ASANUMA CORPORATION
Q2 Financial Results Briefing for the Fiscal Year Ending March 2024
November 17, 2023

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 2024

[Fiscal Period]

FY2023 Q2[Date]

November 17, 2023

[Number of Pages]

15[Time]

13:30 – 14:02(Total: 32 minutes, Presentation: 29 minutes, Q&A: 3 minutes)[Venue]Kabutocho Heiwa Building 2F, 3-3 Kabutocho Nihonbashi, Chuo-ku, Tokyo
103-0026[Venue Size]

145 m2[Participants]

10[Number of Speakers]

3
Makoto Asanuma
Morio Yamakoshi
Marika Asanuma

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Presentation
Moderator: Thank you for standing by. The time has arrived, and we will now begin the financial results
briefing for ASANUMA CORPORATION.
To begin, I would like to introduce three people from the Company. First, Makoto Asanuma, Representative
President and CEO.
Makoto Asanuma: I am Asanuma. Thank you very much.
Moderator: Thank you.
Next is Morio Yamakoshi, Representative Director, Senior Managing Officer, and Head of the President's Office.
Yamakoshi: I am Yamakoshi. Thank you very much.
Moderator: Thank you very much.
Next is Marika Asanuma, Executive Officer and General Manager of the Corporate Communications Division.
Marika Asanuma: I am Marika Asanuma. Thank you very much.
Moderator: Thank you.
Today, we will start with President Makoto Asanuma, followed by General Manager Marika Asanuma, andafter their explanations, we will have time for a question-and-answer session. Now, without further ado,
President Asanuma, please go ahead.
Makoto Asanuma: I am Makoto Asanuma, the President of the Company, as introduced just now. Thank youvery much for joining us today. I will now present ASANUMA CORPORATION's financial results for Q2 of the
fiscal year ending March 31, 2024. First, I will give a brief overview of the financial results.
First, as for the environment of the construction industry, private-sector construction investment hasremained firm, with demand for new warehouses, logistics facilities, factories, and other facilities expanding
due to the strong drive for capital investment. However, the cost of construction work is still rising due tosoaring material prices caused by factors such as the increased demand associated with the end of the COVID19 pandemic and prolonged supply chain disruptions caused by the invasion of Ukraine by Russia, as well as
soaring labor costs due to labor shortages.
As a result of these factors, consolidated results for Q2 of the fiscal year ending March 31, 2024 showed YoY
increases in orders and sales, but a decrease in gross profit and other earnings figures. However, comparedto the plan, the strong performance of our Singapore subsidiaries contributed to the consolidated results, andboth sales and profits exceeded the plan. Orders, sales, profits, and dividends for the full year are expected
to be in line with the plan disclosed in May.
Less than six months remain in the Three-year Medium-Term Plan that we are currently working on. The entire
Company will continue to work together to achieve our performance targets and complete theimplementation of each measure.

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Marika Asanuma, Executive Officer and General Manager of the Corporate Communications Department, will
now explain the details.

Marika Asanuma: Today, I would like to explain, if you would look at the second page of the horizontal
document in the handouts. I would like to begin by explaining the details of our results for Q2 of the fiscal
year ending March 31, 2024. As stated in the second item, this fiscal year is the final year of the Three-Year
Medium-Term Business Plan, and I would like to explain the progress of this plan.
Let me briefly touch on the outline of the initiatives of the Three-Year Medium-Term Business Plan. In ourThree-Year Medium-Term Business Plan, we have set forth the theme of taking on the challenge of changes
in the external environment, and we have identified three changes in the external environment.
First, as a response to domestic construction investment, which is expected to decline over the medium tolong term, we are focusing on our maintenance and repair business so called renovation business. The second
change in the external environment is that the working population is expected to decline, and we areresponding to this trend through digital transformation and other measures. Third, we believe that we must
respond to non-financial management activities, such as ESG and SDGs, more than ever before, and we are
implementing a variety of measures to respond to this trend.
We are proceeding with the Three-Year Medium-Term Business Plan based on these three pillars, and I will
explain the progress of the plan later in this presentation.

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Please turn to page three. In this section, I will first explain the details of our consolidated financial results for
Q2 of the fiscal year ending March 31, 2024.
The first red box shows the results for Q2, and to the right is the YoY change and comparisons with the plan.
In addition, the second red box shows the full-year plan for the current fiscal year and the rate of progress
toward the full-year plan for Q2 in percentages.
First, please look at the first red box. The first line shows the results for Q2, with orders received of JPY85,229
million, an increase of JPY16,910 million YoY, and to the very right, an increase of JPY1,929 million over theplan. As mentioned earlier by the president, orders have been firm against the backdrop of a favorable orderenvironment.
The second line, in terms of sales, the results for Q2 totaled JPY70.04 billion, an increase of JPY3,152 million
YoY and an increase of JPY5,070 million over the plan. Here, as construction progressed smoothly, net sales
increased both in comparison to the previous year and to the plan.
Continuing on to profit, please look at the gross profit margin on line four. In Q2, the gross profit margin was
at 9%, down 1.1% YoY and down 0.7% from the plan. This is due to the continuing impact of high material
prices and a decline in profit margins, resulting in a YoY decrease in profit. As a result, operating profit was
JPY1,585 million, a decrease of JPY580 million YoY, and net income was JPY1,101 million, a decrease of
JPY1,034 million YoY.
On the other hand, if you look at the rightmost column of the profit section, the comparison with the plan,
you will see that we are overachieving compared to the plan. The operating profit was higher by JPY55 million,
and the net profit was higher by JPY246 million. Regarding these figures, we have two renovation-related

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4subsidiaries in Singapore, which performed very well. Their strong performance was reflected in the
consolidated results, resulting in the figures exceeding the plan on a profit basis.
I would like to continue by discussing the percentage of progress toward the full-year plan here in the second
red box. As you can see here in the Q2 progress rate, we are making progress at a satisfactory level, but the
progress rate of net profit for the period under review is somewhat low.
As shown on the second reference material, we plan to record an extraordinary profit from the transfer ofassets in H2, as disclosed on November 8, and if this is factored in, we expect to achieve our full-year plan. As
a result, we plan to pay a dividend of JPY197.5, as planned. We also expect the dividend payout ratio to exceed
70%.

Please continue to page four. Earlier, in the consolidated results section, I mentioned that orders haveremained strong. I would like to briefly explain the details of this trend.
The consolidated figures at the bottom show YoY increases, as indicated earlier, mainly driven by construction,
as indicated in the first red box. Among these, the third line from the top, the rightmost column, shows a YoY
increase of JPY17,491 million for the private sector, mainly due to orders received for factories andwarehouses.
Another factor indispensable to the increase in orders received is our overseas subsidiaries, the Singapore
subsidiaries, which I mentioned earlier. They have steadily received orders and have also contributed to theconsolidated results.

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Please continue to page five. Now, I will explain the status of our efforts in the Three-Year Medium-TermBusiness Plan, where, as I mentioned earlier, the current fiscal year is the final year.
I mentioned earlier that we have three areas of focus, the first of which is the renovation business. We havebeen carrying out our medium-term business plan with the goal of a business portfolio in which more than
35% of our consolidated operating profit at the end of the current fiscal year will be from the renovation
business. As planned, we expect to achieve 35% at the end of the fiscal year ending March 31, 2024, the endof the final year of the plan.
Specifically, as of Q2 of this fiscal year, operating profit from the renovation of domestic construction projects
and ASEAN renovation projects totaled JPY1,106 million as a whole, an increase of JPY626 million YoY, and we
expect to achieve our goal for the full year as well. Although the share of operating profit has grown slightly,
the consolidated operating profit, which is the denominator, is rising steadily when viewed on a fiscal year
basis, and we are expecting 35.2% at the end of the fiscal year.
As for the factors behind this increase, as you can see in the domestic renovation section below, there was anincrease in this area as well, where we were able to secure large orders for renovations. And, as I mentioned
earlier, we also booked orders in Singapore, which contributed to the YoY increase.

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Now, for the measures we are taking to obtain renovation orders, please see page six.
Our construction renovation is mentioned in the title at the top, and we are branding it with thename ’ReQuality’. I would like to explain a little about the technology, which is an indispensable factor inpromoting ‘ReQuality’. The renovation business is something that every company is doing, but as part of ourvalue-added offerings, we are proposing renovation projects using our own unique technologies. Let me
highlight two specific examples of this here.
First of all, advanced RC examination and diagnosis technology mentioned on the left side. This involves an
examination of reinforced concrete using our proprietary standards and proposing a more appropriate or
optimal renovation based on the results of the examination. We use our standards, conduct examination
based on them, and make the most appropriate proposals, which contributes to cost savings on the customerside.
We also have another technology called “Kantsuchi block.” These kinds of blocks, as you see in the picture,are usually thought to be made with concrete. What we are proposing are blocks made with soil. Their effects
include, for example, absorbing moisture, absorbing odors, and circulating air, and our technical laboratory
can make and provide blocks that take advantage of these soil properties.
Specifically, JR West Properties Co., Ltd. is a customer who develops and owns sites, as you may know. This
customer reused the soil left over from their construction sites to create these blocks using our technology
and installed them in their customer's office. We have introduced such examples here. These are just someof the technologies we are using to offer value-added renovation proposals.

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Another essential part in discussing our brand ’ReQuality’ is our Nagoya branch renovation project, shown
below the middle section. When we first began promoting ’ReQuality’, we decided to first create a flagshipproduct that would incorporate all of our various technologies and know-how. It was a project to completelyrenovate a 30-year-old building that was owned by our company.
For this, we have received various domestic and international awards, including the Good Design Best 100,
which I am sure you all have heard about. We have also received the SG Mark, which is the Singapore Good
Design Award. As a result, in addition to our efforts being praised, it has been a motivating factor for our
employees, and we are continuing to promote ’ReQuality’ using this as a steppingstone.

Please continue to page seven. Here, I would like to explain another essential element for our renovation
business that has been mentioned often before, the ASEAN renovation business.
We have two renovation-related businesses in Singapore, one of which is Singapore Paints & Contractor Pte.
Ltd. (SPC), which became a subsidiary of ours in October 2018. In addition to renovation work, this company
paints buildings, etc. The other is Evergreen Engineering & Construction Pte. Ltd., which became a subsidiary
last January. In addition to renovation, it also does maintenance and electrical installation.
As shown in the figures here, their performance has been very strong, and as I mentioned while explaining
the consolidated business results, they are contributing firmly to the consolidated results.
Next, in the part written Thailand, we are working with Toray Industries, Inc., and Toray International, Inc., ona joint project with a material called carbon fiber, to reinforce bridges and viaducts by adhering carbon fiber
sheets to their legs, etc. We are working diligently to accumulate orders for this area, and we are graduallybuilding up the number of orders.

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Please continue to page eight. The second area of focus of the Three-Year Medium-Term Business Plan is toaddress the decline in the working population, of which I will explain the digital transformation portion.
As you are aware, the number of workers at construction sites has become extremely tight due to the decline
in the productive labor force. Therefore, it has become very difficult for senior employees to educate junioremployees, or for supervisors to teach their subordinates, as they used to do in the past.
Therefore, we developed a system, this software called “GEMBA (construction site) Trainer” together withanother company. If you look at this photo, you can probably guess what it is, but it shows an avatar that canwalk around construction sites. For example, you can see this yellow triangle in the upper left photo. Whenthe avatar goes to this triangle, it zooms in on the situation and quizzes the user what precautions should betaken, or what problems exist. The software then shows multiple choices, and when the user clicks on the
choice that they think is correct, the correct answer appears, and of course, it also shows mistakes, and the
explanations appear.
I have actually tried the demo version, and it is hard to see here in this photo, but the screen is very beautiful,and you can walk around with the avatar as if you were really on the site. And it has been very well received
for allowing people who have never been on site to learn about the work, while imagining what it is like, while
having fun. Here, though, it's more of an adventure part, where you are walking around various buildings.
In the exercise part, there is no walking around, just quizzes, and you are given quizzes at different levels, andyou answer them to accumulate more and more points. If we introduce this into the training of newcomers,for example, by having them compete with their peers, it would be possible to do so, and I think it would
encourage the enjoyment and motivation to learn more and more.

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9Currently, only these two buildings, S and RC, are available, but we are currently considering expanding thisto various types of buildings, and while it will be construction sites, we are also considering expanding it tocivil engineering as well.

Please continue to page nine. Here, I would like to explain the status of our non-financial management
activities, including ESG and SDGs, which is the third area of our focus.
Of these, I would like to pick up on the first one here, which is our environmental initiatives. As shown in Table
1, we have established CO2 reduction targets for FY2030 and FY2050 and have raised the targets for CO2
emissions from business activities and CO2 emissions from electricity and gas as shown in Scope 1, based on
the results of FY2022. We will take this opportunity to further reduce our CO2 emissions.
We have also set a new target for CO2 emissions in Scope 3 Category 11, which is CO2 emitted after thedelivery of buildings to customers. We have set a reduction target for this during the current fiscal year aswell and are working to further reduce CO2 emissions in order to meet this reduction target.

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I would also like to briefly touch on the second of our non-financial management activities, our social
contribution activities.
Our policy for social contribution activities is as follows: “In order to realize the ideal form of society as a member of society, each and every employee is aware of
his/her social responsibilities and actively promotes social contribution activities.

”

As part of our social contribution activities, we sponsor and support sports for the disabled based on thispolicy. As one of them, we have been sponsoring the Japan Dream Baseball League every year since 2018, andin September this year, due to the pandemic, the world championships were held for the first time in five
years. We also sponsored this event, and in addition to our sponsorship, we are also actively contributing by
watching the games, as well as our president's appearance at the opening ceremony. We are also very
honored to have presented the medals to the athletes during the closing ceremony.
We have also been sponsoring the Japan Blind Tennis Federation since 2018, as you can see in the four
pictures on the right side. In addition to our continuous sponsorships, our corporate communications
department is also involved in volunteer activities to assist visually impaired people.

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11For the final topic, I would like to mention the most recent articles that featured our efforts.
One was a newspaper article by Architectures,Constructions & Engineerings News, which featured the“GEMBA (construction site) Trainer” that I mentioned earlier. The other was also featured by theArchitectures,Constructions & Engineerings News, but in my explanation of the orders received earlier, I
mentioned that we have received orders for warehouses and logistics facilities. One of these was Daiwa
House's logistics warehouse and distribution facility, which was featured in the newspaper. There are threebuildings here, two of which were constructed by us.
That is all from me. We have introduced some of our initiatives here, but we have also included a variety of
our initiatives in our CSR Report, which I hope you will also take a look at.
That is all from me. If you have any questions, please go ahead.

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12Question & Answer

Moderator [M]: Thank you very much for your explanation. Let's move on to the question-and-answer session.
This briefing, including this Q&A session, will be transcribed in full and released.
Does anyone have questions? Yes, thank you very much. The staff will come and give you a microphone.
Participant [Q]: Thank you for your explanation. This is about your results, the renovation business on page
five. Orders for construction in Japan doubled from JPY10.8 billion in the previous fiscal year to JPY19.6 billion
this fiscal year, and the progress rate is already at 98%. I'm wondering if this is still a promising area for future
growth. I wonder how much growth we can expect in the current fiscal year, and whether we will see figuresfrom the next fiscal year in a new medium-term plan.
Apart from the numbers, I would be happy if you could share something, even if it is just an idea of how muchthe growth might be. If there are any bottlenecks or other issues regarding growth, I would appreciate it if
you could mention them as well. That is all. Thank you very much.
Yamakoshi [A]: Regarding the domestic orders for renovations, the full-year plan is JPY20 billion, and we aresure that we can achieve that.
Currently, our target is to have domestic and overseas renovations account for at least 35% of ourconsolidated operating income, and for the future, we are considering a goal to achieve 40% or an even higher
rate.
Participant [M]: Thank you very much.
Moderator [M]: Thank you very much. Are there any other questions? Does anyone else have questions?
Anyone else?
Since there seem to be no further questions, this concludes the financial results briefing of ASANUMACORPORATION. Thank you very much, President Asanuma, Representative Director Yamakoshi, and General
Manager Marika Asanuma, for joining us today.
Marika Asanuma [M]: Thank you very much.
Moderator [M]: For all the participants, thank you very much for your participation.
[END]______________
Document Notes
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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.

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