Briefing on Results for the Third quarter of theFiscal Year ending March 31, 2016

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Highlights of Results for the Third quarter of FY2016/3(Consolidated)(million yen）

Rate ofchange(YoY)

Third quarter ofFY2015/3

Third quarter ofFY2016/3

Change(YoY)

Net Sales

37,629100％

36,633100％△996 △2.6％

Operating income

3,421

9.1％

2,696

7.4％

△725

△21.2％

Ordinary income

3,702

9.8％

3,034

8.3％

△668

△18.0％Net income

2,492

6.6％

2,093

5.7％

△399

△16.0％

Capital investment

1,887－912－△975△51.7％732－

937－

205

28.0％

115.82yen－

97.95yen－

Depreciation
Net income per shareROE(%)

7.6 Annualized

5.9 Annualized△17.87yen △15.4％－－2

Sales Trends by Product (Consolidated)(million yen）

Third quarter of
FY2015/3

Third quarter of
FY2016/3

Change(YoY)

Rate of
Change(YoY)

37,629100％

36,633

100％

△996

△2.6％

Generators

28,61676.0％

27,703

75.6％

△913

△3.2％

Welders

4,344

11.5％

3,955

10.8％

△389

△9.0％

Compressors

838

2.2％

786

2.1％

△52

△6.2％

Others

3,830

10.2％

4,18711.4％

357

9.3％

By productNet sales3Engine Generators (Consolidated)(million yen）

Third quarter ofFY2015/3

Generators

28,616

Third quarter ofFY2016/3

27,703Rate of change(YoY)△3.2％• In Japan, shipment of the Stand-by generating sets for disasterprevention decreased.
• Overseas, shipment to Asia and the Middle and Near East increased.
Manufacturing engine-driven generators with capacity from 1kVA to 1100kVA
Mobile-type generators
Power source on a construction site and for civil engineering work and disaster recovery/restoration, etc.
Stand-by generating sets (stationary type)Back-up power source such as disaster prevention equipment and offices, etc.
Power-supply vehicles, power light, etc.

65%

Domestic market share ofengine generators (mobile-type)

Mobile-type generator

Stand-by generating sets

*According to a Company survey

4Engine Welders (Consolidated)(million yen）

Third quarter of
FY2015/3

Welders

4,344

Third quarter of
FY2016/3

3,955

Rate of change(YoY)△9.0％• Shipment to domestic market and Europe decreased.
The Company developed the first engine-driven welder for outdoor work in Japan.
Ranging from 135A for welding light-gauge steel to a 500A engine-driven welder
for heavy-gauge steel, a TIG welder and a CO2 welder, etc.
Welding of steel construction for buildings, condominiums and bridges
Welding of important structures such as petroleum storage tanks and pipelines

55%

Engine welder

Battery welder

Domestic market share ofengine welders*According to a Company survey

5Engine Compressors (Consolidated)(million yen）

Third quarter of
FY2015/3

Compressors

838

Third quarter ofFY2016/3

Rate of change(YoY)△6.2％786• Shipment to the overseas market generally increased and to thedomestic market decreased.
Manufacturing compressors
with air discharge amounts from 1.6㎥/min to 42.4㎥/min.
 Breaking-up of roads and ground improvement work of roads
 Mortar spraying work for preventing landslides of mountain roads
 For artificial snow machines on ski slopes, etc.

20%

Engine compressor

Motor compressor

Domestic market share ofengine compressors*According to aCompany survey

6Others (Consolidated)(million yen）

Third quarter of
FY2015/3

OthersThird quarter of
FY2016/3

3,830

4,187Rate of change(YoY)

9.3％• Sales of self-propelled lifters, etc. increased.

Sales of other products
Self-propelled lifters
PartsSecondhand equipment and purchased
merchandiseRepair sales, etc.

Self-propelled lifter

Load testing equipment

7

Sales Trend by Region (Consolidated)(million yen）

Third quarter ofFY2015/3

Third quarter ofFY2016/3

Change(YoY)

Rate of change(YoY)

37,629100%

36,633

100%

△996

△2.6%

Domestic sales

22,19259.0%

20,994

57.3% △1,198△5.4%

Overseas sales

15,43741.0%

15,639

42.7%

202

1.3%

North/Central
America

8,322

22.1%

7,339

20.0%

△983

△11.8%

Asia

4,937

13.1%

5,589

15.3%

652

13.2%

Others

2,176

5.8%

2,709

7.4%

533

24.5%

By region

Net sales

Third quarter of FY2015/3

Japan

Third quarter of FY2016/3

Japan

0

5,000

10,000

North/Central
America
North/Central
America
15,00020,00025,000

OthersAsia

Asia

30,000

Others35,00040,0008Factor Analysis of Changes in Operating Income（Consolidated）
Decrease in
Operating income• Both the cost rate and the ratio of SG&A to sales
increased.
(million yen）

Third quarter of
FY2015/3

Third quarter of
FY2016/3

Change(YoY)

Operating income

3,421

2,696

△725

Operating income margin

9.1%

7.4%

△ 1.7percentage point

Third quarter of
FY2015/3

Third quarter ofFY2016/3

Rate of change(YoY)

Gross profit margin

24.5%

23.8% △ 0.7percentage point

Ratio of SG&A to sales

15.4%

16.5%

Ratio of operating income tosales

9.1%

7.4% △ 1.7percentage point••

1.1percentage point

Gross profit margin worsened due to a fall in the shipment of profitable products and an increase of thefixed cost, etc. in Denyo Vietnam.
Ratio of SG&A to sales increased due to an increase of the depreciation expenses and personnel expenses,etc.

910Outlook for FY2016/3 : Consolidated Income and LossKeypoints• Net sales are expected to be 51.0 billion yen.
• Assumed exchange rate is 110 yen/dollar.
(million yen）

FY2015/3

FY2016/3(forecast)

Change(YoY)

Rate ofChange(YoY)

Net sales

52,267100%

51,000100%△1,267

Operating income

5,348

10.2%

4,000

7.8%

△1,348 △25.2%

Ordinary income

5,757

11.0%

4,300

8.4%Net income

3,857

7.4%

3,0005.9%

Capital investment

2,531－

1,200－△1,457 △25.3%△857 △22.2%△1,331 △52.6%

999－

1,300－

301

179.38yen－

140.36yen－△39.02yen

8.6%－

28.0yen－Depreciation
Net income per share
ROE(%)Cash dividends pershare

△2.4%

30.1%
－

equity is calculated by using the amount
6.3% *Shareholders’of money at the end of the third quarter of FY2016/3.

28.0yen－－－11

Changes in the Amount of Capital Investment (Consolidated)(million yen）

End of March2013

End of March2014End of March2015

End of March
2016 (plan)

1,457

2,453

2,531

1,200

Cost ofequipment••

Main uses••

Laboratory & Training
Center 814
Machinery of Fukui plant,etc. 150
U.S. Plant 237
Vietnam Plant 127

•
•

•
•

Machinery of Fukui plant,etc. 480
Nishinihon Generator Mfg.
270
Vietnam Plant 440
Singapore 1,100

•
•

•
•
•

Machinery of Fukui plant,etc. 440
Nishinihon Generator Mfg.
160
U.S. Plant 50
Vietnam Plant 1,630
Singapore 180

•
••
•
•

Machinery of Fukui plant,
etc. 450
Nishinihon Generator Mfg.
35Singapore 255
Vietnam Plant 85
Others 375

Amount of capital investment

million

3,000
2,500
2,000
1,500
1,000
5000
End ofMarch2013

End ofMarch2014

End ofMarch2015

End ofMarch2016(plan)

Denyo Vietnam the 2nd factory12Outlook for Sales by Product (Consolidated)

Overview• Sales of generators are expected to decrease by 1,279 million yen (3.2 %).
• Sales of welders are anticipated to decline by 156 million yen (2.8%).
• Sales of compressors are forecasted to be up by 74 million yen (6.6%).
(million yen）

FY2015/3

By productsConsolidatedsales

52,267FY2016/3 (forecast)100%

51,000Change(YoY)

Rate ofchange(YoY)

100% △1,267△2.4%

Generators

40,079 76.7%

38,800 76.1% △1,279△3.2%

Welders

5,556 10.6%

5,400 10.6%

△156

△2.8%

2.4%

74

6.6%

5,600 11.0%

96

1.7%

Compressors
Others

1,126

2.2%

5,504 10.5%

1,20013

Outlook for Sales by Region (Consolidated)(million yen）

FY2015/3

Change (YoY)

Rate of change(YoY)

100% △1,267△2.4%

FY2016/3 (forecast)

52,267

Domestic sales

31,468 60.2%

30,800 60.4%

△668

△2.1%

Overseas sales

20,799 39.8%

20,200 39.6%

△599

△2.9%

North/Central
America

11,234 21.5%

10,150 19.9% △1,084

△9.6%

Asia

6,619 12.7%

6,900 13.5%

281

4.2%

Others

2,945

6.2%

205

7.0%

By region

Consolidated
sales

FY2015Japan

FY2016/3(forecast)

Japan
0

10,000100%

5.6%

51,0003,150

North/Central
America
North/Central
America
20,00030,00040,000Asia

Asia

OthersOthers
50,00060,00014Details of the Operating Income Forecast (Consolidated)
Decrease inoperating income• The operating income margin decreased from the previous fiscal
year and the operating income is expected to decrease by 1,348
million yen.

(million yen）

FY2015/3

FY2016/3(forecast)

Change (YoY)△1,348Operating income

5,348

4,000

Operating income margin

10.2%

7.8% △2.4

FY2015/3

FY2016/3(forecast)

percentage points

Change (YoY)

Gross profit margin

25.1%

23.8%

△1.3

percentage point

Ratio of SG&A to sales

14.9%

16.0%

1.1

percentage point

Ratio of operating income
to sales

10.2%

7.8%

△2.4

percentage point••

Gross profit margin is expected to be worsened due to a fall in the shipment of profitable products and anincrease of the fixed cost, etc. in Denyo Vietnam.
Ratio of SG&A to sales is expected to increase due to an increase of the depreciation expenses andpersonnel expenses, etc.

15Notes on Our Outlook

This material contains assumptions and outlooks for the future andforecasts based on plans as of February 10, 2016.
Actual results may differ materially from projected values due to future
economic changes and competition.
This material is prepared for the purpose of providing information andis not meant to solicit investment in securities issued by the Company.
Investors are responsible for making their own final investment decision.

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