Results for Fiscal Year
Ended March 31, 2023
May 30, 2023

DKK Co., Ltd.

Table of contents
1. Result Highlights (Consolidated)

2. Forecasts for Current Fiscal Year (Consolidated)
Performance and Forecasts of each3.
Business Field
4. Topics
5. Progress of Medium-Term Business Plan

1

1. RESULT HIGHLIGHTS(CONSOLIDATED)

2

Overview of FY3/23 Results◼ Net sales for the Radio Frequency Business increased, but that for the Telecommunication Businessdecreased; as a result, the overall net sales declined.
◼ A rise in cost-to-sales ratio, driven mainly by a spike in material prices, resulted in decreases in operating
income, ordinary income and net income.

■ Full-year statement of income(Millions of yen)

FY3/22

FY3/23

results

Forecasts

33,96832,000

Cost of sales

27,770Gross profit
Selling, general, andadministrative expenses

Net sales

YoY change

Results

Difference fromforecast

Amount Percentage Amount Percentage

31,817 -2,151 -6.3%-183 -0.6%-

27,732-38 -0.1%

-

-

6,198

-

4,084 -2,114 -34.1%

-

-

6,145

-

5,595

-

-

-550 -8.9%

Operating income

53-1,800-1,510 -1,563

-

290

-

Operating margin

0.2%

-5.6%

-4.7%

-

-

-

Ordinary income

448-1,500-1,219 -1,667

-

281

-

Ordinary income margin

1.3%

-4.7%

-3.8%

-

-

-

Net income attributable toshareholders of parent company

705-1,700-1,181 -1,886

-

519

-

1.5%

-3.8%

-2.7%

-

-

-

ROE

-

-

-

Note: The figures for FY3/23 is the latest forecasts released on March 24, 2023.

3

Net Sales◼ Net sales down 6.3%
◼ The Telecommunication Business’ net sales decreased 12.8% as demand from customer capital
expenditure was restrained in the mobile communication-related segment, although infrastructure
investment recovered in some business areas.
◼ The Radio Frequency Business’ net sales increased 14.7% thanks in part to a recovering trend in unit
vehicle output.

Net Sales(100 million yen)500

Net Sales
31.8 billion yen

Radio Frequency

YoY change
Down 2.1 billion yen

Telecommunication

400
339
300

79

(down 6.3%)

320
90

318
91

YoY change
Down 3.3 billion yen(down 12.8%)

200
100

Telecommunication
22.5 billion yen

259

230

225

0
FY3/22 results

FY3/23 forecasts

FY3/23 results

Note: The figures for FY3/23 is the latest forecasts released on March 24, 2023.

Radio Frequency
9.1 billion yen
YoY change
Up 1.1 billion yen(up 14.7%)

4

Operating Income◼ Operating income decreased due to factors including a decrease in net sales, spikes inmaterial prices, procurement costs and energy prices, and a weaker yen, although theratio of selling, general and administrative expenses to sales decreased.
1(100 million yen)

Operating Income

20

6%Operating income
Operating margin

4%

10
2%

Operating loss
1.51 billion yen

0%

YoY change
Down 1.56 billion yen

0.5
0

0.2%

-15.1

-10

-18.0
-5.6%

-2%
-4%

-4.7%

-20

-6%
FY3/22 results

FY3/23 forecasts

FY3/23 results

Note: The figures for FY3/23 is the latest forecasts released on March 24, 2023.

5

Segment Income◼ Income decreased for the Telecommunication Business, affected by a decrease in net sales
and spikes in material prices, etc.
◼ The Radio Frequency Business’ income increased, driven by such factors as increased net
sales due to a recovering trend in demand from capital expenditures in the automotive
industry and improved productivity, although an impact of spikes in material prices was felt.
Segment Income(100 million yen)

30

20%

Telecommunication

Telecommunication
0.05 billion yen

Radio Frequency
Operating margin

13.3%

15%

20
12.4%
7.8%

10%

10
10.5
20.1

11.3

FY3/22
results

5%

0.2%
0.5

0

FY3/23
results0%
FY3/22
results

YoY change
Down 1.9 billion yen(down 97.5%)

Radio Frequency
1.13 billion yen
YoY change
Up 0.07 billion yen(up 7.1%)

FY3/23
results6

2. FORECASTS FOR
CURRENT FISCAL YEAR(CONSOLIDATED)7

Overview of FY3/24 Forecasts
FY3/23
results

Net sales

FY3/24
forecasts(Millions of yen)
YoY change
AmountPercentage

Operating income

31,817
22,5789,131-1,51037,00025,800
11,100500

Operating margin

-4.7%

1.4%

Telecommunication

50

1,600

Operating margin

0.2%

6.2%

Radio Frequency

1,132

1,550

Operating margin
General and administrative
expenses, etc.

12.4%

14.0%

-2,695-2,65045-

Ordinary income-1,219

600

1,819

-

Ordinary income margin
Net income attributable toshareholders of parent company
ROE

-3.8%

1.6%

-1,181

500

-2.7%

1.2%

Telecommunication
Radio Frequency

5,183
3,222
1,969
2,010
-

16.3%
14.3%
21.6%
-

1,550
-

3100.0%
-

418
-

-

-

-

1,681
-

36.9%

-

Note: Net sales of the facility-leasing business, the electric power sales business, etc., which are not included in the reportablesegments, are omitted.

8

Net Sales and Operating Income Forecasts◼ Net sales are expected to increase driven by signs of market recovery and efforts for new
businesses.
◼ Operating income is expected to increase, driven mainly by normalized selling prices,
improved operational efficiency, and reorganized production structures.
(100 million yen)

Net Sales(100 million yen)

20

500
Up 5.1 billion yen

400

Operating Income

Operating margin4%(up 16.3%) YoY

10

Up 2.0 billion yen
YoY

300

200

6%

Operating income

318

370

1.4%

5.0

0

2%
0%
-2%

-15.1
-10

100

-4%
-4.7%

0

-20
FY3/23 results

FY3/24 forecasts-6%
FY3/23 results

FY3/24 forecasts

9

Segment Forecasts◼ We estimate both net sales and profit will increase for both the Telecommunication andRadio Frequency Businesses.
(100 million yen)Segment Net Sales(100 million yen)

30

400
Telecommunication

Segment operating
Segment
IncomeincomeTelecommunication

Radio Frequency

20%

Radio Frequency

15%

300

12.4%

20
200

15.5

10

225
100

6.2%

91

111

0
FY3/24
forecasts

FY3/23
results

FY3/24
forecasts

11.3

5%

0.5
0.2%

0
FY3/23
results

10%

16.0

258

14.0%

FY3/23
results

FY3/24
forecasts

0%
FY3/23
results

FY3/24
forecasts

10

3. PERFORMANCE AND
FORECASTS OF EACH
BUSINESS FIELD

11

Mobile Communications-Related Field

Telecommunication◼ As key customers restrained capital expenditures, demand dropped significantly, resulting indecreased net sales.
◼ We expect net sales to increase in the current fiscal year as we expect demand will recover forantennas for mobile communication base stations, wireless equipment products, etc.
(100 million yen)

Mobile Communications: Net Sales

160

140
FY3/23 result
7.8 billion yen

120

YoY change
Down 5.4 billion yen(down 40.8%)

100
80

133

60

FY3/24 forecast
8.8 billion yen

40

78

20

88

YoY change
Up 0.9 billion yen(up 11.7%)

0FY3/22 results

FY3/23 results

FY3/24 forecasts

12

Fixed Wireless Communication-Related Field

Telecommunication◼ Net sales increased driven by recovery in demand for administrative radio systems for disaster prevention
associated with local governments’ efforts such as reinforcing disaster-prevention structures and promoting
digitalization.
◼ In the current fiscal year, we expect net sales to increase as we are closely monitoring developments indefense-related budgets and anticipating a recovery in demand for administrative radio systems for disasterprevention.

Fixed Wireless: Net Sales(100 million yen)100
80

FY3/23 result
6.2 billion yen

60

YoY change
Up 0.7 billion yen(up 14.2%)

78

40

FY3/24 forecast
7.8 billion yen

62
20

55

YoY change
Up 1.5 billion yen(up 24.0%)0FY3/22 results

FY3/23 results

FY3/24 forecasts

13

Broadcasting-Related Field

Telecommunication◼ Net sales increased thanks to aggressive sales expansion activities, although demandremains sluggish for capital expenditures from broadcasters.
◼ We expect net sales to increase for the current fiscal year, due to sustained demand forequipment renewal and maintenance from broadcasters.
(100 million yen)

Broadcasting: Net Sales

50
40

FY3/23 result
3.8 billion yen

30

YoY change
Up 0.8 billion yen(up 28.3%)

38

20

40
FY3/24 forecast
4.0 billion yen

29

YoY change
Up 0.15 billion yen(up 4.1%)

100
FY3/22 results

FY3/23 results

FY3/24 forecasts

14

Solutions-Related Field

Telecommunication◼ Net sales increased as system solutions using the local 5G technology, etc., camera solutions
using the AI technology, etc. performed strongly, driven mainly by the national and local
government customers.
◼ In the current fiscal year, we expect net sales to increase as we work to expand our customer
base by participating in test projects and forming tie-ups with other companies to expand
business.
(100 million yen)

Solutions: Net Sales

6
FY3/23 result
0.18 billion yen

5

YoY change
Up 0.06 billion yen(up 46.9%)4
5

3

FY3/24 forecast
0.5 billion yen

2
1

YoY change
Up 0.3 billion yen(up 166.0%)

1.8
1.2

0
FY3/22 results

FY3/23 results

FY3/24 forecasts

15

Other Field

Telecommunication◼ Net sales increased thanks to solid performance of outdoor steel building frameworks andenvironmentally friendly products, including LED aviation obstacle lights and fuel cells.
◼ We expect net sales to increase in the current fiscal year, anticipating demand forenvironmentally friendly products, including aviation obstacle lights for offshore wind-power
facilities, which are expected to grow.

Other: Net Sales(100 million yen)60
FY3/23 result
4.3 billion yen

50

YoY change
Up 0.4 billion yen(up 10.3%)

40

30
43
20

47
FY3/24 forecast
4.7 billion yen

39

YoY change
Up 0.3 billion yen(up 7.5%)

100
FY3/22 results

FY3/23 results

FY3/24 forecasts

16

Induction Heating Equipment-Related Field

Radio Frequency◼ Net sales increased, driven by a recovering trend of demand for capital expenditures in theautomotive industry.
◼ We expect net sales to increase in the current fiscal year, anticipating that auto component
makers’ capital expenditures for EV-related components will remain active and that orders
for heat-treatment equipment for auto components will be strong overseas, mainly in South
Korea and China.
Induction Heating Equipment: Net Sales(100 million yen)100
FY3/23 result
6.6 billion yen

80

YoY change
Up 1.0 billion yen(up 18.8%)

60
40

66

82

56

20

FY3/24 forecast
8.2 billion yen
YoY change
Up 1.5 billion yen(up 22.8%)

0FY3/22 results

FY3/23 results

FY3/24 forecasts

17

Contract Heat Treating Service-Related Field

Radio Frequency◼ Net sales increased slightly due to the impact of a recovering trend of unit output, althoughautomakers adjusted production.
◼ We expect net sales to increase in the current fiscal year, anticipating a further recovery invehicle output.
(100 million yen)Contract High-frequency Heat Treating Service: Net Sales

40
FY3/23 result
2.3 billion yen

30

YoY change
Up 0.04 billion yen(up 1.7%)

20

10

23

23

27

FY3/24 forecast
2.7 billion yen
YoY change
Up 0.3 billion yen(up 13.5%)

0FY3/22 results

FY3/23 results

FY3/24 forecasts

18

New Radio Frequency Areas Business-Related Field

Radio Frequency◼ Positive net sales were achieved thanks to orders won through sales activity for carburizing
hardening equipment.
◼ We expect net sales to increase in the current fiscal year as we work on initiatives in new
business areas by aggressively making investments, reaching out to new customers to
expand uses, and promoting tie-ups with other companies.
New Radio Frequency Areas Business: Net Sales(100 million yen)3
FY3/23 result
0.07 billion yen
YoY change
Up 0.07 billion yen

2

1

2

YoY change
Up 0.12 billion yen(up 163.2%)

0.7

0

0
FY3/22 results

FY3/23 results

FY3/24 forecast
0.2 billion yen

FY3/24 forecasts

19

4. TOPICS

20

R&D Initiatives

Telecommunication› Promote research and development of millimeter-wave/terahertz band antenna technologies in
preparation for Beyond 5G/6G› Work on antenna in package, terahertz band antennas, metamaterial application, etc.
Antenna in package

Antenna (16-element array)

Terahertz band antenna

Metamaterial application

Transmissive metasurface(Front)Terahertz band
omnidirectional antenna

28GHz band AiP (16 elements) (Back)

World’s firstomnidirectional antennain the 300GHz bandrealized (Source: DKK)

Variable incident-reflection
angle reflector panel21

Camera Solution Initiatives

Solutions› Tally the number, genders, and age segments of pedestrians using people movement analysis systemthat takes advantage of artificial intelligence (AI)› Use the data for local communities to help them create liveliness and attract customers

Camera systems x AI

• Provide one-stop service using
network-building technology andsystem design

Total

Camera map

Analysis by attribute

Large

Location A
Category1

Category 4

Location B
Place: Location A
Statistic: 2,000

Attribute1

Category
2

CategoryY

Attribute2

CategoryX

Category 3

Location C
Small

Composition by attributeTime series analysis

Category X
Category Y
Attribute1
Category
4

Statistic• Help solve regional issues using
AI-based image analyzing
technology and DKK’s camera
solution

Category
3
Category
2
Category
1

Statistic
Time

22

Local 5G Initiatives

Solutions› Participation in test projects on using local 5G to solve issues› Aim to construct systems that can be used in normal times, not just in addressing disasters
Work on disaster resistance improvement of disaster-prevention centers using mobile base station vehicles• Construct networks fordisaster situations that do
not rely on
telecommunications
carriers

Networks used in disasters

Disastermanagement
headquarters

Local 5G

Mobile local 5G
base station vehicle

Disaster-hit areas• Can connect to fiber-optic
networks for roadmanagement by using local
5G self-operated wirelessnetwork• Area construction suited
to individual locational
conditions by using DKK
antennas23

Environmental Management Initiatives

Other Businesses› LED aviation obstacle lights and navigation aid lights using long-life light sources
provided to offshore wind power equipment makers
Contribution to reducing environmental impact• Reduce maintenanceworkload in areas where
work is difficult by using
long-life light source LEDs
Medium-luminosity
obstacle light

Low-luminosity
obstacle light

Navigation aid light
DKK Safety light24

Vehicle electrification initiatives

Induction Heating
Equipment› Respond to changes in composition of auto parts amid global trend of vehicle electrification› Promote development of high-frequency hardening equipment for motor components essential for
EVs and HVs

Integrated equipment system that can alone handle the entire shaft hardening process• Equipment that can alone
perform all processes ofhardening the outer surface (twolocations) of a hollow shaft,hardening its inner surface, andtempering the whole of it• Hardening and tempering
equipment for EV componentsthat are attracting interest
Hardening and tempering equipment for EV motor shafts

25

Initiatives for Improving Customer Productivity

Induction Heating
Equipment› Established technology to correct warping, a problem that mainly occurs during the hardening oflarge components› Allows automated processing using robots

Warping-correcting technology and automated processing equipment using robots• Automatically performs hardening processing,washing and stamping with two robots set up in
front of the hardening machine• Workers only perform simple operation of taking
work piece out of or into the stocker. Achievesnormalization and labor-saving• Equipment that hardens and tempers 2-meterlong linear gear
• Hardens and tempers the linear gear surface
and the back side separately by using two
oscillators, and adjusted output andfrequencies, successfully reducing warping

26

Initiatives to Expand Sales Channels

Induction Heating
Equipment› Sales channel expansion to non-auto industries› Hardening and tempering equipment for large construction machinery
Many successful results for large components for construction machinery• Heats power shaft parts of large
construction machinery vehicles
weighing up to 1.5 ton while rotatingthem• Using eccentric heating coils toachieve the optimum conditions for
hardening heating• Design with large components in
mind, which has a large opening for
maintenance, making it convenient to
set up the components to beprocessed

27

New Radio
Frequency Areas

SDGs Initiatives› Developed technology to dry industrial waste using superheated steam› Contribution to achieving SDGs through energy saving and waste reduction
Drying treatment technology for industrial waste (food residue)● DKK superheated steam drying technology ● Customized design of processing equipment<Continuous processing equipment><Batch processing>Industrial
waste(food residue)
Used coffee
Outer leaves
groundsof lettuce
DKK TECHNOLOGY

After drying• Reuse of industrial waste• Reduction ofindustrial waste• Feed for livestock,etc.

• Design customized to suit
location of installation, amounts ofprocessing• Used coffee ground pellets

28

5. PROGRESS OF MEDIUMTERM BUSINESS PLAN

29

Basic Policy and Priority Measures of Medium-Term Business Plan “DKK-Plan 2025”
In order to realize sustainable growth through solution of social issues, weestablished “DKK-Plan 2025,” our medium-term management plan which clearlystates the goals and what to focus on and promote for the period through FY3/25.

Medium-Term Business Plan: DKK-Plan 2025: Basic Policy

Improve corporate value through promotion of sustainability management
Priority1

measures

Strengthen business foundation◼ Enhance corporate governance; promote compliance management◼ Improve employee engagement◼ Promote environmental management

2

Optimize business portfolio◼ Ensure visibility of business profitability of new segments/ROIC◼ Promote structural reforms, including the Group◼ Strengthen business foundation for profit creation

3

Realize new business creation early◼ Capital tie-ups and active investment in M&A◼ Launch solution business toward resolving social issues◼ Aggressive investment in human resources development

30

OVERVIEW OF MEDIUM-TERM BUSINESS PLAN: DKK-PLAN 2025 (I)Numerical Targets◼ Overall targets◼ Segment net sales targets for FY3/25
Net sales targets

FY3/22
results

FY3/25targets

MobileCommunications

14.0 billion
yen

Net
Sales

33.9 billion
yen

43.0 billion
yen

Fixed Wireless

7.0 billion
yenNet
income0.7 billion
yen

2.0 billion
yen

D/E
ratio

0.01

ROE

1.5%

0.2–0.3
5.0%

Broadcasting

4.0 billion
yen

Solutions

1.5 billion
yen

Other
Businesses

4.3 billion
yen

Net sales targets

Induction
Heating
Equipment

7.3 billion
yen

Contract
Heat
Treating
Service

2.8 billion
yen

New Radio
Frequency
Areas

2.0 billion
yen

Existing businesses: 39.5 billion yen
New businesses: 3.5 billion yen* New businesses are Solutions and New Radio Frequency Areas.

31

OVERVIEW OF MEDIUM-TERM BUSINESS PLAN: DKK-PLAN 2025 (II)Structural Reforms
Optimize business portfolio
Drastic organizational reforms for execution of
growth strategy◼

Reform of affiliate companies in preparation for group
integration
Consolidate production facilities
Consolidate/split subsidiaries based on the business field or area

Consolidate construction work divisions
Separation from sales divisions; enhance cost management byintegrating technologies from across Japan

Promote active use of human resources
Use human resources within the Group in flexible mannerStronger profit structure◼

Shareholder Return Policy andInvestment Strategy
Shareholder
returns

Dividends /share buybacks

Minimum 10.0 billion yen

Note: Including share buybacks disclosed in February 2022

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

M&A
M & A

Up to 4.0 billion yen✓ Aggressively carry out for new business creation

Optimization of overseas strategies

Growthinvestment(total for period through end-March 2025)

Create optimum production structure

Capital expenditures

About 4.0 billion yen

R&D investment

About 6.0 billion yen

Reorganize production facilities in a flexible manner, including partnercompanies, in order to address currency risks and improve profitability

Expand areas of Radio Frequency operations overseas
Expand and enhance services through optimum allocation of equipmentproduction, maintenance and contract-processing services Channelinghuman resources in response to demand

Improved profitability ofoverseas operations✓ Make investments that pay attention to cost of capital
Other
investments

Update investment /DX investment /ESG-related investment

About 4.0 billion yen

32Priority Measures and Initiatives under DKK-Plan 2025
• Based on priority measures of DKK-Plan 2025, five initiative items were
established according to what to address.
Priority measures
Initiative items

1

Strengthen businessfoundation

1

2

2

3

Optimize businessportfolio

Realize new
businesscreation early

Initiatives for “Enhancing
corporate governance”
Initiatives for “Workplaceculture and work stylereforms”

3

Initiatives for “Promoting
environmental management”

4

Business strategy

5

Investment strategy

33

Progress of DKK-Plan 2025 (Measures to Strengthen Business Foundation) (I)
Strengthening corporate governance
Board of Directors• Nomination Committee
FY3/23: Met 4 times
Review of skills matrix• Compensation Committee
FY3/23: Met 5 times
Directors' compensation ratio changed(70 basic : 30 performance-linked)
KPI for calculating directors’
bonuses (consolidated operating
income) added

Organization• Expanded divisions obtaining ISO 27001
certification
Mainly headquarters, administrative divisionsof operations, defense-related divisions
obtained certification

Other• Execution of reduction in cross-heldsharesNo. of issues held

Balance

End-March 2021 40 issues

5,243 million yen

End-March 2022 37 issues

10 issues
3,736 million yen
Down 2,264
million yen 2,979 million yen

End-March 2023 30 issues

Malus and clawback provisions introduced• Effectiveness evaluation(i) Deepening deliberation regarding
Medium- and Long-Term Management
Strategy
Issues(ii) Further improvement in Board of
Directors operation

End-March 2025
target20 issues

2,622 million yen

34

Progress of DKK-Plan 2025 (Measures to Strengthen Business Foundation) (II)Workplace culture and work style reforms• Enlisted external service to conduct “employee engagement survey”• Ratio of female managers increased
April 2022: 5.9%
April 2023: 6.5% *Line managerial position ratio• Mid-career personnel managerial position ratio improved
April 2022: 15.3%
April 2023: 15.9%• Reduction in average annual total working hours driven by productivity
improvement through use of DX
FY3/23 result: 1,851 hours(FY3/25 target: about 1,800 hours)

35

Progress of DKK-Plan 2025 (Measures to Strengthen Business Foundation) (III)Promote environmental management• Express support of TCFD* recommendations and disclose information in* TCFD: Task Force on Climate-Related Financial Disclosurescompliance with them
DKK group’s Scopes 1 and 2 GHG emissions measured (for FY3/20–FY3/22)
Scope 3 measurement began
Information disclosure compliant with TCFD recommendations carried out• Contribution to the environment through operation of business
Percentage of waste recycled measured (FY3/20–FY3/22)• Employee environmental awareness improved
Environmental education conductedLight down

• Development of superheated steam equipment▲ Cyclone method

Equipment with low CO₂ emissions aimed at contributing to decarbonization superheated steam• Sales increase of environmentally friendly products,
including aviation obstacle lights targeting power generationequipment for offshore wind-power facilities

equipment
Patent No. 7063948

36

Progress Toward DKK-Plan 2025 Numerical Targets◼ Numerical targets under DKK-Plan 2025 and results in current fiscal year••

Net sales came to 31.8 billion yen in FY3/23, affected by restrained capital expenditures bycustomers in the Mobile Communications segment.
We need to improve both net sales and net income to achieve FY3/25 targets.

FY3/22 results

FY3/23 results

FY3/25 targets

Net
sales

33.9 billionyen

31.8 billion
yen

43.0 billion
yenNet
income0.7 billion
yen-1.1 billion
yen

2.0 billion
yen

D/E
ratio

0.01

0.09

0.2–0.3

ROE

1.5%

-2.7%

5.0%

37

Progress of DKK-Plan 2025 (Progress of Business Strategy) (I)
Creation of new businesses• Promote research and development of millimeter-wave/terahertz band
antenna technologies in preparation for Beyond 5G/6G
Initiatives for antenna in package, terahertz band antennas, metamaterial application, etc.

• Business matching
Promote efforts to collaborate with wide-ranging companies and universities• Adopted for the Ministry of Internal Affairs and Communications’“Development Demonstrations for Realizing Local 5G to Solve
Local Issues”
Help local governments speed up initial disaster response using local 5G transmissionof high-definition video from drones• Planning and production project launched
Launched as a project that can be actively participated by young employees with the
purpose of creating new businesses, etc.
In this fiscal year, we plan to expand the target scope and launch a project for managers.
38

Progress of DKK-Plan 2025 (Progress of Business Strategy) (II)Contribution to social infrastructure development• Began delivery of wireless equipment for NTT DOCOMO’s
5G commercial services
Realized flexible network construction not restricted by specific vendors• Succeeded in developing local 5G millimeter-wave antenna using
low-loss circuit boards
Realized antenna that excels in both electrical properties and mechanical strength• Administrative radio systems for disaster prevention associated withlocal governments’ effort to reinforce disaster-prevention structures,promote digitalization, etc.
• Continuation of broadcasters’ equipment update and maintenance
Maintain and update broadcasting equipment as a social mission• Measures for vehicle electrification
Developed integrated equipment that can process the entire shaft hardening processwith just a single system• Labor saving and improved productivity of heat treatment equipment
Automation of warping-correcting technology using robots
39

Progress of DKK-Plan 2025 (Structural Reforms)◼ Domestic and overseas group company reorganization•

Carried out drastic organizational reforms, aiming to improve profitability by improving operational
efficiency, reducing costs, and reallocating assets and invested capital

Domestic affiliate reorganization••

Carried out reorganization (merger/company split)
among DKC Co., Ltd., Koshuha Co., Ltd. andDenko Techno Heat Co., Ltd., our wholly owned
subsidiaries, on the effective date of April 1, 2023
Working to strengthen profitability in construction
divisions and consolidate businesses, improve theircompetitiveness, etc. in the radio frequency
business

Overseas affiliate reorganization••

Proceeding with dissolution of DKK Sino-Thai Engineering
Co., Ltd. and reorganization involving business transfers
between DKK MANUFACTURING (THAILAND) CO., LTD.
and DKK（THAILAND） CO., LTD.
Working to withdraw from unprofitable business in Thailand
where demand for communication steel towers has
decreased, improve profitability by overhauling antenna
production facilities, and consolidate businesses in Radio
Frequency Business to boost competitivenessDissolution
DKK Sino-Thai Engineering Co., Ltd.

Transferof radio frequency
business
DKK
MANUFACTURING(THAILAND)
CO., LTD.

DKK(THAILAND)
CO., LTD.

Dissolution
after business
transfer

40

Progress of DKK-Plan 2025 (Capital Strategy)
Capital allocation worked out as capital strategy to achieve sustainable growth
Working to put interest-bearing debts to effective use, improve capital efficiency, carry out
investment to ensure growth, and strengthen shareholder returns

Capital allocation•

Carry out rebuilding of commitment lines to takeadvantage of interest-bearing debts, with the target set
at D/E ratio of 0.2 to 0.3•

Reduce cross-held shares•

Conduct share buybacks to optimize capital levels

Investment strategy
FY3/23
investment
amountR&D investment
Growth capital
expenditures

FY3/25
investment plan(cumulative)

1.4 billion

6.0 billion

yen

yen

0.63 billion

4.0 billion

yen

yen

Other investments 0.43 billion
yen

4.0 billion
yen

M&A
•
•
•

Options being considered, linking them with othergrowth investment (development investments, etc.)
plans
Investment Committee established
Money to be used to shore up shareholder returns if
M&A not carried out
FY3/23

M&A

None
applicable

FY3/25Up to

4.0 billion
yen

41

Shareholder Returns / Investment Performance
Shareholder return policy
Shareholder returns totaled 10 billion yen over three years from FY3/22

Payout ratio
•

40%

DOE

2%

Lower bound of target

1.5%

We aim to actively implement measures to enhance shareholder returns.

Purchase of treasury stock

Pay dividends•

Interim dividend of 30 yen per share paidout•Year-end payout of 30 yen planned

•
•

59.7%
Total
NumberofRetiredsharesFY3/2330 yen30 yen(Interim)(Year-end, targeted)

Share buybacks totaling 2.5 billion yen completed
Retirement carried out in accordance withretirement policy
Ratio of the number of retired
shares to the number of treasury
shares before retirement

1.98
millionshares•Share buybacks worth 2.5 billion yen underway

42Progress of DKK-Plan 2025 (Sustainability Initiatives)
Other: Sustainability-related track record• DKK website / company brochure sustainability page created• Supply chain sustainability
Basic Policy and Guidelines on Sustainability in Supply Chains established43Notes on Earnings Forecasts
Figures included in this document that are related to descriptions,
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, andactual results may differ from them due to a variety of factors.
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 inregulations in Japan and overseas, and accounting standards andpractices.

44