Status of Business Progress in
the Medium-Term Management Plan“Century 2025” Phase3 FY2023 2nd Quarter
November 10, 2023

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 Core
Businesses
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 internalcommunication

Disclose financial & capital policies

FY2022–FY2025
2022～2025年度Phase 3
Phase3Company of Choice「選ばれる」
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

Contribute to thesustainability of society
Accelerate work stylereforms

Invest toward the nextera

Long-Term Vision“Century 2025”
Becoming even more the
ステークホルダーから
company of choice for
もっと「選ばれる」会社
stakeholdersの実現

Note: The ESG policy in Phase 2 has evolved into the Sustainability policy in Phase 32©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Phase 3 Performance Targets and Progress
Phase 3 targets
By FY2025

FY2022
Results

FY2023
Forecast

FY2023
1H Results

Net Sales¥220.0bn¥190.8bn¥215.0bn¥89.4bn

Gross profit[ratio]¥36.0bn(16.5%)¥27.0bn(14.2%)¥32.5bn(15.1%)¥11.9bn(13.4%)

Ordinary profit[margin]¥12.0bn(5.5％)¥6.2bn
(3.3％)¥10.0bn(4.7％)¥1.8bn
(2.1％)

Phase 3 targets
By FY2025

FY2022
Results

FY2023
1H Results

Ordinary profit
margin

5.0% or more

3.3%

2.1％

Dividend policyDividend payout ratio 50% or
moreAnnual dividend per share of¥70 or more

Dividend payout ratio 87.4%
Annual dividend per share of¥75

At the time of the interim
dividend
Dividend payout ratio:
announced for the full year
Dividend per share of ¥35

Acquisition oftreasury stock

About 5 million shares*

1.5 million shares(Cumulative total of1.5 million shares)

Acquisition of 1.5 million shares
planned**(Cumulative total of 3.0 millionshares)

ROE

8.0% or more

5.1%

Announced for the full year

Growthinvestment

About ¥20bn*¥3.2bn(Cumulative total of ¥3.2bn)

Announced for the full year

* Cumulative total during period of plan** 48 thousand shares repurchased as of September 30

3©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Orders Received/Net Sales(Millions of yen)

(Millions of yen)

(Forecast)(Forecast)

4©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Gross Profit/Gross Profit Margin(Millions of yen)

(Forecast)(Forecast)

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Status of Measures◆Technological Development⚫ Received the Japan Society of Industrial Machinery
Manufacturers Chairman’s Award for our tar fuelexhaust gas treatment device
This device was developed together with NIKKO CO., LTD. as a device
to detoxify the hazardous components separated from exhaust gas
released in the gasification furnace at wood biomass power plants. It has
been installed in the wood biomass conversion power generationequipment at NKC Nagai Green Power (Nagai City, Yamagata), currently inoperation.
This award demonstrates our technological superiority and reaffirms ourachievement of stable business operation. We will continue to pursuemarket development and contribute to achieving a decarbonized society.

Gas engine
generator

Wet-type dust
collector(Wood chips)
Gas cooler
Gasification
furnace

Tar separationtub

Heated lighttar heater

Combustion air (pre-heating)
Tar burner

Flash steam
ExhausterTar combustion
device (furnace)

Kerosenetank
Heated lighttar nozzle

Fresh water
nozzleCombustion
air fan

The biomass power generation process⚫ Our research into the use of insects to convert
sewage sludge into feed and fertilizer is selected
for sewage line application research by theMinistry of Land, Infrastructure, Transport andTourism
Amid increasing demand for grains and cereals around the world,
as well as rising energy prices and the soaring prices of feed andfertilizer due partly to changes in the global situation, this researchuses insect-treated sewage sludge as a recycled resource, converting
it into feed and fertilizer.
The actual research will be conducted jointly with the Okinawa
Institute of Science and Technology Graduate University andBioAlchemy, a startup company launched by the university.
We will continue to provide energy-saving, energy-creating, GX,and other technologies with high added value to actively contribute tosolving social issues.

①Modification of sewage sludge

Physical processing

Sewage sludge

Chemical processing

Search for and implementation of existing modification
methods suited to insect processing

Microbial processing

Experimentation/verification/analysis/evaluation

Mixed processing

Post-processing

Feed
Grown insects

Post-processing

SortingInsects
Fertilizer

Post-processing

Decomposed organic matter

Processing using insects

Insect residue

Experimentation/verification/analysis/evaluation②Insect processing using sewage sludge as feed

Heavy metal removal
Analysis/evaluation③Possibility of removing heavy metals

Illustration of the proposed technology

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Status of Measures◆Technological Development⚫ Received the Chugoku Bureau of Economy,
Trade and Industry Director’s Award for ourcontinuous sterilization device and continuous
sterilization method
This device was jointly developed with SHINKO INDUSTRIES CO.,LTD. (Yamaguchi) for medical and pharmaceutical wastewater
treatment.
The wastewater from plants and other facilities that manufacturebiopharmaceuticals and vaccines may contain bacteria and viruses.
Heat treatment is required to detoxify this water, but more energysaving methods are demanded in light of the recent need to reduce
CO2 emissions.
This newly developed device uses a heat recovery unit to collect theheat from the heat-treated water and use it to pre-heat wastewater
before treatment. This enables a reduction in the use of steam andcooling water compared to previous continuous sterilization devices.

The continuous sterilization device

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Status of Measures◆Strengthen the business base in the Facilities Construction
Business and Environmental Systems Business⚫ Accumulated large-scale urban development projects and ongoing projects for thefuture in the industrial HVAC field⚫ Strengthened our capabilities in the industrial HVAC field for semiconductor and EV
battery manufacturing equipment in Japan⚫ Promoted the LCE business through large property orders in the water, sewage, andwaste fields◆Promote DX⚫ Established the DX Promotion Division (on April 1,2023)⚫ Formulated and announced the SANKI DX Vision◆Promote open innovation

SANKI DX Vision⚫ Strengthened cooperation between the R&D Center and universities, researchinstitutions, startups, and others⚫ Collaborated with startups in the Facility Systems Business and Machinery SystemsBusiness8©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Status of Measures◆Growth investment⚫ Invested in plant expansion at AQUACONSULT and expanded our businesses
through overseas market development⚫ Installed a cleanroom inside the Yamato Product Center in the Machinery Systems
Business and strengthened our development and manufacture of cleanroom
equipment⚫ Relocated the office of the Facility Systems Business, aiming to expand the businessby promoting sales activities utilizing the new office, based on a new concept◆Earth MIRAI Project⚫ Received over 100 responses from across the Group. Held four exchange
meetings between respondents, established themes for deeper investigation, andlaunched initiatives to achieve this⚫ Collaborated with the Technological Strategy Council for a Better Future, newly
established by the R&D Center, and promoted initiatives on the future direction oftechnological development and new business fields in step with the council
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Status of Measures◆Sustainability⚫ Updated disclosure in accordance with the TCFD recommendations(addressing the 1.5°C scenario)⚫ Introduced solar PPAs for the Sanki Techno Center and Yamato
Product Center⚫ Recycling of old uniforms into towels

Old uniforms
recycled intotowels⚫ Held shrub-trimming events for Sanki-no-Mori and Kansha-no-Morienvironmental protection initiatives⚫ Certified under the 2023 Certified Health &Productivity Management Outstanding
Organizations Recognition Program (largeenterprise category)

Shrub trimming⚫ Continued to dispatch employees to the Japanese
Antarctic Research Expedition⚫ BCMS
Also established BCMS at Group companies and will commence Groupwide operation from this fiscal year
Implemented companywide large-scale disaster drills
Engaged in drills for each event set forth under the BCP[Notes]TCFD (Task Force on Climate-related Disclosures)
BCMS (Business Continuity Management System)

Health &Productivity
Managementcertification

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【Reference】Vision for 2050
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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【Reference】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.

12©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

【Reference】Sanki Engineering Group Materialities (Key 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

Contribute to acarbon-freesociety
Use engineering
to build acomfortableenvironment

Stable earningsand strongerbusiness basePursuit ofhappiness forcolleagues

Create newsocial value

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

Improve 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

13©2023 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Statements about the future, such as results forecasts included in these materials, are based on judgments made according tothe information available to the Company as of November 10. Actual results may differ from the figures contained herein due toa number of factors.
For inquiries, please contact:
Corporate Communications Department,
SANKI ENGINEERING CO., LTD.
Tel：+81-3-6367-7041

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