Financial Results for the Third Quarter of the Fiscal YearEnding March 31, 2024

Hakudo Co., Ltd. (7637)

February 9, 2024
2024 © Hakudo Co., Ltd. All rights reserved.

Table of Contents

1． Q3 FY03/24 Results

P 2

2． FY03/24 Financial Forecasts

P17

3．Progress Report for Achieving the
Medium-Term Management Plan
(FY03/23~ FY03/25)

P232024 © Hakudo Co., Ltd. All rights reserved.

1

Q3 FY03/24 Results

2024 © Hakudo Co., Ltd. All rights reserved.

2

Result Highlights

Net sales

Gross profit

Ordinary profit

42,930 million yen

6,921 million yen

2,201 million yen(down 9.4％ YoY)

Net sales(down 12.1％ YoY)

(down 34.7％ YoY)

Q3 FY03/24 Summary• Sales decreased by 9.4% YoY due to continued stagnation in the semiconductor production
equipment (SPE) industry.
• Sales (JPY3,470million) in North America were added from the current consolidated fiscal year, andsales in the overseas segment increased by JPY3,337 million YoY.

Gross profit• Gross profit decreased by 12.1% YoY due to lower sales and due to the impact of a decrease (JPY394
million) in inventory valuation gain.

Ordinary profit• Ordinary profit decreased by 34.7% YoY despite the recognition of Non-operating profit such as
dividend income and foreign exchange gains, due to increased freight, labor, and other costs.

2024 © Hakudo Co., Ltd. All rights reserved.

3

Summary of Consolidated Statements of Income (PL)• Net sales decreased by JPY4,448 million YoY due to the impact of a decrease in sales volume
caused by the continued stagnation in the semiconductor production equipment (SPE) industry.
• Ordinary profit decreased by JPY1,168 million YoY due to an increase in various G&A
expenses and a decrease in the impact of inventory valuation.
Unit: Million yen
Q3 FY03/23

Net sales
Standard stock items
Special-order items

Gross profit
Operating profit
Ordinary profit
Inventory revaluation impact
Foreign exchange losses/gains
Ordinary profit(Excluding inventories and foreignexchange impact)

Profit attributable to owners ofparent2024 © Hakudo Co., Ltd. All rights reserved.

47,37929,306
18,072
7,874
3,166
3,369
451
32

Sales
ratio

Q3 FY03/24

Sales
ratio

YoY
Change(rate)

YoY
Change(amount)

0.1%

42,93025,806
17,123
6,921
1,885
2,201
57
68

2,885

6.1%

2,075

4.8%

-28.1%

-810

2,289

4.8%

1,512

3.5%

-33.9%

-776

61.9%
38.1%
16.6%
6.7%
7.1%
1.0%

4

-

-9.4%

-4,44860.1%-11.9%-3,50016.1%-12.1%-952

4.4%-40.4%-1,2805.1%-34.7%-1,1680.1%
0.2%-87.3%

113.0%

-394

39.9%

-5.2%

-948

36

Factors Affecting Year-on-Year Change in Net Sales• Although unit sales prices of standard stock products increased, sales decreased by
JPY4,448 million YoY due to the significant impact of lower sales volume.
1,716

Unit: Million yen

61,602
61,60247,379-5,1673,273-89

42,930Standard stock items (parent)-JPY3,451 million YoY-4,182

Special-order items (parent)-JPY4,271 million YoY

Q3 FY03/23

Higher unit
selling prices ofstandard stock
items

Lower
standard stock
item volumes

Lower unit
selling pricesof specialorder items

Higherspecial-order
item volumes

Subsidiaries andconsolidated
adjustments

Q3 FY03/24

For Hakudo’s individual standard stock items: sales volume -17.2% YoY, selling price +7.2% YoY2024 © Hakudo Co., Ltd. All rights reserved.

5

Quarterly Sales Trends•

Despite the addition of sales in North America starting from the current consolidated fiscal
year, recent sales have been on a downward trend, mainly due to declining sales to thesemiconductor production equipment(SPE) industry.
16,062
14,655
12,636

12,187
11,12011,436
10,483 10,455

10,005

10,345

14,966

Unit: Million yen
15,712 15,603
14,222

14,717

13,182

13,991 14,221

11,421

10,992
9,962

9,358
8,477

Q2
FY03/19Q4
FY03/19Q2
FY03/20Q4
FY03/20Q2
FY03/21

Standard stock items
2024 © Hakudo Co., Ltd. All rights reserved.

Q4
FY03/21Q2
FY03/22

Special-order items

6

Q4
FY03/22Q2
FY03/23Q4
FY03/23Q2
FY03/24

Net Sales by Product Category••

Stainless steel sales increased on a QoQ basis due to the addition of sales in North America.
Mainstay aluminum products declined by 18.2% YoY due to lower sales to the semiconductor
manufacturing equipment industry. Overall sales declined by 8.9% on a QoQ basis.
Unit: Million yen

FY03/23
Q1

Q2

Consolidated
net sales

16,062

15,712

Aluminum

10,694

Copper

FY03/24Q4Q1

Q2

15,603

14,222

14,717

13,991

14,221-8.9%

10,24910,076

8,800

9,060

8,339

8,244

-18.2%

2,106

2,010

2,134

2,248

2,138

2,024

2,126

-0.4%

Stainless
steel

2,565

2,607

2,632

2,414

2,830

2,971

3,074

16.8%

Others

696

844

761

759

687

655

774

1.7%

2024 © Hakudo Co., Ltd. All rights reserved.

Q3

7

Q3

Vs. Q3
FY03/23

Composition Ratio of Net Sales by Industry (Japan)• Sales ratio for Semiconductor/FPD production equipment industry declined significantly QoQ.
• Both sales amount and sales ratio increased in Automobile/motorcycles industry andAircraft/aerospace industry, which are positioned as our mid-term strategic targets
FY03/23
1Q

2Q

3Q

FY03/24
4Q

1Q

2Q

Semiconductor/
FPD production
equipment

47.2% 45.0% 43.0% 37.5% 39.3% 38.5% 36.2%

Other machine
tools

15.0% 15.4% 15.5% 17.3% 17.7% 17.7% 18.3%

OA devices
Vacuum/hydraulicdevices

8.6% 7.8% 8.6% 9.9% 8.9% 9.0% 8.8%
6.5% 6.9% 7.8% 7.4% 7.1% 5.5% 5.7%

Electronic
components

4.3% 4.9% 4.9% 4.9% 4.7% 5.9% 6.3%
4.1% 4.7% 5.2% 5.6% 4.8% 5.5% 5.6%
3.7% 4.1% 4.0% 4.3% 4.1% 4.3% 4.2%

Aircraft/aerospace
related3.1% 2.9% 3.1% 3.7% 4.4% 3.8% 4.6%

Automobiles/
motorcycles
Dies

Other industries

7.6% 8.3% 7.8% 9.3% 9.0% 9.6% 10.3%2024 © Hakudo Co., Ltd. All rights reserved.

8

Q3
FY03/24

3Q

4.6%

10.3%

4.2%

36.2%

5.6%
6.3%
5.7%
8.8%
Semiconductor/FPD
半導体・FPD製造装置
production
equipment
OA機器
OA
devices

18.3%
Other
machine tools
その他工作機械
空圧・油圧機器
Vacuum/hydraulicdevices

自動車・自動二輪車
Automobiles/motorcycles

Dies
金型

電子部品
Electronic components

Aircraft/aerospace
航空・宇宙関連
relatedOther
その他 industries

Financial Performance by Segment•••

Sales of West Coast Aluminum & Stainless, LLC acquired in March 2023 are recorded in North
America segment, contributing to an increase in overseas sales.
In the North America segment, operating loss was recorded due to PMI expenses and temporary
weak performance, but it is expected to recover soon. Net income attributable to owners of parent
company was JPY34 million, mainly due to foreign exchange gains on yen-denominated intercompany
loans and gains on debt waiver by the ex-owner of West Coast Aluminum & Stainless, LLC
In China, both domestic and foreign demand was weak, resulting in a recurring loss of JPY12 million.
Unit: Million yen

Q3 FY03/23
Net salesJapan45,268Operatingprofit/lossesQ3 FY03/24

Ordinary
profit/lossesProfitattributableto ownersof parent

Net sales

Operatingprofit/lossesOrdinary
profit/lossesProfit (loss)
attributableto ownersof parent

3,071

3,254

2,198

37,482

1,917

2,068

1,398

-

-

-

3,470

-108

34

34

North
America

-

China

1,214

7

26

19

965

-32

-12

-9

Other

896

88

88

71

1,012

110

111

88

2024 © Hakudo Co., Ltd. All rights reserved.

9

Factors Affecting Year-on-Year Change in Ordinary Profit• Profits decreased due to the impact of a drop in sales volumes of both Standard stock items
and Special-order items.
• Ordinary profit declined by JPY1,168 million YoY due to higher costs per sales volume(KG),
such as freight and energy costs, and lower inventory evaluation impact.
Unit: Million yen

3,369

-38

-24

-896

← Ordinary profit
excludinginventory andforex impact
JPY2,885 million

Q3 FY03/23

Standard stock
items (parent)-394

Ordinary profit
excluding inventory →and forex impact
JPY2,075 million-469

Special-order
items (parent)

2024 © Hakudo Co., Ltd. All rights reserved.

Manufacturing
expenses(parent)

SG&A
expenses(parent)10

Non-operating
losses

Subsidiary profit
and consolidated
adjustments

Inventorychanges

2,201

Q3 FY03/24

Quarterly Ordinary Profit Trends• Ordinary profit declined JPY228 million QoQ due to a decrease in sales volume caused bycontinued stagnance in the semiconductor production equipment (SPE) industry .
• Compared to the Q2 and Q3 of FY03/24, the profit increased by JPY49 million due to the
profit from inventory evaluation effects and foreign exchange gains.
Unit: Million yen

1,222

1,030

1,272
1,157

1,087
1,009

962

831
699

657

635

582
394

Q2
FY03/19390

Q4
FY03/19

411

372

522
309

Q2
FY03/20

Ordinary profit
excluding inventories
and foreign exchange
impact2024 © Hakudo Co., Ltd. All rights reserved.

619

687

781

732

Q4
FY03/20306

Q2
FY03/21Q4
FY03/21

Gain on revaluation of
inventory

Q2
FY03/22Q4
FY03/22

Loss on revaluationof inventory11

Q2
FY03/23Q4
FY03/23
Foreignexchange
gains

Q2
FY03/24
Foreign exchange
lossesBalance Sheet (BS)••Inventories, accounts receivable, and accounts payable decreased significantly due to lower sales.
Cash and deposits decreased by JPY783 million due to capital expenditures, income tax payments, anddividend payments.
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable– trade (Including electronicallyrecorded monetary claims operating) Inventories

Inventories
Other current assets
Non-current assets
Property, plant andequipment
Intangible assets
Investments and other assets
Total assets
Liabilities and net assets

Current liabilities
Notes and accounts payable –trade (Including electronicallyrecorded obligations –operating)Accrued expenses
Income taxes payable
Other current liabilities
Non-current liabilities
Total liabilities
Net assets
Total liabilities and net asses

As of March 31,
Composition ratio
2023

As of Dec 31,
2023

78.4%
14.0%

16,83539.0%

15,59838.9%-1,236

10,631
324
9,319
6,250
1,413
1,655
43,149

24.6%
0.8%
21.6%
14.5%
3.3%
3.8%
100.0%

9,316 23.2%
207
0.5%
9,743 24.3%
6,516 16.2%
1,480
3.7%
1,746
4.4%
40,120 100.0%-1,315
-116
+423
+266
+66
+90
-3,028

As of Dec 31,
2023

Composition
ratio

44.9%

-3,452-783

Change21,76850.4%

19,02044.1%

15,88439.6%-3,135

860
579
1,308
151
21,92021,22943,149

2.0%
1.3%
3.0%
0.4%
50.8%
49.2%
100.0%

779
1.9%
99
0.2%
1,266
3.2%
133
0.3%
18,164 45.3%
21,956 54.7%
40,120 100.0%

-80
-479
-41
-17
-3,756+727-3,0282024 © Hakudo Co., Ltd. All rights reserved.

18,030

75.7%
13.1%

Change33,8296,038

As of March 31,
Composition ratio
2023

30,377
5,254

Unit: Million yen

Composition
ratio

12

-3,738Current assets: Down JPY3,452
million Decrease in cash due to acquisition ofequity interest in WCAS and dividend
increase Decrease in inventories due to lower
sales
Non-current assets: Up JPY423 million
 Increase in property, plant andequipment due to purchase ofmachinery and equipment.
 Increase in investments and otherassets due to an increase of shares ofOristar Corporation, Vietnam relatedcompany, by share dividends.
Current liabilities: Down JPY3,738
million Decrease in notes and accounts
payable-trade due to lower sales
Non-current liabilities: Down JPY-17
million
Net assets: Up JPY727 million

Business Environment (1)Raw Material Market Trends for Aluminum, Copper and Stainless Steel•

Aluminum ingot prices, which had continued to rise, have been on a downward trend since
March 2022, but have recently been recovering.

1,400

Unit: Thousand yen per ton

Aluminumingots
アルミニウム地金

1,200

電気銅建値 copper priceElectrolytic
ステンレス製品市中価格
Stainlesssteel sheet

1,000

End of Dec 2023
1,280 thousand yen
per ton800

End of Dec 2023
610 thousand yen
per ton600
400
End of Dec 2023
380 thousand yen
per ton

200
0

Sep
2016

9月末

Mar
2017年
2017

3月末

Sep
2017

9月末

Mar
2018年
2018

3月末

Sep
2018

9月末

Mar
2019年
2019

3月末

Electrolytic copper price: JX Nippon Mining & Metals
Aluminum ingots: Nikkei monthly average2024 © Hakudo Co., Ltd. All rights reserved.

Sep
2019

9月末

Mar
2020年
2020

3月末

Sep
2020

9月末

Mar
2021年
2021
3月末

Sep 2022年
Mar
2021 2022

9月末

3月末

Stainless steel sheet: Japan Metal Daily median13

Sep 2023年
Mar
2022 2023

9月末

3月末

Sep
2023

9月末

Business Environment (2)Comparison of Semiconductor Production Equipment Sales and Standard Stock Items Sales•

Despite the expectation of long-term demand growth due to advancements in IoT, digitaltransformation (DX), AI, and EV there have been widespread moves by semiconductor
manufacturers to revise their capital investment plans due to inventory and production
adjustments, and this move is expected to continue for a while.
Hakudo’s net sales ofstandard stock 5.0
items(Billion yen)

Sales of production
600 equipment in Japan
6,000(Billion yen)

50

Hakudo’s net salesof standard stock
items

500
5,000

4.5
45
4.0
40

35
3.5

400
4,000

30
3.0
25
2.5

3,000
300

20
1.5

2,000
200

15
1.0
10

1,000
100
0
0

0.5

5
Mar
2018年
2018
3月

Sep
2018
9月

Mar
2019年
2019
3月

Sep
2019
9月

Mar
2020年
2020
3月

Sep
2020
9月

Mar
2021年
2021
3月

Sep
2021
9月

Source: Semiconductor Equipment Association of Japan - statistical data
2024 © Hakudo Co., Ltd. All rights reserved.

14

Mar
2022年
2022
3月

Sep
2022
9月

Mar
2023年
2023
3月

Sep
2023
9月

0

0

Business Environment (3)Comparison of Machine Tool Orders and Standard Stock ItemsSales••

The volume of machine tool orders has been in decline since peaking in March 2022.
Compared to the Q3 (October-December) in the previous fiscal year, domestic orders decreased by
20.9% and foreign orders decreased by 11.6%.
Hakudo’s net sales ofOrder amount(Billion yen)standard stock items(Billion yen)

200
2,000

4.0
40

Hakudo’s net salesof standard stock
items

180
1,800
160
1,600

3.5
35
3.0
30

1,400
140

2.5
25

1,200
120

2.0
20

1,000
100
800
800

1.5
15

Foreign orders

600
600

1.0
10

400
400
200
200
00

0.5
5

Domestic orders

Mar
2018年
2018
3月

Sep
2018
9月

Mar
2019年
2019
3月

Sep
2019
9月

Mar
2020年
2020
3月

Sep
2020
9月

Mar
2021年
2021
3月

Sep
2021
9月

Mar
2022年
2022
3月

Source: Japan Machine Tool Builders' Association - machine tool orders statistics

2024 © Hakudo Co., Ltd. All rights reserved.

15

Sep
2022
9月

Mar
2023年
2023
3月

Sep
2023
9月

00

Business Environment (4)Ratio of Hakudo aluminum product sales to rolled aluminum product shipment value•

Hakudo’s aluminum product sales are around 30% of rolled aluminum product shipment value, ourindustry share remained almost unchanged.

Rolled aluminumproducts(Billion yen)

40.0
400.0

300.0
30.0

27.8%

Rolled aluminum product shipment amounts
アルミニウム圧延品出荷金額

28.8%

Ratio of Hakudo aluminum product sales to rolled
出荷金額に対する白銅アルミニウム売上金額の割合

35.0
350.0
27.7%

27.9%

27.4%

28.8%

27.9%

27.9%

27.2%

29.3%
33.6%

30.4%

aluminum product shipments
28.3%

Ratio of
Hakudo aluminum
sales vs. shipment
amount (%)
40.0%

28.9%

29.8%

29.3%

35.0%
29.2%

28.9%

27.5%

30.0%

250.0
25.0

25.0%

200.0
20.0

20.0%

150.0
15.0

15.0%

100.0
10.0

10.0%

50.0
5.0

5.0%

0.0
0.0

0.0%

1Q

2Q

3Q

4Q

1Q

FY03/20
2020年3月期

2Q

3Q

FY03/212021年3月期

4Q

1Q

2Q

3Q

FY03/222022年3月期

Note: Aluminum rolled products shipment value is the total of sheets (6.0 mm+), disks, tubes, and bars.

Source: Rolled Aluminum Statistics Monthly Report, Japan Aluminum Association

2024 © Hakudo Co., Ltd. All rights reserved.

16

4Q

1Q

2Q

3Q

FY03/232023年3月期

4Q

1Q

2Q
FY03/24
2024年
3月期

3Q

FY03/24
Full-year Financial Forecasts

2024 © Hakudo Co., Ltd. All rights reserved.

17

•
•

Downward revision of Full-year Financial Forecasts

Full-year FY03/2024 forecast was revised downward based on the judgment that the recovery indemand for semiconductors, which had been expected in the second half of FY03/2024 and beyond,has been slower than expected and that demand will remain stagnant during the current fiscal year.
Sales are expected to decrease from JPY6,800 million(-10.8%) to JPY56,400million, and ordinary
profit is expected to decrease from JPY560 million(-17.6%) to 2,620 million.

(Million yen)

FY03/23
Q3 forecast

FY03/24
Q3 result

ChangeFY03/24full-year
Initial forecast

FY03/24full-year

ChangeRevised forecast

47,37942,930-4,44863,200Operating profit

3,166

1,885

-1,280

2,970

2,320

-650

Ordinary profit

3,369

2,201

-1,168

3,180

2,620

-560

451

57

-394

62

+62

Ordinary profit(Excluding inventories
impact)

2,917

2,144

-773

3,180

2,558

-622

Profit attributable to ownersof parent

2,289

1,512

-776

2,150

1,760

-390

Net sales

Inventory revaluation
Impact-Note: Our full-year forecast for FY03/24 takes into account an inventory revaluation impact up to the end of Q1.
1USD=JPY135, 1CNY=JPY19.69, 1THB=JPY3.67（As of May 2023）
2024 © Hakudo Co., Ltd. All rights reserved.

18

56,400-6,800Full-year Financial Forecasts and target of MTMP•••

FY03/2024 is expected to not achieve the targets in the second year of the medium-term
management plan, in part due to the downward revision of the financial forecast.
FY03/2025 is expected to see increasing sales through various measures, cost reductions
through operational improvements in 2H FY03/2024 and beyond, as well as a gradual recovery
in semiconductor demand driven by IoT, DX, AI, EV, and other factors.
However, in the final year of the medium-term management plan (FY03/2025), estimates ofachievement are under scrutiny due to a slower-than-expected recovery in demand forsemiconductors and increases in personnel and other costs.

(Million yen)

FY03/24
Q3
actual results

FY03/24full-year
initial forecast

FY03/24full-year
forecast
Correction

FY03/24
target of
MTMP

Net sales

42,93063,20056,40066,800Operating profit

1,885

2,970

2,320

-

Ordinary profit

2,201

3,180

2,620

4,500

Inventory revaluation
impact57-

FY03/25 target
of MTMP71,800
5,400

62

-

-

Ordinary profit(Excluding inventories
impact)

2,144

3,180

2,558

-

-

Profit attributable to owners ofparent

1,512

2,150

1,760

-

-

2024 © Hakudo Co., Ltd. All rights reserved.

19

Shareholder Returns (Changes of the Dividend Policy)• The Company's basic dividend policy is to strengthen its financial position anddistribute results backed by business performance. The new dividend policy will
be applied starting from the current fiscal year end to strengthen shareholder
return.

Dividend payout ratio

Minimum annual dividend（Full year）（newly applied）＜present＞
More than

40%

80

＜New＞
More than

45 ％

JP¥

In principle,
the higher of the above two shall be the dividend amount.
2024 © Hakudo Co., Ltd. All rights reserved.

20

Shareholder Returns (Dividends)•••

The dividend amount was calculated in accordance with the revised dividend policy.
As a result, applying the minimum annual dividend of 80 yen, the year-end dividend is expected
to be 45 yen per share, an increase of 2 yen per share.
The annual dividend is expected to be 80 yen per share, an increase of 3 yen per share overthe initial forecast.
Dividend Forecast for FY03/24

115

Dividend
payout ratio
44.0%

Dividend
payout ratio
57.3%

Dividend
payout ratio
51.3%

58

58

2020年

2021年

3月期
FY03/20

The lower section

3月期
FY03/21

67

Dividend
payout ratio
45.2%

51

Unit: yen

80

Dividend
payout ratio
51.6%

45
48

58

2022年

2023年

3月期
FY03/22

3月期
FY03/23indicates the interim dividend, while the upper section*The dividend for FY03/22 includes a commemorative dividend of JPY9 per share.
2024 © Hakudo Co., Ltd. All rights reserved.

109

21

35
2024年
FY03/24
3月期

Forecast
予想

represents the year-end dividend.

Shareholder Returns （ Shareholder Benefit Plan ）• On January 17, 2024, the base date will be changed from the end of September of eachyear to the end of March of each year.
• There will be no changes other than the base date in terms of the number of units heldand points awarded.
Shareholder Benefit Plan
Shareholders holding three units (300 shares) or more listed or recorded in the Company's shareholder registry as of the end of
March each year are eligible for the shareholder benefit. The points can be exchanged for more than 4,000 carefully selected
products on the Hakudo Premium Benefits Club, a special website for shareholders only, or exchanged for "WILLs Coin" a commonshareholder benefit coin that can be combined with benefit points from other Premium Benefits Club companies.

Shareholder Benefit Points Chart (1 point is approximately equal to 1 yen)
Number of shares heldAwarded points

Less than 300 shares

0 points

300-399 shares

3,000 points

400-499 shares

5,000 points

500-599 shares

10,000 points

600-999 shares

20,000 points

1,000-1,999 shares

30,000 points

2,000-2,999 shares

40,000 points

3,000 shares or more

50,000 points

2024 © Hakudo Co., Ltd. All rights reserved.

Every May

22

Example of selected items

Progress Report for Achieving
the Medium-Term Management Plan
(FY03/23~ FY03/25)

2024 © Hakudo Co., Ltd. All rights reserved.

23

Medium-term Management Plan Key Strategic Policies• Targeting business evolution, a stronger management foundation and the promotion ofsustainability management by FY03/25 based on exceptional strategies.
Management Issues and Key Strategic Policies
Expand business domain

Enhance core businesses

Advancebusiness toachieve growth2

1Strengthen processing
functions and supply
capabilities, including
development ofprocessing company
network

Strengthen and expand
customer base, raise
profit margins throughHakudo Network Service
evolution

6

Strengthen
managementfoundation

3
Increase procurement
and supply capabilities
through SCM
restructuring

7
Strengthen digitalplatforms to enhance
corporate value

10

5

4
Expand growth fields
and strengthen sales

8
Enhance manpower,
develop existing staff andincrease engagement

9
Strengthen PDCA
management to realize
strategies

Promote sustainability management*For details, please refer to the Medium-term Management Plan presentation announced on May 26, 2022
2024 © Hakudo Co., Ltd. All rights reserved.

24

Expand overseas
businessStrengthen governanceImplementation Status of Key Strategic Policies (1)(1) Strengthen and expand customer base, raise profit margins through Hakudo Network
Service (E-Commerce) evolution
Hakudo standard stock

Open site from
July 2023

5,400 items＋

Inventory at other companies

78,700 items

companies using

11,700 companies※by the end of
December 2023

Allows price quotes
without login

registered users
23,500 users“metal 3D printer modeling”“drawing in the web”
“material of CAD dataof drawing”※Including the number ofregistrations for CS net services※by the end of
December 2023

【Number of Companies Registered at Hakudo Net Service（Total）】【Number of Items Available at Hakudo Net Service】
90,00080,00070,00060,00050,00040,00030,00020,00010,0000Convenient
new features

14,00012,000

他社在庫品
Inventoryat other companies

10,000

当社標準在庫品
Hakudostandard stock

Cumulative registrations
登録件数累計

8,000
6,000
4,000
2,000

FY03/16

FY03/17

FY03/18

FY03/19

FY03/202024 © Hakudo Co., Ltd. All rights reserved.

FY03/21

FY03/22

FY03/23Q3
FY03/2425

0

FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 FY03/21 FY03/22 FY03/23

Note: Includes CS Network Service registrations

Q3
FY03/24

Implementation Status of Key Strategic Policies (2)(2) Expand growth fields, strengthen sales
Automotive

Semiconductor

Aircraft/aerospaceindustryindustry

Q3 FY03/24

industry

Q3 FY03/24

Q3 FY03/24

sales ratio

sales ratio

sales ratio

36.2％

4.6％

6.3％

Consolidate the industry throughspecialized departments

Established a new baseObtaining new customers(Iga Warehouse) in Iga City

Utilize 3D printers to acquire new customers
in automotive-related fields

Establish a method for accumulating industry
knowledge through consolidation ofsemiconductor related sales partners

Consolidate processing equipment such as
waterjet cutting machines, machining centers,
and wire cutting machines【Growth domain quarterly sales indicators】
250

Semiconductor FPD
production equipment

半導体FPD製造装置

200

Automobiles
自動（自動二輪）車(motorcycles)

Aircraft/aerospace-related
航空・宇宙関連

150
100
50

Q1

Q2

Q3

Q4

FY03/21

Q1

Q2

Q3

Q4

FY03/22Q2

Q3

FY03/23

Note: Sales index based on sales in Q1 FY03/21
2024 © Hakudo Co., Ltd. All rights reserved.

Q1

26

Q4

Q1

Q2
FY03/24

Q3

Implementation Status of Key Strategic Policies (3)(3) Overseas business expansion• Hakudo USA Inc., a wholly owned subsidiary of the Company, acquired 51% equity interest in "WestCoast Aluminum & Stainless, LLC" in U.S.A , making it a subsidiary in March 2023.The 100-day PMI
phase was completed and the company now entered the business expansion phase.
• As of the end of Q3 FY03/24, Hakudo Group‘s overseas sales ratio is expected to achieve the 12%
target for the third year of the MTMP(FY03/25) ahead of the original schedule.
Status of Activities

 Expansion of Sales Items

Expanding e-commerce business at overseas subsidiaries, mainly in Thailand.
In Southeast Asia, we aim to expand sales via distributor partners, particularly in Vietnam.
Planning to expand import wholesale business and processing business of nonferrous metals
at a U.S. subsidiary. Also started preparation for e-commerce business.

 Consideration of investment and partnerships

Continued to pay visits and have discussions with possible investment candidates andpartners mainly in the U.S., South Korea and Taiwan.

Overseas Net Sales and Sales Ratio
7,000

6,000
5,000
4,000
3,000
2,000

15%

Overseas sales
海外売上高
海外向け売上高比率(実績)
Ratio of sales for overseas

6%

5%

9%

8%

10%

FY03/19

FY03/2015%

5%FY03/21

FY03/22

FY03/23

FY03/24
Forecast

Note: Overseas sales calculated as the sum of overseas subsidiary sales and head office export sales to non-subsidiary companies overseas.
2024 © Hakudo Co., Ltd. All rights reserved.

20%

10%

1,000

0

Unit:
Million yen

270%Progress in Sustainability Management (1/3)••

The status of efforts to date for action items and targets pursued by subcommittees established under the ESG/SDGs
Management Committee are as follows. This information is reported to the Board of Directors, which in return provides
proposals and advice for the actions.
Increasing sales due to expanding sales and lineup ECO products, which are environmentally friendly. A portion of theproceeds from the sale of ECO products is donated to society, improving employees' awareness of social contribution.
Material
issues

Initiatives
Reduce CO₂
emissions

1. Reducing
environmental
Improve
impact andresponding to manufacturing
climate change efficiency

2. Building
responsible
supply chains

FY03/25 Targets

FY03/25 KPIs *1

Commence concrete reduction measures to achieve(1) 42% reduction by FY03/30 compared to FY2020(2) carbon neutrality by FY03/50.

 CO₂ emissions






Contribute to society by conserving and reducing
the depletion of natural resources and curbing
environmental pollution through more efficientdeliveries, less industrial waste, and lower scrap
rates.

Energy consumed
Freight cost reduction rates
Waste disposal costs
Manufacturing department
consumable costs

Q3 FY03/24 Efforts
 Preparation for Installation of Solar Panels at Shiga
Factory Purchase FIT Non-Fossil Certificates Support for disclosure of CDP (Carbon Disclosure
Project)Introduction of electric vehicles in company
fleet Implemented activities to improve delivery efficiency
by restructuring the distribution network
 Reduced standby power consumption of facilities Continued cutting oil recycling measures

Promote paperlessoffices

Reduce costs by eliminating resource waste andpromoting recycling, preserve forests andcontribute to the protection of the naturalenvironment.

 Office printing costs

 Decreased printing expenses for meeting materials
through digitization

Strengthen
environment-friendly
products

Contribute to society through the stable supply of
products with low environmental impact (ECO
products, etc.), and management that considers
environmental impacts.

 Environment-friendly product sales
volumes Expand sales of ECO products and consider lineup
expansion

Promote green
procurement

Contribute to society by ensuring that suppliers
comply with the Hakudo Green Procurement
Guidelines, and management that considers
environmental impacts.

 Number of MOUs exchanged with
suppliers complying with the Green
Procurement Guidelines
 Green procurement rates

 Conducted MOU exchanges with multiple business
partners

Strengthen
relationships with
suppliers

Contribute to society by cooperating with suppliers
and implementing CO₂ reduction measures, andpromoting CO₂ reductions throughout the supply
chain.

 Green aluminum suppliers
discovered Recycled aluminum suppliers
discovered Consider introducing products manufactured frommaterials with reduced CO₂ emissions
 Started sales of "ECO63S square bar" with low CO₂
emissions Formulation of internal human rights
policies

 Initiated human rights due diligence efforts
 Establishment of Hakudo Group Human Rights Policy Education for all employees

Contribute to society by working with supply chain

Respect human rights partners to promote human rights awareness inmanagement.

1. In-house KPIs for the three-year period from FY03/23 to FY03/25.
2024 © Hakudo Co., Ltd. All rights reserved.

28

Progress in Sustainability Management (2/3)
Material
issues3. Activities
targetingsociety

Initiatives

FY03/25 Targets

FY03/25 KPIs *1

Q3 FY03/24 Efforts

Contribute to future
generations

Contribute to the development of next-generation
technologies and the strengthening of humanresources by supporting advancement of
manufacturing culture and human resource
development in Japan.

 Number of industry-academia
collaboration projects

 Visited university research exhibitions and exploredopportunities for new collaborative initiatives

Contribute to society

Contribute to a sustainable society, instilling a senseof pride in employees and earning the trust ofsociety.

 Amount of donations to local
communities and organizations

 Expand installation of donated vending machines
within the company
 Collecting in-house used books and donated them

Increase employee satisfaction to enhance
employee motivation to be productive andresponsive to customers, enhance our impact onsociety (social contributions) and positively impact
company performance.

 Attrition rates
 Paid leave acquisition rates
 Percentage of male employees
taking parental leave Number of significant near-missincidents

 Explored strategies to prevent employee
resignations due to child-rearing or caregiving
responsibilities
 Enhancement of benefits and activities topromote employee awareness Provide support to promote use of sportsclubs Preemptively prevented near-miss incidents
through workplace inspections

Promote diversity

Increase organizational productivity andcompetitiveness by hiring and utilizing diverse
human resources.

 Female employee ratios
 Female manager ratios
 Foreign nationality Manager
ratio Considered implementing training anddevelopment programs for female managers
and potential female managers
 Ensure fairness and transparency incompensation
 Consideration of an appropriate and fairsystem that encourages employees who haveachieved results to challenge themselves
further

Enhance employee
education

Provide knowledge and skills necessary forbusiness operations, and opportunities to acquire
knowledge and skills.

 Education costs per employees Training participation rates

 Consideration of proposed revisions topersonnel evaluations

Increase employee
satisfaction

4. Investing inhumanresources

1. In-house KPIs for the three-year period from FY03/23 to FY03/25.
2024 © Hakudo Co., Ltd. All rights reserved.

29

Progress in Sustainability Management (3/3)
Material
issues

5. Corporate
governanceInitiatives

FY03/25 Targets

FY03/25 KPIs *1

Q3 FY03/24 Efforts

Zero violations

Conduct education aiming for zero tolerance.

 Zero compliance violations

 Executed compliance training sessions
 Conducted comprehension checks incompliance.

Confirm policy
compliance status

Ensure compliance with each policy*Current policies and basic principles are as
follows:• Privacy Policy• Basic Policy on Corporate Governance• Basic Policy on Sustainability• Basic Policy on Disclosure Confirmation of compliance withthe aforementioned policies

 Conducted information security study meetings
 Implementation of information security
education

Enhance responses tobusiness risks anddisasters

Conduct thorough assessment of businessrisks and review BCP. Also, create a system
 Risk assessment points
ensuring employee safety and the smooth
resumption of operations when disaster occurs,  Number of disaster preparedness
drills conducted
through implementation of drills and response
measures.

 Review of risk assessment points
 Carried out company-wide safety confirmation
drills Conduct emergency drills

6. Internaldissemination
activities ofPromote internal
the ESG/SDGs dissemination activities
Management
Committee

Enhance the company-wide consciousness
towards ESG/SDGs management byconducting educational activities and events
related to ESG/SDGs.

 Employee penetration of
ESG/SDGs management(questionnaire survey)
 Cumulative number of episodecontests Promoting communication among employees
by introducing thank you cards
 Distributed and delivered ESG/SDGs-related
posters, books, and videos
 Consideration of business plans involving theSDGs

7. Develop
new products
and services Make products andservices concrete
related to
ESG/SDGs

Develop new products and services

 Number of new products andservices introduced

 Considering to develop new CO₂ offset related
products and services

1. In-house KPIs for the three-year period from FY03/23 to FY03/25.
2024 © Hakudo Co., Ltd. All rights reserved.

30

Sustainability Management Initiatives
Hakudo is conducting a wide range of activities, including the creation of employment
through its own farms, in addition to contributing to society through manufacturing.
Hakudo Farm

Super Minimum
Challenge

We operate Hakudo Farm as partof our effort to promote
employment for people withdisabilities.

The Super Minimum Challenge is a
project aimed at attaining record
speeds using a 50cc engine. It is
held annually in Bonneville, Utah.

As of January 2024, we have 12
employees at locations in
Yokohama City, Kanagawa
Prefecture and Misato City,
Saitama Prefecture. We grow about
30 kinds of vegetables, mainly leafy
greens.

The world speed record was set atthe 2019 competition, where
aluminum material provided by
Hakudo was also used for the bikes.

Harvested vegetables are donatedto a children's cafeteria as well as
distributed to our employees.

Shita-machi
Bobsleigh

The Japanese top (“koma”) battle isa tournament-style competition inwhich manufacturers from all overJapan bring professionally madekoma to compete against one
another. High school student koma
competitions are also held in eachprefecture.

The Shita-machi Bobsleigh is a
project in which small factories
located in Ota Ward play a central
role in creating world-class sleds,
while also conveying to the world the
manufacturing capability of Ota Ward,a city of industry located in Tokyo’sshita-machi area.

Hakudo supports the high school
student Koma Battle in Kanagawa
Prefecture by supplying materials
and engaging in other activities topromote the development ofJapanese manufacturing.

More recently, parts fabricatedusing a 3D printer have also been
used.

*Prepared based on information as of January 31, 2024.
2024 © Hakudo Co., Ltd. All rights reserved.

Koma Battle

31

The materials for the Shita-machi
Bobsleigh are supplied by Hakudo at
no cost. The bobsleigh that wasmade with these materials secured
the 19th spot in the WorldChampionships held in January 2023.
(Photo credit: International
Bobsleigh & Skeleton Federation)

Thank you very much for your attention.
■Hakudo Official Social Media Accounts
We have created official accounts on LINE and Facebook toregularly disseminate product introductions, exhibition
announcements and other useful information.
Please use the QR codes to follow Hakudo online!
■Disclaimer
This document contains projections based on assumptions,
outlooks, and plans regarding the future as of February 2024.
Actual results may differ materially from those projected inforward-looking statements due to risks and uncertainties
related to the global economy, competitive conditions, andother factors.
■For more information, please contact:
Hakudo Co., Ltd. Management Planning Section
E-mail address: hkdkeiki＠hakudo.co.jp
Website: www.hakudo.co.jp

2024 © Hakudo Co., Ltd. All rights reserved.

32