Financial Results for the First Quarter Year Ended on March 31, 2025

Hakudo Co., Ltd. (7637)

August 19, 2024
2024 © Hakudo Co., Ltd. All rights reserved.

Table of Contents

1． Q1 FY03/25 Results

P.2

2． FY03/25 Financial Forecasts

P.17

3．Progress on
Key Strategies in the Mid-termManagement Plan

P.21

4．Initiatives for Sustainability
Management

P.26

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

1

Q1 FY03/25 Results

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

2

Financial Highlights

Net sales

Gross profit

Ordinary profit

15,745 million yen

2,677 million yen

996 million yen(up 7.0％ YoY)

Net sales(up 21.1％ YoY)

(up 44.9％ YoY)

Q1 FY03/25 Summary• Sales increased by 7.0% YoY due to increase of sales to the semiconductor production equipment (SPE)industry.
• The overseas sales also increased by JPY475 million YoY because of the depreciation of the Japanese
yen and the recovery of the demand in China.

Gross profit• Gross profit increased by 21.1% YoY due to higher sales and the impact of an increase by JPY46 million
in inventory valuation gain.

Ordinary profit• Ordinary profit increased 44.9% YoY due to the impact of increased revenue, despite higher operating
costs such as freight and labor costs, and lower non-operating income.

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

3

Summary of Consolidated Statements of Income (PL)• Net sales increased by JPY1,028 million YoY due to the increase in selling prices caused bybuoyant commodity market and the sales recovery in the semiconductor production
equipment (SPE) industry and office equipment industry.
• Ordinary profit increased by JPY308 million YoY due to increase in sales and inventory
valuation profit.

Unit: Million yen

Q1 FY03/24

Net sales
Standard stock items
Special-order items

Gross profit
Operating profit
Ordinary profit
Inventory revaluation impact

Ordinary profit

14,717
8,747
5,970
2,211
551
687
-2

Sales
ratio

-

59.4%
40.6%
15.0%
3.7%
4.7%
-

Q1 FY03/25

15,745
9,497
6,248
2,677
868
996
43

Sales
ratio

YoY
Change(rate)

YoY
Change(amount)

-

7.0%

1,028

60.3%

8.6%

749

17.0%

21.1%

466

5.5%

57.7%

317

6.3%

44.9%

308

39.7%

0.3%

4.7%

-

278

46

(Excluding inventories impact)

689

4.7%

952

6.0%

38.1%

262

Profit attributable to owners ofparent

473

3.2%

688

4.4%

45.3%

214

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

4

Factors Affecting Year-on-Year Change in Net Sales• In addition to increase in selling prices of standard inventory products caused by a rapid
recovery of raw material markets, the significant increase in sales volumes contributed toincreased sales of standard inventory products by JPY736 million YoY.

412

452

70

324

Unit: Million yen

15,745-230

Special-order items-JPY159 million YoY

14,717
Standard inventory items＋JPY736 million YoY

Q1 FY03/24

Higher unit
selling prices ofstandard
inventory items

Lowerstandard
inventory item
volumes

Lower unit
selling pricesof specialorder items

Higher special- Subsidiaries andconsolidated
order item
adjustments
volumes

Q1 FY03/25

Standard inventory items (non-consolidated): sales volume ＋4.8% YoY, selling price +3.6% YoY2024 © Hakudo Co., Ltd. All rights reserved.

5

Quarterly Sales Trends

・Though the sales had remained sluggish due to the stagnation of the semiconductor
production equipment(SPE) industry, Sales in Q1 FY03/25 increased by JPY1,423 million andthere were some good signs of recovery QoQ(Q4).
16,062
14,655 14,966
12,636

15,712

Unit: Million yen

15,603
14,222

13,182

14,717

15,745
13,991 14,221

14,322

11,421
9,358

9,962
8,477

Q2
FY03/21Q4
FY03/21Q2
FY03/22Q4
FY03/22Q2
FY03/23

Standard stock items

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

6

Q4
FY03/23Q2
FY03/24

Special-order items

Q4
FY03/24Q2
FY03/25Q4
FY03/25

Net Sales by Product Category•

Aluminum, Copper , Stainless steel and the other sales increased QoQ(Q1) due toincrease in both the sales volume and unit selling prices caused by the price increase of
raw materials.

Unit: Million yen

FY03/23
1Q
Consolidated
net sales

2Q

FY03/24

3Q

4Q

1Q

2Q

3Q

4Q

Q1
Vs. Q1
FY03/25 FY03/24

16,062 15,712 15,603 14,222 14,717 13,991 14,221 14,322 15,745

7.0%

Aluminum

10,694 10,249 10,076

8,800

9,060

8,339

8,244

8,587

9,363

3.3%

Copper

2,106

2,010

2,134

2,248

2,138

2,024

2,126

2,141

2,442

14.2%

Stainless
steel

2,565

2,607

2,632

2,414

2,830

2,971

3,074

2,947

3,061

8.1%

Others

696

844

761

759

687

655

774

645

878

27.8％

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

7

Composition Ratio of Net Sales by Industry (Japan)• Both sales ratio and sales amount for Semiconductor/FPD production equipment industry
increased QoQ (Q4).
• Though sales ratio decreased, sales amount increased due to increase in overall sales in
automobile/motorcycles, mold and other machine tool industry.
• Both sales ratio and sales amount for Aircraft/Aerospace industry, which are positioned asa key strategic industry, continues to increase.
FY03/24
1Q

2Q

FY03/25

3Q

4Q

total

1Q

Semiconductor/
FPD production
equipment

39.3%

38.5%

36.2% 36.4%

37.6% 37.3%

Other machine tools

17.7%

17.7%

18.3% 18.0%

17.9% 17.8%

8.9%

9.0%

8.8% 11.6%

9.6% 10.3%

7.1%

5.5%

5.7%

5.4%

5.9%

5.9%

4.7%

5.9%

6.3%

5.1%

5.5%

5.1%

4.8%
4.1%

5.5%
4.3%

5.6%
4.2%

5.4%
4.3%

5.3%
4.2%

5.4%
4.0%

4.4%

3.8%

4.6%

4.1%

4.3%

4.3%

9.0%

9.6%

10.3%

9.7%

9.6% 10.0%

OA devices
Vacuum/hydraulicdevices
Automobiles/
motorcycles
Dies
Electronic components
Aircraft/aerospace
related
Other industries

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

Q1
FY03/25

8

4.3%

10.0%

4.0%

37.3%

5.4%

5.1%

5.9%
10.3%
Semiconductor/FPD
半導体・FPD製造装置
production
equipment
OA機器
OA
devices
自動車・自動二輪車
Automobiles/motorcycles
電子部品 components
Electronic
その他 industries
Other

17.8%
Other
machine tools
その他工作機械

空圧・油圧機器
Vacuum/hydraulicdevices
Dies
金型
Aircraft/aerospace
航空・宇宙関連
relatedFinancial Performance by Segment•••

Though the company posted an operating loss by JPY31 million in North America, ordinary profit
recorded JPY32 million and increased JPY69 million YoY due to Non-operating incomes such as foreignexchange gains of Yen-denominated parent-subsidiary loan.
In China, though both domestic and foreign demand recovered, the company was unable to improve
profit ratio resulting in an operating loss of JPY5 million.
On the other hand, in the other segment (Thailand), ordinary income increased by JPY7 million YoY.
Q1 FY03/24
Net sales

Operatingprofit/lossesQ1 FY03/25
Profitattributableto ownersof parent

Ordinary
profit/losses

Net sales

Operatingprofit/losses

Unit: Million yen

Profit (loss)
attributableto ownersof parent

Ordinary
profit/lossesJapan

12,937

548

678

457

13,490

855

909

613

North
America

1,154

-35

-37

-20

1,296

-31

32

31

China

296

-6

1

0

559

-5

3

2

Other

328

44

44

35

399

50

51

41

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

9

Factors Affecting Year-on-Year Change in Ordinary Profit• Standard inventory items significantly increased due to increase in both the sales volume
and unit selling prices.
• Despite higher costs per sales volume(KG) such as freight and electricity cost, Ordinary
profit increased JPY308 million YoY due to the significant impact of increase the sales.
4263

Unit: Million yen

-103

102
-89

687
687

996

996

-76
Ordinary profit
excludinginventory impact →JPY952 million← Ordinary profit
excludinginventory impact
JPY689 million

Q1 FY03/24

46

Standard
Special-order Manufacturing
inventory items (parent)
Expenses
items (parent)(parent)

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

SG&A Non-operating Subsidiary profit Inventory
and consolidated changes
lossesexpensesadjustments(parent)
10

Q1 FY03/25

Quarterly Ordinary Profit Trends• Increased by JPY308 million vs. the Q1 of the previous fiscal year due to a rise in inventory
valuation gain.
• Increased by JPY349 million from the previous quarter (Q4)
Unit: Million yen

Q2
FY03/21Q4
FY03/21Q2
FY03/22

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

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

Loss on revaluationof inventory

Gain on revaluation of
inventory

11

Q4
FY03/24
Foreignexchange
gains

Q2
FY03/25Q4
FY03/25
Foreign exchange
lossesBalance Sheet (BS)• Inventories, accounts receivable, and accounts payable increased due to the recent sales
increase.
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 otherassetsTotal assets
Liabilities and net assets

Current liabilities

Notes and accounts
payable – trade (Including
electronically recorded
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,
2024

32,1285,700

Composition ratio

76.5%
13.6%

As of June 30,
2024

34,4085,850

Unit: Million yen

Composition
ratio

77.5%
13.2%

Change+2,280+149

16,05238.2%

17,49639.4%+1,444

10,221
153
9,887
6,653
1,422
1,811
42,015

24.3%
0.4%
23.5%
15.8%
3.4%
4.3%
100.0%

10,872
188
9,992
6,691
1,461
1,839
44,400

24.5%
0.4%
22.5%
15.1%
3.3%
4.1％
100.0％

+650
+35
+104
+37
+38
+28
+2,384As of March 31,
2024

19,420Composition ratio

46.2%

As of June 30,
2024

21,488Composition
ratio

48.4％

Change+2,067

17,14740.8%

19,04342.9%+1,895

788
324
1,160
114
19,534
22,48142,015

1.9%
0.8%
2.8%
0.3%
46.5%
53.5%
100.0%

1,337
340
767
98
21,586
22,81344,400

3.0%
0.8%
1.7%
0.2%
48.6%
51.4%
100.0%

+549
+15
-392
-15
+2,052+332+2,3842024 © Hakudo Co., Ltd. All rights reserved.

12

Current assets: Up JPY2,280 million
 Increase in inventories due to higher
sales
Non-current assets: Up JPY104 million
 Property of machinery capital
investment increased Increase in dollar-denominatedgoodwill amount from March 31, 2024
due to yen depreciation(up JPY42 million)
Current liabilities: Up JPY2,067 million
 Increase in notes and accounts
payable-trade due to higher sales
Non-current liabilities: Down JPY15
million Decrease in over one-year leaseobligations
Net assets: Up JPY332 million

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

Though aluminum ingots price continued to decline since March 2022, price has been on a
downtrend trend recently due to the weak yen rising LME price.
Electrolytic copper prices continue to rise due to the weak yen and demand expectations.
Unit: Thousand yen per ton

1,800
1,600
1,400
1,200

アルミニウム地金
AluminumingotsEnd of June 2024
1,570 thousand
yen per ton

電気銅建値
Electrolytic
copper price

Stainless steel sheet

ステンレス製品市中価格

End of June 2024
600 thousand yen
per ton

1,000
800
600
400

End of June 2024
477 thousand yen
per ton

200
0

Sep
2020

Mar
2021

Sep
2021

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

Mar
2022

Sep
2022

Mar
2023

Sep
2023

Stainless steel sheet: Japan Metal Daily median

13

Mar
2024

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

Lower Inventory procurement and production volume adjustments by semiconductor manufacturers bottomedout due to a part of recovery caused by generative AI and expansion of demand in capital investment for
semiconductor in China.
However, future prospect is still unclear due to recent rising interest rates, the rapid fluctuation of exchange
Hakudo’s net sales orate and stock markets and other geopolitical factors.
standard stock
items(Billion yen)

Sales amount ofequipment in Japan(Billion yen)

6,000
6000

50
50

Hakudo’s net salesof standard stock
items

5,000
5000

45
45
40
40
35
35

4,000
4000

30
30
25
25

3,000
3000

20
20

2,000
2000

15
15
10
10

1,000
1000

00

55
Sep
2020
9月

Mar
2021年
2021
3月

Sep
2021
9月

Mar
2022年
2022
3月

Sep
2022
9月

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

14

Mar
2023年
2023
3月

Sep
2023
9月

Mar
2024年
2024
3月

00

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

Though the volume of machine tool orders has been in decline since its peak in March 2022, there
are some signs of recovery recently.
Sales order decreased by 6.9% (domestic orders) and increased by 5.3% (overseas orders) YoY(AprilJune).

••

Order amount(Billion yen)

Hakudo’s net sales ofstandard stock items(Billion yen)

Hakudo’s net salesof standard stock
items

1,800

1800
1,600

1600

40
40
35
35

1,400
1400

30
30

1,200
1200

25
25

1,000
1000

20
20

800
800
600
600

15
15

Overseas orders

10
10

400
400

200
200
0
0

55

Domestic orders

Mar
2020

Sep
2020

Mar
2021

Sep
2021

Mar
2022

Sep
2022

Mar
2023

Source: Japan Machine Tool Builders' Association - machine tool orders statistics
2024 © Hakudo Co., Ltd. All rights reserved.

15

Sep
2023

Mar
2024

00

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

Hakudo’s aluminum product sales have continued to be around 30% of rolled aluminum productshipment value.

•

Rolled aluminumproducts(Billion yen)

Hakudo’s net salesof standard stock
items

400.0
400.0
350.0
350.0
300.0
300.0

28.8%

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

27.8%

40.0%

29.3%
33.6%

30.4%
28.8%

27.9%

27.9%

27.2%

28.9%

29.8%

29.3%

35.0%
29.2%

28.9%

27.5%

27.3%

28.7%

30.0%

250.0
250.0

25.0%

200.0
200.0

20.0%

150.0

150.0

15.0%

100.0

10.0%

50.0

5.0%

0.0

0.0%

100.0
50.0

0.0

1Q

2Q

3Q

4Q

1Q

FY03/212021年3月期

2Q

3Q

4Q

1Q

FY03/222022年3月期

2Q

FY03/232023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.

3Q

16

4Q

1Q

2Q

3Q

2024年
FY03/24
3月期

4Q

1Q

FY
2025年
03/25
3月期

FY03/25
Financial Forecasts

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

17

Upward revision of Q2 FY03/25 Financial Forecasts•

As business performance and market conditions exceeded our expectations at the beginning of the
fiscal year, we upgraded the Q2 FY03/25 Financial Forecasts mainly due to a part of recovery inthe semiconductor production equipment industry of Q1 FY03/25 and increase in aluminum
ingots price and depreciation of the yen.
• On the other hand, the company left its full-year forecasts unchanged, taking into account the
recent rise in interest rates in Japan, sharp fluctuations in foreign exchange rates and stock
markets, and the uncertain outlook for the raw materials market.
Unit: Million yen
FY03/25
Q2
Previously
announced
forecasts

FY03/25
Q2
Revisedforecasts

Rate ofrise andfall

ChangeFY03/25
full-year forecast

Net sales

30,80031,800

3.2％

1,000

64,100Operating profit

1,400

1,560

11.4％

160

3,060

Ordinary profit

1,500

1,780

18.7％

280

3,200

Profit attributable toowners of parent

1,000

1,220

22.0％

220

2,140

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

18

Shareholder Returns (Dividends)••

Based on the upward revision of Q2 FY03/25 Financial Forecasts, The middle of dividend revisedby 49 yen per share (+9 yen from the beginning of the fiscal year 2025 ).
the annual dividend for the FY03/25 is expected to be 85 yen per share
Dividend Forecast for FY03/25
Dividend Policy・Dividend payout ratio of 45% or more
for the full year
・Minimum annual dividend of 80 yen per
share※ In principle, whichever is higher shall be
the dividend amount.

Dividend
payout ratio
51.3%

58

Dividend
payout ratio
44.0%

67

2021年

109

Dividend
payout ratio
45.2%

51

2022年

FY03/22
3月期

58
2023年

FY03/23
3月期

indicates 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.

80

Dividend
payout ratio
47.3%

45

48

FY03/21
3月期

The lower section

115

Unit: yen

19

35
2024年

FY03/24
3月期

85

Dividend
payout ratio
45.0%

36

49
2025年
FY03/25
3月期

Forecast
予想

represents the year-end dividend.

Shareholder Returns （ Shareholder Benefit Plan ）• On January, the base date will be changed from the end of September of each year to theend 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

20

Example of selected items

Progress on
Key Strategies in the Mid-termManagement Plan

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

21

Planned Initiatives for FY03/25•

The main initiatives in line with our key strategic policies for FY03/25 are as shown below.

Key Strategic Policies
Established in the Medium-Term Management Plan

Advancebusiness toachieve
growth①Strengthen and expand customer base, raise
profit margins through Hakudo Network
Service evolution

 Increase the variety of items offered, with a goal of growing gross profit Boost the number of Hakudo Network Service (including CS Network
Service) users
 Launch e-commerce services in our overseas subsidiaries②

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

 Enhance our blueprint processing services and implement automatic
quotation features
 Enhanced processing services through introduction of laser processing
machines

Increase procurement and supply capabilities  Introduce additional automated machinery to save manpower andstandardize factory operations③ through SCM restructuring④ Expand growth fields and strengthen sales

 Conduct customer feedback sessions and relay their needs to manufacturers
 Pursue industry-wide sales expansion by leveraging new processing
equipment Started special sales activities focused on new dormant and existingcustomers⑤ Expand overseas business Expand our US subsidiary's operations
 Explore potential investment opportunities in South Korea and Taiwan

Strengthen digital platforms to enhance Optimize operational efficiency using Robotic Process Automation (RPA) andthe Internet of Things (IoT)

Enhance manpower, develop existing staff

 Introduce new HR evaluation system (more performance based) Enrich our employee benefits program to enhance employee satisfaction⑧ strategies

Strengthen PDCA management to realize Compile and disclose an integrated report⑨ Strengthen governance Extend the range of our JIS Q27001 certification coverage⑥ corporate value
Strengthen
managementfoundation

Planned Initiatives for FY03/25 (Excerpt)⑦ and increase engagement2024 © Hakudo Co., Ltd. All rights reserved.

22

Progress on Key Strategies in the Mid-term Management Plan (1)(1) Strengthen and expand customer base, raise profit margins through Hakudo Net
Service (E-Commerce) evolution
Hakudo standard stock

EC Packages for
Foreign Countries

5,400 items＋

Inventory at other companies

97,400 items

companies using

12,400 companies※by the end ofJune 2024

・Thailand introduced
Features for・China and U.S. to be
introduced in Q2
Processed drawings

registered users
24,800 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 ofJune 2024【Number of Companies Registered at Hakudo Net Service（Total）】【Number of Items Available at Hakudo Net Service】

120,000

100,000
80,00060,000

Cumulative number of registered companies

他社在庫品
Inventoryat other companies

Cumulative number ofregistered users

当社標準在庫品
Hakudostandard stock

40,00020,0000

2021年
FY03/213月期末

2022年
FY03/22
3月期末

2023年
FY03/23
3月期末

2024年
FY03/24
3月期末

2025年
Q1

FY03/21

FY03/25
3月期
6月末

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

23

FY03/22

Y03/21

FY03/23

Note: Includes CS Network Service registrations

FY03/24Q1
FY03/25

Progress on Key Strategies in the Mid-term Management Plan (2)(2) Expand growth fields, strengthen sales
Aircraft/aerospace

Automotive

Semiconductor

industryindustryindustry

Q1 FY03/25

sales ratio

4.3％

5.1％

Consolidate the industry throughspecialized departments

Established a new base
(Iga Warehouse) in Iga City

Obtaining new customers

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

Establish a method for accumulating industry
knowledge through consolidation ofsemiconductor related sales partners【Growth domain quarterly sales indicators】
Semiconductor FPD
半導体FPD製造装置
production equipment

sales ratio

sales ratio

37.3％

250

Q1 FY03/25

Q1FY03/25

Automobiles(motorcycles)

Strengthen our procurement capacity for

Aerospace-standard materials imported fromoverseas manufacturers in cooperation with
WCAS

Aircraft/aerospace-related
航空・宇宙関連自動（自動二輪）車

184
162

150

134

50
1Q

2Q

3Q

4Q

1Q

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

2Q

3Q

FY03/22

4Q

1Q

2Q

3Q

FY03/23

24

4Q

1Q

2Q

3Q

FY03/24

4Q

1Q

2Q

3Q

FY03/25

4Q

Progress on Key Strategies in the Mid-term Management Plan (3)(3) Overseas business expansion• Achieved the overseas sales ratio target of 12% for the Hakudo Group in the final year of the mediumterm management plan (FY03/25) ahead of the 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.
Nonferrous metals import wholesale and processing business started at a U.S. subsidiary. E-commercebusiness is scheduled to start in Q2 FY03/25.

 Consideration of investment and partnerships

Continued to pay visits and have discussions with possible investment candidates and partners mainly in the
U.S., South Korea and Taiwan. In addition, some pilot transactions have already started in Taiwan.

Overseas Net Sales and Sales Ratio
10,000
8,000
6,000
4,000

海外売上高
Overseas sales

Unit: Million yen

15%

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

8%

9%

10%

20%

17％

10%
5%

2,000
0

FY03/21
FY03/22
FY03/23
FY03/24
FY03/25 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.

15%

25

0%

Initiatives for Sustainability
Management2024 © Hakudo Co., Ltd. All rights reserved.

26

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 inreturn provides proposals and advice for the actions.
Our CO₂ emissions reduction target by FY2030 was achieved ahead of schedule.
Efforts to reduce CO₂ emissions include the installation of solar power panels at the Shiga Plant and the introductionof EVs. The Company has also decided to install solar power panels at its Fukushima Plant.

Material
issues

Initiatives
Reduce CO₂
emissions

1. Reducing
environmental
impact andImprove
responding to manufacturing
climate change efficiency

Promote paperlessoffices

FY03/27 Targets

FY03/27 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
 The amount of CO₂ emissions
reduction by our initiatives

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.

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

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

2. Building
responsible
supply chains

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

Q1 FY03/25 Efforts
 Preparation for installation of solar panels at
Fukushima Plant
 Introduced five electric vehicles
 Achieve our target to reduce the amount of CO₂
emissions for fiscal year 2023 (reduced by 42％
compared to fiscal year 2020)
 Implemented activities to improve delivery efficiency
by restructuring the distribution network
 Reduced standby power consumption of facilities Continued cutting oil recycling measures
 Introduction of environmentally friendly packaging
materials

 Office printing costs

 Decreased printing expenses for meeting materials
through digitization

 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 Started sales of "ECO63S square bar" with low CO₂
emissions Started to consider launching more products torestrain the amount of CO₂ emissions

 Formulation and implementation of
our Group human rights policies

 Initiated human rights due diligence efforts
 Internal penetration activities of Hakudo Group
Human Rights Policy
 Confirmation of human rights guidelines with client

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.

27

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

Initiatives

FY03/27 Targets

FY03/27 KPIs *1

Contribute to the development of next-generationand the strengthening of humanContribute to future technologies
resources by supporting advancement ofgenerations
manufacturing culture and human resource
development in Japan.
Contribute to a sustainable society, instilling a sense

Contribute to society of pride in employees and earning the trust ofsociety.

Increase employee
satisfaction

Promote diversity
4. Investing inhumanresources

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

management ofhealthy good work
environment

Promotion the health both mentally and physically of
employees
Improve adequacy living as a member of society

Enhance employee
education

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

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

 Number of industry-academia
collaboration projects

 Visited university research exhibitions and exploredopportunities for new collaborative initiatives
 Planned and made Factory Tours for students Offer metal materials for free to the students whojoined in the “Student Formula Robot Competition”

 Amount of donations to local
communities and organizations

 Making a donation continuously Collecting in-house used books and donated them Attrition rates
 Average overtime working hours
 Paid leave acquisition rates
 Percentage of male employees
taking parental leave Enhance a work environment for employees totake a paid leave more easily
 Make an improvement plan based on thesurvey of employee benefits
 Provide support to promote use of sports clubs

 Female employee ratios
 Female manager ratios
 Foreign nationality Manager
ratio

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

28

Q1 FY03/25 Efforts

 Promote for employing more people withdisabilities
 Make a future plan for implementing training
and development programs for female
managers and potential female managers
 Hire more permanent employee fromoverseas actively

 The number of cases ofharassment

 Promote health care continuously( obtainhealthy Top-tier company “silver”).
 Analysis the factor of heavy stress based on the
result of survey
 Conduct the Counseling by professional.
 Strengthen workplace patrols to prevent minor
incident before it happens

 Education costs per employees Training participation rates

 Carry out the education based on the annual
educational plan Fulfilling new hire training The rate of people have heavy
stress Work-related accident frequency
rateProgress in Sustainability Management (3/3)
Material
issues

Initiatives

FY03/27 Targets

FY03/27 KPIs *1

Q1 FY03/25 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

Conduct thorough assessment of business risks
and review BCP. Also, create a system ensuring  Risk assessment points
employee safety and the smooth resumption of Number of disaster preparedness
operations when disaster occurs, throughdrills conducted
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

 Employee penetration of
Enhance the company-wide consciousness
ESG/SDGs management
towards ESG/SDGs management by conducting(questionnaire survey)
educational activities and events related toCumulative number of episode
ESG/SDGs.
contests Promoting communication among employees
by introducing thank you cards
 Distributed and delivered ESG/SDGs-related
posters, books, and videos
 The survey of activities of tree-planting andenvironmental volunteers

7. Develop
new products
and services
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

5. Corporate
governance

Enhance responses tobusiness risks anddisasters

Make products andservices concrete

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

29

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.
Super Minimum
Challenge

Hakudo Farm

We operate Hakudo Farm as part ofour effort to promote employment forpeople with disabilities.
As of July 2024, we have 12
employees at locations in Yokohama
City, Kanagawa Prefecture and Misato
City, Saitama Prefecture. We growabout 30 kinds of vegetables, mainly
leafy greens.
Harvested vegetables are donated toa children's cafeteria as well as
distributed to our employees.

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

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

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 inTokyo’s shita-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 July 31, 2024.
2024 © Hakudo Co., Ltd. All rights reserved.

Koma Battle

30

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 August 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.

31