Briefing on Results for the First quarterof the Fiscal Year ending March 31, 2025

Stock code: 6517
Stock exchange listing: Tokyo

All Rights Reserved. Copyright Denyo Co., Ltd.

0Contents

Ⅰ．Overview of Results for theFirst quarter of FY2025/3

Ⅱ．Outlook for FY2025/3

All Rights Reserved. Copyright Denyo Co.,Ltd.

1

Ⅰ．Overview of Results for theFirst quarter of FY2025/3

All Rights Reserved. Copyright Denyo Co.,Ltd.

2

Highlights of Results for the First quarter of FY2025/3 (Consolidated)•

Net Sales decreased year on year, mainly due to a decrease in
shipments to the United States.

•

Incomes increased year-on-year, due to price revisions forsome products and the impact of yen depreciation.

Key Point(million yen)First quarter of
FY2024/3

First quarter of
FY2025/3

Change(YoY)

Rate ofchange(YoY)

16,836100%

16,708

100%

△ 127

△ 0.8%

Operating income

996

5.9%

1,716

10.3%

719

72.2%

Ordinary income

1,177

7.0%

1,920

11.5%

743

63.2%

Profit attributable to ownersof parent

806

4.8%

1,259

7.5%

453

56.3%

Capital investment

210

－

286

76

36.2%

Depreciation

302

－

289

△ 13

△ 4.3%

39.07yen－

61.02yen

21.95yen

56.2%

Net sales

Net income per share

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3

Sales Trends by Product (Consolidated)

Overview

1. Sales of generators decreased by 510 million yen (3.5%).
2. Sales of welders increased by 95 million yen (9.7%).
3. Sales of compressors increased by 40 million yen (21.3%).
(million yen)First quarter of
FY2024/3

Change(YoY)

Rate ofchange(YoY)

16,836100%

16,708

100%

△ 127

△ 0.8%

14,39685.5%

13,886

83.1%

△ 510

△ 3.5%

Welders

991

5.9%

1,087

6.5%

95

9.7%

Compressors

192

1.1%

233

1.4%

40

21.3%

Others

1,256

7.5%

1,501

9.0%

245

19.5%

Net sales
Generators

By productFirst quarter of
FY2025/3

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4

Engine Generators (Consolidated)
First quarter of
FY2024/3

Generators••

14,396million yen

First quarter of
FY2025/3

Rate of change(YoY)

13,886million yen

In Japan, shipment to the rental industry remain robust.
Sales of medium- and large-sized stand-by
generating sets for disaster prevention
equipment increased.
Overseas, shipment to the United States remainedsluggish.

△ 3.5

%

70%
*According to a
Company survey(5-year average)

Domestic market share ofengine generators(mobile-type)

Manufacturing engine-driven generators withcapacity from 1kVA to 1100kVA

Soundless generator“Mālie”

Generator with operational
data recording function

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⚫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 for disaster prevention equipment
and offices, etc..
⚫Power-supply vehicles, etc..

5Engine Welders (Consolidated)
First quarter of
FY2024/3

991million yen

Welders•

First quarter of
FY2025/3

The mainstay of small welders and large welders
for overseas markets increased.

Rate of change(YoY)

1,087million yen

9.7%

55%
*According to a
Company survey(5-year average)

Domestic market share ofengine welders

The Company developed the first engine-driven welder foroutdoor 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.
CO2 welder⚫Welding of important structures such as petroleum storage
tanks and pipelines.

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6

Engine Compressors (Consolidated)
First quarter of
FY2024/3

Compressors•

First quarter of
FY2025/3

192million yen

The shipment to the domestic market increased.

Rate of change(YoY)%

233million yen

21.3

15%
*According to a
Company survey(5-year average)

Domestic market share ofengine compressors

Manufacturing compressors with air discharge
amounts from 1.7㎥/min to 45.3㎥/min.
⚫ Breaking-up of roads and ground improvement workof roads.
⚫ Mortar spraying work for preventing landslides ofmountain roads.
Engine compressor

Motor compressor

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⚫ For artificial snow machines on ski slopes, etc..

7

Others (Consolidated)
First quarter of
FY2024/3

Others•First quarter of
FY2025/3

1,256million yen

Rate of change(YoY)

1,501million yen

19.5%

Self-propelled lifters and parts associatedwith products increased.

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

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Load testing
equipment

8

Sales Trends by Region (Consolidated)(million yen)First quarter of
FY2024/3

First quarter of
FY2025/3

Rate ofchange(YoY)

Change(YoY)

16,836100%

16,708

100%

△ 127

△ 0.8%

Domestic sales

7,243

43.0%

8,155

48.8%

912

12.6%

Overseas sales

9,593

57.0%

8,553

51.2%

△ 1,040△ 10.8%

North/Central
America

7,118

42.3%

6,214

37.2%

△ 904

△ 12.7%

Asia

1,549

9.2%

1,693

10.1%

144

9.3%

Others

925

5.5%

645

3.9%

△ 280

△ 30.3%

By region

Net salesFirst quarter of
FY2024/3

North/Central
America

Japan

First quarter of
FY2025/3

2,000

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4,000

OthersAsia

OthersNorth/Central
America

Japan
0

Asia

6,000

8,000

10,00012,00014,00016,00018,0009Factor Analysis of Changes in Operating Income
Increase in Operating Income

Increased due to gross profit improvement.
(million yen)First quarter of
FY2024/3

First quarter of
FY2025/3

Operating income

996

1,716

719

Operating income margin (%)

5.9%

10.3%

4.4 percentage points

First quarter of
FY2024/3

First quarter of
FY2025/3

Rate of Change (YoY)

Gross profit margin

19.9%

24.5%

4.6 percentage points

Ratio of SG&A to sales

14.0%

14.2%

0.2 percentage points

5.9%

10.3%

4.4 percentage points

Ratio of operating income to sales

Change (YoY)•

The gross profit margin improved, partly due to the effect of reflecting a portion of cost
increases in sales prices and partly due to the effect of the depreciation of the yen.

•

The ratio of SG&A to sales increased due to an increase in labor costs, etc..

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10

Ⅱ．Outlook for FY2025/3

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11

Outlook for FY2025/3: Consolidated Income and Loss
Key points

1. Net sales are expected to be 74 billion yen.
2. Assumed exchange rate is 140 yen/dollar.
FY2024/3

FY2025/3(forecast)(million yen)
Change(YoY)

Rate ofchange(YoY)

Net sales

73,140100%

74,000

100%

860

1.2%

Operating income

7,089

9.7%

6,700

9.1%

△ 389

△ 5.5%

Ordinary income

7,378

10.1%

7,000

9.5%

△ 378

△ 5.1%

Profit attributable toowners of parent

5,095

7.0%

4,700

6.4%

△ 395

△ 7.8%

Capital investment

1,913

7,050

5,137

268.5%

Depreciation

1,228

1,400

172

14.0%

246.83yen

227.62yen△19.21yen

7.3%

*6.5%

64.0yen70.0yen

Net income per
share

ROE
Cash dividends pershare* Equity is calculated by using the amount of money at the end of FY2024/3.

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12

Outlook for Sales by Product (Consolidated)
Overview

・ In Japan, sales are expected to remain steady on the back ofsolid construction demand.
・ Overseas, demand in America are expected to decrease, partly
as a reaction to the rapid increase over the past two years.
(million yen)

FY2025/3(forecast)

FY2024/3
73,140100%

74,000

100%

860

1.1%

Generators

61,48784.1%

61,700

83.4%

213

0.3%

Welders

4,437

6.1%

4,900

6.6%

463

10.4%

Compressors

693

0.9%

700

0.9%

7

1.0%

Others

6,521

8.9%

6,700

9.1%

179

2.7%

Consolidated sales

By product

Rate ofchange(YoY)

Change(YoY)

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13

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

FY2024/3

FY2025/3(forecast)

Change(YoY)

Rate ofchange (YoY)

73,140100%

74,000

100%

860

1.2%

Domestic sales

38,38952.5%

40,400

54.6%

2,011

5.2%

Overseas sales

34,75047.5%

33,60045.4%△ 1,150△ 3.3%

North/Central
America

25,23034.5%

23,40031.6%△ 1,830△ 7.3%

Asia

6,642

9.1%

7,000

9.5%

358

5.4%

Others

2,877

3.9%

3,200

4.3%

323

11.2%

By region

Consolidated sales

FY2024/3

Japan

North/Central
America

Asia Others

FY2025/3(forecast)

Japan

North/Central
America

Asia Others

50,00070,0000

10,000All Rights Reserved. Copyright Denyo Co.,Ltd.

20,00030,00040,00060,00080,00014

Details of the Operating Income Forecast
Decrease in operating income

Operating income is expected to decrease due to anincrease in expenses.
(million yen)

FY2024/3

Operating income

Operating income margin

FY2025/3(forecast)

Change (YoY)

7,089

6,700

△ 389

9.7%

9.1%

△ 0.6 percentage point

FY2024/3

FY2025/3(forecast)

Change (YoY)

Gross profit margin

22.2%

22.0%

△ 0.2 percentage point

Ratio of SG&A to sales

12.5%

13.0%

0.5 percentage point

9.7%

9.1%

△ 0.6 percentage point

Ratio of operating income
to sales•The gross profit margin is expected to decline due to increases in labor costs anddepreciation costs.

•

The ratio of SG&A to sales are expected to rise due to increases in personnel costs,
domestic logistics costs, etc..

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15

Changes in the Amount of Capital Investment
End of March
2022
Cost ofequipment

Main uses

End of March
2023

839

(単位：百万円）

End of March
2024

4,213

End of March2025 (plan)

1,913

7,050

・Machinery of Fukui plant,

・Machinery of Fukui plant,

・Machinery of Fukui plant,

etc.

etc.

etc.

440

etc.

190

・Nishihatsu

4,160

170
20
1,090

・U.S. Plant

100

・Nishihatsu

・U.S. Plant
・Vietnam Plant
・Others

290
50

20
20
460

360

・Nishihatsu

2,500

・Nishihatsu

・U.S. Plant
・Vietnam Plant
・Others

20
70
1,260

・U.S. Plant
・Vietnam Plant
・Others

million yen

・Machinery of Fukui plant,
760

・Vietnam Plant
・Others200
1,830

Amount of capital investment

8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

Completion of Nishihatsu’s new head
office plant is scheduled in FY2024.

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End of
March
2022

End of
March
2023

End of
March
2024

End ofMarch2025(plan)

16

Profit Distribution Policy• We are aware that it is important to increase the profit returned to shareholders as well as
striving to improve earning strength and financial strength.
• We will continue our progressive dividend policy and flexibly acquire treasury shares toallocate results at an approximate total payout ratio of 40%.
• Under this policy, Denyo plans to pay 70 yen per share (30 yen at the interim and 40 yen
at the year-end), taking into consideration the earnings forecast and the total return ratio.

Trends in annual dividend per share,
payout ratio and total payout ratio

yen
90
60.0%

80
70
60
50

31.6%

30.8%

25.4%

22.9%

14.5%
20.4%

20

35.6%

30.8%

20.4%

30

25.9%
28.5%

28.0%
23.7%

22.4%

Approximately40%

32.2%

30.4%

40
23.5%

Total payout ratio

44.9%

43.8%

25.9%

25.4%

14.5%

14.8%

14.5%

15.6%

18

22

24

28

30

30

40

42

46

47

47

50

64

FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023100dividend per share

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payout ratio

FY2024FY2025

FY2026

total payout ratio

17Notes on Our Outlook

This material contains assumptions and outlooks for the futureand forecasts based on plans as August 8, 2024
Actual results may differ materially from projected values
due to future economic changes and competition.
This material is prepared for the purpose of providing informationand is not meant to solicit investment in securities issued by
the Company.
Investors are responsible for making their own final investment
decision.

Notice:This document is a translation of the original Japanese document and is only forreference purposes. In the event of any discrepancy between this translated
document and the original Japanese document, the latter shall prevail.

All Rights Reserved. Copyright Denyo Co.,Ltd.

18

Reference Materials

All Rights Reserved. Copyright Denyo Co.,Ltd.

19

Overview of the Company
The leading manufacturer of outdoor power sources such as engine generators and engine welders
History:

July 2,1948

Established as Japan Power Welding Machine Co., Ltd.

1959

Developed and launched Japan’s first high-speed engine-driven welders.

1961

Began to manufacture and sell engine-driven generators.

1966

Developed soundproof engine-driven generators.
Changed its corporate name to Denyo Co., Ltd.

1983

Listed on the Second Section of the Tokyo Stock Exchange.

2000

Listed on the First Section of the Tokyo Stock Exchange.

2022

Transited to Prime Market in Tokyo Stock Exchange.

Company size, etc. (FY2024/3 on a consolidated basis)(million yen)

Net sales

73,140Overseas sales

34,750Ordinary income

7,378

Profit attributable to owners of parent

5,095

Total assets

100,540

Net assets

75,843Market capitalization (as of March 31)

53,125

Number of employees

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Head Office (Nihonbashi-Horidomecho,Tokyo)

1,408persons

20

The Group Companies
100%

100%

( Nishihatsu Co., Ltd. )
100%

80%
100%

100%

100%

76%

51%

100%
*1. Other than the above, the New Japan Machinery Corporation is anequity-method affiliate (investment ratio 15.7%).
2. Underlined companies are manufacturers.

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21

Business Overview
As a pioneer in outdoor power sources, we supply engine-driven
generators, welders, compressors and other products to Japanand to at least 150 other countries and regions.
Engine generators

Engine welders• Engine-driven welders used
Featuresoutdoors

Applications• Used for welding steel materials in
piping, bridge, pipeline and otherconstruction work

Enginecompressors
Long-term vision
1%for
FY2035Engine welders
Endeavor to serve society through6% the provisionof power sources to realize a sustainable society
and increase corporate value while addressing
Othersdifferent issues
regarding sustainability⚫ Mobile generators• These are generators that can betransported with trucks. As a kind of
portable power plant, they stably supply
Featureshigh quality electricity at any location.
• An extensive lineup of products with
outputs ranging from 1 kVA to 1,100 kVA

9%Engine compressors• Compressing air to supply
compressed air

Medium-term Management Plan
「Denyo2026」
Main business(products)• Civil engineering, construction, port,
harbor and other worksites
Applications •• Broadcasting trucks and many othersituations⚫ Stationary power generators

Features • Allowing air tools to be used in any

place since they require no powersource• Rock drills and machinery for soil
improvement
Applications• General-use and standby generators installedon the rooftops of buildings and in basements

Enginegenerators
84%

Features • Manufacturing and sales of standby generators
used as backup power sources mainly in theevent of a power failure• Used in spray concrete work

Company name

Denyo Co.,Ltd.

Establishment

July 1948

Number of
employees(consolidated)

596 (1,408) as of March 31,
2024• Generators for disaster resilience
Installed in department stores, hotels andother buildings where the general publicgathers and used as backup power sources forsprinklers and other fire-fighting equipment
Applications

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Outdoor events• Generators for non-disaster power
failures
Installed in office buildings, factories,
hospitals and other facilities and used as
backup power sources for electric equipment

22

VisionLong-term vision for
FY2035 established.
Contribution to the prosperity ofsociety through the provision of safe
and secure power sources based on
the benefits for three parties
principle.

Management
Philosophy

Management
Vision• Aim to be the global No. 1 brand of high•quality
創造力と不断の技術革新を通じて、高品質
power sources with creativity andパワーソースのトップランナー（グローバル
constant
technological innovation

No1ブランド）を目指す• Aim
to be a vital organization in which
every
employee strives for self• 社員一人ひとりが自らを高め、責任を持っ
improvement and acts responsibly.

て行動する活性化組織を目指す

Long-term vision
for FY2035

Financial • Consolidated net sales: 100.0
billion yen
targets• Ordinary income: 12.0 billion yen(ordinary income margin: 12%)• ROE: 8%

Endeavor to serve society through the provisionof power sources to realize a sustainable society
and increase corporate value while addressing
different issues regarding sustainability• Decarbonized products: 33%
Nonfinancial • Reduction of Scope 1 and 2
emissions: 50%
targets• Percentage of female
managers: 15%

Medium-term Management Plan
「Denyo2026」
Invest in growth to realize the long-term vision which contributes to the prosperityof society and push ahead with the construction of a management baseQualitative target

Quantitative targets

Strive to preserve the global environmentin accordance with the Basic Policy on
Sustainability and carry out sincere andfair business activities to achieve
management that earns the trust ofsociety for the long term

• Consolidated net• Total payout ratio:
sales: 80.0 billion yen
Approximately 40%• ordinary income• Sales of decarbonizedmargin: 10%
products: 3.0 billion yen• ROE : 7%

Business strategies
Core areas

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Growth areas

Areas in which we willtake on new challenges

Increasingorganizational capacity

23Key Management Targets
Financial targets

Non-financial targets

1

Consolidated
Net Sales Plan

８０.0 billion yen

2Ordinary
income8.0 billion yen

3

ＲＯＥ

4

Total payout
ratio

1

Sales of decarbonizedproducts

３.0 billion yen

2

SCOPE１,２

５０％ reduction

7.0％

3

Percentage offemale managers

１５％

Approximately ４０％*1 A target of the long-term vision for FY2035 applicableto the group companies in Japan, calculated using theemission intensity per unit of consolidated net sales.

(ordinary income margin:

10.0% )

*1

*2

*2 A target of the long-term vision for FY2035
applicable to Denyo Co., Ltd. only

unit：million yen

FY2023
results

Medium-termManagement Plan
FY2026

Value or percent
changeSales of decarbonizedproducts

Percentage of female
managers

15％ or more

1.5 billion yen

billion yen

15％

３.0

increase

Consolidated
Net Sales

73,14080,0006,860

Ordinary
income

7,378

8,000

622

1.5

ROE

7.3％

7.0％

Total payout
ratio

25.9％

40.0％

14.1％

FY2023billion yen

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2.4％

FY2026

FY 2023

FY 203524

Efforts toward carbon neutrality
Denyo regards global environmental problems as a key management issue, and engages
proactively in environmental initiatives. We consider initiatives aimed at creating a hydrogenbased society (such as through the use of hydrogen fuel cells) to be one effective means of
reducing CO2 emissions and preventing atmospheric pollution, with the aim of preventing global
warming.

Hydrogen-light oil mixed combustion Generator• Started sales and delivered the first machine to Komatsu Oyama Plant• Power can be generated with up to 50% hydrogen mixed in with the fuel• 50% reduction in CO2 emissions compared to using only light oil as fuel• Successfully commercialized through technology licensing by Komatsu Ltd. and Hitachi, Ltd.
• Expand sales as a key product for building a hydrogen supply chain
Intended use• Private consumption using byproduct hydrogen• Back-up power source in a power outage, etc.
■Specifications of this generator
Generation output

250kW

Output voltage

200/400V

Frequency

50Hz

Hydrogen Fuel
Consumption
Diesel fuelconsumption
Power generation
efficiency
Hydrogen-light oil mixed combustion Generator
delivered Komatsu Oyama Plant

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Hydrogen mixing
ratio range

115Nm3/h(50% hydrogen mixed)
34L/h(50% hydrogen mixed）
35～40％
0%～50％(Can be operated with diesel oil only)25

Efforts toward carbon neutrality
Fuel-cell Portable Generator•

Selected by Japan’s Ministry of the Environment as a “Low Carbon Technology
Research and Development Program”•
Developed a new power conditioner especially for fuel cells, and installed it in
the generators•
Demonstration operation will start in June 2021
Intended use•
Civil engineering and construction sites•
Houses without power after a disasters•
Location where TV reporters are reporting, and event sites, etc.

Dedicated Hydrogen Generator•••

Uses only hydrogen as fuel and does not emit CO2
Starting with the development of the 45kVA class , which is the volume zone
Aiming for market launch after 2025

Intended use•
Civil engineering, construction sites , harbor construction•
TV broadcasting, various events, leisure, etc.

Mobile Battery LED floodlights•••

WELZACK
Quiet and no CO2 emissions
Uses a detachable cartridge-type
lithium-ion battery
Long operation possible

Intended use：Night construction, events, etc.

All Rights Reserved. Copyright Denyo Co.,Ltd.

Intended use： Repair work on stairs andnarrow areas, etc.
26

Trends and Forecasts by Product Sales
Sales by product
Generators

Welders

Compressors

Others80,00070,00060,00050,000

5,482
727
4,401

6,365
5,719
1,059
5,115

1,012
5,072

5,845
755
4,386

6,521

6,700

693
4,437

700
4,900

61,48761,700

FY2024/3

FY2025/3(forecast)

5,856
727
4,829

40,00030,00053,70050,43620,00043,66044,02043,754FY2021/3

FY2022/3

10,0000FY2019/3

FY2020/3

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FY2023/327

Changes in Sales by Region and Forecasts
Sales by region
Japan

North/Central America

Asia

Europe and others

80,00070,00050,000

2,423
3,948

5,527

7,000

25,23023,40038,38940,400

FY2024/3

FY2025/3(forecast)

2,886

4,596

18,43010,89740,000

6,642

5,902

5,197
2,252

3,200

2,547

2,216

60,0002,877

14,08021,617
13,05230,00020,00033,69337,04337,737

FY2020/3

FY2021/3

34,632

34,244FY2022/3

FY2023/3

10,0000FY2019/3

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28

Changes in Results for the Last 30 Years
Net sales,
100 milion yen

JapanOverseas

Ordinary income

Ordinary income,
100 million yen

800

80

700

70
Great EastJapan
Earthquake

600

500

400

60

50

Y2K boom

Lehman
shock

40

300

30

200

20

100

10

0

0
Fisicalyear

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2-8-5, Nihonbashi-horidomecho, Chuo-ku, Tokyo 1038566, Japan
Phone: +81-3-6861-1111, Facsimile: +81-3-6861-1181
https://www.denyo.co.jp/english/