Medium-term Management Plan

VISION 24(FY2020 – FY2024)

July 30, 2020

- 1 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Summary of the Medium-term Management Plan Vision 19 (1)[Theme]Evolving into a High-Quality Engineering Enterprise!

～ Enhancing individual ability and harnessing comprehensive strength ～Company-wide performance:
Achieved V19 numerical targets with sales amount of ¥172.9 bn andordinary income (margin) of ¥14.2 bn (8.2%) in FY2019

Key measures:
Steadily moved forward to become a high-quality engineering
enterprise by improving proposal-based sales capabilities and on-site
capacity, as well as interdivisional collaboration for joint on-site
construction, based on both improved individual abilities andharnessing of comprehensive strength- 2 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Summary of the Medium-term Management Plan Vision 19 (2)Pursuit<V19 Key Measures>

ResponseoftoQuality

Safety, Quality,Compliance

Securing and strengthening
capacityStrengthening sales

Strengthening overseas
business

Harnessing comprehensive strength

Enhancing individual ability

Personnel training andrevitalization

ChangeEnvironmental and newfields response- 3 -Made steady progress in eachmeasures, although the level ofprogress varies- Carried out campaign to strengthen
safety and quality control- Expanded education systems andprograms, established Human
Resources Development
Department- Promoted parallel deployment ofknow-how for improving
construction profitability,
strengthened support for partnercompanies- Strengthened company-wide sales
capabilities by strengtheningorganizational capabilities- Promoted the Group’s united efforts
to rebuild its overseas business base
- Implemented initiatives forrenewable energy projects,
promoted establishment of systems
that take advantage of the cloudⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Summary of the Medium-term Management Plan Vision 19 (3)Business performance
VISION 19 Targets

FY2016FY2017FY2018FY2019

Salesamount¥165.0 bn¥137.2 bn¥146.8 bn¥157.0 bn¥172.9 bn

Ordinary
income¥12.5 bn

¥8.84 bn

¥10.40 bn¥11.56 bn¥14.20 bn

Ordinary
incomemargin

≥7.5%

6.4%

7.1%

7.4%

8.2%

- 4 -

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Future Market Environment
VISION 24 (FY2020 - FY2024)
Although there will be no significant decline in demand after the Olympics,
construction demand will level off
Construction demand in large
metropolitan areas

Renewable energy and powertransmission

Redevelopment of the Tokyo metropolitanarea, Osaka (large-scale projects such as theWorld Expo), Nagoya, Hakata, etc.

Solar, biomass, geothermal and wind power;
renewal of system connections and power gridTransportation infrastructure

Information & communications

Linear shinkansen, highway renewal

Realization of IoT and 5G, achievement ofSociety 5.0

Corporate capital investment trends
Concerns regarding sluggish capital investment,
especially in the manufacturing sector⇒ Carefully watching the downsizing of themarket

Southeast Asia
Market expansion accompanying economicgrowth- 5 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

The Sumitomo Spirit / Corporate Philosophy

The Sumitomo Spirit (Business Principles)
Article 1
Sumitomo shall achieve prosperity based on solid foundation by placing prime
importance on integrity and sound management in the conduct of its business.
Article 2
Sumitomo’s business interest must always be in harmony with public interest; Sumitomo
shall adapt to good times and bad times but will not pursue immoral businessCorporate Philosophy
Recognizing its social mission and responsibility, the Sumitomo Densetsu Group:- Aims to develop a favorable environment to support a prosperous and securesociety.
- Values its technical prowess and the customer's confidence in it, and provides highquality engineering service that gives a high level of customer satisfaction.
- Practices fair and transparent management based on compliance in keeping with ahigh standard of corporate ethics.
- Seeks to create a vibrant and pleasant business environment while fostering
employees rich in creativity.
- 6 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Theme -The Group will strive for further growth and expansion based on thebusiness foundation it has built up through business activities that
focus on quality in order to become a comprehensive engineering
enterprise that truly meets the needs of society through the growthof people and technology.
Accordingly, we have established the following theme for our new
medium-term management plan, “VISION 24” starting in FY2020 andwill work together as a unified Group based on this theme.

Sustainable Development through a New Growth
Strategy and Comprehensive Strength!

- 7 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Basic Concept -As a comprehensive facilities corporate group, the Group will allocate resources toimprove the capacity and technical capabilities of each division, aim to increase sales,and expand comprehensive services to customers through the comprehensive strengthfrom the coordination of each division.

Ordinaryincome¥15.0 bn

Ordinary
income¥8.8 bnOrdinary
incomeOrdinary¥14.2 bn
Ordinary income
income ¥11.5 bn¥10.4 bn
Sales amount¥172.9 bn
Sales amount¥157.0 bn

Sales amount¥137.2 bn

Sales amount¥146.8 bn

Sumitomo Densetsu
as oneSales amount¥200.0 bn

Implementation of growth strategy for each division(Power Transmission Works) Promoting the three businesses of power transmission,
new energy, and private sector demand(Domestic Electrical Works) Strengthening capacity, expanding renewal andmaintenance(Overseas) Development of business domains, promoting localization(Information & Communications Works) Market expansion strengthening solution
capabilities(Mechanical Equipment) Development of business domains, strengthening capacity

Growth investment Capital investment, technology
development, education, and M&As and alliances
FY2016FY2017FY2018FY2019FY2024- 8 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Numerical Targets [Consolidated orders received, sales amount, ordinary income, and ordinary income margin]

VISION 24
FY2024 target
Orders received¥200.0 bn

Sales amount¥200.0 bn

Ordinary income¥15.0 bn

Ordinary incomemargin

7.5%- Growth investment
FY2020 to FY2024 (five years) total ¥20.0 bn- Capital efficiency benchmark
ROE (return on equity): Target 10%- Financial soundness benchmark
Equity ratio: Maintain 50% level- Shareholder returns policy
Dividend payout ratio: Target 40% (FY2024)- 9 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 – Key Measures (1)[Ideals of the Sumitomo Densetsu Group]

Aim to become a comprehensive engineering enterprise that truly meetsthe needs of society through the growth of people and technology[Theme of V24]
Sustainable development through a new growth strategy andcomprehensive strength!
Sumitomo Densetsu as one, enhancement of SEM brand power (safety and security,high quality, reliability, and enterprise value)[Four key measures]

Safety, quality, andcompliancePursuing improved customer satisfaction(proposal-based sales capabilities,capacity, and technical capabilities)

Securing and developing humanresources and implementing
work style reforms

Enhancing enterprise value
in anticipation of the future

Corporate Philosophy of the Sumitomo Densetsu GroupThe Sumitomo Spirit- 10 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Key Measures (2) -Safety, quality, and compliance
We will make sincere efforts to ensure safety and quality that are top priority issues
and the foundation of our business management, and to thoroughly enforcecompliance.
◆ Ensure safety and quality◆ Thoroughly enforce compliance

Securing and developing human resources andimplementing work style reforms
The Group will further enhance employee training and create a comfortableworkplace in an aim to create a vibrant and pleasant business environment while
fostering employees rich in creativity.
◆ Expand training facilities and education programs◆ Secure human resources◆ Pursue efficiency improvements for improved productivity◆ Reduce total working hours◆ Strengthen diversity initiatives- 11 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Key Measures (3) -Pursuing improved customer satisfaction
We will further refine our proposal-based sales capabilities, capacity, and technicalcapabilities, and harness our Group's comprehensive strength to provide
engineering services with a high level of customer satisfaction in order to respond todemand in the domestic and overseas markets, including major metropolitan areas,
as well as in the energy and environmental fields and the development of a supersmart society.
◆ Strengthen proposal-based sales capabilities◆ Secure and strengthen capacity◆ Focus on expected growth areas (information & communications business,mechanical equipment business, overseas business, and renewable energy market)◆ Respond to new technologies and new construction methods

Enhancing enterprise value in anticipation of the future
The Group will work as one to improve the enterprise value of the SumitomoDensetsu Group in order to remain a company that is sought after by allstakeholders (including customers, employees, and shareholders).
◆ Undertake ESG and SDGs initiatives◆ Maintain financial strength and enhance shareholder returns◆ Promote Health & Productivity Management◆ Improve employee satisfaction by enhancing employee benefits and improving theworkplace environment- 12 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Capital Policy -The Group will make growth investments while improving earnings andmaking effective use of capital in an aim to achieve medium to long-termbusiness growth and increase enterprise value.
Furthermore, we view the provision of returns to shareholders as one of themost important management measures, and we will pay stable dividends
while maintaining a balance with internal reserves and taking into accountbusiness performance and future business development.

- Growth investment
FY2020 to FY2024 (five years) total ¥20.0 bn- Capital efficiency benchmark
ROE (return on equity): Target 10%- Financial soundness benchmark
Equity ratio: Maintain 50% level- Shareholder returns policy
Dividend payout ratio: Target 40% (FY2024)- 13 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Medium-term Management Plan VISION 24 - Growth Investment -We will make aggressive investments with an eye on medium to long-termbusiness growth and improvement in our enterprise value as we promote
specific initiatives under the four key measures set forth in VISION 24.

Growth investment
FY2020 to FY2024 (five years) total ¥20.0 bn- Capital investment
Expansion of training facilities and business locations,
IT investments to improve productivity and business efficiency- Technology development
R&D on new technologies, new construction methods, and new fields- M&As and alliances
Consider in an aim to expand business scale and domains- Education and employee benefits
Create a rewarding work environment and implement work style reforms- 14 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Notes on Perspective Information
This presentation material is based on currently
available information. Actual results may differ fromforecasts due to a variety of factors.

END- 15 -Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.