April 1, 2020 – March 31, 2023

DAIHATSU DIESEL MFG. CO., LTD.

Review of the Current Mid-term Management Plan (FY2016-FY2020)

2015 Mid-term Management Plan Results

2

Issues

Results and Issues

Despite the establishment of a growth platform, including the introduction of large-scale engines and dual-fuel engines and the establishment of a production system, we failed to meet our targets due to the absence of a full-fledged recovery of demand for new shipbuilding.

Summary

System integrator

Hyundai Heavy

Industries

13%CSSC

11%

Daewoo

Shipbuilding &

Marine

Engineering

8%Imabari

Shipbuilding

8%CSIC

6%Yangzijiang

Shipbuilding6%

JMU4%

Kawasaki Heavy

Industries

4%

Samsung Heavy

Industries

3%Tsuneishi

Shipbuilding

3%

Other

34%

2020 Mid-term Management Plan The Environment Surrounding the Company

・Shift to large scale through integration/affiliation among shipyards in Japan, China, and South Korea

・Flow of domestic systems integration integration and standardization of industry platform・Steps toward further tightening environmental regulations, and the next-generation technology

that supports this

Background

3

Construction share by Group Flow of domestic systems integration

Source：Clarksons

1st Hyundai Heavy Industries(South Korea) Daewoo Shipbuilding & Marine Engineering 21%

2nd CSSC 17％(China) CSIC

3rd Imabari Shipbuilding 12％(Japan) JMU

The Company

Marine cargo

Shipbuilding

Orders Design Procurement

Construction

(Conventional domestic maritime industry structure)

(European-style massive system integrator structure)

The Company

Marine cargo

Shipbuilding

Orders Basic designProcurement

Detailed design

Construction

Common specifications

2020 Mid-term Management Plan Targets

4

2020 Mid-term Management Plan(Consolidated Targets for FY2023)

Net sales ¥75.0 billion

Operating margin 10％

Equity ratio 50％

ROE 10％

Payout ratio 30％

V

i

s

i

o

n

１ ２

３ ４

Expand Sales Domains and Increase our Share Strategically by Introducing New Products to the Market

Proposals to broaden the functions of environmentally-friendly andinfrastructure-related productsReorganize shipyards worldwide, and strengthen sales structure in line with integrationand standardization of industry platformStrengthen collaboration with licensees, and deepen relationships with shipyards in China and Japan

5

１

Sales strategy for marine-use engines

Sales strategy for land-use engines

・Momentum for nationwide standardization and commonization of specifications to strengthen competitiveness

・Deepen relationships with major shipyards

・Respond to environmental issues in China

・Large-scale floods and earthquakes in recent years

・Aging social infrastructure

Image of remote monitoring system

・Accelerated shift to large-scale engines in line with advancing environmental regulations

Switch to proposal-based sales with standardized designs

Provide speed and added value in collaboration with licensees

Sales aggressively against the backdrop of product lineup and efficient production at Himeji Factory

Determine when and where to repair facilities using the

Company’s IoT technologyNumber of container ships built

(Source: Clarkson)

Further efficiency improvements and cost reductions through standardization and commonization

…design efficiency, streamlining of material costs, procurement management costs, and logistics costs between Moriyama and Himeji

Reduction of lead-time and stabilization of procurement by renewing and standardizing methods of process time management

Standardization

Commonization

Improve Production Efficiency through Synergic Effects among Group Production Bases

6

２

Issue

reso

lutio

n

Special drawings

Increased costs for missing items

Prolonged lead time

Increased inventory

Missing parts

Short-delivery order

World-class Technology Developmentwith a View to the Next-generation Energy

World-class technological capabilities：Fuel-economy technology with diesel, dual fuel and gas engines

Next–generation technology : Combustion technology：LNG, LPG, Hydrogen, Ammonia

：IoT technology：Engine condition monitoring, Sensor development, Factory IoT

Emission standards

2008

Average fuel consumption* 40% improvement

2030

*Emissions per unit of transportation

Total emissions 50% reduction

2050

GHG Zero emissions

2100

IMOGHG

regulations

7

３

Diesel engines LPG reformersGas engines

Establish a Solid Earnings Base with an Awareness of ESG

Accelerate in-house manufacturing of key devices

ESG management: Social contribution through products, SDGs, biodiversity, sustainable manufacturing,

work-style reforms

Utilization of marine transportation

8

４

Shipped throughout the world from adjacent berths (Himeji Factory)

Dual-fuel engine

Certified SHIGA Low-Carbon Brand 2019

Solar power generation/Electricity recovery system

Globally-bound shipments

2020 Mid-term Management Plan Targets

9

Net sales ¥75.0 billion

Operatingmargin

10％

Equity ratio 50％

ROE 10％

Payout ratio 30％

2020 Mid-term Management PlanTargets

(Consolidated Targets for FY2023)

DAIHATSU DIESEL MFG. CO., LTD.

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