.87¥224.22▲ 112.65

ーNet sales

Profit (loss)
attributable toowners of parent
Earnings pershare (Yen)Amount%14２．『中期的な当社経営方針』に関連する主要な取り組み状況

Dividends per Share
Since the announcement of the Medium-Term Management Policy on June 2, 2021, we have set a dividend policy as
follows, with a target of 8% ROE:
• When ROE falls below 3%, a payout ratio of 100% will apply.
• When ROE is between 3% and 6%, a DOE of 3% will apply.
• When ROE exceeds 6%, a payout ratio of 50% will apply.

Note: We made a ten-for-one share consolidation effective October 1, 2017.
Dividend payouts for the periods prior to the share consolidation are adjusted to be in line with the post-consolidation payouts.

15

２．『中期的な当社経営方針』に関連する主要な取り組み状況

KPIs Established in the Medium-Term Management Policy•

Net sales on pace to exceed the plan in the first year of the medium-term management policy.

•Faced with earnings structure deterioration due to structural increases in energy and material
prices and high logistics costs, improvement in operating margin is lagging, and we are now
promoting profit structure reform through sales price revision and cost reduction.

•Although ROE reached 6.3% due to recording deferred tax assets of ¥380 million at our U.S.
subsidiary, this was a temporary accounting profit from tax effect accounting. Profit structurereform must continue.

•Completed share buybacks of 130,000 shares / ¥340 million.
(Millions of yen)

Net sales
Operating profit
Annualized return on equity (ROE)

Share buybacks(through March 31, 2026)

Fiscal year
ended March
31, 2021

Fiscal year
ended March
31, 2022

Forecast for the
fiscal year
ending March
31, 2023

21,624

26,59929,30026,50030,000

701

1,383

1,500

2,000

3,100

0.0%

6.3%

4.1%

5.5%

8.0%ー340ー* The cumulative amount of buybacks projected through March 31, 2026.

Target for the
fiscal year
ending March
31, 2024

Target for the
fiscal year
ending March
31, 2026

500 ～ 2,000*
16

Contact us

SAKAI HEAVY INDUSTRIES, LTD.
IR Office :Takao Yoshikawa

Email: sakai.ir＠sakainet.co.jp

Telephone: +81-3-3434-3401 (from outside Japan)
Fax: +81-3-3436-6513 (from outside Japan)

Performance forecasts and other forward-looking statements in this document are based on
Information available at the time of this writing, as well as certain assumptions deemed reasonable.
Actual performance and other results may differ depending on a variety of factors.