Results for Fiscal Year
Ended March 31, 2022
May 27, 2022

DKK Co., Ltd.

Table of contents

1. Result Highlights
2. Segment Results (Nonconsolidated)
3. Forecasts for Current Fiscal Year
4. Medium-Term Business Plan Highlights

11. RESULT HIGHLIGHTS

2

Consolidated Net Sales
 Consolidated net sales dropped.
 Net sales for Telecommunication Business dropped due to restriction or postponement of demand.
 Net sales for Radio Frequency Business showed signs of recovery but the increase remained small dueto the semiconductor shortage.
(100 million yen)

Consolidated
Net Sales
33.9 billion yen
YoY change
Down 7.5 billion
yenConsolidated Net Sales

Radio Frequency
Telecommunication(down 18.1%)
Telecommunication

25.9 billion yen
YoY change
Down 8.0 billion
yen(down 23.7%)
Radio Frequency

7.9 billion yen

Initialforecast

YoY change
Up 0.5 billion yen

Results(up 7.1%)

3

Consolidated Operating Income
 Consolidated operating income dropped due to decreased net sales, a spike in materials and logistics
costs, etc.

(100 million yen)

Consolidated Operating Income

Operating income
Operating margin
Consolidatedoperating income
0.05 billion yen

YoY change
Down 1. 53 billionyen(down 96.6%)

Initialforecast

Results4

Segment Income (Consolidated) Profit decreased for Telecommunication Business due to a spike in materials-related costs and intensifiedcompetition to win orders.
 Profit rose for the Radio Frequency Business due to a recovery trend in demand, although the impact from thesemiconductor shortage was felt.

Segment Income(100 million yen)

Telecommunication

Telecommunication

2.01 billion yen

Radio Frequency
Operating margin

YoY change
Down 1.86 billionyen(down 48.1%)
Radio Frequency

1.05 billion yen
YoY change
Up 0.18 billion yen(up 21.5%)

Initial Results
forecast

Initial Results
forecast
5

Overview of FY3/22 Consolidated Results
 Ordinary income fell 1.35 billion yen year-on-year as operating income decreased.
 Net income decreased 0.45 billion yen year-on-year.
■ Full-year statement
income [consolidated](Millions of yen)
FY3/21
results

FY3/22
Initial forecast

Difference from initial
forecast

YoY change
Results

AmountPercentage

AmountPercentage

41,47842,00033,968-7,510-18.1%-8,032-19.1%

Cost of sales

33,750-27,770-5,980-17.7%--

Gross profit

7,727

-

6,198

-1,529-19.8%--

Selling, general, andadministrative expenses

6,143

-

6,145

2

0.0%

-

-

1,583

1,600

53

-1,530-96.6%-1,547-96.7%

3.8%

3.8%

0.2 %

--

-

-

1,799

1,800

448

-1,351-75.1%-1,352-75.1%

Ordinary income margin

4.3%

4.3%

1.3%

-

-

-

-

Net income attributable toshareholders of parent company

1,155

1,200705

-450

2.5%

2.5%

1.5%

-Net sales

Operating income
Operating margin
Ordinary income

ROE-38.9%--495--41.3%-6

2. SEGMENT RESULTS(NONCONSOLIDATED)7

Mobile Communications: Net Sales (Nonconsolidated) Net sales fell due to improved 5G investment efficiency and as mobile carriers pushed back some basestation construction plans.
 For the current fiscal year, we anticipate net sales will remain largely flat with a slight decrease.
(100 million yen)

Mobile Communications: Net Sales(Nonconsolidated)

FY3/22 result
12.8 billion yen
YoY change
Down 0.2 billionyen(down 2.0%)FY3/23 forecast
12.0 billion yen
YoY change
Down 0.8 billionyen(down 6.6%)

Initialforecast

Results

FY3/2 (F)8Fixed Wireless: Net Sales (Nonconsolidated) Net sales decreased due to extension of construction schedules affected by the impact of the COVID-19
pandemic.
 For the current fiscal year, we expect net sales to increase as demand from government offices isexpected to gradually recover.
(100 million yen)Fixed Wireless: Net Sales(Nonconsolidated)

FY3/22 result
5.4 billion yen
YoY change
Down 5.6 billionyen(down 50.9%)

FY3/23 forecast
6.5 billion yen
YoY change
Up 1.0 billion yen(up 20.0%)

Initialforecast

Results

FY3/23 (F)9Broadcasting: Net Sales (Nonconsolidated) Net sales decreased as capital expenditure demand from broadcasters dropped, affected mainly by theCOVID-19 pandemic.
 For the current fiscal year, we expect to achieve an increase in net sales by working to capture demand
from moves to update existing terrestrial digital broadcasting equipment.
(100 million yen)

Broadcasting: Net Sales (Nonconsolidated)

FY3/22 result
2.7 billion yen
YoY change
Down 1.3 billionyen(down 32.6%)

FY3/23 forecast
3.9 billion yen
YoY change
Up 1.1 billion yen(up 41.1%)

Initialforecast

Results

FY3/23 (F)10Other: Net Sales (Nonconsolidated) While competition to win orders remained a challenge, net sales largely stayed flat thanks to ouraggressive proposition sales effort.
 For the current fiscal year, we expect net sales to remain largely flat as we continue to work to capture
demand.
(100 million yen)Other: Net Sales (Nonconsolidated)
FY3/22 result
0.9 billion yen
YoY change
Down 0.07 billion
yen(down 7.0%)

FY3/23 forecast
0.8 billion yen
YoY change
Down 0.1 billionyen(down 14.1%)

Initialforecast

Results

FY3/23 (F)11Radio Frequency: Net Sales (Nonconsolidated) Net sales increased, driven by recovering demand from the automotive industry.
 For the current fiscal year, we expect net sales to increase, although we anticipate theimpact from the semiconductor shortage will be felt.
(100 million yen)Radio Frequency: Net Sales(Nonconsolidated)

FY3/22 result
4.8 billion yen
YoY change
Up 0.2 billion yen(up 4.4%)

FY3/23 forecast
6.3 billion yen
YoY change
Up 1.4 billion yen(up 30.3%)

Initialforecast

Results

FY3/23 (F)12Overview of Nonconsolidated Net Sales(Millions of yen)
FY3/21
results

Net sales

FY3/22
Initialforecast

YoY change

Results

AmountPercentage

Difference from initial
forecast
AmountFY3/23

Percentage

Forecasts

YoY change
AmountPercentage

34,30833,40027,310-6,998-20.4 %

-6,090-18.2 %30,000

2,690

9.8 %

Telecommunication

29,34527,85022,478-6,867-23.4 %

-5,372-19.3 %

23,350872

3.9 %MobileCommunications

13,115

14,30012,852-263-2.0 %-1,448-10.1 %

12,000-852-6.6 %

Fixed Wireless

11,037

8,200

5,418

-5,619-50.9 %

-2,782-33.9 %

6,500

1,082

20.0 %

Broadcasting

4,102

4,200

2,764

-1,338-32.6 %

-1,436-34.2 %

3,900

1,136

41.1 %

Cable
Broadcasting

2450453429 1787.5 %403

806.0 %

100-353-77.9 %

1,063

1,100

989-74-7.0 %-111-10.1 %

850-139-14.1 %Radio Frequency

4,632

5,200

4,835

203

4.4 %

-365

-7.0 %

6,300

1.465

30.3 %

Other Businesses

330350330

00.0 %-20-5.7 %

350

20

6.1 %

Other Businesses

Note: Of the figures for FY3/22, the ASBJ Statement No. 29 Accounting Standard for Revenue Recognition was applied only for the actual
net sales of 27,310 million yen.

13

3. FORECASTS FOR
CURRENT FISCAL YEAR

14

Consolidated Net Sales and Operating Income Forecasts
 Consolidated net sales have been recovering gradually from the impact of the COVID-19 pandemic. We
expect the overall net sales will increase from a year earlier.
 Consolidated net income is expected to increase, driven by cost-cutting activities and efforts to improve
operational efficiency.
(100 million yen)

Consolidated Net Sales

Up 3.0 billion yen(up 8.9%) YoY(100 million yen)

Consolidated Operating
IncomeOperating income
Operating margin

Up 0.6 billion yen(up 1,312.4%) YoY

FY3/23 (F)FY3/23 (F)15

Segment Forecasts (Consolidated) We estimate both net sales and profit will increase for the Telecommunication and Radio
Frequency segments.
(100 million yen)

Net sales

Telecommunication

FY3/23 (F)(100 million yen)Radio Frequency

FY3/23 (F)Segment income

Telecommunication

FY3/23 (F)Radio Frequency

FY3/23 (F)16Overview of Consolidated FY23/3 Forecasts(Millions of yen)

FY3/22
results

FY3/23
forecasts

YoY change
AmountPercentage

33,96837,000

3,032

8.9 %

Telecommunication

25,90827,000

1,092

4.2 %

Radio Frequency

7,959

9,900

1,941

24.4 %

53750

697

1,312.4 %2.0 %2,430-Telecommunication

0.2 %2,010

Operating margin

7.8 %

9.0 %

-

1,058

1,400

Operating margin
General and administrative
expenses, etc.
Ordinary income

13.3 %

14.1 %-3,015-3,080-65

2.2 %448900452

100.8 %

Ordinary income margin
Net income attributable toshareholders of parentcompany
ROE

1.3 %

2.4 %

705

750

1.5 %

1.6 %

Net sales

Operating income
Operating margin

Radio Frequency

420

20.9 %-342-

32.3 %--45-

6.2 %

-

Note 1: Net sales of Other segment omitted

17

Initiatives in Mobile Communications

MobileCommunications

Promotion of radio equipmentdevelopment• Work to develop widely adaptable radio
equipment to increase competitiveness as a
growing adoption of the O-RAN international
standard, as we can expect an increase in wideranging customer demand.
Development of antennas
and peripheral devices• Focus on development of advanced antennas required for 5G and expand alineup of products in anticipation of “beyond-5G” demand, including measures
for terahertz waves, not just 5G demand.
• In order to make attractive propositions to capture demand for local 5G solutions,develop repeaters and metamaterial reflector panels, which are essential for area
construction, to ensure the advantageous position for products.
18

Initiatives in Radio Frequency

RadioFrequency

Shift to the high-frequency induction heating method as the share ofheat-treatment furnaces is large in the metal heat processing
industry.
Furnace heat treatment method

Advantages• Can perform batch processing in large
capacity• Equipment already depreciated as it
was introduced years ago

Disadvantages• Take time to start up equipment as itburns gas or oil (and emits CO2)
• Involve hazardous work that requiresseparate assignment of persons
responsible for safety management

High-frequency induction heating method

Advantages• Can process after starting up instantly• Do not emit CO2 while processing andis safe with limited scope of areas
exposed to high temperatures• Processing on production lines
possible• Can address mass production using
automated processing by robots

Disadvantages• Require spending for installing
induction heating equipment
19

Initiatives on GovernanceCompliance program

Management’s commitment
Communicate from the management layer a message, clearly and on anongoing basis, that compliance is the most important matter andprecondition for the management and the management team is committed
to leading the effort to maintain compliance.

Effective compliance promotion
Promote compliance for the group as a whole through, among others,meetings attended by persons responsible for compliance from the DKK
group members.

Maintaining internal rules and ensuring everyone is aware of themAppropriately reflect work processes in rules, including those of groupcompanies, and take measures in response to amendments to related laws,etc.

20

Shareholder Return For FY3/22, we plan a year-end payout of 60 yen per share, with DOE of 1.5% set as the lower limit.
 As a measure to enhance shareholder returns and improve capital efficiency, we are in the process ofbuying back treasury shares totaling up to 1,100,000 shares or 2.5 billion yen in a period from February
2022 to December 2022.
 We decided on a policy to retire the portion in excess of 10% of treasury shares in FY3/22.

Our policy on shareholder return
Targeting payout ratio of 40% on a consolidated basis with DOE of 1.5% as the lower limit.
Our policy for shareholder returns is to aim for a payout ratio of 40% on aconsolidated basis while not letting the dividend on equity ratio (DOE) on aconsolidated basis to fall below 1.5%. As part of a measure for enhancing shareholder
return, we are buying back treasury shares totaling up to 2.5 billion yen setting in aperiod from February 2022 to December 2022.
We decided in FY3/22 on a policy to retire the portion in excess of 10% of treasury
shares.

Year-end payout of 60 yen per share planned for FY3/2221

4. MEDIUM-TERM BUSINESSPLAN HIGHLIGHTS

22

DKK-Plan2025 EstablishedWe established a 3-year plan starting from FY3/23.

Access this URL for detailed information:
https://www.denkikogyo.co.jp/ir/library/pdf/plan/2022/DKK_plan2025.pdf

23

In Pursuit of Our Ideal
Create new businesses and further expand existing
businesses by FY3/31 to strengthen our business foundation

From page 5 of Medium-Term Business Plan: DKK-Plan2025

24

To Realize DKK-Vision2031
Aim for further growth by laying a foundation forgrowth by FY3/25

From page 9 of Medium-Term Business Plan: DKK-Plan202525

Basic Policy and Priority Measures
Build a solid foundation for growth, with threemeasures at the center

From page 10 of Medium-Term Business Plan: DKK-Plan2025

26

Material Issues to Achieve Goals
Promote initiatives for five material issues to achievesustainable development and growth

From page 11 of Medium-Term Business Plan: DKK-Plan2025

27

Numerical Targets
Numerical targets set for pursuit to improve revenue
base

From page 12 of Medium-Term Business Plan: DKK-Plan2025

28

Financial Strategy
Aggressive investment to lay the foundation for improved profitabilityFrom page 40 of Medium-Term Business Plan: DKK-Plan202529

Toward Strengthening Business Foundation
Restructure relationship of trust with all stakeholders bydeveloping highly transparent management structure

From page 14 of Medium-Term Business Plan: DKK-Plan202530

Toward Strengthening Business Foundation
Solidify business foundation by securing a Board of Directors
structure that incentivizes Directors to promote reforms

From page 16 of Medium-Term Business Plan: DKK-Plan2025

31

Toward Strengthening Business Foundation
Prioritize human resources, which form the basis for management
Aim for growth and sustainability while paying attention to externalenvironment

From pages 19 and 21 of Medium-Term Business Plan: DKK-Plan2025

32

Business Strategy
Work to optimize business portfolio, with two of thefive material issues as axes

From page 24 of Medium-Term Business Plan: DKK-Plan2025

33

Business Strategy
Establish new segments for the purpose of business structuralreforms and clear management of profit for each division

From page 25 of Medium-Term Business Plan: DKK-Plan2025

34

Business Strategy
Aim for net sales of 43.0 billion yen by FY3/25, up
about 25% from the level in FY3/22

From page 27 of Medium-Term Business Plan: DKK-Plan202535

Business Strategy
Set local 5G as the key target, develop radio technology and a solution
service for customer issues, and grow it into a 5.0 billion yen business

From page 29 of Medium-Term Business Plan: DKK-Plan202536

Business Strategy
Develop a new market by finding applications for the superheated steam technology
Set it as the core business of environmental management and grow it into a 5.0billion yen business

From page 31 of Medium-Term Business Plan: DKK-Plan202537

Business Strategy
Work to expand our market share and improve profitability through social
contribution by building social infrastructures, using the technology and trust
we have developed as the basis
GoalStrategyMobileCommunications

To expand our shares in the 5G market and improve profitability byentering the radio equipment market, in addition to antennas, inearnest

Take advantage of our antennas to expand shares, expand scope ofbusiness fields by enhancing/expanding O-RAN radio equipment
products, and improve profitability reforming production locations andconsolidating construction work divisions

Fixed WirelessTo help establish society resistant to disasters and improve
profitability by stepping up development of administrative radiosystems

Increase sale of 280MHz band disaster-prevention radio systems,
develop disaster-prevention products in collaboration with solutions
business, and improve profitability by unifying calculation divisions
and consolidating construction work divisions

To maintain and update broadcasting equipment as a social mission

Steadily capture demand from update needs, increase orders by
reinforcing the strengths that allow us to take on wide-ranging areasof work, and improve profitability by consolidating construction work
divisionsTo actively sell products friendly to the environment and capture
continuous demand for outdoor steel building frameworks

Expand sales of environmentally friendly products, including LED
aviation obstacle lights, improve quality in steel building frameworks
and plating processing business, and step up differentiation
measures for ancillary work, etc.

Broadcasting

Other Businesses

Induction Heating To capture emerging demands associated with electrification ofvehicles, expand market shares, and improve profitability
Equipment

Promote activities to convert other heat treatment methods to theinduction heating method, which has a low impact on theenvironment, capture demand from emerging needs in the EV
market and develop coil-manufacturing technology to improve
profitability

Contract Heat
Treating Service

Cut costs and improve profitability by developing markets using
overseas operations, downsizing staff in the heat-treatment process,making factories smart, and introducing solar power equipment

To promote use of the induction heating method in the global
market and improve profitability

Excerpts from pages 32 to 37 of Medium-Term Business Plan: DKK-Plan202538

Business Strategy
Expand existing businesses, beginning with drastic reforms and begin totarget overseas markets, rather than just the domestic market

From page 38 of Medium-Term Business Plan: DKK-Plan202539

Capital Strategy
Make ROIC and WACC the key indicators to make us aware of investment
impacts toward future growth and business expansion

From page 43 of Medium-Term Business Plan: DKK-Plan2025

40

Thank you very muchfor your attention.

41

APPENDIX

42

Operating Results Recalculated According to New Business Segmentation(Millions of yen)

FY3/22Results

Net sales
Telecommunication

New segment inTelecommunicati
on Business25,908

Mobile Communications

13,310

Fixed Wireless

5,509

Broadcasting

2,996

Solutions

Other Businesses
Radio Frequency

New segments inRadio Frequency
Business

33,968

Induction Heating
Equipment-Related
Contract Heat Treating
Service
New Areas Business

128

3,966
7,959
5,619

2,341
0

Note 1: Net sales includes revenues from facility leasing and power salein addition to Telecommunication and Radio Frequency.

43

Notes on Earnings Forecasts
Figures included in this document that are related todescriptions, including plans and policies and not past facts,are forecasts regarding future earnings. They are allcalculated based on management assumptions and views
based on information grasped by the company at the timeof writing.
Therefore, these forecasts include risks and uncertain
factors, and actual results may differ from them due to avariety of factors. Such potential risks and uncertain factors
include changes in economic situations and productdemand levels in major markets, fluctuations in the foreignexchange market, changes in regulations in Japan andoverseas, and accounting standards and practices.
44