59

TOKYO CENTURY CORPORATION60

INTEGRATED REPORT 2023

Business Model

Tokyo Century’s Two Value Creation Cycles
Tokyo Century’s core competences are its unique financial services, its partnership strategy, and its
highly specialized professionals. By merging these competences, we drive the improvement of corporate
value through two value creation cycles based on our business characteristics.

1

Identification of Partners’ Issues

	Identification of business opportunities for addressing partners’ issues

2 Merging of Financial Services

	Merging of financial functions, robust asset portfolio, asset
management expertise, relationships with wide-ranging customers, and other value-adding functions

1

2

Sources of CompetitivenessExpertise for Jointly Operating­Businesses and Generating Earnings
with Partners
Joint
Investment

Partners

3 Business Growth through Co-Creation
	Reduction of risks through joint business operations withpartners and growth through return-generating businesses
created using expertise of the Company and of partners

Financial functions
Asset management
Wide-ranging customer base

4 Monitoring

Value Creation Cycle
through Partnerships

Decisions regarding sales/withdrawal based on results of

Joint Venture

operating environment and monitoring analyses in accordance with the basic strategy of pursuing growth by maintaining holdings over the long term

3

4

Diverse and Highly Specialized Professionals
Who Maximize the Value of Assets and Partners andExpand the Scope of Value Creation

P.87

Partnership Strategy
Highly Specialized Professionals

1

Identification of Customers’ Issues

	Provision of high-value-added services based on a concise
understanding of the issues of customers and their needs
for financial functions and other services

Sources of CompetitivenessHighly Specialized Assets

2 Provision of Assets
2

1	Reduction of customer lease payments through accurate
appraisals of asset value and differentiation of services byholding highly specialized assets

3 Provision of Value	Improvement of competitiveness through provision of comprehensive services including the leasing of assets and provision of after-sales services

Value Creation Cycle
through Asset ValueBusinesses

4

4 Enhancement of Value
3	Improvement of earnings power by effectively organizing
asset portfolio to reuse or sell assets while practicing asset
replacementValue

C H A PT E R 5

Financial Services

Business Model and Growth Strategies by Operating Segment

Our team of diverse and highly specialized professionals make it possible for us to develop a wide
range of unique businesses with high barriers to entry by growing asset-based business models andteaming up with prime partners. Tokyo Century will continue to bolster its team of specialized professionals to develop even more creative businesses.

Core Competences

61

TOKYO CENTURY CORPORATION62

INTEGRATED REPORT 2023

At a Glance

Portfolio Transformation and Business Overview

Transformation of Distribution of Segment Assets¥5.4 trillion

Overview of Business and Performance(Fiscal 2022; ROA represents the ratio of net income to segment assets)

Major Offerings

Strengths and Characteristics

Quantitative Traits

Cross-Company
Strategy
Organization

Equipment Leasing
Financial services optimally matched to needs ofcapital investments in information and communications
equipment and other assets

24%

Net income

Segment assets

ROA¥22.9 billion¥1,287.1 billion

1.7%

 easing, installment payment, and otherLfinancial services for information andcommunications, manufacturing, andother equipment
IT solutions
Subscription services and collaboration
with partners

 iverse leasing business solutions
Dand services
Co-creative businesses advanced
together with prime partners

 ustomer base comprisingC
more than 20,000 companies

 orporate auto leasingCIndividual auto leasing
Car rental services

 ull lineup of auto leasing, car rental,Fand other comprehensive auto
services
Next-generation mobility services
accommodating electric vehicles,
etc., through collaboration withprime partners

 leet composed of more thanF
720,000 vehicles
Car rental network comprising
563 locations (including consultation offices) in Japan as well as
overseas locations in Hawaii andGuamApprox. 16,000 affiliated maintenance locations for corporate
auto leasing services

 easing, finance, and other busiL
nesses related to aviation, shipping,and real estateBusiness investments (principal
investments)
Structured finance, etc.

 usinesses developed with focusBon highly specialized assets
Highly competitive financial services offered through collaboration
with industry-leading business
partners

Industry-leading fleet of 349
owned and managed aircraft
and provision of services toaround 95 airlines in roughly
45 countries through aircraft
leasing subsidiary Aviation
Capital Group LLC (ACG)IT equipment leasing
Auto businessJoint crediting mechanism (JCM)
business iverse financial services offeredDthrough global network
Highly competitive fair market value(FMV) leases provided by U.S. IT
equipment leasing company CSI
Leasing, Inc.

 lobal network encompassingG
more than 50 countries andregions centered on North
America, Europe, and Asia

Automobility
Wide-ranging auto services provided using­industry-leading fleet

11%

Segment assets

ROA¥12.1 billion¥611.6 billion

2.0%

Segment assets

ROA*1¥38.9 billion¥2,490.6 billion

1.7%*1 Excludes one-time extraordinary losses related to Russia (¥58.0 billion)

46%

International BusinessLeasing and auto service businesses developed throughglobal network encompassing more than 50 countries andregions centered on North America and Asia
Net loss*2

Segment assets

ROA¥5.9 billion¥655.7 billion(1.0)%*2 Includes one-time valuation losses on operational investment securities (¥17.3 billion)

81%

Environmental Infrastructure
12%
3%
12%
4%
March 31, 2009
(Total for two pre-merger
companies)

5%
March 31, 2023

Point 2

Number of segments increased from four toJapan-leading scale in solar power and other renewableenergy businesses
Net income*3

Segment assets

ROA¥0.2 billion¥277.9 billion

0.1%* 3 Includes one-time expenses associated with bad debt and with trial operation of
new power plant (¥4.0 billion)
Note: Performance figures for fiscal 2022 have been restated to reflect the calculation methods used following the fiscal
2023 establishment of the Environmental Infrastructure segment (Net income and ROA are approximations.).

five following fiscal 2023 establishment of Environmental Infrastructure segment
 olar power, biomass power, and otherS
renewable energy businesses
Storage battery businesses
Solar power plant asset managementbusinesses

 apan-leading scale of solar powerJ(mega solar) plants owned andoperated
Environment-related business value
chain constructed through collaboration with partners

145 operational solar power
plantsRenewable energy generation
capacity of 750 MWC H A PT E R 5

Net income*1

DX Task Force

Unique viable businesses built on specialized expertise indiverse product areas

GX Task Force

Ongoing expansion of
portion of portfolio represented by high-profitability Automobility,
Specialty Financing, andInternational Businesssegments since fiscal
2009 merger

Business Model and Growth Strategies by Operating Segment

Specialty Financing

Point 1

¥2.1 trillion

Net income

63TOKYO CENTURY CORPORATION64

INTEGRATED REPORT 2023

Growth Strategies by Operating Segment

EQUIPMENTLEASING

Profit Target of Medium-Term Management Plan 2027
Net income

Business Development Approach
Promotion of Partnership Strategy and Cultivation of Areas of Expertise

ROA*1 forecast

Non-consolidated
Subsidiaries and affiliates¥29.0 bn

FY2027
Target2.2%¥22.9 bn

Strategic growth fields

Shaping of new future
for the Equipment
Leasing segment
Strategic allocation of resources

to growth areas featuring high potential
for collaboration with close partners

ents

m
vest

in
n of
ratio
e
l
s
e
Acc
area
owth
in gr

Municipalities

Digitaltransformation
Ammonia
and related
andStorage batteries hydrogen technologies
Renewable energy

Circulareconomies

Distribution
andreal estate

Enhancement of consolidated management

Organic business areas
Expansion of customer and partner bases

コーポレートシンボル

Promotion of Consolidated Management
Aタイプ（英語版）

データは、アイソレーションの枠（透明）を設定しています。

FY2022
Result1.7%

Affiliates
カラー

NTT Group 50%

FY2022
ResultFY2027
TargetFocus Areas

Tokyo Century 50%*1 Return on segment assets
based on net income
モノクロ

NIPPON EXPRESSHOLDINGS, INC. 49%

partners, with particular attention devoted to areas such as renewable energy, distribution facilities, and digitalA scheme has been introduced in which Tokyo Century donates amounts determined based on generation volumes to customer-designated public interest organizations or NPOs as part of in-house solar power generation
system support services being provided together with the Kyocera Group. Other proactive initiatives are being
advanced for contributing to society alongside such efforts to support the introduction of renewable energy.

Koichiro SatoA grid storage battery business was launched together with ITOCHU Corporation and Osaka Gas Co., Ltd., in June

Managing Executive Officer
President, Equipment
Leasing Business
Development Unit

2023. Contributions will be made to decarbonization through the supply of energy supply–demand adjustment
systems for power grids, which will play an important role in the popularization of renewable energy.
NTT TC Leasing Co., Ltd.
Building leasing services will be provided for new market facilities as part of a project for reorganizing publicly certified wholesale markets being advanced by Toyama City. This project represents NTT TC Leasing’s first collaborative
real estate venture with Tokyo Century. Furthermore, growth will be pursued in Tokyo Century’s businesses as wellAffiliates

as in businesses advanced through coordination with the NTT Group.
NX·TC Lease & Finance Co., Ltd.
Collaboration is being practiced centered on distribution facilities, which will lead to the start of operations at the
NXLF Gamagori Warehouse in April 2023. Ongoing initiatives will be made for bolstering real estate and distribution
solutions centered on the NX Group.
TC Business Service Corporation, which was responsible for middle-office functions, was absorbed in April 2023
to reorganize business support organizations with the aim of improving organizational resilience with a focus on

Business Support

expanding businesses in renewable energy, distribution facilities, digital transformation, and other growth areas.
Attention will be directed toward strengthening business support functions and utilizing robotic process automation and other IT tools to improve operational efficiency as we seek to help resolve customer management issues.

iates to build upon existing
businesses and createbusinesses in new areas

MESSAGEtransformation.

Growth Areas

dated management of affil-

he New Fourth Medium-Term Management Plan, theprevious medium-term management plan that covered
the period from fiscal 2020 to fiscal 2022, was advanced
during a challenging operating environment for a company likeTokyo Century that specializes in the proposal of solutions that
address issues. This environment was characterized by suchdevelopments as the activity restrictions and economic slowdown
that stemmed from the COVID-19 pandemic. Even in such an environment, we continued to forge ahead with collaborative businesses with close partners, thereby building the consolidated
management frameworks that will support our future growth.
Specifically, we established NTT TC Leasing Co., Ltd., in fiscal 2020,

T

NITTSU Lease & Finance Co., Ltd. (currently NX·TC Lease & FinanceCo., Ltd.), in fiscal 2021, and FFG Lease Co., Ltd., in fiscal 2022.
During the period of Medium-Term Management Plan 2027,
which kicked off in fiscal 2023, our basic strategy will be to continue to build upon such efforts while transforming existing businesses and aggressively investing in growth areas to achieve
ongoing growth.
For our growth strategies, we have defined strategic growthareas including distribution facilities, storage batteries, and digitaltransformation. By taking advantage of our stable earnings foundation, we will concentrate management resources in these areas
while accumulating knowledge with the aim of cultivating these
into new areas of expertise that can support future earnings. We
have been advancing viable businesses in growth areas up until
now. However, we plan to pivot toward more strategic and active
approaches and frameworks going forward.
Moreover, we recognize it is the contributions of diverse andhighly motivated human resources that drive the growth of ourbusiness. This is why we are making ongoing efforts to develop
workplace environments that motivate individuals and enable
them to feel a sense of tangible growth and to heighten workplaceengagement. In addition, our business support structures werereorganized in fiscal 2023 to bolster support functions. Looking
ahead, we plan to accelerate efforts for fostering people and organizations that are capable of responding to customer needs.

C H A PT E R 5

The Equipment Leasing segment will focus on growth areas featuring high potential for collaboration with close

Expansion of real estate leasing businessacross Japan
Promotion of coordination with the Nippon
Express Group

Enhancement of consoli-

Business Model and Growth Strategies by Operating Segment

Growth Strategies

Tokyo Century 49%

Expansion of asset portfolio by capitalizing onhigh creditability
Further coordination with the NTT Group65

TOKYO CENTURY CORPORATION66

INTEGRATED REPORT 2023

Growth Strategies by Operating Segment

AUTOMOBILITY

Profit Target of Medium-Term Management Plan 2027
Net income

ROA*1 forecast

Business Development Approach
Business Portfolio Pursued through Expansionof Next-Generation Businesses

Next-Generation Businesses
Enhancement of Mobility Service Value Chain

EVs¥16.0 bn
FY2027
TargetData businesses

Next-generation
businesses

2.3%¥12.1 bn

Sophisticated maintenanceservices

Logistics, parking lots, etc.

2022

FY2027
Target【コミュニケーションロゴタイプ】
単独使用タイプ（スローガンがつかない場合はこちらを採用）

Ancillary services(charging infrastructure)

Existing Businesses

2.0%

FY2022
ResultLeasingand rental

Autonomous driving

Existing
businesses

FY2022
ResultSales andreuse ofautomobiles
and batteries

2023

2024

2025

2026

2027

(FY)

Corporate auto leasing*1 Return on segment assets
based on net income

Car rental services

Individual auto leasing

MESSAGE arbon-neutrality strategies will be accelerated through means such as ramping up electric vehicle (EV) transacC
tions and developing and proposing new EV-related businesses.

Masato Osugi

 trategies will be evolved by utilizing a diverse range of channels, including those of NTT, the Mizuho Group,S
ITOCHU, and TOKYO GAS Co., Ltd.

Managing Executive Officer
President, Automobility
Business Development Unit

M&A activities and other non-organic growth methods will be used to expand strategic businesses.

Existing Businesses

Nippon Car Solutions Co., Ltd.
(NCS) nhancements to services and value will be pursued through the utilization of digital technologies and the cultivaEtion of related expertise.
 he development and dissemination of a new brand for Nippon Car Solutions Co., Ltd., will be promoted alongsideTefforts to improve productivity, reform processes, and strategically foster human resources on a Companywide basis.
 perating foundations will be reinforced through accelerated development of locations with a focus on addressingO
customer needs and achieving efficient operations.
IT will be employed to improve operational efficiency and enhance customer services (membership services,apps, etc.).

Nippon Rent-A-Car Service, Inc.
(NRS)Trials of EV rentals will be conducted as part of decarbonization initiatives.
The creation of new businesses that are synergistic with existing businesses will be pursued.
 he development of systems and workplace environments that emphasize people will be promoted to create aThighly efficient organization.
 he enhancement of business earnings will be pursued by exploring new sales channels and augmenting vehicleT
supply support for agents and other unique functions.
 V leasing and other product and service offerings that accommodate market needs will be expanded and newEservices will be developed to increase earnings opportunities.

Orico Auto Leasing Co., Ltd.
(OAL)

 fforts will be made to cater to demand for changing vehicles in response to lease maturity or cancellation, andE
contract continuation rates will be heightened via re-leasing (contract extensions).
 he enhancement of sales capabilities and growth will be pursued through conversion of Orico Auto Leasing
TCo., Ltd., into a subsidiary by Orient Corporation.
 rameworks will be created to allow for the provision of one-stop services to customers in EV businessesF
encompassing charging services, energy management, and battery reuse services.

Next-Generation Businesses

 fforts to create new earnings sources will be accelerated based on areas designated as next-generation busiE
nesses Tokyo Century should strengthen, including EVs, data businesses, sophisticated maintenance services,logistics, parking lots, and autonomous driving.
Functions will be supplemented to strengthen existing businesses through coordination with partners.

he operating environment for the Automobility segment
is undergoing great change. This change can be seen in
the emergence of new technologies, like electrified vehicles for contributing to decarbonization as well as connected vehicles, and the appearance of businesses based on new ideas
developed by participants from other industries. At the same time,
the way we use vehicles is being reexamined in light of the acceleration of workstyle reforms spurred by the COVID-19 pandemic.
In this environment, we are leveraging the strength of our complete, industry-leading lineup of mobility services, including corporate and individual auto leasing, and car rental services to advance
growth strategies for expanding our businesses and strengthening
our operating foundation.
Strategies to expand our businesses include the accelerationand enhancement of organic growth in existing businesses via
differentiation through the proposal of high-value-added products
and via customer retention efforts founded on the use of digitaltransformation and AI technologies to uncover customer needs.

T

C H A PT E R 5

Evolution of Existing Businesses and Promotion of Next-Generation Businesses

We are also advancing projects for achieving non-organic growthwith the goal of supplementing previously lacking functions andexpanding our business scope. Other business expansion efforts
include redoubling our approach toward new technologies anddecarbonization by means of creating EV value chains andenhancing data analysis and utilization.
As for strategies to strengthen our operating foundation, we will
educate and train human resources while accelerating businessprocess reengineering to achieve further improvements in operational efficiency using IT.
Medium-Term Management Plan 2027, which was launched infiscal 2023, defines our vision of becoming the top mobility service
company in Japan. Our mission in this capacity will be to provide
innovative, high-quality services to contribute to the realization of asustainable, eco-friendly, and people-friendly mobility society with
an emphasis on customer happiness and employee happiness.
Our first step toward this goal was the creation of the Next
Generation Automobility Business Division within the Automobility
Business Development Unit in April 2023. With this new organization, we are shifting from a product-oriented perspective to a market-oriented perspective. Our goals in this undertaking are todevelop a fourth pillar of business to stand alongside the existing
businesses of Nippon Car Solutions; Nippon Rent-A-Car Service,
Inc.; and Orico Auto Leasing. We also aim to accelerate new business initiatives for supplementing our functions in next-generation
business areas.
Going forward, we will take advantage of our fleet of some
720,000 vehicles to strengthen our relationships with important
existing partners. At the same time, we will aggressively propose
the introduction of EVs, important building blocks of a decarbonized society, while fully capitalizing on the capabilities of digitaltransformation and IT technologies with the goal of quickly
amassing an EV fleet of around 100,000 vehicles.

Business Model and Growth Strategies by Operating Segment

Growth Strategies

67

TOKYO CENTURY CORPORATION68

INTEGRATED REPORT 2023

Growth Strategies by Operating Segment

SPECIALTYFINANCING

Profit Target of Medium-Term Management Plan 2027
Net income

ROA*2 forecast

Business Development Approach
Business Map
Aviation

Real estate

Shipping

Principal investments

Structured finance¥48.0 bn
FY2027
Target¥38.9 bn

1.7%

North America

EuropeJapan
Middle East Asia
AfricaFY2022
Result*1
FY2022
Result*1

1.7%

FY2027
Target*1 Excluding extraordinary losses related
to Russia (¥58.0 billion), provisional
figure for fiscal 2022 reflecting adjustments made in conjunction with theestablishment of the Environmental
Infrastructure segment

Australia*2 Return on segment assets
based on net income

MESSAGE

Shintaro Yamazaki

 y fully leveraging the solid platforms and leasing and finance functions of Aviation Capital Group LLC (ACG) andB
GA Telesis, LLC—which can accommodate the entire life cycle of new, mid-life, and end-of-life aircraft—and promoting coordination with these companies, we will seek to bolster our earnings power.

Managing Executive Officer
President, Specialty FinanceBusiness Development Unit

 s we build upon businesses with prime partners, we will advance promising medium- to long-term projects toAenhance our earnings foundation.

Real EstateOur global portfolio will be flexibly revised based on changes to the market environment.
 oordination will be stepped up with subsidiary TC Kobelco Real Estate Co., Ltd.; NX·TC Lease & Finance; andCaffiliate NTT TC Leasing as we cultivate and enhance our staff of highly specialized employees.
 oint investments with Advantage Partners Inc. will be advanced alongside enhancements to businessJ
investment models.

Principal Investments

Investment in solutions to ESG, sustainability, and other social issues will be increased.
 s efforts are made to discover potential projects through partnerships and Group networks, we will also proA
mote improvements to the value of investees.

Shipping

New Businesses

Ship ownership businesses will be enhanced as a transition to high-profit business models is promoted.
Asset management functions will be refined and the partnership strategy will be advanced.

 usinesses that contribute to carbon offsets and to the global environment will be advanced centered on investB
ments as a limited partnership in the forestry fund of Sumitomo Forestry Group.
 pportunities for new investments that respond to decarbonization and digital transformation trends will beOsought out.

nder the period of the previous medium-term management plan, the Specialty Financing segment continued tocreate new financial services that respond to changes in
the operating environment. These services were supplied throughaircraft leasing company ACG as well as through coordination
with Advantage Partners, via which we grew our principal investment business. In addition, the segment expanded into the hotel
sector in the real estate business while also investing in data centers in the United States. The aviation business, meanwhile, washeavily impacted by the COVID-19 pandemic and the war in
Ukraine. However, this business has been returning to a growth
track thanks to the recovery of the aviation market and ACG’s ability to take quick and flexible action.
The newly launched Medium-Term Management Plan 2027
gets its start in a turbulent operating environment, plagued bychanges in financial industry conditions and by a need to address
climate change. Nevertheless, our principal investment and otherU

C H A PT E R 5

 reviously ordered new technology aircraft will be delivered to customers amid the robust aircraft demand andP
rapid market recovery seen as the COVID-19 pandemic subsides while we bolster trading functions to build ahigh-quality portfolio.

investment businesses as well as our real estate business maintain strong momentum, giving hope for the possibility of massive
growth in the future. I also look forward to the future developmentof our strongly performing shipping business as well as the newly
commenced storage battery, forestry, and electric vertical take-off
and landing aircraft businesses, through which we began to lay
the foundations for future growth. I have particularly high expectations for the forestry fund being developed together with
Sumitomo Forestry as a new initiative for helping decarbonize theworld. At the same time, we will be moving forward with efforts tostrengthen earnings power during the period of the medium-term
management plan. These efforts will include replacing low-efficiency assets and promoting asset turnover from business
investments. We will also seek to heighten asset efficiency with afocus on profitability in order to develop a portfolio that contributes to higher levels of return on assets.
The Specialty Financing segment is turning its attention toward
asset life cycle management with the aim of creating a value
chain that covers areas spanning from product development touse, recycling, and resale. By combining our capabilities for managing assets with our financial functions, we look to expand ouroperations from a variety of perspectives, including that of a business that uses products and that of an entity utilizing financial
expertise. Furthermore, I anticipate the emergence of a connectedsociety in the near future. This society will be characterized byconnections between everything, whether that be real estate,
automobiles, railways, ships, or even aircraft components. In thissociety, Tokyo Century will have a role to play as a hub for suchconnections. As we fulfill this role, we will coordinate with partners
to grow our business by combining our communications, data,
infrastructure, asset management, and finance functions.

Business Model and Growth Strategies by Operating Segment

Growth Strategies

AviationCentral andSouth America

69TOKYO CENTURY CORPORATION70

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Growth Strategies by Operating Segment

INTERNATIONAL
BUSINESS

Profit Target of Medium-Term Management Plan 2027
Net income (loss)

ROA*1 forecast

Business Development Approach
Business Map
CSI

ITAD* services

Auto

TrucksConstruction machinery finance

Leasing

CSI base¥21.0 bn
FY2027
Target2.4%¥(5.9) bn

EuropeNorth America

Approx. 40 bases in
the United States

Asia

Central andSouth America
Valuation losses on
operational investment securities(¥17.3 billion)

FY2022
ResultFY2027
TargetFY2022
ResultAustralia(1.0)%*1 Return on segment assets
based on net income

CSI SI has established new bases in Northern Europe and Asia and is augmenting its ITAD service facilities inCEurope and the United States, and it intends to continue to aggressively expand its business domain. At the sametime, CSI’s earnings foundation will be reinforced as the company accommodates the needs of multinational
companies for standardized services while accelerating the creation of intra-Group synergies with existing overseas subsidiaries.

Toshio Kitamura
Director andSenior Managing
Executive Officer
President, International
Business Development Unit

 urther growth is anticipated for CSI amid the global digitalization trend and the brisk demand for IT services
F
seen in conjunction with the rising number of IoT devices.

Partnership Strategy

 AXIS Financial Services Americas, LLC, was established as a joint venture with ITOCHU and Hitachi Construction
Z
Machinery Co., Ltd. This company will utilize Tokyo Century’s expertise in relation to the financial business it isdeveloping together with Hitachi Construction, which already has a foothold in Asia, while also expanding thisbusiness in the United States.
 hrough our partnership with the NTT Group, we will collaborate in deploying managed services on a global scale.
T
In addition, existing data center businesses will be expanded in India as we also look to extend these operations
to North America and other areas.
We will expand our business through strong alliances with prime local companies and with Japanese partners.
 ruck, arbor equipment, and small construction equipment dealer Fiber Marketing International, Inc., is providingT
one-stop services together with financing company AP Equipment Financing Inc. Going forward, we will seek toexplore niche markets through means such as expanding our dealer network via M&A and other activities.

Auto, Niche, and Other
Growth AreasIn the auto business, we are bolstering auto leasing operations while improving installment payment and otherservices through digital transformation. In addition, growth is being accelerated through M&A activities.
 nvironment-related business initiatives will include the ongoing advancement of the projects in which Tokyo
E
Century functions as a representative under Financing Programme for Joint Crediting Mechanism (JCM) Model
Projects along with proactive efforts to accommodate the shift toward EVs and other eco-friendly automobiles.

*1 Leasing based on FMV derived from the assessed residual value of IT equipment*2 Services for disposing of IT assets safely and appropriately

he International Business segment had to develop its
business amid the global impacts of the COVID-19 pandemic during the period of the previous medium-term
management plan. Nevertheless, we succeeded in growing ordinary income to ¥10.7 billion in fiscal 2020 and to ¥19.0 billion in
fiscal 2021. In fiscal 2022, however, valuation losses on operational investment securities of ¥18.7 billion were recorded, proving
to be the main factor in the segment posting ordinary loss of ¥0.9
billion. Despite this loss, the segment has continued to achieve
steady growth.
A central pillar of the growth of the International Business segment is U.S. subsidiary CSI. In the midst of the pandemic, thiscompany established new bases in Northern Europe and Asia

T

while also augmenting its network of ITAD service facilities in
Europe and the United States, thereby laying the foundations forsteady growth. CSI provides leasing and ITAD services in morethan 50 countries. Going forward, we intend to continue utilizing
the strength of CSI’s base network and the value of its ITAD services to expand its presence and achieve substantial growth bycatering to the needs of multinational companies. Meanwhile, in
the United States, ZAXIS Financial Services Americas, which operates under the Hitachi Construction brand, was established, andwe are also working to expand our financing and dealership businesses with regard to specialty equipment and other niche fields.
In Asia, we are growing our business through collaboration withpartners while cementing our operating foundations centered on
auto businesses. The segment is also actively expanding its JCM
projects and environment-related businesses. In our collaborative
efforts with the NTT Group, we are globally deploying managed
services and expanding our jointly operated data center business
into North America based on the success thereof seen in India.
Medium-Term Management Plan 2027, which began in fiscal
2023, prescribes the ongoing advancement of alliance strategies
as we leverage strengths in the IT, mobility, and environmental
fields to differentiate our operations through a focus on growthand niche areas. At the same time, we aim to place local hires inmanagement positions at overseas subsidiaries while also heightening engagement with employees. Meanwhile, we will enhancecustomer services through the proactive use of green transformation and digital transformation in pursuit of rapid growth going
forward.

C H A PT E R 5

 ince being consolidated in 2016, CSI Leasing, Inc. (CSI), has continued to post new record highs in ordinaryS
income each year achieved through the smooth growth of its fair market value (FMV) leasing,*1 IT asset disposition (ITAD) services,*2 and other businesses.

Business Model and Growth Strategies by Operating Segment

MESSAGE

Growth Strategies

71TOKYO CENTURY CORPORATION72

INTEGRATED REPORT 2023

Growth Strategies by Operating Segment

ENVIRONMENTALINFRASTRUCTURE

Profit Target of Medium-Term Management Plan 2027
Net income

ROA*3 forecast

Business Development Approach
Energy Value Chain
Renewable Energy Generation¥7.5 bn

Power Distribution

Power Retail

FY2027
Target1.7%¥0.2 bn

New fuel olar power, biomass,
S
binary geothermal power,
wind power, and otherpower generation

Hydrogen nvironment-related infraE
structure EPC*3 peripheral
areas

One-time expenses*2(Approx. ¥4.0 billion)

FY2022
Result*1

FY2027
Target*1 Provisional figure for fiscal 2022 as new
segment*2 One-time expenses associated with bad
debt and with trial operation of new
power plant (¥4.0 billion)

Green transition support

 quity investments and debt
Efinancing orporate power purchaseCagreements

Asset management

 eed-in tariffs and feed-inFpremiums

Storage batteries

Carbon credits
Power aggregation

Reuse and recycling

FY2022
Result0.1%*3 Return on segment assets
based on net income*3 Engineering, procurement, and construction

Renewable Energy Generation
Volume (Consolidated)

22 MW

FY2012(First year of feedin tariff program)

750 MW
FY2022

Kyocera TCL Solar
Japan-leading scale withtotal generation capacityof 398 MW and
89 domestic locations

Cycle of strengthening earnings capacity and promoting
ESG through robust support for business strategies
targeting decarbonization by customers and business
partners offered via reinforcement and expansion of renewableenergy, storage battery, and other ­environment and energy businesses
in Japan and overseas

MESSAGEThrough the installation of new storage batteries, earnings power will be strengthened by allowing for electricity to
be stored or sold based on supply and demand balance.
Two types of battery systems are provided: integrated systems that combine battery systems with high-output-variability solar power systems and systems linked to power grids, which entail the construction of power plants

Expansion in
Growth Areas

Hiroshi Satoequipped with grid-use storage batteries.

Deputy President, Directorand Executive Officer
President, Environmental
Infrastructure Business
Development Unit

Biomass power, binary geothermal power, etc.
Biomass power and binary geothermal power generation projects will be promoted and related initiatives will be
expanded to include more diverse power sources together with prime partners including Forest Energy Inc., JFE
Engineering Corporation, and ITOCHU Corporation.
Overseas renewable energy projects
The insight accumulated in Japan will be utilized to advance initiatives in North America, Europe, and Australia.
Corporate power purchase agreements
Support for optimal decarbonization strategies will be offered based on the needs of customers in Tokyo Century’s
wide-ranging customer base.

Growth throughCoordination between
Existing Businesses
and Partners

Renewable energy business investment fundTotal investments of around ¥100.0 billion centered on solar power generation are planned through a renewableenergy business investment fund established jointly with NTT Anode Energy Corporation; Sumitomo Mitsui Trust
Bank, Limited; and Sumitomo Mitsui Trust Investment Co., Ltd.
Asset and technical management
A&Tm Corporation, a joint venture established with Tokyo Gas Engineering Solutions Corporation and KYOCERA
Communication Systems Co., Ltd., will provide efficient business management and earnings improvement services
for solar power generation projects through the comprehensive provision of asset and technical management.

he Environmental Infrastructure segment was established in April 2023 with the goal of accelerating the
growth of Tokyo Century’s environment-related businesses and consequently its contributions to a decarbonized society. This move brought the number of the Company’s operating
segments to five.
Over the years, Tokyo Century has proceeded to expand thescope of its environment-related businesses from the operation ofsolar power generation projects based on feed-in tariff programs
to include corporate power purchase agreements, asset management, and even new power sources such as woody biomass
power and binary geothermal power. We have done so by capitalizing on the experience, insight, and networks developed throughour forays into solar power generation businesses.

T

Centered on Kyocera TCL Solar, these solar power generation
businesses have entailed forays into the ownership and operationof solar power plants across Japan, among other domains. These
plants have been used to contribute to a stable supply of renewableenergy. In addition, we are advancing corporate power purchaseagreement businesses to support customers’ decarbonization
strategies through Urban Energy PV LLC, a joint venture solar
power generation business company established together with
JFE Engineering. Meanwhile, A&Tm, a joint venture we establishedwith Tokyo Gas Engineering Solutions and KYOCERA Communication Systems, provides asset and technical management services.
This company is combining the strengths of its various business
partners to build an environment-related value chain through suchmeans as the provision of services for improving the generation
efficiency and profitability of solar power plants.
Going forward, the Environmental Infrastructure segment willcontinue to grow said existing businesses while also expanding
the scope of its operations to include peripheral businesses andcompletely new businesses. For example, we are accelerating initiatives to achieve not only the rapid development of storage battery businesses that contribute to more efficient use of renewableenergy but also expansion into overseas renewable energy projects. Tokyo Century will thereby aim to grow the Environmental
Infrastructure segment into a pillar of earnings.
We also strive to make contributions to the realization of adecarbonized society. To this end, we are steadily forging ahead
with greenification initiatives based on our transition road map,
which was established to achieve effectively zero greenhouse gas
emissions at the biomass co-firing power plant of Shunan Power
Corporation by fiscal 2040.

C H A PT E R 5

Storage battery businessBusiness Model and Growth Strategies by Operating Segment

Growth Strategies