HAZAMA ANDO GROUPMEDIUM-TERM MANAGEMENT PLAN 2025
（FY3/24 – FY3/26）

INDEX

１．The HAZAMA ANDO Group’s Vision…P2

２．Overview of the Previous Medium-Term
Management Plan ( FY3/21 – FY3/23 )3-3-1-05. Energy Creation Initiatives…P18

3-3-1-06. Real Estate and InfrastructureManagement Businesses…P192-1. Financial Results…P3

3-3-1-07. Technology Research andDevelopment…P202-2. Major Initiatives…P43-3-1-08. Group Business…P22

2-3. Growth Investment Results…P6

3-3-1-09. Partner Companies…P23

3-3-1-10. Production System Reform
through DX…P24

3-3-1-11. Partner Strategy…P25

３．Medium-Term Management Plan 2025
3-1. Our Understanding of the External Environment…P73-2. Our Understanding of Management Issues…P8

3-3-2. Increasing the Value of Human
Capital…P26

3-3. Outline of the Medium-Term
Management Plan

…P9

3-3-3. Promoting ESG Management…P27

3-3-1. Enhancing Business Growth

４．Financial and Other Indicators

3-3-1-01. Civil Engineering Business…P10

3-3-1-02. Building Construction Business…P12

3-3-1-03. Overseas Business…P14

3-3-1-04. Life Cycle Support (LCS) Business…P16

4-1. Performance Targets…P28

4-2. Growth Investment Plan

…P29

4-3. Cash Allocation…P30
11. The HAZAMA ANDO Group’s Vision
The HAZAMA ANDO Group put in place HAZAMA ANDO VISION2030, the Group’s long-term vision, in February 2020.
Taking into account the four pillars of value creation, we are promoting reforms to further increase corporate value.
Corporate Philosophy

VISION2030

1. We shall contribute to enhancing society by construction
2. We shall pursue customer satisfaction with reliable technologies and passion
3. We shall realize a prosperous future by creating new values

Through the acceleration of innovation and tireless efforts to take on each new challenge,
create new value and contribute to the resolution of social issues

Achieve customer satisfaction and gain their trust by means of innovative technologies and solutions

Create ○Address needs through the Group’s technological capabilities and know-how nurtured through longcustomeryears of experience and support customers’ business activities
value 〇Work swiftly to meet customers’ expectations by strengthening life cycle support including
environmental (decarbonization) solutions

Secure stable profits and return profits by further strengthening our mainstay business and investing
Create in strategic growth○Further strengthen the mainstay construction business by enhancing capabilities for winningshareholder
orders x worksite skills x profitability
value 〇Strengthen governance for sustainable corporate value creation〇Transform into a properly balanced business portfolio of flow and stock businesses

Contribute to the realization of a decarbonized, low environment impact, recycling-oriented society

Create to leave a fertile global environment for the next generation
environmental 〇Promote the decarbonization of business activities (RE100 and SBT)
value 〇Contribute to the decarbonization of society as a whole by promotion energy creation and rolling out
energy-saving technologies

Realize enhancements in the sense of well-being and in the motivation of employees by creating
Create safe and comfortable working environments〇Promote measures that enhance the Company’s appeal and contribute to increased employee

employeeengagement (human capital investment, a highly credible personnel evaluation system)
value ○Strengthen support for the further career development of employees (education, development, careerformation, diverse work styles, work-life balance)

Medium-Term
Management Plan 2025

Toward the creation of four values ― Increase corporate value + Enhance the Company’s appeal ―22-1. Financial Results－Overview of the Medium-Term Management Plan (FY3/21 – FY3/23)－* Consolidated financial results* Amounts of less than one billion yen are
rounded down

FY3/21

FY3/22

Results

Results

FY3/23Medium-Term
Management Plan

Results

Net sales¥352.1 billion ¥340.2 billion¥440.0 billion¥372.1 billion

Operating profit¥27.3 billion(7.8%)¥26.6 billion(7.8%)¥30.5 billion(6.9%)¥19.8 billion(5.3%)

Ordinary profit(Medium-Term
Management Plan KPI)

¥25.8 billion¥25.8 billion¥30.0 billion¥19.6 billion(Of which, non-construction
earnings)* Figures in parentheses are theratios of non-construction earnings toordinary profit.

(¥2.2 billion)(8.8%)(¥2.2 billion)(8.6%)(¥3.0 billion)(10.0%)(¥1.1 billion)（6.1％）ROE (Medium-Term
Management Plan KPI)Net profit ÷ Equity* x 100

12.2 ％

12.3 ％

12 ％

10.8％

* (Equity as of the end of the61.9 ％

124.9 ％

FY3/22 – FY3/23
Cumulative Total

FY3/22 – FY3/23
Cumulative Total

100% or more*

117.2％* November 2021: Shareholder returns
expansion announcement

Growth investment* Figures in parentheses are thecumulative amounts.

◆ External environment
・Despite the significant slump in the economy from the first fiscal year of theMedium-Term Management Plan owing to such factors asCOVID-19, conditions are
exhibiting a gradual recovery trend entering FY3/23 and the “with-Corona” era・Firm trends in public sector construction investment; recovery trend in recent
private-sector construction investment
・Ongoing harsh external environment owing to such factors as soaring material, fueland labor costs as well as intensifying competition◆ Net sales
・Fell short of completed construction contract plans owing to such factors as theshortfall in non-consolidated orders
・While the precast concrete (PCa) business of consolidated subsidiaries and otherfactors progressed in line with plans, non-construction business net sales decreased
in FY3/23◆ Operating profit, Ordinary profit
・Despite securing a certain level of business profitability, fell short of plans owing tosuch factors as the shortfall in net sales; downturn in gross profit on completed
construction contract in FY3/23 owing to a variety of factors including thedeterioration in profitability of certain construction projects and increase in theprovision for warranties for completed construction resulting from the occurrence oflarge-scale repair work; non-construction business profitability also declined due tolower sales and the inability to absorb fixed costs in the PCa and other businesses◆ ROE

previous fiscal year + Equity asof the end of the fiscal year) / 2

Total return ratio(Medium-Term
Management Plan KPI)

Review of the Previous Medium-Term Management Plan Period¥4.8 billion(¥4.8 billion)¥6.4 billion(¥25.0 billion)(¥11.2 billion)¥7.9 billion(¥19.1 billion)

・Despite efforts to reduce equity and improve capital efficiency, unable to offset the
decline in profit; fell short of ROE plans◆Total return ratio
・Achieved total return ratio plans through various measures including the large-scalepurchase of own shares and increase in the dividend amount◆Growth investment
・Took an equity interest in a biomass power plant and commenced solar power
generation power purchase agreement (PPA) business operations in the energy field・Promoted the acquisition of rental real estate in the real estate field・Refurbished Technical Research Institute facilities; focused on technology R&D
・Slowdown in overseas partner strategic investment owing to COVID-19; continued
to consider investment in start-up companies while engaging in collaboration32-2. Major Initiatives

Civil
Engineering

Construction
Business

NonConstruction
Business

Building
Construction－Overview of the Medium-Term Management Plan
(FY3/21 – FY3/23)－
Initiatives

Our Understanding of the Issues

・Remained active in areas of strength including urban as well as mountain tunnel civil engineering, power, and energy;
continued to a exert a presence
・Vigorously engaged in a variety of activities including technology development across such wide-ranging fields as highway
and other renewal projects; positioned as a part of the Company’s business segment
・Strengthened efforts in disaster prevention and mitigation as well as national land resilience-related businesses; steadyprogress in various activities including ongoing construction projects
・Promoted the development of various ICT-related technologies that contribute to automation as well as increased speed
and sophistication; introduced into tunnel, shield, and other construction work

・Efficient placement of personnel through thepromotion of large-scale project construction
・Development of segments in which the Group
maintains a competitive advantage in a bid tosecure building construction orders
・Early development and promotion of young staff
through the transmission of know-how
・Building relationships and strengthening
cooperation with partner companies
・Development of proprietary technologies otherthan environment-related technologies throughwhich the Group can secure a competitive
advantage
・Elimination of accidents, public hazards, anddefects
・Strengthening of overseas business risk
management systems; setting of priority regions(countries) and concentrated investment inresources
・Increase in production volumes through theactive use of PCa and expansion of external sales
・Further productivity gains through the rapid rolloutof DX

・Established the LCS Division; put in place an integrated structure encompassing planning and design as well as
maintenance; upgraded and expanded services
・Employed the results of next-generation ZEB trial demonstrations at the Company’s Technical Research Institute; steadily
accumulated a track record of ZEB introduction projects
・Efforts to promote the use of BIM models at each of the design, cost estimation, and construction phases to increase
efficiency and sophistication

Overseas

・Undertook a flexible review of each measure in response to changes in the external environment including COVID-19

Shared・Set up a PCa plant, the Company’s third production base, at the Kikugawa Plant in Shizuoka Prefecture; expanded the useof proprietary PCa materials at various civil engineering and building construction sites
・Implemented training including partner companies; promoted increased efficiency and productivity in on-site operations bydeploying the Buildee shared platform

Renewable
EnergyRelated

・Established the Renewable Energy Business Department; in addition to participating in the Sakaide Biomass Power
Generation Project, began considering in earnest related businesses
・Commenced solar power generation power purchase agreement (PPA) business operations (provided value-added services
to customers through collaboration with the Building Construction Business)
・Accumulating energy management know-how through research and development

Real EstateRelated

Other

・Initiated steps to engage in facility management (FM) business activities at the Tohoku Branch Office Building held by
the Company; operations scheduled to comment at the end of 2023
・Promoted the acquisition of real estate for leasing purposes through a subsidiary

・Continued assessment of appropriate investment
risk and increase in the pace of deployment

・Undertook venture investments with the expectation of synergies with core businesses４2-2. Major Initiatives－Overview of the Medium-Term Management Plan
(FY3/21 – FY3/23)－
Initiatives

Other

Environment

・Promoted decarbonization activities; endorsed the recommendations of the TCFD and disclosed informationaccordingly,established the Environmental Strategy Committee
・Selected as a CDP2022 supplier engagement leader

Compliance・Formulated and implemented the in-house Integrity Declaration in a bid to increased compliance awareness

Securing andDeveloping
Human
Resources

・Established the Career Development Department and revised the human resources development policy andjob-specific education plan
・Recognized the need to review compensation standards and to increase employee engagement including
improvements in working environments as important issues; considered specific measures

Work-Style
Reform・Acquired White 500 certification; introduced teleworking and work interval systems; efforts to promote eight or moreclosures in four weeks at worksites underway

Diversity

・Women’ empowerment: Increased the ratio of women hired among new graduates from 18% to 21% (FY3/23 newgraduate recruitment results)
・Elderly employment: Considered ways to secure employment opportunities up to the age of 70
・Employment of people with disabilities: Participated in IBUKI Fujisawa Farm (an indoor farm-based employment
support service for people with disabilities and established an office support
team)
Employment rate of people with disabilities 2.43% (statutory rate 2.3%)
・Employment of foreign nationals: Conducted a survey targeting foreign national employees; translated various
documents including the Company’s principal personnel rules and regulations into
EnglishDX
Promotion

・Established the DX Strategy Department; formulated the 2030 DX Vision; promoting various measures

Our Understanding of the Issues

・Sharing of Group-wide issues and thestrengthening of education to accelerate thedecarbonization of businesses
・Enhancement of education and training geared
toward the development of human resources
and improvement of skills
・Improvement of employee engagement throughthe implementation of specific measures
・Promotion of diverse work styles and the
reduction of total working hours
・Upgrade and expansion of human resources
systems to promote the success of all
employees regardless of gender, age, disability,
nationality, etc.
・Acceleration of DX deployment and early
penetration throughout the Group througheducation５

2-3. Growth Investment Results－Overview of the Medium-Term Management Plan (FY3/21 – FY3/23) －(Billion yen)
FY3/21

FY3/22

FY3/23Results

Results

Results

Investment Investment Investment
AmountAmountAmountEnergy-related
business

Real estate-related
business

Partner strategic
investment

ー

1.7

ー

2.0

0.4

ー

2.6

0.8

0.1

Cumulative Three-Year
Investment AmountMedium-Term
Management Plan

Results

Cumulative
Investment
AmountCumulative
Investment
Amount

5.0

5.0

5.0

Review of the Previous Medium-Term Management Plan Period

4.5◆Promoted various measures while properly determining the significance of initiatives withrespect to such issues as business profitability and environmental value
・Against the backdrop of the Japanese government’s 2050 carbon neutral declaration in October
2020, commenced solar power generation power purchase agreement (PPA) business operations
in with renewal energy-related market expansion
・Recognizing the significance of building long-term relationships with customers, established thesolar power generation power purchase agreement (PPA) business as a key pillar
・Unable to reach satisfactory terms and conditions, cancelled overseas IPP business activities,
included in the Group’s planned large-scale projects; despite this cancellation, steady progress in
the Sakaide Biomass Power Generation Project, in which HAZAMA ANDO maintains an equity
interest
・Investment returns for many renewable energy projects not expected to be fully realized until 2026
or later

2.9◆Adopted a cautious approach toward the selection of projects taking into accountinvestment risk・Acquired rental real estate through subsidiary company Ryoko Kaihatsu
・Commenced facility management (FM) business operations to promote the effective use of realestate, including a branch building, held in Japan (Tohoku Branch Office Building)

0.1◆Undertook initiatives in Japan and overseas, including efforts to form alliances that help
strengthen the construction and non-construction businesses
・Impacted by COVID-19 and the large-number of underperforming projects, no significant
developments in investments◆Undertook capital investments in such areas a research facilities in conjunction with ongoinginvestments in the development of various technologies
・Engaged in development activities aimed at securing advances in technology, improvements in
productivity, and the creation of environmental value in line with construction demand・Increase capacity at the Company’s Technical Research Institute and PCa plants held
◆Undertook investments aimed at promoting innovation, including investments in venturecompanies

Innovation investment,
other

3.1

4.1

4.4

10.0

11.6

Total

4.8

6.4

7.9

25.0

19.1
6

3-1. Our Understanding of the External Environment― Medium-Term Management Plan 2025 ―External Environment
An era in which a variety of values exist and diversity is required
Opportunities

Risks
Sustainability-related
Decarbonization and biodiversity
Weak economic
growthRising geopoliticalrisks

Surge in material
and fuel prices

Shortage in thelabor force

Technological innovation-based
Productivity improvement needs

National land
resilience

Startup support, etc.
Increased businessco-creation momentum

Human capital management

Society 5.0
realization

New capitalism

COVID-19-based
New normal

Stronger demand for sustainable management73-2. Our Understanding of Management Issues
Issues relating to the Previous Medium-Term Management Plan
◆Shortfall in orders (business volume)◆Decline in profit due to a deterioration in the profitability of certain
construction projects and the incidence of repair work
◆Lack of speed in responding to environmental changes

Main Factors◆Insufficient segments in which the Group maintains competitive advantage
and cost competitiveness◆Insufficient systems in place to maintain and improve quality andincrease profit productivity◆Insufficient organizational capacity for the flexible development ofpolicies in response to environmental changes and social needs

The HAZAMA ANDO Group's management issues in light of the previous Medium-Term Management Plan
and current external environment
Increasing the Value ofPromoting ESG
Enhancing Business Growth
Human CapitalManagement◆ Business operations that respond immediately
to changes in the external environment◆ Realization of appropriate capital measures

Management
Approach◆ Maximization of employee value throughproactive human capital investment◆ Contributions to the environment and society◆ Ongoing strengthening of governance◆Enhancing Business Growth・Improve safety and quality while ensuring profits
・Strengthen sales, worksite, design capacity, and technological capabilities of the building construction business, including expansion of segments in which the Group
maintain a competitive advantage
・Build a business portfolio that is highly resilient to changes in the business environment through steady investment in growth・Strengthen cost competitiveness by leveraging the expertise of Group companies
・Strengthen construction work structure and systems by cultivating human resources and strengthening relationships with partner companies to transmit know-how, etc.,
and strengthen DX initiatives to formulate and implement data-based strategies and improve productivity◆Increasing the Value of Human Capital・Upgrade and expand investment in human capital・Strengthen the management foundation by securing diverse human resources and maximizing employee value◆Promoting ESG Management
・Enhance sensitivity to changes in the environment by strengthening ESG initiatives and other measures; strengthen the ability to respond to society and customer needs
・Promote capital-efficient management and appropriate investments in growth by strengthening governance8

3-2. Outline of the Medium-Term Management Plan
VISION2030

Realizing the creation of four values and the startof the next decade
・Customer value
・Shareholder value
・Environmental value ・Employee value

Toward the creation of four values― Increase corporate value + Enhance the Company’s appeal ―Key KPIs
3-3-1.

MEDIUM-TERM
MANAGEMENT
PLAN
FY3/21 – FY3/23

Initiating steps to realize
VISION2030
・Strengthening of the core
construction business・Diversification of the revenue
base・Implementation of measures
aimed at generating profits asshareholder returns

Enhancing Business Growth3-3-1-01.
3-3-1-02.
3-3-1-03.
3-3-1-04.
3-3-1-05.
3-3-1-06.
3-3-1-07.
3-3-1-08.
3-3-1-09.
3-3-1-10.
3-3-1-11.

Civil Engineering Business
Building Construction Business
Overseas BusinessLife Cycle Support (LCS) Business
Energy Creation Initiatives
Real Estate and InfrastructureManagement Businesses
Technology Research and Development
Group Business
Partner Companies
Production System Reform through DX
Partner Strategy

3-3-2. Increasing the Value of Human Capital
3-3-3. Promoting ESG Management◆ Our promises to customers① Provide safety, high quality, andhigh productivity at a fair cost
② Provide various environmental andother solutions◆ Our promises to shareholders① Secure stable profits and return
profits to shareholders② Maintain high capital efficiency③ Undertake various initiatives
including steps to upgrade andexpand governance◆ Our promises to society andthe environment① Reduce GHG emissions to achievecarbon neutrality② Undertake various initiatives including
the introduction of energy-creatingand energy-saving technologies◆ Our promises to employees① Realize well-being② Support autonomous careerformation③ Undertake various initiatives
including steps to foster a cultureof mutual education, challenge,
and creativity

9

3-3-1-01. Civil Engineering Business
Quantitative Indicators
FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26Plan¥21.2 billion¥21.5 billion¥23.0 billion¥23.9 billion(Profit margin)(15.9％)(16.2%)(15.9%)(15.9%)Net Sales on Completed
Construction Contracts¥133.4 billion¥133.0 billion¥145.0 billion¥150.0 billion

Non-Consolidated Plan
Gross Profit on Completed
Construction Contracts

Market Trend Forecasts

Our Strengths

Firm trends in public investment
Growth in public and private investment in the renewal and renewable energy
business sectors

・Track record and technological superiority in high-difficulty urban civil engineering construction(including shield and large-scale excavation work)
・Wealth of experience in mountain tunnel construction; possession of DX-based automated andadvanced technologies (i-NATM®)・Extensive construction experience in the field of power engineering (dams and power plants)
・Extensive construction experience in water and sewage facility renewal construction
・Possession of specialty technologies (including radiation waste treatment technology, large crosssection non-excavation technology: WJ segment method )・Precast concrete (PCa) plants held by the Group (three locations with a manufacturing capacity of
150,000 cubic meters per year)
・Construction work structure and systems in collaboration with technically reliable and competent
partner companies
・On-site support structure and systems built on experienced technical departments at head andbranch offices

・While new public sector construction projects are projected to remain flat, the market expected toremain stable(Increase in disaster prevention and mitigation, national land resilience, and defense-related
projects)
・Renewal business growth in line with aging infrastructure(Renewal of highways as well as water and sewage facilities)
・Market growth toward carbon neutrality by 2050
(Work in various areas including the shift to hybrid dams, decarbonization and replacement ofthermal power plants, and the resumption of operations at nuclear power plants)

10

3-3-1-01. Civil Engineering BusinessPriority Measures
Strengthen Sales Capabilities

Strengthen Worksite Capabilities (Achieve¥150.0 billion in completed construction)◆Secure a steady stream of ongoing orders and expand
construction in areas of industry-leading strength◆Increase profit productivity through production process
reform・Urban civil engineering: Shield work (deep-laid, long-distance, large crosssection, high-difficulty), large-scale excavation work, urban flood damage
countermeasures, river improvement work・Mountain tunnel civil engineering: Mountain tunnel work utilizing DX andICT technology, dam renewal work
・Power civil engineering: Work related to the resumption of operations at
nuclear power plants and decommissioning-related construction,hydroelectric power plant renewal work, radioactive waste treatment facilityand underground network-related construction

・Create an environment in which technical staff can concentrate on safety
and quality control work (partial outsourcing of administrative tasks,change in roles of senior/administrative staff)
・Standardize use of remote cameras, digital signage, eYACHO, and drones,
etc.
・Undertake the standard implementation of mountain tunnel construction
DX (i-NATM®), a data integration platform, and remote centralized
management system for temporary tunnel facilities
・Accelerate the pace of information standardization and sharing through theuse of cloud computing worksite data (eDOX)・Reduce the incidence of defects through the introduction of AI-basedknowledge management tools, and control the occurrence of disasters
through the introduction of a safety management system (strengthen
safety measures through a real-time AI analysis system for accident andsafety patrol data)◆Strengthen efforts related to the large-scale
maintenance and renewal of public infrastructure・Highways: Floor slab replacement work (manufacture of Group-owned
PCa plant floor slabs)
・Water purification plants: PFI and DBO method water purification plantrenewal work

◆Respond to surges in labor and material costs◆Engage in disaster prevention and mitigation as well as
national land resilience measures

・Conduct appropriate negotiations with clients in accordance with theterms and conditions of contracts

・Four lane road construction, double network, seismic reinforcement, andurban flood damage countermeasures◆Improve the skills of on-site staff◆Share information and accelerate the pace of decisionmaking through the use of DX tools
・Digitally transform technology research and development information
management, improve cost management system functionality◆Reinforce the sales structure and systems through thestrategic placement of personnel from technology
management divisions

・Upgrade and expand a variety of specialized technical training andconduct video content education
・Promote the early acquisition of first-class qualification (provide
acquisition support and incentives)
・Select projects that contribute to the transmission of construction skills
and technical capabilities (small-scale, RC structure, and rare types of
construction), undertake the strategic placement of young staff and earlytraining of young managers
・Expand the use of construction information modeling (CIM) through ICT
literacy education◆Maximize technical response capabilities throughthe coordination of civil engineering and building
construction
・Undertake integrated initiatives for water purification and power
plants◆Upgrade and expand employment of talented
personnel and enhance follow-up after employment
・Expand mid-career employment and strengthen new graduate
employment
・Actively conduct internships, on-site tours, hands-on construction
events, etc.
・Enhance young employee follow-up by introducing a mentor system◆Increase cost competitiveness・Strengthen procurement capabilities by using the three PCa plants
owned by the Group (expand and diversify PCa materials including
shield segments and PCa slabs)
・Expand the overseas procurement network
・Utilize Group companies (Hazama Ando Kogyo: centralizedpurchasing, Aoyama Kiko: foundation construction)◆Perfect and implement competitively superior
technology◆Strengthen relationships with partner companies113-3-1-02. Building Construction Business
Quantitative Indicators
FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26Plan¥17.2 billion¥18.6 billion¥20.1 billion¥21.0 billion(Profit margin)(8.4%)(8.1%)(8.4%)(8.4%)Net Sales on Completed
Construction Contracts¥206.2 billion¥230.0 billion¥240.0 billion¥250.0 billion

Non-Consolidated Plan
Gross Profit on Completed
Construction Contracts

Market Trend Forecasts

Our Strengths

Private sector investment is expected to remain flat despite showing signs of arecovery; closely observe the impact of global conditions, uncertainty surrounding
the future of financial markets, and rising materials and energy prices

・Continued stream of orders from leading existing customers
・Existing mechanisms that prioritize profitability in projects and initiatives
・Possession of and implementation track record for a diverse range of environmentally friendly
technologies→ New LCA method-based environmental impact assessment technology for buildings→ Environmental proposal capabilities based on energy management technologies, including
the solar power generation PPA business→ Net-ZEB and ZEH-M Oriented certification track record
・(PCa) plants held by the Group (three locations with a manufacturing capacity of 150,000 cubic
meters per year)
・Ability to address customer needs in the LCS business・Order environment for new construction projects is expected to experience intense ongoing costcompetition
・Manufacturing industry exhibiting a return to domestic operations from an economic security
perspective
・Renewal market expected to experience continued growth・Market growth toward carbon neutrality in 2050
(Diversification of needs, including environmentally friendly technology)
・Expectations of a market recovery as the effects of COVID-19 dissipate

12

3-3-1-02. Building Construction BusinessPriority Measures
Strengthen Sales Capabilities

Strengthen Worksite Capabilities (Achieve¥250.0 billion in completed construction)

Strengthen Design Systems and Capacity◆Secure a steady stream of ongoing orders and expand
construction in areas of industry-leading strength◆Increase profit productivity and improvethe environment through production process reform◆Improve the sophistication of environmental proposals
centered on ZEB

・Logistics facilities, production facilities (semiconductor plants, foodprocessing plants, etc.)

・Create an environment in which technical staff can concentrate on
safety and quality control work (partial outsourcing of administrative
tasks, change in roles of senior/administrative staff)
・Standardize use of remote cameras, digital signage, eYACHO, anddrones, etc.
・Reduce the incidence of defects through the introduction of AI-basedknowledge management tools, and control the occurrence of disasters
through the introduction of a safety management system (strengthen
safety measures through a real-time AI analysis system for accident
and safety patrol data)・Accumulate commissioning know-how from actual projects
・Actively communicate information internally and externally◆Respond to surges in labor and material costs

・Introduce a front-loading design and construction flow based on a single
model BIM, front loading, and PCa
・Standardize the design and construction of PCa materials using theGroup’s diverse track record◆Bolster strategic initiatives for expanding areas ofstrength
・Data centers, office buildings, super high-rise condominiums◆Realize synergy effects with the LCS business・Deeper relationships with customers based on one-stop services◆Strengthen portfolio management
・Strengthen profitability management by application-specific order, andreallocate human resources◆Share information and accelerate the pace ofdecision-making through the use of DX tools
・Enhance the sophistication of project management and analysis byimproving sales system functions
・Strengthen collaboration between the sales, design, cost estimation, andconstruction departments; improve proposal capabilities and ordercompetitiveness・Maximize customer satisfaction by using systems developed in-house→ Provide environmental value by using automated LCA calculation
systems→ Shorten estimate lead times by using a simplified approximation andestimate system◆Reinforce the sales structure and systems throughthe strategic placement of personnel from technology
management divisions

・Share information with customers, respond in a detailed manner, andaccept orders under appropriate terms and conditions◆Improve the skills of on-site staff
・Promote the early acquisition of first-class qualification (provide
acquisition support and incentives)・Use construction BIM models through ICT literacy education
・Select projects that contribute to the transmission of construction
skills and technical capabilities (super high-rise, small-scale, andspecialty technology construction), undertake the strategic placement
an early training of young staff◆Improve design capacity by using DX tools
・Develop and operate a high-volume design automation system forthe planning stages
・Introduce an AI-based structural design support system◆Achieve higher quality, shorter construction periods,
and lower costs◆Reinforce functions through alliances◆Improve ordering opportunities by expanding thescope of initiatives for dedicated application-specificteams and participating in projects from the upstream
stage◆Maximize technical response capabilities throughthe coordination of civil engineering and building
construction◆Perfect and implement competitively superior
technology◆Strengthen relationships with partner companies

・Undertake integrated initiatives for water purification and power plants◆Increase cost competitiveness◆Upgrade and expand employment of talented
personnel and enhance follow-up after employment

・Strengthen procurement capabilities by using the three PCa plants
owned by the Group・Expand the overseas procurement network
・Utilize Group companies (HAZAMA ANDO KOGYO: centralizedpurchasing, AOYAMA KIKO: foundation construction)

・Expand mid-career employment and strengthen new graduate
employment
・Actively conduct internships, on-site tours, hands-on construction
events, etc.
・Enhance young employee follow-up by introducing a mentor system13

3-3-1-03. Overseas Business
Quantitative Indicators
Non-Consolidated Plan

FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26Plan

Gross Profit on Completed Construction Contracts¥0.5 billion(Profit margin)(2.1％)¥2.0 billion(6.9％)¥2.1 billion(7.8％)¥2.1 billion(8.4％)(Of which Civil Engineering)¥▲0.4 billion(▲6.0％)¥0.3 billion(5.3％)¥0.4 billion(7.0％)¥0.4 billion(8.9％)(Profit margin)¥1.0 billion(5.0％)¥1.6 billion(7.3.％)¥1.7 billion(8.0％)¥1.6 billion(8.3％)Net Sales on Completed Construction Contracts¥27.7 billion¥29.5 billion¥27.2 billion¥25.0 billion

Of which Civil Engineering¥7.2 billion¥6.5 billion¥5.7 billion¥5.0 billion

Of which Building Construction¥20.4 billion¥23.0 billion¥21.5 billion¥20.0 billion(Profit margin)(Of which Building Construction)

Market Trend Forecasts

Our Strengths

Despite the presence of uncertainties, construction related markets are expected torecover gradually

Civil Engineering Business・Global economic disruptions due to increasing geopolitical risks→ Greater risk of resource price increases, distribution slowdowns, and exchange rate fluctuations,etc.
・Market sluggishness attributable to COVID-19 expected to gradually dissipate
・Growth in the logistics, data center, and related markets in ASEAN countries
・Intensifying competition due to the entry of major Japanese construction companies into ASEAN
countries
・Recovery in demand for Japanese production facilities in North America, including Mexico* Figures on the left are included in the Civil Engineering andBuilding Construction businesses.

・Ability to support infrastructure (technology) exports to developing countries with a focus on ODA(loans and grants), and an extensive track record in contributing to the SDGs
・Existing business track record in 26 countries, mainly in Asia and Latin America

Building Construction Business・Extensive track record with a focus on Japanese company production facility projects in Asia andNorth America (ASEAN countries, Mexico, etc.)143-3-1-03. Overseas BusinessPriority Measures
Basic Approach

Overseas Business Management Policy

Organizational and Human Capital
Investment

・Focus on business stability in light of the external environment,
and strengthen personnel development, as well as businessfoundations and systems, in order to achieve future growth・The Civil Engineering business will continue to carefully selectprojects amid the limited number of ODA projects in countries inwhich the Company operates
・The Building Construction business will strengthen competitivenessand maintain a consistent scale by selecting winnable projects,
regions, and fields under a competitive environment and bypromoting localization through collaboration with partner companies
in local industries◆Carefully select ODA projects in light of risk
assessments◆Personnel development

Basic Plan
・Business scale:¥25.0 billion in completed construction,¥2.0 billion in gross profit on completed construction contracts
Orders: Civil Engineering ¥5.0－10.0 billion,
Building Construction ¥15.0－20.0 billion
・Markets:
Civil Engineering (Asia, Latin America),
Building Construction (Asia, North America)・Fields:
Civil Engineering (ODA)
Building Construction (production facilities for Japanese private
sector and foreign companies, ODA)
Civil Engineering and Building Construction (energy andenvironment-related)* New entry investigation (urban development business and
PPP business fields)

・Engage in projects that require sophisticated technology, including
traffic, water supply and sewage, disaster prevention, hospital, airport,
and energy and environment related projects◆Expand the customer base for private sector projects
with a focus on production facility projects
・Improve cost competitiveness and expand the customer base bypromoting localization
・Upgrade and expand the business portfolio→ In addition to Japanese production facilities, strengthen efforts toacquire foreign-capital, medical and commercial facility, logistics
facility, and data center projects
・Energize sales approaches starting at from the upstream stage andstrengthen Groupwide sales capabilities by supporting the overseas
expansion of domestic customers and by flowing overseas customers
back to Japan・Promote alliances with local industries and global companies thatpossess know-how and track records from the perspectives of business
management capacity and risk management, for the purpose of market
development intended to expand the scope of business while considering
entry into such new fields as the PPP business◆Work to put in place structure and systems tostrengthen risk response capabilities; strive to secureand increase profits
・Strengthen worksite skills through PM training
・Improve and strengthen systems for overseas branches and sales
offices,etc., by training and assigning Quantity Surveyors (QS)・Strengthen the contract management function by cooperating with
global consulting firms and attorney offices

・Increase the ratio of foreign-national staff at international businessdivisions to 10%
・Implement training in a planned manner for capable young and mid-career employees, including foreign national staff; actively promotepersonnel to executive and PM positions to help revitalize theorganization
・Train overseas location manager candidates from among internationaland domestic staff (promote education and personnel interaction
through onsite training in Japan)
・Newly establish a short-term overseas work rotation system as acareer path for young and mid-career employees in Japan (expand therange of global personnel)
・Introduce a specialized education system (overseas and domestic study
programs, etc.) for manager candidates in international businessdivisions, and develop personnel who can participate in international
business with a view to entering new fields◆Enhance systems
・Consolidate civil engineering and building construction back-office
departments in order to streamline and improve the efficiency of theorganization and tasks① Responsibility specialization for sales personnel: Private sector
building construction, ODA, new fields② Improve operational efficiency by delegating authority to sales
offices and worksites
・Incrementally transfer management functions to Asian and North
American branches to put in place the required environment for selfcontained, localized operations15

3-3-1-04. Life Cycle Support (LCS) Business
Quantitative Indicators
FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26Plan¥5.4 billion¥4.8 billion¥4.9 billion¥5.0 billion(Profit margin)(11.4%)(11.3%)(11.5%)(11.6%)Net Sales on Completed
Construction Contracts¥48.1 billion

Non-Consolidated Plan
Gross Profit on Completed
Construction Contracts¥42.3 billion¥42.6 billion¥43.0 billion* The figures on the left are the totals for the Renewal
business and the Building Service Management business* The figures for the Renewal business are included in
the Building Construction business

Market Trend Forecasts

Our Strengths

Continued expansion in the RN market, for both housing and non-housing buildings

・Ability to combine know-how accumulated through renewal construction with building
maintenance in order to provide building diagnosis, planning, construction, and aftercare services
in an integrated manner (LCS) and in a way that is tailored to the life cycle of the building ownedby the customer
・LCS dedicated organizations that can rapidly address customer needs at branches throughout
Japan (renewal construction + building management service functions)・Construction track record in a wide array of applications (offices, logistics, production facilities,
commercial facilities, etc.)
・Possession of ZEB remodeling technologies that have been demonstrated at the TechnicalResearch Institute (creation of comfortable user-centric (people-centric) spaces)

・In addition to facility longevity measures, customer needs are expected to diversify into other areas,
including energy conservation measures, etc.
→ Facility longevity needs: LCC quantitative assessments, reductions, and measures→ Decarbonization needs: LCA quantitative assessments, ZEB renewal→ Barrier free and wellness service needs→ Safety improvement needs: Earthquake resistance, crime prevention, BCP measures, etc.
→ Needs corresponding to changes in business styles: Expansion of telework, web conferencing
systems, expansion of 5G implementation
etc.

Despite the expanding market, entry by many companies is expected to intensify
competition
ICT-based DX promotion in the building maintenance industry

16

3-3-1-04. Life Cycle Support (LCS) BusinessPriority Measures
Basic Approach

Strengthen LCS in line with Customer Needs

Improve Productivity and Enhance
Systems

・Provide high added value and build long-lasting relationships oftrust with customers through facility LCS while addressing adiverse range of needs
・Reduce costs and perform appropriate risk assessments torealize stability for the LCS business, and achieve this together
with high profit productivity
・Invest the required resources to maintain and strengthen
systems that take every possible precaution for safety andquality assurance
・Continue strengthening personnel development and the businessfoundation, including partner companies, to achieve future growth◆Pursue customer satisfaction through a level ofservice diversification that is only achievable by alarge construction company◆Use DX tools・Strengthen LCC quantitative assessments together with proposal
and service capabilities for the related reduction measures in linewith facility longevity needs
・Strengthen service capabilities for LCA quantitative assessments+ ZEB remodeling, energy creation, and energy management
proposals, including PPA, in line with decarbonization needs
・Construct a system in anticipation of property managementbusiness development
・Address a range of various other customer needs(commissioning, carbon footprint, earthquake resistance, barrier
free retrofitting, wellness services, etc.)
・Enhance the level of building service management by utilizing amaintenance management BIM and other forms of DX
・Provide long-term repair planning and building diagnosis
services◆Pursue the maximization of synergy effects throughcollaboration between the renewal business andthe general building service management business・Share sales information, unit cost information (standard
renewal unit price preparation), technological information(VECD proposals), and construction information through datasystem integration
・Maximize construction management efficiency by visualizing
costs, processes, progress, and production track record
・Roll out sales management nationwide, share information, andaccelerate decision making by effectively using sales systems
・Roll out a maintenance management BIM by introducing
renewal construction management systems and building
management systems, and by using facility management
software◆Strengthen QCDSE management
・Based on the improvement of productivity through production
process reform and the use of DX, secure the required
personnel and realize optimal personnel assignments, including
for back-office departments, and create an environment inwhich technical staff can concentrate on safety and quality
control work (partial outsourcing of administrative tasks,change in roles of senior/administrative staff)
・Roll out and utilize AI-based knowledge management tools・Strengthen safety measures by analyzing disaster data in realtime, and implement efficient safety education through the useof videos and e-learning173-3-1-05. Energy Creation Initiatives
Quantitative Indicators
FY3/23Results

FY3/26Plan

FY3/31
Plan

Scale of renewable energy businessdevelopment (cumulative total)

40 MW

80 MW

200 MW

Amount of investment (cumulative total)¥4.5 billion¥14.5 billion¥30.0 billion

Amount contributed to consolidated
financial resultsー¥0.1 billion¥3.0 billion

Market Trend Forecasts

Priority Measures

Continued expansion of the renewable energy market
due to the promotion of policies aimed at realizing
a carbon-neutral, decarbonized society by 2050

Resolve social issues and achieve sustainable growth for
the HAZAMA ANDO Group; promote the development andacquisition of renewable energy power plants◆Solar power generation 50MW・Technological development relating to storage batteries andthe utilization of hydrogen as well as an accelerated pace ofCO² fixation technological development
・Development of renewable energy that can be used in carbon
offsetting and promotion of the development of technologies
that contribute to reduction of CO² emissions in supply chains

Following the revision of the National StrategicSpecial Zone Law , moves toward a super city
concept and an accelerated pace in the realizationof smart cities

・Promote onsite and offsite PPA・Promote the solar power generation business, including the acquisition of
secondary projects◆Biomass

20 MW* Scale of business development HAZAMA ANDO equity
conversion* Amount contributed to consolidated financial results is
calculated as the sum of gross profit from non-consolidated
operations, gain or loss on special-purpose companies, andequity in earnings (loss) of affiliates.
Calculation of the amount contributed to consolidated
results anticipated after 2026 following the construction of
power plants, etc.

Promote renewable energy-related technologicaldevelopment◆Shift to self-consignment of power supply
services, develop storage battery control
technology

Acquire and roll out green hydrogen utilization
know-how・Promote the Sakaide Biomass Power Generation Project・Utilize power generation and exhaust heat in collaboration with local lumber
business operators and foresters◆Small- and medium-output hydroelectric power

5MW・Small- and medium-output hydroelectric power generation, etc. utilizing
existing dams (domestic/overseas)◆Onshore wind power, etc.

5MW・New, replace18

3-3-1-06. Real Estate and Infrastructure Management Businesses
Quantitative Indicators
FY3/23Results

FY3/26Plan

FY3/31
Plan

Amount of investment(cumulative total)¥2.9 billion¥12.9 billion¥20.0 billion

Amount contributed toconsolidated financial results¥0.2 billion¥0.3 billion¥0.6 billion* Amount contributed to consolidated financial results excluding
real estate sales, etc.;posted rental revenue target* Amount contributed to financial results includes profits fromexisting businesses

PPP/PFI business operator selection More than ５projects (three years)

Market Trend Forecasts

Priority Measures

Despite firm trends in housing construction
investment, uncertainty persists due to the risk ofrising interest rates and other factors against the
backdrop of the lingering impact of COVID-19

Secure stable earnings, promote real estate-related
business initiatives that contribute to collaboration with theconstruction business◆Participate in redevelopment projects in regional cities(create construction business opportunities)

Implement investments based on a cautious approach
toward investment risks and business profitability◆Promote real estate leasing business initiatives◆Improve asset value and secure stock through the FM
business (effective use of Company-owned realestate)◆Collaborate with construction business sales
departments

・Following the Tohoku Branch Office Building, continue renovation of realestate under ownership

・Undertake the referral of land and prior acquisition of commercial realestate・Collaboration and business alliance with partner companies

・Real estate value added◆Promote public real estate utilization project (PPP/PFI)
initiatives
・Promote the stock business on land owned by various entities including
the government and universities193-3-1-07. Technology Research and Development
Quantitative Indicators

Amount of R&D investment* Including capital investment
in research institutes

FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26Plan¥4.0 billion¥4.1 billion¥2.0 billion¥2.0 billion

Technology Development Trend Forecasts

Our Strengths

Increase in the pace of technology development needs that help improve productivity
and contribute to addressing shortages in the labor force

・Possession of specialty construction technologies in urban civil engineering construction (including
shield and large-scale excavation work)
・Possession of DX-based automated and advanced technologies (i-NATM®) for use in mountaintunnel construction
・Possession of specialty technologies (including radiation waste treatment technology, large cross-section incision technology: WJ segment method))・Possession of environmentally friendly technologies, including next-generation energy
management systems

・Use of robotics, AI, and DC at the construction phase
・Deepening the system of cooperation with BIM/CIM

R&D investment growth that contributes to the achievement of SDGs and resolutionof other social issues
・Carbon neutrality (CN); green transformation (GX)
・National land resilience; disaster prevention and mitigation
・Infectious disease response technology
・Large-scale infrastructure renewal technology

20

3-3-1-07. Technology Research and Development
Priority Measures
Technology development that contributes toimprovements in productivity, safety, andcompetitiveness as well as addressing
shortages in the labor force

Technology development that contributes tothe achievement of SDGs

Basic technology research, etc.

◆Enhance the sophistication and labor-savings ofconstruction technology and management that employ
ICT, BIM/CIM, DX, robotics, and AI◆Carbon neutrality (CN); green transformation (GX)

◆Disposal of radioactive waste

・Develop CARBON POOL Concrete
・Develop technologies to promote the use of environmentallyfriendly concrete
・Develop, demonstrate, and roll out next-generation ZEB
・Promote the renewal ZEB-related technologies
・Demonstrate, deepen, and roll out next-generation energy
management systems
・Technologies compatible with energy shift
・Develop and demonstrate technologies that take into accountmore widespread use of wood in urban construction

・Develop analysis evaluation technologies
・Develop technologies for ascertaining physical properties ofground around deep underground spaces◆National land resilience; disaster prevention andmitigation; natural disasters

・Renew large shaking tables
・Install centrifugal loading test equipment

・Highway renewal
Further deepen floor slab replacement work and tunnel renewal
technologies
・Mountain tunnel civil engineering
Build a mountain tunnel data integration platform(i-NATM® advanced construction management system)
・Urban civil engineering
Enhance the sophistication of large cross-section non-excavation
tunnel construction methods and under-road construction
technologies
・Develop automation technologies using unmanned construction
equipment and develop automated material transportation systems
・Enhance the sophistication of BIM/CIM-related 3D technologies
and improve the efficiency of construction management by using
image analysis
・Develop and standardize ICT tools for labor-saving on-sitemanagement
・Work toward the digital transformation of cost estimation
・Roll out productivity improvement technology that utilizes PCa
materials

・Develop ground improvement methods and high-performance
construction management technologies that relate to national
land resilience
・Develop high-performance seismic isolation structures for major
earthquakes◆Environmental technologies
・Conduct social implementation R&D for general waste
solidification disposal sites
・Develop biomass ash utilization technologies◆Refurbishment of Technical Research Institute◆Technology and R&D structure and systems
・Implement a rotation system in accordance with humanresources development plans◆Infectious disease response technology
・Develop air quality management technologies that contribute tosuppressing the spread of infectious diseases and enhancing
comfort21

3-3-1-08. Group Business
Quantitative Indicators
FY3/23Results

FY3/24Plan

FY3/25Plan

FY3/26
Plan

Operating Profit¥1.5 billion¥0.9 billion¥2.1 billion¥2.8 billion

Net Sales¥27.4 billion¥31.0 billion¥30.2 billion¥30.2 billion* Operating profit represents profit by Groups business segments.
* Net sales represents sales to external customers.

Group Business Management Policies and Priority Measures
Management Policies
・Achieve sustainable growth of the HAZAMA ANDO Group as a whole by expanding
the revenue base of each Group company
・Achieve fairness and integrity in our business by promoting sustainable management
throughout the Group as a whole and taking full responsibility for corporate actions
・Promote cost reductions by optimizing business processes throughout the Group

Shared Measures
・Increase productivity through the use of DX tools, and expand the scope of initiatives
by sharing information and strengths
・Recruit human resources and hold joint training (compliance, safety and quality, etc.
(accounting, legal, screening, etc.))
・Reduce costs by integrating overlapping processes

Simultaneously Expand Business Scale and Improve Profitability◆Hazama Ando Kogyo: Sale of construction materials, manufacture and sale of PCa, insurance,
office support
・Engage in the full operation of the three PCa plants held
(expand and diversify PCa products, including shield segments and slabs)
・Strengthen profitability, productivity, and cost competitiveness by introducing automation and efficiency technologies to PCa
plants・Strengthen the Group’s procurement capabilities by upgrading and expanding materials and improving trading company
functions◆Aoyama Kiko: Specialized foundation construction
・Contribute to the Group’s sales and profit by upgrading and expanding construction equipment held and aggressively developing
the foundation construction business based on accumulated technologies and knowledge◆Ryoko Kaihatsu: Real estate, development
・Support the construction business and upstream operations through Group collaboration
・Secure stable rental income through the systematic replacement of real estate holdings◆Three overseas subsidiaries: Construction business, development of BIM models
・Develop services that align closely to customers’ needs as a local base that collaborates with Japan・Improve BIM modeling development capabilities through collaboration with companies specializing in BIM and construction
drawing plans223-3-1-09. Partner Companies
Quantitative Indicators
・Orders placed with regular members* : 90% or more*Partner companies that form the core of HAZAMA ANDO's construction activities and lay the foundation for the Company's construction quality and safety
・Provide support based on the results of a needs assessment survey of cooperative association members
Support recruitment activities
Provide education and training support: Six times a year, total of 100 persons per year
・CCUS card clock-in rate : 70% or more

Priority Measures◆Strengthen relationships with cooperative association members◆Promote measures aimed at securing a labor force

・Undertake the stable and planned placement of orders by sharing information on medium- tolong-term projects at an early stage to help stabilize the business of partner companies
・Provide necessary cooperation and support in conducting needs assessments

・Implement measures to reduce the burden of recruiting staff and technicians at partner companies(provide recruitment activity tools, jointly organize on-site tours and skills experience programs forstudents)
・Reduce workload through joint safety and quality training(conduct various training and education programs using training facilities)
・Support the hiring and education of foreign workers
・Undertake eight or more closures in four weeks at worksites; Improve the working environment, beginningwith efforts to promote women's empowerment
・Improve the compensation of technicians
・Provide conditions that make it easier to work by standardizing operations at all worksites◆Provide support in addressing digital transformation
・Reduce workload through various measures including the provision of DX technology and by
supporting the introduction of Buildee; implement other measures to reduce cash flow burdens
including upfront investment23

3-3-1-10. Production System Reform through DX
Vision (2030 DX VISION)
Realize diverse work styles

Realize the expansion of capabilities

Innovate (create new value)・Expand the freedom of working locations and times throughremote control and remote support
・Improve self-fulfillment while at work and work-life balance・Allow for work styles that suit the lifestyles of each individual

・Accelerate the pace of the work proficiency of young on-site
employees by expanding capabilities through the use of IT
・Promote the development of IT and DX skills through reskilling・Enhance the sophistication of environmental technologies
and energy management services
・Roll out resources generated through improvements to
productivity in the core business, including those fromroutine work automation

Priority Measures
Promote digitalization and employ efficiency andautomation technologies◆Digitalize on-site operations
・Enhance the sophistication of 3D technologies and improve the efficiency ofconstruction management by using image analysis
・Develop, employ, and standardize various DX and ICT tools that will help
enhance the sophistication and improve the efficiency of on-site QCDSE
management
・Realize high-speed construction by using robotic technologies
・Digitalize and visualize construction related information encompassing suchitems as safety and quality
・Develop automation technologies using unmanned construction equipment
and develop automated material transportation systems
・Automate production processes at PCa plants owned by the Group・Share information in real time by developing and introducing communication
tools
・Enhance the sophistication of remote control and remote support
technologies by using high-speed communications technologies (5G)・Improve accessibility by centralizing and converting accumulated
information to Web-based formats◆Digitalize administrative tasks
・Digitalize and centralize human resources data
・Automate routine work by using RPA・Promote the shift to paperless and cloud operations in an ongoing manner(including the transition to electronic business transactions)・Improve efficiency through work flow systemization and visualization

Utilize data and build data infrastructure

Secure IT and DX personnel◆Centralize and analyze data as part of safety and quality
management◆Provide occupation-specific IT reskilling education

・Enhance the sophistication of safety and quality management byintroducing AI knowledge management tools
・Apply real-time analysis for safety and quality related data

◆Actively use data in sales activities
・Enhance the sophistication of project management and customer
management by fully using sales systems◆Promote data use in civil engineering construction
・Share and centralize management of on-site information by building adata integration platform◆Promote data use in building design, cost estimation,and construction
・Coordinate design and cost estimates by using BIM, and accelerate
the pace of estimates by using a simplified approximation system
・Minimize waste by visualizing BIM-LEAN resource data

◆Coordinate LCS business construction data and building
management service data
・Share sales information, unit cost information, technology information, andconstruction information through data coordination
・Maximize construction management efficiency by visualizing costs,
processes, progress, and production track record
・Roll out a maintenance management BIM by introducing renewal
construction management systems and building management systems,
and by using facility management software

・Formulate and implement IT and DX training plans tailored to site
operation departments and management departments
・Promote IT and DX literacy in a bottom-up manner
・Encourage acquisition of information system qualifications(IT Passport, etc.)
・Education and promotion activities for IT tool use◆Educate, promote, and hire highly-skilled IT andDX personnel
・Actively recruit and appropriately assign mid-career employees
・Strengthen personnel development for those with high levels ofsystem development and management capabilities, data analysis
capabilities, AI application capabilities, and cyber security
management capabilities◆Introduce and use a centralized education
management system
・Accelerate the pace of reskilling through the use of systems
・Realize education that can be received anywhere at any timeby using e-learning24

3-3-1-11. Partner Strategy
Quantitative Indicators
Plan

FY3/23 Results

Investment total¥0.1 billion

FY3/24Plan

FY3/24Plan

FY3/26Plan¥10.0 billion

Priority Measures
・Further expand the areas of expertise and strength for the construction business, expand fields to peripheral businesses, and strengthen fields that require supplementing(upstream and downstream areas, work types, applications, etc.)
・Form alliances in priority areas of business outside of construction, such as the renewable energy business and the real estate business・Strengthen the business foundation for overseas operations and form alliances with partner companies that help promote localization25

3-3-2. Increasing the Value of Human Capital
Quantitative Indicators
Item

FY3/23Results

FY3/26plan
At least 80%

Remarks
Positive response rate to engagement related items
through employee surveys

Realize well-being

・Review of compensation standards coupled with theupgrade and expansion of benefits
・Upgrade and expand training content

In order for a company to grow together with
its employees, each individual employee mustachieve well-being

Employee engagement score

72％

Investment in human resources(including such items as
training expenses)－

Compared with FY3/23
Increase of ¥5.5 billion

Number of certified employees－

Holders of eachqualification
First-class architect, engineer, and other qualifications
Increased by at least 10%

Number of female managers

29 persons

Medium-Term Management
Plan 2025 KPI

60 persons

We aim to be a company that values its
employees more than any other in theconstruction industry

Manager: Assistant manager (equivalent to manager
class) and above

We will maximize the value of our humancapital by placing well-being at the core of
our measures and by investing actively in ourpeoplePriority Measures◆Foster and instill a culture of mutual education,
challenge, and creativity◆Increase employee compensation◆Promote work-style reforms

・Review compensation (salary, bonus, etc.) standards
・Upgrade and expand benefits (introduce benefits to enhance work-lifebalance, enhance benefits according to labor environments, etc.)

・Promote diverse work styles for those working outside the office・Reduce overtime hours worked and promote use of holiday leave◆Reconstruct human resources systems and evaluation
systems to be highly credible

・Improve incentives to acquire qualifications by enhancing various measures,
including benefits for qualification holders (provide support for various course
attendance expenses and time to attend)
・Support for first-class architecture licensing: Revise options for new employee
training (external courses) to realize timely licensing
・Support for engineer licensing: Provide support for external course attendanceand enhance internal support systems to realize timely licensing
・Offer career formation support based on a self-reporting system◆Instill integrity◆Improve knowledge and skills, and enable reskilling by
providing different learning options◆Promote diversity and inclusion

・Review human resources systems with a focus on well-being
・Review personnel evaluation systems and assessment standards◆Promote health management
・Provide total support for maintaining and improving employee health(physical, mental)
・Expand medical checkup expense subsidies for employees and their families(spouses)◆Improve the compensation of employees rehired after
retirement
・Review compensation systems and standards
・Work to secure employment opportunities up to the age of 70◆Support autonomous career formation

・Graduate school attendance by employees, etc.: Promote graduate school
attendance by employees in selective and open-enrollment programs
・IT skills and language, etc.: Newly establish various training systems◆Select young employees and provide early training
・Develop leaders for the next generation
・Revise promotion standards to enable early promotions

・Roll out and disseminate new employee training policies
・Implement new occupation-specific education plans
・Implement integrity education on an ongoing basis◆Promote initiatives for human rights management
・Formulate and disseminate human rights policies
・Augment human rights education and training
・Increase the percentage of female employees and managers
・Expand the hiring of people with disabilities
・Prepare human resources systems and rules that make it easy
for employees to work, regardless of gender, nationality, ability or
disability, or years of service, etc.

26

3-3-3. Promoting ESG Management
Quantitative Indicators

Environment

Contribute to theRealization of a
Decarbonized Society

FY3/31 GHG emissions(compared with FY3/18)
Scope1+2 Reduce by at least 55％
Scope3
Reduce by at least 33％

Scale of renewable energy
business development 80 MW(HAZAMA ANDO equity conversion)

Increasing the Valueof Human CapitalSocialGovernance

Address the issue ofhuman rights

Human resources investment(compared with FY3/23)¥5.5 billion increase
Rate of education and training
attendance
100%

Priority Measures
・Reduce scope 1 and 2 GHG emissions by 34% or more and scope 3 GHG emissions by 21% ormore in FY3/26, based on the revised 1.5°C scenario to achieve carbon neutrality in 2050
・Continue to address recommendations under the TCFD framework; promote measures aimed
at raising the Group’s CDP evaluation ranking
・Contribute to the decarbonization of business activities by the Company and customers aswell as society as a whole by promoting energy creation (see 3-2-1-05.) and rolling out energy-saving technologies (see 3-2-1-02,04,07)

・Promote measures aimed at improving compensation, reviewing education and training
systems, increasing employee engagement as well as reforming and diversifying work styles(see 3-2-2.)

・Augment education and training including the supply chain based on the human rights policy

Promote regional
development

3 cases or more(three-year cumulative total)

・Promote projects that provide new solutions that enhance the attractiveness of the region,
including decarbonization and job creation to resolve issues confronted by the region

Transition to acompany with anaudit and supervisorycommittee, etc.

Ratio of external Board directors
A majority
Ratio of female Board directors
30% or more・Further enhance corporate governance by strengthening the supervisory function of the Boardof Directors
・Improve the agility of business execution by accelerating the pace of management decision-making

Establish the
Sustainability
Committee, etc.

Promote ESG management at fourannual meetings

・Engage in activities that help address issues related to sustainability for the Group as a whole
as an advisory body to the Board of Directors
・Identify human rights issues, develop and implement a system for identifying and assessing
risks (human rights DD), and actively disclose details

Reduce policy
shareholdings

・Policy to reduce holdings in listed companies, excluding cases where holdings can contribute to an increase in corporate value, by
examining the economic rationality and significance of holding shares from the perspective of capital efficiency as well as maintaining
and strengthening relationships with business partners

274-1. Performance Targets (Consolidated)
Consolidated Financial Results
FY3/23Results

Net sales

FY3/24
Plan

Consolidated Ordinary Profit and Investment in Human Resources

FY3/25Plan

FY3/26Plan¥26.2 billion¥31.2 billion¥32.7 billion¥34.6 billion

Gross profit¥42.0 billion¥43.5 billion¥47.7 billion¥50.3 billion

Selling, general &administrative expenses¥22.1 billion¥23.0 billion¥23.9 billion¥23.2 billion

Operating profit¥19.8 billion¥20.5 billion¥23.8 billion¥27.1 billion

Ordinary profit(Of which the nonconstruction business)* Figures in parentheses are theratios of non-construction earnings toordinary profit.

ROE¥40.0 billion¥372.1 billion ¥400.0 billion ¥422.2 billion ¥438.2 billion(Of which the nonconstruction business)(Of which attributable to theimpact of human resources
investment expansion)* Compared with FY3/23

Ordinary profit

Human resources
investment expansion¥▲5.5 billion

Profit increase¥12.4 billionー¥▲3.5 billion¥▲5.5 billion¥19.6 billion¥19.7 billion¥23.0 billion

Ordinary profit¥26.5 billion¥▲5.5 billion¥26.5 billion
Medium-Term
Management
Plan 2025 KPI¥1.1 billion¥0.9 billion¥2.1 billion¥2.9 billion（6.1％）（4.6％）（9.1％）（10.9％）

Ordinary profit¥19.6 billion
Non-construction
earnings¥10.0 billion¥2.9 billion¥1.1 billion
10.8％

10％

11％

12％
Medium-Term
Management
Plan 2025 KPI

FY3/23

FY3/26

FY3/31

Final Fiscal Year of the Medium-Term Management Plan: Performance-Related Key KPIs (Consolidated)

Ordinary profit
RＯＥ
Total return ratio¥ 26.5 billion
12％ or more
70％ or more28

4-2. Growth Investment Plan
Undertake growth investments of ¥100 billion or more over the 11-year period from FY3/21 to FY3/31

Plan to invest approximately ¥40.0 billion over the next three-year period (cumulative total ¥60.0 billion) in the Energy business, Real estatebusiness , Partner strategic investment, Innovation investment, Technology development investment, Other
Results

FY3/24-FY3/26
Plan

FY3/27-FY3/31
Plan

Cumulative
Total¥4.5 billion¥10.0 billion¥15.5 billion¥30.0 billion¥2.9 billion¥10.0 billion¥7.1 billion¥20.0 billion¥0.1 billion¥10.0 billion¥4.9 billion¥15.0 billion¥11.6 billion¥10.0 billion¥13.4 billion¥35.0 billion

FY3/21-FY3/23

・Renewable energy business

Energy・Power purchase agreement (PPA) business

Real estatebusiness

Partner strategic
investment

Innovation investment,
technology development
investment, Other

・Facility management (FM) business assets owned・Profitable property acquisition

・Alliances with business partners in Japan and overseas

・Collaboration with start-up companies and new business investment
・Technical Research Institute refurbishment, etc.
・Technology development investment
・Venture capital investment

Total amount19.1 billion¥

40.0 billion¥

40.9 billion¥

100.0 billion¥29

4-3. Cash Allocation◆ Financial strategies that help increase corporate value and enhance the Company’s appeal
Target a* total return ratio of at least 70% ,undertake the flexible purchase of own shares taking into
account business performance and financial conditions*Medium-Term Management Plan 2025 KPIThree-Year (FY3/24-FY3/26) Cash Allocation
SourceDebt ¥10.0 billion¥72.0 billion
or moreOperating cash flows

Cash Outflow
Capital investment, other ¥4.0 billion
Growth investment ¥40.0 billion¥43.0 billion

Growth investment andshareholder returns
management allocation
Cash on hand

Shareholder returns ¥28.0 billion¥19.0 billion or more

FY3/26 Total return ratio 70% or more
30

■ Disclaimer
Numerical targets and other forward -looking statement contained in this documents
are based on information available to the Company at the time of preparation andcertain assumptions that it considers reasonable. These forward -looking statements
are therefore subject to various risks and uncertainties.
Accordingly, actual results may vary significantly from numerical targets and otherforward-looking statements due to a variety of factors including changes in theeconomic and business environments in which the HAZAMA ANDO Group operates.

Appendix
Major Achievement (FY3/21-FY3/23)
ESG initiatives
・ ZEB related■Acquired Net-ZEB certification
2022 Tohoku Branch Office FM Business Portion■Acquired Nearly ZEB certification
2022 Technical Administration Building, Kawagoe Works, TOYOCHEM CO.,LTD.

■Acquired ZEB Ready certification
2021 Asaka Plant Project, Shindengen Electric Manufacturing Co., Ltd.

■Acquired ZEH-M Oriented certification
2022 Tohoku Branch Office FM Business Rental Apartment Building Portion■Established a ZEB demonstration area and commenced operations
at the Technical Research Institute (2020)・Selected as a CDP2022 supplier engagement leader(CDP Worldwide Japan)
Selected in FY3/23

・Awarded the 2022 Cogeneration Grand Prize in the Consumer Use Category(Advanced Cogeneration and Energy Utilization Center of Japan)
Technical Research Institute Next-Generation Energy Project FY3/23

・Certified as a Health and Productivity Management Outstanding
Organization (White 500)
(Jointly sponsored by Japan’s Ministry of Economy, Trade and Industry and
the Nippon Kenko Kaigi)
Certification acquired in March 2023

Building Construction business related
・Acquired BIM BSI Verification certification (BSI Group Japan)
Acquired certification in FY3/23

・Received the BCS Award (Japan Federation of Construction Contractors)
Kumamoto Castle Special Tour Passage in FY3/23

・Received the Good Design Award (Japan Institute of Design Promotion)
Asaka Office, Shindengen Electric Manufacturing Co., Ltd. in FY3/23

・Received the Seismic Retrofit Excellence in Architecture Award(Japan Building Disaster Prevention Association)
Kuroshima Cathedral anti-seismic work (important cultural asset) in FY3/22

Civil Engineering business related
・Received the Civil Engineering Award(Japan Federation of Construction Contractors)
Takao River Underground River Improvement Project in FY3/23

・Received the Japan Construction Machinery Construction Excellence Award(Japan Construction Machinery and Construction Association)
ICT construction using remote technology in a mountain tunnel in FY3/23

・Received the Outstanding Civil Engineering Achievement Award(Japan Society of Civil Engineers)
FY3/21 Group I Realized the early opening of disaster recovery roads byapplying the ECI method in construction of the Futaenotoge
TunnelGroup II Takao River Underground River Improvement Project―Underground river development directly under a river
flowing through a densely populated residential area―
FY3/22 Group I Japan’s first ICT construction using remote technology in a
mountain tunnel(Tamashima Kasaoka Road Rokujoin tunnel construction)