Material on the Consolidated Financial Results
for the Six Months Ended September 30, 2023
YAHAGI CONSTRUCTION CO., LTD. Code no.: 1870 ( Listed on Prime Section of Tokyo
Stock Exchange and Premiere Section of Nagoya Stock Exchange )©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Contents
I

Company overview

II

Financial Results for the Six Months
P. 18
Ended September 30, 2023

III

Financial Forecasts for the FYEMarch 31, 2024

P. 30

IV

Medium-Term Management Plan

P. 35

V

FACT SHEET

P. 51©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

P. 3

2

I
Company overview©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Company overview
Company nameYAHAGI CONSTRUCTION CO., LTD.

Headquarters

3-19-7, Aoi, Higashi-ku, Nagoya-shi, Aichi, Japan

Representative

Mitsuhiro Takayanagi, President and Representative Director

FoundedMay 14, 1949

Capital¥6,808 million

Markets listed on

Prime Section of Tokyo Stock Exchange and Premiere Section of Nagoya Stock Exchange

Business description

General construction business [building construction, civil engineering, and real estate businesses]

Number of employees

1,288 (consolidated)

OfficesTokyo, Osaka, Tohoku (Sendai), Hiroshima, Kyushu (Fukuoka)
YAHAGI BUILDING AND LIFE CO., LTD.
YAHAGI ROAD CO., LTD.

Group companies

YAHAGI REAL ESTATE Co., Ltd.
Techno Support Co., Ltd.
HOKUWA CONSTRUCTION, INC.

Major shareholders

1. Nagoya Railroad Co., Ltd.
2. The Master Trust Bank of Japan, Ltd. (Trust account)
3. Yahagi Construction Business Partner Shareholding Association
4. Resona Bank, Limited.
5. MUFG Bank, Ltd.

YAHAGI GREEN Co., Ltd.
Nanshin Takamori Development Co., Ltd.

19.1%
7.6%
6.5%
4.7%
4.7%
(As of March 31, 2023)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

4

Origin of the company nameIn 1949, the Company was established in Koromo-cho, Nishikamo-gun, Aichi (present
Takyocho, Toyota-shi).
The company name embodies the founder Katsuo Yamada’s philosophy.

YAHAGI CONSTRUCTION
He expressed his desire
to make a leap from the
Yahagi River, which flows
through his hometown to
the Pacific Ocean, to all
over Japan©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Construction
company aiming at
modern construction
throughmechanization.

5

YAHAGI CONSTRUCTION: Who we areThree keywords representing the characteristics of YAHAGI CONSTRUCTION
Design and construction
Design andconstruction

With our design division being one of the largest in the Tokai area, we haveestablished an integrated system that covers steps from design to construction
to propose solutions to customer problems from the planning/design stage.

Real estate business
Real estatebusiness

Tokai area

In addition to the construction business, we also engage in the real estatebusiness such as the development of land for industrial use in cooperation
with administrative authorities and local communities and the sale ofcondominiums under our own brand.

Tokai area
Since the establishment in 1949 in the present-day city of Toyota, we havebeen operating mainly in the Tokai area and have become a representative
general construction company in the Tokai area.

An engineering-oriented, mid-sized general contractor based in the Tokai area with strengths
in design and construction as well as the real estate business©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

6

History
Diversification and expansion ofmanagement

Industrialization of construction

Foundation to 1970

1950

1960

Received the first order from
Nagoya Railroad for construction
work inside the rail tracks.

1967• Promoted diversification of businesses, including
expansion into condominiums for sale andgreenery businesses.

1971 1972

1982

1989

2013 and onward• In response to the bursting of the economic bubble, worked on theselection and concentration of management resources, such as
moving away from a business structure dependent on public works
and focusing on aseismic reinforcement projects centered on the
PITA Column method.

1991

1993

Promoted to the First
Listed on the Second
Section of Market at theSection of Market at theEstablished
Nagoya Stock Exchange.
YAHAGI GREEN Nagoya Stock Exchange.
Co., Ltd.
Expanded into the condominiums for
Launched the VENT VERT Series
sale business.
of YAHAGI REAL ESTATE.
First VENT VERTThe Company was established in
Koromo-cho, Nishikamo-gun, Aichi(present Takyocho, Toyota-shi).

Re-growth and further
leaps

1991 to 2012

1971 to 1990

• Aggressively introduced large-sized heavy machinery
such as motor scrapers to work vigorously towardmechanization and industrialization.

1949

Selection and concentration of management
resources

1995 1996

2000

Listed on the First
Section of the Tokyo
Stock Exchange.

2001• Working on business expansion in the economic
zone which will be established through the opening of
the maglev train line (maglev economic zone) bystepping up efforts for large-scale projects andstrengthening real estate development.

2006

Established YAHAGIROAD CO., LTD.

Established Techno Support
Co., Ltd.

2014

2023

Made HOKUWACONSTRUCTION, INC.
a subsidiary.
Established Railway Technology
Training Center.

Developed PITA Column
method.

Pavilion Series

Merged with Meitetsu Construction Co., Ltd.

Developed the PAN WALL method.

Established Institute of Earthquake Engineering &Technology (currently Engineering Center).

Introduced two motor scrapers.

Established YAHAGI REAL ESTATE Co., Ltd. and International Development
Building Co., Ltd. (currently YAHAGI BUILDING AND LIFE CO., LTD.)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

7

Trends in financial results
Industrialization of construction

Diversification and expansion ofmanagement

Foundation to 1970

Selection and concentration ofmanagement resources

1971 to 1990

• Aggressively introduced large-sized heavymachinery such as motor scrapers to work
vigorously toward mechanization andindustrialization.

• Promoted diversification of businesses,
including expansion into condominiums
for sale and greenery businesses.

Re-growth and further leaps

1991 to 20122013 and onward• In response to the bursting of the economic bubble, worked on
the selection and concentration of management resources,
such as moving away from a business structure dependent on
public works and focusing on aseismic reinforcement projects
centered on the PITA Column method.

• Working on business expansion in themaglev economic zone by stepping up efforts
for large-scale projects and strengthening
real estate development.

160

2,000

FY2030 net sales target¥200 billion

Trends in financial results (in JPY 100 mil.)
売上高（右目盛り）
Net sales (right scale)

営業利益（左目盛り）
Operating profit (left scale)2011
Great East Japan Earthquake

120

1991
Bursting of economic bubble

2008
Global financial crisis

1,500

2013 and onward
Abenomics

00

Non-consolidated

Consolidated©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

30
(Forecast)

25予

23予

30予

500

25
(Forecast)

40

23(Forecast)

1,000

1948
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
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06
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18
19
20
21
22

80

(Fiscal year)

8

YAHAGI ENGINEERING
A construction engineering company that meets customer needs at every stage of the building life cycle
Beyond merely constructing buildings, we provide new value that only the Yahagi Construction Group can realize, by integrating specialized know-how of
the Group companies that are well-versed in each field with unique technologies that are dedicated to respective fields.

YAHAGI REAL ESTATEYAHAGI ROAD

Condominiums for sale business
Real estate development business
Real estate leasing business
Real estate brokerage business

Paving business
Civil engineering business
Manufacture and sales of asphalt mixture
Recycling business

Utilization of land

Planning/
designConstruction

YAHAGI BUILDING AND LIFE

Techno Support

Apartment and building management business
Building construction business

PAN WALL (an earth reinforcement method using panelsand “soil nails” for slope protection) business
PITA Column (a seismic retrofitting method using external
reinforcing for existing buildings) businessTechnological development, trial experience production

Building
management

Maintenanceand building
diagnostics

Renewal/renovation

YAHAGI CONSTRUCTIONHOKUWA CONSTRUCTIONYAHAGI GREEN

Nanshin Takamori Development

Building construction business
Civil engineering business
Real estate business

Building construction businessGreenery business
Golf course management business

Operation of golf courses(Takamori Country Club)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

9

Corporate philosophy and management philosophy
Corporate philosophy“Sincere, enterprising and creative”
We shall create on our own with a sincere and enterprising spirit and engage
in business that always meets the needs of society.

Management philosophy
We aim for self-fulfillment of our employees and sustainablecorporate growth, by creating value through constructionengineering.
©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

10

Business description
Three pillars of YAHAGI CONSTRUCTION’s businesses
Building construction businessWe have a variety of track records in constructing
condominiums for sale with a special design for major
developers, large distribution facilities of over ¥10 billion invalue, commercial facilities, offices, station buildings andothers.

Composition by segment for FYE March 2023
Net sales

Gross profitRealestateCivil engineering businessIn addition to government projects such as road construction,
residential land development and renewable energy-related
projects that include the acquisition of development licenses,
we engage in railroad-related projects such as elevated track
construction and track maintenance for Nagoya Railroad.

Real estate
Civil
engineering

Building
construction

Building
construction
Civil engineering

Real estate businessIn addition to the development of land for industrial use thatflexibly responds to the needs of companies andadministrative authorities, we engage in a variety ofbusinesses related to real estate, including thecondominiums for sale business under our original brand(VENT VERT), real estate leasing and brokerage.
©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

11

Building construction business
GLP Yao I (Yao City, Osaka Pref.)Composition of net sales by use(FYE March 2023)
Commercial
facilities

Others5%
OthersPROUD Tower Kasugai (Kasugai City, Aichi Pref.)Factories
Logistics
facilities
Housingcomplexes

Contributing to the revitalization of the local economy
through job creation and others
IKEA Nagakute (Nagakute City, Aichi Pref.)Major clients
Nomura Real Estate DAIWA HOUSE
Development
INDUSTRY
MITSUBISHI ESTATE GLP JapanDAIKYOIKEA Japan
Sekisui House
Nagoya Railroad

Project to redevelop the area around the station tocreate a new bustle

Contributing to global furniture/interior retailer’s first
store opening in the Tokai region©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

12

Civil engineering business
FBIT Misaki Power Plant(Misaki-cho, Kume-gun, Okayama Pref.)Composition of net sales by use(FYE March 2023)

Others5%
Construction of Shin-Tomei Expressway Gotemba
Interchange (Shizuoka Pref.)OthersLanddevelopment

Road
construction

Large-scale solar power generation facility that
contributes to carbon neutrality

PAN WALL method
Railroadrelated

Nagoya Railroad Inuyama Line Hotei Station main line track(Konan City, Aichi Pref.)Major clients
Ministry of Land,
Infrastructure,
Transport and Tourism
Central NEXCO
Aichi Prefecture
Nagoya Railroad

TOYOTA HOUSING
JGC
Toyo Engineering

Contributing to the development of robust social
capital, including by helping to make the Tomei
Expressway a double-network
Contributing to safe and stable transportation via
railroad©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

13

Real estate business
VENT VERT Gifu The Tower

Composition of net sales by use(FYE March 2023)
Obu Tokai Development Project(Obu City and Tokai City, Aichi Pref.)OthersReal estateleasing
Condominiums
for sale

Condominiums for sale business where the entire processfrom product planning to sales and management iscovered by the Group

Real estatesales

MultinaBox (Osu, Naka-ku, Nagoya City)

Real estate development in collaboration withcompanies, administrative authorities and local
communities

Development and operation of a commercial facility that
contributes to the revitalization of the district©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

14

YAHAGI CONSTRUCTION in figures
Net Sales (FYE March 2023)

111.1 billion¥

Operating profit (FYE March 2023)

Operating profit margin (FYE March 2023)

7.2 billion

6.5%

¥

*Record high*Construction industry average: 4.1%

Payout ratio (FYE March 2023)

Expected dividend yield

YAHAGIENGINEERING

41.0%
Cumulative construction area using PAN WALL
method (as of the end of April 2023)

363,000 m

4.59%*Calculated based on the annual dividend forecast of ¥60 for
FYE Mar 2024 and the closing price of ¥1,306 on October 31

2*Equivalent to as large as 7.8 times the size ofTokyo Dome (building area)

Design and construction ratio

Number of engineers(FYE March 2023)(as of the end of June 2023)

88.3%

143 first-class architects
303 first-class building operation andmanagement engineers
318 first-class civil engineering work
operation and management engineer

Percentage of building construction orders received(excluding demolition and repair)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

15

Management

President andRepresentative
Director
Mitsuhiro
Takayanagi

Vice President andRepresentative Director
Shuji Nawa

Vice President andRepresentative Director
Takashi Yamashita

General Manager of Civil
Engineering Business
Division

General Manager ofCorporate Division

Outside Director
Shinji Ishihara

Outside Director
Yuka Nakagawa

Head of Ishihara Law
OfficeProfessor of School of
Law at Chukyo
University

Outside Director
Hideomi Ban
Chairman and
Representative Directorof Bankaku Co., Ltd.

Director and Senior
Managing Executive
Officer
Osamu Goto
General Manager of SalesManagement Division

Full-Time Audit &Supervisory Board
MemberJunichi Kurimoto

Director and Senior Managing
Executive Officer
Kenji Shimizu

Director
Hiroki Takasaki

General Manager ofArchitectural Business
Division

President andRepresentative Director of
Nagoya Railroad Co., Ltd.

Full-Time Audit &Supervisory Board
MemberMasafumi Igaki©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Outside Audit &Supervisory Board Member
Yoshitaka Aichi

Outside Audit &Supervisory Board Member
Yuzo Okamoto

Representative partner
and COO of Attax Tax
Accountant Office

Representative partner of
MARK Consultants Inc.

16

Skills matrix
Name

Position in the Company

Committee membership

Corporate
management

Sales and real estatedevelopment

Technology and IT

Mitsuhiro Takayanagi

President and Representative
Director

CSR/ESG Committee(Chairperson)
Nomination and Remuneration
Committee(Chairperson)

✓

✓

✓

Shuji Nawa

Vice President andRepresentative Director

CSR/ESG Committee(Vice Chairperson)

✓

✓

✓

Takashi Yamashita

Vice President andRepresentative Director

CSR/ESG Committee(Vice Chairperson)✓

Osamu Goto

Director and Senior Managing
Executive Officer

CSR/ESG Committee✓

Kenji Shimizu

Director and Senior Managing
Executive Officer

CSR/ESG Committee✓

Hiroki Takasaki

Director

Shinji Ishihara

Outside Director(Independent officer)

Nomination and Remuneration
Committee✓✓✓

Yuka Nakagawa

Outside Director(Independent officer)

Nomination and Remuneration
Committee✓✓✓

Hideomi Ban

Outside Director(Independent officer)

Nomination and Remuneration
Committee✓✓

Junichi Kurimoto

Full-Time Audit & Supervisory
Board Member

✓

✓

✓

Masafumi Igaki

Full-Time Audit & Supervisory
Board Member

✓

✓

✓

Yoshitaka Aichi

Outside Audit & Supervisory
Board Member(Independent officer)

✓

✓

✓

Yuzo Okamoto

Outside Audit & Supervisory
Board Member(Independent officer)

✓

✓

✓

✓

✓

✓

Personnel and labor
relations

Finance andaccounting

✓
✓
✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Compliance and risk
management✓

Up to four major skills, etc. possessed by each person are marked with a check mark ”✓.”

©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

17

Ⅱ
Financial Results for the Six Months
Ended September 30,2023©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

Financial Results for the Six Months Ended September 30,2023 Highlights
 Net sales
Net sales reached ¥52.1 billion, increased by ¥10.6 billion year on year, setting a new record high for the first half.

 Profit
Although gross profit increased, selling, general and administrative expenses increased due to higher personnel expenses,
mainly caused by raises in employee salaries and bonuses, higher expenses associated with increased business activities, andother factors. As a result, profit declined at each profit level from operating profit and below.
Operating profit （ JPY mil ）Net sales（JPY mil）
YoY ￥0.2 bn.（14.4％）

10.6 bn.（25.7％）

0.1 bn.（15.6％）

YoY ￥

4.7%

Profit attributable to owners of parent（ JPY mil ）YoY ￥Operating profit margin

Return on sales

4.2%* 52,158

46,852
41,495

2.9%

2,184

3.4%
2.9%

1,738

2.0%
1,487

1,577
1,206

2021.92022.92023.92021.92022.92023.92021.92022.91,017

2023.9*Net sales marked a record high.

©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

19

Financial Results for the Six Months Ended September 30,2023(Millions of Yen)

Six months
ended
Sept.30,2021
ActualSix months
ended
Sept.30,2022
ActualSix months
ended
Sept.30,2023
ActualYear on year
Increase/decrease

Change46,852

41,49552,158

10,662

25.7%

42,61435,71545,72810,012

28.0%

4,237

5,779

6,429

649

11.2%

6,013

5,995

6,377

381

6.4%

（Gross profit margin）

12.8%

14.4%

12.2%

Gross profit on completed construction contracts

4,603

4,003

4,558

555

13.9%

Gross profit on real estate business and other

1,410

1,992

1,819

▲173

▲8.7%

Selling, general, andadministrative expenses

3,829

4,257

4,889

632

14.8%

Operating profit

2,184

1,738

1,487

▲250

▲14.4%

4.7%

4.2%

2.9%

2,211

1,775

1,564

4.7%

4.3%

3.0%

1,577

1,206

1,017

3.4%

2.9%

2.0%

Net sales
Net sales of completed construction contracts
Net sales in real estate business and other

Gross profit(Operating profit margin)

Ordinary profit(Ordinary profit margin)

Profit attributable to owners of parent(Return on sales)©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

▲2.2pt▲1.3pt▲210▲11.9%▲1.3pt▲188▲15.6%▲0.9pt20

Factors for increase or decrease in net sales/operating profit(vs results for the first six months ended September 30, 2022)
 Net sales・・・ Increased by ¥10.6 billion year on year, setting a new record high for the first half.

Construction business : Net sales increased by ¥10.0 billion year on year due to the progress in construction mainly in large building construction projects for which
orders were received in or before the previous fiscal year.
Real estate business : Net sales increased ¥0.6 billion year on year due to the growth in revenue in the condominiums for sale business.

 Profit

・・・Operating profit by decreased ¥0.2 billion year on year.

Construction business : Profit increased by ¥0.5 billion year on year due to a significant profitability improvement effect from the approval for a change that is a substantial
increase in amount at the time of completion of a large civil engineering project.
Real estate business : Profit decreased by ¥0.1 billion year on year as there was no sale, during this first six-month period, of self-developed land for industrial use thatwas sold in the previous fiscal year, despite the positive effect from increased revenue in the condominiums for sale business.
S&GA: Expenses increased by ¥0.6 billion year on year due to higher personnel expenses mainly caused by raises in employee salaries and bonuses,
higher expenses associated with increased business activities, and other factors.

Net sales（ JPY mil ）YoY ￥Operating profit （ JPY mil ）10,662 mil.

YoY ￥

▲642

+692
+9,358+654+649

250 mil.
+388

52,158▲173+116

41,4951,738
1,487（ Prior period ）22,553（ Prior period ）7.4％（ Prior period ）13,162（ Prior period ）
17.7％

▲632

（ Current period ）（ Current period ）（ Current period ）（ Current period ）31,911

5.4％

Gross Profit on completed Building
construction+50

Six months ended
Sept.30,2022
ActualBuilding
construction

Civilengineering

Real estatebusiness

Six months ended
Sept.30,2023
ActualSix months ended
Sept.30,2022
ActualEffect of increase inrevenue fromcompleted construction
contracts(building construction)

13,81720.5％

Gross Profit on completed Civil
engineering+504

Effect of decrease in
Effect of increase in
Effect of improvement in Real estate businessgross profit margin onrevenue fromgross profit margin on
completed construction completed construction completed construction
contracts
contracts
contracts(building construction)(civil engineering)(civil engineering)©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

S&GA

Six months ended
Sept.30,2023
Actual21

Comparison with financial forecasts（Millions of Yen）

Six months ended
Sept.30.2023
Forecast

Net sales

Six months ended
Sept.30.2023
Actualvs forecasts
Increase/ decrease

Change53,00052,158

▲841

98.4%

Net sales of completed
construction contracts

46,10045,728

▲371

99.2%

Net sales in real estatebusiness and other

6,900

6,429

▲470

93.2%

5,500

6,377

877

116.0%（Gross profit margin）

10.4%

12.2%

Gross profit on completed
construction contracts
Gross profit on real estatebusiness and other

3,300

4,558

1,258

138.1%

2,200

1,819

▲380

82.7%

5,000

4,889

▲110

97.8%

500

1,487

987

297.5%

0.9%

2.9%

500

1,564

0.9%

3.0%

Profit attributable toowners of parent

300

1,017

（Return on sales）

0.6%

2.0%

Gross profit

Selling, general, andadministrative expenses

Operating profit（Operating profit margin）

Ordinary profit（Ordinary profit margin）©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

1.8pt

2.0pt

1,064

313.0%
2.1pt

717

339.3%
1.4pt

22

Factors for increase or decrease in net sales/operating profit（Vs year-beginning forecasts）
 Net sales・・・Fell short of the forecast by approximately ¥0.8 billion.
Construction business : Slightly lower than the forecast due to delays in works of some large building construction projects.
Real estate business : Lower than the forecast because the planned sale of real estate for sale was not realized due to a revision in the plan by the counterparty.

 Profit

・・・Operating profit exceeded the forecast by ¥0.9 billion.

Construction business : Higher than the forecast due to a significant profitability improvement effect from the approval of a change that is a substantial increasein amount at the time of completion of a large civil engineering project.
Real estate business : Lower than the forecast due to the impact of the sale of real estate for sale not being realized.
S&GA: Slightly fell short of the forecast mainly due to lower-than-expected sales costs of condominiums.

Operating profit （ JPY mil ）Net sales（ JPY mil ）53,000841mil.

vs forecast ￥vs forecast ￥987mil.
+1,083+419
52,158▲789

Gross Profit on completed Building
construction
+121

▲470

（ Forecast ）32,700（ Forecast）
4.9％（ Actual ）31,911（ Actual ）
5.4％

+160
500
▲39

+110

1,487

S&GA

Six months ended
Sept.30,2023
Actual▲380+53（ Forecast ）13,400（ Forecast ）12.7％（ Actual ）13,817（ Actual ）20.5％

Gross Profit on Civil engineering+1,136Year-beginning
forecast

Building
construction

Civilengineering

Real estatebusiness

Six months ended
Sept.30,2023
Actualof decrease in
Effect of improvement in
Effect of increase in
Effect of improvement in Real estate businessYear-beginning Effectrevenue fromgross profit margin onrevenue fromgross profit margin on
completed construction completed construction completed construction completed construction
forecast
contracts(building construction)

contracts(building construction)©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

contracts(civil engineering)

contracts(civil engineering)23

<Overall status by segment> Building construction
 Orders received
Decreased by ¥6.6 billion from the previous fiscal year when there was a concentration of orders for large logistics facilities and factories.

 Net sales
Increased by ¥9.3 billion year on year due to the progress in construction mainly for large commercial facilities and large logistics facilities for which orders werereceived in or before the previous fiscal year.

 Gross profit
Increased by ¥0.05 billion year on year thanks to the effect of higher revenue, despite the impact of the decline in profit margin.

Orders received by use (JPY mil)Net sales by use ( JPY mil )Gross profit（ JPY mil ）YoY ￥ 6.6 bn. (38.3 ％）YoY ￥ 9.3 bn. (41.5 ％）YoY ￥ 0.05 bn. (3.0 ％）■General construction works■Condominium construction works■General construction works■Condominium construction works

Consolidated gross profit margin
8.5%

17,444

7.4%
31,911

29,799

3,113

5.4%

7,310
10,761

9,718

2,528

5,680

3,347

7,474

22,553

14,331
24,601

4,341
7,414

20,081

1,670

1,721

2022.92023.916,8733,1332021.92022.92023.92021.92022.92023.9©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

2021.924

<Overall status by segment> Civil engineering Orders received
Increased by ¥0.6 billion year on year due to an increase in private-sector works.

 Net sales
Increased ¥0.6 billion year on year as a change that is a substantial increase in amount was approved at the final settlement discussion for a large civil engineering
project.

 Gross profit
Increased by ¥0.5 billion year on year due to the profitability improvement effect from the aforesaid increase in amount.

Orders received by use (JPY mil)YoY ￥ 0.6 bn. (5.4 ％)16,432

Net sales by use ( JPY mil )Gross profit （ JPY mil ）YoY ￥ 0.6 bn. (5.0％)

YoY ￥ 0.5 bn. (21.6％)■PW works■Governmental projects■Private-sector works
11,978

12,62912,814■PW works■Governmental projects■Private-sector works
13,817
13,162

Consolidated gross profit margin

20.5%
16.2%

10,090
4,687

5,637

6,794

6,171

17.7%

6,390
2,836
2,074

4,311

5,388

5,480

4,203

2,031

1,902

1,512

2021.92022.92023.9

4,819

5,891

1,817

2,172

1,534

2021.92022.92023.92021.92,332

2022.92023.9* PW works︓ Works performed by “PAN WALL” method, a reinforced earth method for natural grounds which is the Company’s unique technology©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

25

<Overall status by segment> Real estate business Net sales
Increased by ¥0.6 billion year on year due to the significant revenue growth in the condominiums for sale business, although there was no sale, during this first six-month period, of selfdeveloped land for industrial use such as those in the previous fiscal year.

 Gross profit
Decreased by ¥0.1 billion year on year as there was no sale of self-developed land for industrial use that offers a high profit margin, despite the positive effect from increased revenue in thecondominiums for sale business.

 Results of condominiums for sale
Number of units sold increased 53 year on year due to the completion of new buildings for delivery in addition to the continued strong sales of buildings that began delivery at the end of
the previous fiscal year.

Breakdown of net sales ( JPY mil )Gross profit（ JPY mil ）YoY ￥ 0.1 bn. (8.7％)

YoY ￥ 0.6 bn. (11.2％)■Condominiums for sale business■Real estate sales■Others
6,429
5,779

Number of condominium units soldYoY 53 units (139.5％)
91 units

Real estate sales
33.3%

34.5%
28.3%

2,176
4,237

2,044

47 units
19

38 units

1,886
2,237
457
1,894

1,497

2021.92022.9

4,234

1,410

2023.92021.9

1,992

1,819

2022.92023.9©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

2021.92022.92023.926

Consolidated financial position
 Total assets : Total assets increased by ¥2.4 billion due to an increase of ¥1.8 billion in costs on construction contracts in progress
associated with the progress of works in the construction business and an increase of ¥2.0 billion in real estate forsale as a result of purchasing land for industrial development, among other factors.
 Liabilities : Liabilities increased by ¥1.9 billion due to payments of income taxes and consumption taxes, while interest bearing
debt increased by ¥4.0 billion as borrowings were used to cover both higher costs on construction contracts inprogress and financing needs associated with the purchase of real estate for sale.
 Net assets : Net assets increased by ¥0.5 billion mainly due to the recording of retained earnings.
❏Consolidated balance sheets（ Millions of Yen）

As of Sept.30,
2023 Actual

ChangesCash and deposits

22,821

20,771 ▲2,049

Trade receivables

42,75342,670▲83

Liabilities

Current liabilities

As of March 31,
2023 Actual

As of March 31,
2023 Actual

As of Sept.30,
2023 Actual

ChangesAccounts payable

18,697

17,743▲953

Short-term borrowings

28,10031,8003,700

Advances received on construction
contracts in progress

4,604

5,059

455

Others5,442

3,787 ▲1,655

Total

56,84358,390

1,546Long-term borrowings

3,800

4,100

300

Others

8,912

8,982

70

Total

12,712

13,082

370

2,074

3,921

1,847

20,23922,314

2,074

Others

4,334

4,185

▲148

Total

92,22393,863

1,639

Property, plant and equipment

28,49729,014

517

805

717

▲88

8,460

8,855

395

Total liabilities

69,556

71,472

1,916

37,76338,588824

Net assets

60,43160,978546

129,987

132,451

2,463

129,987

132,451

2,463

Costs on construction contracts in progress
Real estate for sale

Intangible assets
Investments and other assets
Total

Total assets

Long-term
liabilities

Fixed assets

Current assets

AssetsTotal liabilities and net assets©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

27

Consolidated financial position❏Key management indicators（ Millions of Yen）

FYE March 2020
ActualFYE March
2021 Actual

FYE March2022 Actual

FYE March2023 Actual

Six months ended
Sept.30.2022
ActualSix months ended
Sept.30.2023
ActualReturn on assets (ROA)

7.3%

6.3%

5.0%

5.9%

－

－

Return on equity (ROE)

10.2%

6.2%

8.6%

7.6%

－

－

Earnings per share (EPS)¥118.85¥75.86¥112.18¥104.83－－

Equity ratio

48.6%

42.1%

49.4%

46.5%

51.3%

46.0%

Interest-bearing debt

26,05742,94030,40031,90025,90035,900Net interest-bearing debt（*）

12,281

20,848

8,388

9,078

5,315

15,129（*） Net interest-bearing debt = interest-bearing debt - cash and deposits❏Consolidated statements of cash flows（ Millions of Yen）

Six months ended Six months ended Six months ended Six months ended
Sept.30.2018
Sept.30.2019
Sept.30.2020
Sept.30.2021
ActualActualActualActualSix months ended
Sept.30.2022
ActualSix months ended
Sept.30.2023
ActualCash flows from operating activities▲ 4,351

2,823

4,050

4,732

4,580

▲ 4,174

Cash flows from investing activities▲ 580▲ 1,462▲0▲ 2,014

▲ 586

▲ 816

Cash flows from financing activities

4,320▲ 2,7394,169▲ 5,023▲ 5,4202,951©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

28

Orders received, And carry forward to the second half
 Orders received
Decreased by ¥6.0 billion from a year earlier when there was a concentration of orders
for large logistics facilities and factories.

 Carry forward to the second half
Decreased by ¥6.9 billion year on year as net sales significantly increased from a year
earlier while orders received declined from a year earlier in the building construction.
*

Orders received（ JPY mil ）YoY ￥6.0 bn. (20.5％)
29,422

23,90623,391On October 30, 2023, the sale of lot No. 1 of the Obu Tokai Development Project wascompleted, simultaneously completing the building construction contract. At present, bothorders received and carry forward to the second half have increased significantly.

❏Orders received（Millions of Yen）
Six months
ended
Sept.30.2021
ActualSix months
ended
Sept.30.2022
ActualSix months
ended
Sept.30.2023
ActualBuilding construction

7,474

17,444

10,761▲6,682▲38.3%

Civil engineering

16,432

11,978

12,629

651

5.4%

Total

23,90629,422

23,391▲6,031▲20.5%

Year on year
Increase/decrease

2021.92022.9ChangeCarry forward to the second half（ JPY mil）
YoY ￥6.9 bn. (8.2％)
84,034❏Carry forward to the second half

（Millions of Yen）

77,10558,549Six months
ended
Sept.30.2021
ActualSix months
ended
Sept.30.2022
ActualSix months
ended
Sept.30.2023
ActualBuilding construction

30,14456,95545,479▲11,475▲20.1%

Civil engineering

28,40527,07931,625

4,545

16.8%

Total

58,54984,034

77,105▲6,929▲8.2%

Year on year
Increase/decrease

2023.9Change©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

2021.92022.92023.929

Ⅲ
Financial Forecasts for the FY
March 31,2024©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

Financial Forecasts for the FY March 31,2024
In forecasts for the fiscal year ending March 31, 2024 (full year), a record high is expected at eachprofit level, with net sales of ¥122.0 billion, operating profit of ¥9.5 billion, and profit of ¥6.3
billion.
 Net sales
With a large increase in sales in the real estate business, overall net sales will exceed the result in the previous year, achieving a record high.
 Profit
Due to robust growth in revenue, profit will also far exceed the result in the previous year at each profit level, achieving a record high.

❏ F u l l - y e a r Consolidated forecasts for FY March 2024
FYE March2023
ActualNet sales（Millions of Yen）

FYE March
2024

111,110

Year on year（Full year）

Full year Forecast

122,000

Increase/ decrease

10,889Change9.8%

Net sales of completed construction contracts

94,26598,700

4,434

4.7%

Net sales in real estate business and other

16,84523,300

6,454

38.3%

16,59019,700

3,109

18.7%

（Gross profit margin）

14.9%

16.1%

Gross profit on completed construction contracts

10,8229,400▲1,422▲13.1%

Gross profit on real estate business and other

5,768

10,300

4,531

78.6%

Selling, general, and administrative expenses

9,377

10,200822

8.8%Operating profit

7,212

9,500

2,287

31.7%

（Operating profit margin）
Ordinary profit（Ordinary profit margin）
Profit attributable to owners of parent(Return on sales)

6.5%
7,259
6.5%
4,508
4.1%

7.8%
9,500
7.8%
6,300
5.2%

Gross profit©2023

All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

1.2pt

2,240
1,791

1.3pt
30.9%
1.3pt
39.7%
1.1pt

31

Factors for increase or decrease in net sales/operating profit(vs results for the fiscal year ended March 31, 2023)
 Net sales
Construction business : Results are expected to exceed those in the previous year, as net sales of HOKUWA CONSTRUCTION,INC., which became a subsidiary,
will be added.
Real estate business: Results are expected to significantly exceed those in the previous year due to the sale of the largest ever self-developed land.

 Profit
Construction business : Profit is expected to be lower than the result in the previous year due to a decline in profit margin stemming from some unprofitable works.
Real estate business: Profit is expected to significantly exceed the result in the previous year in conjunction with the sale of self-developed land.

Net sales（ JPY mil ）Gross profit （ JPY mil ）YoY ￥10,889 mil.

YoY ￥ 2,287 mil.

+4,531+6,454111,110+3,670▲822

122,000

+763

7,212
▲662

FY March
FY March20232023
ActualBuilding
construction

Civilengineering

9,500

Real estatebusiness

Actual©2023

FY March
2024
Forecast

FY March
2023
ActualBuilding
construction

All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

▲759

Civil
engineering

Real estatebusiness

S&GA

FY March
2024
Forecast

32

Real Estate Business Topics: Obu Tokai Development Project
Largest development project ever undertaken by the Company as a business owner
A project to develop two industrial parks of about 70,000 tsubo (230,000 m2) in Obu City and Tokai City, Aichi Prefecture. The sale of lot No. 1 with Nomura Real Estate
Development Co., Ltd. was completed in October 2023. Expecting to record approximately ¥60.0 billion in total for net sales of completed construction contracts and net sales
in real estate business and other over the three periods from FYE March 2024 to FYE March 2026.

(For details, please refer to “Notice Concerning Sale, etc. (Plan) of Real Estate for Sale” disclosed on October 20, 2023.)

 Project outline

 Project schedule: April 2016 to March 2027 (plan)
2017

2018

Land arrangement

2019

2020

2021

Acquisition ofdevelopment permission
Change to urbanization
promotion area

2022

2023

2024

Land
formationwork

2025 2026 2027
Completion of sale of lot No. 1

Lot No. 1

Building construction (lot No. 1)

Building construction (lot No. 2)

On saleLot No. 2

Local preference

Administrative preference Realization of area plan inaccordance with the city planningmaster plan Integrated development in the area
Lot No. 1

Our Solution
 Promoting development as a business owner in consideration of preferences of both parties

Lot No. 2

Accumulated know-how

Landowner
negotiation

Administrative
consultationLanddevelopment

Attracting
companies

Constructionwork©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

Aerial photo of the site
(as of September 30, 2023)

33

Dividends
 Interim dividend for FYE March 2024 will be ¥30 as announced.
 The year-end dividend forecast is set at ¥30 as announced, and the annual dividend is expected to be ¥60, an increase of ¥17 from theprevious fiscal year.
 The Company plans to increase dividends for three consecutive periods (no dividend reduction for 11 consecutive periods).
 Dividend payout ratio continues to exceed the dividend policy of “30% or more” in the medium-term management plan.
2019.3

Interimdividend¥12

2020.3¥162021.32022.3¥172023.3¥17¥19

Trends in annual dividends per share2024.3

Ordinary dividend¥30

Commemorative dividend

44.8%
41.0%

Payout ratio （Consolidated）
Year-end
dividend

¥16

¥18

¥17

¥21

¥24

¥30
(Forecast)

33.9%

¥28

（*）¥34

¥34

¥38

¥43

¥60 21.5%(Forecast)¥18
Payout ratio（Consolidated）

27.1%

28.6%

44.8%

33.9%

(*） Including commemorative dividend of ¥4 for the 70th anniversary of foundation

©2023

41.0%

¥60

28.6%
25.5%

Annualdividends

41.0%

20.5%

27.1%
¥43

20.4%

¥22

¥24

¥24

16.3

17.3

18.3

¥34

¥34

20.3

21.3

¥38

¥28

41.0%
(Forecast)

15.3

All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

19.3

22.3

23.3

24.3

（ F o r e c a s t ）34

IVMedium-Term ManagementPlan©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

The Company’s position
We aim to make a leap from a mid-sized player to a second-tier major player with net sales of ¥200 billion or more.
Profit has already been comparable to that of second-tier major players.
Hierarchical classification of construction companies based on average
consolidated net sales over the past three years

1

Kajima Corporation¥2,079.6 billion¥123.3 billion

2

Obayashi Corporation¥1,922.8 billion¥41.0 billion

3

Taisei Corporation¥1,543.2 billion¥96.0 billion

4

Shimizu Corporation¥1,482.9 billion¥45.1 billion

5

Takenaka Corporation¥1,260.4 billion¥46.3 billion–

Net sales

Operating profit

6

Haseko Corporation¥1,027.2 billion¥90.1 billion

15

Tokyu Construction¥288.8 billion¥5.1 billion

16

Okumura Corporation¥249.4 billion¥11.8 billion

17

Toa Corporation¥213.5 billion¥6.5 billion

18

Fukuda Corporation¥154.3 billion¥5.2 billion––

Company name

–

Rank

–

–

–

–

¥111.1 billion¥7.2 billion

Ranking figures are based on data for the fiscal year ended March 2023 or December 2022.

Secured operating profit
comparable to second-tiermajor players

29

YAHAGI CONSTRUCTION

Source) Compiled by the Company with reference to the 40 companies for which financial analysis and hierarchical classification were
performed by the Research Institute of Construction and Economy.

©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

5 super-general contractors

Net sales of ¥1
trillion or more
12 second-tier major generalcontractors

Net sales of ¥200 billion
or moreMid-sized general contractors

Net sales of less than¥200 billion
36

Vision for FY2030 and the positioning of the medium-term
management plan
Vision for FY2030: “Problem-solving and value-creating company”
 A company that contributes to the sustainable development of customers, communities, and society by creating andproviding new value through construction engineering in order to realize a better society, not just by solving problems
faced by customers and communities.
 A company that expands business beyond the Tokai area to the maglev economic zone, and has strong
competitiveness in specific customers and fields within the areas.
 We aim for net sales of around ¥200 billion.

Net sales
target2,000億円¥200 billion

Recognition of the future market environment
In addition to the shift in industrial structure and business models caused by the
COVID-19 pandemic, society’s values have shifted from economy-focused tosustainability-focused. In the future, it will be necessary to evolve the businessmodel to a sustainable one while creating both social and corporate value.

¥130 billion
1,300億円¥106.6billion1,066億円

FYE
March 2021
2021年3月期

Period to develop thefoundation for accelerated
growthFY2021 to FY2025

Period foraccelerated growth
FY2026 to FY2030

FYE
March 2026
2026年3月期©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

FYE
March 2031
2031年3月期

37

Business policy
Transformation into a problem-solving and value-creating company“Enhancement of capabilities to build and create” and the “development of the foundation for sustainable growth”
toward accelerated growth
Deepening and evolving existing businesses

Exploring and developing new areas andfieldsConstruction business
Building construction segment

Real estate business
Real estate segment

Civil engineering segment

•
•
•
•

Strengthening of production systems to scale up business
Expansion of business areas/target fields
Reform of the construction production process to improve productivity
Development of new technologies and services/acquisition of technologies
and know-how• Improvement of safety and quality levels and strengthening of management
systems• Development and sales of land for industrial and residential use based on market
needs, mainly in the Tokai area
• Expansion of development areas in the maglev economic zone
• Expansion of development solutions such as government-owned land utilization
projects• Expansion of fields through maintenance, stock- and fee-based businesses

Company-wide• Strengthening of planning and proposal
capabilities/strengthening of capability to drive projects• Value co-creation with various partners• Development of an attractive and rewarding work environment• Promotion of SDGs initiatives (SDGs Declaration)

Establishing a management foundation to support growth©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

38

Numerical targets and dividend policy Numerical targets (consolidated)FYE March 2026

FYE March 2021
ActualTargetChangeNet sales¥106.6 billion¥130 billion

22%

Operating profit¥7.3 billion¥10 billion

37%

Previous medium-term
management plan period

Current medium-term
management plan period Dividend policy• Provide continuing and stableshareholder returns, while taking into
account consolidated financial results
and financial conditions.
• Target payout ratio of 30% or more.
• Consider purchasing treasury shares
flexibly as needed, in light of growthinvestment conditions and market
trends.

FYE March
2019

FYE March
2020

FYE March
2021

FYE March 2022 to FYE March 2026

ActualActualActualTargetAnnualdividends

¥28

¥34*

¥34

Payout ratio

27.1%

28.6%

44.8%

Payout ratio

30% or more

*Including commemorative dividend of ¥4 for the 70th anniversary of foundation©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

39

Progress in numerical targets and dividend policy
The Company has been making good progress against targets for all of net sales, profit and dividends.

Net sales (JPY mil)Operating profit (JPY mil)

Dividend per share and payout ratio
Dividend per share

130,000

Payout ratio

122,000
111,110

106,615

9,500

¥60

10,00093,090
7,362

¥43

7,212
¥38

6,169

2021.321.3期

2022.322.3期

2023.323.3期

2024.324.3期予(Forecast)

2026.3(Plan)
26.3期計画

2021.321.3期

2022.322.3期¥342023.323.3期

2024.324.3期予(Forecast)

2026.3(Plan)
26.3期計画©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

2021.32022.32023.32024.3(Forecast)

2026.3 (Plan)

40

Efforts to achieve the medium-term management plan (1)“DPL Meiko Yatomi I,” the largest building construction project undertaken by the Company
Deepening and evolving existing
businesses

Exploring and developing newareas and fields
Location

Enhancement of production systems
to scale up business• Received an order for the largest building construction
project everConstruction
periodBusiness
operator

Designed by

Reform of the construction
production process to improve
productivity

Establishing a managementfoundation to support growth
Yatomi City, Aichi Pref.

Overview of construction work
Structure: Steel-framed reinforced
concrete structure

DAIWA HOUSE INDUSTRY Co., Ltd.

Floors: 4 floors

YAHAGI CONSTRUCTION CO., LTD.

Total floor area

November 2020 to June 2022

: 210,360 ㎡• Realized manpower-saving construction such as
reinforcement prefabrication method

Strengthening of planning and proposal
capabilities/ strengthening of capability
to drive projects• Proposals with high economic efficiency and design freedom
from the initial stage of planning were regarded highly

Improvement of safety and quality
levels and strengthening ofmanagement systems• Established reliable construction procedures based on fullscale construction verification

We have been engaging in various initiatives from the design stage, to accumulate and develop verification
data for them and to further promote the “enhancement of the capabilities to build and create” in the future.
©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

41

Efforts to achieve the medium-term management plan (2)HOKUWA CONSTRUCTION, INC., which is based in Kyoto, became our subsidiary.
Deepening and evolving existing
businesses

Exploring and developing newareas and fields• Expand business beyond the Tokai area to the maglev economic zone.
• Leverage our strong sales base in the Kansai area, mainly in Kyoto, which should result in significant synergy
such as expanded trade areas.

Expansion of businessareas/target fields

Enhancement of production
systems to scale up business

Value co-creation withvarious partners

HOKUWA CONSTRUCTION
Net sales (JPY mil)Business field

Profit (JPY mil)OperatingprofitOrdinary
経常利益
profit

営業利益

8,038
7,133
6,233

当期純利益
ProfitExecuted construction work for rental apartments for students,
hotels, welfare facilities and others.

333 329

6,640

220

New
construction

189 187116

2020.320.3期

2021.321.3期

2022.322.3期

2023.323.3期

2020.320.3期

2021.321.3期

53 70 4281 78

2022.322.3期

2023.3
23.3期

Renewal/renovation

47©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

42

Cash allocation
Allocate cash appropriately to future growth investments and shareholder returns, by utilizing interestbearing debt to the extent that financial soundness can be maintained, in addition to earned profit.
Cash allocation policy
FYE March 2022 to FYE March 2026
Utilization of interest-bearing debt
DE ratio of 1.0× or
below
Equity ratio of over40%

Increase in interestbearing debt

Income taxes

Growth investment
Approx. ¥30 billion:

Real estate investment

Growth investment(in net investment
amount)Operating cash flows¥45 billion or¥30 billion or
more

R&D investment
Human resource
investment
Investment in informationequipment

etc.

Shareholder returns
Continuing and stable shareholder
returns

more

Shareholder
returns©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Payout ratio of 30% or more
Flexible purchase of treasury
shares43

Analysis of current status of capital cost and return on
equityThe Company’s return on equity (ROE) exceeds its cost of shareholders’ equity.
The difference (equity spread) is on a decreasing trend.

As ROE declines, PBR continues to be at a low level, below 1×.
Our future challenge is to widen the spread.
Trends in PBR and ROE

Trends in equity spread (ROE − cost of shareholders’ equity)
1.1×*Based on the closing price on Sep. 29

1.0×
1.02×

0.9×

0.99×
0.91×

0.90×

0.8×
0.7×

0.75×
0.68×

0.6×

0.67×
0.65×

0.60×

0.59×

0.5×
15.3

16.3

17.3

Equity spread

18.3

19.3

2020.32021.3

Cost of shareholders’equity2022.32023.3

15.3

16.3

17.3

18.3

19.3

PBR (left axis)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

2020.3 2021.3 2022.3 2023.3

24.3

ROE (right axis)

44

Efforts to maximize corporate value
We will step up our efforts to widen the spread and improve PER to maximize corporate value (i.e., PBR
in excess of 1×).

Maximizing corporate value
Drivers to improve corporate value

Details of main initiatives

Widening the spread
Profit growth

Improvement in capitalefficiency
Shareholder returns
Optimization of financial
leverage

Improving PER

FY2025 financial results
targets
Net sales: ¥130 billion
Operating profit: ¥10 billion

Growthstrategy• Steady achievement of themedium-term management plan

Financial
andcapitalstrategy• Utilization of cash and deposits - optimal allocation to
growth investment and shareholder returns• Review of assets held
• Utilization of borrowings• Strengthening of shareholder returns

IRstrategy• Strengthening of IR activities• Expansion and increased sophistication of information
disclosure©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

45

Strengthening of IR
We will expand opportunities for dialogue with shareholders and investors, and enhance thedissemination of information for deeper understanding of the Company’s growth strategy.
Expansion and increased sophistication of
information disclosure

Strengthening IR activities
1

Financial results briefing sessions
Hold for the first half and full year, twice ayear in total.

23Disclose materials on quarterly financial results.

45

WebsiteEnhance the dissemination of non-financial
information such as sustainability, in addition tofinancial information.

Hold individual IR/SR meetings.
Exhibit at IR events.

English communication
Disclose financial results summary and materials on
financial results in English.

Investor meetings and IR meetings
Hold company briefing sessions for individual
investors.

Materials on the consolidated financial
results

6

Integrated reports
Publication of integrated reports (planned)©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

46

Investment plan and progress
We plan to make growth investment to build the foundation for realizing the vision for FY2030, in theamount of approx. ¥30 billion over 5 years.
Growth investment areas

Real estate
investment

R&D investment

Human resource
investment

Investment in
informationequipment

Previous medium-term
management plan period(Actual)Current medium-term management plan
period (Plan)

Progress up to FYE March 2023
(Actual)

3 years

5 years

2 years• Total amount:¥16 billion• Total amount:
Approx. ¥30 billion• Annual average:¥5.3 billion• Annual average: ¥6 billion(13%up)• Made investment worth¥20 billion in total
FYE March 2022: ¥9.5 billion
FYE March 2023:¥10.4 billion• Annual average: ¥10 billion©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

47

Shareholder returns
 Dividend policy• Provide continuing and stable shareholder returns, while taking into account consolidated financial
results and financial conditions.
• Target payout ratio of 30% or more.
• Consider purchasing treasury shares flexibly as needed, in light of growth investment conditions andmarket trends.
Previous medium-term management
plan period
FYE March
2019

FYE March
2020

ActualActualCurrent medium-term
management plan period

Dividend per share andpayout ratio

FYE March
FYE March 2022 to FYE March 2026
2021

ActualDividend per share

Average dividend yield

Payout ratio

Average dividend yield¥60

Target¥43

Annualdividends

¥28

¥34*

¥34

Payout
ratio

27.1%

28.6%

44.8%

¥34

¥38

2021.32022.3

Payout ratio

30% or more
2023.32024.3(Forecast)*Including commemorative dividend of ¥4 for the 70th anniversary of foundation©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

2026.3(Plan)

2021.32022.32023.32024.3(Forecast)* Average dividend yield = Average annual
share price (closing price) ÷ Annual dividends
per share48

ESG/SDGs Contribution through business activities:
Utilization of PAN WALL method
Expansion of technology menus for disaster prevention and mitigation: Development ofcommunity resilient to natural disasters
We provide safe and resilient buildings by utilizing various construction technologies and know-how that the Company has
cultivated to date, including disaster prevention/mitigation technologies.

S(Society)

Priority issues (the Group)

Priority issues (Materiality)

Main initiatives

Promotion of the development of safe, secureand comfortable community

Development of safe and secure community

Expansion of technology menus for disasterprevention and mitigation
For a typical (block) retaining wall, construction is performed from thebottom upward, after drilling up to 5 m.

Utilization of PAN WALL method

Cutting soil witha stable gradient

The Company utilizes its original “PAN WALL method” for earth reinforcement to contribute to the development andimprovement of social infrastructure.
This method has excellent seismic resistance structure due to the high strength of precast concrete panels andreinforcing materials (steel bars and cement milk). The main feature of this method is inverted construction, in which
panels are constructed stepwise from the top downward to complete the wall surface while controlling the looseness ofthe ground. Its soundness was verified in the Great East Japan Earthquake in 2011 and the torrential rainfalls innorthern Kyushu in 2017.

Example) Stacking blocks

Resulting inexcess drilling

The PAN WALL method can be used to construct up to 20 m in height fromthe top downward safely and efficiently.
Constructing
downward

Involving no
extra drilling

Building a structure from the top

Points of contribution to SDGs
With the recent intensification of natural disasters due to climate change, there is growing need for disaster prevention/mitigation and increased national resilience to disasters.
The PAN WALL method is expected to see even stronger demand as a method to meet such social needs.
1 Disaster prevention/mitigation and increased
national resilience
Contribution to building sustainable and resilient social
infrastructure through high durability and excellent
seismic resistance

2 Environmental considerations during construction
work
Contribution to reductions in forest loss and CO2
emissions by reducing the volume of excavated soil andminimizing topographic changes©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

3 Active roles played by diverse human resources
Development of an environment that accommodates
diverse workers, such as by preparing multilingual
construction manuals

49ESG/SDGs Utilization of human capital
Our basic human resource strategy Aiming to be a “company that is chosen andthat employees want to continue working for”
In order to realize our vision for FY2030, we believe it is important to continue to develop and create “human resources who solve problems and create value,” secure
diverse human resources in both quantity and quality, and ensure that they realize their full potential while feeling pride and satisfaction in working in the Group. We aim
to be a “company that is chosen and that you want to continue working for,” by transforming into the company where each employee can shine and the company thatappeals to and attracts human resources.

Three pillars supporting our human resource strategy(1) Increasing diverse construction engineers
1) Actively recruit diverse human resources.
2) Encourage the elderly to play an active role.

Active recruitment of female engineers• The ratio of female engineers hired as new graduates has been at
10% or more since FY2017.

Active recruitment of human resources with foreign
nationality
・Since FY2018, the Company has been actively recruiting foreign
nationals, and currently has 26 foreign employees. Foreign
nationals accounted for more than 10% of new graduates hired in
FY2022.

Introduction of a mandatory retirement age of 65• In April 2021, the Company raised the retirement age from 60 to
65 for all Group employees, with compensation levels maintainedat the same level when they continue to assume the same role as
they did before reaching the age of 60(2) Creating a mechanism that supports thegrowth of each employee(3) Developing a work environment where each
employee can shine

1) Encourage people to learn and actively investing in skill
development.
2) Create a mechanism that enables employees to chart
their own future goals.
Training/education system to support careeradvancement

1) Management reform for those in managerial positions
2) Develop a safe work environment.
3) Promote physical and mental health management.

Training by level (for all job types), training by job type
Program to support certification acquisition
Voluntary internal study sessions
OJT education program and distance-learning program

Main initiatives
Improvement in long
working hours
Improvement intreatment
Response to inflation

Increase investment in human resource development

Institutional reform in response to diversifying values
and work styles
Develop a system that enables everyone to find his/her work
rewarding and feel own growth, respects the values of eachindividual employee, and supports career development that
responds to diversifying work styles.

©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Work-life balance• Increased operational efficiency using digitaltechnologies• Development of back-office systems on the ground• Raised wages for the third consecutive year
• Expanded allowance for workers commuting long
distance• Paid a flat rate of ¥100,000 per person to all of theemployees to mitigate the impact of rising prices on dailylife• Promotion of male employees’ taking childcare leave(publicizing activity, etc.)• Refreshment leave system

Mental health care

• Established a consultation desk utilizing external EAP(Employee Assistance Program)

Improvement of thework environment• Installed space for refreshment and co-working in theheadquarters building (September 2022)

50

V
FACT SHEET©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Consolidated Financial Results (For the Last 5 Years) and
Forecasts(Millions of yen)

2019.32020.32021.32022.32023.32024.3 (Forecast)

92,754

90,129106,615

93,090111,110122,000(1.2%)(▲2.8%)(18.3%)(▲12.7%)(19.4%)(9.8%)

7,705

7,764

7,362

6,169

7,212

9,500

(0.2%)(0.8%)(▲5.2%)(▲16.2%)(16.9%)(31.7%)

7,747

7,829

7,445

6,174

7,259

9,500

(Year-on-year percentage change)(0.4%)(1.1%)(▲4.9%)(▲17.1%)(17.6%)(30.9%)

Profit attributable to owners of parent

4,476

5,158

3,292

4,842

4,508

6,300

(Year-on-year percentage change)(9.6%)(15.2%)(▲36.2%)(47.1%)(▲6.9%)(39.7%)Net sales(Year-on-year percentage change)

Operating profit(Year-on-year percentage change)

Ordinary profit©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

52

<Overall status by segment> Building construction<(Millions of yen)

2019.32020.32021.32022.32023.3

ActualActualActualActualActualConsolidated orders received

51,50459,72152,51560,07264,034

Condominium
construction works

23,86013,591

10,13113,806

14,326

General construction
works

27,644

46,13042,384

46,21649,70848,39444,26358,63550,30064,329Condominium
construction works

8,050

14,58419,067

16,43011,444General construction
works

40,34329,67839,56733,87052,885

Consolidated gross profit

6,325

6,360

5,929

4,669

5,062

Consolidated gross profit
margin

13.1%

14.4%

10.1%

9.3%

7.9%

Consolidated net sales©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

53

<Overall status by segment> Civil engineering<(Millions of yen)

2019.32020.32021.32022.32023.3

ActualActualActualActualActualConsolidated orders received

33,77325,21828,831

32,56734,485Governmental projects

8,533

9,291

12,11912,88615,083

Private-sector works

20,892

10,13012,980

15,481

15,190

PW works

4,348

5,797

3,732

4,200

4,212

Consolidated net sales

29,56429,61833,771

28,69329,936

Governmental projects

10,63812,54814,877

8,946

12,158

Private-sector works

14,65812,341

14,52015,41013,452

PW works

4,268

4,729

4,372

4,336

4,325

Consolidated gross profit

5,412

5,097

5,760

5,710

5,759

Consolidated gross profit
margin

18.3%

17.2%

17.1%

19.9%

19.2%

©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

54

<Overall status by segment> Real estate business(Millions of yen)

2019.32020.32021.32022.32023.3

ActualActualActualActualActual

14,796

16,247

14,20814,096

16,845

Condominiums for salebusiness

10,013

8,856

10,039

7,292

9,315

Real estate sales

1,646

4,023

621

2,991

3,448

Others

3,137

3,368

3,547

3,813

4,082

Consolidated gross profit

4,770

4,842

4,009

4,555

5,768

Consolidated gross profit
margin

32.2%

29.8%

28.2%

32.3%

34.2%

Number of delivered units

293

198

199

180

223

Number of contracted units

290

184

130

194

224

Consolidated net sales❏ Results of condominiums for sale©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

55

Status of consolidated subsidiaries(as of September 30, 2023)(Millions of yen)
Name

Address

CapitalFiscalyear end

Business description

Net sales for thecurrent fiscal year

YAHAGI REAL ESTATE
Co., Ltd.

Higashi-ku,
Nagoya800

March

Condominiums for sale business, real estate development business, real estateleasing business, real estate brokerage business

5,146

YAHAGI BUILDING AND
LIFE CO., LTD.

Higashi-ku,
Nagoya400

March

Apartment and building management business, building construction business

1,945

YAHAGI GREEN Co., Ltd.

Higashi-ku,
Nagoya100

MarchGreenery business, golf course management business

1,769

Techno Support Co., Ltd.

Higashi-ku,
Nagoya50

March

PAN WALL (an earth reinforcement method using panels and “soil nails” for slope protection) business,
PITA Column (a seismic retrofitting method using external reinforcing for existing buildings) business,
technological development, trial experience production

594

YAHAGI ROAD CO., LTD.

Toyota, Aichi

300

March

Paving business, civil engineering business, manufacture and sales of asphalt mixture,
recycling business

2,915

Nanshin Takamori
Development Co., Ltd.

Takamori-machi,
Shimoina-gun,
Nagano50

March

Operation of golf courses (Takamori Country Club)201

HOKUWA
CONSTRUCTION, INC.

Shimogyo-ku,
Kyoto

85

March

Building construction business

2,602(Notes)1. All the above companies are wholly-owned subsidiaries of YAHAGI CONSTRUCTION CO., LTD. (For Nanshin Takamori Development Co., Ltd., there are indirect holdings of 69%).
2. The Company acquired all the shares in HOKUWA CONSTRUCTION, INC. as of March 31, 2023, and made the said company its subsidiary.

©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

56

Share price trend (January 2018 to October 2023)
Share price
(Yen)

1400
1200

Closing price as of theend of October: ¥1,306
PER: 8.9x
PBR: 0.94x1000
Trading volume(1,000 shares)

800

3000
600
2500
400
2000
200

1500

0

1000
500
0
Jan-18

Jul-18Jan-19Jul-19Jan-20Jul-20Jan-21

Jul-21

Jan-22©2023 All rights reserved., YAHAGI CONSTRUCTION CO., LTD.

Jul-22

Jan-23

Jul-2357

Disclaimer*Forward-looking statements such as earnings forecasts contained in this document include
projections for the future, assumptions underlying plans and predictions as of the date of the releaseof this document. These statements are not guarantees of future performance by the Company. Actual
results may differ significantly depending on various factors in the future. This document contains
estimates that have not been audited, and the figures are subject to change.
*This document has been translated from the Japanese original for reference purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the original
shall prevail©2023 All rights reserved., YAHAGI CONSTRUCTION CO.,LTD.

58