Financial Results for the Fiscal Year Ended on March 31, 2024

Hakudo Co., Ltd. (7637)

May 10, 2024
2024 © Hakudo Co., Ltd. All rights reserved.

Table of Contents

1． FY03/24 Results

P 2

2． FY03/25 Financial Forecasts

P18

3．Initiatives and Progress Reportfor Achieving the Medium-Term
Management Plan

P23

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

1

FY03/24 Results

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

2

Result Highlights

Net sales

Gross profit

Ordinary profit

57,253 million yen

9,267 million yen

2,847 million yen(down 7.1％ YoY)

(down 8.7％ YoY)

(down 28.6％ YoY)

FY03/24 Summary
Net sales• Sales decreased by 7.1% YoY due to continued stagnation in the semiconductor production
equipment (SPE) industry.
• Sales (JPY4,586million) in North America were added starting from the current consolidated fiscal
year, and sales in the overseas segment increased by JPY4,533 million YoY.

Gross profit• Gross profit decreased by 8.7% YoY due to lower sales and due to the impact of a decrease (JPY399
million) in inventory valuation gain.

Ordinary profit• Ordinary profit decreased by 28.6% YoY despite the recognition of Non-operating profits 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 JPY4,349 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 JPY1,141 million YoY due to an increase in various G&A
expenses and a decrease in the impact of inventory valuation profit.
Unit: Million yen
FY03/23

Net sales
Standard stock items
Special-order items

Gross profit
Operating profit
Ordinary profit
Inventory revaluation impact

61,60238,322
23,27910,152
3,777
3,988
505

Sales
ratio

FY03/24

0.8%

57,253
34,46022,792
9,267
2,523
2,847
105

62.2%
37.8%
16.5%
6.1%
6.5%

Sales
ratio

YoY
Change(rate)

YoY
Change(amount)--7.1%-4,34960.2%-10.1%-3,861

39.8%

-2.1%

-487

16.2%

-8.7%

-884

4.4%

-33.2%-1,2545.0%-28.6%-1,141

0.2%-79.0%-399(Excluding inventories impact)

3,483

5.7%

2,741

4.8%

-21.3%-742

Profit attributable to owners ofparent

2,737

4.4%

1,916

3.3%

-30.0%-820

Ordinary profit

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

4

Factors Affecting Year-on-Year Change in Net Sales• Although unit selling prices of standard inventory products increased due to the impact of
raw material market hypes and other factors, sales of standard inventory products
decreased by JPY3,842 million YoY due to the significant impact of a decrease in sales
volume.
2,035

Unit: Million yen

61,602
61,602

61,602-5,878

4,471

-268

Standard inventory
items(parent)-JPY3,842 million YoY

57,253-4,709Special-order items (parent)-JPY4,977 million YoY

FY03/23

Higher unit
selling prices ofstandard
inventory items

Lowerstandard
inventory item
volumes

Lower unit
selling pricesof specialorder items

Higherspecial-order
item volumes

Subsidiaries andconsolidated
adjustments

FY03/24

For Hakudo’s individual standard stock items: sales volume -15.0% YoY, selling price +6.3% 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

Unit: Million yen

15,712

14,966
14,222

14,717

14,322
13,991 14,221

13,182

11,421

10,992
10,005

15,603

10,345

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
FY03/24Q4
FY03/24

Net Sales by Product Category••

Stainless steel sales increased due to the addition of sales in North America.
Mainstay aluminum products declined by 14.0% YoY due to lower sales to thesemiconductor manufacturing equipment industry. Overall sales declined by 7.1% YoY.
Unit: Million yen

FY03/23
1Q

2Q

3Q

FY03/24

total
4Q

1Q

2Q

total

3Q

4Q

Vs. Q4YoY
FY03/23

Consolidated
net sales

16,062 15,712 15,603 14,222 61,602 14,717 13,991 14,22114,322 57,253

0.7%

Aluminum

10,694 10,249 10,076 8,800 39,821 9,060 8,339 8,244 8,587 34,232-2.4% -14.0%

Copper2,106 2,010 2,134 2,248 8,500 2,138 2,024 2,126 2,141 8,431

-4.8%

-0.8%

Stainlesssteel

2,565 2,607 2,632 2,414 10,218 2,830 2,971 3,074 2,947 11,824

22.1%

15.7%

645 2,764 -14.9%-9.7%

Others696

844

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

761

759 3,061
7

687

655

774

-7.1%

Composition Ratio of Net Sales by Industry (Japan)• Sales ratio for Semiconductor/FPD production equipment industry declined YoY.
• 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
Semiconductor/
FPD production
equipment
Other machinetools
OA devices

2Q

3Q

FY03/24
4Q

total

1Q

2Q

3Q

4Q

total

47.2% 45.0% 43.0% 37.5% 43.4% 39.3% 38.5% 36.2% 36.4% 37.6%
15.0% 15.4% 15.5% 17.3% 15.7% 17.7% 17.7% 18.3% 18.0% 17.9%
8.6%

7.8%

8.6%

9.9%

8.7%

8.9%

9.0%

8.8% 11.6%

9.6%

6.5%

6.9%

7.8%

7.4%

7.1%

7.1%

5.5%

5.7%

5.4%

5.9%

Automobiles/
motorcycles

4.3%

4.9%

4.9%

4.9%

4.7%

4.7%

5.9%

6.3%

5.1%

5.5%

Dies

4.1%

4.7%

5.2%

5.6%

4.8%

4.8%

5.5%

5.6%

5.4%

5.3%

Electronic
components

3.7%

4.1%

4.0%

4.3%

4.0%

4.1%

4.3%

4.2%

4.3%

4.2%

Aircraft/aerospac
e related

3.1%

2.9%

3.1%

3.7%

3.2%

4.4%

3.8%

4.6%

4.1%

4.3%

Other industries

7.6%

8.3%

7.8%

9.3%

8.2%

9.0%

9.6% 10.3%

9.7%

9.6%

8

4.1%

9.7%

4.3%
36.4%

5.4%
5.1%

Vacuum/hydrauli
c devices2024 © Hakudo Co., Ltd. All rights reserved.

Q4
FY03/24

5.4%
11.6%
18.0%
Semiconductor/FPD
半導体・FPD製造装置
production equipment
OA機器
OA
devices

Other machine tools
その他工作機械

自動車・自動二輪車
Automobiles/motorcycles

金型
Dies

電子部品 components
Electronic

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

空圧・油圧機器
Vacuum/hydraulic devices

Financial Performance by Segment•••

In North America, the company posted an operating loss by JPY205 million and ordinary loss by
JPY97 million due to PMI expenses, despite non-operating profits such as a JPY70 million gain on
debt forgiveness of West Coast Aluminum & Stainless, LLC, which was acquired last year.
In China, both domestic and foreign demand was weak, resulting in a recurring loss of JPY9 million.
On the other hand, in the other segment (Thailand), ordinary income increased by JPY46 million YoY.
Unit: Million yen

FY03/23
Net sales

Operatingprofit/losses

FY03/24

Ordinary
profit/lossesProfitattributableto ownersof parent

Net sales

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

58,803

3,810

3,995

2,776

49,900

2,627

2,814

1,885

North
America

-

-126

-126

-126

4,586

-205

-97

-71

China

1,581

-0

25

14

1,360

-39

-9

-11

Other

1,216

93

94

72

1,405

141

141

114

Japan

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 inventory
items and Special-order items.
• Ordinary profit declined by JPY1,141 million YoY due to higher costs per sales volume(KG),
such as freight and energy costs, and lower inventory evaluation positive impact.
Unit: Million yen

3,988

41

168
-8
544
-960

← Ordinary profit
excludinginventory impact
JPY3,483 million

FY03/23

Standard
inventory
items (parent)-399

Ordinary profit
excludinginventory impact →JPY2,741 million-519

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

2,847

FY03/24

Quarterly Ordinary Profit Trends• Increase by JPY26 million vs. the 4Q of the previous fiscal year due to a rise in inventory
valuation gain.
• Decrease by JPY135 million from the previous quarter (3Q) due to a decrease in foreignexchange gains and ordinary loss in North America.
Unit: Million yen
1,272

1,222
1,157

1,087
1,030

1,009

962
831
699

657
582
394

390

411

372

Q4
FY03/19Q2
FY03/20

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

646

619

522
309

Q2
FY03/19

687

635

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
FY03/24Q4
FY03/24

Foreign exchange
lossesBalance Sheet (BS)••Inventories, accounts receivable, and accounts payable decreased significantly due to lower sales.
Non-current assets increased JPY567 million due to an increase in equipment investment.
Unit: Million yen
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,
As of March 31,
Composition ratio
2023
2024

Composition
ratio

Change33,829
6,038

78.4%
14.0%

32,128
5,700

76.5%
13.6%

-1,701-337

16,83539.0%

16,052

38.2%

-782

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%

10,221 24.3%
153
0.4%
9,887 23.5%
6,653 15.8%
1,422
3.4%
1,811
4.3%
42,015 100.0%

-410
-171
+567
+403
+8
+155
-1,133As of March 31,
As of March 31,
Composition ratio
2023
2024

Composition
ratio

Change21,76850.4%

19,42046.2%-2,34819,02044.1%

17,14740.8%-1,873

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

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

788
1.9%
324
0.8%
1,160
2.8%
114
0.3%
19,534 46.5%
22,481 53.5%
42,015 100.0%

-71
-255
-148
-37
-2,385+1,251-1,1332024 © Hakudo Co., Ltd. All rights reserved.

12

Current assets: Down JPY1,701
million➢ Decrease in inventories due to lower
sales
Non-current assets: Up JPY567 million➢ Increase in property, plant andequipment due to purchase of solar
power panels and various machineryand equipment

Current liabilities: Down JPY2,348
million➢ Decrease in notes and accounts
payable-trade due to lower sales
Non-current liabilities: Down JPY37
million
Net assets: Up JPY1,251 million

Cash Flows•••

Cash flow from operating activities was +JPY2,527 million , mainly due to a decrease in working
capital resulting from lower sales.
Cash flows from investing activities was –JPY1,612 million , mainly due to capital and IT investments
in Japan.
Cash flows from financing activities was –JPY1,328 million , mainly due to repayment of long-termbank debt (U.S. sub-subsidiary) and dividend payments.
Unit: Million yen

FY03/23

FY03/24

Cash flows fromoperating activities

321

2,527

Cash flows frominvesting activities-1,552-1,612

Cash flows fromfinancing activities
Effect of exchange ratechange on cash andcash equivalents
Cash and cash
equivalents at end of
period2024 © Hakudo Co., Ltd. All rights reserved.

-1,416-1,328

11

75

6,038

5,700

13

<Main Breakdown>①Cash flows from operating activities +JPY2,527 million
・Profit before tax adjustments：+JPY2,847 million
・Depreciation：+JPY1,048 million
・Amortization of goodwill：+JPY41 million
・Decrease (increase) in notes and accounts
receivable-trade：+JPY861 million
・Decrease (increase) in inventories：+JPY499 million
・Increase (decrease) in notes and accounts
payable-trade：-JPY1,938 million
・Income tax payments：-JPY1,153 million②Cash flows from investing activities –JPY1,612 million
・Payments for purchase of property, plant and equipment：-JPY1,338 million
・Payments for purchase of intangible assets：-JPY210 million
・Payments for purchase of investment securities：-JPY56 million③Cash flows from financing activities –JPY1,328 million
・Repayment of long-term debt：-JPY372 million
・Decrease due to dividend payment：-JPY974 million

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

Aluminum ingots price continued to rise until March 2022. Price has been on a downtrend
since then, but has recently risen again due to the weak yen and other factors. Electrolytic
copper prices also rose rapidly and reached new hights.

1,600

Unit: Thousand yen per ton

Aluminumingots
アルミニウム地金

1,400Electrolytic
電気銅建値 copper price
1,200

Stainlesssteel sheet
ステンレス製品市中価格
1,000

End of March 2024
600 thousand yen
per ton800

End of March 2024
1,370 thousand yen
per ton600

400

End of March 2024
400 thousand yen
per ton

200

0

Sep
2016

Mar
2017年Sep
2017 2017

9月末

3月末

9月末

Mar
2018年 Sep
2018 2018
3月末

9月末

Mar
2019年 Sep
2019 20193月末

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

9月末

Mar
2020年 Sep
2020 2020
3月末

9月末

Mar
2021年 Sep
2021 2021
3月末

9月末

Mar
2022年

2022

3月末

Stainless steel sheet: Japan Metal Daily median

14

Sep
2022

9月末

Mar
2023年
2023

3月末

Sep 2024年
Mar
2023 2024

9月末

3月末

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

In the long term, huge demand is expected to increase due to IoT, DX, AI, and electric vehicles, etc. Althougha sense of bottoming out has emerged, a full-fledged recovery is expected to still take time.
Although there was a temporary equipment demand for generated AI and China at the end of the fiscal year,
memory and logic semiconductors, which account for a large portion of semiconductor demand, have yet tosee a recovery in demand and are still in an adjustment phase.
Sales of production
600 equipment in Japan(Billion yen)

Hakudo’s net sales ofstandard stock 5.0
items(Billion yen)50
4.5

Hakudo’s net salesof standard stock
items

6,000
500

5,000

45
4.0
40
3.5

400

35

4,000

3.0

30

300

25
2.5

3,000

1.5
20

200

2,000

15
1.0
10
0.5

100
1,000

5

0

0

0
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: Semiconductor Equipment Association of Japan - statistical data
2024 © Hakudo Co., Ltd. All rights reserved.

15

Sep
2022
9月

Mar
2023年
2023
3月

Sep
2023
9月

Mar
2024年
2024
3月

0

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

The volume of machine tool orders has been in decline since its peak in March 2022.
Compared to the Q4 (January-March) in the previous fiscal year, domestic orders decreased by
14.6% and foreign orders decreased by 5.3%.
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

140
1,400

2.5
25

120
1,200

2.0
20

100
1,000
800
800

1.5
15

外 需

600
600

1.0
10

400
400
200
200
00

Mar
2018年
2018
3月

0.5
5

内 需

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

Sep
2022
9月

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

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

16

Mar
2023年
2023
3月

Sep
2023
9月

Mar
2024年
2024
3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 in spite of a sales decrease.

Rolled aluminumproducts(Billion yen)

40.0
400.0

30.0
300.0

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

aluminum product shipments

27.7%

27.9%

27.4%

28.3%

28.8%

27.9%

27.9%

27.2%

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

28.9%

40.0%

29.3%
33.6%

30.4%
29.8%

29.3%

35.0%
29.2%

28.9%

27.5%

27.3%

30.0%

25.0
250.0

25.0%

20.0
200.0

20.0%

15.0
150.0

15.0%

10.0
100.0

10.0%

5.0
50.0

5.0%

0.0
0.0

0.0%

1Q

2Q

3Q

FY03/20
2020年3月期

4Q

1Q

2Q

3Q

FY03/212021年3月期

4Q

1Q

2Q

3Q

4Q

FY03/222022年3月期

1Q

2Q

3Q

FY03/232023年3月期

4Q

1Q

2Q

3Q

2024年
FY03/24
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.

17

4Q

FY03/25
Financial Forecasts

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

18

FY03/25 Financial Forecasts••

Although the semiconductor production equipment industry, which has a significant impact on the
Hakudo Group's business performance, is expected to see increased sales and profits in the longterm due to expected demand expansion, the current situation remains in an adjustment phase, anda full-fledged recovery is not still expected until the second half of the current year or later.
On the other hand, we plan to strategically start procuring more inventories and increasing
personnel in preparation for a full-fledged recovery in demand.
FY03/23

Sales
ratio

FY03/24

Sales
ratio

Rate ofchange vs.
previous
year’s result

FY03/25
targetof MTMPNet sales

57,253-64,100‐12.0%

71,800Operating profit

2,523

4.4%

3,060

4.8%

21.3%

-

Ordinary profit

2,847

5.0%

3,200

5.0%

12.4%

105

0.2%

‐

‐

-

2,741

4.8%

3,200

5.0%

12.4%

-

1,916

3.3%

2,140

3.3%

11.7%

-

Inventory revaluation impact

Ordinary profit(Excluding inventories impact)

Profit attributable to owners ofparent※‐※ As it is difficult to forecast raw material market conditions, the forecast for inventory evaluation impact is assumed only forthe 1Q period, and the impact is not incorporated for this forecast from the 2Q forward.
19
2024 © Hakudo Co., Ltd. All rights reserved.

5,400

Shareholder Returns (Changes of the Dividend Policy)• The Company's basic dividend policy is to strengthen its financial position anddistribute its proper cash backed by business performance. The dividend policy
was changed in February 2024 in order to strengthen shareholder returnmeasures.

Dividend payout ratio

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

40%

80

＜New＞
More than

JPY

45 ％

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

20

Shareholder Returns (Dividends)•

Based on the Revision of Dividend Forecast, the annual dividend for the FY03/25 is expected tobe 85 yen per share (+5 yen from the previous year).

Dividend Forecast for FY03/24

115
Dividend
payout ratio
44.0%

67

Dividend
payout ratio
51.3%

58

48

Unit: yen

109
Dividend
payout ratio
45.2%

51

58

80
Dividend
payout ratio
47.3%

45

35

40

2022年

2023年

2024年

FY03/21
3月期

FY03/22
3月期

3月期
FY03/23

3月期
FY03/24indicates 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.

21

Dividend
payout ratio
45.0%

45

2021年

The lower section

85

2025年

FY03/25
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

Initiatives and Progress Reportfor Achieving
the Medium-Term Management Plan
(FY03/23~ FY03/25)

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

23

Review of FY03/24 of the Medium-term Management Plan
• We have not achieved the forecast figure due to lower sales volume caused by continued
stagnant demand and delayed recovery in the semiconductor production equipment
industry, the mainstay of the Company's business, as well as higher freight, electricity andother costs.
• Downward revision of earnings forecast was made in Q3 FY03/24.
FY03/24
Sales
ratio

Actual(Million yen)

MTMP target

Sales
ratio

Difference

Achievement
rate

Net sales

57,253-66,800--9,546

85.7%

Operating profit

2,523

4.4%

4,400

6.6%

-1,876

57.3%

Ordinary profit

2,847

5.0%

4,500

6.7%

-1,652

63.3%

Inventory revaluation
impact

105

0.2%

-

-

Ordinary profit(excluding inventories
and foreign exchange
impact)

2,741

4.8%

4,500

6.7%

-1,758

60.9%

Profit attributable toowners of parent

1,916

3.3%

3,100

4.6%

-1,18361.8%

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

-

24

-

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 growth

1

2

3

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

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

Increase procurement
and supply capabilities
through SCM
restructuring

6

Strengthen
managementfoundation

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.

25

Expand overseas
businessStrengthen governanceReview of Initiatives from the Second Year of the Medium-Term
Management Plan (FY03/24)• We continued to improve a customer convenience by enhancing the functionality of the
Hakudo Net Service and also increasing the number of product items.
• Sustainability management has been also promoted through the installation of solar
power panels and the market placement of environmentally friendly eco products.
Date

April 2023
July
July

Implementation status of initiatives✓ Established a new base (Iga Warehouse) in Iga City, Mie Prefecture, Japan. Began operation ofwaterjet cutting machines, machining centers, wire cutting machines, etc.
✓ Established "Business Administration Division" by integrating and reorganizing Administration
Division and Corporate Planning Division.
✓ Established "ESG/SDGs Promotion Office" as a dedicated department to promote ESG/SDGs.
✓ At the foot of the "New Products and Services Subcommittee," the seventh subcommittee of the
ESG/SDGs Management Committee✓ At foot of the 7th and final meeting of the ESG/SDG Management Committee, the "New Products
and New Services Subcommittee" was launched.

Related key strategic policies② Strengthen processing functions and supply
capabilities, including development of processing
company network⑩ Promote sustainability management⑩ Promote sustainability management① Strengthen and expand customer base, raise
profit margins through Hakudo Network Service
evolution⑩ Promote sustainability management

September ✓ Introduced electric vehicles.
September ✓ Addition of automatic product reviews and ordering functionality for the "3D printer modeling withmetal" service on the White Copper Net service.

① Strengthen and expand customer base, raise
profit margins through Hakudo Network Service
evolution

October✓ Establishment of a new sales promotion section in the Standard Products Sales Division to increase④ Expand growth fields and strengthen sales
the total order rate by strengthening inside sales activities.

October✓ Number of non-material items in the Hakuto Net Service exceeds 50,000 items.

① Strengthen and expand customer base, raise
profit margins through Hakudo Network Service
evolution

November✓ Drawing" function for specifying drilling and notch machining on the web and "Material Drawing
Assist" function for automatically presenting necessary materials from drawing 3D CAD data areadded to Hakudo Net Service.

① Strengthen and expand customer base, raise
profit margins through Hakudo Network Service
evolution

December✓ Started sales of Eco63S square bar.

⑩ Promote sustainability management

January2024✓ Installed solar panels at the Shiga Plant.

⑩ Promote sustainability management

February✓ Started operation of employee training program for the new fiscal year.

⑦ Enhance manpower, develop existing staff andincrease engagement

March✓ Revised personnel evaluation system⑦ Enhance manpower, develop existing staff andincrease engagement2024 © Hakudo Co., Ltd. All rights reserved.

26

Implementation Status of Key Strategic Policies (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

79,500 items

companies using

11,800 companies※by the end of
March 2024

・Thailand introduced
・China and U.S. to be
introduced in Q2

registered users
24,100 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
March 2024

【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

25,000
他社在庫品
Inventoryat other companies

Cumulative number of
登録社数累計registered companies

20,000

Hakudostandard stock
当社標準在庫品

Cumulative number of
登録ユーザ数累計
registered users

15,00010,000
5,000
0

2016年
FY03/16

2017年
FY03/17

2018年
FY03/18

2019年
FY03/19

2020年
FY03/20

2021年
FY03/212022年
FY03/222023年
FY03/23

2024年
FY03/24

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

2016年
FY03/16

2017年
FY03/17

2018年
FY03/18

2019年
FY03/19

2020年
FY03/20

2021年
FY03/212022年
FY03/222023年
FY03/23

2024年
FY03/24

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

3月期末

Note: Includes CS Network Service registrations
2024 © Hakudo Co., Ltd. All rights reserved.

27

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

Automotive

industryindustry

Aircraft/aerospaceindustry

Q4 FY03/24

Q4 FY03/24

Q4 FY03/24

sales ratio

sales ratio

sales ratio

36.4％

4.1％

5.1％

Consolidate the industry throughspecialized departments
Establish a method for accumulating industry
knowledge through consolidation ofsemiconductor related sales partners

Obtaining new customers

Established a new baseUtilize 3D printers to acquire new customers
in automotive-related fields(Iga Warehouse) in Iga City
Consolidate processing equipment such as
waterjet cutting machines, machining centers,
and wire cutting machines【Growth domain quarterly sales indicators】
250

Semiconductor FPD
半導体FPD製造装置
production equipment

200

Automobiles(motorcycles)

自動（自動二輪）車

Aircraft/aerospace-related
航空・宇宙関連

150
100
50
1Q

2Q

3Q

4Q

FY03/212021年3月期

1Q

2Q

3Q

4Q

FY03/222022年3月期

2Q

3Q

FY03/232023年3月期

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

1Q

28

4Q

1Q

2Q

3Q

FY03/24
2024年3月期

4Q

Implementation Status of Key Strategic Policies (3)(3) Overseas business expansion• The 100-day PMI phase for West Coast Aluminum & Stainless, LLC, which became our groupcompany in March 2023, was completed. The Company entered a phase of business expansion,
including the start of an EC business and a processing business.
• Achieved the overseas sales ratio target of 12% for the Hakudo Group in the final year of themedium-term 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

Unit: Million yen

10,000Overseas
海外売上高sales

8,000

15%

6,000
4,000

15%

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

20%

6%

5%

9%

8%

10%

10%
5%

2,000

0%

0
2019年

2020年

2021年

2022年

2023年

2024年

FY03/19
FY03/20
FY03/21
FY03/22
FY03/23
FY03/24
3月期
3月期
3月期
3月期
3月期
3月期
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.

29

Planned Initiatives for FY03/25••

The main initiatives in line with our key strategic policies for FY03/25 are as shown below.
We aim to achieve our medium-term management plan by increasing sales through overseas
business expansion and improving profit margins with the evolution of Hakudo Network Service.
Key Strategic Policies

Advancebusiness toachieve
growth①✓ Increase the variety of items offered, with a goal of growing gross profit
Strengthen and expand customer base, raise ✓ Boost the number of Hakudo Network Service (including CS Network
profit margins through Hakudo Network
Service) users
Service evolution✓ Launch e-commerce services in our overseas subsidiaries②✓ Enhance our blueprint processing services and implement automaticStrengthen processing functions and supply
quotation features
capabilities, including development of✓ Enhanced processing services through introduction of laser processing
processing company network
machines③ capabilities through SCM restructuring✓ Introduce additional automated machinery to save manpower andstandardize factory operations④ Expand growth fields and strengthen sales✓ Conduct customer feedback sessions and relay their needs tomanufacturers✓ 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 Taiwan⑥ corporate value✓ Optimize operational efficiency using Robotic Process Automation (RPA)
and the Internet of Things (IoT)⑦ and increase engagement✓ Introduce new HR evaluation system (more performance based)✓ Enrich our employee benefits program to enhance employee satisfaction⑧ strategies✓ Compile and disclose an integrated report⑨ Strengthen governance✓ Extend the range of our JIS Q27001 certification coverage

Increase procurement and supply

Strengthen digital platforms to enhanceStrengthen
managementfoundation

Planned Initiatives for FY03/25 (Excerpt)

Enhance manpower, develop existing staff

Strengthen PDCA management to realize

302024 © Hakudo Co., Ltd. All rights reserved.

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 theintroduction of 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

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

FY03/24 Efforts✓ Solar panel installation at Shiga Plant✓ Preparation for installation of solar panels at
Fukushima Plant✓ Introduced two electric vehicles✓ Purchase FIT Non-Fossil Certificates✓ Support for disclosure of CDP (Carbon Disclosure
Project)✓ 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

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✓ 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✓ Conduct fact-finding surveys on human rights✓ Education for all employees

2. Building
responsible
supply chains

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.

31

Progress in Sustainability Management (2/3)

Material
issues

Initiatives

FY03/25 Targets

FY03/25 KPIs *1

FY03/24 Efforts⚫ Number of industry-academia
collaboration projects✓ Visited university research exhibitions and exploredopportunities for new collaborative initiatives✓ Planned and made Factory Tours for Uni.students✓ Provided metal materials for EV racing car parts forfree⚫ 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
✓ Donation to Japanese Red Cross Society (NotoPeninsula Earthquake Relief Fund)✓ Donation to Japan Committee for UNICEF⚫ 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 sports
clubs✓ Preemptively prevented near-miss incidents
through workplace inspections✓ Identified current issues through companywide stress check test so as to come up witha plan to tackle the issues.

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✓ Revision of HR evaluation system to motivate
employees to acquire more skills

Contribute to future
generations
3. Activities
targetingsociety

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.

Contribute to a sustainable society, instilling a sense

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

Increase employee
satisfaction

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

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.

32

Progress in Sustainability Management (3/3)
Material
issues

5. Corporate
governanceInitiatives

FY03/25 Targets

FY03/25 KPIs *1

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

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

Make products andservices concrete

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 the
SDGs✓ Distribution of Company Policies Guidebooks

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.

33

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 April 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.

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 beenused.

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

*Prepared based on information as of April 30, 2024.
2024 © Hakudo Co., Ltd. All rights reserved.

Koma Battle

34

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 May 2024. Actual
results may differ materially from those projected in forwardlooking statements due to risks and uncertainties related to theglobal economy, competitive conditions, and other 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.

35