To Daifuku’s Shareholders and Investors

To Daifuku's Shareholders and Investors

We would like to begin this message by expressing gratitude to our shareholders and investors for their ongoing support.

1. Operating and financial review

During the first three quarters of the fiscal year (the period from April 1, 2020 to December 31, 2020), the global economy still remained sluggish, reflecting the impact from the COVID-19 pandemic. Japan and other countries did at one point see a resumption of economic activity; however, the outlook remains uncertain given the continued increase in the number of infected people and the uncertain timing of the end of the pandemic.

Amid these economic and business conditions, during the first half orders at the Daifuku Group reflected delays in negotiations with customers, mainly due to restrictions on international/domestic movements and working at the office. Orders during the third quarter bounced back from the second quarter, to a new record high for a three-month period (149,454 million yen). Sales were favorable, underpinned by an extensive order backlog, even amid the pandemic.

Specifically, the Group received orders of 338,763 million yen, up 0.2% from the previous fiscal year and recorded sales of 346,770 million yen, up 8.8%.

Income remained favorable, driven by the increased sales of intralogistics systems for manufacturers and distributors in Japan.

Consequently, the Group posted operating income of 30,067 million yen, up 4.0% from the previous fiscal year, and ordinary income of 30,937 million yen, up 4.8%. Net income attributable to shareholders of the parent company was 22,084 million yen, up 1.3%.

2. Outlook for the fiscal year ending March 31, 2021

The earnings forecast for the fiscal year ending March 31, 2021 is as follows:

The earnings forecast for the fiscal year ending March 31, 2021 (April 1, 2020 - March 31, 2021)
FY2019 FY2020 (Forecast) Rate of change
Orders received 483.1 billion yen 460.0 billion yen down 4.8%
Net sales 443.6 billion yen 470.0 billion yen up 5.9%
Operating income 40.4 billion yen 42.5 billion yen up 4.9%
Ordinary income 40.9 billion yen 43.2 billion yen up 5.4%
Net income attributable to shareholders of the parent company 28.0 billion yen 31.0 billion yen up 10.5%

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.

3. Basic policy for dividends

Daifuku regards 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, with the aim of achieving additional profit distribution to shareholders. We appropriate the remaining surplus to internal reserves for future growth.

Under its four-year medium-term business plan, Value Innovation 2020, Daifuku aims to achieve a dividend payout ratio of 30% and increase its corporate value through investment in growth.

The Company decided its interim dividend for the fiscal year ending March 31, 2021 to 30 yen per share, based on a resolution made at the Board of Directors meeting held on November 6, 2020. The Company plans to pay a year-end dividend of 45 yen per share, for an annual dividend of 75 yen per share.

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

February 2021
Hiroshi Geshiro, President and CEO