2月 8日経営会議（付議）
2月10日取締役会（付議）“Century 2025” Phase3
FY2022 to FY2025 Sanki Engineering Group Medium-Term Management Plan“Century 2025” Phase 3
Enhance quality and reliability and become
the enduring company of choice
Finishing touches ahead of the 100th anniversary andpreparing the groundwork for the next era

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Contents
Sanki Engineering GroupManagement Philosophy

Sanki Engineering GroupManagement Philosophy

31(Ultra Long-Term Vision)

Vision for 2050
Promote Sustainability Management
Formulate Sustainability Policies
Sanki Engineering Group Materialities (Key Issues)

5678

Long-Term Vision “Century 2025”
Medium-Term Management Plan“Century 2025”
Phase 3 (FY2022–FY2025)

Long-Term Vision “Century 2025”
Phase 3 Basic Policies
Overview of Phase 3 Measures101112Strengthen Core Businesses
Promote Growth Strategy
Enhance the Sanki Brand
Strengthen Information Dissemination Capabilities
Disclose Financial and Capital Policies

1417181920(Enhance the Company’s Qualityand Reliability)

Contribute to the Sustainability of Society
Accelerate Work Style Reforms
Invest toward the Next Era

222324

Financial Performance Targets

Financial Performance Targets
Business Portfolio Strategy

2627

2345Vision for 2050

Maturity and Evolution of Measures
to Enhance Quality and Reliability(Basic rute)

New Measures for Phase 3

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Sanki Engineering Group Management Philosophy

We create comfortable environments through engineering andwidely contribute to social development.
We will refine our skills and wisdom with the aim of increasing client satisfaction.
We will place significance on communication and mutual respect.
We will remain aware that we are a member of society and will act accordingly.

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1Vision for 2050
(Ultra Long-Term Vision)

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Vision for2050
Sanki,“The Enduring Companyof Choice”
Striving to be a company that contributes to therealization of a sustainable world by using

engineering to solve social issues such ascarbon neutrality and create a pleasantenvironment- Promote sustainability management- Formulate sustainability policies- Determine materialities (key issues)

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Promote Sustainability Management
Sanki the Enduring
Company of Choice
Striving to be a company that
contributes to the realization ofa sustainable world by using
engineering to solve social
issues such as carbon neutrality
and create a pleasantenvironment

Sustainability Policies
Aiming to realize a strong business base and asustainable society by “creating comfortableenvironments through engineering and widely
contributing to social development”

2050

Long-Term Vision

Five materialities

2030
Pursuit ofhappiness forcolleagues

Contribute toa carbon-freesociety
Create newsocial value

Strengthen
corebusinesses

Management
Philosophy
We create comfortableenvironments throughengineering and widely
contribute to socialdevelopment.

Promotegrowthstrategies

Financialand capital
ESG

Strengthen
information
dissemination
capabilities

Enhancethe Sanki
brand

Sanki's carbonneutral declaration
Stableearnings andstronger
businessbase

Use engineering
to build acomfortableenvironment

Improve
corporate value

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Formulate Sustainability Policies

Sustainability Policies
Aiming to realize a strong business base and a sustainable society by “creating comfortableenvironments through engineering and widely contributing to social development”

Sanki’s Carbon-Neutral Declaration
The Sanki Engineering Group is making serious efforts to address theclimate change crisis facing the world and aims to achieve carbon
neutrality for the Group’s own GHG emissions (Scope 1 and 2) by 2030 andfor GHG emissions including the supply chain (Scope 1, 2, and 3) by 2050.

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Sanki Engineering Group Materialities (Key Issues)Materiality identification process
Identify issues

Use engineering to build a comfortable environment● Build strong social infrastructure● Diversify water treatment businessContribute to a carbon-freesociety● Promote decarbonization● Promote renewable energy
power generation business● Expand decarbonizationrelated market

Evaluate business activities and their impact from thefollowing, and identify 34 issues● The value chain status, risks and opportunities, longterm vision, and strategy of the Group's businessactivities● International guidelines, the economic, social, andenvironmental external environment, and social
demands

Prioritize and validate● Evaluate and prioritize the issues identified on the twoaxes of improving corporate value and improving
environmental and social value, and designate them as
the five materialities● Examine whether issues important to the Group havebeen addressed and whether stakeholder expectations
have been reflected, then finalize

Final review and approval

Contribute to acarbon-freesociety

Use engineering
to build acomfortableenvironment

Stable earnings
and stronger
business basePursuit ofhappiness forcolleagues

Create newsocial value● Confirmation and review by each department● Review and approval by the Sustainability Committee● Deliberation and decision by the Board of Directors

Pursuit of happiness forcolleagues● Improve human resource
development and technology● Promote work style reforms● Respect human rights● Promote diversity

Create new social value● Promote activities that
contribute to society● Expand automation andlabor-saving market● Expand consulting services

Review and advancement● Incorporate materialities into the management plan andset targets● Sustainability Committee reviews progress towardmaterialities and targets and reports to the Board ofDirectors● Update materialities as needed based on social changes
and progress of activities●Guidelines etc. referred to in STEP 1Improve corporate value
Stable earnings and stronger business base
● Strengthen governance system● Thorough compliance● Promote occupational safety and health● Improve quality ● Increase productivity● Promote DX● Secure stable long-term business● Returns to stakeholders(In-house)
・Long-term vision, business strategy, management plan
・Exchange of opinions with officers and departments
・In-house surveys(External)
・ ISO 26000 ・SDGs ・GRI standard ・SASB standard ・Examination and evaluation of ESG (DJSI, etc.) ・Integrated report survey ・Opinions and advice from outside experts and advisers ・Global risk report

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2Long-Term Vision“Century 2025”
Medium-Term Management Plan“Century 2025”
Phase 3 (FY2022-FY2025)
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Long-Term Vision “Century 2025”
In the run-up to our 100th anniversary, ourCentury 2025 long-term vision aims to further
improve our quality and reliability, which willencourage even more stakeholders to choose
our company.

Phase 3
FY2022–FY2025

Increased reliability willencourage more stakeholders
to choose our company

Phase 2FY2019–FY2021

Phase 1FY2016–FY2018
Enhance quality by refining ourskills and wisdom anddeveloping our humanresources as a foundation forresponding to change

Superior quality generates
stakeholder satisfaction, andstakeholder satisfaction andconfidence leads to reliability“Company ofchoice”

Increase reliability

Enhance quality
FY2016Note:

FY2019FY2022

FY2025The Group considers stakeholders as: customers, shareholders/investors, employees, business partners, local communities, government agencies, and others

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Phase 3 Basic Policies
The Phase 3 medium-term management plan will put the finishing touches on our Century 2025
long-term vision. During this phase we will realize our ambition of becoming the company of choicethrough the maturation and evolution of measures taken up till now aimed at improving quality andreliability, and the addition of three new measures, namely: contribute to the sustainability ofsociety, accelerate work style reforms, and invest toward the next era.
Phase 1
Enhance Quality

Phase 2
Enhance Reliability

Strengthen CoreBusinesses
Improve component technologies
and achieve stable growth

Promote Growth Strategies
Pursue future growth in the areasof technology and business

Enhance the Sanki Brand
Develop human resources thatpossess the Sanki spirit andsocial contribution

Further pursue quality
・Improve construction
productivity
・Meet to energy saving andlabor reduction needs
・Promote technological R&D
・Continue to receive orders forstock projects
・Create better work conditions
・Improve internal
communication

Disclose financial & capital policies

FY2022–FY2025

Phase 3Company of Choice
Maturity and Evolution of Measures toEnhance Quality and Reliability

FY2019–FY2021

Refining Technical Skills andHuman Resources to Enhance Quality

FY2016–FY2018

Strengthen information dissemination capabilities
Note:

Contribute to thesustainability of society
Accelerate work stylereforms
Invest toward the nextera

Long-Term Vision“Century 2025”
Becoming even more thecompany of choice forstakeholders

The ESG policy in Phase 2 has evolved into the Sustainability policy in Phase 3

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Overview of Phase 3 Measures

New measures for Phase 3
Improve the company’s quality
and reliability
Work on new measures for sustainablegrowth in the future

Contribute tothesustainabilityof society

Enhancethe SankibrandInvest
toward thenext era

Accelerate
work stylereforms

Companyof choiceStrengthencorebusinesses

Disclosefinancialand capital
policies

Strengthen
information
dissemination
capabilities

Promotegrowthstrategies
Continue the measures listed in Phases 1and 2 and aim for further evolutionMaturity and evolution of measures to enhance qualityand reliability
Basic rute

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3
Maturity and Evolution ofMeasures to Enhance
Quality and Reliability(Basic rute)

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Strengthen Core Businesses

Common Points
1

Improve technology to prevent occupational
accidents and troubles during construction

2

Promote occupational safety and health together
with the Health and Safety Cooperative Association

3

Human resources development aimed at acquiring
new unique technologies

4Improve business efficiency through the operationof a new business system

5Introduce the latest SFA and deploy finely tuned
sales activities

Note:SFA (Sales Force Automation) sales support systems

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Strengthen Core Businesses

Facilities Construction Business

Strengthen business baseUse of digital and robot
technologies◼ Accumulate future stock projects in◼ Promote use of BIM to improve
growth fields such as large-scale
productivity and quality of designurban redevelopment projects,and construction work
semiconductor and other◼ Bolster security of systems that
manufacturing facilities, and data
share information outside thecenterscompany◼ Obtain renewal work by strengthening ◼ Develop alternative technology withthe maintenance system
robots at construction sites◼ Improve productivity by optimizing
business collaboration between theheadquarters and the construction site
◼ Improve procurement capabilities
using an electronic procurement
system and centralized purchasing
and expand to other businessdivisions

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Strengthen Core Businesses

Facility SystemsBusinessMachinery Systems
Business

Environmental
Systems Business◼ Strengthen the total integration
business of building ICT◼ Expand on-site informationand communication
infrastructure business◼ Expand consulting serviceofferings◼ Further cultivate theautomation and labor-saving
market using robots and ICT
such as AI and IoT◼ Expand sales of sorting
systems for the logistics
market◼ Commercialization of facility
predictive maintenance using
AI diagnosis◼ Expand sales of products thatmeet energy-saving needs◼ Develop energy creationrelated businesses such as
renewable energy power
generation◼ Promote LCE business (stockbusiness)

Note:LCE (Life Cycle Engineering) is a business concept created by the Group to provide new construction, management,maintenance, renewal, and reconstruction services throughout a building’s life cycle.

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Promote Growth Strategy

1

Expand proposals including the development of newtechnology to realize a carbon-free society

2

Strengthen the structure of industrial HVAC for
semiconductor and other manufacturing facilities inJapan and overseas

3

Expand business by developing overseas markets
for water treatment facilities

4

Promote open innovation (cooperation between
different industries, universities, and venturecompanies)

5

Business reform and creation of new business
opportunities through DX

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Enhance the Sanki Brand

1

Establish the Earth MIRAI Project to explore
new technologies

2

Conduct capital investment to promote carbon
neutrality for the company

3

Strengthen the SANKI YOU Eco Contribution
Point System

4

Continue to support environmental
conservation in Antarctica

5

Contribute to society by supporting sports andthe arts

Note:SANKI YOU Eco Contribution Points: When a customer adopts our proposal for energy savings during construction work carried out by our company, the amount ofCO2 emissions reduced by the solution is converted to Eco Contribution Points (100 yen per tonne), which are used to subsidize environmental conservation activities.
It is a system that contributes to the prevention of global warming and the realization of a sustainable society together with customers.

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Strengthen Information Dissemination Capabilities1

2

Incorporate information transmission
methods that are in line with the times, suchas video sites on the Internet and digital
signageEnhance content to be disseminated such as
corporate governance, news releases ontechnological development, and social
contribution activities

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Disclose Financial and Capital Policies

1

Stable and sustainable returns forstakeholders◼ Payout ratio of 50% or more
◼ Annual dividend per share of ¥70 or more
◼ Buyback about 5,000,000 treasury stock over
the term of Phase 3◼ Further improve payment terms for businesspartners

2

ROE target: 8% or more

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4New Measures forPhase 3(Enhance the Company’s
Quality and Reliability)

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Contribute to the Sustainability of Society

1

Promote the development of new technology torealize a carbon-free society

2

Reduce overall greenhouse gas emissions, including in thesupply chain

3

Promote CSR procurement in consideration ofenvironmental burden and human rights

4Strengthen SANKI YOU Eco Contribution Points

5Formulate and make use of a BCMS to maintain an effective
BCP
Note:●BCP (Business Continuity Plan)
Note:●BCMS (Business Continuity Management System)

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Accelerate Work Style Reforms

Pursuit of happiness for colleagues at the GroupTo be able to realize the value of achievement, growth, self-actualization, contribution
to social development, etc., and receive appropriate treatment based on respect forhuman rights

11Continuation of Smile Project led by top management

22

Reform of personnel system centered on active appointmentof young people and extension of retirement age

3

Improve quality and productivity with DX and reduce
working hours

4

Securing and training human resources in considerationof promoting diversity

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Invest toward the Next Era

Fields1Measures

Decarbonization technology

1Growth investment about ¥20bn(energy saving, energy creation, etc.)

2Automation and labor-saving
technology (material handling)2

External collaboration such asopen innovation

3

LCE business (stock business)

3M&A

4

DX

Nurture the growth of new engineering businesses in these fields
that society requires as we advance toward the future

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5
Financial Performance
Targets

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Financial Performance Targets
ResultPlan(Billions of yen)Phase 1FY

Phase 22019

2020

Phase 3201620172018

Net Sales

168.5

170.1

212.3

Gross profit(ratio)

22.5

25.0

31.632.1

28.7

31.0

36.0

(13.4%)(14.7%)(14.9%)(15.5%)(15.1%)(15.5%)(16.5%)

Ordinary income(ratio)

6.8

7.4

11.2

11.2

8.1

10.0

12.0

(4.1%)(4.4%)(5.3%)(5.4%)(4.3%)(5.0%)(5.5%)

207.6

2021

190.0

2025

200.0

220.0

Phase 3 Management targets
Ordinary profit
margin

5.0% or more

Dividend policy

Dividend payout ratio 50% or more
Annual dividends per share of ¥70 or more

Acquisition oftreasury stock

About 5 million shares*

ROE

8.0 % or more

Growthinvestment

About ¥20bn**Cumulative during period of plan

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Business Portfolio Strategy
Comparison of consolidated sales share■ Facilities Construction■ Facility Systems■ Machinery Systems■ Environmental
Systems
0.9■ Real Estate 10.8

4.85.5■ Facilities Construction■ Facility Systems■ Machinery Systems■ Environmental
Systems12■ Real Estate878
FY201620

FY2025(%)

7Net Sales¥168.5bnTarget

11(%)

Net Sales¥220.0bn72

TargetExpand operations in theFacility Systems business andMachinery Systems business2Plant Division(Machinery Systems + EnvironmentalSystems)

Share 20%

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Supplementary Materials

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Summary of Phase 1 and 2

Results
Target1
2

Progress ofMeasures

1Earnings remain strong and are
expected to almost achieve theplan

2

Sustained improvement in grossprofit margin

3

Regarding financial and capital
policy, providing adequate
shareholder returns while also
improving the balance sheet

1Overall capital investment ofabout ¥10bn for construction of
the Sanki Techno Center andYamato Product Center2

A new Sustainability Committee
chaired by the president has been
established, putting in place asystem for initiatives toward therealization of a sustainable society

3Completely revamped advertisingand raised level of exposure,making the company’s presence
widely known

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Understanding of Business Environment in Phase 3

Facilities Construction Business

Facility Systems Business◼ Continued large-scale urban redevelopment,
growing investment in semiconductor
manufacturing facilities and data centers◼ The office environment is entering a periodof change due to the increase in teleworkand DX progress, opening more
opportunities to provide new services◼ Increased opportunities to provide
proposals for renewing equipment toachieve carbon neutrality◼ Building automation equipment and on-site
information infrastructure are becoming
increasingly sophisticated due to urban
redevelopment

Machinery Systems Business

Environmental Systems Business◼ Continued growth in e-commerce to support
solid demand for logistics centers◼ Continued growth in energy-saving needs atenvironmental systems facilities◼ Labor shortages due to further decline in
the workforce to drive growth in automationand labor-saving needs◼ Increased focus on energy creation, partly
due to introduction of FIP system

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Trends in Major Investment Items
Human capital investment(non-consolidated)

R&D investment(non-consolidated)

ICT investment(non-consolidated)■ Cost price ■ SG&A costs(Millions of yen)

(Millions of yen)

(FY)

(FY)
Note: SG&A costs include education andtraining expenses(Millions of yen)

Note: Includes labor costs

SANKI ENGINEERING CO.,LTD.

(FY)
Note: Includes computer and CAD training costs

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Statements about the future, such as results forecasts included in thesematerials, are based on judgments made according to the information
available to the Company at the time of disclosure. Actual results may
differ from the figures contained herein due to a number of factors.
For inquiries, please contact:
Corporate Communications Department,
SANKI ENGINEERING CO., LTD.
Tel：+81-03-6367-7041

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