Fiscal Year Ended March 31,
2022
Financial Results Briefing
Session Materials
June 10, 2022

Nikko Co., Ltd.
Tokyo Stock Exchange Code: 6306
Masaru Tsuji, Representative Director and President
Hiroshi Fujii, Senior Managing Director1

FY 2022-2024
Medium-Term Management
Plan□ In this briefing session material, AP denotes asphalt plants in our business, andBP, concrete plants.

2

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

pp. 8–10

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

3

3

Review of Previous Medium-Term Plan Period of Long-term (10-year) Basic Policy,
Looking into the Future
Previous Medium-Term Management Plan Period
Long-term Basic Policies
1. Strengthen revenue base in Japan
Improve profitability (10% in operating
margin) by boosting product appeal by raising
the level of all divisions of sales, service,engineering, and manufacturing.

2. Establish overseas sales
As a manufacturer, establish new overseas bases
to promote Nikko products, one of the best in theworld, in the ASEAN region (doubling overseas
net sales to 9.0 billion yen from the current
4.5 billion yen)

Results for FY 2019 (1st year)

Results for FY 2020 (2nd year)

Results for FY 2021 (3rd year)

Operating margin in Japan

Operating margin in Japan

Operating margin in JapanFY 2018 4.5% → FY 2019 6.0%

FY 2019 6.0% → FY 2020 6.5%

FY 2020 6.5% → FY 2021 5.3%

Overseas net sales: 4,390 mil. yen

Overseas net sales: 3,730 mil. yen

Overseas net sales:(Sales declined due to the impact of COVID-19)

Signed an agent agreement with TIPCO Asphalt,
Thailand’s top company in asphalt manufacturing andsales

Feb. 2020 AP sales and maintenance company

Established Nikko Asia (Thailand) Co.,
Ltd.

Oct. 2020: Nikko Asia (Thailand) Co., Ltd.

began full-scale operationsReceived
orders for 2 APs

3. Promote new businesses (incl. M&As)

Mobile plant business

Mobile plant business

Invest management resources in expansion of
new businesses and develop new pillar productsin the industrial and construction machinery fields(Create 10.0 billion yen in net sales from new
businesses)

FY 2018 90 mil. yen → FY 2019 500 mil. yen

FY 2020 1,070 mil. yen

Waterproof boards

Waterproof boards

FY 2018 210 mil. yen → FY 2019 810 mil. yen

FY 2020 900 mil. yen

Thailand factory completed in

FY 2021
Mobile plant business
FY 2021 1,440 mil. yen
Waterproof boards
FY 2021 1,010 mil. yen
M&A

4. Put work-style reform into practice
Boost operation efficiency and significantly
improve labor productivity(To centralize office work and utilize IoT and AI)• Enhanced web conferencing system toenable quick information sharing without
constraints of time and place• Identified the problems with
telecommuting and a dispersed working
system• Dramatically improved production
efficiency by introducing production
facilities based on latest technology at
manufacturing divisions (fiber laser, etc.)

5. Make ROE a KPI

Market cap

Aim to achieve a market capitalization of at least
50.0 billion yen and an ROE of at least 8%
Aim for a dividend payout ratio of 60% or higher andenhance returns to shareholders

FY 2018-end 19.25 bil. yen→ FY 2019-end 24.36 bil. yen• Continuing with FY 2019 initiatives• Remote maintenance contract rate
End of Jan. 2020: 46%→ End of Aug.: 67%→ End of May 2021: 73.8%• Prepared materials and movies forwebinars (the maintenance division
has shot 30 movies)

Market cap

FY 2020-end 6.8%

ROE

FY 2018-end 4.4% → FY 2019-end 5.2%
FY 2019 dividend payout ratio 97.6%

FY 2020 dividend payout ratio 60.5%
Share buyback completed on Sept. 17(treasury stock purchased: 616,700
shares or 399,960,700 yen)www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

Mar. 1 M&A of Ube Kohki Co., Ltd.

• Continuing with FY 2019 initiatives• Remote maintenance contract rate

76.1% as of the end of March 2022
• Flat rate remote maintenance
Received 13 orders

Market cap

FY 2020-end 29.24 bil. yen
ROE4,740 mil. yen (estimate)2022 All rights reserved.

FY 2021-end 24.28 bil. yen
ROE

FY 2021-end 5.2%

FY 2021 dividend payout ratio 69.5%

4□ I would like to explain the Medium-Term Management Plan.
We formulated the medium-term plan with focus on the long-term prospects in 10 years.
There are roughly five basic points.
□ The first point is to strengthen the revenue base in Japan. We aim to achieve an operating margin of 10% in 10 years. Looking back at the past three
years, it was 6.0% in FY 2019, the first year, and 6.5% in FY 2020. It fell to 5.3% in the third year, the previous fiscal year, which was disappointing.
I will explain the reasons afterwards.
□ The second point is to establish overseas sales, in other words to establish overseas markets with an eye on growth.
We ultimately started off with a plan to double overseas sales from 4.5 billion yen to 9.0 billion yen. In the initial fiscal year, we achieved about 4.4
billion yen, while in the second year sales fell to 3.7 billion yen given the significant impact of COVID-19. Although sales slightly improved to 4.7 billion
yen in the third year reflecting the recovery from COVID-19, they still ended up falling short compared with the target.
□ The third point is to promote new businesses. The goal is to grow new businesses into major pillars through means including M&As and we started byaiming for a business scale of 10.0 billion yen in 10 years. The two businesses of mobile plants and waterproof boards grew greatly, and comparedwith the approx. 0.3 billion yen in sales before the medium-term plan began, sales grew to 1.3 billion yen in the first fiscal yen, to 2.0 billion yen in thesecond year, and 2.5 billion yen to the third year, posting satisfactory growth.
□ The fourth point is to put work-style reform into practice. We would like to try out a business development wherein our work-style reforms inspire workstyle reforms at our customers. We drove it forward by implementing concrete items such as the centralization of office work, IoT, and utilization of AI,
which would lead to improvements in operating efficiency. Partly because of COVID-19, online meetings became common place. Telecommuting anddispersed working systems are becoming established.
We plan to continue promoting the working system regardless of COVID-19.
In this initiative, development of the remote maintenance business in the maintenance service field could be seen in the figures. We were able to raise
the ratio of customers signing up for remote maintenance service, which initially was about 46%, to the current 76.1%. Another major item is the flat
rate maintenance service, an initiative that benefits both our customers and us by improving the operation efficiency of the maintenance service.
We set aside a one-year assessment period for deciding the core of the flat rate maintenance business. When there is trouble at a plant, which is amanufacturing facility, what is important for the customer is restoring it as soon as possible. More important than just raising the speed of response
through remote maintenance service, we are currently working on an initiative that, in the future, would enable us to take measures before something
breaks down or fails. If we can develop a technology that eliminates failure and keep the plants running, we can sign contracts at more inexpensive
rates than the existing rates with customers for flat rate maintenance service. This way, we can have a maintenance system that enables us to replaceparts at optimum timings based on judgments from our plant monitoring so that the plant will not fail, instead of starting our work after a customer’sfacility fails and causes trouble. It will improve both our operating efficiency and customers’ maintenance costs, and we believe we have reached astage where we can shift to this system while increasing the number of customers. We have recognized it as an item where we succeeded in deliveringa certain level of results.
□ The final item is setting forth ROE as KPI. We have started with the targets of 50.0 billion yen in market cap and 8% in ROE in 10 years. In the initiative
to strengthen shareholder returns by aiming for a dividend payout ratio of 60% or more, we feel that we were able to make good on our promise to acertain extent, as the ratio for the first year was 97.6% including the 100th anniversary commemorative dividend, 60.5% in the second year, and 69.5%
in the third year. However, the market cap is evaluation by the shareholders, and the current situation is such that we need to put more efforts or theshareholders will not value us highly, so we consider this as a point we need to reflect upon.

4

Summary of Previous Medium-Term Management Plan (1)(Net sales)(mil. yen)

Period of the MediumTerm Management Plan
before the last plan

(Operating income)Previous Medium-Term Management Plan
Numerical plan and results

1st year

3rd year

2nd year
7.9%

5.9%

6.4%

6.0%

50,000

7.1%

5.8%

6.1%

5.3%

4.5%

40,00035,70035,11432,71735,15136,50037,86638,00038,846

5,000

4,000

31,7803,000

30,000

3,000
2,600
2,302

2,300
20,000

1,944

2,103

2,053

2,053

2,000
1,427

10,00001,000

FY 2016

FY 2017

FY 2018

Net sales

1st year of
Medium-term
plan

FY 2019
results

Operating income

2nd year of
Medium-term
plan

FY 2020
results

3rd year of
Medium-term
plan

FY 2021
results0

Operating marginwww.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

5□ The overall trend shows that sales scale and business scale have been risingalso when compared to earlier figures. We feel a sense of achievement regarding
sales, which denotes the business scale, of having been able to generate acertain level of success.
Nevertheless, profits did not reach the target and we would like to work on it as amajor task and recover it through continuous initiatives from now on.

5

Summary of Previous Medium-Term Management Plan (2)Business Climate
While shipment volume of asphalt mixture and concrete in Japan continued on a slight declining trend,
users continue to have appetite for investments thanks to the government’s new five-year, 15 trillion yen
plan of measures for disaster prevention/mitigation and national resilience, which started in FY 2021
AP remained in a state of plateau, given the replacement demand for plants built during the economic
bubble period
Overseas business was significantly affected by COVID-19, but recovered in the final fiscal year
We established a sales and maintenance subsidiary and a manufacturing subsidiary in Thailand for full
expansion into the ASEAN market

Review of the previous Medium-Term Management Plan
▶ Sales: • Overseas AP and the route sales of the conveyor business for the first two years did notreach the targets due to the impact of COVID-19• Mobile plants and waterproof boards, which are new businesses, grew significantly▶ Profits: Profit, mainly of AP, missed the target by a large margin due to the sharp rise in raw material
costs and unprofitable projects
This was offset by the planned production of BP given the strong demand as well as mobile
plants and waterproof boards→From the beginning of the final fiscal year, we passed on the rise in raw material prices tothe quotes starting with the newly received orders▶ Promotion of new businesses: In the final fiscal year, we added a manufacturing, sales, andinstallation company to the group through M&A

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

6□ While the business environment has not changed so much, the Japanese government has been
implementing measures for disaster prevention and mitigation as well as for increasing national
resilience under a five-year plan worth 15 trillion yen from 2021.
We recognize this as a tailwind situation for us. Among our products, demand for replacing the AP
and BP built during the economic bubble era due to ageing has been continuing.
While the Japanese business was not so significantly affected by COVID-19, new businesses andoverseas business were greatly impacted as movement became restricted. However, in the thirdand final year of the medium-term plan, we were able to take actions, though small, and we wereable to make a start that would enable some recovery.
We described the review of the previous fiscal year in the bottom part, and the impact of COVID-19
became a major factor in lowering the figures for route sales in the conveyor business field.
□ Fields that include new businesses, whose main business products are mobile plants and crushers,
made good progress. Waterproof boards, which are disaster prevention products, also saw
significant growth, with products for responding to guerilla rainstorms, etc. becoming popular. As forprofits, the raw material price hike has been an extreme negative factor in all aspects. Setting aside
price increases, one issue that has been a negative factor for us is the prolonged delivery time of
supplies, which makes planning more difficult in our business plan. We are naturally taking theunprecedented measure of having proactive inventory practices.
□ Other than that, there is one positive action, which is one of the reasons that reduced profits tosome extent. We have been vigorously making capital investment to increase operating efficiency.
There are reasons such as the robust investments we made for production facilities of factories toimprove productivity as well as investment for development. We were consistently looking forpartners for the purpose of M&As to promote new businesses, and we were able to acquire acompany called Ube Kohki at the end of March this year. It is a partner which will play a major role in
the new fields as well as for Nikko-developed products and environment- and recycling-related fields.

6Summary of Previous Medium-Term Management Plan (3)Trends in Sales and Operating Income by Business
AP-related Business(Net sales)
30,000

6.4%
25,00020,000

9.0%

6,000
9.5%

19,00030,000

6,000

6.4%

8.3%

18,700(mil. yen)

BP-related Business(Operating income)

19,4673.1%
5,000

25,0004,000

20,0003,000

15,00020,00018,32817,51815,000

8.1%

9.0%

8.3%

9.5%

9.5%

10.4%
5,000

4,000

3,000
10,83910,000

1,900

1,710

1,570

2,000

10,000

5,000

562

0

1,000

5,000

FY 2020
plan

FY 2020
results

FY 2021plan

FY 2021
results

761

837

879

893

FY 2019
plan

FY 2019
results

FY 2020
plan

FY 2020
results

FY 2021
plan

17.0%

20.2%

17.0%

2,500
17.5%

17.2%

6,660

5,840
5,000

5,000

4,900

2,500

500

562

3,400
2,390

3,018

1,073

482

1,000

1,000
679

587

578

2,500

0
FY 2019
results

FY 2020
plan

FY 2020
results

559

510

500

0
FY 2019
plan

1,500

5,200
1,170

1,020

544

16.1%
2,000

6,796

1,500
5,000

17.2%

10.7%

10.4%
7,500

3,200

FY 2021
results

10,000

2,000

2,634

1,000

0

19.5%

7,500

2,900

2,000
1,123

Other Businesses
2,500

17.2%

9,400

750

Environment- and Conveyor-related Business
10,000
21.3%

9,212

0

0
FY 2019
results

9,300

9,158

1,239

1,118

FY 2019
plan

9,200

FY 2021
plan

500

0

FY 2021
results

Net sales

0
FY 2019
plan

Operatingincomewww.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

FY 2019
results

FY 2020
plan

FY 2020
results

FY 2021plan

FY 2021
results

Operating margin
2022 All rights reserved.

7

These are the graphs illustrating our business areas.
□ The Other Businesses soared, and this is because the waterproof board andmobile plant businesses thrived, as I have mentioned earlier.
□ The large shortfall came from the slump in the AP-related Business, which is ourlargest business segment. The scale of sales did not decline significantly, butthere were many overlapping negative factors with respect to profits. Every year
we receive questions as to why the business cannot generate profits even though
it has a 70% market share. We have been carrying out activities to verify projects
that are major negative factors in order to avoid them. More than that, we havebeen earnestly pursuing drastic reduction in costs, improved operating efficiency,
and development of products that attract customers with their performance rather
than cost. So, we intend to push forward so that things will move towards
improvement from the next fiscal year onwards without fail.

7

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

pp. 8–10

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

882030 Vision◼ Maintain and strengthen the Nikko brand, which boasts technological prowess andproduct appeal as a manufacturer, and expand our service business to achieve
60.0 billion yen in net sales and 6.0 billion yen in operating income in 2030
Nikko GroupA top manufacturer of plant facilities and environmental products backed by high technological prowess
At the same time, become a management partner for customers by offering operation and maintenance services

2030: Consolidated net sales of 60.0 billion yen and operating income of 6.0 billion yen

Changes in business

Expand the scale by leveraging Nikko’s technology(Strengthen operation and maintenance services)(Lateral expansion of products and markets)

Japanese Asphalt PlantRelated Business

Concrete Plant-Related
Business

Overseas Asphalt PlantRelated Business

Environment- andConveyor-related Business

A management partner forcustomers, through operating
plants by leveraging the strong
product appeal of the plant
manufacturer

A top manufacturer by far, as
well as an environmentallyfriendly manufacturer byimplementing total
management of ready-mixed
concrete plants

Global asphalt plant
manufacturer

A comprehensive belt
conveyor manufacturer withfocus on modularization✓ Support for decarbonization✓ Remote and automatedsupport✓ Comprehensive concrete
management system✓ Plant support center✓ Mobile plants✓ Environmentally friendly
products✓ Expansion in ASEAN✓ Global standard products

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

✓ Sell portable belt conveyor
using EC
✓ Enter into channel
conveyor market✓ CPS (Conveyor planning
service)✓ Overseas Expansion

9□ This time around, we revised the targets of the long-term vision upwards, for 10
years from now in 2030, to 60.0 billion yen in net sales and 6.0 billion yen in
operating income. When the previous Medium-Term Management Plan started,
the targets for 2030 were 50.0 billion yen in net sales and 4.0 billion yen in
operating income. In that sense, we believe that our activities during the previous
medium-term plan in fact exceeded what was envisioned in the long-term vision.
□ Among the four businesses shown in this page, the business area in which weneed to work the hardest for achieving carbon neutrality is the AP segment. Its
main fuel is heavy oil, which is a fossil fuel, and more than a million tons of CO2
a year is currently being emitted by APs in Japan. The reality is that our APs,
which account for 70% of the market, are emitting a million tons of CO2. We havebeen earnestly pushing forward with development and employment for activities
to bring it to zero in 2050 and we very much would like to bridge this to activities
so that such additional values of AP will be recognized by customers.
□ One more thing, although it says remote and automated support, the ultimate
need of customers is an unmanned plant. While we believe it is physicallypossible at this point given the present progress in IT, we will require technology
of a slightly higher order to ensure safety and maintain stable production. So, we
hope to be able to explain these activities as early as possible in the medium
term.
Other than that, we are considering various activities such as environmental
measures for concrete plants and development of global strategic models foroverseas.

9Position of New Medium-Term Management Plan
◼ The new Medium-Term Management Plan is a time period in which we build a structure,processes, and systems toward 2030
2030

60.0 billion yen(consolidated)

New Medium-Term Management Plan (2022–2024)

Operating margin of

10.0%
Business✓ Standardization of AP, BP plants✓ Sell portable belt conveyor using EC, offer channel
conveyors✓ Enter into Indonesia and Vietnam with overseas AP
business

Internalfunctions✓ Global marketing, DX promotion✓ Build cooperative sales structure for new businesses✓ Rebuild human resource management foundation andsystems

Business expansion phase•Introduce new services and systems in Japan•Establish new revenue base in overseas markets

2024

50.0 billion yen
At present
38.8 billion yen(consolidated)

Introduce technology, rebuild production structure(consolidated)(FY 2021)

Operating margin ofInternal investment phase

6.0%

Operating marginof 5.3%
Build a structure, processes, and systems thatform the base of the 10-year vision in the three
years of the next medium-term plan, and promote
testing and system development of new services
aimed at the next 10 years

Business✓ Remote and automated support, comprehensive management
system✓ Full-fledged expansion of environmentally friendly products✓ Expansion in ASEAN

Internalfunctions✓ Open and start full operation of a management support center✓ Automated and remote operations using technology✓ Review production process, the Head Office Plant to focus on
assembly

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

10□ Regarding the positioning of the new Medium-Term Management Plan, we willproceed with the goals of 50.0 billion yen in consolidated net sales and operating
margin of 6% for the final fiscal year of 2024, compared with the long-term targetsof 60.0 billion yen in net sales and operating margin of 10.0% for 2030.
□ In the previous medium-term plan, we achieved the net sales target but could notreach our profit target. Our direction is to grow the body of our business large,
and then strengthen our organs and repeat that process to build a strong andsound body.
□ We established departments which we did not have before. We have establishedthe Global Marketing Team, the DX Business Team, and the Low Carbon Task
Force within the CEO’s Office. We started up these new departments to ensure
our direction in the genres that will be required in the future and we plan to further
strengthen them.

10

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

11

11

Numerical Plan for New Medium-Term Management Plan
Sales and Operating Income Plan(mil. yen)
(Net sales)

60,000Previous MediumTerm Management
Plan

7.0%
6.0%

5.9%

6.0%

5.8%

6.1%
5.3%

4.8%

4.4%

(Operating income)New Medium-Term
Management Plan
6,000

5.5% 5.8%

4.5%

6.0%
50,00050,0005,000

48,0002.0%

2.2%
42,00040,00037,86632,71732,07331,78030,70730,0004,000

35,15135,114

34,11038,846

3,000
2,800

27,08723,8033,000

24,553
2,302

2,249
2,103

20,000

1,832

2,300
2,053

2,053

1,944

2,000

1,629
1,427
1,186

10,000

1,000
470

541

0
10

11

12

13

14
Net sales

15

16

17

18

Operating income

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

19

20

21

0
22 plan 23 plan 24 plan(fiscal year)

Operating margin

2022 All rights reserved.

12□ Please look at this graph comprehensively as a whole. We will steadily increase
the business scale and strive to grow profits as well.

12

Numerical Plan for New Medium-Term Management Plan
Shareholder Returns(mil. yen)Previous Medium-Term Management Plan

New Medium-Term Management PlanFY 2019 results

FY 2020 results

FY 2021 results

35,151
2,053

37,8662,302

38,8462,053

42,0002,300

48,0002,800

50,000
3,000

1,588

2,082

1,649

1,600

1,900

2,100

40
1,550
97.6%
30,293
5.2%

33
1,260
60.5%
31,451
6.8%

30
1,146
69.5%
32,050
5.2%

30
1,144
71.5%
32,506
4.9%

30
1,144
60.2%
33,262
5.7%

35
1,334
63.5%
34,028
6.2%

Sales
Operating income
Net income attributableto owners of parent
Dividend par share (yen)Total dividend
Dividend payout ratio
Net assets
ROE

FY 2022 plan

5.2%

5.7%

5.2%

4.9%

69.5%

71.5%

6.2%

100%

60.2%

60.5%

63.5%

50%

50 yen200 yen

60% or more inpayout ratio during
the current medium-termplan period

100 yen

97.6%

FY 2024 plan

Our policy is to achieve

New Medium-Term
Management Plan period

6.8%

FY 2023 plan

17

15

15

15

15

10
10

18

15

15

15

18

2019

2020

2021

2022 plan

2023 plan

2024 plan

100th
anniversarycommemorative
dividend
Interim dividends

Year-end
dividends

Dividend payout
ratio

0%

ROE

★The Company carried out a one-to-five split of shares in its common stock effective October 1, 2019, and the amount of dividends have been adjusted to the value after the split

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

13□ I would like to explain the numerical plan of the new Medium-Term Management
Plan as well as shareholder returns.
In the previous medium-term plan period, we worked towards the goal of
ensuring 60% or more in dividend payout ratio. Additionally, for the new mediumterm plan period, we will continue with the theme of a secure payout ratio of 60%
or more, and we will strive to enable shareholder returns that exceed dividends of
30 yen per share a year, which is the current base.

13

Numerical Plan for New Medium-Term Management Plan
Growth Investment
Item

Human resource
enhancement

R&D

Investment (three years)

Nikko nonconsolidated
up 145(up 69)2.53 bil. yen(1.19 bil. yen)

⚫AP-related business field

59 people⚫BP-related business field

20 people⚫Environment and conveyor field

12 people⚫Overseas

6 people⚫Development

12 people⚫Mobile plants

11 people⚫Other25 people⚫AP-related business field ◼New environmentally friendly products◼Remote and automated support⚫BP-related business field ◼Management support center⚫Environment and◼Product improvement
conveyor field◼System development◼Product development⚫Overseas◼Investment in IT incl. EC◼Development of standard models◆ Build a new factory in Hyogo Prefecture (0.5 bil. yen)
◆ Build a development and testing center (1.0 bil. yen)

Capital investment

6.0 bil. yen(6.3 bil. yen)

* The figures in parentheses denote the previous Medium-Term Management Plan

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

14□ I am going to explain growth investment, which is a major item for achieving thelong-term goals and the medium-term plan.
□ Regarding the strengthening of human resources, we added 69 people during theprevious medium-term and are planning to add 145 more people during the next
three years of the current medium-term plan.
□ We will also increase R&D expenses in a similar manner and plan tocontinuously make capital investment.
Each division worked on the new Medium-Term Management Plan for more thana year. We believe that these are necessary items and conditions for coming up
with the figures that show the outline of investment for management growthrequired for achieving the goal. We are also planning to report them as indicators.

14

Numerical Plan for New Medium-Term Management Plan
Sales and Operating Income Plan by Division
AP-related Business(Net sales)
6.4%

6.4%

7.0%

7.0%

23,00023,0003.1%

25,00020,0005.8%

19,467
17,51820,00018,32815,0006,000

30,0005,000

25,000

6,000

8.3%
4,000

20,0003,000

15,0002,000

10,000

10.4%

9.5%

1,600
1,118

1,239

5,000

1,600

1,000

0

5,000

FY 2020

FY 2021

FY 2022
FY 2023
FY 2024
New Medium-Term
Management Plan

10,80010,500

2,000

761

879

FY 2019

FY 2020

1,123

1,050

20.4%

20.2%

20.0%

1,050
1,000

0
FY 2021

FY 2022

FY 2023
FY 2024
New Medium-Term
Management Plan

20,000

4,500
12.2%

21.3%

1,050

Other Businesses
3,000

17,5007,500

10,8009,212

Environment- and Conveyor-related Business
10,0009.7%

00
FY 2019

9.7%

3,000
9,158

1,150
562

5,000

10.0%

4,000

10,83910,000(mil. yen)

BP-related Business(Operating income)

30,000

2,500

20.0%

17.5%

17.2%

10.7%

16.1%

9.6%

2,000

4,000
3,500

15,00019.5%

13,50011,70012,500

3,000
2,500

5,000

1,500

10,000

9,000
2,000

2,634
2,500

562

3,018
2,500

2,390
482

587

2,500

500

2,700

500

1,000

5,000

550

0

7,500

500

FY 2020

FY 2021

1,170

1,073

1,100

1,250

1,300 1,500
1,000
500

0

FY 2022
FY 2023
FY 2024
New Medium-Term
Management Plan

Net sales

6,660

2,500

0
FY 2019

6,796
5,840
1,020

0
FY 2019

Operatingincomewww.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

FY 2020

FY 2021

FY 2022

FY 2023
FY 2024
New Medium-Term
Management Plan

Operating margin
2022 All rights reserved.

15

15

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

16

16

Basic Policy of New Medium-Term Management Plan
◼ For each businesses, we will actively invest in launch of new products and services
for business structure reform under the 2030 vision and in enhancing necessaryorganizational abilities

AP in Japan✓ Develop environmental products by leveraging the development capability as a
top manufacturer✓ As a solution partner, support the plant operation of customers

BPAP
overseas

Conveyors✓ Carry out a comprehensive management of ready-mixed concrete plants✓ Develop products that satisfy the high quality requirements of precast concrete✓ Design and launch standard model products that are competitive also inoverseas markets✓ Build an organizational structure for expansion into the ASEAN market✓ Offer convenience and efficiency that goes beyond the manufacturer’s
framework by leveraging the engineering of conveyor line, while realizing shortdelivery time and low price through modularization✓ Develop web-based services and design structure and build a foundation fordelivering new products and services
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

17

17

Business Strategies
AP in Japan◼ Leverage the high technological prowess as a top manufacturer, establish
technologies for decarbonization, remote control, and automation and support
customers’ plant operation more than ever1.

Support for decarbonization⚫ Develop low-carbon mixture
manufacturing system⚫ Develop combustion technology
for decarbonized fuels

Accept order
Manufacturing of mixture
Custo
mer

Allocation of vehicle

Transport

Crushing

Pavement
works* Offering of subscriptionbased maintenance
Production plan data
Mix information

Truck location information
Plant operation-Operation data
Offering of plant operation information⚫ Offer combustion technology forbiomass and gas

DX team

NIKKO

2.

Remote and automated support⚫ Offer partially remote shipment
system⚫ Build remote control andautomation technology⚫ Accumulate plant operation data
based on expansion of the numberof contracts for maintenanceservice subscription

Feedback to planning and development

Nikko

Feedback to plant operation

Evolve technology and products as
a manufacturer, based on customer (At present)
needs
Decarbonization andlow carbon
Digitization including
IoT

Fuel shift
More stability and trust
through proposal ofenergy saving

Plant withenvironmental impact
Stable operation by onsite MS

Support for decarbonization

Be a management partner forcustomers through service
Strengthen customer
relations using subscription
system, etc.
More stability and trust
through predictive
maintenance

Remote monitoring andremote operation
Automated plant
operation

Remote and automated support

Become a one and only manufacturer with bothtechnological prowess and service capabilities!

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

18

18

Business Strategies
BP in Japan◼ Aim to become a top manufacturer by offering a comprehensive management of ready-mixed
concrete plants and by developing products that cater to the high quality requirements ofprecast concrete as well as being an environmentally friendly manufacturer

1.

Development and expansion of in-house
control panels⚫ Promote standardization of plants byincreasing control panel developed
in-house and accumulating plant
operation information of customers⚫ Introduce service to support
operation of customer plants

2.

Expansion into developing fields⚫ Expand mobile plants into areas
which are no longer reachable due toconsolidation of plants⚫ Develop and expand products in
response to customers’
environmental needs such as CO2
emissions reduction

Comprehensive
concretemanagement

Standardizati
on of plants

Grasp the status ofplant maintenanceand operation
Comprehensive
management ofplants

Improve
profitability
through realizationof short delivery
time and low price

Plant support
service

Become a partner
who support plantmaintenance

Mobile BP

Carbonrecycling

Cater to remoteareas createdas a result of
plant
consolidation

Develop products
in response tocustomers’
environmental
needs

Development and expansionof in-house control panels
Maintenance and operation of plants
Base for data linkage and utilization

Secure profits and improve
maintenance efficiency forready-mixed concrete
manufacturers

Expand the sales and market
share among secondary
concrete productmanufacturers and local
general contractors

A top manufacturer by far as well as an environmentallyfriendly manufacturer that implements total managementof ready-mixed concrete plants

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

19

19

Business Strategies
Maintenance Services◼ Aim to become the management partner of customers, and to become indispensable for theirplant operations by improving the efficiency of existing operations through the leveraging oftechnology and data as well as supporting their plant operations.
AP in JapanBP◼ Improve efficiency of existing operations⚫ Promote function-based segregation ofoperations and exclusive assignments toaccumulate skills and knowhow as anorganization⚫ Leveling operations through promotion ofpredictive maintenance◼ Preparation to start new services⚫ Accumulate the necessary data and knowhow
for plant operation service through expansionof subscription-based maintenance service◼ Improve efficiency of existing operations⚫ Like AP in Japan, promote the accumulation ofknowhow as an organization and the levelingof operations◼ Promote new services⚫ Contribute to stable operations throughexpansion of subscription-based maintenanceservice amid engineer shortage at customers⚫ Build relationships with customers and aim tobecome the customers’ partner for plant
operations

MS

Support through the full
utilization of technology
and data

AP overseas◼ Preparation of maintenance structure⚫ Upon entering a new market, develop amaintenance structure at local distributors anda structure to remotely support customers◼ Acquisition of revenue opportunities⚫ Acquire revenue opportunities from information
regarding problems and through the proposal of
facility upgrade while visiting importantcustomers and other means

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

Conveyors◼ Establishment of maintenance structure⚫ Establish a swift maintenance structure andevolve it into a structure that enables predictive
maintenance in the future◼ Acquisition of revenue from maintenanceservices⚫ Acquire revenue from maintenance services in
the conveyor business by improving andleveling operations
2022 All rights reserved.

20

20

Business Strategies
AP Overseas◼ Start up the Thailand production base early on and establish sales structure inIndonesia and Vietnam

1. Design plants standardized for overseas⚫ Start a marketing team to grasp the needs ineach country

A market where we willcontinue to grow in theexisting fields⚫ Design standardized plants that are costcompetitive and catering to the needs inoverseas markets through the introduction of
supplies, etc.

Customers: Large-scale
Model: Large

2. Develop a structure for entering into newmarkets⚫ During the period of the new medium-term
plan, we will newly enter the Indonesian and
Vietnamese markets⚫ Strengthen production capacity in China andThailand to cover the entire ASEAN region⚫ Establish cooperation structures with local
distributors* Size of circle corresponds
to the scale of sales[Legend]: Manufacturing baseMarket that will becomea new revenue base in
10 years: Sales base: No base(handle per project basis)

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

21

21

Business Strategies
Conveyors◼ While realizing short delivery time and low price through modularization, become a design andmanufacturer that offers conveyor lines in a package

1.

Modularization of portable conveyors⚫

⚫

Establish a unique position where “high priceproducts are delivered in a short time”
through modularization and a design andmanufacturing that reflects customizationneeds

A comprehensive belt conveyor manufacturer with strength inmodularization
Black rubber belt conveyors
Portable conveyor(Portable belt
conveyor)

Conveyor with functions

Mass manufacturing(modularization)

Information disclosuresystem
Optimization
Portable belt
conveyor

Strengthen relationship with customers by
utilizing web-based service

Offering of conveyor lines in a package⚫

Offer modularized channel conveyors in ashort delivery time at low price⚫

Contribute to user convenience andefficiency through engineering related toconveyor system

CPS
Channel conveyor

Conveyor +Peripherals

Design andmanufacturing

Optimization of
conveyor lines

Design Manufacturing

Conditions,needsStandardize shapes andsizes in demand2.

(measuring, tripper, verticalconveyance)

Supply conveyors at low
cost in a short delivery
time

Offer standard drawings
Reduce man-hours at both
Nikko and customers

Modularize the body and limit
design and manufacturing toancillary parts

Offer optimum conveyor
lines including front and reardevices

Raise the dependence on
Nikko by offering
necessary information
early on

Supplement customer
operations and swiftly
respond to customer requests

Offering of conveyor
lines in a package

End user

Assembled
Distributor andproducts manufacturer dedicated trading firm

(civil(agriculture(industrial waste
and recycling) engineering) and grains)www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

(warehouse)

22

22

Business Strategies
Mobile Plants◼ Capture top sales share and strengthen profitability
Mobile plant = mobile crushers, belt conveyors, soil improving machine
Advantages: easy installation, can be used quickly, easy to move to desired location,
sales channels for used machines
1.

2.

For business stabilization⚫ Build sales network, establish andpromote rental service⚫ Promote maintenance business
Develop new products and proposed
products⚫ Research market and customer needs⚫ In-house development of products andpromote their sales within and outsideJapan

Imported devices
Mobile crushers andscreens

Build sales
networkNikko products

Mobile belt conveyor

Promote rental
service

Promotemaintenancebusiness

Mobile soil improving
machineCreate new best- Expand Nikko products
selling products in Japan and overseas

Create new best-selling products
Mobile crusher, screen, and soil improving machine market Strengthen performance, ability for technology
proposals, and maintenance support capability

199 units Data by Japan Construction Equipment Manufacturers Association
FY 2024: To capture 50% market share andbecome No.1 in sales sharewww.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

Expand profitability
2022 All rights reserved.

23

23

Fiscal Year Ended March 31,
2022
Financial Results

24

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

25

25

FY 2021 Performance Highlights (1)• Net sales: Up 2.6% year on year, posting a record high→ p. 27 FY 2021 Performance Highlights (1)→ p. 61 Trend in Key Financial Data
• Order backlog: Up 14.8% year on year (up 4.4% excl. 1,484 million yen in order backlog of Ube Kohki)→ p. 27 FY 2021 Performance Highlights (1)→ p. 56 Trends in New Orders Received and Order Backlog per Business Segment (Cumulative)• Net sales of overseas business (AP + BP): Up 27.3% year on year; overseas sales ratio: Up +2.3%→ p. 45 AP-Related Business Details and Strategy for the Future (3)• AP-related business: Operating income fell 54.6% year on year as we were unable to absorb the impacts ofthe decline in net sales of AP in Japan and due to the increase in supply prices
and steel prices, as well as the increase in personnel costs and raw material prices in China→ p. 28 FY 2021 Performance Highlights (2)→ p. 30 AP-related Business→ p. 31 AP-related Business (Japan vs. Overseas)• Net sales declined 5.9% year on year due to the AP-related business in Japan, temporary suspension ofbusiness negotiations due to changes in organization and structures of customers, and pressure on profits at
customers due to sharp increase in prices of raw materials such as asphalt→ p. 28 FY 2021 Performance Highlights (2)www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

26

This is regarding the financial results for FY 2021.
□ AP struggled. Meanwhile, BP performed very strongly. Net sales were a record
high. Net sales in 1993 were the highest until now. So, we were able to set a newrecord in net sales for the first time in about 30 years. The record for operating
income was 2.7 billion yen in 1990, and the level in FY 2021 is still about 700
million yen short.

□ We recognize that in the FY 2021 financial results, the price increases in raw
materials including steel were even greater than what we had initially assumed.
The negative impact of price increases on profits were 336 million yen.
□ Order backlog rose 14.8% year on year. This includes about 1.5 billion yen inorder backlog of Ube Kohki, which joined the Nikko Group on March 1, and evenwith this excluded, it is still up 4.4%. In the previous fiscal year, we achieved
record sales, and we have started the current fiscal year with sufficient orderbacklog for achieving even higher sales.
□ Regarding the overseas business, sales declined slightly in FY 2020 due to theimpact of COVID-19, but totaled 4.7 billion yen in FY 2021, which was a record
high for the overseas business. Sales in China grew along with exports to Taiwan.
In FY 2021, our Thailand operations began, and though small, we posted somesales. Meanwhile, the AP-related business in Japan remained lackluster and is
as described here.

26

FY 2021 Performance Highlights (1)▶ Sales:

AP products in Japan (down 1,570 million yen), BP products (up 1,440 million yen), China (up 310 million yen), exports (up 510 million yen),
Thailand (up 180 million yen), environment (up 490 million yen), conveyor (up 130 million yen), other business (down 130 million yen),maintenance services (down 360 million yen)
▶ Operating income: Declined due to costs of starting the Thailand subsidiary’s business and an increase in selling, general and administrative expenses
including R&D expenses▶ Ordinary income: Declined due to the absence of special dividend (340 million yen) from Maeda Road Construction Co., Ltd.
▶ Orders: AP-related business (down 2,100 million yen), BP-related business (up 2,120 million yen), environment- and conveyor-related business(up 130 million yen), other business (down 320 million yen), total (down 150 million yen)
▶ Order backlog: AP-related business (down 510 million yen), BP-related business (up 1,240 million yen), environment- and conveyor-related business(roughly unchanged), other business (up 1,390 million yen), total (up 2,120 million yen)(mil. yen)(mil. yen)

FY 2020 results FY 2021 Results

YoY change(amount)

YoY change (%) FY 2021 forecast

Net sales

37,866

38,846

+980

+2.6%

39,000Operating income

2,302

2,053

(249)

(10.8)%

2,300

Operating margin

6.0%

5.3%

(0.7) pt

5.9%

Ordinary income

2,973

2,274

(699)

(23.5)%

2,500

Net income
attributable to ownersof parent

2,082

1,649

(433)

(20.8)%

1,700

New orders received

40,00939,852(157)(0.0)%

38,800Order backlog

14,361

16,490+2,129+14.8%

14,161www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

–

2022 All rights reserved.

27□ These are the highlights of the financial results with sales, profits, and orderbacklog figures at the bottom. I will not explain in detail because I would be
repeating myself, but sales grew. Profits declined due to the significant impact ofincreasing raw material prices. New orders received during the fiscal year was
slightly down but almost at a level equivalent to the previous year. The orderbacklog shows that we can start from a launch pad at a higher level than theprevious year.

27

FY 2021 Performance Highlights (2)Results compared with the previous year
Net sales
AP-related
Operating income
Business
Operating margin
Net sales

BP-related
Operating income
Business
Operating margin
Environment
Net sales- andOperatingincomeconveyorrelated
Operating margin
business
Otherbusiness(mil. yen)

YoY change(amount)

FY 2020 results

FY 2021 results

YoY change (%)

FY 2021 forecast

19,46718,328

1,239

562(1,139)(5.9)%

19,000(677)(54.6)%

6.4%

3.1%

(3.3) pt

1,250

9,212

10,839+1,627+17.7%

9,200

–

6.6%

879

1,123

+244

9.5%

10.4%

+0.9 pt+27.8%

2,390

3,018

+628

+26.3%

482

588

+105

+21.7%

400

20.2%

19.5%

(0.7) pt

–

18.2%

6,100

–

Net sales

6,796

6,660

(136)

(2.0)%

Operating income

1,170

1,073

(97)

(8.3)%

Operating margin

17.2%

16.1%

(1.1) pt

(1,469)(1,293)(176)

Corporate expenses

850
8.7%

–

2,200

1,000
16.3%

(12.0)%(1,300)▶ Net sales of AP-related business: In Japan, net sales of products fell 24.5% from a year earlier. Net sales of maintenance service also declined 6.0%
Overseas net sales: Exports were up 235.3%, net sales in China up 9.1%, and those in Thailand up 4,405.9%(up 187 million yen)
▶ Net sales of BP-related business: Net sales of products increased 29.5% from a year earlier. Net sales of maintenance service rose 4.8%
▶ Environment- and conveyor-related business: Net sales of environmental products were up 219.3% from a year earlier
Net sales of conveyor business rose 6.3% from a year earlier▶ Other business: Net sales of mobile plants were up 35.3% from a year earlier (1,070 million yen → 1,448 million yen)
Net sales of waterproof boards were up 12.0% (903 million → 1,011 million)
Net sales of temporary construction materials were down 12.0%. Net sales of crushers were down 3.9%. Net sales of hand tools
were up 7.8%
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

28□ Now, we will look at the segments.
□ AP’s sales result for FY 2021 declined 1.1 billion yen from the previous year.
Operating income became roughly half. Meanwhile, sales of BP increased 1.6
billion yen and operating income also rose 240 million yen. The businessperformed very strongly. Sales of the environment- and conveyor-related
business reached 3.0 billion yen after a long time. Factors include moderateenvironment-related sales in FY 2021, as well as the growth in conveyors. In the
Other Business, mobile plants and waterproof boards, which are growthbusinesses, grew more or less in line with the plan, but sales of scaffoldings andtemporary construction materials fell considerably in FY 2021. Also, sales ofcrushers declined slightly from the previous year.

28

FY 2021 Quarterly Performance Trend
Quarterly net sales and operating income trends

Net sales: 35,151

Net sales: 37,866

Net sales: 38,846

Operating income: 2,053

Operating income: 2,302

Operating income: 2,053

18,0001,800

13,000

1,300

8,000

800

3,000

300

▲ 2,000

Net sales

▲ 200

1Q

FY 2019
2Q
3Q

4Q

8,001

9,138

7,422

10,5891Q

FY 2020
2Q
3Q

4Q

7,271

10,954

13,234

6,407

1Q

FY 2021
2Q
3Q

4Q

8,817

10,191

8,157

11,681
1,025

Operatingincome

276

683

81

1,013

408

592

(96)

1,398

375

593

59

Operatingmargin

3.4%

7.5%

1.1%

8.7%

5.6%

5.4%

(1.4)%

10.6%

4.2%

5.8%

0.7%

8.8%

16,47914,361

15,342

16,490Order
backlog

Operating income

Net sales and order backlog(mil. yen)

12,773

13,15812,76912,21914,417

13,030www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

15,2982022 All rights reserved.

14,15529□ These bar graphs show the quarterly trends of sales and operating income forthree years through FY 2021. In FY 2020, we posted a loss in the third quarter,
but in FY 2021 we posted operating income in all four quarters without posting
any losses.
In the meantime, we recorded strong sales and profits in the fourth quarter of FY
2020, while those in FY 2021 were in line with regular years.

29

AP-related BusinessNew orders received(cumulative) (million yen)

16,133
11,196

1Q

13,072

9,835

9,048

5,256

2Q

3Q

18,18014,102

8,419
3,575

4Q

1Q

FY 2019

4,519

2Q

3Q

4Q

▶ New orders received•Down 10.4% YoY

20,2791Q

FY 2020

2Q

3Q

4Q

FY 2021(Factors)
Positive factors: Strong orders overseas (China)
8 units in 3Q and 6 units in 4Q
Negative factors: Declined due to delays in major
projects in Japan
Hesitation in capital investment due tocost increase▶ Net sales

Net sales
19,467
17,51813,365

12,774

12,456
9,527

8,667

9,189

(Factors)•Japan:

5,058

3,991

3,917

•Down 5.9% YoY•Net sales in Japan declined 13.5% YoY•Net sales overseas increased 27.1% YoY

18,3281Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021

Sales were delayed due to prolonged delivery time ofvarious parts•Overseas: In China, net sales recovered to pre-COVID-19 levels
and sales were strong
In Thailand, number of tourists visiting are showing a
recovery trend, while the number of infected people
increased due to the “living with COVID-19” policy

Operating income and operating margin▶ Operating income

6.4%

5.7%

5.0%
7.8%

8.5%

4.1%
6.7%

1,118
676

4.2%

2.4% 3.1%

388

327

3.9%

623

640
340

222

6.4%
1,239

535
199

•Operating income fell 54.6% from a year earlier•Operating margin fell 3.3 pt YoY

562

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021(Factors)•Japan: Impact of sudden rise in steel and supply prices•China: Steel price and personnel cost rose

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

30□ New orders for AP declined 10% year on year. Those for overseas increased,
while those in Japan fell. Price of asphalt soared due to the fuel price hike, androad pavement companies in Japan, who are our users, have been facing severe
financial results. This also probably has had a little impact. There have beensome cases where capital investment plans were slightly postponed in FY 2021.
Additionally, crude oil price continues to remain high in the current fiscal year,
and it is possible that there will be at least some impact on capital investment byroad pavement companies, who are our users.
□ Net sales declined 5.9% year on year. Like orders, net sales in Japan declined
while overseas net sales rose. In particular, sales in China recovered to levels
before COVID-19. Operating income declined significantly by 54.6% year on year.
As I said before, the soaring raw material prices both in Japan and China aregiving significant negative impacts on profits.

30

AP-related Business (Japan vs. Overseas)(cumulative) (million yen) ▶ Japan

Domestic net sales
15,790

6,158

8,340

7,842

9,585

9,044
6,306

3,130

3,467

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 20212,298•Plant products declined 24.5% from a year earlier•Maintenance service fell 6.0% from a year earlier

13,656

13,182▶ Overseas•Up 27.1% YoY•Exports: Up 235.3% YoY•China: Up 9.1% YoY•Thailand: Up 4,405.9% (up 187 mil. yen)
*ChinaSales increased from a year earlier thanks to an increase indemand for large-sized plants
Profits significantly declined due to steep hikes in raw material
costs such as steel price and rising personnel costs

Overseas net sales

4,116 4,337
1,618

4,320

3,189 3,677

2,508
861

1,685

1,591

Held an opening ceremony for the local manufacturing subsidiaryplant in March and began operation

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021

Overseas ratio

41.3

28.9

33.0

Japan
24.8

21.6

17.7

25.0

18.9

31.5

31.4

*Exports (Taiwan, overseas operations)

It is returning to pre-COVID-19 levels, and Taiwan,
Thailand, and maintenance parts have been strong(%)

Overseas*Thailand
Sold 1 unit in 1H and 1 unit in 2H
Order backlog of 3 units for the next fiscal year

4,672

2,882

▶ New overseas orders received and order backlog
32.3

New orders

25.5

China (Nikko Shanghai)
58.7

71.1

67.0

75.2

78.4

82.3

75.0

81.1

68.5

68.6

67.7

74.5

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021

Thailand sales company (NAT)

4,270 mil. yen(up 10.5%)
260 mil. yen

Order backlog
3,140 mil. yen(up 11.1%)
240 mil. yen

Thailand manufacturing company (NIC)

20 mil. yen

0 mil. yen

Exports

650 mil. yen

270 mil. yen

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

31□ Sales of plant products in Japan fell 24.5% year on year, while those ofmaintenance services also fell 6%. Overseas net sales increased 27.1% andexports rose 235% year on year. The large figure is because there were almost
no exports the year before. Though it is not mentioned here, we have suspended
our business related to Russia. In the previous fiscal year, sales of parts to
Russia were 23 million yen. The impact from halting the business is more or lessnegligible.

31

BP-related Business(cumulative) (million yen)▶ New orders received

New orders received

12,086
9,478

8,442

7,278

6,315

5,646

4,823

4,313

3,142

2,061

1,969

• Up 21.3% YoY

9,961

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021(Factors)
While ready-mixed concrete shipment declined due tothe end of disaster restoration works and delays inworks due to the impact of COVID-19, the investment
appetite of users continues to be high thanks to stability
in the market▶ Net sales

Net sales• Up 17.7% YoY• Plant products increased 29.5% from a year
earlier• Maintenance service rose 4.8% from a year
earlier

10,840
9,212

9,158

5,589

4,918

2,442

1Q

7,279

6,192

6,291
4,569

1,972

1,478

2Q

3Q

4Q

1Q

FY 2019

2Q

3Q

4Q

FY 2020

8.3%
6.1%

9.9%
6.0%

7.4%

2Q

3Q

(Factors)• The number of projects continued to increase in newyear works of 4Q▶ Operating income

9.5%

9.9% 10.9%

9.2%

6.5%

10.4%

• Operating income rose 27.8% from a year earlier• Operating margin rose 0.9 pt YoY

1,123
879

761
297

386

2Q

3Q

486

461

FY 2019

4Q

1Q

609

667

2Q

3Q

196

88

110

1Q

4Q

FY 2021

Operating income and operating margin
4.5%

1Q

2Q

3Q

FY 2020

4Q

1Q

4Q

(Factors)• Operating income rose as net sales increased• Profit margin improved, as planned production
brought down costs

FY 2021www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

32□ Compared to AP, BP performed very strongly in the previous fiscal year. New
orders received increased 21.3% year on year. Customers and the entire industry
had relatively robust appetite for capital investment, and new orders grewsignificantly as we further increased our market share and sales also rose 17.7%.
Naturally, operating income also increased 27.8% compared with a year earlier.

32

Environment- and Conveyor-related BusinessNew orders received(cumulative) (million yen)

2,290

2,025

1,787
1,374

1,187

Up 4.8% YoY

3,014

2,875

2401

▶ New orders received(Factors)

1,286

746

JR West: Rotating conveyor for bullet train ballast

523

449

Dryer for coke for iron making

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 202164 mil. yen

228 mil. yen

Net sales
3,018
2,634

2,390

▶ Net sales

2,195

Up 26.3% YoY

1,914
1,572

1,353

1,581

1,059
492

524

424

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021(Factors)
JR West: Rotating conveyor for bullet train ballast
Turbine mixer for glass making
Beverage bottle separator crusher facility:
Bag breaking machine

64 mil. yen
28 mil. yen
4 units
2 units

Operating income and operating margin
16.2%

20.5%

21.3%

562

16.3%

18.1%

15.6%

19.5%
15.4%

17.3%

▶ Operating income• Operating income rose 21.7% from a year earlier• Operating margin fell 0.7 pt YoY

588

21.8%

482
379

393

286

219
114

80

18.1% 20.2%

243

192
66

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021(Factors)• Profit increase from sales expansion• Impact of price increases from 3Q in the conveyor
business

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

33□ This is the environment- and conveyor-related business. New orders received
increased about 5% compared with a year earlier. Those of both conveyors andenvironment-related products grew. In particular, orders for environment-related
products performed strongly. Net sales also increased, up 26.3% year on year.
As sales increased, operating income also rose 21.7%.

33

Other businessNew orders received(cumulative) (million yen)
6,894

5,902

▶ New orders received• Down 4.7% YoY for the entire segment

6,572

5,222

4,578

4,606
3,001

2,923
1,325

• The mobile plant (MP) business expanded steadily
FY 2020 1,110 mil. yen (35 units)
FY 2021 1,890 mil. yen (44 units)

2,820
1,568

1,405

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021▶ Net sales

Net sales

Down 2.0% YoY

6,660

6,796

Positive factors: • MP products: 1,070 mil. yen (34 units) inthe previous fiscal year
→ 1,448 mil. yen (37 units)• Waterproof boards were up 108 mil. yen
YoY

5,840
4,325

4,092

3,899
2,719

2,549

2,647

1,149

1,275

1,361

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021

Negative factors: Temporary construction materials
declined 12.0%
The purchase appetite of temporary
construction material rental companies
have declined, owing to price hike insteel materials

Operating income and operating margin
17.6%
15.2%

13.4% 13.9% 13.8%
1,170

1,020
448

644
171

175

▶ Operating income

17.2%

17.4%
16.5%

377

11.5% 12.0%

14.4%

16.1%

623

565
157

• Operating income fell 8.3% year on year
• Operating margin fell 1.1 pt year on year

1,073

317

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

1Q 2Q 3Q 4Q

FY 2019

FY 2020

FY 2021★Sales composition of Other Business (FY 2021)
Temporary construction materials 22.9%, waterproof
boards and floodgates 24.1%, hand tools 10.9%, mobile
plants 21.7%, crushers 5.1%,
Nikko-developed products 10.9%, other 4.2%

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

34□ This is the other segment. New orders received for the segment as a wholedeclined 4.7% year on year. Net sales also declined 2.0% year on year. From thecurrent fiscal year, Ube Kohki has been included in the other segment and weare expecting annual sales of about 2.0 billion yen and operating income of 0.1
billion yen.

34

Factor Analysis of Changes in Ordinary Income for FY 2021
Increase

Decrease

Total(mil. yen)(mil. yen)

Item

ImpactContent

Contribution
from net sales+264

Increase in net
sales
+979

Rise in raw
material costs

-336

Steel
+251
Copper wire +57
Supplies+28+381

Reduction of costof-sales ratio excl.
the rise in raw
material costs:
73.09%→ 72.10%

Rise in SG&A
expenses-558

Rise in personnel
costs +143
M&A related +76
Rise in experimentand researchexpense +57

Dividends
income-423

Absence of special
dividends-344

FY2021 ordinary income

Other non-operating
incomeForeign exchange losses

Decrease in dividend
incomeRise in SG&A expenses

Lower cost-of-sales ratio

Rise in raw material costs

Contribution from net sales

FY2020 ordinary income

Lower cost-ofsales ratio

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

35□ This is the analysis of factors contributing to the changes in ordinary income.
□ Ordinary income for FY 2020 was 2.973 billion yen and 2.273 billion yen for FY
2021. The factors contributing to profit increase are shown in blue. By contrast,
the factors that contributed negatively are shown in red.
□ Profit contribution from the about 1.0 billion yen sales increase was 264 million
yen, negative effect of the soaring raw material costs was 336 million yen, theimpact of improvement in cost-of-sales ratio mainly targeting outsourcing costs
was 381 million yen, and the negative impact from the increase in sales andadministrative expenses was 558 million yen.
The negative impact of the decline in dividends income was 423 million yen. It
decreased because in FY 2020 there was the special factor where we received
special dividends from Maeda Road Construction. Foreign exchange-related
profits were up 20 million yen compared with a year earlier. Other non-operating
income were down 47 million yen.

35

Balance Sheet Trends(mil. yen)

FY 2020

FY 2021

ChangeMain factors in year-on-year change
Increase:

Current assets

Assets32,381

34,127

1,746

Property andequipment

9,183

10,669

+1,485Intangible assets

660

1,036

+375

Investments andother assets

6,472

6,246

(225)

48,69752,079+3,381

Current liabilities

14,41815,774+1,355Long-term
liabilities

2,827

4,254

+1,427

Total assets

Inventory assets
Raw materials andsupplies
Electronically recordedmonetary claims
Decrease: Notes and accounts
receivable-trade

Increase:

Liabilities

Decline:Total net assets

31,451

32,050+598

Net assets per share (yen)823.01

837.22+14.21www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

Decline:+116 mil. yen(1,092) mil. yen

Buildings and structures +1,387 mil. yen
Machinery, equipment+177 mil. yen
and vehicles
Land+371 mil. yen
Construction in progress(484) mil. yen
Investment securities(192) mil. yen

Increases: Notes and accounts
payable-trade
Contract liabilities
Decreases: Electronically recorded
obligations
Accounts payable-other
Advances received
Increase:+2,230 mil. yen+225 mil. yen+540 mill. yen+4,405 mil. yen(146) mil. yen(100) mil. yen(2,932) mil. yen

Retained earnings+388 mil. yen
Foreign currency translation +296 mil. yen
adjustment
Valuation difference on(139) mil. yen
available-for-sale securities

2022 All rights reserved.

36□ This shows the balance sheet trends.
□ As we acquired Ube Kohki as of March 1, the balance sheet as of the end of FY
2021 consolidates Ube Kohki’s balance sheet. Net assets increased 1.3 billion
yen partly due to this.
Net assets increased 98 million yen.

36

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

37

37

FY 2022 Outlook (1)(mil. yen)

FY 2021 results

FY 2022 forecast
Year-onyearchange1H

2H

Full year

1H

2H

Full year

19,008

19,83838,84620,00022,00042,000+8.1%

Operating income

968

1,085

2,053

1,000

1,300

2,300

+12.0%

Operating margin

5.1%

6.0%

5.3%

5.0%

6.0%

5.5%

0.2 pt+227

Ordinary income

1,105

1,168

2,273

1,150

1,350

2,500

+10.0%Net income attributableto owners of parent

867

782

1,649

700

900

1,600

+3,154
Net sales

+247

(49)
(3.0)%+4,663

New orders received

18,802

22,19841,33723,00023,00046,000+11.3%

Order backlog

14,155

16,361

16,49019,361

20,361

20,361+23.5%+3,871▶ In AP, sales of products in Japan will decline, while those of overseas business such as in China and exports will increase▶ Sales of maintenance service are expected to be in line with the previous fiscal year
▶ R&D expenses and depreciation and amortization to increase (342 million yen)www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

38□ This is the consolidated outlook for FY 2022.
□ We expect net sales of 42.0 billion yen for the full year, which is a planned
increase of 3.1 billion yen. The contribution of Ube Kohki is expected to be 2.0
billion yen and the portion attributed to the existing Nikko is expected to be 1.1
billion yen. We expect 2.3 billion yen in operating income, 2.5 billion yen in
ordinary income, and 1.6 billion yen in net income. Net orders received during theperiod is planned at 46.0 billion yen and we expect 20.3 billion yen in orderbacklog.

38

FY 2022 Outlook (2)(mil. yen)

FY 2020 results

Net sales

AP-related
business

OperatingincomeOperatingmarginNet sales

BP-related
Business

OperatingincomeOperatingmarginNet sales
Environmentand Conveyor- Operating
relatedincomeBusiness
OperatingmarginNet sales

Otherbusiness

OperatingincomeOperatingmarginCorporate expenses

1H

2H

9,527

9,940

640

FY 2021 results

Full year

1H

2H

19,467

9,189

9,139

599

1,239

388

6.7%

6.0%

6.4%

4,918

4,294

486

FY 2022 forecast
Year-onyearchange1H

2H

Full year

18,3289,520

10,48020,000

174

562

500

650

1,150

4.2%

1.9%

3.1%

5.3%

6.2%

5.8%

9,212

5,589

5,251

10,840

5,000

5,500

10,500

393

879

609

514

1,123

460

590

1,050

9.9%

9.1%

9.5%

10.9%

9.8%

10.4%

9.2%

10.7%

10.0%

1,059

1,331

2,390

1,581

1,437

3,018

1,190

1,310

2,500

192

290

482

243

345

588

220

280

500

18.1%

21.7%

20.2%

15.4%

24.0%

19.5%

18.5%

21.4%

20.0%

2,719

4,071

6,790

2,647

4,013

6,660

4,280

4,720

9,000

377

793

1,170

317

756

1,073

480

620

1,100

13.9%

19.4%

17.2%

12.0%

18.8%

16.1%

11.2%

13.1%

12.2%

(3.9) pt

(696)

(773)

(1,469)

(589)

(704)

(1,293)

(650)

(850)

(1,500)+16.0%

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

Full year

2022 All rights reserved.

+1,672+9.1%+588+104.6%+2.7 pt(340)(3.1)%(73)(6.5)%(0.4) pp(518)
(17.2)%(88)(15.0)%+0.5 pt+2,340+35.1%
+27
+2.5%

39

□ We expect a 1.6 billion yen increase in sales of AP for the current fiscal year to 20.0 billion yen.
Sales of Nikko Shanghai in China are expected to increase 600 million yen. Sales in Thailand,
which is now fully operational, are expected to increase 600 million yen compared with a year
earlier. We are expecting a total increase of 1.2 billion yen in overseas sales. The difference is thesales increase in Japan. Operating income is expected to be 1.15 billion yen and operating marginis 5.8%, so the forecast is still short of the 6.4% operating margin in FY 2020. Looking at thecurrent fiscal year, the Chinese business struggled in FY 2021 in terms of profits as we could notraise prices corresponding to the soaring raw material prices. Sales of the projects for which we
received orders in FY 2021 will be recorded in the current fiscal year and we made sure to accept
those orders at raised prices. For the current fiscal year, profits of the Chinese business will
improve by 200 million yen compared with the previous fiscal year as per our plan. If you look at
profits of the AP products in Japan in FY 2021, projects with tougher prospects for profitability
became concentrated due to our strategy. There will be almost no projects like these in FY 2022
and we expect profits in Japan to also improve. In Thailand, we expect 270 million yen in loss again
for the current fiscal year. There was a 250 million yen deficit in Thailand in FY 2021. It is still in thestart-up phase and we assume it will continue with losses for about two more years.
□ As for BP, we expect 10.0 billion yen in sales, 1.05 billion yen in operating income, and a profit
margin of 10%.
It continues to be strong in FY 2022 and the order backlog at the beginning of the fiscal year was ata very high level, so we expect it to reach a level similar to FY 2021.
□ We budgeted sales of the environment- and conveyor-related business to decrease from a year
earlier.
There is absence of order backlog of a major environment-related project at the beginning of the
fiscal year and this has been discounted.
□ Sales of the other businesses are expected to be 9.0 billion yen, up 2.3 billion yen from a year
earlier, and operating income to be 1.8 billion yen. As I mentioned before, we expect 2.0 billion yen
in sales and 100 million yen in operating income from Ube Kohki.

39Factor Analysis of Changes in Ordinary Income for FY 2022 (Forecast)

Increase

Decrease

Total(mil. yen)(mil. yen)

FY 2022

Absence of foreignexchange gains

Rise in depreciation
and amortization

Rise in R&D
expenses

Rise in personnel
costs

Improvement incost-of-sales ratio

Contribution fromnet sales

FY 2021

Item

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

ImpactContent

Contribution fromnet sales+880

Increase in net
sales +3,154

Improvement incost-of-sales ratio+125

Improvement of
0.29% in reductionof cost-of-sales ratio

Rise in personnel
costs

(360)

An increase in wage
(200)
An increase in
number of
employees(160)

R&D expenses(301)

Depreciation andamortization(41)

Absence of foreignexchange gains(77)2022 All rights reserved.

Euro (67)40□ This is the forecast of the analysis of the factors contributing to the changes inordinary income for FY 2022.
□ We expect 2.5 billion yen in ordinary income. It was 2,274 million yen in FY 2021,
so it is an increase of about 250 million yen. The breakdown is: an impact of 880
million yen from the 3.1 billion yen in net sales increase, and 125 million yen fromthe improvement in cost-of-sales ratio. Meanwhile, there will be a negative impactof 360 million yen from the rise in personnel costs. The negative impact from theincrease in wage is 200 million yen and that from the increase in the number of
personnel is 160 million yen. R&D expenses will increase about 300 million yen.
The impact of the increase in depreciation and amortization is expected to be 41
million yen. We are assuming an impact of 77 million yen from the absence of
foreign exchange gains in the previous fiscal year.

40

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

41

41

AP-Related Business Climate and Outlook
AP steady-state share

Asphalt mixture output and number of asphalt plants installed
Virgin mixture
1,782

80,000Recycled mixture

Plants installed

2000

Unknown
0.7%

1,738
1,597

8,467

1500
28,186

Mixture output (1,000 tons)

60,000
1,172

1,130
1,040

1,041

43,392

1000

40,00041,47367,46433,25331,64850,008

Other
Tanaka Iron 1.9%
Works19.8
%
Nikko
77.7%

FY 2021 Nikko survey

28,813
28,611

20,000

Number of plants (units)

1,335

500

25,97815,745

12,454

9,992

9,914
9,469

0

0
2021

FY 2022 forecast

2020

2015

2010

2005

2000

1995

Source: Japan Asphalt Mixture Association. Number of units in FY 2021 and FY 2022 are Nikko estimates▶ Prices of asphalt, the raw material, and heavy oil, which is the fuel, soared reflecting the recent sudden rise in the crude oil priceand profits are on a declining trend for the industry as a whole.
Concerns regarding deteriorating appetite for capital investment▶ Shipment of mixture is expected to increase in the Osaka area in the future as the 2025 World Exposition approaches▶ We expect decarbonization-related products to growwww.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

42

42

AP-Related Business Details and Strategy for the Future (1)Net sales

15,05412

17,25813(mil. yen)

15,071

17,252 16,580 17,179 16,434 17,518

14

15

16

17

18

19

19,467 18,328 20,000

20

21Operating income

FY 22
forecast

Sales ratio of AP-related business
Thailandbusiness
Chinese 1.0%
business
Plant sales
20.6%
26.5%
Exports
3.8%
Maintenance service
48.0%

2,125
1,492
1,214

1,234

1,253

1,348
963

1,118

1,239

1,150

Net sales annual growth rate

562
12

13

14

15

16

17

18

19

20

21

Operating margin

FY 22
forecast

FY 2020 → FY 2021 results

12.3%
9.9%
8.1%

7.2%

7.6%

7.8%
5.9%

6.4%

6.4%

5.8%

Plant sales(24.5)%

Maintenanceservice
Chinese business(6.0)%

Exports

3.1%

Thailand business
12

13

14

15

16

17

18

19

20

21

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

+9.1%
+235.3%+4,306.9%

FY 22
forecast
2022 All rights reserved.

43

43

AP-Related Business Details and Strategy for the Future (2)New product performancein AP-related businessAP demand and Nikko share
100

100%
(V) industry units(R) Nikko share(R) industry units
Overall Nikko share(units)(V) Nikko share

16
80%

60

60%

40

40%

20

20%

0

27

20

12

20

15

9

14

14

25

24

29

22

29

23

29

22

32

37

FY
22
fore
cast
24 20

(V) industry units

18

18

5

6

10

3

7

10

10

10

18

10

16

16

14

18

17

16

18

(V) Nikko share

56% 67% 60% 67% 70% 0% 71% 70% 80% 70% 72% 60% 81% 69% 64% 67% 59% 75% 72% 76%(R) Nikko share

67% 85% 75% 65% 60% 67% 71% 71% 84% 67% 69% 73% 76% 78% 72% 73% 53% 76% 67% 70%(R) industry units

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

Nikko plant share

Industry: number of plants

80

Number of newmodel APs
(VP and MBD)
Number ofcrushing plants
Number ofdecarbonization-related
products

17

18

19

20

FY 21

2

3

3

5

2

3

0

1

0

2

2

1

0

0

3

2

2

9

★Decarbonization-related products(Foamed asphalt device, biomass burner, etc.)

0%

21

17

Overall Nikko share 62% 76% 71% 65% 64% 50% 71% 71% 83% 68% 70% 69% 78% 74% 70% 70% 55% 75% 69% 73%
V: Virgin mixtures
R: Recycled materials

Source: Nikko▶ Introduce VP-IV, an improved version of large model VP-II, in FY 2022 so as to improve profit▶ Strengthen decarbonization-related products and aim for CO2 of 50% in 2030 -> 0% in 2050
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

44

44

AP-Related Business Details and Strategy for the Future (3)Nikko’s overseas net sales and overseas sales ratio
14.7%
12.1%

9.2%

12.2%

8.3%

4,564

6,154

4,000

9.9%
8.7%

3,956

9.0%

10%

4,747

4,000

4,390
3,965

2,000

12.5%

11.3%

2,668

2,825

2,980

3,838

3,730

2,956

5%

Net sales (mil. yen)

Net sales (mil. yen)

6,000

Nikko Shanghai net sales
5,000

15%

3,000

3,468

3,299

2,000

3,637 3,631

2,027 2,087 2,131
1,669

1,000

0

0

0%
13

14

15

16

Net sales

17

18

19

20

21

13

FY 22
forecast

Percentage of Group net sales[Taiwan]Employees have been dispatched, and sales activities have started. Conversion,
maintenance, orders for plants[Russia]
Business negotiations as well as parts supply have stopped
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

16

17

18

19

20

21

FY 22
forecast

30

Net sales volume (units)[Thailand]
Budget is expected to focus on maintenance works and expansion works for existing roads.
Large-scale works have been postponed to the year after next and beyond and the numberof such works may increase from 2023
We estimate mixture volume to be high in the north and northeastern areas, which will be
the main target from the next year onwards
Started production at the new factory in March

15

Nikko Shanghai AP unit sales

The overseas division and exports are showing a recovery trend from the impact of thenovel coronavirus[China (Nikko Shanghai)]
In 2021, COVID-19 infection, which was showing a declining trend, began expanding invarious areas from March
While demand was high, the business stagnated due to the prolonged lockdown inShanghai. Concern over sales decline

14

20

10

1
3

2
1

1
4

3
3

9

8

8

9

13

14

15

16

5
0

6
0

7

6
3

8

4

5
2

12

15

2
12
8

11

10

21

FY 22
forecast0

Virgin2022 All rights reserved.

Recycling

17

18

19

20

Virgin and recycling plants

45

45

BP-Related Business Climate and Outlook
Trends in ready-mixed concrete shipments, price, and number of factories
4,227

4,110

12,36012,190

Ready-mixed concrete shipped (10,000 m3)
3,515

5,000

Number of factories

4,000

3,368

3,170

10,000

3,120
3,000

8,796

8,391

7,610 7,350

2,000

5,000
1,000
0

0

180

Ready-mixed concrete unit price index (FY 2015 = 100)

Number of factories

Ready-mixed concrete shipped (10,000 m3)

15,000Source:National Federation of ReadyMixed Concrete Industrial
Associations
The forecast for FY 2021 wasmade by Nikko

Sapporo160
Sendai

140
120

Tokyo

100

Nagoya

80

Osaka

60

Fukuoka

40
12

13

14

15

16

17

18

19

20

FY 2021

Source:Economic Research Association▶ Nationwide ready-mixed concrete shipment in FY 2021 was 76.10 million m3, which is 2.7% less than FY 2020, the lowest sincepeaking out in FY 1990
In some regions, there were special demand from the Olympic Games and development of bullet train service and expressways andrestoration from large-scale disasters, but all in all it has not recovered from the slump partly due to the impact of COVID-19.
However, private-sector demand, which has been suppressed by COVID-19, is showing signs of recovery nationwide
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

46

46

BP-Related Business Details and Strategy for the Future (1)(million yen)

Net sales

8,577

Sales ratio of BP-related business
10,267
8,287

9,521

9,356

7,893

9,158

9,212

10,840

Exports Nikko Shanghai
0.4%
0.3%

10,500

5,889

12

14

16

18

20

FY 22
forecast

Operating income

678

712

878

1,123

1,015

1,006

666

761

879

Concretepumps
1.8%
Maintenanceservice
39.1%

Plant sales
58.4%

1,050

317

12

14

16

18

20

FY 22
forecast

Operating margin
8.6%

FY 2020 → FY 2021 results

Plant sales
10.8%

7.9%

Net sales annual growth rate

8.6%

10.7%
8.4%

8.3%

9.5%

10.4%

10.0%

+29.5%

Maintenance service+4.8%

Concrete pumps(14.5)%

5.4%

Nikko Shanghai
Exports
12

14

16

18

20

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

(3.9)%+355.6%

FY 22
forecast
2022 All rights reserved.

47

47

BP-Related Business Details and Strategy for the Future (2)Total BP demand (value and number of units)

BP steady-state share trends
Units by Nikko

300

160

Units by others

4,000

Nikko share

31.1% 32.0% 32.6%

35%

140 140
3,456 3,414 3,406 3,396

140

120

3,000

105
97

99

98
93

93

90

76

57

100

194

209 201 199

186

48

198
170

251
73

72

52

55

199

151
116 123218

239 240 233

140

259 100

77
71

80

60

241

60

220
40

Demand (units)

200

Number of BPs in Japan (units)

Demand (100 mil. yen)

113

0
Total demand

Total shipped units

3,335

29.6%
28.4%

3266 3,196 3,170

30%

30.4%
25%

2,519 2,467 2,458 2,431 2,347 2,297 2,250
2,000

20%
2,174 2,138
15%

10%
1,000

20

0

27.1%27.7% 27.8%

3,298

937

947

948

965

988 1,001 1016 1022 1032

13

14

15

16

17

0

5%

0%

18

19

20

FY

Source:2021
Japan Construction Equipment Manufacturers Association’s BP Subcommittee(Maintenance services included in demand amount)▶ Ready-mixed concrete shipments in FY 2022 is expected to be 73.50 million m3. While private-sector demand is gradually
recovering led by redevelopment in Tokyo Metropolitan area, it marked a record low for the fourth consecutive year. Costs of raw
materials, personnel, and transportation have risen and we expect ready-mixed concrete cooperative societies in various regions
to carry out unprecedented levels of price increase to ensure future business continuation of members.
▶ Increase market share by launching new differentiated products to meet new demand, which arises from sales expansion toprecast industry, where demand continues to grow, as well as from ready-mixed concrete industry consolidation.
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

48

48

Maintenance Service Business Net Sales Level and ShareAP and BP maintenance service: Net Sales Level and Share
70%

64.8%
60.7%

18,000

62.8%

62.2%
59.5%

54.7%

56.5%

54.2%
51.5%

16,000

54.2%

53.9%

53.8%

54.9%

50%

14,000MS sales (mil. yen)60%

12,00040%
10,00030%
8,000

12,547

6,000

9,811

9,398

12,135

12,511

12,286

12,05012,65013,402
12,033

13,036

13,25020%

10,618

4,000
10%
2,000
0

Percentage share of MS in domestic AP and BP segment

20,000

0%

10

11

12

MS net sales

13

14

15

16

17

18

19

20

Percentage share of MS in domestic AP and BP segment

21

FY 22
forecast▶ Work on further improvement of efficiency through new measures such as flat-rate maintenance services as well
as stable operation of customer plants

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

49

49

Environment- and Conveyor-Related Business Outlook and Strategies(mil. yen)

Net sales

Sales ratio of environment- andconveyor-related business

3,931
2,853
2,085

1,944

12

2,289

14

2,647

2,775

16

18

2,634

2,390

3,018

20

FY 22
forecast

Operating income

562

527
250

337

166

12

14

369

308

16

417

482

18

20

588

12.0%

Conveyor
products
73.1%

500

FY 22
forecast

Net sales annual growth rate

Operating margin
18.5%

Conveyor
service Environment
3.2% al products
23.6%

2,500

FY 2020 → FY 2021 results
21.3%
14.7%

8.5%

20.2%

19.5%

20.0%

15.0%

13.9%

Environmental products

7.8%+219.4%

Conveyor products
+5.0%
12

14

16

18

20

FY 22
forecast

Conveyor service+50.1%▶ Delay is expected in plant capital investment in FY2022 due to the impact of COVID-19 and prolonged delivery time of control-related
devices▶ In the conveyor business, we are planning for improved business performance by responding to customer needs by shortening
delivery time of products and introducing new products
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

50

50

Other Business Outlook and Strategies(mil. yen)

Net sales

Other business sales
9,000

4,058

4,292

12

4,495

4,301

14

4,133

4,480

16

4,677

5,840

18

6,790

20

FY 22
forecast

Operating income
1,020
59

388

12

451

277

14

462

417

16

1,170

Other
Nikko- 5.8%
developed
Temporary
products
construction
9.4%
materials
22.9%
Crushers
5.1%

6,660

Mobileplants
21.7%

1,100

1,073

Waterproof
boards,floodgates
24.1%
Hand tools
10.9%

502

18

20

FY 22
forecast

Net sales annual growth rate
Operating margin
9.0%

17.5%
10.1%

10.0%

10.3%

17.2%

FY 2020 → FY 2021 results

16.1%
12.2%

10.7%

6.4%

1.5%

12

▶

14

16

18

20

FY 22
forecast

Mobile plant business and waterproof boards are expected to grow continuing from theprevious term
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

Temporary construction
materials
Waterproof boards,
floodgates
Hand tools(26.2)%

Mobile plants+35.3%(0.3)%+7.8%

Crushers(3.9)%

Nikko-developed
products
Other+11.6%(44.7)%51

51

Future Capital and Financial Strategy
To liquidate assets worth approx. 5 bil. yen (as of the end of FY 2018) lying dormant on
the balance sheet into cash

Sales results for the period from FY 2019
to FY 2021: 1.9 bil. yen(i) Sell strategic shareholdings:
about 2 bil. yen

Status of reducing strategically-held shares (in mil. yen)
FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Number of issues
sold completely

5

7

6

6

6

4

Amount sold

193

405

194

720

506

691

Book value

132

221

106

272

468

376

Sales gain

61

184

88

448

37

314

(ii) Improve CCC: about 3 bil. yen

FY 2021 improvement results: 1.4 bil. yen

150(days)

100

50

0
2010

2011

2012

2013

2014

2015

2016

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2017

2018

2022 All rights reserved.

2019

2020

FY 202152

52

Financial Strategy
Balance Sheet Trends
Cash and cash equivalents

Accounts receivable-tradeNon-current assets

Other assets

Total assets 34,989
6,755
10,121

4,708
2,818
4,174

23,28910,264End of FY 20112011年度

6,645

11,032

11,592

5,537

Total assets 52,079
6,783
12,436
2,492
10,754

1,987

7,255

5,370

4,114

3,735

13,069(mil. yen)

Inventories

純資産
固定資産
棚卸資産
売掛債権
Notesその他資産
and accounts payable-trade
Interest-bearing
debts
Other liabilities 手元流動性
Net assets
Total assets 44,976

9,655
29,08911,705

9,408

32,0507,251

End of FY 20162016年度End of FY 2021
2021年度▶ We will continue with sale of strategic shareholdings.
▶ Aim to enhance shareholder returns (to continue with divided payout ratio of 60% or more during the current
medium-term plan)
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

53

53

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

54

54

Trends in Net Sales, Profit, Cash Flows, and Other Indicators(mil. yen)

FY 2019

FY 2020

FY 2021

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

8,001

9,139

7,422

10,5897,271

10,954

6,407

13,234

8,817

10,191

8,157

11,681

AP-related Business

3,917

4,750

3,789

5,062

3,991

5,536

3,247

6,693

5,058

4,131

4,176

4,963

BP-related Business

2,442

2,127

1,722

2,867

1,478

3,440

1,274

3,020

1,972

3,617

1,690

3,561

492

861

561

720

524

535

513

818

424

1,157

614

823

Other business

1,149

1,400

1,350

1,941

1,275

1,444

1,373

2,698

1,361

1,286

1,678

2,335

Operating income

Net sales

Environment- andConveyor-related Business

276

683

81

1,013

408

592

(96)

1,398

375

593

59

1,026

AP-related Business

222

454

(53)

495

340

300

(105)

704

199

189

(61)

235

BP-related Business

110

187

89

375

88

398

(25)

418

196

413

58

456

Environment- andConveyor-related Business

80

139

174

169

114

78

94

196

66

177

136

209

Other business

175

273

196

376

171

206

188

605

157

160

306

450

Corporate expenses

(313)

(370)

(322)

(404)

(305)

(391)

(248)

(525)

(244)

(345)

(382)

(322)

Ordinary income

361

673

129

979

979

609

(89)

1,474

519

586

89

1,079

Net income attributable toowners of parent

270

733

(33)

618

746

353

(133)

1,116

378

489

838

(59)

573

–

Cash flow from operating
activities
Cash flow from investing
activities
Total dividend
Share buyback

229

3,809

2,784

2,224

(609)

(1,867)(2,165)

–

775

–

775

–

0
www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

572

–

400
2022 All rights reserved.

683

–
0

55

55

Trends in New Orders Received and Order Backlog per Business
Segment (Cumulative)(mil. yen)

New orders
received(cumulative)

FY 2019

FY 2020

FY 2021

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

AP-related
business

3,575

8,419

11,196

16,133

5,256

9,835

14,102

20,279

4,519

9,048

13,072

18,180BP-related
Business

1,969

4,313

6,315

9,478

2,061

4,823

7,278

9,961

3,142

5,646

8,442

12,086

Environment- andConveyor-related
Business

449

1,187

1,787

2,401

746

1,374

2,290

2,875

523

1,286

2,025

3,014

1,325

2,923

4,578

5,902

1,405

3,001

5,222

6,894

1,568

2,820

4,606

6,572

7,320

16,84323,87733,9159,469

19,03628,89340,0099,753

18,80228,14639,852

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

AP-related
business

8,466

8,561

7,548

7,424

8,688

7,732

8,751

8,235

7,696

8,094

7,942

7,725

BP-related
Business

2,967

3,184

3,464

3,760

4,342

3,665

4,845

4,508

5,678

4,565

5,672

5,755

Environment- andConveyor-related
Business

342

219

258

152

373

467

869

636

734

341

466

631

997

1,194

1,498

883

1,013

1,165

1,553

981

1,187

1,154

1,261

2,377

12,773

13,15812,76912,21914,417

13,03016,47914,361

15,29814,155

15,342

16,490

Other
Total

End-of-term orderbacklog

Other
Total

FY 2019

FY 2020

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

FY 20212022 All rights reserved.

56

56

Trends in net sales
Full-year trend(million yen)

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2022
forecast

FY 2021

Vs FY 2021

AP

15,071

17,252

16,58017,18016,434

17,51819,46718,32820,000

+9.1%

BP

8,287

10,267

9,356

9,522

7,893

9,158

9,212

10,83910,500(3.1)%

Environmentand conveyor

2,853

2,289

2,647

3,932

2,775

2,634

2,390

3,018

2,500

(17.2)%

Other

4,495

4,301

4,133

4,481

4,677

5,840

6,790

6,660

9,000

+35.1%

Total

30,707

34,11032,71735,114

31,78035,151

37,866

38,84642,000+8.1%

50,000AP

BP

Environment and conveyor

Other

40,0009,000

30,000

4,301
4,495

2,289

4,481
4,133
2,647

3,932

20,00015,071

6,660

2,390

3,018

9,212

10,839

2,500

2,634
9,158

10,500

9,356

9,522

17,252

16,58017,18016,434

17,51819,46718,32820,000FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022
forecast

8,287

10,000

5,840
4,677
2,775

2,853
10,267

6,790

7,893

0
FY 2014www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

57

57

Trends in New Orders Received
Full-year trend(mil. yen)

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2022
forecast

FY 2021

Vs FY 2021

AP

17,114

16,553

16,71817,182

18,884

16,133

20,27918,18021,000+15.5%

BP

10,069

9,517

9,966

9,066

8,438

9,478

9,961

12,086

12,000(0.7)%

Environmentand conveyor

2,711

2,796

3,203

2,948

2,773

2,402

2,875

3,014

3,000

(0.5)%

Other

4,606

4,203

4,248

4,420

5,008

5,903

6,894

6,572

10,000+24.1%

Total

34,50133,06934,13433,61735,10433,91640,00939,85246,000+11.3%

APBP

50,000

Environment and conveyor

Other
10,00040,000
6,894

8,056

2,875

3,014

3,000
4,606

30,000

2,711

2,796

4,248

4,420

3,203

2,948

5,008

5,903

2,773
2,402

9,961

8,438

10,069

9,517

9,966

9,066

17,114

16,553

16,71817,182

18,884

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

20,00010,0004,203

12,00012,086

9,478

20,27916,13318,18021,0000

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

FY 2019

FY 20202022 All rights reserved.

FY 2021

FY 2022
forecast
58

58

Trends in Order Backlog
Full-year trend(mil. yen)

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2022
forecast

FY 2021

Vs FY 2021

AP

6,728

6,028

6,357

6,359

8,809

7,424

8,235

7,725

8,725

+12.9%

BP

3,467

2,717

3,350

2,895

3,440

3,760

4,508

5,755

7,255

+26.1%

Environmentand conveyor

309

816

1,371

387

385

152

636

631

1,131

+79.2%

Other

535

437

551

491

821

883

981

2,377

3,377

+42.1%

Total
25,00011,039

9,997

11,62910,132

13,455

12,21914,361

16,49020,488+24.3%APBP

Environment and conveyor

Other

20,000
3,377
1,131
2377

15,000821
385

10,000

535
309
3,467

437
816
2,717

551
1,371
3,350

491
387
2,895

5,000

3,440

6,028

6,357

6,359

FY 2014

FY 2015

FY 2016

FY 2017

631

4,508

5,755

7,424

8,235

7,725

FY 2019

FY 2020

FY 2021

7,255

3,760

8,809
6,728

981
636
883
152

8,725

0
FY 2018

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

FY 2022
forecast
59

59Trends in Capital Investment, Depreciation and Amortization,
R&D Expenses, and Nonfinancial Data
(mil. yen)
FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Capital investment

335

844

815

877

1,261

550

1,889

1,483

2,748

1,907

Depreciation and amortization

389

395

422

487

482

472

508

611

677

759

R&D expenses

256

295

276

227

271

291

211

379

392

449

Number of employees(consolidated)
Average age of employees(non-consolidated)
Average years of service(non-consolidated)
Female employees(non-consolidated)
Number of new-graduate hires(non-consolidated)
Number of female new-graduate
hires (non-consolidated)
Percentage of female hires (nonconsolidated)
Number of foreign-national hires(non-consolidated)
Number of foreign-national
employees (non-consolidated)
Foreign national employees(consolidated)
Overseas employees(consolidated)

763

767

796

803

797

807

799

44.7

43.3

43.1

42.2

42.3

42.2

40.9

838 years861
1,038(persons,
old, or years)
41.1

41.1

40.8

21.2

20

19.3

18.2

18.5

18.3

16.0

15.8

15.4

15.3

31

31

33

39

42

42

45

51

55

59

15

21

21

30

17

19

15

14

29

32

0

1

3

1

2

0

0

0

3

6

0%

4.7%

14.2%

3.3%

11.7%

0%

0%

0%

10.3%

18.8%

0

6

0

0

0

1

1

0

1

0

2

8

6

6

6

7

8

5

5

6

90

91

95

94

93

101

98

116

116

194

90

91

95

92

91

101

98

123

121

197

New products for reducing environmental impact
FY 2013

New
products[Sand dryer] [Hightemperature
preheating burner]

FY 2014[NTB-II burner]• Energy saving
Features• Higher plant• Higher combustion
reducing
production efficiency
environment
efficiency in• Energy saving
al impact
combustion range

FY 2015

FY 2017

FY 2018

FY 2022[VP Series APs]–

[Foamed asphalt
manufacturing
equipment][Powdered fuel burner]• Space saving• Preventing diffusion• Energy savingof recycled material• Exhaust gas reduction odorous gas• Low noise–[Newly designed bag
filter]

FY 2016www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

• Aimed at burning• Support for manufacture
powdered biomass fuels• Reduce CO2 emissionsof warm-mix asphalt
from burners

2022 All rights reserved.

60

60

Trend in Key Financial Data
Operating margin and ROE
8.0%

Operating margin (%)

7.0%

ROE (%)

6.8%

6.6%
5.9% 6.0%

6.0%

5.8%

5.3%

6.0%
4.4%

4.4%

4.0%

4.8% 4.8%
2.3%

2.4% 2.1%
1.6%

2.0%

1.6%

1.1% 0.8% 1.3%

1.2%

0.0%

1.0% 0.7%

0.5%
△0.4%

△2.0%

2.0% 2.2%

2.1%

1.1%
△0.2%

4.6%

6.0%
5.2%

5.2%

4.9%

3.6% 3.4%

1.1%

3.6%
2.0%

△0.4%
0.7%

0.5%

0.5%

△1.2%
△2.1%

△4.0%
△6.6%

All-time high figures△6.0%

Net sales: 38,800 mil. yen (FY ended Mar. 2022)
Operating income: 2,700 mil. yen (FY ended Nov. 1990)△8.0%

ROE (post 1994 capital increase): 6.8% (FY ended Mar. 2021)△10.0% △8.9%

98

99

0

1

2

3

4

5

6

7

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

FY
2021

15

16

17

18

19

20

(mil. yen)99
Net sales

0

1

2

8

9

10

11

12

13

14

FY
2021

22,157 22,595 23,170 24,307 24,812 24,864 22,175 25,035 26,942 23,856 23,971 23,803 24,553 27,087 32,073 30,707 34,110 32,717 35,114 31,780 35,151 37,866 38,846

Operating income(loss)

352

536

492

379

248

185

(55)

271

189

(98)

265

470

541

1,186

2,249

1,832

1,629

1,944

2,103

1,427

2,053

2,302

2,053

Ordinary income

201

846

664

688

492

537

350

699

545

482

899

812

621

1,108

1,982

1,582

1,648

1,993

2,239

1,576

2,142

2,973

2,274

Net income (loss)

121

298

(93)

(284)

567

265

203

315

513

(499)

124

461

122

881

888

1,348

1,896

1,340

1,490

1,345

1,588

2,082

1,649

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

61

61

Contents
FY 2022-2024 Medium-Term Management Plan
Summary of Previous Medium-Term
Management Plan

pp. 3–7
pp. 8–10

Policy of New Medium-Term Management Plan
Numerical Plan for New Medium-Term
Management Plan

pp. 11–15

Business Strategies

pp. 16–23

FY 2021 Financial Results
FY 2021 Results

pp. 25–36

FY 2022 Outlook

pp. 37–40

Business Climate and Management Strategy

pp. 41–53

Reference Materials

pp. 54–61

Company Information

pp. 62–67* The last digit of the figures of changes in this document may differ fromthose in the Quarterly Report due to the treatment of fractions less than unit.

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

62

62

Company Overview
Net sales breakdown bybusiness segment (FY 2021)

Japanese name

Nikko Co., Ltd.

Head office1013-1, Eigashima, Okubo-cho, Akashi, Hyogo Prefecture

Established

August 13, 1919

Capital9,197 mil. yen(as of March 31, 2022)

Consolidated net sales

38,846 mil. yen(FY 2021)

Consolidated operating income

2,053 mil. yen(FY 2021)

Ratio of net sales outside Japan

12.2%(FY 2021)

Subsidiaries

12 companies(FY 2021)

Number of employees(consolidated)

1,038(as of March 31, 2022)

Governance structure:

Otherbusiness
17.1%
Environment- andconveyor-related
7.8%

AP-related
47.2%

BP-related
27.9%

Company with Audit & Supervisory Board
Directors: 9, of which 4 are outside directors
Audit & Supervisory Board Member: 4, including 3 outside
auditors (as of March 31, 2022)* AP: Asphalt plant
BP: (Concrete) batching plant

Management Philosophy
Adopting a “Customer-First Policy,” the Nikko Group provides customers with truly
satisfactory products and services, while continually promoting self-reform aimed at
winning broad trust and fulfilling our mission as a solutions partner evolving withcustomers.
Representative Director and President

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

63

63

Business Segments
AP-related
business

Market share (based on Nikko’s survey)

Main products: ⚫Asphalt plants ⚫Recycling plants ⚫Crushing plants ⚫Mixture silos⚫Electronic control devices, plant management system

Nikko share

77%

Asphalt plants (MBD)

BP-related
business

Crushing plant

New model asphalt plant (VP II)

Main products: ⚫Concrete batching plants ⚫Compact concrete batching plant ⚫Concrete pumps⚫Electronic control devices, plant management system ⚫Plant facilities for concrete product production, etc.

Nikko share

32%
BP integrated management system(Cyber Advance)

DASH-Hyper mixer

Environmentand conveyorrelated business

DASH-H275RA V‒TRIU batching plant

Main products: ⚫Belt conveyors, conveyors for facilities, beverage container recycling plants⚫Oil-polluted soil cleaning plant, plastic recycling plantPortableconveyor(Nikko share)

60%

Modular belt conveyor

Otherbusinesses

Super modular conveyor

Compact crusher (Choiwaru-no-jaw)

Main products: ⚫Pipe scaffoldings, steel gangplanks, pipe supports ⚫Temporary aluminum staircases ⚫Shovels, spades, mortar mixers⚫Floodgates, waterproof boards, crushers ⚫Real estate leasing, construction machinery product leasing ⚫Sales of housing renovation, etc.

Mobilecrushers andscreens(Nikko share)

MOBILE

20%
Mobile crushers

Roll breaker

Waterproof boards

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

64

64

History

Products
1919
1951

EstablishedTOMBO brand farming tools
Concrete mixers and winches

Production Sites

Overseas Expansion

Group Expansion in Japan(including acquisitions and transfer of business)

1919

Head Office Plant

1994

Nikko Baumaschinen(Germany)

1968

Ichiishi Kogyosho (M&A)

1938

Industrial machinery factory

1997

Taipei branch (Taiwan)

1971

Nikko Electronics Co., Ltd.
established1956

Ready-mixed concrete plant

1968

Tokyo factory

2001

Nikko (Shanghai) Construction
Machinery

1983

Nikko Machinery Co., Ltd.
established1958

Asphalt plants

1994

Satte factory

2020

Nikko Asia (Thailand) Co., Ltd.

1994

Tombo Industry Co., Ltd.
established

1962

Telescopic steel props

2004

Shanghai Jiading factory

2020

Nikko Nilkhosol Co., Ltd.
(Thailand)

1995

Nikko Sec Co., Ltd. established1963

Pipe scaffolding

2014

Kakogawa factory

2002

Niigata Engineering (transfer ofbusiness)

1966

Conveyor system

2016

Fukusaki factory

2006

Mitsubishi Heavy Industries(transfer of business)

1983

Floodgates

2008

Maekawa Kogyosho (M&A)

2000

System for cleaning oil-polluted
soil

2001

Waste plastic treatment system

2007

Concrete pumps

2015

Crusher (import and sales)

2022 Ube Kohki (M&A)

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

65

65

Nikko Group Business Vision

Nikko Group Business
VisionWe strive to remain the leading company of asphalt and batching plants.
We aim to expand our overseas business and become the top manufacturer inthe Asian market.
We will work to brush up on our core technologies in “heating,” “mixing,” “material
handling” and “control” as we expand business.
We will strive to remain a future-creating company ready to contribute to society.
Representative Director and President

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

66

66

Nikko’s Business Model

www.nikko-net.co.jp ⓒ Copyright NIKKO CO., LTD.

2022 All rights reserved.

67

67

Please feel free to contact us if you desire a meeting or have other requests(Online meetings and meetings in Tokyo also can be arranged.)

Tel: +81-78-947-3141

E-mail: IR-nikko@nikko-net.co.jp

Contact: Hachiken, Finance Department, Nikko Co., Ltd.
⚫ Future projections and other forward-looking statements in this material were prepared based on information currently available to the

management.
⚫ These statements contain risks and uncertainties, such as changes in performance outlook due to the financial situation for theCompany in Japan and abroad, industry trends, product demand and supply, advances in new technology, and other factors.
Accordingly, investment decisions should not be made based only on the forward-looking statements in this material.
⚫ Note also that forward-looking statements in this material are subject to change without prior notice, except where procedures are
required by law.
www.nikko-net.co.jp ⓒ Copyright

NIKKO CO., LTD.

2022 All rights reserved.

68

68