Translated version- Adapt to our surroundings and aim
for sustainable growth -Mid Term Plan
May 2019

1

Contents
１

Roundup of the previous mid term plan
Recognizing our surroundings and key points goingforward

２
３

Basic policy & basic strategy, keywords

４

Priority measures and initiatives to improve

５

Strategies to enhance business capabilities

６

Business strategies of group companies

７

ESG and work style improvement initiatives

８

スイブルくん ©こもりまこと

９productivity

Business goals (numerical targets)
Capital policy
21. Roundup of the previous mid term plan
■Achievements and challenges in the previous mid term plan
(1) Orders received, sales
Orders were received in well-balanced fashion between base projects such as railroads and roads,
renewable energy projects such as mega solar facilities, non-residential projects such as large
distribution facilities and government buildings, and Private Finance Initiative projects. Challenges wereexpanding earthquake-resistance business and sales strategy for our condominiums.
(2) Operating profit
Consolidated operating profit reached a new record high in FY2017 but it decreased in FY2018 due to adecline in gross profit margin from fewer highly profitable projects in our architecture department, poorsales of our condominiums resulting from a slump in the apartment/condominium market, rising generaland administrative costs due to improved working conditions and increased numbers of staff, andeffects from low-profitability projects at group companies.

■Consolidated performance by fiscal year
2018/3
Mid term plan
Orders received
Sales
Operating profit
Operating profit
margin1,540

hundred million yen

1,500

hundred million yen

70

2018/3
Actual% difference
from plan

1,486

(3.5)

1,534

+2.3

hundred million yen

hundred million yen％％

2019/3
Mid term plan

1,600

hundred million yen

1,560

hundred million yen% difference
from plan

1,696

+6.0

1,524

(2.3)

hundred million yen

hundred million yen％％

hundred million yen

hundred million yen

76

+9.5

％

hundred million yen

hundred million yen

67(13.0)

4.7

5.0

+0.3

4.9

4.4(0.5)

％

％

pt

77

2019/3
Actual％％％％3

2. Recognizing our surroundings and key points going forward

・Investments for building infrastructure arecontinuing for now
・More social infrastructure updates
・Promoting “National Resilience” measures
・Growth of the renovations market
・Technological innovations such as AI androbots

・Less new construction projects
・Less construction workers
・Less households overall
・Economic contraction from declining
population
・Post-Olympic economic uncertainty

Negative factors

Positive factors

Recognizing our surroundings

・Our own proprietary technology fordisaster prevention and mitigation
construction
・Extensive track record in renewableenergy-related construction
・Industry-academia collaborative jointresearch・Our performance in public sector
construction where we have competitiveadvantage

・i-Construction must progress quickly
・On-site engineers still stretched too thin
・Productivity improvement is absolutely
essential
・Work style improvement initiatives are
essential

Negative factors

Positive factors

Key points

43. Basic policy & basic strategy, keywords

Basicpolicy-

Outside-the-box thinking and strong fundamentals –Adapt to our surroundings and aim for sustainable growth Further bolster efforts toward renovation-related projects

Basicstrategy

 Get more projects and expand in private non-residential andprivate civil engineering Develop the next new business after ABDS
 Advance into new business (contract) categories (PFI, EPC, etc.)

53. Basic policy & basic strategy, keywords
Adapt to our surroundings and aim for sustainable growth

Create business

Create uniquedomains

technologies

Creation
Create work
styles
Outside-the-box thinking and strong
fundamentals
6

4. Priority measures and initiatives to improve productivity
Bolster efforts in transportation infrastructure

Enter the market in earthquake-resistance, and in public facilities management
utilizing Public Private Partnership and Private Finance Initiative business

Bolster efforts in construction, including replacements, for wind power
generation, micro-hydroelectric power generation, and mega solar

Develop and bolster business that utilizes real estate

Achieve at least an 80% rate of 8 days of facilities not in operation every fourweeks, and 100% rate of 8 days off every four weeks for individuals

 Improve productivity by embracing and actively implementing ICT, BIM,CIM, and AI technologies
 Boost cost competitiveness through collaborative and cooperative efforts
with partner companies Pursue thorough compliance and strengthen corporate governance Bolster efforts that take ESG, SDGs, and capital cost into consideration
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5. Strategies to enhance business capabilities
OtherConstruction business

PFI business in Yokosuka

Using BIM model data forconstruction(VR model room)
And Hostel Kanda

Enhance precision and productivity in construction by
expanding our use of BIM and CIMBoost productivity through AI, ICT, work done by

secure land sites nearrobots, etc.


stations in Tokyo, etc.

Strengthen relationships with partner companies byemploying the MEISTER System, etc.
Advance into new business (contract) categories suchas PFI and EPC

Working through ABDS to

Working on real estate
renovation projects suchas hostels
86．Business strategies of group companies
Mirai Construction

Toko Geotech

Other groupcompanies
Aoki Marine
 Ensure the vessels they own
are in operation to ensureprofitability
Asunaro Road
 Utilize ICT technologies andimprove productivityEngage in “NationalResilience” and maintenanceand repair, bolster
technological capability

Develop next generation
construction methods thatthe market desires

M’s Boost proposal capabilities inconversion business

Embrace business use of iConstruction

Build community-based sales
systems

Niigata Mirai Boost construction
capabilities in civilengineering projects

Bolster efforts toward newoffshore energy

Add more automation,mechanization, and use ofrobots in construction work

Shimada Gumi
 Strengthen business base in
Kanto and Kyushu

97. ESG and work style improvement initiatives
ESG & SDGs

Renewable energy-related
construction projects

Work Style Improvements

Hands-on learning for children
during summer vacation

Measures to counter global warming: Bolster
efforts toward renewable energy-related
construction projects, etc.

Developing wall-climbing robots

Safety patrols by female
employees

Improve productivity through the use of ICT, AI,
unitization, robot construction, etc.

Social contributions: Facility tours and handson learning with construction technology forpreschool and school age children, etc.

Achieve at least an 80% rate of 8 days offacilities not in operation every four weeks, and100% rate of 8 days off every four weeks forindividuals by March 2022

Governance: Improve the effectiveness of theBoard of Directors and strengthen governance,etc.

Designate Wednesday and Friday every week as“No Overtime Work Days”

Promote the advancement of women10

8. Business goals (numerical targets)
Non-consolidated
2020/3
Orders received
Sales
Operating profit

Net profit for thefiscal year

2022/3960

Hundred million yen

920

2020/3

1,020

Hundred million yen

9502022/3

1,610

Hundred million yen

1,550

Hundred million yen

1,600

Hundred million yen

Hundred million yen

Hundred million yen

4045

72

80

Hundred million yen

Hundred million yen

Hundred million yen

Hundred million yen

4.3

4.7

4.6

5.0％

52

Hundred million yen

39

Hundred million yen％57

Hundred million yen

42

Hundred million yen％72

Hundred million yen

48

Hundred million yen

Real estate
2.5 billion yen

Sales bysegment

1,700

Hundred million yen

Operating profit
marginOrdinary profit

Consolidated

Civil
engineering
47 billion yen

Architecture
45 billion yen

Civilengineering Architecture
47.5 billion 45 billion yenyen％

80

Hundred million yen

50

Hundred million yen

Real estate
2.5 billion yenCivilengineering
108 billion
yen

Architecture
47 billion yen

Architecture
47.5 billion
Civil
engineering yen
110 billion
yenConsolidated net profit for the fiscal year indicates net profit attributable to owners of the parent.

119. Capital Policy■Basic policy on profit sharing
We consider shareholder returns to be a key management issue. Our policy isto strive to improve shareholders’ equity needed to bolster our financial
standing, while maintaining a stable dividend and providing returns from ourprofits according to our business performance.
■Dividend by year
2016/3Actual

2017/3
Actual2018/3
ActualDividend pershare

1820222424

Payout ratio

33.3

32.2

35.5

34.0

33.6

26.2

27.7

22.9

32.3

27.3

(non-consolidated)

Payout ratio(consolidated)

yen％％

yen％％

yen％％

2019/3 2020/3
Actual Forecast
yen％％

yen％％

12

終了

Note: Information within these materials which pertains to future developments was created based on
available information at the time the materials were created. There are several factors which could resultin actual future performance differing from what is indicated in these materials. Additionally, thesematerials were created with the intention of providing reference information to be used by investors fortheir investment decisions, and do not constitute any sort of effort to solicit the purchase or sale of
Asunaro Aoki stock.