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Copyright THK CO., LTD. 2025. All rights reserved. Supplementary Materials For Financial Results For 1st Half of Fiscal 2025 August 6th 2025 THK CO.,LTD.
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Copyright THK CO., LTD. 2025. All rights reserved. | Ⅰ. Financial Results for 1st Half of Fiscal 2025 ⚫ Financial Highlights P.3 ⚫ Trend in Net Sales P.4 ⚫ Operating Income – Change Factors P.5 – 6 ⚫ Assets, Liabilities and Equity P.7 Ⅱ. Progress of the New Management Policy “Early Realization of ROE of Over 10%” ⚫ Path to "ROE of Over 10%" P.9 ⚫ “Selection and Concentration” in the Automotive & Transportation Business P.10 ⚫ "Structural Reform" of the Industry Machinery Business P.11 ⚫ Profit Increase in the Growth Areas： Machine Component Parts Business P.12 ⚫ Profit Increase in the Growth Areas： Growth of FA Solution Business P.13 ⚫ Balance Sheet Management with Emphasis on Capital Efficiency P.14 ⚫ Continuous evolution of corporate governance P.15 Ⅲ. Financial Forecast for Fiscal 2025 ⚫ Orders Received by Region P.17 ⚫ Financial Forecast P.18 – 19 1 Contents This presentation material contains forward looking statements that reflect the Company’s business plans, performance projections, and management strategy. Such statements are based on information currently available to the Company. However, changes in the operating environment may cause actual results and achievements to differ from those anticipated in this corporate presentation material. Also, please let you know that this presentation material includes reference information that are not exactly accounts indication matters.
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Copyright THK CO., LTD. 2025. All rights reserved. | 2 Ⅰ. Financial Results for 1st Half of Fiscal 2025
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Copyright THK CO., LTD. 2025. All rights reserved. | 3 Financial Highlights Consolidated Revenue Consolidated Operating Income ◼ ¥176.2 billion (-2.0% YoY) The outlook of the global economy remained uncertain amid concerns such as increasing geopolitical risks including the situation in Ukraine and in the Middle East, continuing inflation, and U.S. tariff policy. Despite this situation, revenue increased in the industrial machinery business due to the recovery in demand mainly in U.S. and China. In the automotive & transportation business, demand remained largely unchanged after the drop in automobile production in the second half of the previous year. ◼ ¥6.1 billion (-26.4% YoY) In the industrial machinery business, despite the increased revenue, operating income declined due to various unfavorable factors including deterioration of sales mix, hike in various costs, and stronger yen as compared a year earlier. In the automotive & transportation business, profit declined due mainly to the negative impact of volume effects on decreased revenue. In addition, profit declined due to costs incurred associated with the structural reform under the new management policy. ◼ Although revenue exceeded the initial plan, operating income fell short. Revenue exceeded the initial plan by ¥2.9 billion because THK captured the recovering demand in the industrial machinery business, and the yen was weaker than expected. However, operating income fell short by ¥0.8 billion mainly due to the increase in U.S. import tariffs. Key Point
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Copyright THK CO., LTD. 2025. All rights reserved. | 4 Trend in Net Sales 57,215 51,524 51,799 54,892 51,061 44,117 44,266 49,472 41,738 43,357 36,668 33,171 36,431 29,959 33,426 34,148 25,771 30,254 32,787 35,742 13,443 11,612 11,893 13,529 12,658 ※地域別売上高は *Geographic sales is based on where our customers are located. *Growth rate by industry is based on the figures in local currency from January to June. *Growth rate for Automotive & Transportation was calculated based on the sum of net sales of THK RHYTHM and TRA. 1H 2H 1H 2H 1H 2023/12 2024/12 2025/12 1US$ 134.87 146.17 152.21 150.74 148.41 1EUR 145.79 158.12 164.51 163.12 162.14 1CNY 19.47 20.20 21.09 20.99 20.46 Asia and other Regional Sales and Growth Rates by Industry China Europe The Americas Japan Y/Y +6.4% ⚫ Machine tools ⚫ General Machinery ⚫ Electronics ⚫ Automotive & Transportation -23.3％ -23.3％ -4.6％ -19.7％ -8.4％ ⚫ Machine tools ⚫ General Machinery ⚫ Electronics ⚫ Automotive & Transportation -7.9％ -0.7％ +1.8％ -13.3％ ⚫ Machine tools ⚫ General Machinery ⚫ Electronics ⚫ Automotive & Transportation +12.9％ +31.2％ -21.1％ -0.9 ％ ⚫ Machine tools ⚫ General Machinery ⚫ Electronics ⚫ Automotive & Transportation +24.7％ +33.3％ +17.1％ -8.0％ ⚫ Taiwan ⚫ Singapore ⚫ India +68.4％ +32.8％ -0.8％ Y/Y +18.1% Y/Y -8.2% Y/Y -12.4% Y/Y -1.4% Exchange rate 172,908 185,593 166,345 179,851 176,246
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Copyright THK CO., LTD. 2025. All rights reserved. | 5 (Ref.) Operating Income – Change Factors –(1/2) -1.2 -2.3 -0.5 -1.5 3.9 7.8 6.2 Industrial Machinery FY2024_1H FY2025_1H-1.6 billions of yen Effect due to Increased SalesOther income and other expense Change in Variable Cost Ratio Increase in Fixed Cost Foreign Exchange Rate Difference Billions of yen Billions of yen FY2024 FY2025 1H 2H 1H Revenue 105.5 111.1 110.6 Operating Income 7.8 9.0 6.2
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Copyright THK CO., LTD. 2025. All rights reserved. | 6 (Ref.) Operating Income – Change Factors –(2/2) -2.2 -0.1 2.2 0.10.6 -0.6 0 Automotive & Transportation FY2024_1H FY2025_1H-0.6 billions of yen Effect due to Decreased Sales Other income and other expense Change in Variable Cost Ratio Foreign Exchange Rate Difference Billions of yen Decrease in Fixed Cost Billions of yen FY2024 FY2025 1H 2H 1H Revenue 74.3 61.8 65.6 Operating Income 0.6 0 0
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Copyright THK CO., LTD. 2025. All rights reserved. | 7 Assets, Liabilities and Equity Changes in Balance Sheet 230,523 326,906 284,987 188,604 Liabilities Up ¥10,981 million from previous period ◼ Profit Attributable to Owners of the Parent ◼ Dividends Paid ◼ Increase in treasury stock ◼ Foreign Currency Translation Adjustments ◼ Property, Plant and Equipment CAPEX Depreciation ◼ Goodwill and intangible assets ◼ Current liabilities Trade and other payables Number of months’ notes payable Bonds and borrowings Income taxes payable ◼ Non-current liabilities Up 14,383 Down 1,407 Previous period 1.0months This period 0.9months Up 14,630 Down 603 Down 3,401 Current assets Down ¥41,817 million from previous period Equity Down ¥62,888 million from previous period Non-current assets Down ¥10,090 million from previous period 3,727 15,595 35,456 Down 12,756 Down 7,772 9,093 10,466 Down 1,107 ◼ Cash and Cash in Account Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Foreign Currency Translation Adjustments on Cash and Cash Equivalents ◼ Trade and other receivables Number of months’ sales receivables ◼ Inventories Number of months’ sales in inventory Down 36,766 20,302 (8,967) (42,169) (5,932) Down 660 Previous period 2.8months This period 2.8months Down 4,752 Previous period 3.1months This period 3.0months Total Assets 515,511 millions of yen Down ¥51,907 million from previous period Millions of yen Total number and price of shares acquired (as of March 6, 2025) (1) Total number of shares acquired: 10,757,100 shares (2) Total price of shares acquired: 39,999,945,978 yen
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Copyright THK CO., LTD. 2025. All rights reserved. | 8 Ⅱ. Progress of the New Management Policy “Early Realization of ROE of Over 10%”
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Copyright THK CO., LTD. 2025. All rights reserved. | 9 2.8％ Over 10％ Shareholder Return • Dividend policy：DOE 8％ + Flexible acquisition of treasury shares FY2025 Forecast ¥17.3 billion ¥383.6 billion Operating IncomeEquity Capital Structural Reform Period (FY2025～26) Growth Stage (FY2027～29) R O E ¥300.0 billion ＋α Stable Growth Stage (FY2030～) Over ¥40.0 billion operating income required to achieve net profit of ¥30.0 billion Current (FY2024) FY2024 Actual +α Achieve operating income of ¥40.0 billion, which is required for ROE of over 10%, through self-help reforms Potential for further ROE improvement through M&A and other additional factors Shareholder Return Provide appropriate shareholder returns in light of equity capital "Selection and Concentration" in the Automotive & Transportation • Revision of business without sanctuary Capital Policy (Streamlining Balance Sheets) • Reduce cash and bank deposits to net neutral level promptly • Tolerate net debt levels of 1-2x EBITDA (in the mid- to long-term) Set the level of required equity capital at around ¥300.0 billion for the time being Increased Profit in the Growth Areas：+α • Investments in Growth and M&A activities 1 3 4 Evolution of Corporate Governance • Deepen the monitoring system ５ Further investment in growth and continuous growth to increase profits Maintaining appropriate level of equity capital Targets set based on the assumption of maintaining and improving from over 10% FY2027～29 Target Path to "ROE of Over 10%" ¥23.5 billion "Structural Reform" of the Industry Machinery Business： Over ¥20.0 billion • Establishment of a stable, highly profitable structure 2
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Copyright THK CO., LTD. 2025. All rights reserved. | 10 "Selection and Concentration" in the Automotive & Transportation Business1 2017 2018 Recovery plans initiated 2019 Impairment losses recorded Impairment losses recorded “Selection and concentration” announced Background to Date 2020 2021 2022 2023 2024 2025 2026 OperatingLossTurnaroundStructural Reform Actions Reliable execution based on the policy of “Without ruling out any options or possibilities” ImplementedInProgressInProgress THK RHYTHM MALAYSIA Sdn. Bhd. Production activities discontinued Scheduled to be completed by the end of August 2025 Partial closure of production sites in Canada Product consolidation at production sites in China Scheduled to be completed by the end of 2025 (Current progress: 25%) – Transferring all iron-product production lines from THK RHYTHM (GUANGZHOU) CO., LTD. to THK RHYTHM (CHANGZHOU) CO., LTD. ✓ Closely examine cost of capital (WACC) and return on invested capital (ROIC) now and in the future Key Points of Structural Reform without Sanctuary “Selection and concentration” executed
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Copyright THK CO., LTD. 2025. All rights reserved. | 11 "Structural Reform" of the Industry Machinery Business2 Initiatives to Achieve Operating Income Exceeding ¥40.0 billion ＝ Various initiatives implemented with the support of external experts under the ROE10 Project From the February 2025 Release: Initiatives to Achieve Operating Income Exceeding ¥ 40.0 billion 【Each Location】 Forming WGs and reviewing improvement measures based on functions and objectives Working Group (WG) Formation The corporate planning department takes the lead in managing the progress of improvement activities and considering improvement measures Monitoring and PDCA Implementation The President explains the significance of the ROE 10 Project to employees at factories and overseas bases himself Enlightenment Activities Major measures These initiatives are expected to materialize in the second half of FY2025 and beyond
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Copyright THK CO., LTD. 2025. All rights reserved. | 12 Profit Increase in the Growth Areas： Machine Component Parts Business Accelerating the cycle of “Create, Produce, and Sell” 3 Development based on needs-based planning enabled by organizational changes. Strengthen and deepen the task forces for 7 priority areas Strengthening the Task Forces From the February 2025 Release: Machine Component Parts Business Create a system that identifies and reflects needs in cutting-edge global fields Identifying Needs 1. Re-design the development-item review and priority-determination method 2. Enrich the prototype processing (productization) environment Aim to reduce development time by one-third with these measures Shortening development time Maximize profits by rapidly repeating the cycle of “Create, Produce, and Sell.”
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Copyright THK CO., LTD. 2025. All rights reserved. | 13 ■Provide high value-added products and solution services by combining three elements 1.Machine Element Parts （Mechanical） 2. Mechatronics Modules 3. IoT・AI ・LM Guide etc. ・Actuators ・Modules ・OMNIedge Addresses the needs of a wider range of machine users in addition machine builders Expected Market Machine users （Production technologies・ Sier） Maximization of Added Values Machine builders Profit Increase in the Growth Areas： Growth of FA Solution Business Committed to contributing to “Innovation in manufacturing,” achieving sustainable growth even in this age of cutting-edge technology 3 Process Automation Versatile Transport System VTS Actuators for Automation Process-Optimizing Robot PPR series Electric Actuator Transportation Between Processes Autonomous transfer robot SIGNAS Mechatronics Modules Lineup IoT Solution（OMNIedge) Lineup ◼ Condition Monitoring AI Solution ✓Linear Motion Components ✓Rotary Components ◼ Monitoring AI Solution for Cutting Tools ◼ Skill Management AI Solution ◼ Maintenance Integrated Management System ◼ GX Solution ※ Visualizing Factory-Wide Energy Use ■Supporting "Manufacturing Site Innovation" for factory production automation and advancement
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Copyright THK CO., LTD. 2025. All rights reserved. | 14 Steadily reduce equity capital through purchasing treasury shares and proactive shareholder returns Balance Sheet Management with Emphasis on Capital Efficiency As of December 2024 Total Assets ¥567.4 billion Capital Policy ４ ✓ Acquisition of treasury shares of approx. ¥40 billion, announced on November 12, 2024, has been completed Total number and price of shares acquired (as of March 6, 2025) (1) Total number of shares acquired: 10,757,100 shares (2) Total price of shares acquired: 39,999,945,978 yen In FY2025, approx. ¥36 billion of treasury stock was acquired Equity capital reduced by ¥60.5 billion from December 20241 Continue the dividend policy of 8% DOE2 3 Reduction 5 Increase interest-bearing liabilities by ¥11.4 billion Continue the policy to tolerate net debt levels of 1-2x EBITDA Increase As of June 2025 Total Assets ¥515.5 billion 4 Reduction Equity Capital ¥383.6 billion Interest-Bearing Liabilities ¥96.5 billion Cash and Bank Deposits ¥138.2 billion Cash and Bank Deposits ¥101.5 billion Interest-Bearing Liabilities ¥108.0 billion Equity Capital ¥323.0 billion Reduce the balance sheet amount by ¥51.9 billion Cash and deposits decreased by ¥36.7 billion due to the acquisition of treasury shares and shareholder returns.
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Copyright THK CO., LTD. 2025. All rights reserved. | 15 Continuous evolution of corporate governance Evolution of corporate governance 5 Clarify the roles of supervision and execution, and continually reinforce both functions External directors Female directors Organizational Structure Operation of Board of Directors 2010～ 2012～ 2016～ 2014 2015 2022～ … 2024 2025 16 16 8 9 11 12… 0 1 2 2 4 5… 0 0 0 0 0 1… 12 11 5 5 1 2 ◼ Conducted third-party interview- based effectiveness evaluation ◼ Appoint Outside Directors as the Chairpersons of the Nomination Advisory Committee and the Compensation Advisory Committee FY2024 ◼ Revision of the skill matrix of directors ◼ Improve the director compensation system ◼ Revision of the personnel evaluation ◼ Formulation of a CEO succession plan FY2025 (in progress) Company with Advisory & Supervisory Committee Executive officer system introduced Third-party effectiveness evaluation Company with Advisory & Supervisory Board Total number of directors Continue and maintain strengthening measures without pausing the evolution of governance Appoint Outside Directors as the Chairpersons of the Nomination Advisory Committee and the Compensation Advisory Committee
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Copyright THK CO., LTD. 2025. All rights reserved. | 16 Ⅲ. Financial Forecast for Fiscal 2025
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Copyright THK CO., LTD. 2025. All rights reserved. | 17 Orders Received by Region Industrial Machinery THK Japan*1,2 THK America, Inc.*2 THK Europe*2 THK (CHINA) CO., LTD. + THK (SHANGHAI)*2 THK TAIWAN*2 *1 : exclude export *2 : % Change, THK Japan: Billions of YEN THK America, Inc. Millions of USD THK Europe Millions of EUR THK (CHINA) CO., LTD. + THK (SHANGHAI) Millions of RMB THK TAIWAN Millions of NTD 18.4 18.0 18.5 19.2 19.8 22.1 22.4 21.3 19.9 22.0 (43.7) (41.5) (32.7) (15.2) 7.7 22.7 21.1 11.0 0.9 (0.6) 0 10 20 30 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2023 2024 2025 38 34 34 32 42 42 46 44 49 49 (40.2) (39.2) (40.6) (20.0) 12.2 24.9 36.8 39.1 15.1 16.8 0 20 40 60 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2023 2024 2025 39 29 30 29 31 29 27 26 32 33 (28.2) (40.1) (8.0) (15.8) (21.2) (0.1) (8.6) (9.5) 4.1 12.0 0 10 20 30 40 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2023 2024 2025 565 523 365 499 655 895 602 625 963 1,214 (43.6) (45.9) (44.2) 4.5 15.9 71.0 65.2 25.4 47.0 35.7 0 400 800 1,200 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2023 2024 2025 178 191 166 168 201 185 267 324 323 309 (64.8) (39.3) (22.8) 3.9 12.8 (2.9) 60.7 92.8 60.5 66.7 0 100 200 300 400 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2023 2024 2025
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Copyright THK CO., LTD. 2025. All rights reserved. | 18 Financial Forecast (Consolidated) Consolidated （Millions of Yen） 2025/12 2024/12 FY Forecast 1H Results Results Revenue 363,500 176,246 352,759 Y/Y +3.0％ -2.0％ +0.2％ Operating Income 23,500 6,181 17,349 Y/Y +35.5％ -26.4％ -26.8％ Income before income taxes 24,500 6,643 18,782 Y/Y +30.4％ -34.1％ -25.7％ Profit Attributable to Owners of the Parent 18,000 3,727 10,439 Y/Y +72.4％ -48.3％ -43.3％
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Copyright THK CO., LTD. 2025. All rights reserved. | 19 Financial Forecast (Unconsolidated) Unconsolidated （Millions of Yen） 2025/12 2024/12 FY Forecast 1H Results Results Net Sales 150,000 67,923 144,737 Y/Y +3.6％ +0.5％ +0.4％ Japan 95,000 41,393 88,405 Y/Y +7.5％ -2.4％ -0.8％ Operating Income 2,800 223 4,121 Y/Y -32.1％ -85.5％ -42.3％ Ordinary Income 36,600 33,012 18,020 Y/Y +103.1％ +259.7％ +13.3％ Net Income 35,800 32,525 15,495 Y/Y +131.0％ ＋293.9％ ＋18.9％
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Copyright THK CO., LTD. 2025. All rights reserved. | 20 【Support Statement】 Trends in COGS and SG&A 13,586 13,973 14,967 15,025 15,520 1,998 2,124 2,183 2,298 2,286 3,225 2,384 2,805 3,238 2,950 2,841 2,848 2,943 3,550 3,102 8,262 7,712 9,525 8,100 8,973 COGS ratio SG&A ratio Sales-cost ratio decreased by 0.2 points Y/Y COGS SG&A SG&A ratio increased by 0.6 points Y/Y Millions of Yen Other R&D Packing and transportation expense Depreciation and Amortization Personnel Costs 140,300 130,008 139,975 131,000 136,817 75.6% 78.2% 77.8% 75.8% 77.6% Millions of Yen 1H 2H 1H 2H 1H 2023/12 2024/12 2025/12 16.1% 17.5% 18.0% 18.6% 18.6% 29,915 29,043 32,425 32,213 1H 2H 1H 2H 1H 2023/12 2024/12 2025/12 32,833
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Copyright THK CO., LTD. 2025. All rights reserved. | 21 【Support Statement】 － Trends in Orders, Sales and Backlog(Japan – Unconsolidated) – 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2018 2019 2020 2021 2022 2023 2024 2025 Orders 42,223 32,488 25,037 17,808 15,514 14,293 14,221 14,626 16,835 15,225 14,617 19,416 25,314 32,243 34,127 34,376 32,626 30,777 27,446 22,609 18,361 18,018 18,481 19,174 19,768 22,109 22,374 21,289 19,936 21,974 Sales 29,568 33,286 31,114 32,930 26,571 24,851 21,186 20,190 17,511 17,687 15,501 19,118 20,881 24,715 25,427 28,612 28,236 30,817 28,789 29,729 25,468 22,661 19,577 21,413 20,028 22,387 22,048 23,941 20,703 20,689 Backlog 72,886 72,087 66,010 50,888 39,831 29,273 22,307 16,744 16,067 13,605 12,722 13,020 17,453 24,981 33,681 39,444 43,835 43,794 42,451 35,331 28,224 23,581 22,484 20,245 19,984 19,706 20,032 17,380 16,613 17,898 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Orders Sales Backlog （millions of yen）
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Copyright THK CO., LTD. 2025. All rights reserved. | 22 【Support Statement】 –Trends in Orders Classified by Industry (Unconsolidated)– 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 7-9 10-12 1-3 4-6 2018 2019 2020 2021 2022 2023 2024 2025 Machine Tool 5,976 5,534 4,139 2,489 1,737 1,355 1,324 1,138 1,260 1,350 1,301 2,217 3,123 4,659 4,373 4,515 4,539 3,933 4,033 3,125 2,336 2,085 1,977 1,969 2,238 2,532 2,774 2,641 2,627 2,797 General Machinery 7,193 6,021 5,130 3,391 2,485 2,287 2,431 2,482 3,024 2,659 2,891 3,706 5,249 6,175 6,915 6,587 6,210 5,458 4,812 3,313 2,783 2,547 2,489 2,675 3,036 3,518 3,769 3,533 3,886 4,347 Electronics 8,967 5,425 4,575 2,618 2,793 2,717 2,542 2,950 4,601 4,067 3,369 4,472 5,337 7,230 8,739 8,956 7,773 7,762 7,198 5,553 4,290 4,597 4,497 5,388 5,226 5,436 5,166 5,093 4,043 4,660 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Machine Tool General Machinery Electronics （millions of yen）