FY2023 First Half Financial Results
Tsutomu Hiranaka, President & COO

Yorozu Corporation
This is an internal English translation of the Yorozu FY2023 First Half Financial Report originally issued in Japanese, created
for the convenience of English-speaking readers. In case of any discrepancies, the Japanese version will take precedence.

Tokyo Stock Exchange Prime Market (Securities Code: 7294)

Contents

Ⅰ. FY2023 First Half Financial Summary
Ⅱ. FY2023 First Half Results
Ⅲ. FY2023 Annual Forecast
Ⅳ. Progress of FY2023 Approaches
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2023 All Rights Reserved.

2

FY2023 First Half Financial SummaryFirst-Half
Results• Operating income decreased by 13.3% year-on-year, primarily
attributed to decreased output and profits in China and costs
associated with future growth, despite an increase inproduction volume and a profit rise in Japan and the Americas.
• Sound financial stability was upheld through the successful
fundraising aligned with a prudent strategy.

Full-Year
Outlook

Shareholder
Return• Output from major customers will be in line with the planned
production, reflecting current market conditions.
• The full-year outlook remains unchanged, as expenses targetedat future growth will be balanced out through rationalization.
• We will start new initiatives aimed at growth, all while
upholding the current medium-term business plan, YSP2023.
• FY2023 dividend information
Interim: 13 yen (determined)
Annual: 26 yen (planned) (FY2022 annual dividend: 25 yen)
• Dividend payout ratio: 42.0% (planned)© YOROZU CORPORATION. 2023 All Rights Reserved.

3

Contents

Ⅰ. FY2023 First Half Financial Summary
Ⅱ. FY2023 First Half Results
Ⅲ. FY2023 Annual Forecast
Ⅳ. Progress of FY2023 Approaches
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2023 All Rights Reserved.

4

Consolidated Financial Summary for 1H FY2023 (Year-on-Year)
1H FY2022

1H FY2023

71,966

84,25917.1%

Operating Income

542

470

(13.3)%

Ordinary Income

779

754

(3.2)%Net Income*1

314

58

(81.4)%

Million yen

Sales

*1

Y-on-YNet income attributable to owners of the parent

1H FY2022
A

1H FY2023
B

Difference
B-A

% of
ChangeNet Income per Share

13.07 yen

2.42 yen(10.65) yen(81.5)％

Exchange Rate Applied toConsolidated Statements

123.20 yen/$

134.98 yen/$

11.78 yen/$

9.6%

 Sales: Despite a production downturn in Asia, sales increased thanks to higher output in Japanand the Americas aided by the effect of a weaker yen Operating income: Declined, with factors such as reduced China sales, less dies & equipment,
and inclusion of expenses for future growth, despite profits from increased production
 Ordinary income: Remained flat due to higher lending rates, which offset exchange rate gains
 Net income: Went down due to posted corporate tax and related adjustments
5© YOROZU CORPORATION. 2023 All Rights Reserved.

Consolidated Sales by Customer(1H FY2022 vs. 1H FY2023)

Million yen
100,000

Customer

FY2022(%)

FY2023(%)*

Nissan Gr.

43,76660.8%

53,79963.8%

Honda Gr.

11,462

15.9%

10,911

12.9%+2,237（+40.6％）

Toyota Gr.

5,504

7.6%

7,741

9.2%

Isuzu

3,547

4.9%

4,068

4.8%

-551
（-4.8％）

Mazda

1,608

2.2%

1,540

1.8%

Kubota

1,323

1.8%

1,429

1.7%

+10,033（+22.9％）

VW

1,039

1.4%

1,246

1.5%

Mercedes Benz

1,131

1.6%

1,060

1.3%

Subaru

595

0.8%

880

1.0%

Suzuki

1,070

1.5%

843

1.0%

Others

921

1.5%

742

1.0%

84,25980,00071,966
Toyota60,000Toyota

Honda

Honda
40,000

Nissan20,000

NissanMillion yen

Total

71,966 100.00%

84,259 100.00%* Includes sales to Renault and Mitsubishi

0
1H FY221H FY23© YOROZU CORPORATION. 2023 All Rights Reserved.

 Sales increased YoY with most of customers
 A notable increase in sales to Toyota
6Analysis of Impact on Consolidated Operating Income
Million yen(1H FY2022 vs. 1H FY2023)

Decreasein salesin China

2,500

465

2,000

Futuregrowthexpenses604

Rationalization
1,500

734

1,246
1,000

Dies andequipment
289

500

Sales
increase

542

Exchangerateeffect156
470

0

1H FY2022
Actual1H FY2023
ActualOperating Income (-72）

Despite increased profits boosted by production in Japan and the Americas, there wasa slight decline in overall profits, attributable to a drop in output and profits in China,
weak sales of die equipment, exchange rate impacts, and costs aimed at future growth.
7© YOROZU CORPORATION. 2023 All Rights Reserved.

Sales and Operating Income by Region Before Consolidation Adjustment(1H FY2022 vs. 1H FY2023)◆SalesJapan

Americas

Asia

Million yen+7,891+36.3％+9,127+33.8％-3,192-12.0％

50,00025,000021,741FY22◆Operating Income
Million yen

4,000
2,000

29,632

FY23+1,664+170.3％
977

FY22

FY22

36,162

FY23

-149
--％

26,54523,353

FY22

FY23

-613
--％

2,641

0
(2,000)27,035Difference% of Change

FY23

(429)

(578)

(137)

FY22

FY23

FY22

(750)
FY23

 Japan: The boosted sales of parts and dies led to increases in sales and profits, effectively offsetting
the rise in expenses aimed at future growth.
 Americas: Increased sales and profits were mitigated by higher labor costs and expenses related to
new model launches in Mexico, resulting in no change from the previous fiscal year.
 Asia: While rationalizing efforts made profits, less production volume in China led to a decline in profits.
© YOROZU CORPORATION. 2023 All Rights Reserved.

8

Financial Standing for the First Half of FY2023(Million yen)Mar. 31, 2023 A

Sep. 30, 2023 B

Net Worth

63,63070,116Equity Ratio

DE ratioInterest-bearing Debt
NET DE ratio
NET Interest-bearing Debt

0.52

32,835

0.14

Total Assets(Million yen)

45.0%

9,217

0.44
0.11

141,511
1H FY2022 A(Accumulated)

Difference (B-A)
6,486

10.2%

46.1%

--

--

30,753(2,082)(6.3)%

7,896(1,321)(14.3)%

152,098

10,5877.5%

1H FY2023 B(Accumulated)

Difference (B-A)

Cash Flow fromOperating Activities

5,122

5,504

382

Cash Flow from
Investing Activities(814)(3,629)(2,815)--

Cash Flow from
Financing Activities(5,233)(4,167)

1,066

--

7.5%

A sound DE ratio is maintained with a prudent fundraising strategy.
9© YOROZU CORPORATION. 2023 All Rights Reserved.

(Reference) Consolidated Balance Sheet Summary 1H FY2023

Mar. 31, 2023

Sep. 30, 2023

A

B

Current Assets

72,582

76,351

3,769

Fixed Assets

68,92875,746

6,818

141,511

152,098

10,587

Million yen

Total Assets

Difference

Inventories

Current Liabilities

44,393

48,6994,306

Fixed Liabilities

19,677

19,311(366)

64,07168,0103,939

Shareholders’ Equity

62,961

62,694(267)

Accumulated Other
Comprehensive Income

668

7,421

6,753

13,80913,970161

77,43984,087

6,648

141,511

152,098

10,587

Total Liabilities

Non-controlling Interests,
etc.

Total Net Assets
Total Liabilities and Net Assets

Cash & bank deposit
Notes & accounts receivable

B-A© YOROZU CORPORATION. 2023 All Rights Reserved.

Other current assets
Tangible fixed assets
Investments & other assets

(760)
889
1,924
1,673
4,752
2,028

1,250
(970)
Short-term debts
904
Long-term debts due within 1 yr. (2,066)
Others
4,063
Notes & accounts payable

Electronically recorded obligations

Long-term debts
Others(580)
310

Net income
Dividend payment

58
(434)

Valuation difference on
available-for-sale securities
Foreign currencytranslation adjustment

1,116
5,605

10

Contents

Ⅰ. FY2023 First Half Financial Summary
Ⅱ. FY2023 First Half Results
Ⅲ. FY2023 Annual Forecast
Ⅳ. Progress of FY2023 Approaches
Ⅴ. Shareholder Return

11© YOROZU CORPORATION. 2023 All Rights Reserved.

Consolidated Financial Forecast Summary for FY2023

FY2022
ActualMillion yen

Sales

A

Sales
Ratio

160,560 100.0％

FY2023
Forecast

B

Sales
Ratio

160,000 100.0%

Difference

B-A

% of
Change(560)(0.3)%

Operating Income

3,088

1.9％

3,200

2.0%

112

3.6%

Ordinary Income

2,992

1.9％

2,700

1.7%

(292)

(9.8)%Net Income*1

1,422

0.9％

1,500

0.9%

78

5.5%

*1

Net income attributable to owners of the parent

 Expect sales to remain on par with the previous year’s level due touncertainties in China, despite sales growth factors such as the increasein production volume and the positive impact of the exchange rate Expect operating income to increase year-on-year thanks to the Group’s
rationalization efforts, despite additional costs aimed at future growth© YOROZU CORPORATION. 2023 All Rights Reserved.

12Capital Investment and Depreciation
Capital Investment by Region

Depreciation by Region

Million yen

25,000Japan

The Americas

Asia

Japan

The Americas

Asia

20,00015,77315,00012,522
11,216
10,246
10,000

9,880
8,903

7,219
5,000

9,128

6,997
3,367

0
FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

© YOROZU CORPORATION. 2023 All Rights Reserved.

FY22

FY23
13

Contents

Ⅰ. FY2023 First Half Financial Summary

Ⅱ. FY2023 First Half Results
Ⅲ. FY2023 Annual Forecast
Ⅳ. Progress of FY2023 Approaches
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2023 All Rights Reserved.

14

Topics in the First Half of FY2023
PolicyTopics in 1H FY2023

General●Participation in Japan Mobility Show 2023 (Oct.–Nov.)●Publication of Yorozu Integrated Report (Japanese ver. in Aug./English ver. in Nov.)

ESG Management●Transition to green power

Environmental●Installation of the solar power generation system and start of the power
generation at G-YBM/China (Jan.)●Announcement of the name of the new Tokai base (Oct.)●Advancement of Workstyle Reform to Employee Engagement Reform●Kurumin certification (Minister of Health, Labour and Welfare) (June)

Social●Promotion of coexistence with the community

Governance●Live webcast of the general meeting of shareholders (June)

DX Promotion ●Promotion of digital transformation (DX) at the production floor
Stable Profits●Commitment to make an all-out effort to ensure stable profits●Wider application of the unique technologies to flexibly change production volume
in line with demand

New
Technologies
and Methods●Extensive development of lighter products that contribute to reducing
CO2 emissions●Initiatives for sales expansion based on 3 axes; customers, products, and regions
15© YOROZU CORPORATION. 2023 All Rights Reserved.

Key Initiatives for FY2023
Next Medium-Term Business Plan (FY2024–FY2026)

Build and pave the way for Yorozu’s growth strategy
to prove its strong presence in the electrification era
Strategy for growthFoundation for growth
E: Environmental consideration

Core of our growth

Carbonneutrality
S: Social responsibility

Medium-TermBusiness PlanYSP2023(Stable Profits)

Diversity
G: Transparency anddialogue with stakeholders© YOROZU CORPORATION. 2023 All Rights Reserved.

New technologies& methods, andsales expansion
Proactive strategy

New Tokai base16

Medium-Term Business Plan

Yorozu Sustainability Plan 2023

New Technologies & Methods
and Sales Expansion

17© YOROZU CORPORATION. 2023 All Rights Reserved.

Development of New Technologies & Methods
The direction we are heading■Strengthen our ability to propose steel products that
contribute to reducing CO2 emissions
・Arm with a new stamping structure
・Arm using alternative materials
・New burring design structure
・Multi-material structure■ Commercialization of lighter products using ultra-hightensile-strength materials (980MPa class)■Address the demand for enhanced quietness in EVs
YSP2023

YSP2020
FY2018～FY2020 ▼FY2021

15%

23%
Achieved▼

FY2022▼

26%
Achieved

FY2023▼30%
PlannedWeight reduced by 30% or more
© YOROZU CORPORATION. 2023 All Rights Reserved.

18

Development of New Technologies & Methods■Promote active use of 980MPa materials
to reduce weightLightweight■Our next step

Arm using ultra-high-tensile
strength steel sheet

technology

Key
point

Development of next
generation products withultra-high-tensile materials

Weight reduced by 15%
CO2 reduced by 40.7k tons*

Key
point

Weight reduction

Succeeded in commercializationof products made from thickultra-high-tensile sheets

Press-forming
technology to cut weight

Develop a press-forming technologythat can be applied to the shapes ofparts that are difficult to process

Products are set tolaunch in FY2023
Mass production partWe are already working on the development of next generation
products using ultra-high-tensile strength materials and areengaged in the ongoing activities for further sales expansion*Estimate based on model life of 6 years and 200,000 units/year© YOROZU CORPORATION. 2023 All Rights Reserved.

19

Development of New Technologies & Methods
Achieving a higher level of quietness required of EVs
Internal
combustion engine
vehiclesEngineRequired part functions

EVs(Vehicles become heavier)Lighter in weightMotor

Enhanced quietness
Fuel tankBattery

Muffler

Controller

Respond to changes
in sound/vibration
specific to EVs

FY2023 and onward

Study the mechanisms thatgenerate sound and vibration© YOROZU CORPORATION. 2023 All Rights Reserved.

Verification andstructural analysis

20

Contribution to Electrification of Society, Sales Expansion
Customer axis

Product axis

Region axis

Stable customer baseProducts for EVs

Mainly Japan, China
and the U.S.

Strengthen marketing of products for EVs
Toyota Grand Highlander(HEV)

Lexus TX(HEV)VENUCIA VX6
(BEV)

21

© YOROZU CORPORATION. 2023 All Rights Reserved.

Medium-Term Business Plan

Yorozu Sustainability Plan 2023

The New Tokai Base

Yorozu Sustainable
Manufacturing Center（YSMC）© YOROZU CORPORATION. 2023 All Rights Reserved.

22

YSMC Topics
YSMC is on track to starting production
June 21, 2022

Oct. 24, 2022

Nov. 24, 2022

Oct. 26, 2023

January 2024

Signing
ceremony
for incentive
agreement

Land purchaseagreement
concluded anddevelopment
completed

Groundbreaking
ceremonyJAPAN
MOBILITYSHOW

Plannedstart ofoperation

Yorozu Sustainable Manufacturing Center (YSMC)
Aerial view

Progress as ofNovember 2023

Stamping area

Painting area

23

© YOROZU CORPORATION. 2023 All Rights Reserved.

CustomerSociety

YSMC as Our Model Plant
Demand for adecarbonizedsociety withsolutions toenvironmental
and social issues

Demand fortechnologicalinnovation that
contributes tothe accelerationof electrification

Give full attention to the environment
・Achieve zero CO2 emissions in the
manufacturing process・Address issues from an LCA perspective

Co-exist with the community
・Provide opportunities to connect withthe community
・Create employment
・Make joint efforts on environmental
preservation

Contribute to electrification withquality products
・Expand lightweight product lines
・Contribute to customers by reducing CO2
from our products

Marketing and sales base that takes
pride in its CS and ES levels

Yorozu・Closer proximity to customers inTokai and Kansai regions
・Strengthen monozukuri capabilities
・Increase employee engagement

Solutions tovarious issues
through businessactivities© YOROZU CORPORATION. 2023 All Rights Reserved.

A model plant forJapanese parts makers◆Realize a CN factory
・Adoption of green energy
・Solar power generation
・Circular economy◆FY2022/FY2023
Participation incommunity events◆Job application fromnearby residents◆Expansion of BEV items◆Elemental technology
development that helps
reduce CO2 emissions◆An “eco-friendly factory”
System to supply partsfor BEVs◆Relocation of current
Yorozu Aichi employees

Progress
24

YSMC Becoming a Pivotal Hub for Sales Expansion
Products for EVs made in Japan

Aiming to facilitate customers'
expansion of BEV production throughsupply from our “eco-friendly factory"Yorozu Sustainable Manufacturing Center (YSMC)

Yorozu’s products
are used in

Shonai-Y (SY)

80%of the EVS sold in Japan

And more…

Y-Aichi (YI)

Y-Oita (YO)Y-Tochigi (YT)© YOROZU CORPORATION. 2023 All Rights Reserved.

Medium-Term Business Plan

25

Yorozu Sustainability Plan 2023

Carbon Neutrality Promotion© YOROZU CORPORATION. 2023 All Rights Reserved.

26

Roadmap to Carbon Neutrality
March 2023▼▼

March 2024▼

YSP2023∥

April 2022

▼

2030

2040

▼

▼

∥

May 2021

Next Medium-Term Business Plan ～CO2 Emissions Reduction
from 2013 for Scope 1 & 2
Achieved

Suppliers

Scope 3
Material
procurement

Scope 2

Yorozu

７％

12％

15％

Four domestic sites

Electricity

All six domestic sites

New Tokai base

Green energy
Solar power

Overseas sites

Scope 1

New Tokai base
Existing locations

CN for fuel & heat source

Scope 3
Product use

100％

Collaboration with raw material makers & part suppliers

FuelCustomers

50％

Planned

Promote product development that helps reduce
customers’ CO2 emissions
27© YOROZU CORPORATION. 2023 All Rights Reserved.

Approach to Carbon Neutrality
Scope 2

Progress of CN at Global Sites: Solar power generation: Green energy adoption

Japan

Tochigi
Oita
YSMC
ShonaiYE
Yokohama

Overseas

YAT
YAA
YMEX
YAGM
YAB
GYBM
WYBM
YTC/YOATYAIYJATSchedule for
Renewable
Energy Adoption
Alternatives

As of September 2023, achieved a 19%
reduction in CO2 emissions
Target for the fiscal year: 15%
Number of sites Adoption rate % Reduced CO2 ton/year

Expected to achieve a 28%
reduction by September 2024
Number of sites

Adoption rate % Reduced CO2 ton/year

Solar power

4/17

2.2

2,100

6/17

6.1

5,800

Green energy

7/17

21.6

20,800

11/17

38.3

36,000© YOROZU CORPORATION. 2023 All Rights Reserved.

28

Adoption of Solar Power Generation
YSP2020

Scope 2YSP2023

FY2020▼

FY2021Countries Sites
Y-OitaYSMC

Japan
ThailandY-OAT▼

FY2022

Next Medium-Term Business Plan ～▼FY2023

FY20242030▼▼

Green Energy Plans(Plan) Y-Oita January 2024
(Plan) YSMC
September 2024

Y-OAT
January 2020

YTC
(Plan) YTC
November 2023

G-YBM

China

▼

G-YBM January 2023

W-YBM
YMEX

Mexico

YAGM
YAT

USA

(Plan) May 2024

YAA

India

YJAT

Indonesia

YAI(Plan) April 2024

We are committed to expanding CN activities in line with the strategies of each country.
29© YOROZU CORPORATION. 2023 All Rights Reserved.

CO2 Emissions from Arc Welding Independent Survey

Not more than 0.001% ofResultof thesurveytotal global CO2 emissions of approx. 90,000 tons/year

CO2 emissions from arc welding are minimal
We stay ahead of the competition as a specialized maker by taking one stepfurther to study the impact of the heat generating process during arc welding,demonstrating our commitment toward achieving carbon neutrality.

Arc welding

CO2 emissions during arc welding

Approx. 0.9 tons/year or less

CO2 shielding gas

Solid wire

Weld beads

Steel sheet

Arc generating area
Heat
reaction© YOROZU CORPORATION. 2023 All Rights Reserved.

30

Medium-Term Business Plan

Yorozu Sustainability Plan 2023

General Topics© YOROZU CORPORATION. 2023 All Rights Reserved.

31

Exhibit at Japan Mobility Show 2023
Yorozu’s Theme

Our Commitment to Carbon Neutrality
Pioneering Technologies Contributing to
the Electrification Era

Our booth welcomed around 4,000 visitors from Oct. 28 to Nov. 5.
© YOROZU CORPORATION. 2023 All Rights Reserved.

32

Announcement
YOROZU Integrated Report 2023
Japanese：https://www.yorozu-corp.co.jp/investors/material/integrated/
English ：https://www.yorozu-corp.co.jp/en/investors/material/integrated/

Toward a 100-Year-Old Company That
Continues to Develop on the Dual Wheelsof Social Contribution and Growth Strategy
Aimed at a Decarbonized Society

We hope you would take this opportunity to review our approach and vision.
© YOROZU CORPORATION. 2023 All Rights Reserved.

33

Contents

Ⅰ. FY2023 First Half Financial Summary
Ⅱ. FY2023 First Half Results
Ⅲ. FY2023 Annual Forecast

Ⅳ. Progress of FY2023 Approaches
Ⅴ. Shareholder Return© YOROZU CORPORATION. 2023 All Rights Reserved.

34

Shareholder Return271.5%（Yen/Share）

Dividends paid as announced thoughprofits fell on an impairment loss

100

60%

51.6%
75

53yen
51yen

26yen

0

20yen

10.2%

7.6%

5

40

42.4% 42.0%

11

10

10

11

2012

2013

2014

Interim dividend

18
19

40

16

34

10

45%

35.5% 35.4%

20.1%

50

25

58yen

59yen

25

18
2015

2016

2017

46yen

23

35.6%

2018

30%

25yen

25yen

23

Year-end dividend

Dividend payout
ratio “-”due to net loss

15%

13

13yen

13yen

12

13

7
6

7

2019

2020

2021

2022

Memorial dividend

26yen

18

13
13
0%
2023 Forecast

Dividend payout ratio

Our policy is to return profits to shareholders through dividend payments.
We strive to ensure sustainable returns with the payout ratio of 35% or more.
35© YOROZU CORPORATION. 2023 All Rights Reserved.

End

36

Fiscal 2023

First Half Financial Results

Thank you for your attention

Yorozu English website
https://www.yorozu-corp.co.jp/en/© YOROZU CORPORATION. 2023 All Rights Reserved.

37

Disclaimer and Copyright
The financial forecasts, future forecasts, strategies and other statements in thismaterial are established based on judgments made within reasonable forecasts,
according to the information available to the company at the time this material was
prepared. However, there are risks and uncertainties in these forecasts, which could
be caused by any special circumstances and situations that cannot be foreseen.
Therefore, actual results may differ substantially from these forecasts.
Our company is fully committed to disclosing all information that we believe
important to investors. However, please refrain from making decisions based solely
on these forecasts and statements contained in this material.
It is strictly prohibited to reproduce any part of this material in any form, including
photocopying or forwarding, for any purpose without the prior consent of thecompany.
●Contact Us
Yorozu Corporation
Person responsible: Norio Hirano, Member of the Board (EVP & CFO)
Contact personnel: Manabu Ozawa, Accounting Group Manager, Accounting Dept.
TEL 045-543-6802© YOROZU CORPORATION. 2023 All Rights Reserved.

38