Consolidated Financial
Results 3Q FY2023

February 14, 2024

Index• Results Highlights• 3Q FY2023 Results• 3Q FY2023 Results by Segment• FY2023 Outlook1

Company Profile
Company NameHIRANO TECSEED Co., Ltd.

Representative

Kaoru Okada, President

Paid-in Capital¥1,847,821,000 (as of end-December 2023)

Headquarters

101-1, Kawai, Kawai-cho, Kitakatsuragi-gun, Nara Pref. 636-0051, Japan

Group Companies（wholly-owned）• HIRANO GIKENKOGYO Co., Ltd. • HIRANO K&E Co., Ltd., HIRANO AMERICA, INC.

Number of Employees

317 (Consolidated: 414, as of end-December 2023)

Securities Code6245 (Industry: Machinery)

2Results Highlights
3Q FY2023 results

FY2023 earnings forecasts
3Q FY2023

Net Sales¥34,709mn

Operating Income¥2,638mn

Operating Income
Margin7.6%

YoY¥4,480mn＋14.8％FY2023 forecasts
Net Sales¥41,000mn＋13.9％

Operating Income¥2,920mn-0.1pts

Operating Income
Margin7.1%¥322mnYoY-¥1,423mn-3.4％-¥173mn-5.6％-0.2pts

Topics3Q FY2023 results

FY2023 earnings
forecasts✓ Net sales rise in the Coating and Laminating Machinery Segment on working through the order backlog despite recent sluggish
conditions in the EV market✓ Net sales fall in the Industrial Machinery Segment owing in part to longer negotiations despite rise in demand for film making systems
for semiconductor materials applications✓ Operating income margin flat YoY due to inability to offset higher costs, particularly for industrial materials and personnel, despiteacquisition of high-profitability orders✓ Expect slight YoY decline in net sales as a consequence of sales booking postponement resulting from change in clients’ deliverylocations and specifications✓ Expect decline in operating income owing to higher industrial materials, personnel, and outsourcing costs, but aim to improve income
via standardization and sharing of components/equipment, productivity improvement, and pass through of higher equipment value
added into prices✓ Reiterate full-year net sales and operating income guidance3

3Q FY2023 Results

Overview of 3Q FY2023 Results
1Q–3Q FY2023 results(Unit: ¥million)

3Q FY2023 results overview

1Q–3Q FY22 1Q–3Q FY23ChangeYoY %abb-a(b-a)/aOrders

46,022

17,237-28,785-62.5%Net Sales

30,22834,709+4,480+14.8%

Operating
Income2,316

2,638+322+13.9%

Operating
Income Margin

7.7%

7.6%

-0.1%

-Ordinary Income

2,421

2,740+319+13.2%

Ordinary
Income Margin

8.0%

7.9%

-0.1%

-

Net Income

1,675

1,924+249+14.9%Net Income
Margin

5.5%

5.5%

+0.0-

✓ Orders: Down in 3Q as adjustments for changes in clients’ delivery
locations, etc. overlapped with a fallback from strong advance orders inFY2022 and earlier, particularly for EV-use lithium-ion battery coating
equipment, and decline in clients’ order appetite as they monitored
market conditions for geopolitical risk.
✓ Net sales: Up in the Coating and Laminating Machinery Segment on
working through the order backlog despite recent sluggish conditions in
the EV market, but down in the Industrial Machinery Segment owing inpart to longer negotiations despite rise in demand for film making systems
for semiconductor materials applications such as MLCC and polyimide
films✓ Operating income: Slight rise in income due to higher sales, althoughmargin falls owing to sharply higher costs (mainly for industrial materialsand personnel)✓ Ordinary income: Down on higher interest payments on borrowing✓ Net income: Flat as lower ordinary income offsets slight rise in operating
income53Q FY2023 Results by Segment(Unit: ¥million)
OrdersConsolidated total

Net Sales
Operating Income*1
Operating Income Margin
OrdersCoating and Laminating
Machinery Segment

Net Sales
Operating Income*2
Operating Income Margin
OrdersIndustrial Machinery
Segment

Net Sales
Operating Income*2
Operating Income Margin
OrdersOthers, Adjustments

Net Sales

Operating Income*2
Operating Income Margin1Q–3Q FY22

1Q–3Q FY23

ChangeYoY %abb-a(b-a)/a

46,02230,2282,316
7.7%
41,02821,316
1,165
5.5%
3,088
7,831
1,835
23.4%
1,906
1,080
94
8.8%

17,237
34,7092,638
7.6%
12,65027,998
2,593
9.3%
3,375
5,529
851
15.4%
1,211
1,182
278
23.6%

-28,785+4,480+322-0.1%-28,377+6,681+1,427+3.8%+287-2,302-984
-8.0%
-695
+101+184+14.8%-62.5%+14.8%+13.9%-69.2%+31.3%+122.5%+9.3%-29.4%-53.6%-36.5%+9.3%+194.6%-*１：After adjustment for SG&A not assignable to any reporting segment*２：Operating income equivalent to segment profit in the quarterly results report6Factors for Change in 3Q FY2023 Operating Income

Factors for change in operating income(Unit: ¥million)
Main factors（ー）Rise in sales commissions

2,638

Main factors（＋）Sales up on working
through order backlog（ー）Costs up on sharply higher
industrial materials prices,change in locations/specs
Delays from longer
construction times

Main factors（ー）Income down on sales declineIncome down on productmix deterioration

Coating and Laminating Segment

Industrial Machinery Segment

Others+1,427-984+1847

3Q FY2023 Balance SheetAssets(Unit: ¥million)

End-FY2022

End-3Q FY2023

Value

Value

ChangeCurrent Assets

48,15844,654-3,504

Fixed Assets
Tangible FixedAssets
Intangible FixedAssets
Investments andOther Assets
Total Assets

12,363

12,638

+274

7,408

7,386

-22

672

590

-82

4,283

4,661

+378

60,52257,292-3,230Current Liabilities

18,392-5,035

1,303+206

Fixed Liabilities

23,4281,096Net Assets

35,99737,596+1,598Equity Ratio

59.5%

65.6%

+6.1pts

Current Assets Down ¥3,504mn✓ Electronically recorded monetary claims up ¥765mn✓ Marketable securities down ¥2,299mn✓ Advance payments down ¥1,648mn
Fixed Assets Up ¥274mn✓ Investments and other assets up ¥378mn✓ Intangible fixed assets down ¥82mn

Liabilities
Current Liabilities Down ¥5,035mn✓ Short-term borrowings down ¥4,950mn

Fixed Liabilities Up ¥206mn✓ Deferred tax liabilities up ¥424mn✓ Long-term borrowings down ¥239mn

Net AssetsNet Assets

Up ¥1,598mn

8Change in Notes and Accounts Receivable - Trade, and Contract
Assets, and Electronically Recorded Monetary Claims - Operating(Unit: ¥million)

Accounts receivableContract assets

9

3Q FY2023 Results by Segment

Order Backlog, Net Sales, and Orders in the Coating and Laminating Machinery Segment
Order backlog, net sales, and orders in the Coating andLaminating Machinery Segment

Highlights in the Coating and Laminating Machinery Segment(Unit: ¥million)
Order backlog

Net Sales

Marketconditions

Orders90,000✓ Growth slowing in the lithium-ion battery market(particularly in the EV market), but expect growth tocontinue in the long term, with particularly strong
prospects in North America, Asia, and Europe

80,00070,000✓ Orders decline on fall in appetite for new capex due toadvanced orders in FY2022 and in reaction to slower EV
market growth

60,00050,000Orders

40,00030,000✓ While monitoring client trends, aim to work through theorder backlog, develop and strengthen business
partnerships, boost production capacity, and pursue
sharing and standardization of components

20,00010,0000FY20FY21FY22
FY23 2Q 3Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q 2Q 3Q
1Q 2Q 3Q 4Q 1Q 2Q2 3Q3 4Q4 1Q 2Q3 3Q2 4Q2 1Q
FY2020

FY2021

FY2022

Net sales✓ Net sales up YoY, mainly in energy-related areas, on some
progress in working through order backlog✓ Continuing price negotiations with clients

FY202311

Order Backlog, Net Sales, and Orders in the Industrial Machinery Segment
Order backlog, net sales, and orders in the Industrial
Machinery Segment

Highlights in the Industrial Machinery Segment(Unit: ¥million)Order backlog

Net sales

OrdersMarketconditions

18,00016,00014,000✓ Market being driven by film making systems forsemiconductor materials applications, such as MLCC andpolyimide films✓ Market sluggish on impact of Chinese economic conditions,but expect long-term growth and capex investment bysector majors

12,00010,000Orders

8,000✓ MLCC orders up slightly YoY on receipt of orders fromclients in regions such as Japan and China✓ Inquiries for polyimide films from these same clients,
working on turning these into orders

6,000

4,000
2,000Net sales

0FY21
FY22
FY23
FY24 2Q 3Q
1Q
2Q
3Q
4Q
1Q
2Q
4Q
1Q
2Q
3Q
4Q
1Q 2Q 3Q
1Q
2Q
3Q
4Q
1Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
1Q 2Q 3Q 4Q 1Q 2Q2 3Q3 4Q4 1Q 2Q5 3Q6 4Q7 1Q
FY2020

FY2021

FY2022✓ Net sales down YoY despite film making systems forelectronic materials applications becoming the main focus

FY202312

FY2023 Outlook

FY2023 Earnings Forecasts
FY2022

FY2023 Forecast

YoY(Unit: ¥million)ab

Change b-a

YoY % (b-a)/aNet Sales

42,42341,000-1,423-3.4%

Operating Income
Operating Income
Margin3,093

2,920-173

-5.6%

7.3%

7.1%

-0.2pts-Ordinary Income

3,219

3,000-219-6.8%

Ordinary Income
Margin7.6%

7.3%-0.3pts-Net Income

2,243

2,100-143-6.4%

Net Income Margin

5.3%

5.1%

-0.2pts

-ROE

6.4%

5.8%-0.6pts

Dividends Per Share

¥56

¥88

¥32Interim

¥28

¥28

¥0Year-end

¥28

¥60

¥32
14

FY2023 R&D Expenditure, Capex, and Depreciation Expenses
R&D expenditure

Capex and depreciation expenditure (consolidated)(Unit: ¥million)(Unit: ¥million)
Total

Capex

Industrial Machinery Segment

Depreciation expenditure

1,500

Coating and Laminating Machinery Segment400

1,000300
142

144

119

200

1,500
380

1,176
500

100

179

172

185

564

580

551

625

700

279
00
FY2020

FY2021
ActualFY2022

FY2023
Forecast

FY2020

FY2021
ActualFY2022

FY2023
Forecast

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Disclaimer

This document provides information intended solely to help readers’ understanding of HIRANO TECSEED CO., LTD.
Thus, we have no intention to solicit or encourage investment for securities or financial products mentioned in this document. Also, readers are advised that thisdocument is not a disclosure document or statement of financial performance as required by Japan’s Financial Instruments and Exchange Act, Act on Investment Trusts
and Investment Corporations, related cabinet orders, cabinet office ordinances or rules, the rules governing companies listed on the Tokyo Stock Exchange, or any
other applicable rules.
This document contains forward-looking statements, including forecasts of financial position, results of operations, and business-related matters, as well as statements
related to the plans and goals of the management of HIRANO TECSEED CO., LTD. There are a number of known and unknown risks and uncertainties that can cause its
actual results or performance to differ materially from any explicit or implicit forecasts contained herein. These forward-looking statements also rest on a number ofassumptions with regard to our present and future management strategies, as well as the political and economical environments in which we will conduct its futurebusiness operations.
Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy, certainty,validity or fairness of this information and we are not responsible for any error or inaccuracy in the information or data contained herein.
The content of this document can be modified or withdrawn without prior notice.

February 14, 2024
Contact:
General Affairs Division HIRANO TECSEED Co., Ltd .
https://www.hirano-tec.co.jp/en/contact/
Tel: +81-745-57-0681

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