Corporate Presentation Materials(TSE First Section: 6294)

Toshiyuki Kanda, PresidentCorporate Profile
Company nameOKADA AIYON Corporation (As of the end FY3/18)

FoundedJuly 1938 (incorporated : 1960)

Head office

4-1-18 Kaigan-dori, Minato-ku, Osaka-shi, Osaka

Market Listed

Tokyo Stock Exchange 1st section (6294)

Capital stock

2,221 million yen

Net sales

15,399 million yen

Business content

Manufacture, sale and repair of construction and forestry
machinery

Number ofemployees

430 (As of September 2018)

Fiscal year end

March 31

Total number ofshares outstanding

8,378,700 shares
2Main products
Demolition attachment(to be on Excavators)

PrimaryCrushers

Cutters

Environmental machinery(Wood grinders andforestry machinery)

Pulverizers

Wood Hog

Hydraulic breakers

Log
GrapplesBig-Bass

Cable crane fordam construction 3

Business Overview<Manufacturing and Procurement> <Development, sales, and repair>[Overseas sales Network]
・ Overseas dealers
・ U.S. subsidiary[Manufacturing subsidiary]
AIYON TECH

Okada America[Subcontract factory][Domestic sales channels]
・Excavator manufacturers
・Rental companies
・End users

Nansei Group
Nansei machineCo., Ltd.

Nansei Wintech Co., Ltd.

Akatsuki Kikou Co., Ltd.

4

Domestic Business Bases
OKADA AIYON (12 bases)
AIYON TECH (1 base)Nansei Machinery Group(10 bases)

5Overseas Business Network<Map of North America>

Okada America
Head Office

Ohio Branch<Enlarged view ofEurope>

Amsterdam

Texas Branch

Rotterdam

Netherlands
Belgium

Germany6

Overseas Sales Ratio (FY3/19 2Q)
Overseas

19.7%

North
America
68%

Europe8%
Domestic

65.4%

Asia
21%
Oceania2%SouthAmerica
1%

Nansei

14.9%

Overseas Business
Domestic Business
Nansei Group7

Our Strengths

Development
ManufacturingOne-stop handlingcapability
After
SupportSales8

FY3/19 2Q Consolidated Results (Summary)*Figures in parentheses represent YoY comparison

Consolidated net sales was 8,773 million yen (+30.1%)
Ordinary income was 917 million (+29.2%)[Domestic] Sales of crushers with strong demand for redevelopment andrebuilding, and sales of environment-related machinery, etc., whichhave had less impact on exhaust gas regulations, increased.
Sales 5,736 million yen (+10.0%)[Overseas] Against the backdrop of robust overseas demand, sales in North
America, Asia and Europe increased.
Sales 1,728 million yen (+13.3%)[Nansei] Mainly sold forestry machines, steel scrap machines and cable cranes
Sales 1,308 million yen

9Changes in Net Sales (Past 5 Years)

Million yen

Sales growth

20,00015,00017,500
Plan

Steady growth in sales ofcrushers and other machines
13,113

12,043

11,943

15,3998,773

10,000Result

5,707

6,121

6,279

6,742
Record-high

5,000

0'15

'16'172Q'18
Full year'19
10Factors for Changes in Net Sales at FY3/19 2Q
In Japan, in addition to continued strong sales of mainstay crushers,
increased sales of environmental equipment due to the decrease in the impact of
exhaust gas regulations, contributed to the sales growth.
Overseas sales increased as a whole, mainly in North America, Asia and Europe.
(Millions of yen)Overseas

Domestic

Nansei

Nansei

1,308
GrapplesCrushers

334

6,742

'3/18
2Q
3,742

Breakers

Environmentalmachinery

216

19

OthersOverseas

49

202

8,773

▲47
Auxiliarymaterials/repair▲ 52

FY3/192Q

11Changes in Ordinary Income (Past 5 Years)
Million yen

Profit growth

1,500
Plan1,500

Profits steadily grew in line with sales growth 1,270

1,092
917

947

1,000

Result721
555

562

710

Record-high545

500

0'15'16'172Q'18'19Full year
12Factors for Changes in Ordinary Income in FY3/19 2Q
Gross profit in Japan and overseas increased due to higher sales.
SG&A expenses increased in Nansei-related business(Million yen)

Nansei
Gross Profit

Other402
Overseas
Domestic gross profit
gross profit

81149

710
FY3/182Q
710

・ Foreign exchange gain
・ Sale of fixed assets, etc.

▲449

24

Increase of SG&A
expenses(including Nansei:325)

917
FY3/192Q

13

Main Products and Domestic Market Shares (FY3/19 2Q)

Primary crushers

Pulverizers

Cutters

Hydraulic breakers

13%

46%

43%

49%

Prepared by our Company based on the Japan Construction Equipment Manufacturers Association’s
presentation materials (April 2018 – September 2018 total)

14

Tokyo Area Main Products and Domestic Market Shares (FY3/19 2Q)
Primary crushers

Domestic market
national average

46%

Tokyo area

56%

Pulverizers

43%

46%

Cutters49%

53%

Prepared by our Company based on the Japan Construction Equipment Manufacturers Association’s presentation materials (April 2018 – September 2018 total)
Tokyo area: Tokyo, Saitama, Chiba, Kanagawa

15

Sales Composition Ratio (FY3/19 2Q)

OtherGrapples

Nansei

14.9%

4.6%

3.1%

Hydraulic breakers

18.8%

Repair 4.3%
Parts sales

Crushers

9.5%
Environmental-related equipment

36.3%

8.5%

*Our sales composition from April 2018 to September 201816

Sales Composition Ratio (FY3/19 2Q)
Akatsuki Kikou Co., Ltd.

Unit (%)

Sales of machine materials andvarious devices
Nansei machine Co., Ltd.

Construction and others

Forestrymachines

14.830.013.6
Nansei Wintech Co., Ltd.

Cable cranes

Steel recyclingmachines

12.1

9.8
CranesSpecial large winches
Others

6.7 4.5* Nansei Machine Group sales composition from April 2018 to September 2018

8.5
17

Sales by Product Category (by Segment) (2Q)
(Million yen)

FY3/172Q

FY3/182Q

Vs. two fiscal
years before

YoY change

FY3/192Q

AmountChange (%)

Change (%)

Breaker

319

448

396

▲ 52

▲ 11.624.1

Crusher

2,503

2,726

3,060

334

12.3

22.3

Environmental
machinery847

489705216

44.3▲ 16.8Grapple257251270197.6

5.1

Auxiliarymaterials/repair

913

1,001954

▲ 47

▲ 4.7

4.5

Other309

301

351

49

16.6

13.6

Domestic total

5,148

5,216

5,736

519

10.0

11.4

Overseas total

1,131

1,525

1,728

202

13.3

52.8

Nansei Total

--

1,308

-

6,279

6,742

8,773

2,031

Consolidated total

-

30.1

39.718

Sales of OKADA Demolition Machinery by Region (2Q)
(Millions of yen)

FY3/172Q

FY3/182Q

FY3/192Q

YoY change
Amount%Vs. two fiscal
years before(%)

908295
671
1,793
708
68956578684▲ 15182
105
54157
▲ 122

39.8
▲ 2.2
11.3
17.4
8.5
38.5
▲ 13.4

31.7
▲ 4.7
▲ 3.8
20.4
24.8
27.5
23.2

135

153

229

76

49.7

69.6

Japan total

5,148

5,216

Overseas total

1,131

1,525

5,736
1,728
1,308
8,773

519
202
1,308
2,031

10.0
13.3

11.4
52.8

Hokkaido

224

211

Tohoku

704

686

Kanto

1,863

1,611

Chubu and Hokuriku

588

603

Kansai552

635

Chugoku/Shikoku

443

408

Kyushu638

Others(Sales Department of the HeadOffice)Nansei Total
Consolidated total

6,2796,742-30.1

39.7
19

Transition by Segment(Million yen)

Net sales
Domestic
Overseas
Nansei

Ordinary income
Domestic
Overseas
Nansei

FY3/18

FY3/19YoY2Q

2Q

ChangeRatio

6,742
5,216
1,525
710
415
294

8,773
5,736
1,728
1,308
917
540
328
75

2,031
519
202
1,308
207
124
3475

30.1
10.0
13.3
29.2
30.0
11.8
20

Arch 2020
Medium-to Long-Term Management Plan 2nd Stage

Rolling Plan
(FY3/19 – FY3/21)© 2018 Okada Aiyon Corporation.All Rights Reserved.

21

Outline of Medium-to Long Term Management Reforms“Arch 2020 Strategy”
Arch 2020 Strategy (FY3/16-FY3/21)

Build a bridge over the Year 2020 aiming for triple “1.”Sales target triple “2”Financial target triple “10”

① Consolidated net sales 2 times (20billion yen)
② Domestic shares of main products Up
20%
2 times③ Overseas sales① Sales growth rate (average) 10% ormore② Operating income margin 10% or more
③ Return on equity (ROE) 10% or more

Company target triple “1”[Topnotch] Topnotch professionals will offer[First-rate] First-rate products and services[Strength] Aiming for the industry’s No.1 enterprise group22Progress of Medium-to Long-Term
Management Reform "Arch 2020 Strategy"
Medium-to long-term management plan Arch 2020
1st stage (FY3/16 – FY3/18) results
Million yenNet sales
Ordinaryincome

2nd stage (FY3/19 – FY3/21) Medium-termmanagement plan

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

12,043721

13,113
1,092

15,3991,270

17,5001,500

18,5001,700

20,0002,000

Growth + Building aframework

Further growth +Quality improvement

Production system: Expansion of main factory
Domestic operation: Establishment of new locations in Tokyoarea

DomesticIntegration with the NanseiGroup→Chemical reaction

Overseas

Establishment of North
America-Europe-Asia trilateralframework

Management base

Efforts toward work-stylereforms

Aftermarket: Improvement of service factory
systemOverseas development: Establishment of new locationsin North America and Europe
New business development: Management integration
with the Nansei GroupStrengthen management base: Listing on the TSE 1stsection

23

Progress Rate (FY3/19 2Q)
Net sales

50.1%

Operating income

59.2%

Ordinary income

61.2%

Net income

61.7%

0%

50%

100%

24

Progress of Medium-to Long-Term Management
Reform "Arch 2020 Strategy"
2nd Stage (FY3/19-FY3/21) of Medium-term Management Plan

Million yenNet sales
Ordinary
incomeFY3/19FY3/20FY3/21

17,5001,500

18,5001,700

20,0002,000

Further Growth + Quality Improvement

Domestic

Integration with the Nansei Group→ Chemical reaction

Overseas

Establishment of North America-Europe-Asia
trilateral framework

Managementbases

Efforts toward work-style reforms
25

FY3/19 Management Policy

KeywordIntegration

Chemical reaction

The three C’s
1．CONNECTED Further build a new connection to visualize synergy
2．CHANGE

Respond to changes (change and make a change)

3．CHALLENGE Have high aspirations and new challenge but
WITH CHECK don’t forget to check

26

27

Domestic

Integration with the Nansei Group[Cutting][Logging][Chipping]28

Domestic

Integration with the Nansei GroupIn addition to the manufacturing offorestry machineries, commenced
production of OKADA products

Selling Nansei products
through OKADA sales office
networks

29

Demand in the Demolition Market

Domestic

Reference: The "Demand Forecast Matrix" issued by the Japan Construction Machinery Manufacturers Association on August 30● According to the Forecast of Demand for Construction Machinery by the Japan Construction MachineryManufacturers Association, domestic demand for construction machinery as a whole in FY3/19 is expected
to decrease by 4%.
● However, domestic demand for hydraulic breakers and crushers is expected to increase by 9% in FY3/19.
(Million yen)

Shipment value (hydraulic breakers and crushers)
25,00021,60020,00018,46818,052

18,895

'15/3

'16/3

'17/3

19,867(Year-endforecast)

'18/3

'19/3

16,16415,00012,885

13,499

'12/3

'13/3

10,0005,000
0'14/330

Domestic

Aging of Concrete Buildings

30% of buildings would be collapsedwith the shaker in the higher 6 level
Approximately 250 of 850 hotels and commercial facilities would be collapsed in Tokyo(Based on the results of the Tokyo Metropolitan Government Seismic Assessment Disclosure System)

31

Domestic

Forestry Market Demand■ Total lumber demand in 2017 increased for the seventh consecutive year (up4.7% YoY)■ Fuel materials (34.4% in the previous year) accounted for the largest increase
Due to the commencement of operations and an increase in the transaction volume of wood biomass(10,000 ㎥) power generation facilities
Liberalization oflumber import

Peak total
demandPeak lumber
price

Peak import
volumeWood selfsufficiency rate waslowest

Imported log

Lumber selfsufficiency rate

Imported products
Imported fuelmaterial
Current (2017)

Domesticwood
Wood self-sufficiency rate
was lowest (2012)(Year)

Forestry Agency, "Publication of the 2017 Timber Supply and Demand Table" (September 28, 2018)32

Overseas

Establishing a Trilateral Network

NorthAmerica

EuropeAim for localization at
an early stage

Expand market share withthree facilities

Considering theestablishment ofNetherlands Representative Office
new facility(Opened in August 2017)

Okada America
Headquarters
OregonOhio Branch

Texas Branch(Opened in January 2016)

Asia

33

Comparison of 2Q Sales in Major Areas('16/'17/'18)

Overseas'16'17'18(Million yen)

1,188
1,069
500

1,000150

35
8789
324
250500250

3500North America

104100500140Asia

Europe34Managementbases

Efforts Toward Work-style Reforms■ Improving the treatment of employees over 60 years old■ Improving the operation process■ Securing human resources and improving
employee satisfaction
35

2nd Stage (FY2018-FY2020) Business PlanThree-Year Business Plan

(Million yen)
2nd Stage Mid-Term
Management Plan

1st Stage Results

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

Net sales

12,043

13,113

15,39917,50018,50020,000Operating income

760

1,106

1,195

1,500

1,700

2,000

Ordinary income

721

1,092

1,270

1,500

1,700

2,000

Net income attributable toowners of parent

438

696

666

930

1,050

1,250

Overseas sales

2,313

2,095

2,752

3,050

3,500

4,000

Overseas Sales Ratio

19.2%

16.0%

17.9%

17.4%

18.9%

20.0%

36

Dividends and Payout Ratio
Dividends (yen)Payout ratio (%)

55th term

56th term

57th term

58th term

59th term

60th term(Forecast)

37

Shareholder Special Benefit Plan

Number of shares heldＢｅｎｅｆｉｔ

100 shares or moreQUO CARD worth 1,000 yen

200 shares or moreQUO CARD worth 2,000 yen

500 shares or moreQUO CARD worth 3,000 yen

38

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

39