To our shareholders and investors

1. Operating and financial review

Effective with the resolution passed at the 108th Ordinary General Meeting of Shareholders held on June 21, 2024, the fiscal year-end (the closing date of the fiscal year) of the Company has been changed from March 31 to December 31 every year. Accordingly, the fiscal year ended December 31, 2024, an irregular accounting period to implement the change in the fiscal year-end, ran for nine months from April 1 to December 31, 2024 for Daifuku Co., Ltd. and its subsidiaries with a fiscal year ending in March, mainly in Japan. Most non-Japan subsidiaries are consolidated for the 12-month period from January 1 to December 31, 2024. As a reference, comparative information with the same period of the previous year is provided, adjusted to be the same as the current consolidated fiscal year.

During the fiscal year (from April 1, 2024 to December 31, 2024), the global economy remained generally favorable, despite downside risks associated with the sluggish Chinese economy and concerns about a slowdown in the U.S. economy.

In terms of the business environment, logistics-related investment in Japan is on the road to recovery against the backdrop of 2024 logistics problem. In the semiconductor industry, while legacy semiconductor investment in China continues at a high level, investment in certain advanced semiconductors is recovering with increased demand for AI applications. In addition, investment in automation in the back-end processes of semiconductor manufacturing has been emerging. In the automotive industry, investment in production lines to enable mixed production of gasoline-powered vehicles and xEVs (a generic term for electric vehicles, including BEVs, HEVs, PHEVs, and FCEVs) continues at a high level. Investment in automation at airports has also grown, mainly in North America, in line with the recovery in the number of air passengers.

In this economic and business environment, orders remained favorable during the fiscal year, mainly in cleanroom systems for the semiconductor sector in Asia and airport systems in North America.

Sales were strong against the initial plan, underpinned by an extensive order backlog from the end of the previous fiscal year.

Specifically, the Group received orders of 594,769 million yen, up 5.8% from the same period the previous fiscal year after adjustment, and recorded sales of 563,228 million yen, up 6.1%.

In terms of profits, the operating margin increased significantly as a result of efforts to reduce costs, such as increasing production efficiency, which have been underway since the previous business plan. An increase in sales of cleanroom systems for legacy semiconductors in China also boosted the operating margin.

Consequently, the Group posted operating income of 71,546 million yen, up 36.3% from the same period the previous fiscal year, and ordinary income of 74,498 million yen, up 37.0%. Net income attributable to shareholders of the parent company was 57,086 million yen, up 50.6%.

Operating income, ordinary income and net income attributable to shareholders of the parent company reached new record highs for three years in a row, despite reflecting the irregular 9-month period in Japan.

2. Outlook for the fiscal year ending December 31, 2025

The above forecast values are our projections based on information available at the time of this release and contain various uncertainties. Actual results may differ materially from forecast values due to factors such as changes in the business performance of the Company.

Note:
Due to the change in fiscal year-end, the fiscal year ended December 2024 was a 9-month period in Japan and a 12-month period outside of Japan. In the table above, "Year ended December 2024" reflects results for 9 months in Japan and 12 months outside of Japan, and "Year ended December 2024 (Japan: 12 months)" is calculated assuming a 12-month period in and outside of Japan.

3. Basic policy for dividends

The Company regards the return of profits to shareholders as its most important management task and adopts a performance-based policy for cash dividends based on consolidated net income. The Company appropriates the remaining surplus to internal reserves for future growth.

In the four-year business plan for 2027 that started in April 2024, the Company aims to achieve a consolidated dividend payout ratio of 35% or more for each fiscal year.

For the fiscal year ended December 31, 2024, the Company paid an interim dividend of 23 yen per share, and at a meeting held on February 14, 2025 the Board of Directors passed a resolution to pay a year-end dividend of 32 yen per share, for an annual dividend of 55 yen per share. This represents a dividend payout ratio of 35.7%.

With respect to dividends for the fiscal year ending December 31, 2025, the Company plans to pay an annual dividend of 64 yen (an interim dividend of 32 yen per share and a year-end dividend of 32 yen), with a consolidated dividend payout ratio of 36.2%, based on the earnings forecast for the fiscal year ending December 31, 2025 and the shareholder return policy.

We respectfully ask our shareholders and investors for their continued support.

February 2025
Hiroshi Geshiro, President and CEO