Financial Results for FY3/22(TSE Prime 6294)

OKADA AIYON CORPORATION
Yuji Okada, President and Representative Director
Nobuo Maenishi, Managing Director
May 19, 2022

Table of Contents

1. Corporate Profile/History
2. Business Results for FY3/22
3. Outlook for FY3/23 andMid-term Management Plan
"Rolling Plan"
4. Appendix (FY3/22)

１

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 Europe459２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

10,000

Since
1990s
5,000

FY
1990

FY
2000

FY
2010

FY
2020

0

３

1. Corporate Profile/History
2. Business Results for FY3/22
3. Outlook for FY3/23 andMid-term Management Plan
"Rolling Plan"
4. Appendix (FY3/22)

４

Results summary (FY3/22)

20,306 million yen

Net sales

Operatingincome1,771 million yen(+28.7％ YoY)(+15.4％ YoY)

Ordinary
income1,808 million yen

1,190 million yen

Net income(+26.2％ YoY)
(Million yen)

(Million yen)(+29.5％ YoY)
(Million yen)

(Million yen)

20,306

17,957
17,591

1,368

1,377

1,190

1,808

1,771

1,433

1,347
919
884

FY2019 FY2020 FY2021【 Net sales 】

FY2019 FY2020 FY2021

FY2019 FY2020 FY2021【Operating
income】【Ordinary
income 】

FY2019 FY2020 FY2021【Net income】

５

Factors for changes in net sales⚫ In Japan, sales of crushers increased significantly thanks to the effects of sales promotions at exhibitions and other factors. Other sales
were generally steady.

⚫ Overseas, sales were strong in North America, driven by the recovery in economic activity. Sales also increased in Europe, reflecting theenhancement of the distributor network in Europe, and sales in Asia also grew thanks to the success in product introduction.

Overseas

Domestic(Million yen)

GrappleBreaker
Crusher

1,164

120

248

Environment
Other
ATT

22

107

Forestrymachinery

Cable/
crane/
other

189

106

Material/
repair/other

221

20,306
746

▲ 212
Large
environmental
machinery

17,591FY 3/21
3,591 （17,591）

FY3/22６

Factors for changes in operating income⚫ In Japan, sale increased thanks to a sales growth, despite higher expenses and exhibition costs.
⚫ Overseas, despite the impact of higher ocean freight rates in the 2H, profits increased due to thecontribution of new market development in addition to the three major bases.
(Million yen)Domestic GrossprofitAdjustedgross profit

Overseas
Gross profit

209

696
▲376
Increase indomestic
SG&A expenses▲7▲128
Increase inoverseas
SG&A expenses

1,771

1,377

FY 3/21

FY3/22

７

Sales by Segment and Business● Strong performance in mainstay demolition environmental attachment and overseas businessdespite no major change in composition ratio.
*For details of each segment, see "Sales Trends by Model" on page 21.

Net sales (Cumulative)

Net sales (Cumulative)

Net sales (Cumulative)

17,957 million yen

17,591 million yen

20,306 million yen

FY3/20FY3/21

FY3/22
Overseas

16%

17%

Demolishenvironmental
attachment

18%
Repair

53%

14%
16%

14%

51%

19%

解体環境ATT

解体用ATT

林業・大型環境他

林業・大型環境機械

修理

補材修理他

12%

53%

17%

Forestry machinery, large
解体用ATT
environmental machinery, etc.
林業・大型環境機械
補材修理他

８

Capital Expenditures and Depreciation● In FY3/22, capital investment in domestic sales offices and maintenance factories in response to the
manufacturing of large-scale attachments was set to a certain extent.
*See page 15 for plans for the current fiscal year and beyond.

■ Capital investments■ Depreciation and Amortization(Million yen)

2,295

2,500

2,000

1158

1,500

887
765

1,000

636

627
509
500

267

0

＜Investments＞

332

374

FY3/16
ResultFY3/17
ResultFY3/18ResultFactory of
AIYON TECH

Hokuriku
Sales Office

Factory of
AIYON TECH
M&A goodwill

429

433

439

FY3/19ResultFY3/20ResultFY3/21ResultShonan Sales
Office Shikoku
Sales Office

Head Office
Maintenance Factory
Shikoku Sales Office

Shonan Sales
OfficeHiroshima Sales
Office Head
Office in America

482

FY3/22
ResultChubu Sales Office
Hiroshima Sales OfficeSendai Sales OfficeMorioka Sales Office
Sapporo Sales Office(Land)

9

Progress in Sales Office Renovation● Expand factories (AIYON TECH) and sales office facilities in a structured way to increase
production and enhance maintenance function.
2022
Sendai
Sales
Office2021
Hiroshima
Sales
Office2019
Shikoku
Sales
Office

2016
AIYON
TECH

2023
2022
2020

2016

Chubu
Sales
OfficeSapporoSales
Office(Plan)

Shonan
Sales
OfficeHokuriku
Sales
Office10

1. Corporate Profile/History
2. Business Results for FY3/22
3. Outlook for FY3/23 andMid-term Management Plan
"Rolling Plan"
4. Appendix (FY3/22)

11

Long-term Vision “VISION 30”(formulated on May 13, 2021)

Outline of VISION 30
VISION 30 Statement

VISION 30

Key Performance Indicators (KPIs)

Net sales
SloganPeople create an environment

Values[Corporate Culture] Corporate culture that respects individuals andencourages freedom and unity[Business] Providing customer-oriented products and services[Social] Business expansion leading to the resolution of social issues
such as environmental issues

Contribute to create an "environmentally" friendly society throughbusiness activities by fostering human resources capable of creatingan "environment" without being diverted to the "environment"

Triple3
Triple1030 billion yen or more
Operating income
3 billion yen or more
Market capitalization
30 billion yen or more
Net sales growth rate
10% or more
Operating income to net sales
10% or more
ROE 10% or more

VISION 30 3 Strategies
Human Resources
StrategyMarket Strategy① Human Resource Development② Personnel System

Recruitment, development and utilization of human resources
Fair valuation and compensation system reflecting results and contributions③ Work Style Reform

Creating a workplace that is easy to work in, makes people want to work in, and is rewarding to work in① Domestic Strategy

Strengthening integrated value chain in response to increased demand② Overseas Strategy

Market development through the introduction of products and manpower to three bases in the U.S.,
Europe and Asia

③ New Businesses

Strengthening
Management Base

Application of new technologies (new demolition methods, DX, etc.) and promotion of strategic M&A① CG System

Establishment of governance structure to support sustainable growth② Hardware

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 DX③ Software

12

3-Year Numerical Targets (FY2022-2024)
Basic Policy: While responding to the recent increase in demand with existing resources, the three-yearplan will focus on strengthening production systems to increase production and reduce costs in order to
respond to the continuous increase in demand in Japan and overseas.

Numerical plan

(Million yen)

FY2021Result(FY3/22)Comparison
with rolling plan
formulated in
May 2021

FY2022Plan(FY3/23)

Comparison
with rolling plan
formulated in
May 2021

FY2023Plan(FY3/24)Comparison
with rolling plan
formulated in
May 2021

FY2024Plan(FY3/25)

Net sales

20,306+1,806

21,500+1,50023,000+1,00025,000Operatingincome

1,771

+171

2,000

+200

2,200

+100

2,500

Ordinary
income

1,808

+208

2,000

+200

2,200

+100

2,500

Net income attributableto owners of parent

1,190

+130

1,340

+140

1,470

+70

1,670

Operating income to
net sales (%)

8.7

+0.1

9.3

+0.3

9.6

+0.1

10.0

ROE

10.0

+1.0

10.3

+0.8

10.4

+0.2

10.9

(%)

* Assumed exchange rate for planning: 1 dollar = 120 yen, 1 euro = 130 yen

133-Year Plan (FY2022-2024): 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

14

Capital Expenditures and Depreciation and Amortization Plan
In the Rolling Plan FY2022 to FY2024, we will consider further expanding facilities at production bases(AIYON TECH) and expanding major bases (sales offices and maintenance plants).
(Million yen)

Results
FY3/20Capitalinvestments

636
Shonan Sales
OfficeShikoku Sales
OfficeHead Office
Repair FactoryMajor
equipment
Depreciation andAmortization(Million yen)

FY3/21

FY3/22

1,158
Shonan Sales
OfficeHiroshima Sales
Office433

Rolling Plan FY2022 to FY2024

439

FY3/23

FY3/24

FY3/25

2,295

1,000

800

800

Hiroshima Sales
OfficeChubu Sales OfficeSendai Sales Office
Sapporo Sales
OfficeAIYON TECH Plant
Sapporo Sales
OfficeAmerica Head Office
Plant

AIYON TECH Plant
Sapporo Sales
OfficeConsiderexpanding
production andmajor bases

482

530

550

570

2,500
■Capital investments ■Depreciation and Amortization

2,000
1,500
2,295

1,000
1,158

500
636
0

1,000

433

439

481

FY3/20(Result)

FY3/21(Result)

FY3/22(Result)

530
FY3/23(Plan)

800

550

FY3/24(Plan)

800

570

FY3/25(Plan)

15

Shareholder Returns / Dividend Results and Plans⚫ In the previous fiscal year, the annual dividend was increased by 1 yen per share in November from the initial plan of 30
yen, and in February, it was increased by 1 yen to 32 yen.
⚫ For the current fiscal year, we plan to increase the dividend by 1 yen to 33 yen per share (expecting dividend increase for
13 consecutive years).
(Payout ratio: ％）(Dividend: Yen）

35

120.0%

Dividend

Payout ratio

30

100.0%

25

80.0%

20

33

60.0%

32
15

27
22

10

23

28

29

40.0%

24
20.0%

18

5

8.5

10

12
0.0%

5
0

-20.0%
FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23(Plan)

16

Initiatives for Sustainability◆ We are working on materiality issues (important issues) with the aim of becoming a "Valuable company
for 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

17

Initiatives for Sustainability
Examples of efforts to realize carbon neutral
Switch electricity from all domestic bases to renewable energy, achieving almost half of CO2
emissions in FY2020

Changes in CO2 emissions(within Scope I and II domestic group)

ton-CO2
1800

1600
1400
1200

(compared to FY2018)
CO2 emissions

1000

Down 46.6%

800△70.0％

600

400△100.0％200
02018 Result

2019 Result

2020 Result

2030 Target

2050 Target181. Corporate Profile/History
2. Business Results for FY3/22
3. Outlook for FY3/23 andMid-term Management Plan
"Rolling Plan"
4. Appendix (FY3/22)

19

Quarterly Results(Million yen)

FY3/22

Segment
Demolish environment
machinery

1Q

2Q

4Q YoY

3Q

4Q

FY3/21
4Q
Results

YoY
Pct. change(%)

ChangeDomestic

Sales

Over
seas

2,186

3,029

2,330

3,162

2,735

426

15.6

Forestry machinery, large
environmental machinery,cable cranes, etc.

897

791

812

857

892

▲34

▲3.9

Repair and material

606

610

660

718

614

103

16.9

Domestic segment

3,690

4,431

3,802

4,737

4,241

495

11.7

Overseas segment

969

965

836

873

878

▲5

▲0.6

Total sales

4,660

5,396

4,639

5,610

5,120

490

9.6

429

593

328

420

389

31

8.2

Domestic

272

487

303

323

263

60

23.0

Overseas

162

117

33

105

134

▲29

▲21.6

Adjustments

▲4

▲10

▲9

▲8

▲9

0

ー

Operating income margin (%)

9.2

11.0

7.1

7.5

7.6

▲0.1

ー

Operating income

Profits

20

Sales Trends by Model(Million yen)

FY3/20Demolish environmental
attachment

Crushers
Breakers
GrapplesEnvironmental
attachment
OthersForestry machinery, large
environmental machinery,cable cranes, etc.

Domestic

Total
Forestry equipment
Large environmental
machinery
Cable crane
Others
Total

RepairMaterial
Repair
Total
Domestic segment

Overseas

U.S.
EuropeAsia (excluding China)
OthersOverseas segment

Consolidated total

FY3/21

FY3/22

YoY
AmountYo2Y

Changes(%)

Changes（%)

6,055
870
1,085

5,713
807
1,113

6,877
928
1,362

1,164
120
248

20.4
15.0
22.3

13.6
6.7
25.5

570

585

608

22

3.8

6.6

887
9,470
662

825
9,045
662

932
10,708
852

107
1,663
189

13.0
18.4
28.7

5.0
13.1
28.6

978

1,054

842

▲212

▲20.1

▲13.9

662
586
2,889
1,752
859
2,612
14,972
2,153
361
411
58
2,985
17,957

990
566
3,273
1,591
782
2,373
14,692
1,839
478
508
72
2,899
17,591

1,064
598
3,357
1,730
865
2,595
16,661
2,158
717
552
216
3,645
20,306

74
32
83
138
83
221
1,969
318
238
44
143
746
2,715

7.5
5.7
2.6
8.7
10.6
9.3
13.4
17.3
49.9
8.8
198.5
25.7
15.4

60.7
2.1
16.2
▲1.3
0.7
▲0.6
11.3
0.2
98.4
34.4
271.4
22.1
13.1

21

Domestic share of our major products by class
The decline in the market share of primary crushers and pulverizers was affected by the inability of production tokeep pace with demand, despite the growth in sales units. However, we continue to dominate the market sharefor ultra-large class products weighing 100 tons or more.
Share 70.0（％）

Primary Crushers

Share 90.0（％）

Cutters

60.0
70.0

50.0
40.0

50.0

30.0
30.0

20.0

FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22

FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22

Share 70.0（％）

Share 30.0（％）

Pulverizers

60.0

25.0

50.0

20.0

40.0

15.0

30.0

10.0
FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22

Overall share

30 ton or over

Hydraulic breakers

FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22

20 to less than 30 ton

less than 20 ton

Prepared by company based on data presented by the Japan Construction Machinery Manufacturers Association (share of unit sales)

2022年３月末時点

22

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)23

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.

24

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.

25

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

26

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

Manufac
製造
ture

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.

27

Product sales destination (Domestic)
Dismantler
About

10％
Rentalcompanies
About

20％

Excavator manufacturer
and sales company
About

70％

(Other regional rental
companies)*Each image is quoted from each company's website as an example.

28

Overseas Sales(Salescomposition)

Overseas

Europe20％

17.9％

Others
6％

Asia

15％

North
America59％

Domestic*Excluding China【Europe】
800

717

82.1％

600
500

600
400

【Asia】

478

508【North America】
552

411

1500

1000

200

0
(Million yen)

1839

300

200
20/3

2,158

2,153

2000

400

361

2500

21/3

22/3

100
0

20/3

21/3

22/3

500

20/3

21/3

22/3

0

29

Potential for Domestic Demolition Market
Building age and area of non-wooden buildings (concrete buildings)◆ Looking at demolition targets for buildings 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)

80,00070,00060,00050,000

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

Equivalent 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

30

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
1,200

1,224

1,101
2,000

1,000

962
187
329

1,382
3…

1,264

1,000
193
345

210
385

228

238

425

441
581

235
446

251
487

271
545

284

299
647

700

596
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

31

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/42