Financial Results for
Q2 of the Fiscal YearEnding in September 2019CANDEAL Co., Ltd.
TSE Mothers :1446
May 15, 2019
Copyright (C) CANDEAL CO., Ltd. All Rights Reserved.

CONTENTS
1

Highlights

2

What is CANDEAL?

3

FY9/19 Q2 Business Results

4

FY9/19 Business Forecasts

5

Growth Strategy

6

Appendix and Business Outline
・ Strengths of the CANDEAL Group2

1Highlights
3

1

Highlights

Building Lifecycle Support Company
a provider of reliable repair, renovation, maintenance and management services, we eliminate sources ofGroup is a… As
problems and dissatisfaction that create stress for people who use buildings.
Repair service, our main business since the founding, is an eco-friendly business model.

1. Second Quarter

Sales up by 7.8% YoY, and ordinary income up by 42.3%, showing
strong performance. Sales of services for the commercial
environment up by 18.2%, and repair sales up by 7.5%.

2. Full-year Forecast

Sales to up by 10.3% and ordinary income to up by 27.5% YoY.
Forecast record-high profits.
Put emphasis on interim and year-end dividends, shareholder
benefits, and shareholder returns.

3. Future Development

Establish a sustainable growth base through the enhancement ofalliances and service menus.

42
What is CANDEAL?
5

Core of the Group's businessWe aim to eliminate various
stresses associated withbuildings, as well as the stress ofpeople,6

Core of the Group's business

To provide peace of mind andcomfort.
7

Group is a…

Building Lifecycle Support
Company
Through repairs, renovations, maintenance and management of buildings,
we eliminate sources of problems and dissatisfaction that create stress for people who
use buildings822. Outline of the Group

Outline of theServiceOur services include repairs, renovations,maintenance and management of buildings

Target of theService

We can provide services to various types ofbuildings, including houses (detached houses, condominiums),
commercial facilities, hotels and offices.

Business Model

BtoBtoC Business Model
Dispatch engineers to work sites to provide
services through orders from housemanufacturers, general contractors, etc.
92Business Model 1

BtoBtoC model 【Construction services】are classified into 4 categories.
Customer (B)End-User (C)Construction Service
Housing Market(New and Existing)Repair service(One-timefee)Construction services forliving environments(Subscription)

Architectural services for(One-timethe commercial environment fee)

Merchandise sales

House Manufacturer/Power Builder
Building materials
manufacturer/Developer
Real Estate Agents/General Endusers

Commercial facilities
marketStore interiors/chain stores
Commercial general contractor

Provide services (repair, inspection, construction, etc.)

Private Houses(detached houses,
condominiums)

GeneralEnduser

Commercial
facility
Hotels
Offices10

2.2

Business Model 2

Execution ofworks

Inspection

Planning/
designing

RepairDismantling and reconstruction.
Extends a building
lifecycle

Supports finishingof buildings underconstruction

Lifecycle Support
for buildings-repairs, renovations,maintenance, management

Support for risingdemand for vacanthousesRenovation
Re-saleDeliveryTechnology

Technical Staff

Inspection

Call center

Aging, Replacement
Renovation

MaintenanceInterior
ReformRetain customers
through after-sales
service11

2 Founding Story (Group History)
2.
2018Listed on TSE Mothers

56 bases
1,453 employees

Our founding was triggered by:

Mr. Hayashi said "I'm in trouble!"

2008-- Repair service

44 bases, 573 employees

Offer services for thecommercial environment

Restore aesthetics without replacing parts.
Low-cost and short-time delivery

2005-

Acquired 4companies under
the M&A strategy

19 bases, 414 employees

Commenced the industry’s first After-sales
Periodic Inspection service!

2000Repair services were established in theconstruction industry

1995
Established Japan's first specialized

repair company!

122Changes in Group Sales (FY9/07-FY9/18)(Million yen)

Grow our performance through Strategic M&A

14,000Acquired Leyon Consulting(Merged with Spec in October 2016, changed name to Candeal Tec)
① The number of new housing starts were 780 thousand,lowest since the collapse of Lehman Brothers.
② SPEC closed its offices in order to turn a profitablebusiness

12,00010,0008,000

Acquired AFIC
(merged with the House Box in April 2017,changed name to Candeal Design)① Collapse of Lehman Brothers② Full-scale enforcement of therevised Building Standards Law③ Acquired SPEC

6,000

4,000

2,000

0
FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

Burn Repair Co., Ltd.

SPEC Co., Ltd.

Rayon Consulting Co., Ltd.

House Box Co., Ltd.

Construction services for living environments: For
detached houses(repair, inspection, call center, etc.)(Candeal Tec Co., Ltd.)(Candeal Tec Co., Ltd.)(Candeal Design Co., Ltd.)(Candeal Design Co., Ltd.)

Merchandise sales(maintenance merchandise)

Merchandise sales (interior products)
Construction services for living environments(Interior Design/Planning/Design)

Architectural services for the commercial
environment(Interior installation, furniture assembly, lifting, etc.)

Construction services for living environments: For
condominiums(repairs, inspections, residential services, etc.)※ This graph is a simple monthly sum of the sales of each company from the time of consolidation in accordance with the fiscal year-end of Burn Repair Co., Ltd.
※ Our consolidated financial results are from August 7, 2014, to March 31, 2015, April 1, 2015, to September 30, 2015, and October 1, 2015, to September 30, 2016, which differ from our consolidated financial results.
※ House Box Co., Ltd. was consolidated in December 2002, SPEC Co., Ltd. in July 2008, Affect Co., Ltd. in March 2015, and Leyon Consulting Co., Ltd. in November 2015.

AFIC Co., Ltd.

13

3
Business Results for
FY9/19 Q2
143

Summary of Consolidated Business Results(Million yen)

FY9/18
1H

Profit ratio

FY9/191H

Profit ratio

6,827

YoY change

Net sales

6,334

Gross profit

2,291

36.2%

2,446

35.8%

106.8%

Operating income

278

4.4%

353

5.2%

126.9%

Ordinary income

248

3.9%

353

5.2%

142.3%Net income

155

2.5%

197

2.9%

126.3%Net income before
amortization of
goodwill

252

4.0%

293

4.3%

116.3%

107.8%

15

Changes in Quarterly Net Sales and Operating Income

3

Net sales
FY18

Operating income
FY19

FY18
13,50014,00012,239Progressrate

12,00050.6%

Q410,000

9,235

8,000

Q3

Full-year
Forecast

Q4

Q2

3,063

Q2

Q2

3,314

Q1

Q1

Q1

Q1

Q1

Q1

Q1

Q2

Q3

Q4

Q1

Q2

Progress
rate

485

450

73.0%

Full-year
Forecast

400

353

350
300

0
Q4

150

125

100

72

Q1

Q1

Q1

Q1

Q1

Q2

Q3

Q4

0
Q3

Q2

200
Q2

100
2,000

Q3

200

Q2

Q2

299
Q3

500

250

6,000
Q2

278

6,827

6,334

4,000

403

300

Q3

FY19

500

400

(Million yen)

50

Q1

Q1

Q1

Q2

0
Q3

Q4

*In Q3, both sales and profits are relatively lower than in the other quarters due to thecharacteristics of the business<Factors>● Our Q3 period (April-June) does not include a construction peak period (construction peak period: March, September, December)● This period is positioned as a period for strengthening the development of new graduates, and SG&A expenses increased due to the hiring of new graduates and training for them. In
addition, it takes time for them to come to work and contribute to sales.

*Figures for Q1 FY9/18 are for reference because we have not yet listed and have not been reviewed by the auditing firm.

16

3 Analysis of Changes in Consolidated Ordinary Income
Increase in personnel
Decrease in nonexpenses(SG&A)
Increase in non- operating expenses
Increase in SG&A
operating income(Excluding personnel
expenses)
Increase in profits due
42
21
to sales increase
837

FY9/18 Q2Ordinary
income248(Million yen)

FY9/19 Q2Ordinary
income155
Enhancementof governancesystemSales of main
business arestrong

353

17

3

FY9/19 Q2 Composition of Group sales
FY9/19 Q2Cumulative sales: 6,827 million yen Composition ratio by service

Merchandise sales

Construction services for thecommercial environment

Repair service

Merchandise sales 5.6%

Construction services
for the commercial
environment
31.2%

Repair service

Before

After

37.9%

Construction services for living
environments

Construction services forliving environments
25.3%

18

3

Reference Figures: Number of Clients, etc.

Repair service
Industry
No.1

102.8%

Number of client companies

Vs. previous year-end

FY9/18

20,112 companies

FY9/19 Q2

20,673(+561 companies)

companies

Periodic after-sales inspections
IndustryleaderCumulative number of units under management
FY9/18300,973 units

FY9/19 Q2

107.5%
Vs. previous year-end(+22,616 units)323,589 units1932. Platform to Support Growth of Service
Number of in-houseengineers(Number of directly employed persons)Vs. previous
year-end(Employee)

106.8%

106.8%

1,056

(+72)

105.5%

1,001

FY9/18968

FY9/19 Q2

Vs. previous
year-end

1,128

976

102.6%

100.8%

(+25)

(+72)

Partnercompanies

104.7%
(+20)

(+55)

FY9/19 Q2(+8)

1,056 employees

1,128 employees※１

About 450
FY18 Q1

FY18 Q2

FY18 Q3

FY18 Q4

FY19 Q2

companies*1 The number of partner companies is the sum of the three companies: Burn Repair Co., Ltd., Candeal Tec Co., Ltd., and Candeal Design Co., Ltd

Turnover ofengineers

Improved by
3.7%
FY18 1H

FY19 1H

17.2%

13.5%

Technician
training
program

Unique education program manual and teaching materials for humanresources development.
Focusing not only on developing technical skills but also on software
aspects, such as appearance, communication skills, manners, etc.
Technician training program

Debut on-site work by themself in about 3 months

In-house training program

On-site training

Independent

Basic training Practical exercise(3 weeks)(2 weeks)

On-site work
(1-2 months)

Completion of
the training
Practice20

3 Sales by Service(Million yen)

FY9/181H

Composition
ratio

FY9/191H

Composition
ratio

YoY
changeRepair service

2,407

38.0%

2,588

37.9%

107.5%

Construction services forliving environments

1,712

27.0%

1,728

25.3%

100.9%

Architectural services forcommercial environments

1,801

28.4%

2,129

31.2%

118.2%

413

6.5%

380

5.6%

92.0%

Merchandise
sales

Total

6,334

6,827

107.8%
21

3 Status of Repair Service(Million yen)

FY9/18Q2 ResultComposition
ratio

FY9/19Q2 ResultComposition
ratio

YoY
change

2,407

38.0%

2,588

37.9%

107.5%

Repair for detached houses

1,807

28.5%

1,931

28.3%

106.8%

Repair for condominiums

599

9.5%

657

9.6%

109.6%

Repair service

22

3

Status of Repair Service
Repair service for detached houses
70,00028,38929,175

Repair service for condominiums

102.8％
30,000
YoY

25,00070,00022,711

22,41725,000％98.7

YoY

60,00020,00063,73235,00066,38420,000 ％
104.2

YoY

units

units

50,00015,00040,00015,00030,00010,000110.5％

10,000

YoY

20,0005,000

10,00026,596
employees00

FY9/18 Q2

FY9/19 Q2

29,3955,000

employees00

FY9/18 Q2

FY9/19 Q2

Number of orders received
Unit price of orders received (yen)Number of workers

Productivity per worker (yen)23

3

Status of Construction Services for Living Environments(Million yen)

FY9/18Q2 ResultComposition
ratio

FY9/19Q2 ResultComposition
ratio

YoY
change

1,712

27.0%

1,728

25.3%

100.9%

Inspection

458

7.2%

483

7.1%

105.5%

Maintenance, construction,
etc.

986

15.6%

992

14.5%

100.6%

Refit

267

4.2%

252

3.7%

94.2%

Construction services forliving environments24

3

Characteristics of Refit Service
Changes in Sales (Million yen)
1,003

Difficult to estimate orders as thisservice is for recall products
Only the CANDEAL Group can offer recall
service for centralized interior finishingmaterials in nationwide

500
376
252

FY16

FY17

FY18

Flexible approach as required foraccomplishing our social mission
and customer support.

FY19/Q2

25

3

Status of Construction Services for Living Environments
Maintenance,
construction, etc.

Periodic after-sales
inspection

21,35450,00050,00012,60213,01521,070103.3

Refit service

98.7％

14,94950,000

YoY

126.8
％ YoY

11,79320,000％ YoY
10,0005,000
15,00036,37537,175ordersorders

102.2
5,000

％ YoY

44,856

46,145

10,000employees

employees

102.9

22,702％ YoY

orders

5,000

74.3％
YoY

16,865orders00

FY9/18 Q2

FY9/19 Q2

00

FY9/18 Q2

FY9/19 Q20(20,000)

FY9/18 Q2

FY9/19 Q2

Number of orders received

Number of workers

Number of orders received

Unit price of orders received (yen)Productivity per worker (yen)Unit price of orders received (yen)26

3Periodic After-Sales Inspection Results
Number of inspections (1H)
Last 12 years

CAGR

FY9/18 Q2

35.78%

Sales

929 million yen

000

1,000,000

FY9/19 Q2

36,97037,690

YoY

900,000000
800,000

Cumulative number of inspections

700,000000
600,000000

500,000

FY9/18FY9/19 Q2

506,708544,398

107.4%
YoY

400,000000
300,000

Cumulative number of units under
200,000
management000

100,000

FY9/18
0

0
FY06

FY07

FY08

FY09

FY10

FY11

Number of annual
inspections

FY12

FY13

FY14

FY15

Cumulative numberof inspections

FY16

FY17

FY18

FY9/19 Q2
Sales

un
its

300,973323,589 un
its

Around thedoorCounting

107.5%
YoY
27

3

Status of Construction Services for Commercial
Environments and Merchandise Sales(Million yen)

FY9/181H

Composition
ratio

FY9/191H

Composition
ratio

YoY
change

1,801

28.4%

2,129

31.2%

118.2%

Commercial Facilities andHotel Interior

791

12.5%

1,059

15.5%

134.0%

Office Interior

416

6.6%

462

6.8%

111.3%

Furniture assembly

291

4.6%

294

4.3%

101.2%

Lifting, etc.

302

4.8%

312

4.6%

103.2%

413

6.5%

380

5.6%

92.0%

Construction services for thecommercial environment

Merchandise
sales

28

3

FY9/19 Q2 Top 20 Clients
RepairService

Construction
services forlivingenvironments●●

Hajime Construction Co., Ltd

Construction
services for thecommercial
environment●

IKEA JAPAN CO., LTD.

●

Aim Create Co., Ltd.

●

Asahi Kasei Homes Corporation●●●

Yoshichu Mannequin Co. Ltd.
ALMETAX MANUFACTURING CO.,
LTD.

●

●

●

A Factory Co., Ltd.
Obayashi Corporation
NOMURA Co., Ltd

Merchandise
sales

●

●

●
●

Handy Crown Co., Ltd.

●Top 11th-20th
Daiwa House Industry Co., Ltd. / TACT HOME CO.,LTD. / YKK AP Inc. / CS Corporation Co., Ltd.
Daito Trust Construction Co., Ltd. / Dai Nippon Printing Co., Ltd / TNP Co., Ltd. / Sumitomo Realty & Development Co., Ltd.
Haseko Corporation / HASEKO NAVIE CORPORATIONFirst client companies ranked among the top 10 in Q2

29

4
FY9/19Business Forecasts
30

4

FY9/19 Business Forecasts(Million yen)

FY9/17
ResultFY9/18ResultYoYchangeFY9/19Forecast

YoYchangeNet sales

11,95912,239102.3%

13,500110.3%

Operatingincome334

403

120.7%

485

120.1%

Ordinary income

285

345

120.7%

440

127.5%Net income

112

171

152.7%

218

127.2%Net income before
amortization of
goodwill

304

363

119.3%

410

112.8%
31

4

Sales Forecasts by Service Category(Million yen)

FY9/17
ResultFY9/18Result3,886

108.7%

1,254

114.7%

3,494

105.2%

110.7%

1,038

111.7%

1,890

109.9%

2,194

116.1%

1,003

500

49.9%

261

52.2/9

2,875

3,471

120.7%

4,025

116.0%

867

776

89.5%

839

108.0%

11,95912,239102.3%

13,500110.3%

Repair for detached houses

3,446

3,576

Repair for condominiums

1,206

1,093

3,562

3,320

839

929

Maintenance, construction, etc.

1,720

Refit

Inspection

Construction services forcommercial environments
Merchandise sales

Total

YoY
change110.1%

4,670

Construction services for living
environments

FY9/19Forecast

5,140

4,653

Repair service

YoYchange100.4%

90.6%

32

4

Shareholder Return Policy (FY9/19)

Annualdividend

Shareholder
Benefit
ProgramInterim (final figure)5

yenYear-end Forecast

5yenAnnual Forecast

10

yen

For eligible shareholders, we present QUO Card according to the shares held.

Number of shares held

Shareholder Benefit Program

100 to less than 1,000 shares

QUO Card worth 3,000 yen

1,000 to less than 3,000 shares

QUO Card worth 4,000 yen

More than 3,000 shares

QUO Card worth 5,000 yen*Eligible shareholders: Shareholders listed on the Shareholder Register as of September 30, 2019 will be eligible

33

5Growth Strategy

34

Growth Strategy
Reinforce services to the existing housing market
against the backdrop of our “nationwide construction
service network” not available with competitors.
1. Increasing number of new customers for the CANDEAL’s core repair
services service
2. Reinforcing and expanding maintenance and management service
menus for houses
3. Reinforcing and expanding maintenance and construction service forcommercial facilities
3. Enhancing profit margin (higher capacity utilization and cost reduction)
35

Growth Strategy 1

Expand the number of new customers for the core repair
service

Develop customers for repair services in areas thatwere not covered in the past
Real estate broker for existing houses and rental housing

Real estate re-sell agency (after renovation)

Expand the reach to the existing housing market
36

Growth Strategy 1Measures

Alliance with TEPCO HomeTech, Inc.
Strengthening sales capabilities for repair and installation services in the existing
housing market
Entered into a tie-up with TEPCO HomeTech, Inc., which has a broad customer base

TEPCO HomeTech, Inc.
Nationwide construction
network
Repair service throughout the TEPCO service area
Small-scale renovation and maintenance services

Provide comprehensive
energy-saving services
Expanded the service area of TEPCO Maintenance toTokyo, Kanagawa, Chiba and Saitama in September 2018

Affiliated Subsidiary:37

Growth Strategy 2

2. Reinforcing and expanding maintenance andmanagement service menus

Develop a service menu for buyers and sellers of existing houses

Real estate broker/reseller

Services for sellers

Services for buyers
・ After-sales follow-up

・ Pre-sales inspection
・ Initiatives to sustain selling price(Repair, maintenance and minor reforms)

・ Inspection of housing equipment(Periodic Inspection, consultation center and ondemand service)

Existing
house

・ Reform and renovation
・ Housing equipment warranty
・ Creating comfortable space/ ordermade furniture38

Growth Strategy 2Measures ①

Business alliance with Sompo Warranty Inc.
Began development of our original "Inspection & Warranty Service"for housing equipment
Insurance underwriter

Sompo Warranty Inc.

Sompo Japan Nipponkoa Insurance Inc.

Cumulative number of inspections: 506,708!
Nationwide construction network
Offer inspections of facilities for existinghouses and after-sales inspections on anationwide scale

Largest provider of warranty products
Member of the SOMPO Holdings Group
Providing Peace of Mind and Reliability throughout Japan
with firm capital strength

Affiliated Subsidiaries:

Plans to announce detailed service menu in the near future!

39

Growth Strategy 2Measures ②

Business alliance with Domans,Inc.
Entered into a business alliance with Domans,Inc., a leader in the new erain the ordered furniture industry
Expand sales of newly developed mobile apps and provide furniture assembly
services

Sales &
Construction

Furniture can be assembled nationwide.
(Assemble, install, and construct)

Possess a nationwide customer
list in the construction industry

Systems &Manufacturing

Possess a system to provide
high-quality custom-madefurniture with inexpensive price

Enable nationwide sales and marketing activities
Affiliated subsidiary: Candeal Design Co., Ltd.
40

Growth Strategy 3

Reinforcing and expanding maintenance and construction
service for commercial facilities

Leverage the strengths of the nationwide construction network① Construction (maintenance) operator alternative to building materials manufacturers' network
Building materials manufacturers are shifting to orders including construction as well as material sales.
On the other hand, expectations are rising for new construction players who can handle all of the construction
materials in a lump sum amid the downsizing of the conventional regional sales network due to the absence of
successors. Our Group will respond to these expectations.

② Maintenance of guest rooms for accommodation • Development of management services
Periodic home inspections (subscription model) to the retail facility market.
Approach to companies of hotel management, equipment management, cleaning management, interior
management, etc.

41

Growth Strategy 4

Improve utilization rate and reduce costs by improving efficiency by linking the group's systems

Between services

Adjustment of supply-demand gap
Increase of capacity utilization rate

Improvement of
profit ratio

Between subsidiaries
Between regions

Reduction of redundancy and waste
Cost reduction- Current[Image]Techt

RepairService

Shortages
ofengineers

Surplus ofengineers/

Construction services forliving environments

Surplus ofengineers

Shortages ofengineers

Surplus ofengineers

Construction services forthe commercial
environment/

Appropriate
allocation/

Coordination of group systems

Designing

Barn Repair

Under development
Plan to launch in thenext term- Future
Barn Repair

Techt

Designing

Appropriate
allocation

Appropriate
allocation/

Appropriate
allocation

Appropriate
allocation

Appropriate
allocation/

Appropriate
allocation/

42

Future Goal of the
CANDEAL Group43

“Lifecycle Support for buildings” as a core,
Consider expansion into businesses targeting vacant houses
expected to see an increase.
Execution ofworks【Shift focus from new construction to vacant houses
as the vacant house ratio rises to about 30%】

Inspection

Spin out

RepairPlanning/
designing

Demolish→Open space

Vacant house

Total number ofhousesNumber of
vacant house

Lifecycle Support
for buildings

71,560-repairs, renovations,maintenance, management

thousand units

63,770 thousand units

Renew as houses and stores

Renovation
Re-sale53,890

DeliveryTechnology

Call center

Technical Staff

thousand units

42,010Inspection

thousand units

Inspection

2033
Ratio of vacant
house
27.3%

thousand units

MaintenanceInterior

ReformMoving/installation/transport

19,5506,590
3,940 thousand units

thousand units

1988
Results and forecasts of total number of houses/number ofvacant houses/ratio of vacant houses

2003

10,260thousand units

2018

Source: Nomura Research Institute's 2018 Housing Market and Issues for 2030
*Processes by our company based on the graph by Nomura Research Institute

2033

44

Emergence of secondary market inbuildings and residential houses!

MaintenanceManagement
Cleaning

RepairExchange

Evolution of the
Sharing Economy

Insurance
Guarantee

Automation

45

Establishment of a platform for building lifecycle support
Create a system and get a revenue

Residential
construction
Business
Commercial
facility

Be compensated for the work

Operating platform

Interface

Technology platform

Management

Housewives

Group

Customermanagement

Arrangementof work
Planning and operation of
eventsEndUserContent
management

Elderlies

Burn Repair

Technology

IT

Foreigninvestor

Candeal Tec
Candeal Design

Point management
Call-center

Partner companies
Termite control company

Owner's club

GeneralEndUser

Web service to retain customers
For users throughout the building lifecycle
Services that can respond to problems
Have a menu

※ The management platform is an image of the future.

Exterior wall contractor

Development
of partnercompanies

House-cleaning
business
Etc.

46

Are the last point of contact in the building = “Last One-mile” human or technology?

CANDEAL resolves the last one-mile issues by fusing
human (engineer) skills and IT technology.
Light bulbs
need to be
replaced

Filters need tobe replaced

Lifecycle Support for buildings-repairs, renovations, maintenance, management

Last
One-mile
Cleaning ofshared spacerequiredTechnology

Clean-up before
a new tenantmoves inTechnical staff47

By multiplying two technologies,
Becoming a company that is indispensable in the building
lifecycle support"CANDEAL" in all buildings

Manual & Technology
48

6

Appendix49

Industry No.1

Repair service■ Service to repair the damages during housing construction andeveryday life

Before■ Providing services at pre-delivery period as the final stages of
housing construction and the time of maintenance of existinghouses■ Orders are mainly received by house manufacturers, powerbuilders and renovation companies■ One-time-fee business associated with the occurrence ofdamagesAfter
50

Need for repair services◼It is not uncommon to cause scratches on the floor during the construction of a new house. Our repair service restores the floor byrepair without replacement of parts.
◼Compared to the replacement of parts, it is possible to reduce costs, shorten the time, and prevent other defects by repairing only thedefective parts.

Image of defects

BeforeAfter

BeforeBeforeAfter

51

Cumulative number of units undermanagement exceeded 300,000!

Construction services forliving environments◼ Services provided primarily at the timing ofmaintenance after delivery.
The core service is “Periodic after-sales inspection”◼ Subscription business model for existing houses◼ We mostly focus on this service

52

Characteristics of Construction services for living environments■ Provide after-sales support on behalf of construction companies after homes are delivered.
A service lineup that supports the lifecycle of a building will lead to a comfortable living environment
and an increase in the asset value of housing.

[Service lineup]
Periodic after-sales inspections
Inspections are conducted at six months, one year, two years
and five years after delivery.

Maintenance
Maintenance services to maintain a comfortable living
environment

Call-center
Call center specialized for construction as a point of contact
for after-sales service

Renovation
Planning and designing to create comfortable living
environment and increase asset value

53

Architectural services for thecommercial environment◼ Strengths in simultaneous construction work for multiple
stores, including nationwide chain stores◼ Assume assembly services for major Scandinavian furniture
manufacturers operating around the world, at all stores in
Japan◼ In the future, we will introduce and develop a subscription
model for housing after-sales
Commercial facility

Office hotels

Furniture assemblyMulti-store construction, including chain stores,
Interior finish work at department stores

Interior finish work including the installationof fixtures and furniture

Assembly and installation of all furniture
including major furniture manufacturers’ products

54

Merchandise sales◼ In the repair material sales, we offer repair and maintenance materials for professionals andgeneral use at home centers and mass retailers nationwide, and e-commerce websites◼ In the interior products sales, we offer lighting equipment and curtains with the interior advice
service.

Repair materials
Sales of easy-to-use kits to general users

Interior products
Sales of interior products for after-sales service

55Four Strengths Supporting Our Growth1

2

Nationwide
services network

High-quality
service engneers3

Large customer
base nationwide

Maintenance
Customer

Inspection
Customer

RepairCustomer4

Six-month
Inspection

Subscription
business model
Six-month
Inspection

Six-month
Inspection

1-yearInspection

1-yearInspection

2-yearInspection

56

Strengths: 1. Nationwide service network
We can provide services in all prefectures
Service system extending to

56 locations nationwide

Our engineers nationwide:

1,128 engineers

Partner companies:

About

450 companies

Call center to support the network of engineers

3 locations with about 130 employees
57

Strengths 2. High-quality service engineers
We have original training programs, manuals, and teaching materials to develop humanresources
Focus not only on technical capabilities, but also on education for intangible factors
such as personal appearance, language skills, and manners.
Technician training program
In-house training program

Basic training(2 weeks)

Practical exercise(3 weeks)

On-site training

Independent

On-site work
(1-2 months)

Completion of
the training
Practice

Training tools
Manuals by project and work

Abundant video
teaching materials

Exceed 500 times a year
training

Emphasis on on-the-job training andon-site guidance
Quality control through on-site visits

58

Strengths 3. Large customer base nationwide
Potential for next-generation services

Repair service customers
nationwide
20,112 companies

Customers for periodic
after-sales inspection
service

Customers for maintenanceand construction
service59Strengths 4. Subscription business model◼Periodic after-sales inspection is a “Subscription type”, building a stock of annual inspection sales◼Basically, inspection is carried out three times in the first two years after delivery. Five-year, 10-year and 15-year
inspections are also increasing.
◼Specialize in minor reform services, costing less than ¥3 million. Establish a relationship of coexistence withhouse builders.

Image of Accumulation of After-Sales Periodic Inspections
CustomerD

5-yearInspection

6-monthInspection

1-yearInspection

6-monthInspection

1-yearInspection

2-yearInspection

1-yearInspection

2-yearInspection

CustomerC

Customer
B

CustomerA

6-monthInspection

5-yearInspection

2-yearInspection

Warranty against defects – Guarantee period5-yearInspection

5-yearInspection

10-yearInspection

10-yearInspection

10-yearInspection

10-yearInspection

15-yearInspection

15-yearInspection

15-yearInspection

Period of self-responsibility of owner for building
management

60

Disclaimer

This material has been prepared by CANDEAL Co., Ltd. (hereinafter referred to as "") for the purpose ofproviding corporate information, etc. to the Company and its group companies (hereinafter collectively
referred to as “the Group") and is not a solicitation to buy or sell shares or other securities issued by us,

whether in Japan or overseas.

This document contains forward-looking statements, including forecasts, plans and targets related to theCompany and the Group. These statements are based on certain assumptions and beliefs in light of theinformation currently available to the Company at the time of preparation of this document. These statements
or assumptions are objectively inaccurate or may not be realized in the future, and therefore, actual results
may differ materially from these forward-looking statements.

61