YAHAGI CONSTRUCTION Group

Medium-Term Management Plan (FY2021 to FY2025)
1. Review of the Previous Medium-Term Management Plan
2. 10-Year Vision and the Positioning of the Medium-TermManagement Plan
3. Business Policy
4. Numerical Targets and Dividend Policy
5. Investment Plan

May 10, 2021

1. Review of the Previous Medium-Term Management Plan (FY2018 to FY2020)
Previous medium-term management plan Business policy■ Consolidated operating results■ Improve construction engineering capabilities(Millions of Yen)

Previous medium-termmanagement plan period■ Pursue business portfolio resilient to business environmental changes■ Promotion of “work-style reforms” to boost productivity and improve theworking environment

FY2018FY2019FY2020

FY2020

ActualActualActualTarget

Net sales

92,754

90,129106,615

100,000

Building
construction
business

48,39444,26358,635・ cultivate new customers and expand into new business areas in
the construction business, such as receiving a large logistics

Civil
engineeringbusiness

29,56429,61833,771

facility project and a large land formation work project, thereby

Real estatebusiness

14,796

16,247

14,208Gross profit

16,50916,30015,699Building
construction
business

6,325

6,360

5,929

Civilengineeringbusiness

5,412

5,097

5,760

Real estatebusiness

4,770

4,842

4,009

Operating profit

7,705

7,764

7,362

7,000

ROE

9.5%

10.2%

6.2%

8% or
higherSummary of the previous medium-term management plan
As a result of promoting initiatives based on business policies, wewere able to:expanding the business size for both building construction andcivil engineering;・ steadily sell land for a large-scale industrial park that wedeveloped, and make smooth progress in the development ofnew land for industrial use in the real estate business;
・ use the aforementioned results to successfully build a portfoliothat strikes a balance between building construction, civilengineering and real estate;・ achieve our financial targets with record-level sales and profit
growth; and・ achieve the ROE target for the entire period overall despite notachieving the ROE target for FY2020.

© 2021 YAHAGI CONSTRUCTION CO.,LTD.

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2. 10-Year Vision and the Positioning of the Medium-Term Management Plan
The Group set a 10-year vision as a plan for continual growth.
Aiming to achieve targets set for 10 years later, we positioned the current medium-term management plan
period (FY2021 to FY2025) as one to develop the foundation for accelerated growth.
Recognition of the future market environment
In addition to the shift in industrial structure and business models caused by theCOVID-19 pandemic, society’s values have shifted from economy-focused toNet sales

sustainability-focused. In the future, it will be necessary to evolve the businessAroundmodel to a sustainable one while creating both social and corporate value.

10-Year Vision“Problem-solving and valuecreating company”¥Net sales

Net sales¥¥106.6 billion

130 billion

creating and providing new value through constructionengineering in order to realize a better society, not just by

10At
present

5yearslateryears
later

FY2020

FY2025

FY2030

A company that contributes to the sustainable
development of customers, communities, and society by

200 billion

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 withinthe areas.
We aim for net sales of around ¥200 billion.

Up to FY2020

Period todevelop the foundation

Period foraccelerated growth

for accelerated growth
FY2021 to FY2025

toward vision
FY2026 to FY2030

Current medium-termmanagement plan period© 2021 YAHAGI CONSTRUCTION CO.,LTD.

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3. Business Policy
In the current medium-term management plan, we have set forth the following business policy todeepen and evolve existing businesses, while also exploring and developing new areas and fields inorder to establish a foundation for accelerated growth in the five year period of the next medium-termbusiness plan.

❸❶
Strengthening of production
systems to scale up business❷
Reform of the construction
production process to improve
productivity

Strengthening of planning andproposal capabilities/strengtheningof capability to drive projects❹❺
Expansion of businessareas/target fields❻
Value co-creation with various
partners❽
Development of an attractive
and rewarding work
environment❾
Promotion of SDGs initiatives(SDGs Declaration)

Development of new technologies
and services/acquisition oftechnologies and know-how❼
Improvement of safety andquality levels and strengtheningof management systems© 2021 YAHAGI CONSTRUCTION CO.,LTD.

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4. Numerical Targets and Dividend Policy◆ Numerical targets(consolidated)

FY2020

FY2025

ActualTargetNet sales¥106.6 billion¥130 billion

Operatingprofit¥7.3 billion¥10 billion◆ Dividend policy➢ Provide continuing and stable shareholder returns, while taking into accountconsolidated 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 and market trends.
Previous medium-term
management plan period

Current medium-term
management plan period

FY2018FY2019FY2020

FY2021 to FY2025

ActualActualActualTargetAnnualdividends¥28¥34*¥34

Payoutratio

27.1%

Payout ratio 30% or more
28.6%

44.8%

*Including commemorative dividend of ¥4 for the 70th anniversary of foundation© 2021 YAHAGI CONSTRUCTION CO.,LTD.

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5. Investment Plan
➢ Make growth investment to build the foundation for realizing the 10-year vision➢ Plan to make growth investment in the amount of approx. ¥30 billion over 5 years

Previous medium-term
management plan period
FY2018FY2019FY2020

FY2021 to FY2025

ActualActualActualPlan¥7.5billion¥5.1billion¥3.4billion(For three years)
Growthinvestment

Current medium-termmanagement plan period¥16 billion¥5.3 billion/year

Approx. ¥30 billion
・Real estate investment
・R&D investment
・Human resource investment
・Investment in information equipment

UP 13％¥6 billion/year© 2021 YAHAGI CONSTRUCTION CO.,LTD.

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Every part of the forward-looking statements contained in this material are assumptions based on information currently available tothe Company at the time of the release of this material. Please keep in mind that actual results may differ from the forecasts due tovarious factors.