Chapter 2

Revie w o f Busine ss Nikke Business Divisions

Human & Future
Development
Continuing to grow so we can makea greater contribution

Director and Managing Executive Officer
General Manager of Human & Future Development DivisionYoshiro Kawamura
Results of the 2nd year of the 2nd medium-term management plan(fiscal year ended November 2022)(Unit: Million yen)

1st year

2nd year

3rd year (final year)

Fiscal year ended November 2021

Fiscal year ended November 2022

Fiscal year ending November 2023

Medium-term
plan

Results

Medium-term
plan

Results

Difference

Medium-term
planSales

33,00034,05934,00034,938

Forecast*

938

37,40030,800Operating income

5,700

6,115

6,000

6,151

151

6,650

6,250

Operating margin

17.3%

18.0%

17.7%

17.6%

(0.1 points)

17.8%

20.3%

Evaluation*Announced in January 2023

Performance by business segment for the fiscal year ended November 2022
Note: Sales distribution was calculated based on group-wide sales excluding sales of “Others” and adjustment divisions (3,720 million yen). Operating
income distribution was calculated based on the total amount of segment income excluding “Others” and the adjustment amount (-1,584 millionyen).

Human & Future
Development

Sales distribution

Breakdown
Commercial facility
13%
management
Real estate31%
development
23%
Lifestyle support
Communications
and new services

Human & Future
Development

Operating income distribution

Breakdown
Commercial facility
29%
management
Real estate51%
development
15%
Lifestyle support

34,938 million yen

33.2%

Communications
and new services

33%

6,151 million yen

50.0%

4%

Changes in ROIC (return on invested capital)
ROIC

2022

2018

2019

2020

2021

(fiscal year ended November)

13.5％

17.8％

13.3％

16.1％

16.6％

Main products and services• Commercial facility management: Shopping centers• Real estate development: Real estate leasing, sales of solar energy, construction business• Lifestyle support: Childcare and after-school childcare, nursing care, sports related• Communications and new services: Communications, Kids Land (amusement facility for young children), franchise business(Baskin Robbins, Tsutaya, etc.)

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Nikke Group Integrated Report 2023

Tennis schools

Nursing care

Nikke Colton Plaza shopping center (Ichikawa, Chiba Prefecture)

Bilingual kindergarten

Business overview● Provision of services that meet local needs through regional development encompassing stores to entire

communities; development of real estate

Key policies● Pursue customer satisfaction and employee satisfaction to continue providing products and services as theundisputed regional No.1
● Strengthen interaction within business divisions to expand options for community and regional development● Strive to maximize the profits of overall Nikke Group-owned assets and maximize asset value● Emphasize talent development and have employees demonstrate thoughtful action as professionals in each field

Sustainable management-focused medium-term management plan and strategy
Business advantageBusiness strategy“We have an essential role to play in society and business that
we need to maintain. For this, we will need to keep ourcompany growing, and that growth is built on people.” This isthe basic philosophy of the Human & Future Development
Division. It is important, therefore, that the people at every level
and in every context, be it business management, strategicplanning/implementation or job execution, are themselves
growing through the activities they perform. It is important thatthey adopt a responsible, customer-oriented perspective intheir work, making sure to demonstrate thoughtful action. Our
approach to business relies on the constant pursuit ofcustomer and employee satisfaction, providing products andservices that make us the overwhelming regional No. 1.

In the fiscal year ended November 2022, our division wasorganized into four departments: the SC Department, Real
Estate Development Department, Life Value Services
Department, and Communications and New Services
Department. Our aim is to ensure strong interaction between
these departments leading to synergistic growth. We willcontinue to refine our existing business model and bring ouraccumulated wealth of know-how to bear in service of society
to earn the affection of our stakeholders and help build abrighter future. Our mission is to help people live fuller andricher lives through commercial facilities, sports facilities, andother real estate, as well as to support their lives in a range ofcontexts, from childcare to nursing care, striving to ensure weremain an essential business focused on the future.

Risks and opportunities
Our division is concerned about soaring energy costs for large
shopping centers and other facilities. We are also mindful of
the risk of rising costs due to increasing construction material
prices.
There is finally a steady rebound in the number of visitors
to our various facilities after the decline caused by thepandemic. We will continue to work to provide ever morecustomers with comfortable and safe services.

Nikke Colton Plaza renovation
On October 22, 2022, we opened the renovated Nikke
Colton Plaza in Ichikawa, Chiba Prefecture. A partial
redesign of the interior
has made it morecustomer-friendly andeasier to navigate,
providing greater food
options and enhancingthe quality of daily life.

Nikke Group Integrated Report 202324