ASANUMA CORPORATION
Earnings Announcement
May 17, 2019

Event Summary[Company Name]ASANUMA CORPORATION[Event Type]Earnings Announcement[Event Name]

Earnings Meeting[Fiscal Period]

FY2018 Annual[Date]

May 17, 2019

[Number of Pages]

22[Time]

09:00 – 09:31(Total: 31 minutes, Presentation: 31 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][Participants][Number of Speakers]

4
Makoto Asanuma
Morio Yamakoshi
Seiichiro Ishihara
Yoshimichi Yagi

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Presentation
Moderator: Now it’s time to start. We will commence the financial results briefing session for the fiscal year
ended March 31, 2019 for ASANUMA CORPORATION.
To start, I would like to introduce the four people we welcome from the Company. Makoto Asanuma,
Representative President, CEO.
Asanuma: I’m Asanuma. Thank you very much.
Moderator: Morio Yamakoshi, Representative Director, Senior Managing Officer.
Yamakoshi: I’m Yamakoshi. Thank you very much.
Moderator: Seiichiro Ishihara, Executive Officer and Director, Institute of Technology Research.
Ishihara: I’m Ishihara.
Moderator: Yoshimichi Yagi, Manger.
Yagi: I’m Yagi. Thank you very much.
Moderator: Today, President Mr. Asanuma will make a presentation, and after that, we will have a question
and answer session.
President, please start.
Asanuma: Good morning. I’m Makoto Asanuma, President of the Company. Thank you very much forattending our financial results briefing session for the fiscal year ended March 31, 2019. Let me start thepresentation now.

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First, please refer to page four of the financial results briefing session materials for the fiscal year ended
March 31, 2019, which you have on hand. First of all, I would like to explain the environment surrounding us.
In the construction industry, public construction investment remained flat, private construction investment
remained largely unchanged, and capital investment also trended generally flat. However, it is necessary to
pay attention to downward pressure, such as postponement or restraint on capital investment by Japanesecompanies due to the slowdown in the Chinese economy caused by trade friction. It is also necessary tocontinue to pay due attention to the chronic shortage of skilled workers and the rise in construction
material prices.
The graph above shows the trend of construction investment over the last six years. Construction
investment has been on the rise due to strong public investment and a recovery in private investment, andis projected to rise 2.1% year on year to 57.9 trillion yen in FY2019, reflecting a strong trend in both public
and private investment.
Against this backdrop, on May 10, we announced the results for the fiscal year ended March 31, 2019. Next,
Mr. Yamakoshi will explain the summary of our financial results and the progress of our Three-year MediumTerm Plan, announced in April 2018.

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Yamakoshi: I will now explain the summary of the financial results.
First of all, I would like to explain about orders received in the fiscal year ended March 31, 2019. Looking at
the table above, the far-left column shows the results of FY2018 and the second from the left shows theforecasts of FY2019 in orange. Right next to that is shown the actual results as of March 2019. Comparison
with the previous fiscal year and against the plan are also shown.
In the fiscal year ended March 31, 2019, as it’s shown in the total, at the bottom in the middle part of thegraph, we received a total of 153.7 billion yen in orders. This was mainly attributable to an increase in thenumber of private-sector buildings. Compared with the previous fiscal year, the total increased 14.9 billion
yen and it exceeded 23.7 billion yen above the plan.
We have a basic policy to only accept orders for projects that can be constructed by our personnel. We
currently have around 1,270 employees, and it seems reasonable to receive orders of 130.0 billion yen,which can be constructed with that number of workers. However, in the fiscal year ended March 31, 2019,
orders for logistics warehouses and other factories, which have a high value of finished construction work
per worker, increased by 12.0 billion yen from the previous fiscal year to 28.0 billion yen, although this is notshown in the table. In addition, there were advance orders ahead of the consumption tax hike in October
this year, many of which will start construction later. As a result, orders exceeded the results of the previous
fiscal year and the forecasts of the plan.

The gross profit margin at the time of orders was around 9%, which was an improvement of about 1
percentage point from the previous fiscal year, and thus we believe that we are continuing to receive highquality orders.
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Major orders received for the fiscal year ended March 31, 2019 are shown here. The second from the top in
the table is Tosoh Logistics Corporation, and below that, the distribution warehouse of Shimohana Logistics
Co., Ltd, as well as the second down from that, Sugawa Shatai Co., Ltd. Improvements in orders were seen
for those companies.

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5This section presents the consolidated statements of income for the fiscal year ended March 31, 2019.
Looking at the table below, the FY2018 results are shown on the left, the FY2019 plans are shown in orange,
and the FY2019 results are shown on the right. The right highlights the comparison to the previous fiscal
quarter, and the far-right is the comparison to the plan. Looking at the results for the fiscal year ended
March 31, 2019 in the middle part, both sales and profits declined from the previous fiscal year. However, as
shown in the plan at the far-right, we were able to achieve the plan's targets.
In the fiscal year ended March 31, 2018, we completed construction for a very large-scale logistics
warehouse and reconstruction-related work for the Tohoku region of northeastern Japan. However, in thefiscal year ended March 31, 2019, there were no such works. As a result, both revenues and profits declined.
In FY2019, the Company received more additional orders than we had expected, and much progress wasmade in the construction work. In addition, a gain of 0.5 billion yen was generated from the sale of shares
allocated to the purchase of treasury stock of 1 billion yen, which contributed to the achievement of theplan.

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Major completed projects are shown here.
Though it is not shown in the table, we had large-scale construction projects for which the contract value ismore than 3.0 billion yen, totaling 29.5 billion yen. This was 5.8 billion yen less than that of the previous
fiscal year. As I mentioned earlier, in the fiscal year ended March 31, 2018, there were large-scaleconstruction projects, but in the fiscal year ended March 31, 2019, there were few large-scale construction
projects completed.

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7This section presents the consolidated balance sheet for the fiscal year ended March 31, 2019.
The middle column in the table shows the results for the fiscal year ended March 31, 2018, and on the right
are the results for the fiscal year ended March 31, 2019. On the far-right is the difference between them.
Current assets decreased by about 2.3 billion yen compared to the previous fiscal year, attributable to adecrease of 16.4 billion yen in deposits and an increase of about 13.0 billion yen in accounts receivable.
In addition, fixed assets have increased by approximately 0.9 billion yen, which was mainly attributable tothe expansion of the Technical Research Institute and the expansion of systems.
As a result, total assets, as shown in the middle in the table, declined by about 1.4 billion yen.
Current liabilities decreased by 4.5 billion yen, accounts payable decreased by 1.0 billion yen, and shortterm loans payable decreased by 2.6 billion yen. As a result, current liabilities decreased by 4.5 billion yen.
Long-term loans payable, which was shifted from short-term loans payable, increased by 0.9 billion yen,resulting in a 0.9 billion yen increase in long-term loans payable.
As a result, total liabilities decreased by 3.6 billion yen.
Net assets increased by about 2.2 billion yen, and profit attributable to owners of the parent for the fiscal
year ended March 31, 2019 was 4.2 billion yen. Dividends for the fiscal year ended March 31, 2018 were 1.3
billion yen, and share buybacks were 1.0 billion yen. As a result, net assets increased by 2.2 billion yen.

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As I mentioned earlier, as for the deposits at the end of March 2019, the amount of advance increased. Thebalance decreased by 16.4 billion yen from the previous fiscal year to 23.5 billion yen, and we believe thatthe balance is at an appropriate level in light of our business and annual cash flow.

This section presents the Company's performance forecasts for the fiscal year ending March 31, 2020.
The table above shows, from the left, the results for the fiscal year ended March 31, 2019, the plan for the
fiscal year ending March 31, 2020 within the Three-year Medium-Term Plan, the plan for the fiscal year
ending March 31, 2020, the year-on-year comparison, and comparison with the Three-year Medium-Term
Plan.
Regarding orders, at the top, as I mentioned earlier, orders are expected to reduce by 19.4 billion yen fromthe previous fiscal year in the plan for the fiscal year ending March 2020, partly due to a pullback following
the rush increase prior to the consumption tax hike in the fiscal year ending March 2019. However,compared with the Three-year Medium-Term Plan, we expect orders to increase by 1.3 billion yen, due toorders from the Singapore subsidiary, which we acquired.
Net sales are forecast to decline by 1.0 billion yen from the previous fiscal year, a decrease of 1.9 billion yen
compared with the Three-year Medium-Term Plan, due in part to the more-than-anticipated progress madein the fiscal year ended March 31, 2019.
Operating profit, however, is expected to increase by 0.5 million yen from the previous fiscal year to almost
the same level as in the Three-year Medium-Term Plan, taking into consideration the progress of work on
hand.

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9Nevertheless, as I mentioned earlier, in the fiscal year ended March 31, 2019, we sold 1 billion yen of ourshares and generated a gain of 500 million yen. This will be absent in the fiscal year ending March 31, 2020.
The year-on-year rate of change is expected to remain almost unchanged from the previous fiscal year, andis expected to be in line with the Three-year Medium-Term Plan.
We believe that this plan is fully achievable in light of the current accumulation of orders and the status ofwork on hand.

In this section, I would like to explain our plans for indicators.
Looking at the table above, we list the various indicators such as the operating profit margin. They are, fromthe left, the plan for the fiscal year ended March 31, 2019, the results for the fiscal year ended March 31,
2019, and the difference between them. And also, in the yellow column is the plan for the fiscal year ending
March 31, 2020 in the Three-year Medium-Term Plan, and to the right, the plan for the fiscal year ending
March 31, 2020, the year-on-year comparison, and a comparison with the Three-year Medium-Term Plan.
As shown in the table, the operating income margin, ROIC, and ROE all exceeded the plan for the fiscal year
ended March 31, 2019. For the fiscal year ending March 31, 2020, we are basically in line with our mediumterm plan.
The bottom part in small letters shows our calculation method for the cost of capital.
The third from top is the cost of debt at 1.62%. And the cost of equity is 7.41%, assuming the expectedmarket return of 7.0%. The market capitalization of 19.833 billion yen is based on the market capitalization
excluding the Company's own shares as of the end of this March, and the cost of capital is estimated to be
5.1% based on the market capitalization.
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10Since the Company’s stock price has been rising a little recently, the cost of capital based on the current
stock price is slightly above 5.1, rising to around 5.6.
I would like to utilize these indicators in various management activities. I would like to consider theappropriateness of these costs, which are calculated by the Company, while discussing them with ourshareholders.

This section presents the progress made in the Three-year Medium-Term Plan. This plan began in the fiscal
year ended March 31, 2019. In regard to the use of ICT, as shown in the picture in the table above, we are
actively introducing BIM and CIM systems that make the planes three-dimensional, and promoting to
improve the efficiency of our operations.
Next April, we plan to launch a renewal brand that takes into consideration our unique environment. We are
currently preparing for the construction of a model project for this purpose.

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11This slide also shows the progress of the Three-year Medium-Term Plan. The table shows new technologies
and construction methods, and three technologies are listed here.
The technology described at the top analyzes the workers’ movements within workshops, and uses thistechnology as a trend analysis system to improve the productivity of workshops. This technology was
adopted for public submission by the Ministry of Land, Infrastructure, Transport and Tourism, meaning it
was well received. We are currently proceeding with the practical application of this technology at ourworkshops.
The technology in the middle of the table uses special fiber sheets that help improve the efficiency of repair
work on highways and other facilities. This technique has also been adopted for public submission by JICA.
We are currently preparing for commercialization in Thailand.
The technology at the bottom is employed in a mobile plant that helps to improve the efficiency of smallscale repair work on roads. We are currently preparing for the commercialization of this technology at ourworkshops or for sales to road work companies.

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12This is also about the progress of the Three-year Medium-Term Plan. Regarding personnel-related matters in
the upper part of the table, we introduced a salary system according to job duties in April 2018. In April
2019, we introduced a volunteer leave system and a flextime system for the renewal department. We will
also steadily implement initiatives for two-day weekly holidays.
In terms of corporate governance, we plan to increase the number of outside directors from two to three. If
we receive approval at next month's General Meeting of Shareholders, more than one-third of the directors
and a majority of the Nominations and Compensation Committee will be outside directors, as shown here.
As our IR disclosure is still insufficient, we intend to further strengthen it in the future.

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Our Three-year Medium-Term Plan also includes plans for the injection of funds. I would like to mention
that.
Expansion and refurbishment of the Technical Research Laboratory located above were completed in March
this year. We intend to further develop renewal-related technologies at the new Technology ResearchLaboratory.
As for the ICT and mission-critical systems at the bottom, in addition to the introduction of BIM and CIM,
which I mentioned earlier, we are working on initiatives such as “green site” to improve the efficiency ofworkshop document management, a building management system used to collect data on the original
construction site and to utilize this data for post-construction sales, and a construction “career-up” systemthat visualizes the career of technicians working in the field. We are also restructuring our core systems tofurther improve the efficiency of our administrative divisions.

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It also states that we will strengthen our overseas operations as a means of using funds. As described above,as part of our efforts to strengthen our overseas business, in October 2018 we made a Singapore-based
exterior wall coating company into a subsidiary with the aim of developing a renovation business in ASEAN.
As shown at the bottom, in order to further strengthen cooperation with partner companies, in August 2018
we raised the cash ratio for payments to partner companies from 60% to 90%.
Under the Three-year Medium-Term Plan, we plan to spend 20.0 billion yen over the three-year period tothat end, while increasing operating income by 2.3 billion yen over the three-year period. Such investments
for the fiscal year ended March 31, 2019 amounted to 12.0 billion yen.

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I would now like to explain the return of profits to shareholders. From November 2018 to January 2019, asshown in the upper half of the slide, we acquired 313,000 shares of treasury stock, or 1 billion yen, as part ofour shareholder returns.
As shown in the lower half, the Company decided to retire 430,000 of its 446,000 treasury shares at the endof this month.

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Next, we have revised the dividend payout ratio in our Three-year Medium-Term Plan. As shown in the table,
we are aiming to increase shareholder value over the medium to long term. The PBR at the end of March
was around 0.5 times, and I feel shameful, considering the underlying stock price.
As shown in the table, we have revised our dividend payout ratio to 30% for the fiscal year ended March 31,
2019, 40% or more for the fiscal year ending March 31, 2020, and 50% or more for the fiscal year ending
March 31, 2021.
Our President will continue to explain our social contribution activities.

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Asanuma: We at ASANUMA CORPORATION promote social contribution activities in various fields under abasic policy of social contribution. Let me explain our new initiatives that started in the fiscal year ended
March 31, 2019.
In cooperation with sports organizations for the disabled, we have decided to co-sponsor the Japan Dream
Baseball League and the Japan Blind Tennis Federation. Last year in September 2018, a world baseballchampionship for the disabled was held, which takes place once every four years. The Japanese team won
the championship and the pictures above show the presentation of the championship ceremony. In addition,
the nationwide championship is scheduled to be held in Kobe for two days, starting tomorrow, the 18th.
Blind tennis is a sport originating in Japan. It is currently held in 30 countries around the world, and a world
tournament was held in 2017. Competition is conducted indoors, in which a ball with a bell is struck by aracket, and a game is held based on the level of visual acuity. The pictures show the national tournament
held in Hiroshima in September 2018.
Next is about Naradotto FM. This is an FM radio station limited to a small area in Nara City. FM radio
stations play an important role in bringing local communities together in times of disaster. To that end, we
decided to provide a radio program called Okamoto Akio’s Nara Oku-no-Oku, for which Mr. Akio Okamoto,who is a former Gon-guji (Associate Chief Priest) of Kasuga Taisha (Kasuga Grand Shrine), act as a main radio
personality. I would like to help disseminate Nara's history and culture, and help local disaster prevention
activities.
This program was also recognized with an award for excellence in the information education category at theJCBA Kinki Community Broadcasting Award held on April 26 this year.

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What I introduced here are only some of our new initiatives. Going forward, we, as a member of society,would like to commit ourselves to engaging in a variety of activities.
Now, I will conclude our financial results briefing session. Thank you very much for your attention.

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19Question & Answer

Moderator: Thank you for your explanation. Now, I would like to start a question and answer session. If you
have any questions, please raise your hand.
This briefing session, including the question and answer section, is to be transcribed in full and publicized. If
you say your company name and your name when asking questions, they will be disclosed as they are stated.
If you wish to be anonymous, please do not announce your name when asking questions.
So, if you have any questions, please raise your hand. Does anybody have any questions?
Are there any additional matters to be added from the Company side?
Speaker: No.
Moderator: It seems that there are no questions, so I will end the briefing session. Thank you very much foryour attendance toady.
[END]______________
Document Notes
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