To our shareholders and investors

1. Operating and financial review

During the first quarter of the fiscal year (from April 1, 2024 to June 30, 2024), the global economy generally remained favorable, despite downside risks associated with continued high interest rate levels in the West and the sluggish Chinese economy.

In terms of the business environment surrounding the Daifuku Group, while e-commerce-related investment in North America and Japan is in a temporary stagnation phase in the distribution sector, investment in the manufacturing sector has been active. In the semiconductor industry, legacy semiconductor investment in China continues at a high level, while logic and memory semiconductor investment, which had been weak, is on the road to recovery. In the automotive industry, investment in xEVs (a generic term for electric vehicles, including BEVs, HEVs, PHEVs, and FCEVs) continues at a high level. In addition, investment in automation at airports has grown in line with the recovery in the number of air passengers.

In this economic and business environment, during the first quarter of the fiscal year, orders for intralogistics systems from manufacturers and distributors, cleanroom systems from the semiconductor and flat-panel display sectors, and airport systems remained strong; however, orders for automotive systems were almost on a par with the same period of the previous year.

Sales increased in intralogistics systems, cleanroom systems, and airport systems, which benefited from an extensive order backlog at the end of the previous fiscal year, while sales declined slightly in automotive systems.

Specifically, the Group received orders of 183,646 million yen, up 41.2% from the same period of the previous fiscal year, and recorded sales of 145,091 million yen, up 7.8%.

Income increased significantly in all business areas, mainly reflecting drastically improved profitability in cleanroom systems due to the increased number of highly profitable projects combined with cost reduction efforts, as well as progress in revising prices to keep pace with higher costs in line with soaring raw material and labor expenses.

Consequently, the Group posted operating income of 16,404 million yen, up 99.6% from the same period of the previous fiscal year, and ordinary income of 17,604 million yen, up 87.1%. Net income attributable to shareholders of the parent company was 12,874 million yen, up 79.3%.

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 March 31, 2024

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 ending December 2024 will be a 9-month period in Japan and a 12-month period outside of Japan. In the table above, "Year ending December 2024 forecast" reflects results for 9 months in Japan and 12 months outside of Japan, and "Year ending December 2024 forecast (Japan: 12 months)" is calculated assuming a 12-month period in and outside of Japan.

3. Basic policy for dividends

We regard the return of profits to shareholders as its most important management task and has adopted a performance-based policy for cash dividends based on consolidated net income. We will appropriate the remaining surplus to invest for future growth.

Under the four-year business plan for 2027, we have increased the target of consolidated dividend payout ratio to 35% or more for each year to enhance shareholder returns.

With respect to dividends for the fiscal year ending December 31, 2024, the Company has announced on May 10, 2024, a Q2-end dividend of 19 yen per share and a year-end dividend of 18 yen per share. However, as announced on August 8, 2024, considering the favorable progress in Daifuku Group’s performance, especially in terms of profits, the Company has decided to increase its dividends to Q2-end dividend of 20 yen per share and a year-end dividend of 20 yen per share, for an annual dividend of 40 yen per share. Accordingly, the consolidated dividend payout ratio for the fiscal year ending December 31, 2024 is expected to be 35.3%.

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

August 2024
Hiroshi Geshiro, President and CEO