ASANUMA CORPORATION
Q3 Financial Results Briefing for the Fiscal Year Ending March 2022
February 18, 2022

Event Summary[Company Name]ASANUMA CORPORATION[Company ID]

1852-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q3 Financial Results Briefing for the Fiscal Year Ending March 2022

[Fiscal Period]

FY2021 Q3[Date]

February 18, 2022

[Number of Pages]

17[Time]

13:30 – 13:59(Total: 29 minutes, Presentation: 19 minutes, Q&A: 10 minutes)[Venue]Kabutocho Heiwa Building 2F, 3-3 Kabutocho Nihonbashi, Chuo-ku, Tokyo
103-0026 (Hosted by The Securities Analysts Association of Japan)[Venue Size]

145 m2[Participants][Number of Speakers]

4
Makoto Asanuma
Morio Yamakoshi
Seiichiro Ishihara
Yoshimichi Yagi

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

Representative Director, C.E.O
Representative Director Senior Managing
Officer
Executive Officer
Executive Officer

1.800.674.8375
support@scriptsasia.com
1

Presentation
Moderator: Asanuma Corporation will now hold a briefing session on its financial results for the third quarterof the fiscal year ending March 31, 2022. Allow me to introduce the four people from the company. First, I
would like to present Mr. Makoto Asanuma, Representative Director, CEO.
Asanuma: My name is Asanuma. I'm looking forward to working with you.
Moderator: Next, we have Mr. Morio Yamakoshi, Representative Director, Senior Managing Officer.
Yamakoshi: I'm Yamakoshi. I'm looking forward to working with you.
Moderator: Next, we have Mr. Seiichiro Ishihara, Executive Officer.
Ishihara: I am Ishihara. I'm looking forward to working with you.
Moderator: Next is Mr. Yoshimichi Yagi, Executive Officer.
Yagi: My name is Yagi. I'm looking forward to working with you.
Moderator: Mr. Asanuma will give us an explanation shortly. After the presentation, there will be a questionand-answer session, so please come and join us. Without further ado, let us begin.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
2

Asanuma: I'm Makoto Asanuma, the president of the company. I'm looking forward to working with you.
Thank you very much for attending our financial results briefing for the third quarter of the fiscal year ending
March 31, 2022, today. To prevent further spread of COVID-19, I will only touch key points and be brief in myexplanation, so please bear with me.
Today, I would like to explain the current status for the third quarter of the fiscal year ending March 31, 2022,
and the progress of the measures in the Three-Year Medium-Term Plan.
First, please see page three. Comparison of the last fiscal year and the current fiscal year for the full year andthe third quarter, January–March. I will explain the figures for this fiscal year on the right side of the table. In
the third quarter, orders decreased by JPY11.4 billion compared to the previous fiscal year due to thepostponement of about JPY20 billion in orders from the third quarter to January-March, partly caused by the
spread of COVID-19. However, by the end of this fiscal year, we plan to capture the misaligned projects anduse them to achieve the plan.
As we continue to selectively accept orders, we have secured a gross profit margin on orders in the 8% range,
which is on par with the previous two fiscal years. As for the amount of completed construction work, we
expect it to be almost in line with the plan, although there is a slight delay in progress due to delays in thedelivery of materials. No construction work has been suspended due to COVID-19.
Gross profit on completed construction contracts and the gross profit margin on completed construction
contracts decreased by JPY700 million and 0.5 percentage points compared to the previous fiscal year in thethird quarter due to unexpected repair costs and other factors, but both are expected to achieve the plan due
to additional construction in the January-March period. The impact of material price hikes has been minimal
due to early ordering of materials.
SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
3

Operating income for the third quarter decreased by JPY1.1 billion compared to the previous fiscal year, but
we expect to achieve the plan as the gross profit on the just mentioned completed construction and SG&A
expenses will be as planned.
Net income for the third quarter decreased by JPY1.2 billion from the previous fiscal year, but we expect toachieve the plan due to the achievement of the operating income plan and the Sale of Policy Holding Shares
during January through March. There will be no change in the dividend plan.

Next, please look at page four. These are the trends in overall investment in domestic architectural renewal
and the status of our domestic and overseas architectural renewal. In the domestic building renovation
business, we expect to fall short of our full-year plan for the current fiscal year, partly due to a decline inoverall domestic investment, but we will make up for new orders, completed construction, and operating
income with new constructions. In the next fiscal year, we aim to achieve the plan by receiving orders for our
new renewal brand, “ReQuality”.
With regard to the renewal of ASEAN, we expect to achieve the plan for the current fiscal year, and from thenext fiscal year onward, we expect to achieve the plan through the consolidation of newly merged subsidiaries.
In the fiscal year ending March 2024, we plan to increase operating income from renewals to 25% ofconsolidated operating income in Japan and 10% in ASEAN, for a total of 35%.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
4

Please turn to page five. Here, you can find the measures of the Three-Year Medium-Term Plan. In the ThreeYear Medium-Term Plan, which we started this fiscal year, we have set the challenge to change the external
environment. We have identified three changes in the external environment and are working on measures to
respond to them, and I will explain the progress of the main measures.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
5

Please see page six. As for the continuation of strengthening efforts in the renewal business in the ASEAN
region, as shown in the upper part of the table, and as part of the promotion of the renewal business in ASEAN,
we newly made a company engaged in renewal and maintenance business in Singapore a subsidiary.
As shown in the lower part of the table, we established and started operations of a new company in Thailandthat uses carbon fiber for maintenance of highways and bridges. We are on track to increase the operating
income of the ASEAN Renewal Business to 10% of consolidated operating income in the fiscal year ending
March 2024.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
6

Please continue to page seven. In this section, I will explain the promotion of “ReQuality” renewal brandstrategy. In the renovation of the Nagoya branch, as shown in the lower part of the figure, we introduced ourown technologies and know-how in line with “ReQuality” concept of a better circulation for both humans andthe earth, and in particular, we made extensive use of natural materials such as soil and wood.
We have also achieved an 85% reduction in CO2 emissions when comparing rebuilding to a new construction.
In terms of energy consumption during operation, we were able to reduce energy consumption by 52%
compared to before the renovation and have obtained the ZEBready certification. WELL certification, which
evaluates buildings based on health and comfort, is scheduled to be obtained in the future. This is the firsttime in Japan that an entire 30-year-old building has been renovated and certified.
After the completion of this construction, the project received a great response from various architectural
media and was featured in magazines and newspapers. We also had a lot of visitors, which I think was a goodstart for our future branding promotion.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
7

Please continue to page eight. In this section, we will discuss the expansion of earthquake-resistanttechnologies and the advancement of seismic isolation and vibration control technologies. Currently, we aredeveloping new construction methods and design methods for large-scale logistics warehouses, which is our
specialty. Here are some of the main ones.
The first is the development of the column RC beam S hybrid construction method, as shown in the upper left
figure. While taking advantage of the characteristics of steel construction, it is possible to reduce costs by 10%
in the construction of the entire building. Second, on the upper right, is the development of a design method
using the energy method to optimize the vibration control structure. It is possible to reduce the cost while
increasing the efficiency of vibration control effect. The third is the development of a rationalization method
for steel structures, as shown in the lower left. We are developing a variety of construction methods that will
enable us to reduce the amount of steel used in steel construction.
We have already introduced the technologies I mentioned in many of our construction projects, and we willcontinue to upgrade these technologies and use them as a weapon to further strengthen our sales of orders
for logistics warehouses and other products.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
8

Please see page nine. In the upper part of the table, regarding the promotion of cooperation with
subcontractors, we are currently working on cooperation with subcontractors in order to solve the urgent
issue of manpower shortage due to the aging workforce. I would like to highlight the main ones.
First is the Construction Career Upgrading System (CCUS), a system promoted by the entire constructionindustry to improve the treatment of construction workers, and we have introduced it at each of our worksites
to promote and support the registration of subcontractors and construction workers.
Second is the CI-NET system. It is a system that allows efficient exchange of work such as contracts, estimates,
volume, and billing using a network, and we are in the process of introducing this system. As a first step, we
are working on networking contracts with our partner companies.
Thirdly, we introduced a commendation system for productivity improvement measures in collaboration withpartner companies at each workplace in fiscal 2019, and this year marks the third time we have done so. The
total number of applications for this program has been increasing every year, and this year there were 77
applications.
In the lower part of the table, regarding the promotion of the use and introduction of ICT-related systems, wehave established the DX (digital transformation) promotion committee to further strengthen the promotionof the introduction of digital technologies and systems for construction.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
9

Please see page 10. In this section, we will explain about strengthening corporate governance. As part of ourefforts to comply with the revised corporate governance code, we have been working on sustainability, andestablished the sustainability promotion committee in November last year. The committee is promoting the
introduction and development of environmental technologies and the study of non-financial KPIs to resolve
issues.
As for activities related to TCFD and the Task Force on Climate Related Financial Disclosures, Asanuma
Corporation’s own environmental initiative, Eco-Friendly ASANUMA 21, has set a medium- to long-term goalof reducing CO2 emissions per JPY100 million of construction volume by 50% by FY2030 and 70% by FY2050
compared to FY1990. We continue to promote efforts to decarbonize.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
10Please see page 11. Here, I will explain the revision of the capital funding plan. Our basic policy is to allocate
the funds generated by profits to investments and shareholder returns. As I explained earlier, based on the
finalized investment amount for the expansion of the ASEAN region renewal project, we have reviewed andrevised the overall capital investment plan, and as a result, as shown in the table, we have decided to reducethe capital investment by JPY1.7 billion from the initial amount to JPY6.3 billion, and increase shareholder
returns to cover the reduction.
I will explain about shareholder returns on the next page.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
11

Please see page 12. With regard to shareholder returns, the consolidated dividend payout ratio, which waspreviously set at 50% or more, has been revised to 70% or more, and the dividend per share will be JPY363 in
FY2021, an increase of JPY103 from the initial plan, JPY382 in FY2022, an increase of JPY108, and JPY395 in
FY2023, an increase of JPY113. In order to achieve this return to shareholders in this Three-Year MediumTerm Plan, all officers and employees are determined to work together to secure profits.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
12Next, please look at page 13. This is the last one. I would like to introduce you to an article that contains theinitiatives of the measures I have mentioned. On the left is a list of magazines and other media that havecovered the renovation of the Nagoya Branch, as explained in the section on “ReQuality” and the promotionof the renewal brand strategy. The article on the right features an award ceremony and presentation oncollaborative productivity improvement measures at workplaces.
That's all I have to report. Thank you very much for your attention.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
13

Question & Answer

Moderator [M]: Thank you very much for your explanation. This will be followed by a question-and-answer
session.
Let's start with the first one, please.
Nagaoka [Q]: My name is Nagaoka from Strategic Capital, Inc. I would like to ask you two questions. First, I
think that the progress of the earnings forecast for the current fiscal year is not so smooth until the third
quarter, and I would like to know how likely it is that you will fail to meet the forecast. Also, will you be able
to pay dividends as expected even if net income does not reach your earnings forecast?
Company Representative [A]: As the president mentioned earlier, we expect to achieve the plan. We do not
expect to not meet our goal at this time. That's all.
Nagaoka [Q]: Thank you very much. Secondly, I would like to ask you about the dividend level, which wasannounced at the end of last year and is also stated on page 12 of this financial results presentation. The
expected dividends for the next fiscal year and beyond are stated as JPY382 and JPY395. Is it correct to assume
that this is the bottom line, and if net income is higher than expected, dividends will increase accordingly, andif net income is lower than expected, the dividend payout ratio will be raised to maintain this level ofdividends?
Speaker [A]: As I said, we expect to achieve the plan for this fiscal year. We expect to achieve the plan for the
next fiscal year and the fiscal year after that as well, and at this point in time, the dividend payout ratio is 70%
for each fiscal year, and the amount is as you mentioned, and we have no intention of changing it. That's all.
Nagaoka [M]: Thank you very much. That's all from me.
Moderator [M]: Thank you very much. Any other questions?
Participant [Q]: I would like to ask you two questions. This is quite similar to the previous question, but here’s
my first one.
In response to the various messages from activists, I am aware that your company has released a mid-termplan and is changing its business development policy. I think you have explained the performance measuresthis time, but when should we expect to start seeing visible results in terms of performance and profit? Thisis the first point.
Company Representative [A]: Among the things I just explained, the first is our new renewal brand, ReQuality,
which will contribute to orders, completions, and profits from the next fiscal year, as I mentioned earlier. In
addition, our renewal subsidiary in Singapore, which we merged and acquired in January, is naturally
contributing to the figures from this month. In any case, as was explained, we will be able to achieve thetargets of the medium-term three-year plan for the next fiscal year and the year after that. That's all.
Participant [Q]: I would like to ask a supplementary question. Regarding the business environment after
COVID-19, I think that the situation and assumptions may have changed since the time when the mediumterm plan was issued. I would like to know your thoughts on the industry as a whole at this point in time, andhow your assumptions have changed compared to six months or a year ago.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
14

Company Representative [A]: As a company, we have been most affected by COVID-19 in terms of orders.
Renewal orders have been particularly affected. It is difficult to say when this will recover, but I believe that
it will be difficult for construction investment to recover for about two more years. However, even in such asituation, as I mentioned earlier, we will not stop our efforts of accepting orders that ensure profits. That's all.
Participant [Q]: So, you're saying that at this point in time, compared to six months ago or something like
that, your view hasn't changed that much?
Company Representative [A]: Yes. I don't think our perspective has changed that much from six months ago.
Participant [Q]: The second question is quite similar to the previous one, but I think you explained that you
would lower the investment capital plan by less than JPY2 billion from the initial plan and use that as a sourceof dividends. Compared to the past, you have drastically raised the level of dividends, and you have alreadypaid out cash in the form of dividends to the mid-JPY2 billion level. Which means that the balance of cash isabout JPY4 billion less than a year ago. I think the company may no longer have too much cash.
With regard to the level of dividends, what do you think is appropriate for the mid-term business plan andbeyond, and taking into account the amount of cash on hand, what do you believe is the necessary level ofoperation? Does this seem good in terms of business efficiency?
Company Representative [A]: First of all, as I mentioned earlier, the basic principle is to allocate the funds
generated by profits to investment and shareholder returns, but of course, the prerequisite for this is tomaintain at least average levels of equity capital, deposits, and borrowings, especially compared tocompetitors in the same industry. We will also maintain the level of deposits by looking at the level of suchother companies in the industry.
At this stage, we believe that all of these levels are above average, so, again, we will allocate all of the funds
generated by profits to dividends and investments. This time, we decided to reduce investment by JPY1.7
billion, so we decided to allocate JPY1.7 billion to dividends in line with this basic policy. That's all.
Questioner [M]: Thank you very much.
Moderator [M]: Thank you very much. Any other questions?
As there appear to be no further questions, this concludes today's financial results briefing. Thank you all verymuch for your help.
[END]______________
Document Notes
1.
2.
3.
4.

SupportJapan
TollfreePortions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
15

Disclaimer
SCRIPTS Asia reserves the right to edit or modify, at its sole discretion and at any time, the contents of thisdocument and any related materials, and in such case SCRIPTS Asia shall have no obligation to provide
notification of such edits or modifications to any party. This event transcript is based on sources SCRIPTS Asia
believes to be reliable, but the accuracy of this transcript is not guaranteed by us and this transcript does not
purport to be a complete or error-free statement or summary of the available data. Accordingly, SCRIPTS Asia
does not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of theinformation contained in this event transcript. This event transcript is published solely for information
purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an
offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal.
In the public meetings and conference calls upon which SCRIPTS Asia’s event transcripts are based, companies
may make projections or other forward-looking statements regarding a variety of matters. Such forwardlooking statements are based upon current expectations and involve risks and uncertainties. Actual results
may differ materially from those stated in any forward-looking statement based on a number of importantfactors and risks, which are more specifically identified in the applicable company’s most recent public
securities filings. Although the companies may indicate and believe that the assumptions underlying theforward-looking statements are accurate and reasonable, any of the assumptions could prove inaccurate orincorrect and, therefore, there can be no assurance that the anticipated outcome described in any forwardlooking statements will be realized.
THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE
PUBLIC MEETING OR CONFERENCE CALL. ALTHOUGH SCRIPTS ASIA ENDEAVORS TO PROVIDE ACCURATE
TRANSCRIPTIONS, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE
TRANSCRIPTIONS. IN NO WAY DOES SCRIPTS ASIA OR THE APPLICABLE COMPANY ASSUME ANYRESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BY ANY PARTY BASED UPON ANY EVENT
TRANSCRIPT OR OTHER CONTENT PROVIDED BY SCRIPTS ASIA. USERS ARE ADVISED TO REVIEW THE
APPLICABLE COMPANY'S PUBLIC SECURITIES FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER
DECISIONS. THIS EVENT TRANSCRIPT IS PROVIDED ON AN "AS IS" BASIS. SCRIPTS ASIA DISCLAIMS ANY AND
ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWAREERRORS OR DEFECTS, AND ACCURACY, COMPLETENESS, AND NON-INFRINGEMENT.
None of SCRIPTS Asia’s content (including event transcript content) or any part thereof may be modified,
reproduced or distributed in any form by any means, or stored in a database or retrieval system, without theprior written permission of SCRIPTS Asia. SCRIPTS Asia’s content may not be used for any unlawful or
unauthorized purposes.
The content of this document may be edited or revised by SCRIPTS Asia at any time without notice.
Copyright © 2022 SCRIPTS Asia Inc. (“SCRIPTS Asia”), except where explicitly indicated otherwise. All rights
reserved.

SupportJapan
Tollfree03.4405.3160
0120.966.744

North America
Email Support

1.800.674.8375
support@scriptsasia.com
16