FY 3/2018 Financial Overview and FY 3/2019 Forecast. (Information meeting for fiscal year ended March 31, 2018)

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FY 3/2018 Financial Overview and FY 3/2019 Forecast (Information meeting for fiscal year ended March 31, 2018) May 14, 2018

Contents 1 FY3/18 Results FY3/19 Forecast 1. Summary 2. Segment Sales and Recurring Income P3 P5 1. Summary 2. Segment Sales and Recurring Income P13 P14 3. Changes in Recurring Income (YoY) P6 3. Changes in Recurring Income (YoY) P15 4. Housing Business Orders Received and Sales P7 4. Housing Business Orders Received and Sales P16 5. Renovation Business Orders Received and Sales P8 5. Renovation Business Orders Received and Sales P17 6. Overseas Segment Sales and Recurring Income 7. Investments 8. Balance Sheet and Cash Flow P9 P10 P11 6. Overseas Housing and Real Estate Segment Sales and Recurring Income 7. Investments 8. Trends in Gains/Losses, Recurring Income to Net Sales Ratio, and ROE P18 P19 P20

FY3/18 Results

FY3/18 Results 1. Summary See p. 4 of Fact Book 3 Net sales came in at over 1.2 trillion, the highest ever. Recurring income was up slightly year on year. US business income did not make up for decrease in domestic business income (non-consolidated), so net income was down. As reported in financial statements (Consolidated) FY3/17 FY3/18 Change Pct. Net sales 1,113.4 1,222.0 +108.6 +9.8% Gross profit 204.1 219.3 +15.2 +7.4% SG&A expenses 150.1 166.3 +16.2 +10.8% Operating income 54.0 53.0-1.0-1.8% Recurring income 57.8 57.9 +0.0 +0.0% Net income attributable for owners of parents 34.5 30.1-4.4-12.7%

FY3/18 Results 1. Summary (excluding the effect of actuarial gains and losses) 4 There was an actuarial difference of + 2.3 billion (decrease in cost). There was an actuarial difference of + 5.0 billion (decrease in cost) in the previous year. Recurring income excluding actuarial gains and losses was 55.6 billion (YoY increase of 5.1%). <Reference> Excluding the effect of actuarial gains and losses Effect of actuarial gains and losses (Consolidated) FY3/17 FY3/18 Change Pct. FY3/17 FY3/18 Net sales 1,113.4 1,222.0 +108.6 +9.8% Gross profit 204.1 219.3 +15.2 +7.4% SG&A expenses 155.1 168.6 +13.5 +8.7% -5.0-2.3 Operating income 49.0 50.7 +1.7 +3.5% 5.0 2.3 Recurring income 52.9 55.6 +2.7 +5.1% 5.0 2.3 Net income attributable to owners of parent 31.1 28.6-2.5-8.2% 3.4 1.6

FY3/18 Results 2. Segment Sales and Recurring Income See p. 4 of Fact Book 5 (Consolidated) Net sales Recurring income FY3/17 FY3/18 Change Pct. FY3/17 FY3/18 Change Pct. Timber and Building Materials 424.4 435.5 +11.1 +2.6% 4.5 5.6 +1.1 +25.3% Housing 466.3 449.2-17.1-3.7% 32.3 24.9-7.4-22.9% Overseas 247.9 352.9 +105.0 +42.4% 19.3 26.5 +7.2 +37.2% Other 23.0 37.0 +14.0 +61.0% 2.2 4.9 +2.7 +122.0% Adjustment -48.2-52.6-4.4 - -0.5-4.1-3.6 - Total 1,113.4 1,222.0 +108.6 +9.8% 57.8 57.9 +0.0 +0.0% Timber and Building Materials: Revenues and earnings were up owing to focus on fuel materials, domestic material exports, materials for non-residential application, etc. Housing: Revenues and earnings were down due to low level of backlog of orders received at beginning of year for custom-built detached houses. Overseas: Revenues and earnings were up owing to strong US housing business with inclusion of Edge Homes and Bloomfield in consolidated results. Other: Earnings were up substantially owing to contribution by New Zealand forestry business and Mombetsu biomass power generation from beginning of year.

( FY3/18 Results 3. Changes in Recurring Income (YoY) 6 Timber and Building Materials + 1.1 billion Other/ Adjustment + 1.8 billion Actuarial differences - 2.7 billion く) Housing - 7.4 billion Overseas + 7.2 billion FY3/17 57.8 billion +0.0 billion FY3/18 57.9 billion

FY3/18 Results 4. Housing Business Orders Received and Sales See p. 14-15 of Fact Book Detached houses: The number of houses completed was down 542 units year on year, but completed housing unit prices rose. The number of orders received was up 181 units year on year. Apartments: The amount of orders received was down 23.7% due to worsening of the orders received environment, and the total value of houses completed was down 9.1%. 7 Orders received FY3/17 FY3/18 Change Pct. FY3/17 FY3/18 Change Pct. Sales (Units) (7,427) (7,608) (+181) (+2.4%) (8,098) (7,556) (-542) (-6.7%) Contract business Spec homes and development business (Unit price: million yen) (34.2) (33.6) (-0.6) (-1.7%) (37.8) (38.2) (+0.4) (+1.0%) Custom-built Detached Houses 288.5 290.3 +1.9 +0.6% 306.3 288.6-17.7-5.8% Apartments 22.5 17.2-5.3-23.7% 22.1 20.1-2.0-9.1% Other Contracts 2.8 1.7-1.1-39.3% 3.8 3.0-0.8-20.8% Spec Homes 11.2 12.4 +1.2 +10.3% Land 5.7 6.7 +1.0 +16.7% Existing Home Renovation 4.4 3.1-1.3-29.7% Other 8.5 7.6-0.9-10.7% * Orders received are the sum of orders received each FY less the amount of orders that were cancelled during the FY. Net Sales Total 362.1 341.5-20.6-5.7% Profit Ratio 25.4% 24.6% -0.8% Gross Profit 92.1 84.0-8.1-8.8%

FY3/18 Results 5. Renovation Business Orders Received and Sales See p. 12 of Fact Book 8 <Sumitomo Forestry Home Tech> The market lacked vigor overall, so both orders received and construction completed were up slightly year on year. FY3/17 FY3/18 Change Pct. Orders received 63.2 63.3 +0.1 +0.2% Construction completed 61.2 62.7 +1.5 +2.4% Backlog of orders received at term end 26.2 26.8 +0.6 +2.3% Trends in Orders Received 70.0 700 60.0 600 50.0 500 40.0 400 30.0 300 20.0 200 10.0 100 Trends in Construction Completed 70.0 700 60.0 600 50.0 500 40.0 400 30.0 300 20.0 200 10.0 100 0.00 0.00 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18

FY3/18 Results 6. Overseas Segment Sales and Recurring Income 9 Overseas Segment Net sales Recurring income FY3/17 FY3/18 Change Pct. FY3/17 FY3/18 Change Pct. Manufacturing 51.5 47.2-4.2-8.2% 3.9 3.9 +0.0 +0.7% Housing and Real Estate 196.9 306.7 +109.9 +55.8% 20.3 33.3 +13.0 +64.1% Other, Consolidated Adjustments, etc. -0.5-1.1-0.6 - -4.8-10.7-5.9 - Total 247.9 352.9 +105.0 +42.4% 19.3 26.5 +7.2 +37.1% Manufacturing: Profitability increased owing to increase in volume for Japan in MDF manufacturing business and cost reductions in LVL manufacturing business. Housing and Real Estate: The number of units sold in the housing business in the US and Australia rose to 9,223 units ( +2,025 compared to previous year). Number of Units Sold by Country FY3/17 FY3/18 Change Pct. US 4,686 6,380 +1,694 +36.2% Australia 2,512 2,843 +331 +13.2% Total 7,198 9,223 +2,025 +28.1% Conversion rate (average during term) US$/JPY AU$/JPY NZ$/JPY FY3/17 108.74 80.83 75.72 FY3/18 112.19 86.01 79.73

FY3/18 Results 7. Investments 10 Capital Expenditures <*Expense basis> (Consolidated) FY3/17 FY3/18 Change Pct. Tangible Fixed Assets 50.9 17.1-33.9-66.5% Intangible Fixed Assets 2.8 2.2-0.7-23.7% Other 0.3 1.3 +1.0 +273.5% Total 54.1 20.6-33.6-62.0% Main investments Domestic and overseas housing display centers 6.4 billion Software investments 2.5 billion Construction of private-pay elderly care facilities, etc. 4.0 billion

FY3/18 Results 8. Balance Sheet and Cash Flow See p. 7-9 of Fact Book 11 FY3/17 FY3/18 Change FY3/17 FY3/18 Change Cash, deposit, securities 118.0 110.9-7.1 Payables 182.5 181.9-0.6 Receivables 123.5 135.6 12.2 Short-term debt (Bank loans) 37.1 40.5 3.4 Finished goods 24.0 26.5 2.5 Short-term debt (Bonds) 0.0 20.0 20.0 Real estate for sale 48.3 55.8 7.5 Advances received from customers 48.2 50.2 2.0 Real estate for sale in process 80.4 138.5 58.1 Other current liabilities 56.2 64.9 8.8 Construction projects in progress 23.9 25.3 1.4 Long-term debt/bonds issues 121.8 134.4 12.6 Other receivables 45.9 41.7-4.2 Liability for retirement benefits 18.7 16.7-2.0 Other current assets 50.4 37.9-12.5 Other long-term liabilities 33.9 49.4 15.5 Total current assets 514.4 572.1 57.7 Liabilities 498.5 558.0 59.5 Tangible fixed assets 145.8 153.1 7.3 Shareholders' equity 242.5 273.5 31.0 Intangible fixed assets 23.5 29.1 5.6 Accumulated other comprehensive income 32.4 38.1 5.7 Investments and other assets 110.7 149.4 38.7 Non-controlling interests 20.9 34.0 13.1 Total non-current assets 280.0 331.6 51.6 Net assets 295.9 345.6 49.8 Total assets 794.4 903.7 109.3 Total liabilities/net assets 794.4 903.7 109.3 Increase in Real estate for sale from inclusion of Bloomfield Homes in consolidated results and land acquisitions in existing businesses. Increase in Investment securities from acquisition of equity shares in Kumagai Gumi. FY3/17 FY3/18 Operating CF 40.3 13.7 Investing CF -62.4-46.2 Free CF -22.0-32.5 Financial CF 14.3 25.2

FY3/19 Forecast

FY3/19 Forecast 13 1. Summary See p. 5 of Fact Book Net sales to increase 1.310 trillion, while recurring income remains almost flat at 57.5 billion. Work to enhance functions and streamline business through reorganization. (Consolidated) FY3/18 Actual FY3/19 Forecast Change Pct. Net sales 1,222.0 1,310.0 +88.0 +7.2% Gross profit 219.3 231.5 +12.2 +5.6% SG&A expenses 166.3 177.0 +10.7 +6.4% Operating income 53.0 54.5 +1.5 +2.8% Recurring income 57.9 57.5-0.4-0.6% Net income attributable to owners of parent 30.1 31.5 +1.4 +4.5% *Without actuarial differences SG&A expenses 168.6 177.0 +8.4 +5.0% Recurring income 55.6 57.5 +1.9 +3.5%

FY3/19 Forecast 2. Segment Sales and Recurring Income See p. 5 of Fact Book 14 (Consolidated) FY3/18 Actual FY3/19 Forecast Net sales Change Recurring income * FY3/18 profit and loss in Timber and Building Materials, Overseas Housing and Real Estate and Adjustment segments have been recalculated in line with the reorganization. Pct. FY3/18 Actual FY3/19 Forecast Change Timber and Building Materials 465.2 485.5 +20.3 +4.4% 8.6 9.0 +0.4 +4.9% Housing and Construction 449.2 471.0 +21.8 +4.9% 24.9 25.0 +0.1 +0.2% Overseas Housing and Real Estate 306.0 348.5 +42.5 +13.9% 23.5 24.0 +0.5 +2.2% Other 37.0 42.5 +5.5 +14.8% 4.9 5.5 +0.6 +11.5% Adjustment -35.4-37.5-2.1 - -4.1-6.0-1.9 - Total 1,222.0 1,310.0 +88.0 +7.2% 57.9 57.5-0.4-0.6% Timber and building materials: Continue efforts for fuel materials and work on integration of manufacturing and sales and enhancement of marketing functions. Housing: Increase in completed custom-built detached housing and renovations. Overseas: The US and Australian housing businesses will contribute to earnings through organic growth. Promote housing business in Asia. Other: Launch operations at Hachinohe biomass power generation, promote occupancy at nursing care facilities, etc. Pct.

FY3/19 Forecast 3. Changes in Recurring Income (YoY) 15 Other/ Adjustment Timber and Building Materials + 0.4 billion Housing and Construction + 0.1 billion Overseas Housing and Real Estate + 0.5 billion + 0.9 billion Actuarial differences from previous year - 2.3 billion 18/3 Actual 57.9 billion - 0.4 billion 19/3 Forecast 57.5 billion

FY3/19 Forecast 16 4. Housing Business Orders Received and Sales See p. 14-15 of Fact Book Custom-built Detached Houses: Enhance proposal capabilities according to demand, including rebuilds / new builds and with / without land, and aim for orders received of 7,900 units (YoY increase of 3.8%). Apartments: Orders received and sales will both be up year on year owing to establishment of branches and other measures to improve orders received. FY3/18 FY3/19 Forecast Orders received Change Pct. FY3/18 FY3/19 Forecast Sales Change Pct. (Units) (7,608) (7,900) (+292) (+3.8%) (7,556) (7,700) (+144) (+1.9%) Contract business Spec homes and development business (Unit price: million yen) (33.6) (33.7) (+0.1) (+0.2%) (38.2) (38.9) (+0.7) (+1.9%) Custom-built Detached Houses 290.3 299.0 +8.7 +3.0% 288.6 300.0 +11.4 +4.0% Apartments 17.2 23.6 +6.4 +37.2% 20.1 21.5 +1.4 +6.9% Other Contracts 1.7 8.0 +6.3 +366.6% 3.0 3.8 +0.8 +27.0% Spec Homes 12.4 14.0 +1.6 +13.3% Land 6.7 7.1 +0.4 +6.2% Existing Home Renovation 3.1 2.0-1.1-35.4% Other 7.6 7.6-0.0-0.4% * Orders received are the sum of orders received each FY less the amount of orders that were cancelled during the FY. Net sales total 341.5 356.0 +14.5 +4.3% Profit Ratio 24.6% 24.2% -0.5% Gross Profit 84.0 86.0 +2.0 +2.3%

FY3/19 Forecast 17 5. Renovation Business Orders Received and Sales See p. 12 of Fact Book <Sumitomo Forestry Home Tech> Improve operational efficiency, increase interior consultants and execute differentiation strategy leveraging technological superiority. FY3/18 FY3/19 Forecast Change Pct. Orders received 63.3 74.5 +11.2 +17.7% Construction completed 62.7 67.5 +4.8 +7.7% Backlog of orders received at term end 26.8 33.8 +7.0 +26.1% Trends in Orders Received 80.0 800 70.0 700 60.0 600 50.0 500 40.0 400 30.0 300 20.0 200 Trends in Construction Completed 80.0 800 70.0 700 60.0 600 50.0 500 40.0 400 30.0 300 20.0 200 10.0 100 10.0 100 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 Forecast FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 Forecast

FY3/19 Forecast 6. Overseas Housing and Real Estate Segment Sales and Recurring Income 18 Overseas Housing and Real Estate Segment FY3/18 FY3/19 Forecast Net sales Change Pct. FY3/18 Recurring income FY3/19 Forecast Change Housing and Real Estate 306.7 348.8 +42.1 +13.7% 33.4 32.5-0.9-2.6% Other, Consolidated Adjustments, etc. -0.8-0.3 +0.5 - -9.9-8.5 +1.4 - Total 306.0 348.5 +42.5 +13.9% 23.5 24.0 +0.5 +2.2% Pct. The US and Australian Housing Businesses: Expand business scale to 9,850 units (+6.8%) Asian Housing Business: Promote business in Vietnam, Thailand and Indonesia. Conversion rate (average during term) Number of Units Sold by Country US$/JPY AU$/JPY NZ$/JPY FY3/18 112.19 86.01 79.73 FY3/19 (Forecast) 110.00 87.00 79.00 FY3/18 FY3/19 Forecast Change Pct. US 6,380 7,000 +620 +9.7% Australia 2,843 2,850 +7 +0.2% Total 9,223 9,850 +627 +6.8%

FY3/19 Forecast 7. Investments 19 Capital Expenditures <*Expense basis> (Consolidated) Main investments FY3/18 Domestic and overseas housing display centers 7.1 billion New research building at Tsukuba Research Institute 2.5 billion Software investment 3.9 billion FY3/19 Forecast Change Tangible Fixed Assets 17.1 23.8 +6.8 +39.6% Intangible Fixed Assets 2.2 3.9 +1.8 +81.8% Other 1.3 0.7-0.6-47.0% Total 20.6 28.5 +7.9 +38.5% Pct.

FY3/19 Forecast 8. Trends in Gains/Losses, Recurring Income to Net Sales Ratio, and ROE Net sales 1,400.0 1,200.0 1,000.0 800.0 600.0 400.0 200.0 973.0 34.6 Net sales 997.3 36.7 1,040.5 42.0 Recurring income (excluding actuarial gains and losses) 1,113.4 52.9 1,222.0 55.6 Recurring income 1,310.0 57.5 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 11.0% 11.3% 8.0% 3.6% 3.7% 8.0% 7.1% 4.0% 13.3% 12.0% 10.3% 9.7% 20 Recurring income to net sales ratio (excluding actuarial gains and losses) ROE (including actuarial gains and losses) ROE (reference: excluding actuarial gains and losses) 10.0% 10.0% 4.7% 4.5% 4.4% 4.0% 0.0 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 Forecast * Recurring income does not include actuarial gains or losses. *ROE excluding actuarial gains and losses (reference value) is calculated using the effective statutory tax rate, and net assets for each year have not been adjusted. 0.0 0.0%

21 The forecast figures in this presentation are based on projections deemed logical at the time when it was prepared. Actual performance may differ materially from these projections.