First Half Results for the Fiscal YearEnding March 31, 2024
November 30, 2023

Table of contents
1. Result Highlights (Consolidated)

2. Forecasts for Current Fiscal Year (Consolidated)
3. Results and Forecasts of Each Business Field

4. Initiatives in Current Fiscal Year
5. Fundamental Reforms to Improve Business
Performance11. RESULT HIGHLIGHTS(CONSOLIDATED)

2

Overview of FY3/24 Results◼ Net sales for the Radio Frequency Business increased, but that for the Telecommunication Business decreased; as aresult, the overall net sales declined.
◼ Although operating loss improved slightly due to an improved cost of sales ratio, ordinary loss and net loss widened.
(Millions of yen)

1H FY3/23
results
Net Sales
Telecommunication
Radio Frequency
Cost of sales
Gross profit
Selling, general, andadministrative expenses
Operating Income
Operating margin
Telecommunication
Operating margin
Radio Frequency
Operating margin
General and administrative
expenses, etc.
Ordinary income
Ordinary income margin
Net income attributable toshareholders of parent company

1H FY3/24
results

YoY change
AmountPercentage

13,185
9,133
3,994
11,523
1,662

12,5298,019
4,451
10,895
1,633-656-1,114
457
-627
-28

-5.0%
-12.2%
11.5%
-5.4%
-1.7%

2,854

2,796

-57

-2.0%

-1,192
-9.0%
-387
-4.2%
582
14.6%

-1,163
-9.3%
-291
-3.6%
462
10.4%

29

-1,387-1,334

53

-

-906
-6.9%

-1,037
-8.3%

-131

-

-637

-811

-174

-

95
-

-

-120
-

-20.6%--

Note 1: Net sales of Other segment omitted

3

Net Sales◼ The Telecommunication Business’ net sales decreased 12.2% as demand from customer capital expenditure wasrestrained in the mobile communication-related field.
◼ The Radio Frequency Business’ net sales increased 11.5% thanks to recovery in demand for capital expenditures.

Net Sales
12.5 billion yen
YoY change
Down 0.6 billion yen(down 5.0%)

Telecommunication
8.0 billion yen
YoY change
Down 1.1 billion yen(down 12.2%)
Radio Frequency
4.4 billion yen
YoY change
Up 0.4 billion yen(up 11.5%)

4

Operating Income◼ Net sales decreased and upward cost pressure came from such factors as spikes in energy prices, material
prices and personnel expenses. However, operating loss remained unchanged as we worked to improve
productivity to reduce costs and cut expenses.

Operating loss
1.16 billion yen
YoY change
Improvement of
0.02 billion yen

5Segment Income◼ Operating loss improved for the Telecommunication Business, although net sales decreased.
◼ Net sales increased but profit decreased for the Radio Frequency BusinessTelecommunication-0.29 billion yen
YoY change
Up 0.09 billion yen(-)
Radio Frequency
0.46 billion yen

YoY change
Down 0.12 billion yen(down 20.6%)6

2. FORECASTS FOR
CURRENT FISCAL YEAR(CONSOLIDATED)7

Overview of FY3/24 Forecasts(Millions of yen)

FY3/23
results
Net Sales
Telecommunication
Radio Frequency
Operating Income
Operating margin
Telecommunication
Operating margin
Radio Frequency
Operating margin
General and administrative
expenses, etc.
Ordinary income
Ordinary income margin
Net income attributable toshareholders of parent company
ROE

FY3/24
forecasts

YoY change
AmountPercentage

31,817
22,5789,131-1,510
-4.7%
50
0.2%
1,132
12.4%

30,50020,10010,300-1,500
-4.9%
240
1.2%
1,100
10.7%

-1,317-2,4781,168
10-2,694-2,840-145--1,219-3.8%-1,300
-4.3%

-80

-

-1,181-1,100

81

-

-2.7%

-2.7%

189
-32
-

-

-

-4.1%
-11.0%
12.8%
372.2%-2.9%--

Note 1: Net sales of Other segment omitted

Note: The figures for FY3/24 are the latest forecasts released on November 10, 2023.

8

Net Sales and Operating Income Forecasts◼ Net sales are expected to decrease due mainly to a demand slowdown in the Telecommunication Business anddecreased opportunities for orders.
◼ Although net sales decreased and material prices, etc. have spiked, operating loss is expected to remain largely
flat from a year earlier as we work to improve productivity to reduce costs and expenses.

Note: The figures for FY3/24 are the latest forecasts released on November 10, 2023.

9

Segment Forecasts◼ Although net sales are expected to decrease for the Telecommunication Business, its segment income isexpected to increase, driven by improved productivity.
◼ For the Radio Frequency Business, net sales is expected to increase but its segment income is expected todecrease as trend seen in the first half will remain.

Note: The figures for FY3/24 are the latest forecasts released on November 10, 2023.

10

3. RESULTS ANDFORECASTS OF EACH
BUSINESS FIELD

Note: The figures for FY3/24 are the latest forecasts released on November 10, 2023.

11

Mobile Communications-Related Field
1H

Full year

Telecommunication

Net sales dropped as demand remained slumped due to revised capital spendingplans by key customers.
Net sales is expected to decrease in the second half although we see signs ofrecovery.

1H result
2.0 billion yen
YoY change
Down 1.8 billion yen(down 47.6%)
Full-year forecast
6.6 billion yen
Full-year forecast
Down 1.2 billion yen(down 16.2%)

12

Fixed Wireless Communication-Related Field
1H

Full year

Telecommunication

Net sales increased driven by recovery in demand for administrative radio systems
for disaster prevention associated with local governments’ moves to reinforce
disaster-prevention capabilities and promote digitalization.

Net sales are expected to decline as we expect that orders for projects will fall
below the previous year’s levels.

1H result
2.3 billion yen
YoY change
Up 0.2 billion yen(up 12.4%)
Full-year forecast
5.4 billion yen
YoY change
Down 0.8 billion yen(down 14.2%)

13

Broadcasting-Related Field
1H

Full year

Telecommunication

Net sales decreased as customers’ updating plans for broadcasting equipment
still remained postponed.
We expect that net sales will decrease because the trend in the first half willprobably continue in the second half.

1H result
1.0 billion yen
YoY change
Down 0.09 billion yen(down 8.9%)
Full-year forecast
3.0 billion yen
YoY change
Down 0.8 billion yen(down 21.9%)

14

Solutions-Related Field
1H

Full year

Telecommunication

Net sales increased driven by sales boosting efforts for system solutions using
the local 5G technology, etc.

We expect to increase net sales as we participate in demonstration tests, create
new businesses and expand customers.

1H results
0.03 billion yen
YoY change
Up 0.01 billion yen(up 98.7%)
Full-year forecast
0.3 billion yen
YoY change
Up 0.11 billion yen(up 59.1%)

15

Other Field
1H

Full year

Telecommunication

Net sales increased thanks to demand for surface treatment on outdoor steelbuilding frameworks and the solid performance of environmentally friendly
products, including LED aviation obstacle lights and fuel cells.
We expect that net sales will increase because demand for environmentallyfriendly products will probably sustain.

1H results
2.5 billion yen
YoY change
Up 0.6 billion yen(up 31.1%)
Full-year forecast
4.8 billion yen
YoY change
Up 0.4 billion yen(up 9.7%)

16

Induction Heating Equipment-Related Field
1H

Full year

Radio Frequency

Net sales increased, driven by recovery of demand for capital expenditures in theautomotive industry.
We expect net sales to increase due mainly to sustained demand for capital
expenditures and the expansion of sales to areas outside automobiles.

1H results
3.1 billion yen
YoY change
Up 0.2 billion yen(up 8.2%)
Full-year forecast
7.5 billion yen
YoY change
Up 0.9 billion yen(up 13.7%)

17

Contract Heat Treating Service-Related Field
1H

Full year

Radio Frequency

Net sales increased due to recovery in demand as automakers’ production
adjustments have run their course.
We expect net sales to increase thanks to recovery in auto production output
and our responses to changes in components arising from the shift to EVs.

1H results
1.3 billion yen
YoY change
Up 0.2 billion yen(up 20.0%)
Full-year forecast
2.7 billion yen
YoY change
Up 0.3 billion yen(up 13.5%)18

New Radio Frequency Areas Business-Related Field

Radio Frequency

1H

Against the backdrop of growing interest in the SDGs and environmental
considerations, our sales team targeted mainly the food industry

Full year

Promote activities to expand sales into the food industry, approaches toexpanding applications, and collaborations with other companies

1H results
0.0 billion yen
YoY change
Up 0.0 billion yen(-)
Full-year forecast
0.01 billion yen
YoY change
Down 0.06 billion yen(down 87.0%)

19

4. INITIATIVES IN CURRENTFISCAL YEAR

20

Progress of Financial Strategy
Capital allocation•••

Carried out rebuilding of commitment lines totake advantage of interest-bearing debts, withthe target set at D/E ratio of 0.2 to 0.3
Reduced cross-held shares
Conducted share buybacks to optimize capitallevelsM&A••

Acquired shares of Cybercore Co., Ltd. on
September 29, 2023 (made it a subsidiary)Will consider additional M&A
1H FY3/24 result

FY3/25 target (total)

Acquisition of Cybercore shares:

1.5 billion yen

Up to 4.0 billion yen

Investment strategy
Total investment
in 1H FY3/24

Total investment
FY3/25 investment
through 1Htarget (total)
FY3/24R&D investment 0.6 billion yen 2.0 billion yen 6.0 billion yen

Growth capital
expenditures

0.6 billion yen 1.3 billion yen 4.0 billion yen

Other investments 0.2 billion yen 0.6 billion yen 4.0 billion yen

21Progress of Shareholder Returns
Policy on shareholder returns

Target shareholder returns totaling 10.0 billion yen over three years through fiscal
year ending March 2025
◼ DOE

◼ Payout ratio 40%••

2%

Lower limit 1.5%

Pay attention to growth investment aimed at improving earnings and optimum balance sheet composition, in addition to dividends,
and continue to carry out share buybacks
Cancel all treasury shares bought back except for about 10% of the total outstanding shares

Treasury stock

Dividend
PeriodDividend per shareinterim/year-end

Total amount

Status

FY202230 yen / 30 yen

0.6 billion yen

Done

FY202330 yen / 30 yen

0.6 billion yen

PlannedAcquiredvalue

StatusFebruary-December
2022

2.5 billion yen

Acquisition
completed

From February 2023

2.5 billion yen

In progress

PeriodTotal 5.0 billion yen

Total 1.2 billion yen<Progress of shareholder returns>
Dividend

Treasury stock

1.2 billion yen

5.0 billion yen

Toward the target of 10 billion yen in
shareholder returns...
(*Forecast at end of current fiscal year)
Total

62%

progress

22

Sustainability Initiatives (i)ESG progressSocialWorkplace culture and work style reforms
Establishment of Human Rights Policy(Established September 1, 2023)
Aim to become a company that is trusted andcontinuously chosen by society, by acting with anawareness of respect for human rights at the root of ourbusiness activities

Implementation of engagement improvement measures• Established an “hourly leave” (paid leave granted in unitsof hours) system as requested by employees• Expanded evaluation award system as measure to boost
employee motivation toward work
• Introduced birthday leave that can be taken in the monthof birth and volunteer leave of up to three days per year

<Status of leave granted: April 2023 - end-September>
Birthday leave usage
rate: 98.9%

Governance
Strengthening corporate governanceOff-site meetings held
As an initiative to improve the effectiveness of the Board of
Directors, off-site meetings (April-September 2023: 4
times) were held by members of the Board to discuss
management issues.

Number of occasions whenvolunteer leave was taken: 2

Environment
Promote environmental management
Calculation of Scope 3 emissions (from FY2019 toFY2021) completed
23• Calculation for domestic and overseas group companies
completed• “Actual data on Greenhouse Gas Emissions” disclosed on
our website

23

Sustainability Initiatives (ii)Strengthening disclosure of sustainability information

Disclosure of sustainability report

Disclosure of various
performance data
Sustainability KPIs and results
Describe outcomes in previous fiscal year andprogress of KPIs (targets) set for each material
issue.

Data on Environmental, Social andGovernanceCollects data related to ESG (Environmental,
Social, and Governance)

Actual data on Greenhouse Gas Emissions"Sustainability Report 2023“(Only in Japanese)

Reports on actual GHG emissions (Scope1, 2
and 3) data and items recommended by TCFD,
which are: “Governance,” “Strategy,” “RiskManagement,” and “Metrics and Targets.”

Reports on approaches to sustainability and
ESG, and initiatives for social contribution
through business and activity results

Disclose data compiled on targets (KPIs),
performance, and progress of sustainability and
ESG<Sustainability Report URL>

<Download data URL>

https://denkikogyo.co.jp/sustainability/report/

https://denkikogyo.co.jp/sustainability/data/24

5. FUNDAMENTAL REFORMS TO
IMPROVE BUSINESSPERFORMANCE

25

Background of Fundamental Reforms to Improve Business Performance
Medium-Term Business Plan “DKK-Plan 2025” released May 2022
Over the three relevant years, which are positioned as a period in which existing businesses are strengthened
and investments are made in growth business areas, initiatives are stepped up in existing businesses andgrowth businesses in order to achieve 43.0 billion yen in net sales and 2.0 billion yen in net income (ROE
5.0%) for the year ending March 2025, aiming for fresh growth in the future.

◼ Performance targets and progress(consolidated)◼ Challenges in current businessenvironment

FY3/24 forecasts

Net Sales
Net income
30.5 billion yen -1.1 billion yen
FY3/25 targets

Net Sales
Net income
43.0 billion yen 2.0 billion yen

1.

Rapid changes in market for existing
businesses

2.

Slow monetization of new businesses

3.

Slow shift to organizational structure suited tobusiness portfolio

Fundamental reforms are needed to
improve business performance.
26

Outline of Fundamental Reforms to Improve Business Performance
In anticipation of the revision of the Medium-Term Management Plan, formulate andpromote Fundamental Reforms to Improve Business Performance◼ Overall policy• Reforms to optimize business portfolios based on demand forecasts for eachsegment• Review of cost structure in consideration of the order receiving environment andpromotion of fundamental reforms of entire company◼ Improvement measures
1

Business structural reforms

2

Selection and integration of R&D

3

Reform of organizational structures

4

Reinforcing sales capabilities

5

Thorough improvement in operational efficiency
27

Business Structural Reforms◼ Overview• Implement business structural reforms aimed at improving the corporate structure of the entire Group to
improve corporate value• Of the eight consolidated segments, designate Solutions, Fixed Wireless (Defense), and Radio
Frequency businesses as “rising segments” to focus especially on and concentrate resources on them.
• In line with business structural reforms, optimize production and R&D structures and personnel
allocation.
• For other segments, carry out optimum resource allocation after assessing impact of investment

Channel resources intensively to three rising segments
SolutionsIntegrate Cybercore into the group for the early establishment of Solutions Business
Capture demand increases associated with practical application of AI and advancement in wirelesscommunication technology

Fixed Wireless(Defense)
In anticipation of a substantial increase in the defense budget, maximize opportunities to capture future
demand, including for maintenance and development work

Radio Frequency
High possibility for business performance to improve, supported by growth potential of auto-relatedindustry and potential growth rate of our business domains28

Solving Social Issues -Solutions-

Source: Cabinet Office website (translated)

29

Business Structural Reforms -SolutionsRoadmap
VisionShort term

Medium to longterm

Solve social issues through AI-based Solutions Business
Aim to solve social issues through video-based AI solutions, strengthen
proposal and development capabilities, and increase orders incollaboration with Cybercore.
••

Achieve license monetization by leveraging the compatibility of“communication × sensing × AI” to secure stable revenue source
Commercialize “information services” by utilizing the obtained big data

Measures◼ Increase staff in sales and development divisions◼ Expand solution products◼ Develop production and management structure
aimed at transforming business modelR&D expenses
0.6 billion yen(three-year total)

Net Sales
At least
5 billion yen
by FY2030◼ Build a new AI business to secure revenues fromlicensing30

Strengthening Solutions-Related Field

Solutions› Acquired shares in image AI pioneer Cybercore Co., Ltd.
› This is our group’s first capital and business alliance with a company engaged in
AI business.
Profile and acquisition of Cybercore Co., Ltd.
Representative
Director

Yoshihiro Tamaki

Location

Headquarters: 2-9-1 Morioka-Eki NishiDori, Morioka, Iwate

Date ofestablishment

March 2007

Total number of shares
held before change-

Number of sharesacquired

150,000 shares

Value of acquisition

1.5 billion yen

Number of shares held
after change

150,000 shares(52.63% stake)Has the world's highest level of AI algorithm development capabilities in areas such asimage processing, image recognition, and artificial intelligence algorithm development
2021: Vehicle ReIdentification algorithm
ranked first on Papers
with Code‘s website

2021: Won first prize in
CVPR inpersons/objects scope
identification category

2022: Won firstprize in CVPR in
automated retailcheckout category

2022: Ranked 9th globally and1st among Japanese companies
in facial recognition technology
benchmark test by U.S. National
Institute of Standards andTechnology (NIST)

31Strengthening Solutions-Related Field

Solutions› Track record in collaborating with an AI analysis project for human flow and traffic in
central Morioka› Further business synergies through telecommunication × sensing × AI
Morioka case study

Synergies between telecommunication ×
sensing × AI
“Wireless communication technology” wehave developed over the years and“sensing technology” centered on cameras

Cybercore's advanced AI technologies forimage processing, image recognition, andartificial intelligence algorithm
development

Work on “expansion of solution
products” and “expansion of new
and existing markets”
32

Strengthening Solutions-Related Field› Analyze customer behavior with AI
cameras to analyze product trends

Retail behavior analysis

AI cameras analyze movements of customers’bone, hand, eyes, etc. to analyze their tendencies
and preferences when they pick up products.

Identify trends by age and gender, and plan
product layouts

Solutions› Use AI to compare working hours ofexperienced and young workers andidentify variations between them
Improve productivity in factories

Aim to improve work efficiency, stabilize production
output, and normalize work by analyzing data andgiving feedback to each worker

Grasping output quantities in real time makes it
possible to provide customers with specific andclear delivery schedules.

33

Contribution to National Security - Fixed Wireless (Defense-Related) Acquisition, Technology & Logistics Agency (ATLA) technology strategy

Source: Ministry of Defense website (translated)

ATLA R&D Vision• Persistent ISR including space• Stand-off defense• EMS domain• Under-water warfare• Cyber defense

Areas of our focus• Next-generation field communication
system• Next-generation satellite trunk line
communication system• Microwave band technology..., etc.

34

Business Structural Reforms - Fixed Wireless (Defense-Related) Roadmap
VisionAchieve stable earnings by taking advantage of wireless communication
technology we developed over many years

Short term

Win orders through stable supply of equipment against the backdrop ofincreased defense budget and through proactive proposals targeting
maintenance, inspection, and maintenance projects for existing facilities•

Medium to longterm•

Win orders by building structure of the sales and technology division in
anticipation of major equipment renewal (Ebino Transmitting Station*)
Expand new products through core technology development targeting
fields of our focus

Measures◼ Strengthen sales and technology division staff◼ Launch production-sales joint defense projectteam

R&D expenses
0.5 billion yen(three-year total)◼ Strengthen collaboration with partner companies

Net Sales
At least
5 billion yen
by FY2027* The Ebino Transmitting Station is an anti-submarine radio facility operated by the Maritime Self-Defense Force.

35

Strengthening Defense Field

Fixed Wireless› Won an order for the basic design of submarine broadcasting systemtransmission facilities
Supported by increased defense budget•

Won an order for the basic design of submarine broadcasting systemtransmission facilities from the Ministry of Defense in October 2023•

This project involves basic design work for the update of aging
equipment of the Ebino Transmitting Station*, which has been operating
for about three decades.

•

Our unique know-how and track records are appreciated as we areversed in communication equipment and related services such as
updating work and maintenance and monitoring services for transmitting
equipment.

Aim to win orders for various related projects expected in the future under company-wide
effort as a communication infrastructure developer, taking advantage of our “experienceand technological capabilities in antenna construction for the current facility” and “trackrecords of over three decades in maintenance and operation.”* The Ebino Transmitting Station is an anti-submarine radio facility operated by the Maritime Self-Defense Force.

36

DEFENSE

Fixed Wireless

AWARDED BASIC DESIGN CONTRACT OF SUBMARINESBROADCAST TRANSMITTING FACILITIES BY JMSDF
・Our company was awarded basic design contract of submarines broadcast transmitting facilities
by JMSDF(Japan Maritime Self-Defense Force) in October 2023.
・JMSDF, facing aging of its Ebino Transmitting Station (located in Ebino City, Miyazaki Pref.) which
has been under operation for more than thirty years since establishment, is planning constructionof new submarines VLF(Very Long Frequency) broadcast transmitting facilities as a replacement
scheduled to commence operation no later than the end of FY2036.
JMSDF implements the basic design of new facilities in and after FY2023.
・Ebino Transmitting Station is an extremely large-scaled antenna facility equivalent to nothing inJapan. In the past, we have played a major and significant role in design and construction projectof the Station. Subsequently, we have continuously been contributing management andmaintenance of the Station until now.
・We are confident of being an outstanding leading company inJapan in the field of VLF technology.
・We are proud to be awarded the basic design contract, which
could be evaluated as a proof of our strength in VLF
technology backed by long-term experience. We have alreadyprepared the best and will do utmost effort concentrating all
our technological capabilities for the completion of the basic
design, and further for contribution to the establishment of(Photo Source: Website of Fleet Submarine Force, JMSDF)
new transmitting facility.

37

Solving Social Issues -Radio Frequency (Induction Heating)Toward carbon neutrality
Japanese automakers
Largely aligned with the target of achieving carbon neutrality by 2050, which is also thegovernment’s target

We contribute to achieving carbon neutrality
through the following equipment:⚫ EV and HEV motor shaft hardening andtempering equipment⚫ Hub unit hardening and tempering
equipment
Rack shaft(steering)⚫ CVJ hardening and tempering
equipment⚫ Rack shaft hardening andMotor shaft
tempering equipment
Hub unit
Constant velocity joint (CVJ)

38

Business Structural Reforms -Radio Frequency (Induction Heating)Roadmap
VisionWork on technological development for carbon neutrality to maintain top global market
share
•
•

Short term•

Medium to long term••

Upgrade equipment to downsize staff for improved productivity
Increase orders by working with customers at an early stage of prototyping of newcomponents associated with expansion of EVs
Develop demand for maintenance work on existing equipment to stabilize revenue
streamCapture demand through technological development for power saving
Rebuild our overseas manufacturing and maintenance structures based on the
manufacturing bases of automobile manufacturers

Measures◼ Improve development capabilities by increasing staff◼ Establish a prototyping and research base in Tokai
region◼ Boost the production capacity of overseas affiliates

R&D expenses
0.5 billion yen(three-year total)

Net Sales
At least
10 billion yen
by FY2028

39

Enhancing Productivity Improvement Through Equipment
Improvements

Induction Heating
Equipment› Address smaller workforce
Shorten processing time and improve versatility

Contribute to shorter preparation time

Gantry loader diagram

Gantry loader* used for internal conveyance•••

Achieves complex and fast movements
Capable of automatically changing hand
positions
Achieves versatility, with potential to be
applied to various parts

Secure sufficient maintenance space thanks
to the absence of devices other than heatingcoils in front of the equipment

Heating unit diagram (machine parts, coils)

Machin parts and heating coils
assembled on single base plate as a unit

Shorten the time for preparatory work,
including changing components in thefeeder and discharger* The gantry loader is a loader that moves items between processes.

39Strengthening Initiatives for EVs

Contract Heat
Treating Service› Received order for threaded shaft processing for electromechanical brake systems

Increase in safe driving support systems
Electromechanical braking systems required for EVs and selfdriving vehicles
Ball screw
Used in machine tools, etc., it allows
precise placement by motors.

The use of electric system rather than hydraulically assisted
system enables precise control and achieves stability in collision
avoidance.
A lot of know-how is required for the hardening process of
threaded shafts of mechanical brakes, which needs to be lesswearing and high-precision.

••

We won the order as our brake threaded shaft
hardening technology, which requires a lot ofknow-how, was appreciated.
Expand orders by combining induction heating
equipment and contract high-frequency heat
treating service

41

Solving Social Issues -Radio Frequency (New Areas) Contribute to achieving SDGs using high-frequency induction heating
technology developed through our work for automotive industry

Source: Ministry of the Environment website (translated)

42

Business Structural Reforms -Radio Frequency (New Areas) Roadmap
VisionEstablish a new environmental business•

Short term

Medium to longterm•

Resolve customer issues and expand lineup, focusing on disposal offood and other waste
Speed up development and achieve early commercialization bychanneling resources

Expand business scope by commercializing recycling services

Measures◼ Boost sales and enhance development
capabilities by strengthening staff◼ Establish business model and expand
applications

R&D expenses
0.8 billion yen(three-year total)

Net Sales
At least
5 billion yen
by FY2030◼ Develop overseas sales channels
43

Strengthening New Radio Frequency Areas Field

New Radio
Frequency Areas› Step up development of superheated steam systems[Outline of superheated steam equipment]
A device that generates water vapor of 100°C or higher using high-frequency induction heating with zero
direct CO2 emissions[Features]• Can heat to ultra-high temperatures in short time (up to 700C)• Can help save energy by shortening warm-up time thanks to its quick heating capability• Can be optimally customized according to the purpose or request

Improvement in superheated steam equipment
Conveyor belt type launched

Enables continuous processing and drying
treatment of food residues

Contributes to achievingement of SDGs through waste
reduction and recycling
44

Strengthening New Radio Frequency Areas Field

New Radio
Frequency Areas› Strengthening Initiatives for SDGs
Commercialization of recycling services

Molded plastic products
and film products mixed
with waste

Plastics such as
PE and PP

Industrial
waste
Desiccation

Compression
Plastic pellets

Plastic file folders, plastic buckets,
plastic cardboards, garbage bags, etc.

Aim for a recycling service that enables effective use of industrial waste and reduction offossil fuel consumption••

Enables effective use of waste that was to be discarded, by drying it and mixing resin into it
Dried waste materials have the potential to be reused in various forms depending on theirtype, characteristics, properties, etc.
E.g., fertilizers, feed (for livestock), mixed in pulp molds
45Selection and integration of R&D◼ Overview• Selection and integration aimed at improving R&D performance• Accelerate commercialization through aggressive investment in rising segments• Take medium- to long-term strategies and investment impact into account in selecting
R&D targets(100 million yen)Control total R&D investment amount bystrictly screening investment efficiency

Make development investment
in rising segments aggressively▶ Accelerate monetization46

Medium- to Long-Term R&D Strategy◼ Medium- to Long-Term Vision
Establish new businesses in rising segments
Enter new markets by applying antennas, our core technology• Strengthen profitability of rising segments through selection and integration of R&D• Work on application of our core technologies over a medium to long term and develop
new markets

Solutions

Establish a new business combining consulting
services, using various application programs of“camera + AI solutions,” and software licensing

New Radio
Frequency
Areas

Establish waste recycling and processing business using
superheated steam as a new business

Antenna
Application
Field• Realize shared wireless power transmission system• Enter ITS market. Supply a shared system forcommunication with millimeter-wave radar as
infrastructure facility

47

Future of Wireless Power Transmission

Source: Information and Communication Technology Section Subcommittee of Information and Communications Council“Technical Conditions of Spatial Transmission Wireless Power Transmission System in Premises” report (translated)48

Future of ITS*1 With Next-Generation V2X*2 Communication Technology
Zero-accident society through conventional onboard devices (radarand cameras) + next-generation V2X communication technology
Functions of next-generation V2X
roadside units(Information collection andinformation sharing)
Blind area

Two-way communication
between vehicles androadside units
Next-generation V2X
roadside units

Vehicle-roadside unit
communication➡ Share information
held in vehicles,
including direction of
travelRoadside cameras/radars➡ Receive information on theposition and speed
pedestrians and cyclists

Automatically apply brakes to avert
accident using blind area informationfrom the roadside units

Roles of next-generation V2X communication technology in large
intersections (3 lanes on each side)(Source: National Institute of Information and Communications Technology website (translated))*1 “ITS (intelligent transport systems)” is a transportation system that aims to solve traffic problems (accidents, traffic congestion, etc.) using information and communication
technology.
*2 “V2X (vehicle to X)” is a generic term for wireless communication technology that connects vehicles and everything.

49

Reform of Organizational Structures; Reinforcing Sales Capabilities;
Improve Operations Thoroughly◼ Overview• Implement organizational structure reforms in line with business portfolio• Optimize production, sales and R&D structures, and rationalize organizations and personnel including
the head office administrative divisions.
• Shift to profit-centric sales structure by strengthening sales capabilities and improving sales efficiency• Conduct drastic review of operations to improve operational efficiency and reduce fixed costs
Implement organizational structure reforms in line with businessportfolio
Reform oforganizational
structures

Reinforcing sales
capabilities

Review current organization and structures, optimize production, sales,
and R&D structures, and rationalize organizations and personnel
including administrative divisions
Aim for sales organization that can flexibly respond tochanges in market environment
Improve sales efficiency by setting sales KPIs and using digital
tools, including sales force automation (SFA)
Reduce costs, including fixed costs, thoroughly

Improve Operations
Thoroughly

Improve efficiency by promoting DX and outsourcing of operations andreviewing internal rules

50Upcoming Schedule
November 30, 2023

FY3/2024 first-half results briefing• Outline of Fundamental Reforms to Improve
Business Performance explained

4Q FY3/24

Medium-Term Business Plan “DKK-Plan 2025”
Rolling plans to be announced

April 1, 2024

Medium-Term Business Plan “DKK-Plan 2025”
rolling plans carried out based on theorganizational structure after structural reforms
Fundamental reforms promoted
to improve business performanceFirst half of 2025

Medium-Term Business Plan “DKK-Plan 2028”
to be announced
51

Notes on Earnings Forecasts
Figures included in this document that are related todescriptions, including plans and policies and not past facts,are forecasts regarding future earnings. They are all calculated
based on management assumptions and views based on
information grasped by the company at the time of writing.
Therefore, these forecasts include risks and uncertain factors,
and actual results may differ from them due to a variety offactors.
Such potential risks and uncertain factors include changes in
economic situations and product demand levels in major
markets, fluctuations in the foreign exchange market, changes
in regulations in Japan and overseas, and accounting standards
and practices.

52