Financial Results for Q2 FY3/23

November 18, 2022

OKADA AIYON CORPORATION(TSE Prime 6294)

１

Table of Contents

1. Corporate Profile/History
2. Business Results for Q2 FY3/23
and Full-year Outlook
3. Appendix

２

Corporate Profile (As of March 31, 2022)
Business content
Manufacture, sale and repair of construction and forestry machinery fordismantling and crushing
FoundedCapital stock

Net sales

Business bases

July 1938

2,221
million yen

20,306
million yen

22 in Japan
5 overseas(Established in 1960)

Head Office (Minato-ku, Osaka)Group companies

Number of employees(consolidated)

・AIYON TECH. CO., LTD.
(Main assembly plant)
・Nansei Machine Co., Ltd.
(Manufacturing,development and sales offorestry machinery)・Okada America
・Okada Europe

459

3

Business bases【Domestic】【Overseas】

Okada America

Okada Europe

Okada Thailand

OKADA AIYON: 12 bases

Okada America: 3 bases (headquarters/Oregon)

AIYON TECH: 1 baseOkada Europe: 1 base (headquarters/Netherlands)

Nansei Machinery Group: 9 bases

Okada Thailand: 1 base (headquarters/Ayutthaya)4Corporate history
Around 1951
Appearance of
excavator method

1938
EstablishedThe latter half of the1970s

Around 1960
Appearance oflarge air breakerAppearance of thecrushing method

さくがんき

We have grown mainly through the development and sale of demolition attachments
to meet various demand from rock drills to urban demolition machineries.
(Million yen)

25,000Changes in net sales
over the past 30 years

1995
Great Hanshin-Awaji

2011
Great East Japan
Earthquake

Earthquake

1992
Listed on the 2nd Sectionof the Osaka Stock Exchange

2008

2017
Acquisition ofNansei machine Co., Ltd.

2016
Listed on
TSE1

20,00015,000Financial Crisis

10,000Since
1990年代
1990s
以降

5,000

FY
1990

FY
2000

FY
2010

FY
2020

0

５

Table of Contents

1. Corporate Profile/History
2. Business Results for Q2 FY3/23
and Full-year Outlook
3. Appendix

6

Results Summary (Q2 FY3/23)

11,680 million yen

Net sales

Operatingincome1,105 million yen(+8.1％ YoY)(+16.1％ YoY)

Ordinary
income1,168 million yen(+13.9％ YoY)
(Million yen)

(Million yen)

(Million yen)

(Forecast)(Forecast)(Forecast)

2,000

2,000

21,50020,306

Progress
rate
54.3%

Q2
8,456

FY3/21

10,056

1,433

1,377

Progress
rate
53.4%

11,680Progress
rate
57.7%

Progress
rate
55.3%

Q2
1,022

[Net sales]

FY3/23

FY3/21

Progress
rate
52.9%

1,105

735

FY3/22

1,190

Progress
rate
56.7%

Progress
rate
58.4%

Q2
1,026

FY3/23[Operating income]

FY3/21

919

Progress
rate
50.0%

1,168

Progress
rate
55.4%

Progress
rate
58.6%

Q2
659

785

460

758

FY3/22

1,340

1,808

1,771

17,591

Progress
rate
48.1%

(+19.0％ YoY)

(Million yen)

(Forecast)

Progress
rate
49.5%

785 million yen

Net income

FY3/22[Ordinary income]

FY3/23

FY3/21

FY3/22

FY3/23[Net income]7

Business Results for Q2 FY3/23 and Full-year Outlook● As sales and profits for H1 exceeded the forecasts, we revised the full-year forecasts upwardly.

The H2 plan remains unchanged from the initial forecasts due to uncertainty in the financial market and otherfactors despite the strong performance of orders.
(Million yen)

FY3/23

FY3/23

Initialforecasts

Revisedforecasts（May 12,2022）(Current
revision)

Change vs.
forecasts on
May 12

16.1

21,50022,500+1,000

356

11.9

－

－

－

2,242

274

13.9

－

－

－

1,022

1,105

82

8.1

2,000

2,065

+65

1,026

1,168

142

13.9

2,000

2,128

+128

659

785

125

19.0

1,340

1,425

+85

FY3/22
Q2Results

FY3/23
Q2
Results

Net sales

10,056

11,6801,623

Gross profit

2,991

3,347

SG&A
expenses

1,968

OperatingincomeOrdinary
incomeNet income(attributable to ourshareholders)YoY change(amount)

YoYchange(%)

8Factors for Changes in Net Sales⚫ Domestic sales increased due to strong demand for crushers and large orders for cable cranes.
Forestry machinery sales increased due to the effect of new products. Sales of large-scale environmental
machinery for imported products declined due to the impact of long-term delivery times.

⚫ Overseas sales increased due to market development in Europe and recovery in North America and Asia.
(Million yen)Overseas

Domestic

Demolition environment
AT (attachments) 467

49

76
▼

78

25

▼

Grapple Environment
ATT

10,056Q2 FY3/22

626
223

▼

444

Other AT

297

462

201
▼

CrusherCable crane
Forestrymachinery

Breaker

Material/
repair/
other

60

Other
machineryLargeenvironmental
machinery

11,680Q2 FY3/23

9

Sales by Segment and Business (Q2)
● Net sales increased in all 4 segments. Overseas sales ratio gradually increased.

*For details of each segment, please refer to P11 "Sales Trends by Model".

Net sales

Net sales

Net sales

8,456 million yen

10,056 million yen

11,680 million yen
Q2 FY3/23

Q2 FY3/22

Q2 FY3/21

Demolishenvironmental
attachment

Overseas

16%
14%

19%
49%

21%

Repair

52%

12%

17%

解体用ATT

解体用ATT

林業・大型環境機械

林業・大型環境機械

補材修理他

補材修理他

21%
49%

12%
18%
Forestry machinery,large
解体環境ATT
environmental machinery, etc.
林業・大型環境他
修理

10

Sales Trends by Model (Q2)(Million yen)
YoY
FY3/21
Q2

Demolishenvironmental
attachment
Forestry machinery,large environmental
machinery, others

Domestic

Aftersales
business

Crushers
Breakers
GrapplesEnvironmental
attachment
Others
Total
ForestrymachineryLargeenvironmental
machinery
Cable crane
Others
Total
Material
Repair

Total
Domestic segment

Overseas

U.S.
EuropeAsia (excluding China)
OthersOverseas segment

Consolidated total

FY3/22
Q2

FY3/23
Q2

AmountYo2Y

Changes(%)

Changes(%)

2,539
381
489

3,352
448
698

3,796
498
620

444
49
△78

13.3
11.1
△11.2

49.5
30.7
26.8

325

313

288

△25

△8.0

△11.4

405
4,140

403
5,216

480
5,684

76
467

19.0
9.0

18.5
37.3

305

347

571

223

64.2

87.0

612

446

149

△297

△66.5

△75.6

591
252
1,761
786
401
1,187
7,089
896
233
215
21
1,366
8,456

609
283
1,688
821
395
1,217
8,121
1,158
373
260
142
1,935
10,056

1,235
223
2,180
952
466
1,418
9,283
1,387
562
304
141
2,397
11,680

626
△60
492
130
71
201
1,161
229
188
44
△0
462
1,623

102.7
△21.2
29.2
15.9
18.0
16.6
14.3
19.8
50.6
17.1
△0.6
23.9
16.1

109.1
△11.4
23.8
21.1
16.2
19.4
30.9
54.9
141.4
41.4
557.4
75.4
38.1

11

Topics Orders, Manufacturing, and Sales Trends for Major Products (Crushers)● Higher sales of mainstay crushers secured robust orders with growth in unit production.
● Orders in the H1 of FY3/23 (April-September) declined in reaction to the impact of last-minuteorders in the H2 of FY3/22 (October-March) prior to price increases. The backlog of orders will
be addressed through capital investment in AIYON TECH Asaka Plant and productivity
improvements at manufacturing partner companies.
Million yen

300

4,000

Orders received (left scale)

Production (left scale)

Order backlog (Left)

Crushers sales (right scale)
3,500

250
3,000
200
2,500

150

2,000

1,500
100
1,000
50
500

0

0
H1 FY3/20

H2 FY3/20

H1 FY3/21

H2 FY3/21

H1 FY3/22

H2 FY3/22

H1 FY3/23*Orders received, production, and order backlog are set at 100 for the H1 of FY3/20.

12

Topics Lineup of Forestry Machinery● Strong sales of the Okada Hybrid Bucket contributed to a significant increase in sales offorestry machineries. In addition, in anticipation of the forest environment tax, which will be
introduced in 2024, we will strengthen our lineup to respond precisely to increased demand.
OHB-120 (12 ton-class hydraulic excavators)

Building forest working roads-Make product linesScheduled for launch in December
next month
OHB-200 (20 ton-class installation)
To be launched next spring
OHB-60 (6 ton-class installation)●

Features of Okada Hybrid Bucket
Responding to the 4 processes of building a forest working road with 1 vehicle/achieving labor saving and efficiency[Cutting][Transportation][Elimination of roots and backfill][Slope shaping]13

Topics Cable Cranes● Applications /A cable crane is a mechanical device to transport loads by erecting pylons on bothsides of a dam and stretching cables across the dam. Cable cranes are used to transport heavyloads during dam construction and hydroelectric power plant refurbishment, suspending
buckets of fresh concrete and many materials on cables.

Batcher plant

Bridle rope cable craneConcrete bucket

Aggregate storage
facilities● Delivery status/Currently, construction work is underway for the installation of 2 cable cranes
at the Asuwagawa Dam (Fukui Prefecture). This dam is a flood adjustment dam for heavy raindisaster prevention and the construction is scheduled to be completed in FY2026. It will be
the largest water flow type dam in Japan (in dam height, bank volume, and flood adjustment
capacity).

14

Sales Breakdown by Region (Q2 FY3/23)(Sales Composition)

Overseas
20.5％

EuropeNorth
America
58％

23％
Asia
13％
Others6％

Domestic
79.5％[Regional Q2 Trends/Unit: Millions of yen]【Europe】
562

600
500

300

304
260
215
200

233

200

100

100
0

400
300

373

400

【North America】【Asia】

FY3/21

FY3/22

FY3/230

FY3/21

FY3/22

FY3/23

1400
1200
1000
800
600
400
200
0

1387

1158
896

FY3/21

FY3/22

FY3/2315

Factors for Changes in Operating Income⚫ Domestic profit increased due to strong sales of Crusher, cable cranes, etc.
⚫ Overseas, gross profit increased due to higher sales, but profit declined due to higher SG&A
expenses, as the support from the PPP (payroll protection program) in the U.S. in the previous
year disappeared, in addition to the impact of higher ocean freight rates.
(Million yen)Domestic
gross profit

232

1,022

Q2 FY3/22

Domestic
SG&A
expenses

Overseas
Gross profit

Overseas
SG&A
expenses

137▲119

Domestic operating
income: +113

▲156

Overseas operating
income: ▲19

Adjustments

▲11

1,105

Q2 FY3/23

16

Capital Expenditures and Depreciation Plan
Renewal of domestic sales and maintenance bases in response to the growing size of attachments
is expected in this fiscal year.
Expansion of domestic manufacturing plants to increase production and the transfer of the U.S.
headquarters are underway.
■Capital expenditures ■Depreciation and Amortization(Million yen)

2,500

Q2 FY3/23
Results
1,000(Million yen)

2,000
Vs. full-year
forecast
27.5%

1,500

2,295
1,000

500

1,158

1,000
439

482

530

FY3/21(Result)

FY3/22(Result)

FY3/23(Forecast)

0530
Vs. full-year
forecast
49.9%

274

264

Capitalexpenditures

Depreciation andAmortization<Major Capital
Expenditures>
Sapporo Sales Office
AIYON TECH Plant site
U.S. Head Office Plant andWarehouse

Current year17

Shareholder Returns / Dividend Results and Plans⚫ Continue to increase dividends under the progressive dividend policy. Going forward, we will gradually
increase the dividend payout ratio while investing in growth. (Target is 25% by FY3/24 and then 30% within 3
years.)⚫ The annual dividend was increased by 5 yen from the initial forecast of 33 yen to 38 yen per share (+6 yen YoY),
the 13th consecutive year of dividend increases.。
(Payout ratio: ％）(Dividend: Yen）

70

40.0%

Dividend

Payout ratio

60

Payout ratio

35.0%

30%
30.0%

Payout ratio

50

25%
25.0%

40
20.0%

30
15.0%

20
10
8.5

10

12

18

22

23

24

27

28

29

32

38

10.0%
5.0%

0

0.0%
FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24（Forecast）(Target)

By FY3/27(Target)18

Table of Contents

1. Corporate Profile/History
2. Business Results for Q2 FY3/23
and Full-year Outlook
3. Appendix

19

Our Strengths
One-stop circulation model
Utilize user’s needs obtained throughrepair service and direct sales indevelopment work.

Every products require service
and maintenance work.
→ We are the only company
having "in-house“
repair service professional

Design/
設計・
Repair
修理 Develop
開発
ment

販売
Sales

製造

Manufacture

Sales to excavator
manufacturers and distributors

Manufacturing by groupcompanies and subcontractors

Direct sales to end users

Manufacturing-ability does
not constrain novel ideas

We listen to customer’s needs at first hand.

20

Product Characteristics
Our commitment
Cast steel products are used for the primarycrushers and cutters, which are especially required
for strength in dismantling.

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

Canning products --- made by melting steel plates andwelding it
Canning products

Cylinder is equipped with a speed increasing valve to achieveboth power and speed

Use of wedge arms realizes outstanding crushing powerArms do not protrude as they close, and they can be operated indensely populated residential areas.

21

Product application(Demolish environment attachment)- Able to install in excavators of all domestic and overseas manufacturers【Crushers】（Pulverizers）【Crushers】（Primary Crushers）

・ Demolition of the main partof the building・ Crushing theconcrete after
primary crusher【Crushers】（Cutters）
・ Used for cutting rebar andsteel frames[Environmental Attachment (Amidas)]・Select/screen various mixtures
without straining the excavator【Grapples】【Breakers】

・Versatile equipment for demolition ofwooden houses, scrap lumber collection,and disaster relief breakers

・Major equipment in overseas,with outstanding crushing power
・However, the noise is loud.

22

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

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

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

23

Product application(Forestry machines and cable cranes)[Forestry machinery]・ Logging timber in the forest
・ Lumering, pruning and transporting[Cable crane for dam construction
and power plants and dams]

・ Conveying concrete, materials, etc.
on roadless mountain slopes
・ For pipe replacement work at aging
hydroelectric power plants

24Potential for Domestic Demolition Market
Building age and area of non-wooden buildings (concrete buildings)◆ Looking at demolition targets for buildings with 40 years old or older, demolition demand will begin in earnest in the coming
years (an area equivalent to about 1,500 Tokyo Domes will be targeted each year).

Area of buildings targeted to
be demolished in the future(Million square
meters)80,00070,000

Building area that is more than
40 years old at this time

60,00050,000Equivalent to about

715 million ㎡ 15,000 Tokyo Domes

40,00030,00020,00010,000
0

-1950

-1960
Apartment house◆Converted to the floor area of the Tokyo Dome as
46,000 m2.

-1970

-1980

Offices and stores

-1990

-2000

Factories and warehouses-2010
Others

Prepared by company from "Building Stock Materials" by the Ministry of Land,
Infrastructure, Transport and Tourism

25

Outlook for Global Market Growth
Demolition attachment market◆ CAGR (CAGR) for 2021/2025 in the key markets of the U.S., Europe, and Asia was approximately 7.0%
◆ CAGR of Japan in 2021/2025 (CAGR) was also about 6.2%.
5,000 (Million US$)EuropeNorth America

Asia (excluding China)

Japan

OthersOutlook
4,000

1,869
1,749
1,626

3,000

1,505

1,101
2,000

1,000

962
187
329

1,200

1,224

1,382
1,264

1,000
193
345

210
385

228

238

425

441
581

235

446

251
487

271
545

284

299

319

596

647

700

653

689

490

620

721

563

470

470

534

582

550

555

588

628

636

580

632

672

712

747

781

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

0

Prepared by company based on research materials from private research companies

26

Long term Vision "VISION 30“ (Formulated on May 13, 2021)
Outline of VISION 30
VISION 30 Statement
Slogan:VISION 30 Key Performance Indicators (KPIs)

Triple 3

People create an environment

Net sales: 30 billion yen or more

Operating income: 3 billion yen
or moreValues:[Corporate Culture] Corporate culture that respects individuals and encourages freedom and unity

Market capitalization: 30 billion[Business] Providing customer oriented products and services

yen or more[Social] Business expansion leading to the resolution of social issues such as environmental issues

Triple 10
Contribute to create an "environmentally" friendly society through businessactivities by fostering human resources capable of creating an "environment"
without being diverted to the "environment.”

Net sales growth rate: 10% ormore
Operating income to net sales:
10% or more
ROE: 10% or more

VISION 30 3 Strategies
Human
Resources
Strategy(1)Human Resource
Development(2)Personnel System(3)Work Style Reform(1) Domestic Strategy

Market Strategy(2) Overseas Strategy(3) New Businesses

Strengthening
Management
Base

Recruitment, development and utilization of human resources
Fair valuation and compensation system reflecting results and contributions
Creating a workplace that is easy to work in, makes people want to work in, and is rewarding to work in(1) CG System(2) Hardware(3) Software

Strengthening integrated value chain in response to increased demandMarket development through the introduction of products and manpower to three bases in the U.S.,
Europe and Asia
Application of new technologies (new demolition methods, DX, etc.) and promotion of strategic M&A
Establishment of governance structure to support sustainable growth
Maintenance (expansion and new construction) of plants and sales bases in Japan and overseas
Development of system infrastructure and business reform and evolution of customer responsivenessthrough DX

27

3-Year Plan (FY2022 to FY2024) Measures by Division
Our company will focus on expanding production capacity and supply that will contribute to marketing.
★ represents measures related to the expansion of production capacity and supply.
Division

Production

Domestic sales
and services

Overseas

Measures

Details★Strengthening ties with cooperating
suppliers

Stable procurement of products, parts and materials★Strengthening production capacity at
AIYON TECH Asaka Plant

Securing human resources, increasing the number of partnercompanies, and expanding production facilities★Improving productivity and reviewing
cost management at Okada andNanseikikai

Pursuing higher production capacity and lower costs★Shift to mass production at the hydraulicbreaker plant in Vietnam

Strengthening the lineup of the global models of hydraulic breakers★Renovation of the sales offices andmaintenance plants

Sendai Sales Office (April 2022) and Sapporo Sales Office (scheduled
for May 2023) aim to respond to increase in size of construction
machinery

Spread of sales price revisions

Responding to cost increases due to a rise in raw material andtransportation costs

Continuation of the attachment insurance
system

Improving the user's peace of mind by compensating for damage andrepair costs for the first two years after the sale of the “TS Series”
demolition attachments

Strengthening the cooperative structurewith Okada and NanseikikaiStrengthening in-group collaboration in sales and maintenanceservices★Relocation and expansion of Okada
America Head Office

Expanding the functions of warehouses and repair factories in the
major North America region

Enriching products for overseas markets

Development and release of models with overseas specifications

Enhancement of base functions

Deploying personnel and products at overseas bases

28

Initiatives for Sustainability◆ Work on materiality (key issues) with the aim of becoming a "company that has value in society" in our management
philosophy
Materiality (Key Issues) and KPIs
Materiality

Achieving carbon

neutrality

Supporting recycling
systems in society

Conservation and effective
use of mountain and forest
resources

Realization of work stylereform and diversity

SDGs

Commitment

KPI◼ Aiming to realize a decarbonized society, our company will makeefforts to minimize energy consumption and utilize nextgeneration renewable energy.
◼ Recognizing that CO2 emissions from the use of our company’s
products at demolition, forestry and large-scale civil engineeringsites are of high significance, our company will promote efforts todevelop and improve products for achieving electrification andhigher energy efficiency.
◼ Our company will reduce CO2 emissions from indirect
departments and production processes.

◼ Reducing CO2 emissions within the group (Scopes I and II)[Excluding overseas sales companies]
Net 0 by 2050
70% reduction by 2030 (compared to 2018)◼ Efforts to reduce scope III CO2 emissions(Establishment of mechanisms and target selection)◼ Effective use and recycling of resources are important issues inresource-poor countries and contribute to efficient scrap and build.
◼ Our company aims to create a recycling-oriented society bycontributing to the improvement of the efficiency of demolition
sites and by recycling waste materials.

◼ Increasing productivity of attachment demolition operations
by 10% by 2030 (compared to our company's existingproducts in 2020)◼ Contributing to maintaining a recycling rate of 98% or more
for construction waste such as concrete◼ Our company will contribute to the efficiency of forestry.
◼ Our company will contribute to effective utilization of lumber
resources.
◼ Our company aims to make effective use of land by providing
equipment for moving and transporting materials in difficult
construction areas.

◼ Increasing productivity of forestry equipment by 10% by
2030(compared to our company's existing products in 2020)◼ Contributing to the maintenance of hydropower capacity at
250 million kwh/year (by 2030)◼ In response to the decline in the Japanese productive population,
our company will work on productivity improvement andautomation using DX.
◼ Our company will provide a place where everyone can work bycreating a mechanism and environment for recruitment, humanresource development and promotion.
◼ Labor and human rights are also taken into consideration at thegroup's partner companies.
◼ Our company will strengthen the corporate governance system torealize work style reform and diversity.

◼ Introducing a mechanism to measure employee satisfaction
and improve employee satisfaction◼ Female employee ratio: 13% (2021) → 25% (2030)◼ Percentage of female directors: 12.5% (2021) → 25% (2030)◼ Considering labor and human rights when selecting partnercompanies

29

The forward-looking statements contained in this report are basedon management's assumptions and beliefs in light of the material
currently available to the Company and other reasonableassumptions, and involves risks and uncertainties.
Therefore, we do not promise or guarantee the realization of the
future plans and measures presented.

(Inquiries)
Corporate Planning Office,
OKADA AIYON CORPORATIONTEL: 06-6576-1271 FAX: 06-6576-1270
URL: http://www.aiyon.co.jp/30