Creating value for aviationand metropolis with trust

Results Briefing
for Fiscal Year Ended in March 2024
AFC Group

May 31, 2024

AIRPORT FACILITIESCO., LTD.

Tokyo Stock Exchange Prime division(Ticker Symbol: 8864)
https://www.afc.jp

Table of contents

・・・

P2

II． Details of the consolidated financial statements for the
fiscal year that ended in March 2024

・・・

P7

III.

Details of the consolidated projected business for the
fiscal year ending in March 2025

・・・

P15

IV.

Progress of the Medium- to Long-Term Management
Plan

・・・

P20

I.

Outline of the financial statements for the fiscal yearthat ended in March 2024 and projected businessresults for the fiscal year ending in March 2025

Airport Facilities Co.,Ltd.

1

I.

II.

Outline of the financial statements for the fiscal yearthat ended in March 2024 and projected businessresults for the fiscal year ending in March 2025
Details of the consolidated financial statements forthe fiscal year that ended in March 2024

III.

Details of the consolidated projected business forthe fiscal year that ending in March 2025

IV.

Progress of the Medium- to Long-Term
Management Plan

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

2

Outline of the consolidated financial statements
for the fiscal year that ended in March 2024

Consolidated PL

Unit: million yen

Net sales

25,51626,00024,000Year on year:+434 million yen (+1.7%)

25,950Operatingincome3,500

Year on year:+680 million yen (+27.1%)

3,280

3,183

23,7773,000
2,503

22,0002,500

20,000
FY2021(results)

Ordinary
incomeFY2022(results)

Year on year:+1,054 million yen (+49.6%)

2,000
FY2021(results)

Net income

FY2022(results)

FY2023(results)

Year on year:+456 million yen (+29.1%)

2,500

3,500
3,000

FY2023(results)

2,020

3,175

2,962

2,000

 Although there had been the impact of properties
rented for hotels and office buildings that were soldin February 2023, net sales and operating income
both increased with the continued increase inwater supply and drainage service usage alongwith the recovery of the number of airport users.
 Ordinary income and net income increased withthe recording of gain on investments in silent
partnership, etc. by an aircraft leasing fund, andwith decrease in provision for removal cost related
to various construction.

1,564

1,500

2,500

2,121

1,000

2,000

821

500

1,500
FY2021(results)

FY2022(results)

FY2023(results)

FY2021(results)

FY2022(results)

FY2023(results)

Airport Facilities Co.,Ltd.

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Outline of the consolidated financial statements
for the fiscal year that ended in March 2024
Acquisition of two real estate properties for sales(acquired in the latter half of FY2023)

Nihonbashi Hamacho
2-Chome Building(Chuo-ku, Tokyo, acquired in October 2023)

・Traffic convenience is excellent, being a one-minute
walk from Hamacho Station, and a seven-minute
walk from Ningyocho Station.
It is highly noticeable, located at the corner on the
Meiji-za Street. It has a high asset value with asuperb view from inside and being built recently.

・Construction work is already implemented because
setup and half-setup rent methods are introduced.
New leasing will start from now on.

Highlights of
new investment

Solar panels are installedin Singapore

Solar panels are installed on the rooftop of the engine
maintenance plant in Seletar Airport, which is the firsteffort abroad for our company.

Upgrading to eco-friendly
refrigerating machines is under way.
Refrigerating machines at the timing of renewal arebeing upgraded to realize highly efficient and eco-

Sakura Front Ichibancho

friendly heating and cooling facilities.

(Chiyoda-ku, Tokyo, acquired in October 2023)

・Traffic convenience is excellent, being a two-minute
walk from Hanzomon Station, and a nine-minute walkfrom Kojimachi Station.
There are embassies of different countries andoffices of well-known companies gathered nearby.
The area is also known as a high-class residential
area with a long history.
・The building will be fully renovated hereafter, and isscheduled to be newly leased.
* Former name: Ichibancho 27 Building

Expansion of
the HANEDA INNOVATION CITY
parking space business
P2 parking space starts operation in HICity zoneB.
・Parking method: Mechanical・Capacity: 122 vehicles(of which 80 spaces are pay-by-the-hour)

Airport Facilities Co.,Ltd.

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Outline of the consolidated financial statements
for the fiscal year that ended in March 2024

Return of profits toshareholders

Dividend
increase

Annual dividend

Dividend per share:

17 yen(planned)

Interim dividend 7 yen+ year-end dividend 10 yen (planned)(Yen)・Our company recognizes the return of profits to our shareholders as animportant management issue, and aims to achieve the payout ratio of over
40%. Based on comprehensive consideration on mid- to long-term businessdevelopment and financial conditions, profit level exceeding the plan wasachieved, so the annual dividend of 17 yen per share was decided,
exceeding the forecast at the beginning of the term by 3 yen.

Changes in annual dividends

Annual dividend

(％)
100

Payout ratio (consolidated)

20

17

85.1
14

14

14

14

80

14

10

60
44.7
33.1

31.2

FY2018FY201942.2

Payout ratio:
40%

40

0

20
FY2020

FY2021*1*2

FY2022

FY2023*1 Net income for FY2020 was - 933 million yen*2 Net income for FY2021 was 821 million yen
Airport Facilities Co.,Ltd.

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Outline of the projected business for the fiscal year
ending in March 2025
Increases in net sales and operating income are also
aimed for in the fiscal year ending in March 2025.
 Net sales: 29,414 million yen (year on year ＋13.3%)

 Operating income: 3,403 million yen (year on year ＋6.5%)

Consolidated PL/
Dividend forecast
Dividend exceeding the previous fiscal year is scheduled
for the fiscal year ending in March 2025 as well.
Annual dividend per share for the fiscal
year ending in March 2025:

18 yen Net income: 2,193 million yen (year on year ＋8.5%)

6,000Interim dividend 9 yen+ year-end dividend 9 yen■ Net sales (line graph)■ Operating income■ Net income

29,4145,000

25,5164,000

1720,000

18

14

2,503
2,020

2,000

20

3,403

3,183
3,000

30,00025,950

1,564

2,193
10,000

10

1,000
0

0
FY2022 (results)

FY2023 (results)

FY2024 (forecast)
Unit: million yen

0
FY2022 (results) FY2023 (results)

FY2024 (forecast)

Unit: yen

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I.

II.

Outline of the financial statements for the fiscal yearthat ended in March 2024 and projected businessresults for the fiscal year ending in March 2025
Details of the consolidated financial statements forthe fiscal year that ended in March 2024

III.

Details of the consolidated projected business forthe fiscal year ending in March 2025

IV.

Progress of the Medium- to Long-Term
Management Plan

Airport Facilities Co.,Ltd.

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7

Outline of the consolidated financial statements
for the fiscal year that ended in March 2024

Consolidated PL(restated)
Unit: million yen

Net sales

25,51626,00024,000Year on year:+434 million yen (+1.7%)

25,950Operatingincome3,500

Year on year:+680 million yen (+27.1%)

3,280

3,183

23,7773,000
2,503

22,0002,500

20,000
FY2021(results)

Ordinary
incomeFY2022(results)

Year on year:+1,054 million yen (+49.6%)

2,000
FY2021(results)

Net income

FY2022(results)

FY2023(results)

Year on year:+456 million yen (+29.1%)

2,500

3,500
3,000

FY2023(results)

2,020

3,175

2,962

2,000

 Although there had been the impact of properties
rented for hotels and office buildings that were soldin February 2023, net sales and operating income
both increased with the continued increase inwater supply and drainage service usage alongwith the recovery of the number of airport users.
 Ordinary income and net income increased withthe recording of gain on investments in silent
partnership, etc. by an aircraft leasing fund, andwith decrease in provision for removal cost related
to various construction.

1,564

1,500

2,500

2,121

1,000

2,000

821

500

1,500
FY2021(results)

FY2022(results)

FY2023(results)

FY2021(results)

FY2022(results)

FY2023(results)

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

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Details of the consolidated financial statements forthe fiscal year that ended in March 2024

Progress bybusiness segment┃Transitional change of operating income (income/expenses)+680 million
yen

Unit: million yen
Other cost of
sales
+342

Area heating& coolingbusiness
＋49

2,503

Water supply& drainage
service andother business+627

Real estatebusiness-241

Administrative
expenses+14

Repairexpenses
-111

3,183

+ shows increase in profit(increase in income/decrease in expenses)- shows decrease in profit(decrease in income/increase in expenses)

FY23

FY22

Income: + 435 million yen

Real estatebusiness

Area heating &cooling business

Expenses: +245 million yen(-) Decrease in rent revenue due to the selling ofsome real estate properties outside airports(+) Increase in water supply and drainage service usage attributable to the recovery of
Water supply &aviation demand and the full opening of some facilities
drainage service
and other business (+) Sound development of local area communication networks business(+) Increase in sales amount of heating and cooling
service due to extreme heat(+) Decrease in depreciation expenses, etc. with the selling of some real estate properties
outside airports(+) Decrease in the raw material expenses (electricity, gas) for area heating and coolingbusiness(-) Increase in water charge due to increase in water supply and drainage service usage

Expenses

Airport Facilities Co.,Ltd.

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Performance bybusiness segment

Details of the consolidated financial statements forthe fiscal year that ended in March 2024

While some real estate properties outside airports were sold in the first half of the fiscal year, net sales
were generally unchanged with the progress of non-asset business.
On the other hand, operating income increased with efforts in reducing expenses by selling real estate
properties outside airports and increasing the profitability of existing facilities.

Real estatebusiness

Net sales: 19,489 million yen (year on year -1.2％)
Operating income: 2,321 million yen (year on year +6.8％)
Operating income

Net sales
20,000[Net sales](+) Increase in rent revenue with the acquisition of realestate properties for sales(+) Increase in rent due to variable hotel rents(+) Increase in the revenue from parking space in HANEDAINNOVATION CITY(-) Selling of hotels for rent and general office buildings

3,500

18,000

3,000
2,500

16,00019,73019,4892,000

14,0001,500
2,172
12,000

2,321

1,000
500

10,000
FY2022 (results)

FY2023 (results)
Unit: million yen<Major factors for increase/decrease>

FY2022 (results)

FY2023 (results)
Unit: million yen[Operating income](+) Decrease in depreciation expenses, etc. with the sellingof hotels for rent and general office buildings(+) Increase in the profitability of existing facilities(-) Recording of real estate acquisition tax with theacquisition of real estate properties for sales

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

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Performance bybusiness segment

Details of the consolidated financial statements forthe fiscal year that ended in March 2024

Area heating &cooling businessNet sales increased with increase in the sales of heating and cooling service
Increase in operating income with the decrease of raw material expenses (electricity/gas)
Net sales: 3,461 million yen (year on year +1.4%)
Operating income: 527 million yen (year on year +134.2%)

Operating income

Net sales
4,000<Major factors for increase/decrease>

600[Net sales](+) Increase in sales amount of heating and cooling service
due to extreme heat in summer

500
3,000
400
2,000

300
3,412

527

3,461
200

1,000
100
0

FY2022 (results)

FY2023 (results)
Unit: million yen

0225

FY2022 (results)

FY2023 (results)[Operating income](+) Decrease in raw material expenses due to the unit priceof electricity/gas maintained at lower level than expected[Other]・Fee structure is reviewed from the latter half of FY2023
so that it is linked to raw material expenses in order tocope with future changes in energy price

Unit: million yen

Airport Facilities Co.,Ltd.

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Details of the consolidated financial statements forthe fiscal year that ended in March 2024

Performance bybusiness segment

With an increase in the number of airport users such as passengers, water supply anddrainage business is recovering.

Water Supply &Drainage Service
and OtherBusiness

Net sales: 3,000 million yen (year on year +26.3%)
Operating income: 334 million yen (year on year ＋215.0%)

Net sales

Operating income

3000

400

<Major factors for increase/decrease>
300
2000
3,000

200
334

1,974
1000
100
106

[Net sales & operating income](+) Increase in water supply and drainage service usage
attributable to the favorable development of aviation
demand and inbound demand, and the full opening ofsome facilities near the airport(+) Sound development of local area communication
networks business

00
FY2022 (results)

FY2023 (results)
Unit: million yen

FY2022 (results)

FY2023 (results)
Unit: million yen* As for other businesses, local area communication network businessand photovoltaic power generation business are implemented.
Airport Facilities Co.,Ltd.

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Details of the consolidated financial statements forthe fiscal year that ended in March 2024

Consolidatedbalance sheet
End of March, 2024

End of March, 2023
Current
assets
28,881

Unit: million yen
Current liabilities
9,865

Current
assets38,492

Noncurrent
liabilities
33,168

Noncurrent
liabilities
39,641

Total assets:
increase by
10 billion yen

Non-current
assets71,521
Net assets
57,368

Unit: million yen
Current liabilities
10,054Non-current
assets
71,969Net assets
60,765

Amount of total assets

100.4 billion yen

Amount of total assets

110.4 billion yen

Net assets per share

1,095 yen

Net assets per share

1,157 yen

Equity ratio

54.5％

Equity ratio

52.6％[Asset]Non-current assets slightly increased with increase in investment securities attributable to the additional investmentin the aircraft fund, despite the effect of the planned depreciation of buildings. Current assets increased with theacquisition of real estate properties for sales.
As a result, total assets increased by 10 billion yen.
[Liabilities] Although the repayment of short-term debts has progressed, liabilities increased by the making of long-termborrowings for the acquisition of real estate properties for sales, and amounts payable related to renovation works.
[Net assets] Net assets increased with an increase in retained earnings.
Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

13

Details of the consolidated financial statements forthe fiscal year that ended in March 2024

Consolidated cash flow

Unit: million yen[Cash flows from operating activities]
Although expenses increased with increase ininventory assets with the acquisition of real estate
properties for sales, income exceeded this withdecreases in the amount of income before income
taxes, depreciation expenses, and operating loans.
[Cash flows from investing activities]
While there had been income from proceeds from
distributions
frominvestment
partnerships,
expenses of the acquisition of non-current assets
and expenses due to the acquisition of investment
securities attributable to the additional investment in
the aircraft leasing fund exceeded this.
[Cash flows from financing activities]
Although there were expenses associated withpayments of long-term loans payable and paymentof cash dividends, income exceeded this withproceeds long-term loans payable for the acquisitionof real estate properties for sale.

Airport Facilities Co.,Ltd.

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14

I.

II.

III.

IV.

Outline of the financial statements for the fiscal yearthat ended in March 2024 and projected businessresults for the fiscal year ending in March 2025
Details of the consolidated financial statements forthe fiscal year that ended in March 2024
Details of the consolidated projected business forthe fiscal year ending in March 2025

Progress of the Medium- to Long-Term
Management Plan

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

15

Details of the consolidated projected business forthe fiscal year ending in March 2025

Consolidated PL

Unit: million yen

Net salesYear on year:+3,463 million yen (+13.3%)

Operatingincome30,0003,500

25,0003,000

Year on year:+219 million yen (+6.9%)

29,41425,95020,000

2,500

3,403

2,000

15,000

FY2023 (results) FY2024 (forecast)

FY2023 (results) FY2024 (forecast)Ordinary
incomeYear on year:+29 million yen (+0.9%)

Net income

3,500

2,500

3,000

2,000

2,500

3,183

3,175

3,205

FY2023 (results)

FY2024 (forecast)

2,000

1,500

Year on year:+173 million yen (+8.5%)

2,020

2,193

FY2023 (results)

FY2024 (forecast)

1,000

 Net sales are expected to increase according toincrease in water supply and drainage service
usage associated with an increase in thenumber of airport users, by also taking into
consideration increase in rent revenue andproperty sellout with the promotion of non-asset
business, while putting efforts in reinforcing thestable business foundation within the airport.
 As for operating income, it is expected toincrease with increase in net sales, despite therepair expenses for existing facilities andincreasein
depreciation
expensesaccompanied with capital investment.
 Ordinary income and net income are expected
to increase with the expected increase ininvestment profits through the full-year
operation of the aircraft leasing fund as a nonoperating income.
 We aim to achieve increases in net sales andoperating income with the stable achievementof the Medium- to Long-Term Management Plan.

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

16

Details of the consolidated projected business forthe fiscal year ending in March 2025

EBITDA + recovery

・It is expected that the cash flow of the company will be sound accompanied mainly with increasein operating income.

EBITDA + recovery
9,000
8,470
7,835

8,000
7,501

7,901
7,619

7,464

7,535

FY2021

FY2022

7,000

6,000

5,000

4,000
FY2018FY2019FY2020

FY2023

FY2024(forecast)
Unit: million yen* EBITDA + recovery = (operating income + depreciation expense) + recovery + lease cost
Recovery refers to the repayment of the principal of loans.
Airport Facilities Co.,Ltd.

17

Details of the consolidated projected business forthe fiscal year ending in March 2025

Change in business segments reported
Under the business portfolio strategy set out in the Medium- to Long-Term Management
Plan (FY2022 – FY2028), the Group has been strengthening airport-related businessand exploring new business opportunities to develop a profit foundation toward further
growth and create value within and outside airports with an aim to achieve sustainablegrowth.
From the perspective of making the progress of the Medium- to Long-Term
Management Plan easier to evaluate, we will be reporting the results of businesssegments along the same categorization as in the Medium- to Long-Term Management
Plan, starting from the First Quarter of FY2024.
Old segments
Real Estate Business

Outlook bybusiness segment

Outlook by business segment, net sales
Net sales(Unit: million yen)
■ Others

30,000

Water supply & drainage service
and other business

20,000Area heating &cooling business

10,000Real estatebusiness

Real estate leasing, etc. within / outside airports
Non-asset business
Overseas businessSupply of area heating and cooling service

Water supply & Drainage Service
and Other Business

Operation of water supply and drainage service
Shared telecommunication
Solar power generation

Main business
Real estate leasing, etc. within airports

Non-Airport Real Estate Business Real estate leasing, etc. outside airports
Non-asset businessAirport Infrastructure BusinessSupply of area heating and cooling service
Operation of water supply and drainage service
Shared telecommunication

Other businessAirport-related
infrastructure business■ Non-Airport
Real Estate

Non-airport
business

Non-asset
business■ Airport Real estate

Airportrelated realestatebusiness

Haneda Airport
1-Chome project0
FY2023

Airport Real Estate Business■ Airport
Infrastructure

Main business

Area Heating & Cooling Business

New segments

Overseasbusiness

Overseas business; Solar power generation

FY2024・Airport Real Estate Business aims to reinforce a stable business base, including the operation of a fresh
products center in the cargo area and the reviewing of leasing conditions for existing properties.
・Non-Airport Real Estate Business aims to promote non-asset business, and raise the value of properties
through the acquisition of new real estate properties for sales and through value-up construction works
and the revision of rents. The business also assumes the sellout of real estate properties for sales.
・As for Airport Infrastructure Business, on the premise of the provision of stable infrastructure service, it
is expected that facilities maintenance and management expenses in terms of water supply and drainage
increase, in addition to increases in depreciation and repair expenses related to the capital investment interms of heating and cooling service, while water supply and drainage usage is expected to maintain thelevel before the pandemic.
・In Other Business, the full-year operation of solar panels in Singapore is expected.
Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

18

Details of the consolidated projected business forthe fiscal year ending in March 2025
Expected annual dividend for fiscal year
ending in March 2025

Return of profits
to shareholders

Annual dividend per share for the
fiscal year ending in March 2025:

18 yenDividend exceeding the increased
dividend in FY2023 (annual dividendof 17 yen) is scheduled.

Interim dividend 9 yen+ year-end dividend 9 yen(Yen)

Changes in annual dividends

Annual dividend
Payout ratio (consolidated)

(％)

20

100

18

17

85.1
14

14

14

14

80

14

10

60 Payout ratio:

44.7
33.1

31.2

FY2018FY2019

42.2

40%

41.1
40

0

20
FY2020

FY2021*1*2

FY2022

FY2023

FY2024 (forecast)*1 Net income for FY2020 was - 933 million yen*2 Net income for FY2021 was 821 million yen
Airport Facilities Co.,Ltd.

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I.

II.

III.

IV.

Outline of the financial statements for the fiscal yearthat ended in March 2024 and projected businessresults for the fiscal year ending in March 2025
Details of the consolidated financial statements forthe fiscal year that ended in March 2024
Details of the consolidated projected business forthe fiscal year ending in March 2025

Progress of the Medium- to Long-Term
Management Plan

Airport Facilities Co.,Ltd.

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20

Progress of the Medium- to Long-Term Management Plan

Basic Policy

Basic Policy(restated)

Continuous implementation of selection and concentrationand maximum use of business resources* ROA = business profit (operating income + non-operating income) ÷ total assets

Airport Facilities Co.,Ltd.

21

Progress of the Medium- to Long-Term Management Plan

Airport-related
real estate businessA fresh products center starts full operation in the Haneda Airport domestic cargo terminal area
・A fresh products center specializing in handling fresh products is scheduled to start fulloperation by around June 2024 within the domestic cargo terminal area of Haneda Airport,
maintained and operated by our company.
・The center aims to improve the efficiency of the delivery and receipt of cargo by consolidating
the tenants handling fresh products, and to improve safety by reducing the number of traffic
flows within the area.
・Sharing of facilities and equipment will also be sought in the future to contribute to resolving the
problem of labor shortage within the industry and improving the quality of air cargo.

Scale

Approx. 4,000m2

Start ofoperation

June 2024 (planned)

Tenants

Forwarders handling fresh foods andflowers
Airport Facilities Co.,Ltd.

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22

Progress of the Medium- to Long-Term Management Plan

Non-asset
business

Acquisition of four real estate properties for sales; Plan being promoted ahead of schedule
・Development and promotion of "revolving business," which sells
the acquired properties after improving the value throughrenovation, etc., and acquires new properties with the money
obtained, as a pillar of our non-asset business.
・In FY2023, four real estate properties for sales were acquiredahead of schedule.
・In FY2024, sellout of some of the properties is assumed.
・We will continue our efforts in accumulating excellent propertiesand diversifying revenue sources by determining various exit
strategies.

┃List of real estate properties for sales

・Shinjku-ku, Tokyo,
Shinjuku Yawaragi Building(acquired in June 2023)
・Chuo-ku, Tokyo,
Nihonbashi Hamacho
2-Chome Building(acquired in October 2023)
・Chiyoda-ku, Tokyo,
Sakura Front Ichibancho(acquired in October 2023)

Acquired in FY2023

Shizuoka City,
Shizuoka Prefecture,
Gofukukan(acquired in August 2023)

Hiroshima City,
Hiroshima Prefecture,
Hiroshima Motomachi
NS Building(acquired in March 2023)
Hiroshima Motomachi
NS Building

Shinjuku Yawaragi
Building

Gofukukan

Nihonbashi Hamacho
2-Chome Building

Sakura Front
Ichibancho
Airport Facilities Co.,Ltd.

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23

Progress of the Medium- to Long-Term Management Plan

Airport-related
infrastructure business

Upgrading of refrigerating machines is under way; Being friendly to the global environment
・Tokyo Airport Heating & Cooling Co., Ltd. is upgrading two refrigerating machines at thetiming of renewal to high-efficiency turbo refrigerating machines.
・Improvement of efficiency by about 60% at maximum compared to the existing model is
expected.
・As for the whole plant, improvement of efficiency by about 10% is expected.

Refrigerant gas used for the turbo refrigerating machines newly introduced
is non chlorofluocarbonic gas that is friendly to the global environment,with extremely low ozone depletion potential.
Operating ability can be adjusted efficiently by introducing inverter method.
Highly efficient operation becomes available during low-load times, suchas in intermediate seasons in spring and autumn or at night. Significant
energy-saving effects can be expected, contributing to reducing CO2
emission.

Airport Facilities Co.,Ltd.

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24

Progress of the Medium- to Long-Term Management Plan

Overseasbusiness

Obtaining the third aircraft through the aircraft fund,in which our company participates as an anchor investor
・In July 2022, our company signed an investment contract for "MACH I," an aircraft fund, with
Mercuria Investment Co., Ltd., as an anchor investor.
・The second aircraft was obtained in September 2023, and the third aircraft in December 2023.
Adjustment is currently being made for the obtaining of additional aircrafts.
・We will continue considering the expansion of aviation-related investment and aim to diversify
revenue sources.
Fund
operationcompany

Mercuria Investment Co., Ltd
Airborne Capital Limited

Investment
by ourcompany

4 billion yen

Equipment
to beinvested

Assuming the narrow bodies for Boeing
737, Airbus 320, etc.

Invested
countries

Regardless of Japan or abroad

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

25

Overseasbusiness

Progress of the Medium- to Long-Term Management Plan

Installing solar power generation facilities abroad, which is the first effort for our company
・Airport Facilities Asia Pte. Ltd. (AFA), our group company overseas, installed a solar light
power generation facility on the rooftop of the engine plant that the company owns in Seletar
airport, Singapore.
・Electricity generated is sold to StandardAero, which is the tenant of the plant.

・Triggered by this case, expansion of solar power generation facilities installed abroad iscurrently being considered.
Malaysia
Seletar airport

Singapore
Changi Airport

Singapore Office

Invested amount

SGD490,678 (Approx. 49 million yen)

Use

Electricity for inhouse consumption

Annual amount of
power generation

488,100kWh

Date of completion

April 2023

Start of operation

May 2023
Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

26

Progress of the Medium- to Long-Term Management Plan
Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Characteristics of the businesses of our company
Since its foundation, our company has been providing facilities essential for the operation of aircrafts and area heating and cooling service as an infrastructure
within the airport, to air carriers and aviation/airport-related companies, mainly in Haneda Airport, and possesses a stable profit base. Also, in order to create
further corporate value, our company is also putting our efforts into expanding businesses outside airports, as disclosed in the FY2022-FY2028 Medium- to
Long-Term Management Plan.

Net sales by business segment(FY2023)
Water supply &drainage service
and other business
11.6%
Area
heating &coolingbusiness
13.3%

Profit is stable because our main business is real-estate leasing andinfrastructure provision mainly in airports.

Real estatebusiness
75.1%

Net sales by region (FY2023)

・Hangar

Real estatebusiness

Infrastructure

・Area heating & coolingbusiness・Shared telecommunication
・Water supply and drainage

・Cargo terminal
・In-flight meal factory
・Training facility for crews

Outsideairports,
abroad, etc.
13.3%

Airport = public land
Airportrelated
business
86.6%

Airport Facilities Co.,Ltd.

27

Progress of the Medium- to Long-Term Management Plan
Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Recognition of current situation
PBR of our company is 0.52, and ROE is 3.5% (FY2023). Recent stagnation of ROE is partly because of decrease in profit due to the recording of an asset
retirement obligation associated with the facilities renovation in Haneda Airport 1-Chome project (since FY2022), in addition to the temporal decrease in profit
due to the COVID-19 pandemic. While the business model to recover invested capitals in the long term is stable, we also recognize the necessity of further
improving capital efficiency, considering recent requirements.

PBR

ROE

(Times)(％) 8.0%

1.20

6.0%
PBR 1.0

1.00

4.0%

3.1%

3.9% 4.2% 4.2% 3.9% 4.1%
2.9%

3.5%

1.6%

2.0%
0.0%

0.80

0.72

0.60

-2.0%
0.53

0.57

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

0.60

0.56

0.52

0.51

0.50

0.52

PER

0.37

0.40

(Times)40.0
30.0

0.20

20.0
0.00

32.9
23.1
13.6

13.5

14.6

17.6
13.1

15.1

9.0
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

10.0
0.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Airport Facilities Co.,Ltd.

28

Progress of the Medium- to Long-Term Management Plan
Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Policy and objectives towards improvement
Our company is currently working on the FY2022-FY2028 Medium- to Long-Term Management Plan, and is aiming to improve ROE and PBR throughthe Medium- to Long-Term Management Plan target of ROA 5%, based on the recognition of the issues of our companies and requirements from theTokyo Stock Exchange.
Our company aims to develop a business portfolio that is resilient to risks aware ofcapital efficiency, and achieve ROE improvement through ROA improvement, throughthe secure implementation of the Medium- to Long-Term Management Plan.


Improvement of ROA• Linkage with priority measures in theMedium- to Long-Term Management Plan
(1) Haneda Airport 1-Chome Project(2) Expansion of non-asset business(3) Improvement of the profitability ofexisting business

Improvement ofROE

Nurturing
expectation forgrowthReduction of thecost ofshareholder'sequity1.7-foldincrease

Non-airport
空港外
business

Financial and capital strategy• While maintaining the financial soundness,growth investment utilizing liabilities will be
implemented.

Airport-related
空港内
business

FY2021

Roadmap towards achieving the Mediumto Long-Term Management Plan

ROAWork with businesses with high capitalefficiency while also securing the stablebusiness base.

Target for business profit growth

Results

FY2028ROA
Target5.0％

3.4％
FY2021

FY2028 ROA = business profit (operating income + non-operating income) ÷ total assets

We will establish a management base that generates profit stably and efficiently, and improve our IR activities on the business activities
and profits of our company, to win improved understanding, trust, and expectation for growth among our shareholders.


Stable expansion of shareholder return  Promotion of dialogues with investors and  Reinforcement of management baseinformation disclosure• Human resource and organization• Dividend increase linked to profit
development strategy•
Promotionofconstructive
dialogues
with(payout ratio of over 40%)
• Strengthening of corporate governanceshareholders and investors• Changes in shareholder benefits (July 2023)• Improvement of work efficiency utilizing IT• Qualitative and quantitative improvement of
information disclosure
Airport Facilities Co.,Ltd.

29

Progress of the Medium- to Long-Term Management Plan
Changes in shareholder benefits
・From the perspective of developing further understanding of the business of AFC Group and make it useful also
for individual shareholders, we decided to change the shareholder benefit to a meal voucher for Blue Corner UC,
a restaurant operated by our group company from which you can watch the airplanes from July 2023.
・This resulted in an increase in the number of shareholders, which also contributed in the improvement of theaverage net value of trade per day, which is one of the criteria for listing on the Prime Market of the Tokyo Stock
Exchange.
Restaurant name Blue Corner UC
Address

Open hours

Official website

3-5-10 Haneda Airport, Ota-ku, Tokyo
2F of the Utility Center Building
On weekdays, from 11:00 to 21:00 (last call is 19:45)
Closed on Saturdays, Sundays and holidays

https://bluecorner.afc.jp/

Official Instagram https://www.instagram.com/bluecorner_1998/<Conditions for the presentation of shareholder benefit>
Number of stocks held

Details

100 shares or more but
less than 500 shares

Two meal vouchers worth 2,500 yen each (annually)

500 shares or more

Two meal vouchers worth 5,000 yen each (annually)
Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

30

Progress of the Medium- to Long-Term Management Plan
Initiatives for ESG■ Adopted as the trial company for■ Provision of SD plant as a verification test sitefuel-cell forklifts (FCFL) usinghydrogen as a fuel・Haneda Airport SD plant was provided as a verification test site
for CO2 collection and immobilization utilizing microbial fuel cell.

・Our company implemented a trial use
of FCFL by tenants in the Haneda
Airport domestic cargo terminal area for
two months from December 2023.

■ Introduction of eco-friendly■ Implementation of training for employees andofficials
・As a part of human resources development and awarenessraising, training sessions on various themes including not
only issues related to the business of our company, but also
on harassment, mental healthcare, DE&I, ESG, SDGs, etc.,
targeted to the employees andofficials of the company were
implemented, which resulted indeeper understanding on such
issues.

refrigerating machines
・These highly efficient machines use ecofriendly refrigerating gas, contributing toenergy saving and CO2 reduction.
■ Donation of stockpiles against disasters
・Stockpiles against disasters were donated to municipalities in
Hokkaido, Osaka Prefecture, and Tokyo, contributing to foodsupport and reducing food loss.

■ Participation in the HANEDA■ INNOVATION CITY cleaning
activity
・Aiming for cleaning up and improved
understanding of nearby areas byrelevant business operators, ourcompany also participated in thecleaning-up activities.
・In FY2023, our company participated in
the cleaning-up activities in HANEDAINNOVATION CITY and area near
Tama River twice, in May and March.

早川 亮
・三井住友銀行 大森
蒲田法人営業部 次
長 渡邉 昭彦
・三井住友銀行 大森
蒲田法人営業部
守屋■ Promoting paternal childcare leave torealize a workplace where everyone canwork healthily・ In addition to the introduction of the system,
enlightenment activities were also implemented,
such as diffusing information on the actual
experiences of men taking childcare leave. After
introducing the system, five among the six eligible
employees took the childcare leave.

■ Establishment of system for risk control and compliance with laws and regulations through the establishment Risk Management Committee andCompliance Committee■ Securing business continuity through the formulation and continuous review of BCP■ Establishment of improved, transparent governance・Because a potential problem in terms of governance was identified in the process of the appointment of candidates for the directors in June 2021, we have established an
independent inspection committee to implement inspection in April 2023.
Based on the problems and the realization of improvement measures pointed out and proposed by the committee, our company had formulated a revised director nomination policy inDecember 2023 to establish a governance system with higher transparency, strength, and adequacy.
Please also take a look on the Integrated Report released on September 28, 2023 for explanation on our ESG efforts.

URL：https://www.afc.jp/ir/integrated-report.html

Airport Facilities Co.,Ltd.

Airport Facilities Co.,Ltd.

31

Disclaimer

Warnings■ This reference document is not intended to solicit investment.
■ Descriptions regarding future forecasts are based on information currently available,
and the results may turn out differently depending on changes in the businessenvironment, etc.
■ Users should make important decisions on investment and other matters at theirown discretion.
This reference material is also available on our company website.
https://www.afc.jp/

Inquiries:
Public Relations and Investor Relations
Division, Airport Facilities Co., Ltd.

TEL

： 03-3747-0953

E-MAIL

： afc_ir@afc.jp
Airport Facilities Co.,Ltd.