FinancialResults
Briefing

First Half of the Fiscal YearEnding March 31, 2022

November 2021

Sales Breakdown/Market Share (End of September 2021)
Market Share (Auxiliary Engines forLarge Ocean-going Vessels)

Sales Breakdown

BusinessSection

Internal combustion
engines

Application

Land-use

7％

11％

56%
Domestic 44％

Auxiliary power
generators

Other

89％

Marine-use(Breakdown)

93％

Export80％〈Share in Japan〉〈Overseas market share〉

DAIHATSUDIESELDAIHATSUDIESEL45%

Main
propulsion systems

27%

20％

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Remarks on Earnings
POINT
Sales by Horsepower(10,000 hp)

Stable capture ofearnings over lifecycle (30 years)▶Post-voyage maintenanceservices are key.
▶Cumulative total of engine
units (number of ships
carrying our engines) isdecisive.
March March March March March March March March March March March March March March March March March March
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

*Does not include technological partners in China

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Strengthening Business in the After-sales-service
Market/Overseas Strategy (Licensing)
15 yearsago

Sales approx. ¥15.0 billion

Now

Holding the line
Business focus was selling engines to builders ofnew vessels.
Sales for the after-sales-service did not really exist.

Issues forthe future

Major
increase

Sales approx. ¥26.0 billion

Shifting to the offensive
Creation of sales teams specializing in parts
Launch of strategic sales targeting ship-owners
and ship-managers in the after-sales-service
marketGenuine parts usage ratio is approx. 50%.
Scope exists for increasing this rate.
▶Strategic deployment of CMAXS system.

Licensing (in China)
Contract partner since 1982
Granting of rights for Manufacture and marketingof certain classes of internal combustion engine
Expand market share of DAIHATSU brandAnqing CSSC Diesel Engine Co., Ltd.
Anqing Diesel
Anhui Province, China (Yangtze River Basin, 600 km from Shanghai)

SHAANXI DIESEL ENGINE HEAVY
INDUSTRY CO., LTD.
Shaanxi Diesel
Shaanxi Province, China(50 km from Xi’an)

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Market Trend for Marine Cargo
Global shipping capacity

Global ocean cargo volumes, by product(Unit: Billiontons)

14

Iron ore
Grain
Crude oil
OtherCoalContainers
Petroleum products

The averageincrease rate of+ 3.2% / year

(Unit: Milliontons)

1,600

Other (cargo vessels, etc.)

Compared to2006
98% increase

Tankers
Bulk carriers

1,400

12

1,200

10

1,000

8800

6600

4400

2200

00

2006

2008

2010

2012

2014

2016

2018

2020

2022

2006

2008

2010

2012

2014

2016

2018

2020

(Estimate)

Source: The Shipbuilders’ Association of Japan

Increasing trend in shipping capacity in line with increase in ocean cargo volumes, anda recovery in maintenance demand is expected.

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Market Trends for Newbuild Vessels
Volume of work in hand, by country

Volume of orders received, by country(Unit: Million tons)

60

50

40

22132231(Unit: Million tons)

160
140
10

Japan
China
Other countries total

9118
10120
100

17153020

Japan
South Korea
China
European countries total
Other countries total

54

60
1713

10
10802018

2019

22642020

1H FY2022

996149
45
41

40
20

9950

80

1823South Korea
European countries total

3150

23182020192020

2021
END OF JUNE0201836

Source: The Shipbuilders’ Association of Japan

Volume of orders received and volume of work in hand both trended downwards fromfiscal 2019, except in China, due to the COVID-19 crisis, but the trend is for a rapid
recovery beginning in 2021.
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

First Half of the Fiscal Year Ending March 31,2022

Summary of Earnings

Summary(Unit: Million yen)

September
2019
Results

September
2020
Results

September
2021
Results

YoY difference
Increase/Decrease

Net sales

27,321

25,131

23,361(1,770)

Operatingincome646(51)323

Ordinary
income

852

(19)

Net
income511

Basic
earnings pershare

March 2021(%)

Forecast*

Progress(%)(7.0)%

56,000

41.7%

374－

1,500－

616

636－

1,800－

(210)

599

809－

1,500－

16.10(6.64)

18.88

25.52－

47.09－

Total assets

83,42280,98081,294

314

0.4％

－

－

Equity ratio

46.9％

49.4％

50.9％

1.5％

－－－

POINT

Net sales decreased due to a reduction in sales of engines primarily to the Ministry of Defense
Earnings increased due to cost reduction activities, improved production efficiency and an increase inmaintenance-related sales

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Net Sales and Earnings for the Internal
Combustion Engine Section(Unit: Million yen)

Marine-use (Japan)
Land-use (Japan)

30,00025,81325,0002,134469

relatedMarine-use (Over seas)
Land-use (Over seas)

23,576163
1,178

20,00015,000

1,800

1,400

181

1,200

11,407
10,815

1,690

1,217
947

1,000
800
600

10,303

10,828

400
8,468

200
00
1H FY2020

POINT

maintenancerelated(Unit: Million yen)

21,61810,0005,000* including

1,600

2,154
12,906

Internal combustion
engine section earnings* including maintenance-Net sales

1H FY2021

1H FY2022

1H FY2020

1H FY2021

1H FY2022

Net sales decreased, due to a decline in sales of marine-use engines to the Ministry of Defense andcommercial marine-use engines, despite an increase in sales of land-use engines
Maintenance-related sales and earnings both increased slightly despite the impact of movement
restrictions

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Unit Sales and Maintenance-related Net Sales
Maintenance-related net sales

Units sold(Unit: Units)

450

Marine-use (Japan)
Land-use (Japan)

Marine-use (Over seas)
Land-use (Overseas)

414

400

11350

132

300

131

250
200
150

275

204

50

12,767
11,20011,502

10,000

16

8,000

98

6,000
4,000

267

100

14,00012,000349
14(Unit: Million yen)

161

0

2,000
0

1H FY2020

1H FY2021

1H FY2022

1H FY2020

1H FY2021

1H FY2022

Total units sold decreased due to deferment of delivery dates, etc.

POINT

Maintenance-related sales increased slightly due to the move to ease restrictions although there
were lockdowns, etc. in some regions

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Earnings Forecasts(Unit: Million yen)March 2022

March 2021
Results

Increase/decrease(%)

Forecasts a l e s

56,74556,000(1.3)

O p e r a t i n gincome

994

1,500

50.9

income

1,149

1,800

56.6

N e ti n c o m e

712

1,500

110.7

B a s i cp e re a r n i n g ss h a r e

22.43

47.09

N e t

Ordinary―*Exchange rates: March 2021 (Results): ¥105.35, 1H 2022 (Results): ¥108.78, 2H 2022 (Estimate): ¥105.00

Forecast

Plan to increase production, primarily of large-scale auxiliary engines for container ships,
despite a decrease in sales of engines to the Ministry of Defense
Slight increase in maintenance-related sales planned, with a progressive recovery in ocean
cargo volumes

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Progress of the Mid-term Management Plan

DAIHATSU DIESEL MFG. CO., LTD.

Sales Expansion in Growth Markets
China Licensing Business

Trend in Tonnage of New Shipbuilding Completions
2019Other
15.2%

33.9
Korea
27.7%2021 (FORECAST)

2020

China
33.7%

million
CGTJapan
23.4%

Other
12.6%

Other
12.0%

29.4
Korea
29.8%

million
CGTJapan
21.0%

China
37.2%

30.8
Korea
30.6%

million※イメージChina
39.5%

CGT

Brand Global ShareJapan
17.3%

Source: Clarkson September 2021 data

Focusing on the expansion of the DAIHATSU brandin China, centering on business alliances
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Expanding Sales of Dual-fuel Engines(C) Japan Aerospace Exploration Agency (JAXA)

2018

2019

JAXA Tsukuba Space Center

LNG-fueled automobile carrier SAKURA LEADER(6DE28DF)(6DE28DF)*Illustration※イメージ*Illustration

202020212022

LNG-fueled automobile carrier

Large container ship

Bulk carrier

CENTURY HIGHWAY GREEN (6DE28DF)(8DE35DF/6DE35DF)（6DE20DF/6DE23DF）
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedImproving Production Efficiency
Through Synergic Effects Among Group Production Bases
Himeji Factory (Commenced operation in 2018)

DAIHATSU DIESEL ANQINGIRONWORKS.CO., LTD.
(Established in 2007)

Nippon Nozzle Seiki Co., Ltd.
Head Office Factory(Became a consolidated subsidiary in 2015)Moriyama Factory(Commenced operation in 1969)

Nippon Nozzle Seiki Co., Ltd.
Kansai Business Dept. Factory(Became a consolidated subsidiary in 2015)

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Himeji Factory: a Dedicated Large-scale Engine Factory
Trend in the Proportion of Large-scaleEngines※イメージ
Lead time for Large-scale Engine Orders
Design240

Procurement

Manufacture

Shipment

200

Himeji Factory

Orders are strong for large container ship engines

160
120
80
40

Expanded testing facilities, enhanced production capacity by 30% 0201820202022

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedRelentless challenge to new technology
development“Zero Emission Ships”
Adopted technology development for hydrogenfuel promotion plants for ocean-going vessels

Container ships in 2050
(Source: Japan Ship TechnologyResearch Association)

6DE28DFx3台※イメージAwarded “Marine Engineering of the Year (Doko Memorial Prize) 2020”(Source: Japan Ship Technology Research Association)
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedRelentless challenge to new technology
development
The world’s first pure carrier “Suiso Frontier”
that transports liquefied hydrogen connecting
Japan and Australia

Source: HySTRAElectrical propulsion ship with a total length of 116 m,cargotank capacity of 1,250 m3
6DE28DFx3台
6DE-23 x 3 units, reduction gear for 2 engines with 1
shaft RCD-25J x 1 unit,
Selective catalytic reduction system (NoX reductionequipment) SCR 64VB x 3 units※イメージ

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Focusing on ‘With’ and ‘After’ COVID-19

Rise in environmental
consciousness

Digital technology
to enable remote operation

Accelerate decarbonization
Protect human life from the threatof nature
Environmental management

Response todigitalization

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

Roadmap to Developing Next-generation Fuels
2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Hydrogen combustion technologies
Development of hydrogen fuel promotion plant for
ocean-going vessels

Develop a hydrogen combustion engine
Verification at testing facilities fornext-generation fuels

Universityresearch labs

Verification testingZero-emission
vesselprototype

Completeenginedevelopment

Joint researchAmmonia combustion technologies
Verification at testing
facilities for nextgeneration fuels

Biofuels, fuel cells, CO2 capture

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedDirection of Environmentally-conscious Investment
in Development
Composition of Investment in Development by Theme
Development toimprove existingproducts

Development of dualfuel engines

Digitalizationresponse

FY2021 Results

Nextgenerationfuelcompatible

FY2022 PlanEngine operation support system

Key points of investment in development

Cloud computing Maintenance eXpert System (CMAXS)

１）Next-generation fuel-compatible engines
Central theme of the Mid-term Management
Plan (～FY2022)
２）Response to “digitalization”① Engine operation support systems through land-ship
communications

Remote maintenanceSensing (oil mist and gas sensors)② Remote maintenance of onboard engines③ Prompt detection of abnormalities through sensing technology
Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

To Ensure Stable Electricity Supply in an Emergency
Metropolitan Area
Outer Floodway

Installed a diesel generator (8DC-32 engine) in the flood control
facility, aimed at mitigating flood damage from the middle basin ofthe Naka River and Ayase River in the Tokyo metropolitan area

Source: Ministry of Land, Infrastructure,
Transport and Tourism Edogawa River Office

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Environmental Conservation Initiatives
Environmental vision for 2030: plan to reduce CO2 from manufacturing
IncreaseDecrease

ALL DAIHATSU
Green Wave ProjectTotalTarget a 35% reduction by 2025

・Plan to invest progressively in solar power
generating equipment for renewable energy
・Plan to replace on-site power generatorswith more efficient models
Himeji Factory

・Considering the introduction of energy
recapture equipment

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights ReservedMid-term Management Plan Targets(April 1, 2020 to March 31, 2023)

Become the world’s leading engine manufacturer
in terms of quality, technology and service

Vision２１Expand sales domains andincrease our sharestrategically by introducing
new products to the market

Develop world-classtechnology with a view to thenext-generation energy

４３
Improve production
efficiency through synergic
effects among Group
production bases

Establish a solid earnings
base with an awareness ofESG

Copyright © 2020 DAIHATSU DIESEL MFG.CO.,LTD. All rights Reserved

These materials contain statements relating to future earnings and business strategy, etc. Inherent in thesestatements are risk and uncertainty; they form no guarantee of future performance.
Please be aware that actual results may differ significantly from forecasts, due to changes in the businessenvironment, etc.
Furthermore, information relating to companies other than the Company or the Company group, etc., contained here
has been taken from publicly available information, etc. No verification of any kind has been undertaken by theCompany, and no guarantee is offered regarding the accuracy orappropriateness of such information.
The information contained in these materials is intended only for purposes of provision of information, and not forsolicitation to purchase securities.