To our shareholders and investors

1. Operating and financial review

Consolidation period due to the change in fiscal year-end
- First quarter of the fiscal year ending December 31, 2025
Daifuku Co., Ltd. and all subsidiaries: January 1, 2025 to March 31, 2025
- First quarter of the fiscal year ended December 31, 2024
Daifuku Co., Ltd. and its subsidiaries with a fiscal year ending in March, mainly in Japan: April 1, 2024 to June 30, 2024
Most non-Japan subsidiaries: January 1, 2024 to March 31, 2024

Effective from the fiscal year ended December 31, 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. As stated above, although the first quarter of the previous fiscal year and the first quarter of the current fiscal year cover different periods, the percentage change from the same quarter of the previous fiscal year is provided for reference.

During the first quarter of the fiscal year ending December 31, 2025, the global economy generally remained favorable, but uncertainty increased due to the impact of US trade policy and downside risks associated with the sluggish Chinese economy.

In terms of the business environment, while customer decision making on some projects for the distribution and manufacturing sectors have been delayed due to soaring construction costs in Japan, investment in automation in manufacturing and logistics sites is recovering against the backdrop of labor shortages and substantially higher labor costs. In the semiconductor industry, legacy semiconductor investment in China continues at a high level, while demand for investment in certain advanced semiconductors, including automation in back-end processes, remains strong with increased demand for AI applications. In the automotive industry, while decisions on investment outside the United States have been delayed due to US trade policy, new investment plans to increase production capacity in the United States are beginning to be considered. Also, demand for investment in automation at airports to meet the increase in number of air passengers continues.

In this economic and business environment, during the first quarter of the fiscal year, orders for cleanroom systems from the semiconductor sectors remained strong; however, orders for intralogistics systems from manufacturers and distributors declined, as did orders for automotive systems. In addition, orders in airport systems fell, given a reactionary fall from the first quarter of the previous fiscal year when results benefited from orders for a large project.

Sales increased in intralogistics systems, cleanroom systems, and automotive systems, benefiting from an extensive order backlog at the end of the previous fiscal year, while sales declined in airport systems, following the withdrawal from some businesses as part of a review of the business portfolio.

Specifically, the Group received orders of 143,123 million yen, down 22.1% from the same period of the previous fiscal year, and recorded sales of 160,256 million yen, up 10.5%.

Note that, until the previous consolidated fiscal year, the change in order backlog at the end of the most recent period due to exchange rate fluctuations was included in the amount of orders received for that period. However, from the current fiscal year, this amount will no longer be included in the amount of orders received. Orders for the first quarter of the previous fiscal year include the impact of exchange rate fluctuations of 19.2 billion yen. Excluding this impact, the year-on-year change was a decrease of 12.9%.

In terms of profits, profit margins increased in intralogistics systems, cleanroom systems, and automotive systems, the result of cost-cutting initiatives such as production efficiency improvements, and the fact that the first quarter of the current fiscal year included January to March in Japan, when service sales, which are highly profitable, increased due to seasonal factors (the first quarter of the previous fiscal year included April to June in Japan).

Consequently, the Group posted operating income of 23,226 million yen, up 41.6% from the same period of the previous fiscal year, and ordinary income of 23,676 million yen, up 34.5%. Net income attributable to shareholders of the parent company was 16,862 million yen, up 31.0%.

Sales, operating income, ordinary income, and net income attributable to shareholders of the parent company reached new record highs for the first quarter of the fiscal year.

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, the Company aims to achieve a consolidated dividend payout ratio of 35% or more for each fiscal year to further enhance shareholder returns.

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.

May 2025
Hiroshi Geshiro, President and CEO