ASANUMA CORPORATION
Q2 Financial Results Briefing for the Fiscal Year Ending March 2022
November 12, 2021

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 2022

[Fiscal Period]

FY2021 Q2[Date]

November 12, 2021

[Number of Pages]

18[Time]

11:00 – 11:24(Total: 24 minutes, Presentation: 17 minutes, Q&A: 7 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][Number of Speakers][Analyst Names]*

4
Makoto Asanuma
Morio Yamakoshi
Seiichiro Ishihara
Yoshimichi Yagi

Representative Director, CEO
Representative Director Senior Managing
Officer
Executive Officer
Executive Officer

Satoru Matsuhashi

Strategic Capital, inc.

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A.

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Presentation
Moderator: Good morning, everyone. The time has come, so we will now hold an IR meeting for ASANUMACORPORATION. First, I would like to introduce you to the 4 people from the Company who joining us here
today. Mr. Makoto Asanuma, Representative Director, CEO.
Asanuma: My name is Asanuma. I'm looking forward to working with you.
Moderator: Mr. Morio Yamakoshi, Representative Director Senior Managing Officer.
Yamakoshi: I'm Yamakoshi. I'm looking forward to working with you.
Moderator: Mr. Seiichiro Ishihara, Executive Officer.
Ishihara: This is Ishihara. I'm looking forward to working with you.
Moderator: Mr. Yoshimichi Yagi, Executive Officer.
Yagi: My name is Yagi. I'm looking forward to working with you.
Moderator: Today we will have an explanation by Mr. Asanuma, and after he finishes, we will have a questionand-answer session. Go ahead, Mr. Asanuma. I'm looking forward to working with you.
Asanuma: I'm Makoto Asanuma, the president. I'm looking forward to working with you. Thank you very muchfor attending our financial results briefing for the second quarter of the fiscal year ending March 31, 2022
today. From the perspective of preventing the spread of new COVID-19 infections, I will be brief and to thepoint, so please bear with me.
This section explains the progress toward the full-year plan for the second quarter of the fiscal year ending
March 2022 and the progress of the measures for the three-year medium-term plan.

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Please see page 3. The table shows the results for the first and second quarters and the percentage of progressagainst the full-year plan. As for the second quarter results on the right side of the table, orders received were
JPY59 billion. The progress rate was 44.7%, but based on the current projects in hand, we believe that we canachieve the plan.
Gross profit on completed construction projects was JPY5.6 billion, and the percentage of completion was
41%, almost the same as the amount of completed construction projects. Even if the amount of completed
construction work falls slightly below the plan due to the delay in the start of construction, the gross profit
margin is expected to improve more than planned due to additional construction work, etc., and we believe
it is possible to achieve the plan for gross profit on construction work.
As the progress rate of SG&A expenses is 49.2% and the Sale of Policy Holding Shares is scheduled in thesecond half of the fiscal year, the progress rate of operating income and net income is only in the 20% range.
However, we believe that we will be able to achieve the plan for both operating income and net income byachieving the plan for gross profit on construction and selling shares in the second half of the fiscal year. Thereis no change in the dividend plan.

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Next, please look at page 4. Since orders will be the most affected by COVID-19 restrictions, I will explain thecurrent situation. As shown on the right side of the table above, the number of construction projects increased
in both public and private sectors, while the number of civil engineering projects increased in public sector
but decreased in the private sector.
As for the main changes in construction, factories and warehouses increased, and in civil engineering, watersupply, and sewerage increased in governmental works. In private works, however, there was a decrease dueto the large-scale construction of outlets in the previous fiscal year. While it is true that the ordering landscapehas become much harsher due to COVID-19, we are focusing on proposal sales and are continuing to accept
orders focusing on projects that can secure profits. As you can see in the column at the bottom of the page,
we need to receive orders of JPY71.7 billion more to achieve the plan on a non-consolidated basis, but thecurrent orders in hand are JPY280 billion.

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4Next, please see page 5. I would like to explain the current status of our renewal efforts, which we are focusing
on in the three year medium-term plan. The table above shows the progress of building renewal in Japan. The
percentage of progress against the plan for the fiscal year ending March 2022 is 49% for orders received,
38.8% for completed construction work, and 40.8% for operating income, but we believe that we will be able
to achieve the plan for each item because of the steady progress of construction work in hand. In addition,
we are promoting “ReQuality”, a new brand of renewal, in order to increase the operating income of therenewal business in Japan to 25% of the consolidated operating income by the fiscal year ending March 2024.
The table shows the progress of the renewal in ASEAN. As the performance of our subsidiary in Singapore is
progressing smoothly, we believe that we will be able to achieve our targets for each item. In addition, toincrease the operating income of the renewal business in ASEAN to 10% of the consolidated operating incomein the fiscal year ending March 2024, we will start full-scale operation of a new company for renewal of
expressways and bridge piers in Thailand, and we are also considering new M&A opportunities.

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Please see page 6. In this section, I will explain the measures of the three year medium-term plan. In the threeyear medium-term plan that we started this fiscal year, we are working on measures to respond to 3 changes
in the external environment, as shown in the table.
The first change is in domestic construction investment, which is shrinking over the long term, and domestic
maintenance and repair business investment, which is growing steadily due to the aging of infrastructure andbuilding structures. The second is the decline in the productive labor force in the construction sector. The
third is the momentum to improve corporate reputation through non-financial management activities suchas ESG and SDGs. In addition, we will invest JPY3 billion in technology development and ICT-related
investments over the next 3 years. We plan to invest JPY5 billion in new business areas. Among the measures
to respond to these 3 changes, I would like to explain the main ones that have made progress in the first half.

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Please see page 7. I would like to explain about “ReQuality” and the promotion of the Renewal Brand Strategy.
The Nagoya Branch, which has been undergoing renovation in line with the concept of the new renewal brand,“ReQuality”, was completed in September and is now being used as a showroom. As shown in the graph on
the left, the renovation reduced CO2 emissions by 85% compared constructing a new building. As you can see
in the graph on the right, we were able to reduce energy consumption by 52% compared to before therenovation. We are planning to obtain official “ZEBready” certification in the future.
In addition, we have already obtained preliminary certification for “WELL” certification, which evaluatesbuildings based on health and comfort, but we plan to obtain official certification in the future. This is the firsttime in Japan that an entire 30-year-old building has been renovated and certified. With the renovation of the
Nagoya Branch, we will take the opportunity to expand our sales activities by receiving orders mainly forenvironmental proposals, and as I mentioned earlier, we would like to increase the operating income of thedomestic renovation business to 25% of the consolidated operating income by the final year of the threre
year medium-term plan.

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In this section, we will explain the advancement of our original technology, “Ai-MAP SYSTEM”. 1 of the mainfunctions of this system is to analyze the movements and behaviors of skilled technicians so that they canpass on their skills. Secondly, it is possible to manage sites remotely to save time, share information, andrespond to disasters. Third, information can be shared with external systems, such as those of the orderingand supervisory authorities.
We are currently promoting the use of this system in our workshops to improve productivity, and we havereceived inquiries from various industries. We have started to survey the needs of local construction
companies in particular and have formulated a business plan to meet those needs in order to commercialize
sales.

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Please see page 9. In this section, we will explain about the promotion of collaboration with partnercompanies. In recent years, the shortage of manpower due to the aging of the workforce has become anurgent issue, and we are working with our partner companies to improve the treatment of construction
workers and increase productivity.
The following is a brief explanation of the main items among them. In 2019, we will start accepting
applications for productivity improvement measures, such as cost reduction through collaboration withpartner companies and shortening of construction periods at each work site, and after selection, we will holdawards and presentations for excellent measures. This year was the third year for the contest, and the numberof submissions has increased every year to 77 this year.
Secondly, to compensate for the decrease in the number of skilled workers due to the declining and aging
population, the acceptance of foreigners with a new status of residence, specified skills, began in 2019. In Julyof this year, we also set up a consultation service for foreigners with specific skills to help them with theirwork-related problems.
CCUS, the Construction Career Upgrading System, was introduced in 2018 and aims to improve the treatmentof construction workers, clarify career paths, and visualize construction skills. We have also set up the
Asanuma CCUS Support Office to provide telephone consultation services to subcontractors.
Asanuma Meisters are selected from among foremen who have been working at our workplaces for a longtime and are particularly outstanding in their achievements, contributions, and personalities, and are awarded
an incentive. As of the end of March 2021, 205 people have been appointed.

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9Here we will explain about the promotion of “Eco-Friendly ASANUMA 21”. “Eco-Friendly ASANUMA 21” hasbeen implemented since fiscal 2010 as an activity to prevent global warming. The long-term CO2 reduction
target is to reduce CO2 emissions per JPY100 million of construction volume by 50% by fiscal 2030 and 70%
by fiscal 2050 compared to fiscal 1990.
We are currently working to reduce CO2 emissions, curb noise and vibration, and thoroughly manage
wastewater in heavy machinery workshops by ensuring fuel-efficient operation. In addition to environmental
measures with an awareness of the responsibility of use through the proper disposal of hazardous substances,
we are working to promote the reuse of sludge and concrete sludge and to promote recycling by thoroughly
separating waste materials.

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10Please see page 11. In this section, we will explain about corporate governance. As part of our company-wide
efforts to promote “Eco-Friendly ASANUMA 21”, we have decided to establish a Sustainability Promotion
Committee and endorse the TCFD recommendations.
Through the establishment of the Sustainability Promotion Committee, we will discuss activity plans forsustainable issues from a medium- to long-term perspective, report to the Executive Committee, and proceedwith the examination and deliberation of policies, strategies, plans, and measures. In addition, by endorsing
the TCFD recommendations, we will promote environmental management that balances the environment
and the economy and promote the expansion of disclosure of climate change-related information in line with
the TCFD declaration.

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Please see page 12. Here, for the last time, I would like to introduce an article that contains the initiatives ofthe measures I have mentioned. On the left is a feature article about our renewal brand, “ReQuality”, in
Shinkenchiku, a magazine specializing in architecture. Being published in Shinkenchiku has become a goal forarchitects, and it is an indispensable media when discussing contemporary architecture in Japan. The article
on the right discusses the “Ai-MAP SYSTEM”.
That's all I have to report. Thank you very much for your attention.

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12Question & Answer
Moderator: Thank you very much for your explanation. We will now begin the question-and answer-session.
We plan to publish a full transcript of the IR meeting, including questions and answers. Therefore, if you wish
to remain anonymous, please keep this in mind.
If you have any questions, please raise your hand.
Matsuhashi: My name is Matsuhashi from Strategic Capital, Inc. I would like to ask you a few questions. The
first point is about the view of the second half of the year. You said that additional construction work would
increase profits, but the reason why the progress rate was not good in the first half of the last fiscal year wasthat sales did not increase much. Is it correct to assume that those sales will come back in the second half ofthe fiscal year?
Asanuma: The rate of construction progress tends to increase in the second half of the fiscal year toward theend of the fiscal year. However, as I mentioned earlier, even if the delay in the start of construction affects
the second half of the fiscal year and the amount of completed work falls below the plan, the gross profit
margin is expected to exceed the plan, so we believe that we will be able to achieve the plan for gross profit
on construction itself. That's all.
Matsuhashi: Thank you very much. My next question is about the Sustainability Promotion Committee. I
would like to know the frequency and duration of the meetings, and I would like to know the outline of theactivities and how you plan to disclose the output of the activities.
Asanuma: The committee itself was established as of November 5 of the recent disclosure. But, of course, we
had a committee type of meeting to prepare for this. The members are identical. Currently, we have been
doing it once a month, and we hope to continue doing it at that frequency in the future.
I think the content will be extensive in many ways. For the time being, I would like to focus on securing diverse
human resources and promoting them to managerial positions, as well as how to respond to climate change
as a company, although I think the system or method is still unclear. I would like the committee to focus on
these 2 points. That's all.
Matsuhashi: I understand. This is going back to my previous question, but you have announced your support
for the TCFD recommendations. I would like to know how you are planning to improve the content of thereport, and what kind of output you are planning to produce, such as a corporate governance report. You
forgot to mention that previously.
Asanuma: As for the output, of course we would like to disclose our sustainability-related initiatives in the
Corporate Governance Code Report as soon as possible. For the time being, as I mentioned, we will focus on
securing and promoting diverse human resources, and we will also make steady progress in tackling climatechange, although there are still some things that are unclear in the industry.
Moderator: Now, does anyone have any other questions? Anyone? There are no further questions, so thisconcludes the IR meeting of Asanuma Corporation. Thank you very much for joining us today.
[END]______________

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Document Notes
1.
2.
3.

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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].
This document has been translated by SCRIPTS Asia.

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