2018/4-2019/3

Financial Results for the 60th Fiscal Year
Managing Director ：Nobuo Maenishi

Corporate Profile(As of the end FY3/19)
Company nameOKADA AIYON CORPORATIONFoundedJuly 1938 (established: 1960)

Head office

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

Market

TSE 1st section (6294)

Capital stock

2,221 million yen

Net sales

17,866 million yen

Business content

Manufacture, sale and repair of construction and forestry
machinery

Number ofemployees

432 (As of March 31, 2019)

Fiscal year end

March 31

Total number ofshares outstanding

8,378,700 shares

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

3

Overseas Business Bases<Map of North America>

Okada America
Head Office

Ohio Branch<Enlarged view ofEurope>

Amsterdam

Texas Branch

Rotterdam

Netherlands
Belgium

Germany4

Business Overview<Manufacturing and Procurement> <Development, sales, and repair>[Manufacturingsubsidiary]
AIYON TECH.

OKADA AIYONCORPORATION[Overseas sales channels]
・ Overseas dealers
・ U.S. subsidiary
Okada America[Subcontract factory]

Nansei Group[Domestic sales channels]
・Shovel manufacturers
・Rental companies
・End users

5

Main products
Demolition attachment(Tip of hydraulic shovels)

Primary
Crushers

Pulverizers

Wood HogCutters

Hydraulicbreakers

Big-Bass

Environmental machinery(Wood grinders and forestry machinery)6

Sales Composition Ratio
Other
5%

Nansei 16%
Repair andAuxiliarymaterials 14%
3%

Hydraulic breaker

17%

Domestic sales composition ratio
Grapples8%

Environmentrelated
equipment

Crushers
37%※ Our sales composition from April 2018 to March 20197

Main Products and Domestic Shares
Prepared by our Company based on the Japan Construction Equipment
Manufacturers Association’s presentation
Tokyo area: Tokyo, Saitama, Chiba, Kanagawa

Primarycrushers

Cutters

Pulverizers

Hydraulicbreakers

Tokyoarea
Domestic12%

FY3/16

47% 39%49% 47%

41% 39%11%

12%
FY3/19

62%

46%

50%

46%

48%

41%

7%

8

Main Products of the Nansei Group

Cable crane fordam construction

Forestry grapple

Winch

9

Sales Composition Ratio of the Nansei Group

Sale ofgoods

Other
5%

13%

Marine cranes

Forestrymachines
33%

8%

Metal recycling machines

14%

Cable cranes

27%※ Nansei Machine Group sales composition from April 2018 to March 201910Summary of Business Results
9 consecutive years ofsales growth

Net sales

120131

Operating income

Recordhigh

153

178

Recordhigh

1,524 Million

100 million
yen

yen

1,106

1,195760

FY3/16 FY3/17 FY3/18 FY3/19

Ordinary income

Recordhigh

1,560
1,092

FY3/16 FY3/17 FY3/18 FY3/19

Millionyen

Net income attributable toowners of parent

Million1,000 yen

1,270721

FY3/16 FY3/17 FY3/18 FY3/19

Recordhigh696666438
FY3/16 FY3/17 FY3/18 FY3/1911

Factors for Changes in Net Sales in FY3/19
Against the backdrop of robust demand for redevelopment and rebuilding in Japan,
Strengthening of production system contributed to strong sales of mainstay crushers.
Overseas sales increased due to the strengthening of sales capabilities in North America
and an increase in sales agencies in Europe.
(Million yen)Overseas Nansei

Domestic

Environmental
machinery
Crushers
100
255

433

Breakers
15,399 ▲104

FY3/18
5,399

Auxiliarymaterials/
RepairGrapples27

Overseas Nansei
Other170309

17,866

1,275

Other breakdown:
Coupler 80
Sprinkler monk 101

FY3/1912Sales by Product Category
FY3/17FY3/18

FY3/19(Million yen)

YoY change YoY change Vs. FY3/17Amount
Change(%) Change(%)

Breaker706

943838

▲104

▲11.1

18.7

Crusher

5,480

5,875

6,309

433

7.4

15.1

Environment
machinery

1,781

1,147

1,402

255

22.3

▲21.3

Grapples

569

491

591

100

20.4

3.9

Auxiliarymaterials/repair

1,891

1,991

2,018

27

1.4

6.7

Other591

667

838

171

25.6

41.7

Domestic total

11,018

11,114

11,996

882

7.9

8.9

Overseas total

2,095

2,752

3,061

309

11.2

46.1

Nansei Total-1,5322,808

1,275

83.2

-

Consolidated
total

13,113

15,39917,866

2,467

16.0

36.2

13

Sales by Region(Million yen)

FY3/17

FY3/18

FY3/19YoYchange
AmountYoY
Vs. FY3/17
change(%) change(%)

Hokkaido

487

426

532

106

24.9

9.2

Tohoku

1,468

1,400

1,413

130.9

▲3.7

Kanto

3,716

3,701

3,924

223

6.0

5.6

Chubu and Hokuriku

1,321

1,351

1,592

241

17.8

20.5

Kansai

1,207

1,287

1,586

299

23.2

31.4

Chugoku/Shikoku

1,027

846

1,086

240

28.4

5.7

Kyushu

1,492

1,784

1,529

▲255

▲14.3

2.5

Others (Sales Department

299318

329

11

3.5

10.0

Japan total

11,018

11,114

11,996

882

7.9

8.9

Overseas total

2,095

2,752

3,061

309

11.2

46.1

Nansei Total

-

1,532

2,808

1,275

83.2

-

13,113

15,39917,866

2,467

16.0

36.2

of the Head Office)Consolidated total

14

Factors for Changes in Ordinary income in FY3/19
Gross profit in Japan, overseas, and Nansei increased due to increased sales.
SG&A expenses increased as the consolidation of Nansei helped to improve performance.
(Million yen)
Nansei
Gross Margin

505

Domestic
gross profit

262

Overseasgross profit
Nansei
Insurance
for Previous
FY125
SG&A
expenses

▲ 558
1,270

FY3/18770▲61

Foreignexchange
gain

15

Other
Non-operating

2
1,560

SG&A breakdown
Domestic 141
Overseas 121
Nansei299

FY3/1915

Summary of Business Results
Sales growth rate
17.4(%)

16.0

6.3

Operating income(%)
margin
8.5
8.4
7.8

8.9
0.8
FY3/16 FY3/17 FY3/18 FY3/19

ROE
9.86.5(%)

10.2
7.9

FY3/16 FY3/17 FY3/18 FY3/19

FY3/16 FY3/17 FY3/18 FY3/19

Overseas sales ratio (%)
19.2
16.0

17.9

17.1

FY3/16 FY3/17 FY3/18 FY3/1916

Outline of Medium-to Long-Term Management Plan
Arch 2020 Strategy (FY3/16-FY3/21)
Triple “2”×Triple “10”Sales Target Triple “2”① Consolidated net sales: 2 times(¥20billion)② Domestic shares of main products: Up
20%③ Overseas sales: 2 times

Triple “1”Financial target triple “10”① Sales growth rate: 10% or more
② Operating income margin: 10% or more
③ Return on equity (ROE): 10% or more

Company target triple “1”[Topnotch] With topnotch professionals[First-rate] First-rate products and services[No. 1] Aiming for the industry’s No.1 group17

Progress of Management Targets
100 million yenPlans

ResultSelf
assessment

153.9

175.0

178.6

〇

110.1

111.1

114.5

119.9

〇

23.1

20.9

27.5

30.5

30.6

〇

--

15.3

30.0

28.0

△Sales growth
rate

0.8%

8.9%

17.4%

13.6%

16.0%

〇

Operatingincomemargin

6.3%

8.4%

7.8%

8.6%

8.5%

〇

ROE

6.5%

9.8%

7.9%

9.5%

10.2%

〇

FY3/19FY3/16

FY3/17FY3/18

120.4

131.1

Domestic

97.3

OverseasNansei

Net sales18

FY3/20-FY3/21 Management Policy
Corporate Slogan: The three C’s

CONNECTEDCHANGE
CHALLENGE WITH CHECK

Further build a new connection to visualize synergy
Respond to changes (change and make a change)
Have high aspirations and new challenge but don’t forget to check

Basic Policy OKADA 8 Plans

Marketmeasures② Increase sales and profits by increasing production
capacity, including subcontracting company③ Secure of stability by strengthening aftermarket④ Further development of foreign market

Performance Targets (FY3/21)
20 billion yen

Operating income

2 billion yen

Operating income
margin

10.0%

ROE

10.8%

⑤ Working Style Reforms - Improvement in employee
satisfaction and securing of personnel⑥ Improve productivity and efficiency by introducing newcore systems⑦ Strengthen long-term, sustainable human resources⑧ Strengthening Compliance and Risk Management

Investment Plan (FY3/20-FY3/21)

Main Investment
Plans

Net Sales

Managementfoundation measures①Integration with the Nansei Group and chemical reaction

Relocation, expansion, andrenovation of sales offices
Capital expenditures for plantexpansionEstablishment and expansion ofoverseas bases (Europe and Asia)
Introduction of the ERP System

Investment plans(2-years total)

2 billionyen

19Major Initiatives Domestic Segment
To strengthen production and expand sales bases in
response to robust demand for dismantling
Domestic
Net sales
110

Production expansion

100 million yen

111

119

Shipments, orders, and order backlog of proprietary products

120

Shipping

97

2173

8.7
4.4

9.8

8.6

11.3

Order

FY3/20
Plans

Grapples andCoupler 9%

641

2491

2600

2507 2600
625

625

FY3/16 FY3/17 FY3/18 FY3/19 FY3/20Plans

Hokuriku Sales
OfficeRelocated in 2016

Other2%

Crushers
53%

Environmentalrelated
equipment 12%
Hydraulicbreakers 7%

431

BacklogEnhancement ofsales bases

Sales
Breakdown
Auxiliarymaterials/repair
17%2064 2111

Backlog 322

FY3/16 FY3/17 FY3/18 FY3/192321

1828

Shipping 1831

OperatingincomeOrder[by model]

Head Office andKansai Branch
Rebuilt Repair
Building in 2019

System to increase production
AIYON TECH Asaka Factory, which was added inFY2004, will start full-scale operation, andcollaboration with partner companies will bepromoted to establish a system for fiscal
production of in-house products (in-houseproduction and outsourced production).
Partial cooperation with Nansei Machinery has
been implemented since FY2006. Strengthen
production and optimize production for the Group
as a whole.

In-house products: crushers, grasping machines,
couplers, sprinklers, small priests, etc.
Head Office Machinery Division and products
manufactured by Iyontech Co., Ltd.

Expansion of sales and repair
facilities
AIYON TECH (Plant)
Rebuilt Repair
Building in 2017
Yokohama SalesOffice
Relocate and renew in2022

Shikoku Sales Office
Relocated andrenewed in 2019

In response to robust demand for dismantling,
the size of the crushers has been increasing, andthe repair facilities at the sales offices have notbeen able to keep up with the demand. Therefore,
the company is gradually rebuilding andexpanding the facilities.
The company plans to rebuild the repair buildingsof its head office and Kansai branch offices andrelocate its Shikoku and Yokohama sales offices
between FY19 and FY20.

20

Major Initiatives Overseas Segment
Strengthen overseas business development through a tripolar systemwith North America, Europe, and Asia
Overseas Net sales 100 million yen

North America

100 million yen

Further strengthening of sales
35.0
27.5
23.1

30.6

16.3

18.1

20.7

23.1

13.2

20.9
3.9

4.2

3.9

3.1
2.3

Operating income

FY3/16 FY3/17 FY3/18 FY3/19 FY3/20
Plans

EuropeFY3/16 FY3/17 FY3/18 FY3/19

100 million yen

4.3

FY3/20Plans

1.4

Sales Breakdown
Auxiliary Other5%materials

17%
Crushers
9%

Hydraulicbreakers69%[by model]

OtherEurope 2%
9%
Asia
21%

NorthAmerica
68%[by region]

By strengthening its sales force andupgrading its skills, the company
aims to cultivate new dealers andexpand its product lineup ofcrushers and other products.

0.7

2.0

2.9

Expansion of Dutch bases
With the Dutch Representative Officeestablished in 2007
Scheduled to become a local subsidiary in
FY2007.
Accelerate development in Europe bypromoting local recruitment.

FY3/16 FY3/17 FY3/18 FY3/19 FY3/20
Plans

Asia

100 million yen

Established a new base in Thailand

7.1

Established a representative office inThailand in FY2007 to conduct market
research and support for agencies in order
to cultivate priority markets in Southeast
Asia. Aiming to become a local subsidiary at
an early stage.

FY3/16 FY3/17 FY3/18 FY3/19 FY3/20Plans

21

5.0

6.3

6.8

6.3

Major Initiatives Nansei Segment
Integration of Okada and South Star to Realization of Integration
Benefits through Chemical Reactions
Nansei Net sales

Merger of threecompanies

Management rationalization by merger

100 million yen

33.0

Consolidated from
FY3/18 3Q

28.0

OperatingincomeNansei MachineryCo., Ltd.

Nansei Wintec Co.,
Ltd.

2.4

15.3

Nansei MachineryCo., Ltd.

With Nansei Machinery as the surviving company
in April 1919
Three Nansei Group companies merged. Future
core business
Promote management rationalization centered on
the introduction of systems.
Company name changed to "Okada NANSEI."

Akiko Co., Ltd.

1.9

Review of Product andProduction Systems-0.1

FY3/16 FY3/17 FY3/18 FY3/19 FY3/20Plans

Product improvement
Improve mainstay grapples and winches tonew, competitive models. Other products
were also reviewed.

Review of production system

Sales Breakdown
New grapple

Other5%
Sale ofgoods13%
Marine cranes
8%
Metal recyclingmachines
14%Forestrymachines
33%

Cable cranes
27%[by model]

New winch

Integration and cooperation
with Okada

×For SouthernStar products
Sales
cooperation

Cooperation in
the manufactureof Okada
products

Improve productivity and profitability byintroducing standard models and reviewing
cost management.

Mutual cooperation in manufacturing andsales
Some of Okada's products are manufactured byNansei Machinery.
Okada Aiyon sells Nansei Machinery products insome regions to complement Nansei Machinery'ssales and maintenance capabilities.

22<Reference> Relationship with the Environment
Our group's mainstay machinery related to the environment
Disassembly attachment

Forestry machines~ Environmentally Conscious Building Dismantling Equipment ~~ Contributing to forest regeneration and forestry
revitalization through improved work efficiency ~Primarycrushers

Steel cutter

Pulverizers

Wood grappling

Processor harvester

Metal recycling machinery~ Improving the efficiency of cargo handling operations
in metal recycling factories ~Swingyarder
Scrap rudder

Scrap grapple

Cable craneAiyon Work

Large wood crusher~ Manufacturing of chips for biomass power generation,industrial waste treatment, etc.~~ Material Handling Facilities for Hydroelectric Power Plant Construction,
Disaster Prevention Works, etc...

Woodhog
Cable craneCable crane

Big-Bass23

Numerical target
Progress(Million yen)
Medium-Term Management Plan
1st Stage

Medium-Term Management Plan
2nd Stage

FY3/16
ResultFY3/17
ResultFY3/18ResultFY3/19ResultFY3/20Plan

FY3/21Plan

Net sales

12,043

13,113

15,39917,86618,80020,000Operating income

760

1,106

1,195

1,524

1,750

2,000

Ordinary income

721

1,092

1,270

1,560

1,750

2,000

Net income attributable

438

696666

1,000

1,120

1,280

Overseassales

2,313

2,095

2,752

3,061

3,500

4,000

Overseas sales ratio

19.2%

16.0%

17.9%

17. 1%

18.6%

20.0%

to owners of parent24

Numerical target
Comparisonwith plan[Comparison with plan and initial plan]:Upper row: Comparison with medium-term management plan (2nd stage) (prepared in 2018)
Lower row: Comparison with Initial Arch 2020 Strategy (prepared in 2015)(Million yen)

Medium-Term Management Plan 2nd Stage
FY3/19ResultNet sales
OperatingincomeOrdinary
incomeNet income attributable toowners of parent

17,866

1,524

1,560

1,000

Vs. plan+366+1,366+24▲26+60+10+70+50

FY3/20Plan

18,800

1,750

1,750

1,120

FY3/21Plan

Vs. initial
Plan+300+800+500+500+70+70

20,000

2,000

2,000

1,280

Vs. initial
Plan

000000+30+8025

Numerical target
Financial Indicators and Dividends

TargetMedium-Term Management Plan
1st Stage

Medium-Term Management Plan
2nd Stage

FY3/16
ResultFY3/17
ResultFY3/18ResultFY3/19ResultFY3/20FY3/21

Plan

Plan

Sales growthrate

10.0%

0.8%

8.9%

17.4% 16.0%

5.2%

6.4%

Operatingincome margin10.0%

6.3%

8.4%

7.8%

8.5%

9.3%

10.0%

ROE

10.0%

6.5%

9.8%

7.9%

10.2% 10.5% 10.8%

Dividend payout
ratio-34.6% 22.8% 25.3% 21.9% 20.3%

Dividend

-

22.00

23.00

24.00

27.00

28.00

Plan

Plan

TBD

26

Thank you for your attention.
Precautions
The forecasts in this document were preparedbased on the information available at the time of
the announcement of financial results.
Actual results may differ due to various factors inthe future.