Financial Results for the
Fiscal Year Ended March 2020
(TSE1: 6294)
Yuji Okada, President and Representative Director

Corporate Profile (As of March 31, 2020)
FoundedJuly 1938 (Established in 1960)

Businesscontent

Manufacture, sale and repair of construction and forestry
machinery

Capital stock

2,221 million yen

442 (Consolidated)

Net sales

17,957 million yen

Business bases(Group total)
2

Head Office (Minato-ku, Osaka)

Number ofemployees

21 in Japan and 5 overseas

Business Bases[Domestic][Overseas]

Okada America

Okada Europe

Thai Representative Office

3

OKADA AIYON

12 basesAIYON TECH

1 baseNansei Machinery Group 10 bases

Okada America

3 bases (headquarters/Oregon)

Okada Europe

1 base (headquarters/Netherlands)

Thai Representative Office (Ayutthaya)Corporate History
2011

1995

1938
Established(Great East Japan Earthquake)(Great Hanshin-Awaji Earthquake)

Changes in net sales
over the past 30 years

2017
M&A ofNansei machine Co., Ltd.

Around 1951
(excavator method)

2016
Listed on TSE1
1992
Listed on the Second Section of the Osaka Securities Exchange

2008
Financial Crisis

Around 1960 (appearance of large air breaker)

The latter half of the 1970s (appearance of the crushing method)
41990

2000

2010

2020

Product application (attachment)- Able to install in excavators of all domestic and overseas manufacturers[① Primary crushers]・ Demolition of the mainpart of the building[② Pulverizers][③ Cutters]

・ Crushing the concrete after
primary crusher

・ Used for cutting rebar and steelframes.

[④ Breaker]
・ Excellent crushing power
・ However, the noise is loud.

5

Product application (environmental machinery)[Middle and low speed
rotary machine]••

6

Crushable large logs
Played active role in disposing of debris after
the Great East Japan Earthquake[High-speed rotary machine]••

Cutting wood into wood chips
Chips are used in biomass power
generation, etc.

Product application (Nansei Machine)

7[Forestry machinery][Cable crane for dam
construction and power plants
and dams]

・ Logging timber in the forest
・ Limbing, pruning and conveying

・ Conveying ready-mixed concrete,materials, etc. on roadless mountainslopesSales composition ratio (Overall)
Nansei

14.2%

OtherGrapples
Repair

5.7%

Hydraulic breakers

15.6%

5.0%
4.6%

35.9%10.3%
Partssales

8.7%
Crushers

8Environment
machineryApr.2019-Mar.2020 Company consolidated sales composition

Markets composition ratio (Nansei)
OtherMerchandise
sales

14.2%
Marinecranes

Cable cranes

25.7%

7.5%

15.2%
Steel recyclingmachineries

97.0%

30.4%
Forestrymachines

2019/4～2020/3 Composition of Nansei Machinery Sales

Overseas sales ratio
Overseas
16.6%

Domestic
69.2%

Nansei
14.2%

10Europe
12%

Asia
14%

North
America72%

Other2%

Product customers (Domestic)
About 70%

About 20%
[Rental companies][Excavator manufacturers](Example)(Example)(Other, regional rentalcompanies)

11

About 10%
Dismantlingbusinessoperator

Major competitors (attachments)[FURUKAWA ROCK DRILL CO.,LTD][Nippon Pneumatic Mfg.Co.,Ltd.][Taguchi Industrial Co., Ltd.][TOKU PNEUMATIC CO.,LTD. ]12

Our strengths
Products must be wear and repairs required→ We are the only company having "in-house" repair crew

RepairUtilize user needs obtained throughrepair service and direct sales indevelopment

Design/Developm
ent

One-stop

Sales
Sales to excavator manufacturers and distributors
Direct sales to end users
We can hear the direct needs

13Manufac
ture
Manufacturing by group companies and subcontractors
Manufacturing ability not constrained by ideas

Product characteristics
Our commitment
Cast steel products are used for theprimary crushers and cutters, which areespecially required for strength in dismantling.

Cast steel products*Cast steel products: made by melting special steel and pouring it intomolds. There are no linkages, and the strength is higher than that ofcanned sheet metal products.
It can be freely formed and has strength in designing.

Canning products --- made by melting steel plates and welding it
Canning products

Cylinder is equipped with a speed increasing valve to achieve bothpower and speed
Use of wedge arms realizes outstanding crushing powerArms do not protrude as they close, and they can be operated in densely
populated residential areas.

14Changes in product share (Tokyo area)
Primary crushers

Pulverizers

Cutters

Breaker49%
12%National average

44%

37%

46%

10%
Tokyo area

1556%

Tokyo area: Tokyo, Saitama, Chiba, Kanagawa

46%

47%
(Prepared by company based on materials published by the Japan Construction Equipment Manufacturers
Association (CEMA) April 2,019 to March 2020)

Performance summary(Million yen)

FY3/20
4Q results

4Q
YoY change
Amount16

FY3/20
ActualFull-year
YoY change
AmountChange (%)

Change (%)

Net sales

5,076

121+2.4

17,95791+0.5

Operatingincome

391

65

+19.9

1,368

▼155

▼10.2

Ordinary
income368

37+11.5

1,347

▼213

▼13.7

Net income

304

60

+24.8884

▼116

▼11.6

Factors for changes in net sales
 In Japan, sales of crushers are affected by decrease in shipment of excavator due to damage from last year's typhoon, which alsoaffected delivery delays. Strong sales of grapples used for wood dismantling and disaster recovery, and sales of wood grinders alsoincreased.
 Overseas, sales increased in North America and Europe, but business sentiment worsened in Asia
(Million yen)
Other

Domestic

Repairs
GrapplesBreaker

31

Environmentalmachinery▲ 253
Crusher

17,866

172,866
'19/3

145

52

OverseasNansei

▲ 76
▲253

299

146
17,957'20/3

Factors for changes operating income Gross profit increased in Japan due to sales growth, and sales increased in the United States and Europe,

where profit margins are high Decrease in Nansei gross profit due to lower sales, increase in other SG&A expenses in Japan and overseas(Million yen)
Increase in overseas
gross profit
Increase in domestic
25
gross profit

95

▲ 121
Decrease inNansei Gross Profit▲ 156

Increase in SG&A expenses

1,524

・ Japan 72 (43)・ Overseas 105(43)・ Nansei ▼ 15 (6)※ Figures inparentheses arelabor costs.

1024

18

1,368

Sales by product category(Million yen)

FY3/1819

FY3/19FY3/20YoY changeAmount

YoYchange (%)

Vs. FY3/18(%)

Breaker943

838

870

31+3.7▼7.7

Crusher

5,875

6,309

6,055

▼253

▼4.0+3.1

Environment
machinery

1,147

1,402

1,549

146

+10.5

+35.0

Gripper

491

591

890

299

+50.5

+81.3

Repair andmaintenance

1,991

2,018

2,164

145

+7.2

+8.7

Other

667

838

890

52

▼6.2

+33.4

Domestic total

11,114

11,996

12,418

421

+3.5

+11.7

Overseas total

2,752

3,061

2,985

▼76

▼2.5

+8.5

Nansei Total

1,532

2,808

2,554

▼253

▼9.0

+66.7

Consolidated total

15,39917,866

17,95791+0.5+16.6

Sales by region(Million yen)
FY3/18

FY3/20YoY changeAmount

YoYchange (%)

Vs. FY3/18(%)

Kyushu

426
1,400
3,701
1,351
1,287
846
1,784

532
1,413
3,924
1,592
1,586
1,086
1,529

446
1,282
3,781
1,613
1,770
1,288
1,703

▼ 86
▼131
▼143
21
184
202
174

▼16
▼9.3
▼3.6
1.3
11.6
18.6
11.4

4.7
▼8.4
2.2
19.4
37.5
52.2
▼4.5

Other (Head Office)

318

329
11,996
3,061
2,808
17,866530
12,4182,985
2,554
17,957

201
421
▼76
▼253
91

61.13.5
▼2.5
▼9.0
0.5

66.7
11.7
8.5
66.7
16.6

Hokkaido
TohokuKanto
Chubu/Hokuriku
Kansai
Chugoku/Shikoku

Domestic total
Overseas total
Nansei Total
Consolidated total
20

FY3/1911,114
2,752
1,532
15,399

Sales by region (overseas)(Million yen)

FY3/1821

FY3/19YoY changeAmountFY3/20

YoYchange (%)

North America

1,812

2,072

2,153

+81

4.0

Asia

683

635

411

▼224

▼35.2

Europe

205

294

361

67

22.8

Other5260

6000

Total overseas
sales

2,752

3,061

2,985

▼76

▼2.5Overseas ratio
(%)

17.9

17.1

16.6

▼0.5-Capital investments(Million yen)

1,200

■ Capital investments■ R&D Expenses■Depreciation and Amortization

1,000
800
600765887817636627

400

509
200

205

267433429374

332

80

71120

172

181

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20[Major Contents] ・ AIYON TECH's

・ AIYON TECH
Capital Investment(559 million yen)・ Construction of
Hokuriku Sales Office(270 million yen)・ Reconstruction of
AIYON TECH
(220 million yen)・ Land for relocation of
Yokohama Sales Office(201 million yen)・ Newly built of Shikoku
Sales Office(276 million yen)

・ Nansei Group’s
goodwill(209 million yen)・ Land for relocation ofShikoku Sales Office(105 million yen)・ Rebuilding of Head Office
Maintenance Factory (94Millionyen)

080

neighboring landand plant(402 million yen)22

Progress of Medium-to Long-Term Management Plan(Million yen)

1st stage results

FY2015FY2017FY2018FY2019Managementplan

FY2020Net sales

12,043

13,113

15,39917,866

17,95720,000Operating income

760

1,106

1,195

1,524

1,368

2,000

Ordinary income

7211,092

1,270

1,560

1,347

Net income attributable toowners of parent

438

696

666

1,000884

Overseas net sales

2,313

2,095

2,752

3,061

2,985

4,000

Overseas sales ratio

19.2%

16.0%

17.9%

17.1%

16.6%

20.0%

TBD

23FY2016

2nd stage results

2,000
1,250

Current effects of COVID-19
Domestic: No effect until April. Alghouth self-restraint trends continue in sales activities, but operations mostly resumed and thenumber of orders for repair remain unchanged.
Overseas: Effects started to appear since March. Asian operations resumed in some regions.
Nansei: Effects on the machinery division started to appear since April. No major problems in the construction division in the fiscalyear, regardress of COVID-19 effect.
[Net sales by business YoY comparison]

Business

Company

DivisionsRegionFY3/20
ratio to sales

Domestic
business

OKADA AIYON

Construction
machinerydivision

Japan

69%

+18%

▼1%+0%

North America

12%

+43%

▼43%

▼43%

Europe2%+51%▼11%▼43%

Asia and Others

3%+124%

▼45%

▼20%

10%

▼19%+4%

▼14%

4%

▼46%

▼3%

▼37%

Overseasbusiness

Nanseibusiness

24

OKADA AIYON

Construction
machinerydivision

Machinery/
Trading division
Nansei Machine

February

MarchAprilJapan
Construction
division

Market size
(Million yen)

25,000Changes in shipments of hydraulic breakers and crushers
Domestic

20,000Overseas

20,524

19,867
18,468(Forecast)
19,70018,89518,052

16,16415,00012,885

13,49910,06810,000

9,069

8,481

8,061
6,322

6,884 7,241

7,115

7,033

2013年

2014年

8,962

9,079

(Forecast)
7,800

7,561

5,000

0

2010年

25

2011年

2012年

2015年

2016年

2017年

2018年

2019年

2020年

(Prepared by us based on data published as of January 14 of the Japan Construction Equipment Manufacturers Association (CEMA)** Impact of COVID-19 not taken into accountDemolition market demand
Age and architectural areas of non-wooden buildings

As of 2020

Area (10,000 ㎡)

Over 40 years

26

Apartment
house

Office/Store

Factories andWarehouses

OtherForestry market demand(10,000 ㎡)■ Wood self-sufficiency rate increased for eighth consecutive year (36.6%)■ Total demand for fuel materials was 15.6% compared to the previous year.

Wood selfsufficiency rate

Imported logs

Imported productsImported fuel materials

Domestic timber27

Forestry Agency's Announcement of the 2018 Timber Supply and Demand Report (Announced on September 27, 2019)

Toward further growth① [Human Resources Strategy] - Aiming to be a company that is “comfortable, motivated, andrewarding” for employees
・ Our business model is highly dependent on the skills of individual employees
Individual capacity enhancement & teamwork enhancement
required◆ Enhancing training and career support◆ Conduct recruitment of personnel (year-round hiring)◆ Review of evaluation and compensation systems in response to changes in workstyles◆ Efforts to reform work styles
・ Efforts for streamlining and labor savings through systemization
・ Maintenance of "Equal Work and Equal Wages" and the principle ofpermanent employment (Ratio of full-time employees: 97.4%)
・ Securing employment until age 70◆ Consider measures to increase motivation to improve job satisfaction
28

Toward further growth② [Market Strategy]
Domestic: Strengthen production and expand sales bases (including maintenance plants)
・ In October 2020, the Yokohama Sales Office was relocated and opened as the Shonan
Sales Office.

Overseas: Establishment of tri-polar structure in North America, Europe, and Asia
・ Planning and introducing strategic products for overseas markets

Nansei: Realize synergies between Okada and Nansei
・ Realize the effects of the integration through group collaboration in terms ofboth sales and manufacturing, improved productivity, and an overhaul of costmanagement(Medium-to Long-Term Issues)
New Businesses: Expand business domains through m&a and capital alliances
introducing new technologies into existing businesses
・ Compatible with new dismantling methods and new technologies such as AI and IOT29

Toward further growth③ [Strengthen the management base]◆ Introduction of integrated core system・ strengthening group collaboration to streamline and standardize operations andunify information◆ Strengthen Corporate Governance・ Study of the effectiveness of the Board of Directors by an external organization
・ Submit proposals for the election of female outside directors to the General Meeting of Shareholders (to increase theratio of outside directors to one-third)
・ Introduction of electronic voting at the General Meeting of Shareholders
・ Establishment of voluntary Nomination and Compensation Committee (June)
・ Enhancement of dialogue with investors (establishment of team in charge of IR, education)◆ Initiatives for SDGs (Next page→)30

Initiatives for SDGs
Dismantling and metal recycling machinery that supports recycling systems in cities[Strengthening national land and reconstruction capabilities]

The life of concrete is said tobe 40 to 50 years. Resilience
requires dismantling

The highway collapsed in the Great
Hanshin Earthquake. Our products
supported the reconstruction.

Separate process of large quantities ofgarbage generated by the Tohoku
Earthquake using wood crushers[Promotion of recycling of concrete, iron, etc.]

31

Efficient sorting without burdening the shovel
body

The attachment of Nansei Machine isplaying an active role in the recyclingof scrap ironSome machinery treats soft waste such as
wood waste, plastic waste, and tires

Initiatives for SDGs
Forestry equipment and cable cranes that contribute to the effective use of domestic mountainous andforestry resources[It is necessary to cut trees in order to protect the forest]

We use winches to haul theharvested timber down fromthe roadless mountainIt can move, cut down, clear branches,and cut down, which helps to eliminate
the labor shortage

We can cut a large, manageable
tree and handle rootstock[Promote woody biomass power generation and hydroelectric power generation]

32

Thinned wood can be chipped and used as raw
material for power generation

Cable cranes play an active role in transporting materials during
construction of dams and power plants

Our power is 100% derived from a solid woodburning biomass power plant

Changes in dividends
10th consecutive year of dividend increases(Yen)3025(%)Cash dividends

40

Dividend payout ratio

35

34.6

30
20

25.6

25.3
22.8

1521.92710222324

28(Plan)

2015
105

500

FY20163325

FY2017FY2018FY2019FY2020Thank you for your attention.
Precautions
The forecasts in this document were prepared basedon the information available at the time of theannouncement of settlement of accounts.
Actual results may differ depending on various
factors in the future.

35