ASANUMA CORPORATION
Q2 Financial Results Briefing for the Fiscal Year Ending March 2023
November 16, 2022

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

1852-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q2 Financial Results Briefing for the Fiscal Year Ending March 2023

[Fiscal Period]

FY2022 Q2[Date]

November 16, 2022

[Number of Pages]

20[Time]

11:00 - 11:27(Total: 27 minutes, Presentation: 23 minutes, Q&A: 4 minutes)[Venue]Kabutocho Heiwa Building 3F, 3-3 Kabutocho Nihonbashi, Chuo-ku, Tokyo
103-0026 (Hosted by The Securities Analysts Association of Japan)[Venue Size]

145 m2[Participants]

5[Number of Speakers]

4
Makoto Asanuma
Morio Yamakoshi
Seiichiro Ishihara
Yoshimichi Yagi

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Representative Director, Senior Managing
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Managing Officer and Director, Institute ofTechnology Research
Executive Officer, Deputy Manager of
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Presentation
Moderator: We will now begin the ASANUMA CORPORATION’s Financial Results Briefing for the Fiscal YearEnding March 31, 2023.
I would like to introduce four participants from the Company. First, Mr. Makoto Asanuma, Representative
President, and Chief Executive Officer.
Asanuma: My name is Asanuma. Thank you.
Moderator: Next, Mr. Morio Yamakoshi, Representative Director, Senior Managing Officer, and President's
Office Manager.
Yamakoshi: My name is Yamakoshi. Thank you.
Moderator: Next, Mr. Seiichiro Ishihara, Managing Officer, and Director of the Institute of Technology
Research.
Ishihara: I am Ishihara. Thank you.
Moderator: Next, Mr. Yoshimichi Yagi, Executive Officer, Deputy Manager of the President's Office.
Yagi: I am Yagi. Thank you.
Moderator: President Asanuma will give us an explanation today. Please note that there will be time for aquestion-and-answer session after the explanation.
Please go ahead.
Asanuma: I am Makoto Asanuma, Representative President, and CEO. Thank you very much for joining us
today for our financial results briefing. I would appreciate your understanding that I will explain only the key
points from the viewpoint of preventing the spread of new coronavirus infection.
Before I begin my explanation, I must apologize. On August 16, one of our employees was indicted today by
the Chiba District Public Prosecutor's Office for Obstruction of Auction Related to Public Contracts in thebidding process for construction work ordered by Ichikawa City, Chiba prefecture.
Currently, we have already received nomination suspension as a qualified bidder by a number of local
governments and other authorities. We deeply regret this situation and deeply apologize to our shareholders,business partners, and all other concerned parties for the concern and inconvenience this has caused.
We have already taken disciplinary action against the employee in question and reduced the remuneration of
the directors, and as announced on October 20, we will work to further enforce compliance and restore
confidence in the Company.
Today, I would like to explain our results and progress for Q2 of the fiscal year ending March 31, 2023, thestatus of orders received, and the progress of our three-year medium-term plan.

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Please see page three. I will explain the financial results for Q2 compared to the same quarter of the previous
fiscal year and to the plan. The table you see shows, from left to right, the actual results for Q2 of the previous
fiscal year, the plan, and actual results for Q2 of the current fiscal year, then the comparison to the previous
fiscal year, and the comparison to the plan.
Orders received totaled JPY68.3 billion, up by JPY9.3 billion from the previous year, due to an increase in
private-sector construction orders and orders received by overseas subsidiaries. The number of completed
construction contracts was JPY65.6 billion, up by JPY6.4 billion from the previous year and by JPY2 billion fromthe plan, due to the steady progress of construction projects and the completed construction contracts atoverseas subsidiaries. Gross profit on completed construction contracts increased by JPY800 million from theprevious year, and by JPY740 million from the plan to JPY6.38 billion, due to an increase in the amount ofcompleted construction contracts and the decision to add additional work, which boosted the gross profit
margin.
Operating income was JPY2.17 billion, up by JPY650 million from the previous year and by JPY920 million fromthe plan. Net income for the quarter was JPY2.14 billion, up by JPY1.18 billion from the previous year and by
JPY940 million from the plan, due in part to foreign exchange gains and gains on sales of assets.

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Please see page four. I will explain the progress toward the full-year plan for Q2.
This table shows, from left to right, Q2 and full-year results and the progress rate of Q2 results against the
full-year results for the previous fiscal year.
Next, Q2 results, and the plan for the full year, and the progress rate of Q2 results against the full-year planfor the current fiscal year are provided.
As you can see, the progress rate for Q2 of this fiscal year has been between 40% and 50%, and at this stage,
we expect to achieve our full-year plan, and our dividend plan remains unchanged.

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Please see page five.
I would like to explain the status of orders received in Q2.
The table shows, from left to right, Q2 results for the previous fiscal year, followed by the results for thecurrent fiscal year and YoY comparisons.
Although the results of public works projects decreased compared to Q2 of the previous fiscal year, we believethat we were able to make up for this with an increase in orders received for private works.
Orders from overseas subsidiaries also remained steady. Based on Q2 results and the current buildup of orders,
we do not expect the suspension of nominations to have a significant impact.

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Please see page six. I will explain the major measures in the three-year medium-term plan.
Our basic policy is Challenge change" by deeping dive into the unique characteristics of ASANUMACORPORATIONAs shown in the table, we are working on various measures, such as strengthening renovationand promoting
cooperation with subcontractors, in response to the three changes in the external environment.
On the next page, I will explain the progress of each measure. Please see page seven. The following is an
overview of the current status of the building renovation.

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6This table shows Q2 results for the previous period and the current period, as well as the comparison YoY. We
have set a goal
“In FY 2023, operating income from the Building Renovation Business will increase to 35% of consolidated
operating income.“
Orders received for domestic building renovation increased by JPY1 billion from the previous year, but bothsales and profits declined YoY due to the large number of construction projects that had not yet been started,and together with ASEAN building renovation, the share of operating income ratio was only 28.5%.
We hope to achieve this goal by strengthening our domestic building renovation businesses through“ReQuality”, which I will discuss next, and by proposing renovation technologies.

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Please see page right. We will explain the promotion of “ReQuality” and the renovation project of Nagoya
branch.

“ReQuality”, a renovation brand launched last year, is based on t the theme of "Good Circulation for Humans
and the Earth.", and we are strengthening various proposals to create better spaces for workplaces and living
environments while utilizing our proprietary technologies and ICT.
In July of this year, we received the gold rank of the WELL certification, which evaluates buildings based onhealth and comfort, for the renovation of our Nagoya branch, which was carried out last year. This was thefirst time in Japan to acquire the certification for the renovation of an entire building more than 30 years old.
In addition, this renovation project was selected as one of the 100 best in the Good Design Awards. The jury
members commented that, as a recycling-oriented, environmentally conscious building, the building was
meticulously designed from a long-term perspective to a practicable process, and that the approach ofembodying the circulation flow in a building was also a progressive attempt, and highly evaluated the project.

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8Next, please see page nine. As for the upgrading of renovation technology, I would like to explain the
expansion of seismic strengthening technology and the extension of building service life.
Shown on the left this is a seismic monitoring system that automatically diagnoses the condition of a building
immediately after an earthquake using sensors attached to the building and transmits the diagnostic data tobuilding managers as well as tenants.
The CCB method and PRS joint filling method shown on the right can reduce the amount of extra repair workby controlling future cracks in the concrete placed, thereby extending the life of the building and reducing thecost of repairs.
The member companies of the CCB Construction Method Association, of which we are the representative,
have already completed more than 260 projects, and we are aiming to increase orders by adopting thetechnology, which has been recognized as effective in extending the service life of distribution warehouses
and factories, which is our focus.

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Please see page 10. I will provide an overview of the current status of building renovation in ASEAN.
EVERGREEN, which became a subsidiary in January of this year and is listed at the bottom of the table, hasbeen reflected in our consolidated results from this fiscal year, contributing to orders received, sales, andprofits.

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10Please see page 11. I will explain about promoting cooperation with subcontractors.
Recently, the shortage of labor due to the aging of workers has become an urgent issue, and we are working
with our subcontractors to solve this problem. I would like to explain major initiatives.
First, we have introduced the Construction Career-Up System, which is promoted throughout the constructionindustry, at each of our work sites, and we promote and support the registration of subcontractors andconstruction technicians. This system is designed to improve the compensation of construction technicians,
and we will continue to promote it.
Next is the Asanuma Meister system, under which Asanuma Meister is selected among the chiefs of worksites
who have been active for many years and whose achievements, contributions, and personalities are
particularly outstanding. They will be awarded financial incentives. As of March 31, 2022, 218 people havebeen selected.
We also resumed training sessions for members of the Yayoi Kai, a group of subcontractors, which had beensuspended due to the COVID-19 pandemic.
Finally, the award system for productivity improvement measures taken in collaboration with subcontractors
at each worksite is now in its fourth year, with a total of 69 editions this year. We consider collaboration with
our subcontractors to be of the utmost importance, and we intend to further enhance it in the future.

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Please see page 12. We will explain DX promotion, which is indispensable for improving business efficiency
and productivity.
We have established a DX Promotion Committee to study various issues. The first of these is the promotionof the introduction of BIM and CIM, including training to encourage employees to use them, their applicationin order to win orders, and efforts to expand their use not only to the design stage but also to the construction
stage.
Second, in the area of work efficiency using tablets, we are examining how to organize cumbersome
construction photos and inspecting the efficiency of Inspection of bar arrangementand Inspection of finish.
Third, in joint development with other companies, we participate in various projects to utilize robots andother equipment.
Fourth, in the area of digitization of business operations, we will continue to work toward further expansionof digitization of contracts, purchase orders, invoices, and other documents for internal operations andtransactions with external parties.

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Please see page 13.
I would like to explain our approach to decarbonization.
As for our decarbonization efforts, in the previous fiscal year, we had set long-term CO2 reduction targets of
50% reduction of CO2 emissions per JPY100 million of construction by FY2030 and 70% reduction by FY2050
compared to FY1990.
This target is a per-unit reduction target, and in response to the recent demand to set a reduction target based
on total emissions, we have added a target to reduce total CO2 emissions by 73% by FY2030 and 84% by
FY2050, compared to FY1990.
In FY2021, the actual reduction per unit of production was 17 tons, or 43.3%, and the total reduction was
24,000 tons or 67.7%. Please note that these are targets for Scope 1 and Scope 2, and we will review thetargets for Scope 3 as soon as they are available.

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Please see page 14. Some of the initiatives in our decarbonization efforts at our workplaces
As part of our efforts to reduce CO2 emissions, the photo above left shows the use of low-carbon,
environmentally friendly concrete, a technology developed by our company that reduces CO2 emissions by
50% compared to ordinary concrete, in construction projects.
The lower left figure shows a schematic of the introduction of 100% renewable energy power, which we began
introducing at some of our work sites last year. Starting this year, we have decided to introduce this system
to all new construction sites. This energy is approved by the RE100 project, which aims to use 100% renewableenergy for its business activities.
Next, I would like to explain our biodiversity conservation activities, which are listed on the right. We haveadopted CASBEE, Comprehensive Assessment System for Building Environments, evaluation in our design andconstruction project documents and are working to achieve an A-rank rating of 50% or higher for our target
work sites.
The photo below right shows one of these efforts. Many wild birds can be seen around the work site in Yao
City, Osaka, and the area overlaps with the habitat of endangered falcons. Therefore, we selected trees to beplanted using the developed system and worked to preserve the environment by securing green areas in thesurrounding area and on the site.
We will continue to actively consider the environment and aim for a better circulation with the environment.

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Please refer to page 15. The following is an explanation of the Sustainability Promotion Committee's mainefforts to promote sustainability.
The Sustainability Promotion Committee was established last November, and this committee is responsible
for promoting environmental management and TCFD-related activities.
We have formulated a human rights policy and procurement policy, disclosed them on our website, and asked
our employees and subcontractors to thoroughly implement them.
In addition, at the Conference on Promoting Partnership Building for the Future promoted by Keidanren; andrelated ministries and agencies, we declared our support for the purpose of establishing new partnerships bypromoting cooperation and coexistence with supply chain business partners and value-creating businesses.
Other initiatives include setting KPIs in sustainability management, securing core human resources anddiversity, formulating human resource development policies, and developing measures that take humanrights into consideration.

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Please turn to page 16. Lastly, the newspaper reported on the ReQuality-related measures I mentioned earlier,including the Good Design Award for the renovation of the Nagoya Branch and the acquisition of the gold rankof the WELL certification.
Other articles include a technical presentation and some of the articles covering the PRS joint filling methodthat I explained earlier.
That is all from me. Thank you very much for your attention.
Moderator: Thank you very much for your explanation.

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Question & Answer

Moderator [M]: Okay, we will now have time for questions and answers. Does anyone have any questions?
Thank you very much. Please go ahead.
Participant [Q]: Thank you for your explanation. I would like to ask you two questions. The first point is, as
you mentioned at the beginning of your presentation, the impact of the suspension of nominations for public
works projects is minor, but for how long will it affect you?
Secondly, I understand well what you have been saying about the labor shortage as an issue for the industry
as a whole, and I understand your company's efforts, but could you please briefly explain two other points:
the extent of the impact of high costs, the depreciation of the yen, and high material prices, and whether anincrease in orders received for private sector demand will lead to a situation where the Company will not be
profitable. Thank you.
Company Representative [A]: Let me answer. Regarding the duration of the impact of the suspension of
nominations, we have received several suspensions, but most of the suspensions from the so-called central
government agencies have already ended.
Although the suspension of nominations by municipalities still remains, the suspension of nominations by thecentral government, which is our main target for orders, has ended as I just mentioned. So, as the president
mentioned earlier, the suspension of nominations will not have a significant impact on orders. . In fact, and I
repeat this again, the number of orders received has increased over the previous year, so I do not think there
will be a particularly large impact.
As for your question about high costs in addition to labor shortages. For example, iron costs have gone up
about 80% from two years ago. I believe that costs have increased by 20% from a year ago and by about 10%
from six months ago. For the past year or so, such cost increases could have resulted in so-called order losses,
but fortunately, there were no major order losses.
Lately, the price of materials has remained stable and high, and I think we can say that there is less likely than
before that we will see large order losses in the future. Therefore, the impact of the high costs on our businessperformance will not be that great in our case.
That’s all.
Participant [M]: Thank you very much.
Moderator [M]: Thank you. There being no further questions, this concludes today's financial results briefing.
Thank you, President Asanuma, and company members, for your explanation. Also, thank you to all of you forjoining us today. Please make sure you have not forgotten anything and return home safely. Thank you.
[END]______________
Document Notes
1.
2.
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].

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3.
4.

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TollfreeSpeaker 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.

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