Status of Business Progressin the Medium-Term Management Plan“Century 2025” Phase 2 FY2020 2nd Quarter
November 13, 2020

[Orders Received/Net Sales](Millions of yen)

Consolidated Orders Received(Millions of yen)

250,000

Consolidated Net Sales

250,000

Phase 1

Phase 2Phase 1

Phase 2(Forecast)

200,000(Forecast)

200,000

150,000

150,000

100,000

100,000

50,00050,000

0FY20162016年度FY20172017年度FY20182018年度

第２四半期
2Q

FY20192019年度

年度
Full year

FY20202020年度

0FY2016
FY2017 2018年度
FY2018 2019年度
FY2019 2020年度
FY20202016年度
2017年度
2Q
第２四半期

Full年度year2©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Gross Profit/Margin](Millions of yen)

Consolidated Gross Profit

35,000Phase 1

Consolidated Gross Profit Margin
Phase 2(Forecast)

20.0%

Phase 1

Phase 218.0%

30,000(Forecast)

16.0%
25,000

14.0%
12.0%

20,00010.0%

15,0008.0%
6.0%

10,000

4.0%
5,000
2.0%
0

FY20162016年度FY20172017年度FY20182018年度

2Q
第２四半期

FY20192019年度

Full年度year

FY20202020年度

0.0%

FY2016 2017年度
FY2017 2018年度
FY2018 2019年度
FY2019 2020年度
FY20202016年度
第２四半期
2Q

Full year年度

3©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Positioning of the Long-Term Vision and Medium-TermManagement Plan](Second year)
FY2019 - FY2021
FY2016 - FY2018

Phase 2Phase 1

Enhance Reliability

FY2022 - FY2025

Phase 3Company of Choice

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 that possess
the Sanki spirit and social contribution

Further Pursue Quality• Improve construction productivity• Meet to energy-saving and labor
reduction needs• Promote technological R&D• Continue to receive orders for stockprojects• Create a better work conditions• Improve internal communication◆ Disclose Financial & Capital Policies
and ESG Policies◆ Reinforce Information Transmission

Increasing Reliability and Becoming
a Company of Choice◆ Strengthen CoreBusinesses

Refining Technical Skills
and Human Resources toEnhance Quality

Enhance Quality

Long-Term Vision“Century 2025”
Become the company
that is more likely to bechosen by stakeholders

4©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Strengthen Core Businesses
Facilities Construction●Improved construction quality⇒ Established Quality Control Center⇒ Improved work efficiency through the use of autonomous airflow
measurement robots⇒ Improved construction management efficiency through use of digital
information such as building information modeling (BIM)●Established a construction framework that includes partner companies⇒ Reviewed payment conditions for partner companies (ensuredconfidence and trust)

Facility Systems●Provided new consulting services⇒ Established the Consulting Promotion Section⇒ Designed work-styles to meet the needs of different
companies (work-style consulting service)

Change of terms for payment to cash forpartner companies with a capital of 40.00
million yen *For partner companies in all
businesses

Machinery Systems●Expanded hybrid system products and services to cater to labor reduction
and automation needs⇒ Steady growth of ordering and sales of hybrid equipment

Environmental Systems

Airflow measurement robot

・ Our first supercharged fluidized bed
incinerator with binary generation
system・ Through the use of superchargers,
achieved wide-ranging energy
conservation and CO2 reduction andenergy creation through power
generation●Expanded energy conservation and energy generation business fields⇒ Received order for Kitatama Water Reclamation Center No. 1 Sludge Incineration Systems Reconstruction Project (Tokyo)

5©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Growth Strategy - Promotion of stock business for the future ●Clean Hill Tenzan
The energy recovery waste treatment facility, Clean Hill Tenzan,
was completed in March 2020. It was the Group’s first new
construction project for a DBO order.
This was a large LCE project, with Sanki Engineering responsible for theconstruction, and Sanki Kako Kensetsu responsible for 20 years of operation.

* DBO (Design Build Operate: A means of achieving the private management of publicly
owned facilities by placing a blanket order for design, building, operation, and maintenancewith a private enterprise)

Exterior of Clean Hill Tenzan●Other orders to be completed in the future (1 billion yen or more)
Property nameItem of construction

Type of construction

Kurita Water Industries Ltd. New Research and Development Facility
Construction Project (provisional name)

HVAC systems

New construction work

Kanae Tochigi Factory No. 3 Building

HVAC and Plumbing
systems

New construction work

Kawanishi City General Medical Center Development Project(provisional name)Plumbing system

New construction work

Toyota Technical Center Shimoyama Plumbing and Electrical Systems
ProjectPlumbing and electricalsystems

New construction work

Kitatama Water Reclamation Center No. 1 Sludge Incineration Systems
Reconstruction Project

Water and sewage
treatment systems

Expansion
9 other projects

6©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Enhanced the Sanki Brand●Improved technology

Conducted special joint safety patrol insummer of fiscal 2020

Held online presentation and award
ceremony for the Superior Employee
Award, the Yano Technology Award, andthe Construction Method and Business
Improvement Award

Held an internal video presentation of resultsof development at the R&D Center●Initiatives to improve communication

Conducted fiscal 2020 new employee
induction training online(President’s address)

Held gathering with prospective employees
online7©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Social Contribution
SANKI YOU Eco Contribution Point system
Implemented 10th anniversary commemoration plan
●SANKI YOU Eco Contribution Points
Created Kansha-no-Mori and conductedcommemorative tree planting on 10th anniversary

Included in the Nikkei
national edition onOctober 21●Added special page to the Sanki website

8©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆ Reinforce Information Transmission●Currently rolling out new Sanki advertising campaign, “Kaiteki wo Katachi ni (Making Your Comfort aReality),” commercials and posters to the areas of branch offices and branches through Aurora Vision, digital
signage, etc.

Advertisement at Sapporo Station

Advertisement at Sendai Station

Advertisement in central Hiroshima●Broadcast new Sanki commercial
・ We also advertise on
YouTube・ We sponsor programs onnationwide TV, such as
news23, and broadcast
commercials9©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Financial/Capital Policy “Returns to shareholders”
Phase 2Targets● Dividend: Annual dividend per share: 60 yen or more
● Acquisition of treasury stock: Approx. 5 million shares● Total return ratio: 70% or more

●Earnings per share (EPS) and dividends
200.00Phase 1148.9

150.00200

Phase 2180160150.02140

128.51111.4

113.5879.6

100.00
73.91
50.00

40.6
40.6

61.6

95
63.02

55.5

3530

52.9
60

70

73.9

120
100
80
80
60
60
40
40
2020

40.0

0 00.00
FY 2016FY 2017

Earnings per share (yen)FY 2018

FY 2019

FY 2020 (Forecast)

Annual dividend (yen)Payout ratio (%)

Total return ratio (%)●Acquisition of treasury stockYear conducted

Number of shares acquired(thousand shares)

Fiscal 2019

1,958 thousand sharesFiscal 2020 (complete)

1,000 thousand shares

Shares scheduled to be acquired
during Phase 2

Approx. 5,000 thousand shares

Planned shares remaining

Approx. 2,042 thousand shares（％）●Other: Review of payment terms forpartner companies
Change of terms for payment tocash for partner companies with acapital of 40.00 million yen10©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Status of Measures]◆Sanki’s Initiatives from an ESG Perspective
ItemMeasure details•

E (Environment)••

S (Society)

••
•

•
•

G (Governance)••

Active promotion of energy conservation and energy generation(Received order for Kitatama Water Reclamation Center No. 1 Sludge
Incineration Systems Reconstruction Project)
Newly created Kansha-no-Mori and conducted tree planting activities tocommemorate the 10th anniversary of SANKI YOU Eco Contribution Pointsystem
Introduced a flextime system for all employees to promote work-styles thatleverage diversity
Shortened work hours for work-life balanceCommenced Smile Plans through four groups, in order to further promote Smile
Project work-style reforms
Reviewed payment conditions to reform financing of partner companies

Selected external director as chairman of the Board of Directors
Conducted interviews through a third-party institution in order to evaluate theeffectiveness of the Board of Directors
Advisory Committee on Nomination and Remuneration comprised of only
external directors
Ensured independence of legal affairs section as organization reporting directlyto the president
11©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Response to COVID-19 (External)]●Provided infection control technology• We released the patents concerning technology owned by Sanki in orderto support the aims of the IP Open Access Declaration Against COVID-19• Patents released for nine technologies that are thought to contribute to preventionof infection such as sterile room units, which have been installed in medicaland research facilities●Concluded commitment line agreements• Given that the impact of COVID-19 will be prolonged, we concluded commitment line agreements thatallow flexible and stable repayment of funds in order to cater to temporary demand for financing andworking capital to support the stable operation of partner companies, which are importantstakeholders●Changed terms for payments to partner companies• In March 2020, we changed payment terms to cash for all payments to partner companies with acapital of 40.00 million yen that have dealings with the Group. This initiative supports the stable
operation of partner companies during the COVID-19 pandemic●Contributed to student support funds• We contributed to student support funds in order to support students aiming to work in the field ofhealthcare and have experienced a sudden decline in family finances or income from part-time work
as a result of the COVID-19 pandemic

12©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

[Response to COVID-19 (Internal)]● Established the COVID-19 response headquarters before thepandemic headed by the president● Adapted to announcements of government policies and issued
timely internal policy notifications● Ensured sufficient basic resources to prevent infection such asmasks, disinfectant, splash-prevention film, and acrylic panels,etc.
● Rapidly established conditions for telecommuting■Remote Safety And Quality Conference● Actively implemented telecommuting and flextime, andestablished in-house satellite offices, to avoid the 3Cs● Remotely conducted internal functions and held remotemeetings, including the annual meeting of shareholders● Promptly disseminated information inside and outside
the Company as people became infected■Online new employee induction■Added a COVID-19 response page to theCompany’s portal site to inform employees about
response policies, etc.

13©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Statements about the future, such as results forecasts included in thesematerials, are based on judgements made according to the information
available to the Company as of November 13. Actual results may differ fromthe figures contained herein due to a number of factors.
For inquiries, please contact:
Sanki Engineering Co., Ltd.
Corporate Communications Department

TEL: +81-3-6367-7041
14©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.