Action to Implement Management That Is
Conscious of Cost of Capital and Stock Price

June 27, 2024

KYOKUTO KAIHATSU KOGYO CO.,LTD.
TSE Prime Market: 7226

Recognition of Current Status of Corporate Value Enhancement
As a result of continuing to engage in sustainable enhancement of corporate value, PBR rose up to 0.85 times(as of the end of March 2024).
Continuing the effort toward achieving PBR 1× at an early stage remains an important management issue of the Company.

Trends in PBR and stock prices(Times)1.2(Yen)

PBR

Stock price

3,500
3,000

1.0

2,5952,500
0.8

1,654

1,481

2,000

1,183

0.6

1,616
1,388

1,500

0.85

0.4

0.51

0.2

1,000

0.66

0.65

0.49

0.56
500
00.0
End of March 2019

End of March 2020

End of March 2021

End of March 2022

End of March 2023

End of March 2024

1

Action to Implement Management that is Consciousof Cost of Capital and Stock Price (1)1. Calculation and disclosure of the cost of capital, etc. and strengthening of profitability➢ The Company recognizes that its cost of capital was approximately 7% as of the fiscal year ended March2024, and that its weighted average cost of capital (WACC) was approximately 6% as of the above period.

➢ Grasping the cost of capital and WACC appropriately, the Company will step up SR and IR activities, andplan and advance capital measures while formulating profitability indicators including ROE. In this way, theCompany sets a target of continuously and stably securing earnings that exceed the cost of capital, etc.

2Action to Implement Management that is Consciousof Cost of Capital and Stock Price (2)2. Utilization of interest-bearing liabilities➢ By actively utilizing interest-bearing liabilities, we aim to lower our equity ratio, WACC, etc.

3. Stepping up shareholder returns➢ We will continue to pay high levels of shareholder returns in order to improve shareholder satisfaction andcorporate value while controlling shareholders equity.
Our basic policy for shareholder returns is to keep high levels of dividends, and we will purchase andcancel treasury shares in a flexible manner.

3Action to Implement Management that is Consciousof Cost of Capital and Stock Price (3)4. Improvement of profitability and productivity of main businesses➢ We will boost the profitability of our main businesses—Specialty Truck, Environmental Equipment andSystems, and Parking and Other Operations—and increase operating profit, thereby directly improving

profitability indicators including ROE.

5. Aggressive R&D, capital investment and M&A for future growth, and profit creation➢ With the aim of enhancing corporate value sustainably through medium- to long-term corporate
expansion, we will push forward with aggressive growth investment in main businesses and related fields
while considering a balance between the above and shareholder returns.
➢ Actively investing in R&D as well, we will create future revenue sources through the development of newproducts and technologies. By doing so, we strive to increase corporate value continuously.
4Long-term Management Vision
Final target value
Long-term Management Vision

3rd STEP- Kyokuto Kaihatsu 2030 -● Achievement of both“outstanding technology” and“solid quality”

Step-up strategy following three steps● Realization of stable andefficient income

2nd STEP● Business development andexpansion that fully utilize thecomprehensive strengths of theGroup

1st STEP● Strengthening synergies amonggroup companies● Aggressive investment forgrowth● Strengthen R&D systems forresponding to social issues● Steady progress toward therealization and development of asustainable society*1

Sustainability Vision• CO2 emissions reduction: Minus38%*2• Recycling rate: Maintain99.0% or more
(Zero waste for landfill)● Further expansion of businessactivities and social
contribution areas*1: Details will be posted in “Environmental Vision 2030” to be released at a later date.
*2: Compared with the emission intensity of Kyokuto Kaihatsu Kogyo, Nippon Trex, andKyokuto Kaihatsu Parking for FYE March 2013

Management Performance Vision
TERM : FY2028-30● Demonstrate strong influence
through both high productivityand quality● Active response to socialissues• Consolidated net sales : 200 billion yen• Consolidated operating profit margin: 10% or more
• ROE: 10 %TERM : FY2025-27

Consolidated Performance Targets<Targets for FY ending March 2025
• Consolidated net sales :TERM : FY2022-24

140 billion yen or more(including the growth of new M&As)• Consolidated operating profit margin :• ROE :

7% or more6%Shareholder Returns
Total return ratio (Medium-termmanagement plan 2022–24)

100%
Minimum annual dividend per share54 yen5

Medium-term Management Plan (Cash Allocation)
Being conscious of our assessment by a wide range of stakeholders and the need to enhance corporate value,
we are pushing forward with appropriate cash allocation

Cash in hand

Efficientprocurement

ShareholderReturns(A total ofthree years)

Growth investment

30 billion yen or more
Specialty Truck Business
Reinforce main plants

Specialty Truck Business
Reinforce directly operated
service plants

Approx. 11 billion yen

Approx. 1.5 billion yen

Strengthen overseas
businessStrengthen group-wide
R&D

Approx. 3 billion yen

Approx. 6 billion yen

Cumulative results through FYEMarch 2024:

23.2 billion yen

BCP measures and response to SDGs

Approx. 8.5 billion yen

New M&A
investment

Earned cash
flow

Strategic investment

Medium-term Management Plan 2022–24 — Creating The Future As One

Approx. 10 billion yen

Total return ratio (Medium-term management plan 2022–24)

100%
Minimum annual dividend per share54 yen6Progress in Medium-Term Management Plan
Net sales, operating profit margin, and ROE targets* Although there is the gap between the consolidated earnings
forecast for the FY ending March 2025 and the target numbers forthe final fiscal year of the medium-term management plan, we will
strive to improve performance to achieve these target numbers.

(Millions of yen)

200,000
Net sales

Operating profit margin

13.4

Target numbers for the final year ofthe medium-term management plan
Net sales : 140,000 million yen
Operating profit margin : 7% or more
ROE: 6%ROE
150,000

120,173

128,026
117,170

116,910134,000

Announced on May12, 2022
Target numbers of
the long-term
management vision

16.0
14.0
12.0

10.0
10.0

7.1

6.7

(%)

10.0

113,089

7.7
100,000

200,000

8.0

7.0
6.0

3.8

6.0

4.7

3.2

50,000

4.0

3.1

3.7
2.0

0.9
0

0.0
FYE March 2020

FYE March 2021

FYE March 2022

Former Medium-Term Management PlanFYE March 2023

FYE March 2024

FYE March 2025

FYE March 2031

Creating The Future As One
Kyokuto Kaihatsu 2030

7Trend in Consolidated Operating Profit (By segment)(Millions of yen)

8,000

Specialty trucks
7,000

Environment

Parking, etc.

6,880

6,000
5,000

4,481

4,400

4,000
3,000
2,000

2,451

2,644

2,350

2,098

1,994

1,768
1,140

1,143
656

780

FYE March 2023

FYE March 2024

1,000600

0- 555-1,000FYE March 2021

FYE March 2022

FYE March 2025
(Forecast)8

Calculation of Cost of Capital, etc. and Improvement of Balance Sheets
Our recognition is: Cost of capital at approx. 7%, WACC at approx. 6%.
We will take measures, such as utilizing interest-bearing liabilities, to improve capital efficiency, and in this way we will further lower the cost of capital andWACC.
➢ Our equity ratio at the end of the FY ended March 2024 decreased to 68.7% (70.5% at the end of the FY ended March 2023)

Enhance shareholder returns and capital investment and improve capital efficiency whilecurtailing the growth of capital
Equity/Interest-bearing liabilities balance(Millions of yen)

140,000
120,000(Millions of yen)

20,000EquityBalance of interest-bearing liabilities

117,000

112,686

111,537

100,282

100,000

90,15787,03015,00092,181
11,16680,00011,86810,00060,000

6,753
5,094

40,0005,000
2,801

20,0001,411

1,3750Equity ratio

0FYE March 2018

FYE March 2019

FYE March 2020

FYE March 2021

FYE March 2022

63.2%

64.9%

67.5%

70.3%

73.0%

FYE March 2023

DeclineFYE March 2024

70.5% Decline 68.7%

9Stepping up Shareholder Returns(Millions of yen)

6,000

Shareholder return policy: Minimum annual dividend of 54 yen per share plus flexible purchase oftreasury shares
Total return ratio of 100% throughout the period of the current medium-term management plan:
87 yen for FYE March 2024, an increase of 33 yen
126.1

Purchase of treasury shares

5,000

4,00098.6

Payout ratio

95.1

101.0
10080

121

2,400

3,000140120

Total dividends

Total return ratio

(%)

59.0

60

4,447

2,000

40

3,333
24.6

1,000

1,669

2,157

*2,113

20

15.1

00
FYE March 2021

FYE March 2022

FYE March 2023

FYE March 2024

Results

Results

Results

Results

425454

Annual dividend
amount* Excluding extraordinary income(gain on sale of land): 42.2%

Dividend
increase

87

FYE March 2025

Dividend
increase

116

Forecast as of May 14, 2024

10Profitability Enhancement of Specialty Truck Business◆ While the truck market has remained stagnant temporarily due in large part to the pandemic, semiconductor shortages, and chassis
manufacturers’ misconduct related to vehicle certification, we have managed to improve profitability through revising product selling
prices to offset a surge in raw materials and strengthening the overseas business.
◆ Supply Restrictions of truck chassis due to semiconductor shortages and other factors are gradually improving.
◆ Although sales of standard trucks plunged to 55,000 units in the FY ended March 2023, the FY ended March 2024 posted 67,000 units.
⇒ Sales are expected to return to the 80,000- unit level in the FY ending March 2025. *Prior to the COVID-19 pandemic, they were at the 90,000-unit level.
Operating profit of Specialty
Truck Business(Millions of yen)

8,000

6.9

7,000

6,000

Operating profit margin of thesame period

5.9

6.3
4.5

5,000

April and May2022
February 2023
Price revisions

April 2023
January 2024
Price revisions

April 2024
Price revisions

3.9

4,000
3,000

8.0
7.0

6.0
5.0
4.0

5,615

6,417

6,880

3.0

2.34,481

2,000

4,400
2,451

1,000

FYE March 2019

FYE March 2020

FYE March 2021

FYE March 2022

-555

FYE March 2023

2.01.0-0.60-1,000(%)

0.0
FYE March 2024

FYE March 2025
(Forecast)

-1.0

11

Growth Investment (Major Capital Investments and M&As)
Business

Investment item

Specialty
Construction of a technical center
Truck

Investment details

Implementation period

Strengthen the R&D System
The speed in developing new products will beroughly doubled.

FY2026
Planned to be completed

SATRAC ENGINEERING PRIVATE LIMITED,
Boost production capacity
SpecialtyIndia
Increase market share by expanding sales
Truck
Construction of a plant in Chennai channels

FY2025
Planned to be completed

Specialty
NIPPON TREX: Construction of a new plant
Truck

Boost production capacity: An increase ofapprox. 40%

FY2024
Planned to be completed

Specialty Yokohama Plant
Boost production capacity: An increase ofTruck
Automated line for small dump trucks approx. 45%

Year 2024
To be completed in July

Specialty Sendai Service Center
Truck
Reopening after renovation

Reinforce the service systemYear 2024
Completed in April

Specialty Himeji Service CenterTruckReopening after renovation

Reinforce the service system

Year 2024
Completed in JanuarySpecialty Fukuoka Plant: Completion of a new plantTruckbuilding and a new office

Boost production capacity: An increase ofapprox. 30%

Year 2023
Completed in September

Specialty
Adding the Australian distributor to the Group
Truck

First base to expand into Australia andOceania

Year 2023
Implemented in July

Specialty
Adding Kyushu Tokusyu Motors to the Group
Truck

Reinforce the service system

Year 2023
Implemented in April
12Growth Investment (Major Capital Investments)
Construction of a technical center (to be completed in FY2026)

No
rthW
est

East

Retention pond
(which runoffwater isdirected to)SouthSecurit
yoffice
Entrance/Exit◆The speed in developing new products will be roughly doubled.

Retention
pond 1Parkinglot◆Reinforcement of an R&D system to address social issues/Proactive response to social issues• Shorten the development cycle• Make products lighter in weight and carbon neutral• Respond to market needs swiftly• Enhance the capability to adopt the IoT, AI and EV

Yaman
okami
Drivewayentry(substitute)

Lounge andWC◆Determined initiative to improve quality• Install a test course for certification testing of trailers.
• Response to regulations swiftly◆Strengthening synergies among group companies

Conceptual bird’s-eye viewConstruction of a new plant in Nippon Trex (scheduled to be completed in 2024)◆Automation of key processes will increase production capacity by about 40%.
* Under construction in the compound of the head office◆Establishment of a safe working environment by reducing work at high places in theproduction process◆Become a more environmentally friendly plant* Reduce volatile organic compounds generated by coating of parts by approx. 6.3 tons a year.
* Slash CO2 emissions by about 3.2 tons a year by installing solar light power generation systems.

13
Conceptual presentation of the new plantGrowth Investment (Major Capital Investments)
SATRAC, India: Construction of a plant in Chennai (scheduled to be completed in FY2025)
SATRAC, a group company that posted record-high sales in the FY ended March 2024 due to high demand forspecialty tracks in India, is constructing a new plant near the city of Chennai, in the state of Tamil Nadue, India,
with the aim of capturing more contracts by boosting production capacity, and adding market share throughexpanding sales channels as well as starting exports of products in the future.

City of Bangalore

City of Chennai

14