Status of Business Progressin the Medium-Term Management Plan“Century 2025”Phase2 FY2020

May 14, 2021

[Positioning of the Long-Term Vision and Medium-Term
Management 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 thatpossess the Sanki spirit

Further pursue quality• Improve construction productivity• Meet to energy saving and labor
reduction needs• Promote technological R&D• Continue to receive orders for stock
projects• 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 Core
Businesses

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

2©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆[Phase 2] Performance Targets and Results
Phase 2 (FY2019 to FY2021) targets
FY2020FY2019targets

FY2019results

Sales

200.0 billion yen

207.6 billion yen

200.0 billion yen 192.0 billion yen 190.0 billion yen

200.0 billion yen

Gross profit(margin)30.0 billion yen

32.1 billion yen

31.0 billion yen

29.5 billion yen

28.7 billion yen

32.0 billion yen(15%)(15.5%)(15.5%)(15.4%)(15.1%)(16.0%)

Ordinary
income (%)

9.00 billion yen

11.2 billion yen

9.5 billion yen

8.5 billion yen

8.1 billion yen

10.0 billion yen(4.5%)(5.4%)(4.8%)(4.4%)(4.3%)(5.0%)

Targets

Phase 2 (FY2019 to FY2021) operatingtargets

FY2020results

Operatingprofit ratio

5.0% or more (final fiscal year)

4.3%

Dividend

Annual dividend per share:
60 yen or more

Annual dividend:
80 yenAcquisition oftreasury stock

Approx. 5 million shares

FY2020results

Mid-term
forecast

FY2021targets

Dividend per share(Yen)

Phase 2Phase 1

100

25
20

50

1 million shares(total: 2,958 thousand
shares)Total returnratio

70% or more

97.3%

ROE

8.0% or more (final fiscal year)

6.6%

0

10

10

15

20

20

FY2016FY201770

70

FY2019FY202040
FY2018Regular dividend

Extra dividend

3©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆Consolidated Orders Received
SANKI VITAL PLAN

(Million yen)“Century 2025”

217,096

220,000

200,000

180,000

Phase 2Phase 1240,000

183,270

175,291
165,800

168,295

2012年度FY2012

2013年度FY2013

185,880

194,018

191,113

195,580

173,398

160,000

140,000

120,000

100,000
2011年度FY2011

2014年度FY20142015年度FY20152016年度FY20162017年度FY20172018年度FY20182019年度FY20192020年度FY20204©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆ Consolidated Net Sales“Century
2025”“Century
2025”

SANKI VITAL PLAN
(Million yen)

240,000

Phase 2Phase 1

220,000

212,314207,684

200,000

190,067
179,598

180,000

178,901

171,496

168,512170,157

154,658

160,000

147,994
140,000

120,000

100,000
FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20205©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆ Consolidated Gross Profit
SANKI VITAL PLAN

“Century 2025”
Phase 2Phase 1

(Million yen)

35,00031,684

32,11030,00028,75425,06025,00020,00018,237

17,59018,42322,92922,538FY2015FY2016

17,96615,00010,0005,000
FY2011FY2012FY2013

FY2014FY2017FY2018FY2019FY20206©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆ Consolidated Gross Profit Margin（%）

SANKI VITAL PLAN

18“Century 2025”17

Phase 2Phase 1

16

15.5

14.7

15

14

13

15.1

14.9

13.4
12.8
12.3

12

11.4
10.7

11

10.0

10

9
FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY20207©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

COVID-19 Response Measures<Internal>●Established the new COVID-19 response headquarters headed by the president before the pandemic●Rapidly 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●Actively implemented telecommuting and flextime, and establishedin-house satellite offices, to avoid the 3Cs (Closed spaces, Crowded
places, and Close-contact settings)●Remotely conducted internal functions and held remote meetings,
including the annual meeting of shareholders●Promptly disseminated information inside and outside the Company
as people became infected■Online new employee induction<External>●Provided infection control technology
・Released the patents concerning technology owned by Sanki in order to support theaims of the IP Open Access Declaration Against COVID-19
・Patents released for nine technologies that are thought to contribute to prevention of
infection such as sterile room units, which have been installed in medical and researchfacilities●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 secure funds to support partner companies,
which are important stakeholders, and cater to short-term demand for operating capital
8©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆Topics by Segment
Facilities Construction Business・Sales from new orders stagnated for small-scale projects such as repairs due to the impact of the
COVID-19 pandemic. However, we secured orders in excess of fiscal 2019 by catering to strong
demand for semiconductors and 5G products, etc.
(1) On-site introduction of new labor-saving construction technology (development and on-site
introduction of autonomous airflow measurement robots)(2) Reduction of accidents and construction issues and complaints by utilizing Sanki Techno Center

Facility Systems Business・Office work-style consulting increased to prevent the spread of COVID-19(1) Establishment of the Consulting Promotion Department and provision of new consulting services(2) Strong orders received and sales of our next-generation central monitoring system (SIer)

Machinery Systems Business・The need for labor-saving and automation through the use of robots has increased as orders received
and sales to the manufacturing industry have stagnated due to the impact of the COVID-19 pandemic(1) Strong orders received and sales of hybrid systems that combine robotics and transport
equipment

Environmental Systems Business・Orders received greatly increased as a result of increased need for national resilience(1) Order received for a large-scale project utilizing our first supercharged fluidized bed furnace withbinary generation system(2) Development of AI system to estimate moisture content of dewatered sludge
9©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Fiscal 2020 Summary◆ Initiatives to increase quality and reliability
Measures to further pursue quality and increase reliability(1) Further pursue
quality

Promote technological development and cater to energy
efficiency and labor-saving needs
Shareholder returns (dividends and acquisition and retirementof treasury stock)(2) Initiatives toincrease
reliability

Review of payment conditions for partner companies

Work-style reforms, improvement of internal communication,social contribution, and transmission of information

Details on the following pages

10©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Further Pursue Quality◆Promotion of technological development
Development of AI system to estimate moisture
content of dewatered sludge

Development of autonomous airflow
measurement robots for construction equipment◆Catering to energy efficiency and labor-saving needs
Our first supercharged fluidized bed furnace with binary
generation system was adopted for Kitatama Water
Reclamation Center No. 1 Sludge Incineration Systems
Reconstruction Project (Tokyo)
 Wide-ranging energy conservation and CO2
reduction through the use of superchargers
 Energy creation through power generation

11©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Initiatives to Increase Reliability◆Shareholder dividends
AnnualDividend

Dividend per share (yen)100Special dividend according to business results
and social circumstances
25

80

10
60

20
40

20

10

15

20

20

FY2016FY201770

70

FY2018FY2019FY2020Regular dividend

Special dividend

400Acquisition/retirement oftreasury stock(1) 1,000,000 shares retired (retirement completed in August 2020)(2) 1,000,000 shares acquired (acquisition completed in October 2020)
12©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Initiatives to Increase Reliability◆Work style reforms
Smile ProjectWork-style CCU
Smile Project

Smile plans established byeach department under the
Smile Project

Smile plan
Construction

PlantsFacilities
andoverseas

Management
supportSpecific measures implemented byeach department

Company-wide lecture on
work-style reforms given by
Ms. Komuro of Work Life
Balance Co., Ltd.

◆Improving internal communication
President’s CCU

Meeting to exchange opinions between the president and employees held
remotely using avatars* CCU: Century Communication Up

Executives’ CCU

Meeting for executives to exchange opinions about
various topics relating to business operation

13©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Initiatives to Increase Reliability◆Social contribution
10th anniversary of the SANKI YOU Eco Contribution Point system

Donation of 1,382,900 yen to environmental
conservation organizations for the second halfof fiscal 2019

Cumulative donations over 10 years exceed
20 million yen with more than 17,000 trees
plantedSupport for ongoing tree-planting efforts andcommemorative tree-planting◆Transmission of information
Sponsorship of programs on nationwide TV and active
broadcast of commercials

Display at exhibition
・Virtual sewer display(August 18, 2020 to July 31, 2021 (planned))

・ENEX 2021

(December 9 to 11, 2020)“Virtual sewer display can be found here”

14©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

ESG Initiatives
ItemE
Environment

S
SocietyG
GovernanceContent
・Actively promoted energy conservation and energy generation(Received order for Kitatama Water Reclamation Center No. 1
Sludge Incineration Systems Construction Project)・ Newly created Kansha-no-Mori and conducted tree planting
activities to commemorate the 10th anniversary of SANKI YOU EcoContribution Points
・ Dispatched employees to the National Institute of Polar Research
Japanese Antarctic Research Expedition

・ Introduced a flextime system for all employees to promote work styles that leverage diversity
・ Shortened required work hours in the interest of work-life balance
・ Commenced Smile Plans at the four groups, in order to further promote work-style reforms
・ Reviewed payment conditions to reform financing of partner companies
・ Established the Sanki Group Procurement Policy with an awareness of CSR procurement

・ 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
directly to the president

15©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Statements about the future, such as results forecasts included in thesematerials, are based on judgments made according to the information
available to the Company as of May 14. Actual results may differ from thefigures contained herein due to a number of factors.
For inquiries, please contact:
Corporate Communications Department,
SANKI ENGINEERING CO., LTD.

Tel：+81-03-6367-7041

16©2021 SANKI ENGINEERING CO., LTD. All Rights Reserved.