ASANUMA CORPORATION
Q1 Financial Results Briefing for the Fiscal Year Ending March 2022
August 20, 2021

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

1852-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q1 Financial Results Briefing for the Fiscal Year Ending March 2022

[Fiscal Period]

FY2021 Q1[Date]

August 20, 2021

[Number of Pages]

16[Time]

13:30 – 14:20(Total: 50 minutes, Presentation: 35 minutes, Q&A: 15 minutes)[Venue]Kabutocho Heiwa Building 2F, 3-3 Kabutocho Nihonbashi, Chuo-ku, Tokyo103-0026 (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

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Representative Director, CEO
Representative Director, Senior Managing
Officer
Executive Officer, General Manager ofTechnical Research InstituteExecutive Officer

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Presentation
Moderator: Now it's time to begin the Q1 financial results briefing for the fiscal year ending March 31, 2022,
of ASANUMA CORPORATION.
First of all, I would like to introduce you to the 4 members of the Company. Representative Director, CEO, Mr.
Makoto Asanuma.
Asanuma: I'm Asanuma. Thank you.
Moderator: Representative Director, Senior Managing Officer, Mr. Morio Yamakoshi.
Yamakoshi: I'm Yamakoshi. Thank you.
Moderator: Executive Officer, General Manager of Technical Research Institute, Mr. Seiichiro Ishihara.
Ishihara: I'm Ishihara. Thank you.
Moderator: Executive Officer, Mr. Yoshimichi Yagi.
Yagi: I'm Yagi. Thank you.
Moderator: Today, President Asanuma is going to give us an explanation. After the presentation, we will holda question-and-answer session. Now, please start your explanation.
Asanuma: I'm Makoto Asanuma, President of the Company.
Today, thank you very much for attending our financial results briefing for the first quarter of the fiscal year
ending March 31, 2022.
In order to prevent the spread of the COVID-19 infections, I would like to explain briefly and only to the point,
so I would appreciate your understanding.
Now I would like to explain our results for the first quarter of the fiscal year ending March 31, 2022, and theprogress of our 3-year medium-term plan.

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First, please see page 3. The blue part of the table shows the results for the previous fiscal year and the firstquarter of the current fiscal year. The green area shows the full-year results for the previous fiscal year andthe full-year plan for the current fiscal year. The yellow area shows the progress rate for each key performanceindicator.
Let me start from the top of the table. Orders received in the first quarter of the current fiscal year increasedby JPY4.6 billion compared to the same period last year, and the rate of progress was slightly higher. Although
the impact of the COVID-19 infections is still unclear, we believe that we can achieve our full-year plan basedon the status of projects in hand.
Next, the amount of completed construction contracts increased by JPY1.6 billion. Gross profit on completed
construction contracts increased by JPY130 million and the rate of progress was slightly higher. The grossprofit margin on completed construction contracts was at the same level. Profits from the current work on
hand are steady, and there is no problem in achieving the full-year target.
Operating income decreased by JPY0.5 billion due to an increase in depreciation and amortization associatedwith system investments, which are SG&A expenses. Net income decreased by JPY0.3 billion, and the rate ofprogress was slightly lower. As I mentioned earlier, the profit from the construction work on hand has beensteady and is at a level that can cover the increase in SG&A expenses, so we do not foresee any problems inachieving the full-year plan.
The full-year plan for the current fiscal year of orders received is an increase of JPY11.5 billion. The amount ofcompleted construction contracts and profit were almost the same as the previous fiscal year. The dividend
payout ratio is set at JPY260, which is 50.2%, and we are confident that we will be able to achieve both ofthese targets.

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Please continue on to page 4. I mentioned earlier that, as of the first quarter, consolidated orders received
increased by JPY4.6 billion compared to the same period last year, and the plan to increase orders for the fullyear by JPY11.5 billion compared to the previous fiscal year is fully achievable. However, orders received willbe the most affected by the COVID-19 infections, so I would like to explain the current situation.
As for the non-consolidated results for the first quarter of the current fiscal year, as shown in the construction
business in the upper part of the table, orders decreased in building construction for public sector, butincreased in building construction for private sector and civil engineering for public sector compared to thesame period of the previous fiscal year. As shown below in the table by application, orders increased inbuilding construction for factories and warehouses and civil engineering for river repair.
Although the environment for orders is certainly getting tougher than it was before the occurrence of theCOVID-19 pandemic, we are continuing to focus on proposal-based sales and marketing, can secure us profits,
and as you can see outside the table, we are currently accumulating orders that will enable us to achieve ourfull-year plan.

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4Next, please see page 5. In this section, I will explain the measures of the 3-year medium-term plan.
In the 3-year medium-term plan, starting from this fiscal year, as shown in the table, we will work on several
measures to respond to various changes, especially focusing on the 3 changes in the external environment.
The first, which is at the top of the list, is domestic construction investment, which is shrinking over the longterm, and domestic maintenance and repair business investment, which remains strong due to the aging ofinfrastructure and building structures.
The second is the decrease in the number of productive labor force in the construction sector, as shown inthe middle of the page.
The third is the momentum to improve corporate reputation through non-financial management activities,
ESG and SDGs.
Among the measures to respond to these 3 major changes, I would like to explain the main ones that madeprogress in the first quarter.

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Please see page 6. Here, I would like to explain how we are strengthening our efforts in the renewal businessin the ASEAN region.
We established a new subsidiary in Thailand, which is engaged in the repair of aging highways and bridges
using carbon fiber.
In addition, we currently have a subsidiary in Singapore that engages in exterior wall painting and will continue
to focus on the renewal business in the ASEAN region, and by the final year of the 3-year medium-term plan,
we hope to increase operating income from the renewal business in the ASEAN region to 10% of consolidated
operating income.

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Please continue on to page 7. In this section, I would like to explain about the advancement of our originaltechnology, Ai-MAP SYSTEM.
As for the upgrading of our original technology, Ai-MAP SYSTEM, this system used to have, as shown in theupper part of the table, the analysis function of the technical movements of skilled engineers and theinfrastructure communication function that enables on-site management from remote locations.
This time, we would like to add the function of information sharing management, which enables the sharingof jobsite information with external parties, such as clients and supervisory authorities, to further improveproductivity.
In order to commercialize the sales of this system, we have also started to survey the needs of local
construction companies and formulate a business plan to meet those needs.

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Now, please turn to page 8. Here, we would like to explain the promotion of Eco-Friendly ASANUMA 21.
Our long-term CO2 reduction target is to reduce CO2 emissions per JPY100 million of construction by 50% by
FY2030 and 70% by FY2050 compared to FY1990. The results for FY2020 have now been released, and I would
like to explain them here.
Our target for FY2020 was a 40% reduction from the FY1990 level, but we were able to achieve the target
with a 44.6% reduction as a result of each workshop steadily following the procedures to reduce CO2emissions.
We are currently reviewing our procedures to further improve the reduction effect, and we hope to achieve
our goal without fail.

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Please continue on to page 9. Here, I would like to explain the new renewal brand, the acquisition of WELL
certification as part of ReQuality.
We launched our new renewal brand, ReQuality, with an advertisement in the Nikkei newspaper on April 2.
In line with this concept, our Nagoya branch, which is being renovated, will be used as a showroom startingin September.
For the renovation of the Nagoya branch, we have already obtained preliminary WELL certification, which
evaluates buildings on the basis of health and comfort, and we plan to obtain official certification in the future.
This will be the first time in Japan that a renovated 30-year-old building is certified.
We are also planning to obtain official certification for ZEBready, which will reduce energy consumption by
50% through renovation. We have started to receive orders for ReQuality, and we would like to increase
operating income from the domestic renewal business to 25% of the consolidated operating income by thefinal year of the 3-year medium-term plan.

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9Next, please see page 10. In this section, I will explain about the reduction of policy holding shares.
As of the end of March 2021, we own JPY5.56 billion of listed stocks as policy holding shares, but we havebeen reducing the number of stocks where the benefits of dividends and gross profit from construction areless than the cost of shareholders' equity.
As of the end of March 2021, the overall benefit is 20.1%, but we had some individual stocks whose benefit
was less than the cost of shareholders' equity. By reducing them this fiscal year, we intend to make the balance
to less than 10% of consolidated net assets by the end of March 2022.

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10Next, please see page 11. In this section, I will explain about corporate governance and other matters.
With regard to corporate governance, as shown in the table, at the last General Meeting of Shareholders, inaddition to a system in which 1/3 of the Directors are outside the Company and 3 quarters of the corporate
auditors are outside the Company, the introduction of a stock compensation plan with transfer restrictions
was approved.
In addition, as shown in the lower part of the table, a resolution was passed at the recent Board of Directorsmeeting to apply for listing on the Prime Market. We are now beginning the process.

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11Next, please see page 12. Finally, here are some articles that have been published on our initiatives I have justmentioned.
The left is featuring Eco-friendly ASANUMA 21. The middle is about ReQuality in the renewal business. And
the right is about the establishment of a local subsidiary for the renewal business in Thailand.
This was a very brief explanation from me. Thank you very much for your kind attention.

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12Question & Answer

Moderator: Thank you very much. We will now move on to the question-and-answer session.
We plan to publish a full transcript of this IR meeting, including the question-and-answer portion. Therefore,
if you give your name and company name when you ask a question, it will be made public. If you wish toremain anonymous, you may omit your name. So, let me start the Q&A session.
Nagaoka: I'm Nagaoka from Strategic Capital. I have 3 questions.
First, The Company discloses orders received, net sales, and operating income of the renewal business asmanagement indicators. However, on a quarterly basis, operating income is not disclosed. This makes it
impossible to evaluate whether the renewal project is progressing as planned or not. We would like you todisclose the quarterly operating income of the renewal business, as well. What do you think about that?
Yamakoshi: We have not been able to disclose this information yet, but by the end of the fiscal year, we would
like to disclose the planned operating income of the renewal business. That's all.
Nagaoka: I understand. Second, in order to strengthen cooperation with your partner companies, you are
improving payment conditions, specifically, making payments in cash, which from an ESG perspective is 1 ofyour social factor initiatives. You have set up a so-called Suggestion Box for your partner companies, and wewould like to conduct regular observations to see if the Company's working environment is further improving,and whether cooperation with your partner companies is actually being strengthened.
From this perspective, for example, we would like you to disclose the number of complaints from partnercompanies and the number of occupational accidents at partner companies in the CSR report that you publish
every year.
Yamakoshi: We are currently preparing the CSR report that you mentioned. I would like to create it based onthat point, as well.
Nagaoka: I understand. Third and final, the Company recently issued a press release stating that you passeda Board resolution to apply for the prime market. According to 3-1-3 of the Corporate Governance CodePrinciples, listed companies in the prime market are required to disclose their climate change risks. What isyour current approach to the impact of rising temperatures on your business performance, and how do you
analyze it?
Yamakoshi: We are currently discussing what to do about the risk of climate change that you mentioned, as
well as policies for securing diverse human resources. In the Corporate Governance Code Report to bereleased in December of this year, we would like to include the results of our discussions and how we will
specifically implement what we have discussed. That's all.
Nagaoka: I understand. That's all from me.
Moderator: Thank you very much. Does anyone have any other questions? No questions? There seem nomore questions. Is there anything else to add from the Company? Are you fine? Okay. Then, this concludes
today's briefing. Thank you very much.
[END]

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______________
Document Notes
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Portions 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].
This document has been translated by SCRIPTS Asia.

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