Financial Results Briefing
Fiscal Year Ended March 31, 2024

May 21, 2024

1

Summary of Financial
Results

P.4~

2

Market Environment andOur Business Model

P.10~

3

Mid- to Long-Term Vision

P.17~

4

Medium-Term
Management Strategy

P.22~

1

Summary of Financial
Results

P.4~

2

Market Environment andOur Business Model

P.10~

3

Mid- to Long-Term Vision

P.17~

4

Medium-Term
Management Strategy

P.22~

Summary◼ Sales remained strong for large engines and dual-fuel engines mainly for container ships as well as maintenance.

Both net sales and profit increased.
◼ Sales for overseas locations contributed to earnings as the yen depreciated more than expected.
◼ Extraordinary income was recorded as a result of a sale of shares of OMT S.P.A. (Italy).

(Million yen)

FY2023Full-year results

FY2024Full-year results

YoY difference
Increase/Decrease(%)

Net sales

72,113

81,775

9,661

13.4

Operating income

3,601

5,194

1,593

44.2

Ordinary income

3,660

5,546

1,886

51.5

Net income

2,948

5,149

2,201

74.7

Basic earnings per
share (yen)93.37

162.87

69.50

74.4

Total assets

95,377

101,428

6,050

6.3

Equity ratio (%)

47.9

50.1

-

4

Net Sales and Earnings for the Internal Combustion Engine Section◼ Sales of small and medium-sized engines for bulk carriers and tankers rose in addition to sales of large engines(for container ships and car carriers).
◼ With continued solid demand for maintenance, sales increased.

Net sales(Million yen)

Marine-use
船舶用(国内)(Japan)Earnings for the internal combustion engine section

Marine-use
同 (海外)(overseas)

Land-use
陸上用(国内)(Japan)90,00080,00067,85270,000583

53,87760,00050,000

9,000

580

8,000

9,379

10,414

9,717

7,996

7,000
6,000

43,02625,490

5,420

5,000
4,000

36,427

3,906

3,000

20,00010,000(Million yen)

78,229475

40,00030,000Land-use
同 (海外)(overseas)

2,000

18,195

20,42725,243

0

1,000
0

March
2022
2022年3月

March
2023
2023年3月

March
2024
2024年3月*Including maintenance related

March
2022
2022年3月

March
2023
2023年3月

March
2024
2024年3月*Including maintenance related5Unit Sales and Maintenance-related Net Sales◼ Sales composition of large engines and dual-fuel engines increased mainly for overseas.
◼ Maintenance-related net sales increased to a record high as demand continued to be brisk from the previous

fiscal year.
Units sold
(Unit: Units)

Marine-use

船舶用(国内)(Japan)Maintenance-related net sales

Marine-use
同 (海外)(overseas)

Land-use
陸上用(国内)(Japan)1,000(Million yen)
40,000

900

747

800

700

658

600

67

500

216

80

775
54

34,37335,00030,21730,00026,38925,000221

295
20,000400

15,000

300
200

375

446

426

10,000

100

5,000

0

0
March
2022
2022年3月

March
2023
2023年3月

March
2024
2024年3月

March 2022
2022年3月

March 2023
2023年3月

March
2024
2024年3月

6Earnings Forecasts◼ As sales of small and medium-sized engines largely for bulk carriers and tankers become dominant, a decrease inunit sales price is expected as well as a drop in net sales.
◼ The maintenance-related business is expected to remain solid but fall below the previous year’s level.

YoY difference

FY2024Full-year results

FY2025Full-year forecast

Increase/Decrease

Net sales

81,77578,000-3,775-4.6

Operating income

5,194

4,500

-694

-13.4

Ordinary income

5,546

4,600

-946

-17.1

Net income

5,149

3,100

-2,049-39.8

Basic earnings per
share (yen)162.8797.33-65.54-40.2

Annual dividend
(yen)

49.00

39.00

-10

-20.4

Payout ratio (%)

30.1

40.1

-

-

(Million yen)(%)

Exchange rates: ¥141.25 for FY2024 (result) and ¥140.00 for FY2025 (estimate)7Order backlog◼ We have secured an amount of work on hand, enough for two years’ worth of producing engines.
◼ In the order backlog for engines, the main portion of orders received shifted from large engines to small and medium-sized ones, centered on bulk carriers and tankers, as a surge in the construction of container ships calmed down.
Change in order backlog
Marine-use(Japan)船舶用(国内)陸上用(国内)Land-use(Japan)Other
その他(Million yen)
80,00070,000862

64,415

782

Large
83%
Small andmedium-sized, etc. 17%

Marine-use
同(海外) (overseas)
Land-use(overseas)
陸上用
(海外)

1,040

4,513

60,000

Proportion of order backlog by model as of March 2024

Dual-fuelDual-fuelengines
engines

64,3596,725

363

50,00040,00031,08028,02855%

30,000Large
engines
大型機関28%

20,00010,000

Small and medium中小型機関
sizedengines

27,17828,202March
2023
2023年3月

2024年3月
March 2024

0*Including maintenancerelated*Based on value8

1

Summary of Financial
Results

P.4~

2

Market Environment andOur Business Model

P.10~

3

Mid- to Long-Term Vision

P.17~

4

Medium-Term
Management Strategy

P.22~

Marine-use / Land-use Business Models
We provide auxiliary power generators and main propulsion engines for marine use, as well as engines for power generation andpumping for land use.
After delivery, we accumulate long-term earnings through parts sales, repair work, and other maintenance-related businesses.

Marine-use Business Model

Land-use Business Model
For pump stations

Internal combustion engine sales

Engine delivery

DAIH
ATSU
DIES
EL

Pump makers
Heavy electricmachinery
manufacturers
For airports, remote islands
and broadcasting stations

Vessel delivery

Demands concerning Shipyard
performance and prices

Ship owner(shipping
Instructions on
performance and companies, etc.)
parts to be used

For data centers
Subcontra
ctors
Generalcontractors

Sales activities (appeals of and proposals for
performance, price, etc.)

Local
government

Airports andremote islands
Broadcastingstations, etc.
Clients(Businesscompanies, etc.)

Maintenance-related
business

Parts sales andrepair work

Vessel managementcompany1

Ship owner

Direct transactions withend customers

Note) 1. A business operator who is contracted by a ship owner to conduct maintenance and management of vessels, operation management and crew management including employment andassignments to vessels

10Features of the Business Models
We have established an integrated system from R&D to manufacturing, sales, and maintenance of internal
combustion engines. While sales of mainstay marine internal combustion engines are affected by market conditions,the maintenance-related business is a recurring business and contributes to improved stability and profitability.
Business model•

Promote R&D of diesel engines and dual-fuelengines to comply with environmental
regulations, in the following directions

Recurring-type business model (rough idea)
Net sales

R&D‒ Diesel engines: reduce environmental
impact, improve fuel efficiency, support new
fuels, etc.

•

Manufacturing
and sales

Manufacture internal combustion engines formarine and land use and sell them to a wide
range of customers

Maintenance•

Manufacturing bases: Moriyama Factory (Shiga
Prefecture) and Himeji Factory (Hyogo
Prefecture)•

Strong price negotiation power with high market
share

•

Maintenance including parts sales after shipping
internal combustion engines•

Service bases: located in major overseas cities
as well as in Japan•

Recurring-type business model that can expect
sales for a long period of time after shipment,
contributing to stable performance and higher
profit margins

Period X
Internal
combustion
engines

Period
X期
X

Period X+1
Internal
combustion
engines

Period
X+1

X+1期

Period X+2
Internal
combustion
engines

PeriodX+2

X+2期

Period X+3Internal
combustion
engines

PeriodX+3

X+3期

Period X+4Internal
combustion
engines

PeriodX+4期
X+4Period X+5Internal
combustion
engines

Maintenance-related business‒ Dual-fuel: increase efficiency of engines,
support diversified gas fuels, etc.

Period
X+5期
X+5

11

Marine Equipment Market - Market Trends
Maritime logistics is significantly advantageous in terms of transportation volume and costs, and ocean cargo volumes have expanded
as the global economy grows.
Accordingly, the global shipping capacity is in a stable upward trend.
Market structure of shipping, shipbuilding and marine equipment
Maritime transport
The need for maritime

Demand for shipbuilding

transportation is expected toincrease steadily due to lowtransportation costs, transportation
volumes, and low environmental
impact although the need
contracted temporarily due to the
COVID-19 pandemic.

Demand for marine equipment

Vessels have increased steadily as
demand for ocean transportation rose.
(Average increase of 3.2% per year
since 2015)
Stable demand for shipbuilding was
generated.

Global shipping capacity

Global ocean cargo volumes(Unit: billion tons)
15
Coal
Iron ore
鉄鉱石
石炭

Grain
穀物

Containers
コンテナ

Crude
原油
oil

Petroleum
石油製品
products

Other
その他

(Million DWT)
3,000
タンカー
Tankers

10

2,000

5

1,000

0

0
2006

Reference)

2008

2010

2012

2014

2016

The Shipbuilders’ Association of Japan2018

Demand for marine equipment is also
generated in line with demand forshipbuilding.
An increase in the number of vessels
already in service in addition to new ones
is a reason for the expansion of themarket.

2020

2022

2024 (estimate)

2006

2008

2010

バルクキャリア
Bulk carriers

コンテナ
Containers

その他
Other

2012

2018

2022

2014

2016

2020

12

Stable Business Base Supported by Maintenance-related Business
The number of vessels carrying our engines is steadily increasing, and we expect long-term, stableearnings from maintenance-related business.
Number of vessels with engines from DAIHATSU DIESEL

Performance trends of maintenance-related business
Ratio in net sales1
50.0%

Net sales (100 million yen)
1,000
46.4%

9,000

8,700 ships
Approx. 8,700ships
8,500

44.3% 44.8%
41.9%

800

45.8%
43.3%

41.9% 42.0%
818

40.9%

38.4%

40.0%
721

8,000

623
570

600

589

602

573

601

567

576

474

30.0%

419

7,500

400

384

306

342

355

319

332

322

312

20.0%

7,000

200
6,500

239

265

247

246

254

269

246

264

302

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

344

0

6,000
15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

24/3

10.0%

0.0%
Maintenance-related
business

Other

24/3

Ratio of maintenance-related net
sales to the total1

Note) 1. Percentage to consolidated net sales

13

Dominant Market Position and Strong Customer Base
We have established a dominant position in the market of auxiliary engines for large ocean-going vessels, with ahigh share of approx. 49% in Japan and 26% overseas. In addition, we have a strong customer base with a trackrecord of doing business with numerous customers.
Share in market of auxiliary engines for large ocean-going vessels 1

Domestic

Overseas

Customer base 2

Customer attributes

Number of customers

Shipping companies(ship owners)

DAIHATSUDIESELDAIHATSUDIESEL

49%

26%

・Strong price negotiation power with high market share・Appropriate price revisions in line with rising raw material costs

Over 100

Shipbuilding
companies

Approx. 70

Notes) 1. Share of the number of vessels entered into service in January–December 2023: 2. Customers with manufacturing delivery dates from April 2023 to March 2024
Reference)

Sea Web

14

Opening Up the Chinese Market
We promote expansion into China, a growing market and the largest market in the world, through direct shipment aswell as giving license to two Chinese companies. We focus on expanding supported models by concluding
contracts for new large engines.
Direct Shipment + Licensed Partners Shipment Output (cumulative) 1（1,000kWm）
8000

7000

Licensed Partners
Anqing CSSC Diesel
Engine Co., Ltd.
(ANQUING DIESEL)

6000

5000

4000

3000

SHAANXI DIESELENGINE HEAVY
INDUSTRY CO., LTD.
(SHAANXI DIESEL)

2000

1000

0
15/3

Note) 1. Cumulative output of engines shipped from 2015 through March 2024

16/3

17/3

18/3

Directオリジナル
Shipment

19/3

20/3

21/3

22/3

23/3

24/3

ライセンス供与先
LicensedPartners
15

1

Summary of Financial
Results

P.4~

2

Market Environment andOur Business Model

P.10~

3

Mid- to Long-Term Vision

P.17~

4

Medium-Term
Management Strategy

P.22~

Daihatsu Diesel: The Mid- to Long-Term Vision

POWER

FOR

ALL beyond 2030

We create customer value through engines
and service as a power supply company.

Facing various social issues head-on, such as climatechange and the depletion of energy resources,

we support the safety and security of people’s lives
and protect the rich natural environment
We will strive to fulfill these two missions.

17Summary of Mid- to Long-Term Vision
We have formulated a new Mid- to Long-Term Vision that meets the business cycle in order to address the situation where the Company has been undervalued by the market
for a long time.
We will conduct regular reporting and reviewing through the new system and engage in ROE improvement and investment for growth aimed at realizing the Mid- to LongTerm Vision.

Recognition of Market Valuation

Mid- to Long-Term Vision

Trend in PBR (from January 2019)

(x)

1

1

0.94
(End of March)

0.8
0.6
0.4

0.2

We have started considering a company name change in light of the Mid- to Long-Term Vision.
19/1◼

We aim to contribute to net zero emissions
and become a core company in the marine
equipment industry. We will do this by offering
new solutions including servitization andexpanding business domains while striving toincrease sales of engines compatible with nextgeneration fuels.

We aim to expand business domains
through efforts such as M&A for
sustainable growth while driving the two
initiatives of R&D to respond to nextgeneration fuels and establishing asystem for the servitization business.

0
◼

2050

2030

20/1

21/1

22/1

23/1

24/1

Financial Objectives and Capital Allocation

PBR has remained below 1 for a long time.
The situation in which there has been insufficient costs ofcapital to meet market expectations
With the new organization CVIC* at the core, we take thefollowing measures of(1) enhancing our corporate value based on mid- to longterm strategies(2) regularly reporting and reviewing our progress(3) promoting constructive dialogue with investors

to strive to improve our market valuation.
* Corporate Value Improvement Committee

Million yen

FY2024 (results)

By FY2028*Figures excluding gain on sale ofstocks

FY2031 targets

Net sales

81,77580,000100,000

Operating income

5,194

5,000

7,000

10.1% (8.9%*)

6.5% or more

9.5% or more

ROE
◼
◼

We plan to make investments in R&D to respond to next-generation fuels andreinforcement of systems such as for servitization in the years to 2030.
Although we have set a payout ratio of 30% as the standard currently, we will consider
aiming to “avoid a dividend decrease and ensure an upward trend of dividends.”
18

The Mid- to Long-Term Vision
We aim to contribute to net-zero emissions in the shipping and marine equipment industries and to
expand our business scale. We will do this by servitization and providing broader new solutions
primarily in response to next-generation fuels.

Strategic
policies
Individual
strategies

From the present to 2030

From 2030 to 2050

Build systems for long-term
growth and enhance
profitability.

Accelerate growth to realize
the vision based on the new
system.

1. Commercialize engines compatible with
next-generation fuels.
2. Reinforce the servitization business.
3. Extend business domains through M&A
and alliances.
Operating income

1. Increase sales of enginescompatible with next-generation
fuels.
2. Expand the servitization business.
3. Provide broader solutions.

EBITDA

Contribute to net
zero emissions.

Develop into one of
the core companies
in the marine
equipment industry.

Rough ideaof earnings
Depreciation squeezes profits due to theimplementation of investment for growth.
We strive to enhance ROE through initiatives
including the establishment of the servitization
businesses and disciplined M&As.

2050

Initiatives from the present to 2030 will start
making a full-scale contribution.
19

Medium-term financial targets
We commit to achieving an operating income of 5 billion yen and an ROE of 6.5% or more by the fiscal
year ending March 2028 and aim to achieve an operating income of 7 billion yen and an ROE of 9.5% ormore in the fiscal year ending March 2031.
FY2023(results)

FY2024(results)

FY2025(forecasts)

By FY2028

Net sales

72,113

81,77578,00080,000100,000

Operating income

3,601

5,194

4,500

5,000

7,000

Operating margin

5.0%

6.4%

5.8%

6.3%

7.0%

EBITDA

6,355

8,032

7,474

8,700

ー

EBITDA margin

8.8%

9.8%

9.6%

11%

ー

Net income

2,948

5,149
(4,141*)

3,100

3,500

5,000

ROIC

4.3%

6.0%

4.9%

5.1% ormore

6.5% or
more

ROE

6.6%

10.1%
(8.9%*)

6.1%

6.5% ormore

9.5% or
more(Million yen)

FY2031
Targets*Figures excluding gain on sale of stocks

20

1

Summary of Financial
Results

P.4~

2

Market Environment andOur Business Model

P.10~

3

Mid- to Long-Term Vision

P.17~

4

Medium-Term
Management Strategy

P.22~

Plan for Investment for Growth
We plan to invest 45 billion yen for growth to achieve the Mid- to Long-Term Vision.
We will decide on making investment in each case while paying attention to the cost of capital.

Response to next-generation fuels
10 billion yen
Development and production facilities of engines compatible with
next-generation fuels, such as methanol and ammonia, aimed at
expanding our presence in the market
We assume that the fruits will be borne from 2030 onwards.

Technological development and productivity
improvement
15 billion yen

We plan to reduce costs of existing products and reorganize
production facilities.
Enhance competitiveness through cost and production
efficiency improvements and strive to increase sales andimprove profitability accordingly
We assume that fruits will be borne from FY2025.

Strengthening production infrastructure
8 billion yen
We will make capital investment and enhance
added value for the group and affiliatedcompanies for the purpose of controlling
production costs.
We assume that the fruits will be borne from2026 onwards.

Logistics reform
5 billion yen

Digital technology
3 billion yen

Other
4 billion yen

We will optimize logistics that accompanies the shift tomultiple production centers and carry out DX.
We will reduce logistics loss and achieve zero loss of sales
opportunities.
We assume that the fruits will be borne from 2028
onwards.

We endeavor to improve productivity and LTV through the digitaltransformation (DX) of business models.
We assume that the fruits will be borne from 2026 onwards.

We strive to realize net zero emissions at an early stage
and step up the initiative of corporate management of
human capital.
We assume that the fruits will be borne from 2030
onwards.

22

Investment in Factories that Produce Engines Compatible
with Next-Generation Fuels
We will make additional investments in the Himeji Factory to develop it into a key base for assembling andcommissioning engines compatible with next-generation fuels as well as producing more existing engines.

We plan to make investments in a new factory at a level of 10 billion yen in total and aim to put it in operation in 2026.

Total investments: A
level of 10 billion yen
Site planned for
additional facility(1) Next-generation fuels(methanol, ammonia, and hydrogen)Engine assembly and commissioning
factory(2) Engines compatible with next-generation
fuels (methanol)
Addition of facility(3) Plan for factories that ramp up productionof existing engines→ Production capacity forecast at 1.8 times(when converted to existing models)
Next generation fuel (methanol) engine to be
shipped by the end of 2026

23

Investment in Development of Engines Compatible with
Next-Generation Fuels
We will proceed with the development of engines compatible with next-generation fuels, which are an essential
factor in achieving GHG zero in 2050, with all candidates for such engines put under development simultaneously.

Commercial-use engines for methanol and ammonia are scheduled to be shipped out in 2026 and 2028, respectively.
Roadmap for next-generation fuel development
Now

Methanolto 20302026
Planned to start shipment ofcommercial-use engines

2028

Ammonia

HydrogenBiofuels

Planned to start shipment ofcommercial-use engines
Basicexperiment

to 2050
Sales expansion

Sales expansion

Test actual engines by 2030

We will strive to develop more efficient engines by 2030 (development can beadvanced with the existing engine technology).

3 units of 6DE28DF
Simultaneously, we will continue building solutions such as fuel cells, carbon capture, and renewable energy inpreparation for a future fuel source change.
24Started Discussing Company Name Change
We decided to change the company name in order to respond to the rapid changes inenvironmental awareness and digital transformation, as well as to realize the new image theGroup is aiming for and build a new history.

DAIHATSU INFINEARTH MFG. CO., LTD.

INFINITY(Eternity,
Limitlessness)

EARTH(Earth)3 units of 6DE28DF

Scheduled date of change: May 2, 2025
(anniversary of the Company’s foundation) 25

Disclaimer
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Inherent in these statements are risk and uncertainty; the statements give no guarantee of future performance.
Please be aware that actual results may differ significantly from forecasts, due to changes in the business environment, etc.
Furthermore, information relating to companies other than the Company or the Company group, etc., contained here has been taken frompublicly available information, etc. No verification of any kind has been undertaken by the Company, and no guarantee is offered regarding
the accuracy or appropriateness of such information.
The information contained in these materials is intended only for the provision of information, and not for solicitation to purchase securities.