New Medium- and Long-TermBusiness Plan
Road to 100th anniversary
Embracing new challenges(FY2024 to FY2030)
February 07, 2024

Message from the President
Daisue Construction recently formulated “Road to 100th anniversary: Embracing new challenges,” our
new Medium- and Long-Term Business Plan targeting the year 2030.
As we look towards the 100th anniversary of our founding in 2037, we will realize improved profitability
and increased corporate value through the following three challenges as we strive to flourish as a
Prime Market-listed company: increasing the tenacity of our construction business, enhancing ourhighly profitable portfolio, and bringing the foundations of our business into the next generation.
We’ve steadily built up a track record with a focus on condominium construction over our long history,
and in recent years we’ve worked to strengthen our financial base, for example by improving ourcapital adequacy ratio. Most recently, after having achieved a degree of success shoring up ourfinances, we embarked on a gradual transition to a more aggressive approach to management,
starting by acquiring two civil engineering companies.
At the same time, some initiatives haven’t adequately kept pace with the significant changes occurringin the environment in which we do business, for example worsening profitability as a result of factors
including sudden increases in the cost of raw materials, recent initiatives to satisfy criteria forremaining listed in the Prime Market, and calls for us to improve our PBR ratio, which is currently lessthan 1.0.
Our current Medium-term Business Plan, “Challenges for the future,” has been delayed two years,
leading to this misalignment with environmental changes. In addition to formulating this new Mediumand Long-Term Business Plan, we’ve worked to realize a medium- and long-term plan characterized
by ambition and continuity and founded on a long-term perspective by lengthening its term from three
years, the conventional length of our business plans, so that it extends to the year 2030.
Going forward, Daisue Construction will work to maximize its corporate value in line with this plan toprepare for greater challenges.

Kazunori Murao
President and Representative Director

2

Daisue Construction’s VisionHelping increase customers’
corporate value
as a professional construction partner

Becoming a company that creates spacesrich in security and joy
Realizing a people- and Earth-friendly society by building close
relationships with customers

Realizing corporate value befitting a Prime Market-listed company
by achieving a PBR of greater than 1.0

Construction services characterized by

Providing one-stop
supportpeace of mind, trust, andquality

Offering technical and field
capabilities
that fully leverage our expertise based on an
extensive track record

throughout the building life cycle

Manifesting character
that combines extensive knowledge andexperience with passion and dynamic
energy3

Proposing solutions
that leverage real estate and meetcustomers’ needs

New Medium- and Long-TermBusiness Plan
Road to 100th anniversary
Embracing new challenges
Overview

Status of Past Initiatives
We’ve steadily implemented the business and capital strategies we initially outlined one step at a time to build a solid
financial base. At the same time, inflation continues to impact our operations, and a number of profit-related issues
remain to be resolved.
DAISUÉ SINKA 2020
Fiscal year ended March 2018 to fiscal
year ended March 2020

Actions

Challenges for the future
Fiscal year ended March 2021 to fiscal
year ending March 2025*1
 Develop and launch the initial phase of adigital transformation (DX) system that willallow us to leverage knowledge in an
integrated manner across the entire company.
 Start bidding on super-high-rise buildings andsuper-large projects.
 Work to develop zero-energy technologies like
ZEB, ZEH, and wood construction techniques.
 Advance into new businesses, for example byincorporating two civil engineering companies
into the Group.

 Limit large investments and improve financial
robustness.
 Strengthen relationships with major
condominium developers.
 Expand our customer base for renovations,etc.

Net assets

Finance47%

47%

Capital adequacy ratio

43%

42%

38%

36%

19.1 billion yen 20.6 billion yen 21.5 billion yen
13.9 billion yen 16.4 billion yen 17.6 billion yen

6.0%

4.9%

Net sales

4.2%

Profitability
52.9 billion yen

Fiscal year ended
March 2018

3.9%

64.9 billion yen 65.2 billion yen

2.6 billionyen

3.9 billion
yen

Fiscal year ended
March 2019

Operatingincome2.8 billion
yen

Fiscal year ended
March 2020

Fiscal year ended
March 2021

2.6%

69.6 billion yen 71.8 billion yen

2.2 billionyen

Our capital adequacy ratio has
improved, and we’ve achieved a
degree of success shoring up
our finances. We’ve laid afoundation for active
investment in growth.

Operating margin

3.9%

56.5 billion yen

We’ve steadily taken the actions
initially identified in each
Medium-term Business Plan.
We’ve also undertaken morechallenging initiatives, forexample by incorporating two
civil engineering companies
into the Group.

2.7 billion
yen

Fiscal year ended
March 2022

Even as net sales have grownsmoothly, inflation continues to
impact our operations, creating
profit-related issues.

1.9 billion
yen

Fiscal year ended
March 2023

*1: In November 2021, the current Medium-term Business Plan, which originally extended to the fiscal year ended March 2023, was extended until the fiscal year ending March 2025 as a result of changes to the Tokyo Stock Exchange.

5

Our Business Environment and Future Prospects
A struggle for survival is intensifying within the construction industry. Computerizing operations and ensuring sustainability
have become urgent priorities.
Furthermore, the capital markets are demanding the initiatives to increase corporate value accelerate.

Construction
marketSecuring human resources, establishing competitive advantages, and building abusiness fluctuation-resilient base for operations have become even more important.
•••

The shrinking of the labor population and the aging of workers are becoming more serious.
Competition due to the gradual shrinking of the market is intensifying, and pressure for a reorganization of
the industry is growing.
Inflation and business fluctuations are having a strong impact.

We’ve embarked upon an era in which computerization and data utilization
are directly linked to companies’ competitive strength.

Computerization••

A digital transformation (DX) geared towards boosting productivity is progressing rapidly.
High added value through effective use of data has the potential to become a differentiating factor.

We’ve embarked upon an era in which environmental and societal
issues will be resolved by businesses.

Sustainability

Requirementsfrom capital
markets••

Initiatives to address environmental issues, for example through decarbonization, are accelerating globally.
Initiatives to address societal issues such as well-being are also progressing. Companies are underpressure to go beyond “CSR” initiatives and make a contribution through their business activities, anddisclosure of non-financial information has become mandatory.

Companies are being called upon to accelerate their efforts to boost
corporate value through management reforms.
••

Increasing corporate value through capital efficiency improvements is becoming more important in light ofrevisions to the Corporate Governance Code.
Pressure on companies with a PBR ratio of less than 1.0 to make improvements is increasing.

6Positioning of the New Medium- and Long-TermBusiness Plan
Recognizing the need to undertake radical reforms from a longer-term perspective based on the absolute need to maintainour listing in the Prime Market and the increasing necessity of boosting our PBR ratio beyond 1.0, we formulated a new
Medium- and Long-Term Business Plan looking towards 2030.
Strengthening themanagement base
Establishing trust in
financials

Pursuing a sustained improvement in corporate value
Updated based on the absolute necessity ofmaintaining our listing in the Prime Market
Incorporating specificways to increase
corporate value

100th
anniversary of
DaisueConstruction's
founding

New Medium- and Long-Term Business
Plan
Road to 100th anniversary
Embracing new challenges
2030 Vision

Previous Medium-term Business PlanDAISUÉ SINKA 2020

Current Medium-term Business Plan
Challenges for the future

Achieving a PBR
ratio of at least 1.0

Meeting the criteria
for remaining listed
in the Prime Market

Fiscal year
ended March2018

Fiscal year
ended March2019

Fiscal year
ended March
2020

Fiscal year
ended March
2021

Fiscal year
ended March2022

Fiscal year
ended March2023

Fiscal year
endingMarch 2024

Fiscal year
endingMarch 2025

Fiscal year
endingMarch 2026

*Graph illustrates operating income.

7

・・・・・

Fiscal year
endingMarch 2027

Fiscal year
endingMarch 2028

Fiscal year
endingMarch 2029

Fiscal year
endingMarch 2030

Fiscal year
endingMarch 2031

Fiscal year
endingMarch 2038

Concepts informing the New Medium- and LongTerm Business Plan

“Road to 100th anniversary: Embracing new challenges”
We will realize significant growth as a company listed in the Prime Market
through three challenges to accomplish radical reforms as we prepare to markthe 100th anniversary of our founding.

Increasing the
tenacity of ourconstruction
business as we
prepare to escapecompetition

Business development has focused on
condominiums, a segment of the market thathas been a strength for Daisue to date. Goingforward, we will strive to pursue direct-award
projects (as opposed to projects with a bidding
process) and improve profitability byincreasing specialization in key domains,
including the general construction domain,and establishing the Daisue brand whilefurther boosting profitability by refining ourstrengths in the condominium domain.

Enhancing our highly
profitable portfolio
through active
investment andaggressive
management
To date, we’ve limited investment andemphasized financial robustness in ourmanagement. Going forward, we will expand
our business portfolio by undertaking civilengineering, real estate, and community
service-related businesses and build astable, highly profitable foundation for ourbusinesses that’s able to resist the effectsof business fluctuations.

8

Bringing thefoundations of ourbusiness into thenext generation
by revamping theprevious basis of ouroperations
To underpin the significant growth described on
the left, we will strengthen and expand ourhuman resources base, develop moresophisticated organizational structures,
pursue a digital transformation (DX) toboost productivity, and undertake
operational reforms as we bring thefoundations of our business into the next
generation.

Three Challenges and 10 Key Policies
We will realize significant growth through three challenges.

Increasing the tenacity of ourconstruction business

Enhancing our highly
profitable portfolio

Bringing the foundations of ourbusiness into the next generation

Developing even moreadvanced condominium
construction techniques by
pursuing standardization

Reentering the civilengineering market

Building a human resources basethat lets a diverse workforce dotheir jobs in an energetic manner

Pursuing direct-award general
construction projects bysecuring differentiating domains

Entering the real estatedevelopment andreconditioning market at scale

Focusing on building
reconditioning, an area ofgrowing demand

Creating new businesses tosolve social issues

9

Reforming organizational structures
so that we can more readily
accumulate and utilize expertise

Increasing productivity and passing
on skills to younger workers through adigital transformation (DX)

Developing more sophisticatedworkflows through operational
reforms

Roadmap for FY2030
During the first four years, we will establish a foothold for facilitating growth by focusing on reformsof our business base. During the next three years, we will work to reap the benefits of growth.
Fiscal year ending
March 2025

Phase 1 (first 4 years)

Fiscal year ending
March 2028

Phase 2 (last 3 years)

Fiscal year ending
March 2031

Period of reaping
the benefits of growth

Period of business base reforms

Realizing growth based on the foundation laid in Phase 1
Building a foothold for growth
Enhancing and developing the uniquestrengths of Daisue in the construction
business

Creating high-profitability projects byleveraging our strengths in pursuit of directaward projects

Launching new businesses in the areas of civilengineering, real estate, and community service

Creating synergies between new businesses and theconstruction business and positioning them to contributeto profit as our second and third tentpole businesses

Building the necessary foundations for ourbusiness

Contributing to the streamlining of business
operations

10

Operating Income Targets for FY2030
We will strive to achieve a PBR of at least 1.0 and consolidated operating income of at least
5.0 billion yen (and an operating margin of at least 5.0%) in FY2030 (the fiscal year ending
March 2031).
Operating income (condominium construction, general construction, and renovations)

Strive toincrease the
PBR ratio to atleast 1.0

Operating income (civil engineering, real estate, and other)
Operating margin

Net sales of roughly
100.0 billion yen or more

5.0% or greater

Achieve market
capitalization of greaterthan 10.0 billion yen

3.9%

3.6%

3.0%
2.6%

5.0 billion yen or greater
900 million yen
or greater

3.8 billion yen
700 million yen

2.7 billion yen

1.3%

2.6 billion yen
100 million yen

1.9 billion yen
1.0 billion yen
300 million yen

3.1
billionyen

2.5
billionyen

4.1
billionyen orgreater

700 million yen

Fiscal year ended
March 2022

Fiscal year ended
March 2023

Performance

Fiscal year ending
March 2024

Fiscal year ending
March 2025

Fiscal year ending
March 2028

Plan

Outlook11

Fiscal year ending
March 2031

Other Management Indicators
We will work to increase our corporate value by boosting our capital efficiency andaccommodating requests from capital markets.

Capitalefficiencyrelated
indicators

Capitalmarketrelated
indicators

Performance
Fiscal year ended March
2023

Targets
Fiscal year ending March
2025

Targets
Fiscal year ending March
2031

ROE

6.4%

At least 8.0%

At least 10.0%

ROIC

6.2%

At least 5.0%

At least 7.0%

DE ratio

0.01

About 0.50

About 0.65

Marketcapitalization

7.7 billion yen*1

At least 10 billion yen

At least 20 billion yen

DOE

3.6%

At least 4.0%

At least 4.0%

Total
dividend
trend

58.1%

At least 50.0%

At least 50.0%*2*1: As calculated by Daisue. Market capitalization as of March 31, 2023.
*2: Subject to review as appropriate based on the future business environment.

12Reference: Management Policy for Achieving a
PBR Ratio of 1.0
We will work to realize a PBR ratio of 1.0 by achieving ROE of at least 10% and a PER ratioof at least 10.0 in 2030.
(Target)At least 10%

ROE
improvement(Target)At least 10.0

PER
improvement

 Profitability improvement‒ Improving profitability in existing businesses (Pursuing standardization, building
domains that differentiate Daisue from competitors, etc.)‒ Creating new, high-profitability businesses that go beyond capital cost (Entering
the civil engineering, real estate development, and reconditioning markets) Controlling financial leverage‒ Making effective use of debt and actively pursuing investments through M&As
and other means (Undertaking M&As, a digital transformation, andtechnological investment for real estate and strengthening of design
capabilities)‒ Controlling net assets by actively returning profits to shareholders

 Increasing the anticipated growth rate

‒ Formulating medium- and long-term strategies targeting 2030 with a view
towards the 100th anniversary of our founding‒ Growing market expectations by expanding our portfolio of highly profitablebusinesses‒ Actively pursuing IR activities and information disclosure(Making IR materials such as summaries of financial results available in
English, strengthening communication with institutional investors, etc.)

Strengthening monitoring through KPIs with awareness of capitalefficiency
13×Striving toachieve a
PBR ratio of
1.0 in 2030

Increasing the tenacity of
our construction businessExisting Business (1):
Condominium Construction Strengths
We've built good relationships with many developers as a result of our top-to-bottom focus on condominium
construction. Moreover, the impact of the nationwide trend towards market contraction is limited in the metropolitan
areas where we operate.
Extensive track record and customer base incondominium construction

Market outlook in the principal areas in which we operate*1

We have an extensive track record of doing business withoutstanding developers as a result of the top-to-bottom focus
on condominium construction that we've taken to date.

Population decline is limited in the urban areas that are ourprincipal area of operations. For the time being, we expect to see
net population gains in Tokyo’s 23 wards and the city of Fukuoka.

Major condominium
developers

House
manufacturers

Extensive track record of
doing business with 6 of the
7 major developers

We have a history of doing
business with major housemanufacturers like Misawa
Homes

Regional/small andmedium-size developers
Excellent business
relationships with
developers nationwide

Estimated future population (coefficient of change)*1
110
Fukuoka
105

Tokyo’s
23 wards

100

SapporoNagoya36

36

Fiscal year
ended March
2013

30

25

24

19

・・・

26

28

27

Osaka

95

Trend in number of completed condominium construction projects

34
26

90
0
2015

Fiscal year
ended March2023*1: Compiled based on Japan's national census, 2015 population = 100.

15

2020

2025

2030

Nationwide(Outside 5
largest cities)
2035

Existing Business (1):Strategic Direction for Condominium Construction
We will solidify our reputation of strength in condominium construction by embracing the challenges posed by new businessdomains, for example super-high-rise buildings, while enhancing our strengths in conventional apartment building
construction, our flagship business.

Strategic direction for condominium construction

Approach to priority domains

We will put in place mechanisms to parlay our extensive track record
into even greater strength by building standard models that will serveas the basis on which we accommodate individual customers’ needs.

We will increase our presence throughout the condominium domain
by embracing the challenges posed by adjacent domains.

・・・
Project A Project B Project C Project D

Large-scale

Extensive track record incondominium
construction

Development
of data andtypification
Building a standard model
to guide design andconstruction of individual
customers’ projects

200 residential
units and up

・・・
Company
A standard
model

Company
B standard
model

Company
C standard
model

Conventional
condominiums

Company
D standard
model

50 residential
units and up

Streamlining
operations

DesignSmall- andmedium-scale

Customizing thestandard model for
individual projects
Simplifying
drafting ofdesigndrawings

Super-high-rise
condominiums

Simplifying
creation of
construction
plans

・・・

Construction

Middle- andhigh-rise woodcondominiums

Premium
apartments
Reinforced concrete
construction

16

Wood constructionReference: Plans to Undertake Super-high-riseand Wood Construction Projects
We will embrace the challenges posed by new domains, for example super-high-rise
condominiums and middle- and high-rise wood construction dormitories.

*The two left buildings above are part of this effort.

Warabi Station West Exit Class 1
Urban Area Redevelopment Project•••

Wooden Employee Dormitory
Construction Project•

Multi-use facility with total floor space of 56,119 m 2 on a site ofabout 7,287 m2 in the area around the West Exit of Warabi Station
Buildings A and B, each with 1 belowground level and 28
aboveground stories, with floors 1 through 3 occupied bycommercial tenants, a library, and government offices, and floors 4
through 28 occupied by 415 residential units
Tentative construction dates: January 2024 through July 2027

•
•
•

17

Dormitory with total floor space of 4,800 m 2 on a site of about
3,000 m2 Planned atrium in center of building
Concept: A wood-construction, 5-floor, 76-room employee
dormitory with recreational space and IoT features
Using wooden structure technologies currently under development
We’re moving forward with wooden structures in which the building
itself serves to sequester carbon as a way to contribute to a lowcarbon society through cyclical use of forest resources.

Existing Business (2):Strategic Direction for General Construction
We've established a series of policies to guide initiatives in each domain, and we will strive to pursue direct-award
projects and boost profitability by having expert teams circulate expertise in order to secure a competitive advantage.

Strategic direction for general construction

Approach to priority domains

We will work to transition to a high-profitability structure by
efficiently circulating specialized knowledge and expertise whilenarrowing down the priority domains on which we focus resources.

We will select and narrow down the priority domains on which
we focus resources in an effort to outcompete rivals bybuilding on our own unique strengths.

Narrowing downpriority domains

Toppriority
domains

Shortterm
priority
domainsOtherdomains

Quickly establishingcompetitive advantages
Toppriority
domains

Circulationof expertiseby expert
teams
Increasing expertise andbuilding standard
models for individual
domains
Establishingbrands andcompetitive
advantages

Refrigerated
warehouses

・・・
Model A Model B Model C Model D

Specialized brand for the ___ domain

Pursuing direct-award
projects and increasing
profitability

18

Shortterm
priority
domains

PlantsHelping secure stable profits inthe near term

GeneralSmall and mediumwarehouses
size offices

HotelsReference: Example Initiatives Targeting General
Construction
We already have a track record of participating in multiple projects in top-priority and short-term priority
domains, and we’re in the process of gaining a foothold so that we can build on our strengths.

Logicross Osaka-Katano

L.biz Nihonbashi•• Project in which we designed and built a
distribution facility with four aboveground stories
and total floor space of about 20,800 m2• This refrigerated warehouse provides frozen,
refrigerated, and room-temperature zones andoffers a high level of flexibility while meeting adiverse range of tenant needs.

•

19

Project in which we built an office building with 11 abovegroundstories and total floor space of about 3,590 m2
We worked to improve the indoor environment by controlling
temperature and lighting and to control the thermal load on thebuilding’s skin. Thanks to those efforts and active use of naturalenergy such as sunlight, the structure’s environmental performance,
which is designed to help realize a decarbonized society, hasearned high praise, and the structure earned “Rank A” classification
under the Comprehensive Assessment System for Built
Environmental Efficiency (CASBEE) (new construction category).

Existing Business (3):Strategic Direction for Renovations
We use renovations as a hook to secure new-construction projects while focusing on refinement andrenovation projects with a high level of difficulty so that we can highlight our unique capabilities.
Renovation project environment

Strategic direction for renovations

A particularly large number of buildings were completed before
2000 in the non-residential domain, and we expect to see growthin demand for building reconditioning.

We also use renovations as a hook to secure new-construction
projects while focusing on refinement and renovation projects
with a high level of difficulty.

Year ofNon-residential (non-wood) completion

Residential (non-wood)

Pre-1960s
1960s
1970s
1980s
1991
1993
1995
1997

72.2%

Refinementandrenovations

We will establish a high-profitability
business based on our proprietary
technological capabilities by tappingreconditioning demand, which isrising as the existing building stock
ages.

Small-scale
repairs

We're using small-scale repairs as ahook to lead to new-construction
projects as we work to strengthen ourcustomer base, particularly in priority
domains such as plants.

*1

60.1%

1999
2001
2003
2005
2007
2009
2011
2013

(Unit: Tens of thousandsof square meters)

2015
2017

40,00020,0000

020,000*1: Refinement, a reconditioning technique proposed by architect Shigeru Aoki, is a new
construction technique that seeks to lengthen buildings’ service life by reusing the existing
frame, which makes the method less expensive than rebuilding the structure from scratch.

40,000Source: Statistics on Existing Building Stock (Ministry of Land, Infrastructure, Transport and Tourism), data as of January 1, 2018 (prior to 1991, data for 10-year intervals)

20

Reference: Example Initiatives Targeting
Renovations
We’re building our ability to accommodate projects in the renovation market, which is expected to grow in
the future, while accumulating a unique track record in large-scale building reconditioning projects.

Before renovation

After renovation©Hiroshi Ueda (Hiroshi Ueda
Architectural Photography Studio)

THE skM TOKYO HOTEL＆DINING

Chatelet Shinanomachi• Reconditioning project in which a tenant-occupied
building constructed in 2001 (housing a pachinko
parlor and hostess club) was converted into a
compact luxury hotel equivalent to new construction(including exterior and interior work, equipment
updates, and a new elevator).
• The building includes 24 guest rooms, 83 m2 of suites,
and a first-floor restaurant. The pink-gold perforated
metal exterior evokes bubbling Champagne.

• Large-scale renovation project in which a 50-year-old
apartment and tenant-occupied building constructed
in 1971 was revamped with seismic strengthening,equipment updates, and exterior and interior work tobring it up to a similar standard as new construction• By reusing about 84% of the existing frame, we wereable to reduce CO2 emissions by 72% compared to
the rebuilding of the existing building on the same
scale.
21

Enhancing our highly
profitable portfolio

New Business (1):Strategic Direction for the Civil Engineering BusinessWe will strive to expand the scale of our civil engineering business and realize a portfolio that doesn’t depend exclusively
on the construction business by strengthening collaboration with two companies that recently joined the Group.
•

Offering assistance with funds
for human resources
investments, etc. (by acquiring
companies that lack someone tocarry on the business asnecessary)•Strengthening management by
providing management humanresources•

Providing technical assistance

Daisue Construction

Special civil engineering

General civil engineering

domaindomainKamisima
Corporation

Kawanishi Civil
Engineering

・・・(Rock-breaking
domain*1)

・・・

・・・

(Primarily Hyogo
Prefecture)

・・・

Resource
facilitation
Expanding our business by adding
Pursuing scale and securing resources
engineers and building a highExpanding public general contractor
profitability business platformchannels*1: The company has one of the most proven track records in the niche domain of rock-breaking and brings strengths in the form of unique patented techniques.

23Reference: Overview of Two Civil Engineering
Companies That Recently Joined the Group
We’re pleased to welcome Kamisima Corporation, a highly profitable company with proprietary technologies, and Kawanishi
Civil Engineering, which has exceptional civil engineers, to the Group. We will strive to secure consistently high profits bycreating synergies between the two companies and between them and our construction business.

Kamisima
Corporation•

Kamisima, whose strengths include a diverse portfolio of
proprietary patented techniques, has one of the most extensive
track records in Japan in the special civil engineering domain ofrock-breaking. It is an outstanding company that has realized ahigh level of profitability.

•

The company has an extensive pipeline of projects, and it can be
expected to generate further growth by strengthening its ability toaccommodate construction project inquiries, for example bysecuring human resources.

Kawanishi Civil
Engineering
Kawanishi Civil Engineering, which has an extensive track record
centering in Hyogo Prefecture, has many employees who haveearned professional certifications, for example as first-classcivil engineering construction management engineers.

•

The company has an extensive track record earning orders for
public civil engineering projects as a general contractor, and we
expect to be able to generate synergies with Kamisima as well as
our construction business by utilizing its channels.
Operating margin

Operating margin

Net sales

Net sales

54.5%
14.2%

•

6.3%

22.3%

5.1%
940
million yen
yen
9.4 million

13.9
1.39 million
billion yen
yen

3.1%
10.8
yen
1.08 million
billion yen

7.2 million
720
million yen
yen

4.1 million
4.0 million yen 410
400
million yen
yen

Fiscal year
ended May 2021

Fiscal year
ended May 2022

Fiscal year
ended May 2023

Fiscal year
ended July 2021

24

Fiscal year
ended July 2022

Fiscal year
ended July 2023

New Business (2):Strategic Direction for the Real Estate BusinessIn addition to striving to improve and stabilize profitability across the company by participating in real estate development andreconditioning business on a large scale while considering the possibility of M&As to help build our business platform more
quickly, we will create synergies with the construction business and Misawa Homes.



We will create synergies by collaborating with Misawa Homes, which is a
Daisue shareholder, in areas including sourcing and exit strategies.

Real estatedevelopment

Real estate
reconditioning
Providing real estatesolutions to owners
with projects where
there’s room toincrease valueEntering the real estatedevelopment market,
with a focus on luxury
apartments

Daisue’sconstruction
business

 Increasing profitability through closely integrated structures,from development to design and construction
 Strengthening construction sales by utilizing land data

25

New Business (3): New Business Models That
Involve Existing Businesses

Real estate
reconditioning

Real estatedevelopment

We will strengthen our ability to conduct land-paired sales in the construction business based on land data obtained throughthe real estate business. In addition, we will seek to increase profitability by adopting a closely integrated approach that
extends from development to design and construction.

Informationgathering

Purchase

Acquisition of land data

Purchase of land

Sale/ownership of realestateInvestigation of revenuegenerating properties

Provision of real estatesolutions to owners

Sale and operation

Sourcing of properties where
there’s room to increase value

Provision of real estate solutions thatalign with customers’ needs, forexample through property purchases,
sub-lease agreements, etc.

Collection of data fromsources such as real estatecompanies and banks

Development(Design and construction)

Sales
targetingland owners

Design andconstruction

Sales
Construction business

Sale and operation

Land-paired sales
 We will strive to expand orders for directaward projects by proposing land andbusiness plans as a single package,
starting during our own customers’(developers’) planning stage.

26

Design andconstruction by
Daisue Increasing profitability
through a closely
integrated approachthat extends to designand construction

Bringing the foundationsof our business into thenext generation

Human Resource Strategy
We’re working to further strengthen and expand our human resources base to support rapid growth by increasing motivationand engagement, accelerating human resource development, and empowering a diverse workforce to contribute.

Increasing motivation andengagement• We’re putting in place an environment inwhich employees feel motivated so thatthey can do their jobs in an energetic
and dynamic manner.
• We're crafting mechanisms to reward
employees who produce results.

Further strengthening and enhancing aspects of
employee character that support rapid growth
Accelerating human resource
development••

Empowering a diverse
workforce to contribute

We’re promoting a culture that emphasizes
human resources development throughout theCompany.
We’re strengthening development programs
that draw on both on- and off-the-job training andstrategic personnel assignments to help young
employees prepare to make an immediate
contribution to our operations.

•

•

28

We’re building structures that empower adiverse workforce to contribute based on theneed to address labor shortages in existing
businesses and facilitate new businesses.
We will actively secure new human resources
through sophisticated and multifacetedhiring.

Organizational Strategy
We've established the Project Screening Committee and the Business Strategy Headquarters, which reports directly to the president.
(The official names of both new entities remain to be determined.) We will move forward with efforts to optimize order-related decisionmaking and personnel assignments across the company while ensuring that expertise circulates throughout the organization.

Strengthening order-related decision-making
and optimal personnel assignment functions

President andRepresentative Director

New entity
Project
Screening
Committee

New entity
Business
Strategy
Headquarters

Osaka Head
OfficeTokyo Head
OfficeNagoyaBranch• We will take steps to ensure decisions related to orders forimportant projects, for example large projects, are made from acompanywide perspective that takes into account mediumand long-term considerations.
• We will carry out timely integration of personnel across the
Head Office and branch offices through the committee’s
consultations.

Strengthening the accumulation and utilizationof expertise in priority domains• We will work to strengthen our proposal capabilities and torealize more efficient, advanced construction by managing
expertise in a centralized manner and providing it across theCompany in an effort to establish strengths in priority domains.
• We will also seek to increase the sophistication of our design,
estimation, and procurement functions while making use ofdigital transformation (DX) systems.

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DX Strategy
Starting in FY2024, we will work to increase profitability by rolling out proprietary DX systems across the company andrevamping our sales, construction, and management processes to achieve our FY2030 target of at least 5.0 billion yen ofoperating income.

Daisue’s proprietary
DX systems

DaisueConstruction
Customers

Instant rough estimate
systemQuality, scheduling, andcost management andforecasting system

Results monitoring
systemVE/CD search system using up-todate pricing information

Construction integrated management
systemConstruction BIM deployment system

Construction defect forecasting system
Optimal personnel assignment support
systemSales
process
innovation

Construction
process
innovation

Management
process
innovation

Increasing the ratio of
direct-award projects
Increasing profitability at
the time of orders

Applying knowledge fromexperienced site managers toincrease construction
profitability

Preventing loss of profit due tohuman error
Maximizing profit through moreadvanced order management

Innovation in projectplanning velocity

Increasing building value

Shareholders
and markets

Disclosing accurate information
in a timely mannerStarting during the next fiscal year, we will enhance data for high-value-added priority sectors
such as super-high-rise buildings and refrigerated warehouses as well as new businesses.
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Reference: Workflow Linkage Strategy for the DX
We will strive to strengthen DX implementation structures and realize efficient IT investments throughoperational collaboration with Vietnamese company FPT (to build cooperative structures, including off-shoring).

Principal operational collaboration
DaisueConstruction

FPT

DX vendors
IT support humanresources
BIM offshore
collaboration
BPO service

Construction expertise

Cooperative
construction systemdevelopment*1: Vietnam’s largest global IT company

31*1

Operational Reform Policies
We will dramatically review operations for each function based on current issues and future
strategy.

Strengthening ofsales

 Transitioning to KPIs that place greater emphasis on profitability
 Further strengthening our proposal capability, for example by enhancing
technical sales
 Increasing the level of sophistication of our order-related decision-making
process (so that we can pursue challenges in an appropriate manner)

Strengthening of
construction

 Strengthening leadership provided by experienced engineers to spur
improvements in the field Taking steps to circulate knowledge efficiently by adopting a team-based
approach in priority domains
 Tasking the newly created Business Strategy Headquarters to provide
support for utilization of expertise in priority domains
 Strengthening optimal personnel assignments in ways that cut acrossdifferent areas of operations
 Strengthening collaboration with group company Daisue Techno Service

Strengthening oftechnical
assistance Strengthening our design capabilities through M&As of design companies Implementing efficiency measures through visualization of estimated costs on
the project level
 Strengthening the price forecasting function, accumulating and visualizing
purchasing data, and boosting efficiency

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Policies on Initiatives to Address Sustainability
IssuesWe've identified a new set of materialities (key issues) that we need to address as a company, and we’re studying
approaches to resolve them. Going forward, we will strive to steadily resolve these issues through our business activities by
pursuing initiatives and disclosing their results.

Environment

Materialities

Society

Related SDGs

Addressing climatechange•Pursuing carbon neutrality initiatives•

Pursuing ZEB and ZEH structures and wood construction

Pursuing environmentallyfriendly business activities•

Reducing construction byproducts•

Implementing recycling in construction•

Reducing overtime work•

Moving forward with worksite closures•

Encouraging male employees to utilize parental leave programs

Strengthening humanresource development•

Increasing employee satisfaction•

Increasing the number of employees with professional qualifications

Ensuring occupational
health and safety•••

Reducing the number of occupational accidents
Increasing the number of management positions occupied byfemale employees
Increasing the number of female employees•

Increasing the number of experienced workers (through mid-career hiring)Pursuing partnerships•

Introducing a system for advancing careers in the construction industry

Strengthening governance•

Implementing management with awareness of capital cost•

Enhancing disclosure of sustainability-related information•

Raising compliance awarenessPursuing work-life balance

Promoting diversity

GovernancePrincipal initiatives

Ensuring compliance33

Reference:
ESG Initiatives and Information Disclosure
Going forward, we will continue to actively pursue ESG-related initiatives. In addition, we will actively disclosequantitative targets, action plans, and information about our progress towards meeting/implementing them,including with quantitative metrics, through our corporate reports and other means.

Environment

Participating as a member
organization of the Osaka
Zero Carbon Smart City
Foundation (OZCaF)
because we support its
missionSociety

Strengthening humanresource development, forexample by putting in place
specialized training for young
employees and structuresthat encourage them to earn
professional qualifications

Governance

Example ESG initiatives

Establishing targets for
management indicators
founded on an awareness ofcapital cost, for example ROE
and ROIC, and cultivating
enthusiasm for increasing
corporate value over the
medium and long term

Disclosure policies

Company
information
sessions forindividual investors

Corporate report

Going forward, we plan to continue to actively
disclose quantitative targets, progress, actionplans, and other data concerning ESG-related
topics such as the Task Force on Climate-related
Financial Disclosures (TCFD) and human capital.
34

Approach to capital policy

Policy on Shareholder Returns
In addition to maintaining a near-term total dividend trend of at least 50%, we will work actively to return profits
to shareholders in stable manner by making a DOE of at least 4.0% an additional indicator.

Past policy onshareholder returns

Policy on shareholder returns under the new Medium- and LongTerm Business Plan

Dividend ratio ofat least 50%(Starting in fiscal
year ended
March 2023)

Total dividend trend of at least 50% and
DOE of at least 4.0%•

We will maintain active shareholder returns by maintaining a nearterm total dividend trend of at least 50%.
- We plan to revise our policy in the event of unexpected changes
in the future business environment or the Company’s
performance.

•

To facilitate stable returns of profit to shareholders, we will add a
DOE of at least 4.0%.
- We’re adopting DOE as a new indicator so that we can return
profits to shareholders in a stable manner, even if profit were to
fall below anticipated levels.
36

Capital Allocation
Going forward, we will actively make investments needed for growth while continuing toactively return profits to shareholders.
Capital Allocation(Fiscal year ending March 2025 tofiscal year ending March 2031)

Shareholder returns
Shareholder
returns
8.0 billion yen*1

Strategic investments

Operating cash flow
21.0 billion yen

M&A investments
Strategic
investments
20.0 billion yen

Financing cashflow
7.0 billion yen
Cash generation

 We will work actively to return profits to shareholders in astable manner by adopting DOE of at least 4.0% and a near-term
total dividend trend of at least 50%.

 We anticipate making investments on a scale of about 12.0
billion yen in real estate company M&As as we look to make amajor expansion into the real estate development andreconditioning business and in design company M&As tostrengthen our design capabilities.

Growth investments

Cash allocation

 We anticipate making investments on a scale of about 8.0 billion
yen to advance into new business domains, fund zero-energy
technologies, and fund digital transformation (DX) andsystems to revamp our DX technologies and core systems.

*1: Estimate assumes maintenance of 50% total dividend trend.

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A company that creates spaces richin security and joy