Takuma Co., Ltd.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

May 2021

① Reflections on the 12th Medium-Term Management Plan (1 of 2)
 Positioning of the 12th Medium-Term Management Plan
• Final stage of the Corporate Vision that began in FY2012• Strive to achieve cumulative consolidated-basis ordinary profit of JPY 33.0 billion over three years by building a resilient business andmanagement foundation enabling Takuma to respond to future changes in the business environment.

 Results and issues
1. Strengthening and expanding our revenue foundation•Orders increased as we proposed solutions based on customers’ needs throughbusinesses related to previously delivered facilities (equipment improvements andservice life extensions).

•Progress made in initiatives designed to reduce life cycle costs (LCC), for example byutilizing POCSYS.

•We received multiple orders in our O&M business, including from the private-sector for
the first time; began operations and broadened the range of services we offer.

•Firm orders secured for package boilers as well as equipment and systems helped tocontribute to stable consolidated-basis profits.

2. Achieving sustained growth• In the EPC business, we maintained our market position thanks to anincrease in orders for domestic waste treatment and energy facilities.

• Initiatives to maintain our position in sludge incineration and expand theoverseas business are ongoing.

3. Increasing productivity, for example by reforming business processes• Initiatives to improve productivity, for example by utilizing ICT,
have delivered results but remain ongoing.

4. Using human resources effectively• The workforce situation remains tight despite significant expansion in
the number of hires as we work to secure the necessary humanresources we need.

5. Continuing to pursue compliance management• Awareness of the importance of compliance has permeated the Group
thanks to ongoing educational activities. Developing even more effective
measures remains an issue.

• Progress in efforts to refine core technologies and development ofproprietary technologies has generally been smooth.
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1

① Reflections on the 12th Medium-Term Management Plan (2 of 2)
 Financial targets and results under the previous Corporate Vision and the 12th Medium-Term Management Plan• Previous Corporate Vision
FY2020 ordinary profit JPY10.0 billion• 12th Medium-Term Management Plan Total three-year ordinary profit JPY33.0 billion

1,600Sales→ JPY11.0 billion→ JPY33.6 billion（left axis）

160
1,467

Ordinary Profit（right axis）
Unit: JPY 100 Million

1,345
1,220

1,200

1,131

1,163
116

1,039

1,010
100964

891

123

120
110

107

963
94

1,182

103

96
91

800

80

73

400

072

44

2010

40

2011

2012

2013

2014

10th Medium-Term Management Plan
Reinforcement of business foundation
for stability and profitability
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2015

2016

2017

11th Medium-Term Management Plan
Steady expansion in termsof both quantity and quality

2018

2019

2020

0

12th Medium-Term Management Plan
Strengthening of corporate capability
to facilitate steady growth2② Positioning and Financial Targetsof the 13th Medium-Term Management Plan

Lay the foundations for additional growth and take the first steps under the 13th Medium-Term Management
Plan as we prepare to realize the Vision 2030 target of ordinary profit of JPY 20.0 billion.
FY2020

FY2030Vision2030

Previous vision
12th Medium-Term Management Plan

13th Medium-Term Management PlanFirst stepstowards realizing the vision 2030

The Group’s financial
foundations werestrengthened prior to the 12thMedium-Term ManagementPlan.

Ordinary profit
JPY 11.0 billion

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Laying the foundations
for additional growth

Ordinary profit
JPY 20.0 billion

Cumulative 3-year
ordinary profit
JPY 36.0 billion

13th Medium-Term Management Plan
financial targets (cumulative 3-year targets)

Ordinary profit JPY 36.0 billion
Orders received JPY 450.0 billion (for reference)3③ Policies of the 13th Medium-Term Management Plan
Strengthening conventional businesses by reinforcing the Group's management foundation andat the same time acceleratinge its response to future environmental changes. Strive to realize sustainablegrowth alongside customers and society by implementing ESG management through these business activities.

Implementing ESG management

Pursuit of business activities that resolve challenges faced by customers and society
1

Municipal solid waste treatment plants

5

Overseas businesses

2

Water treatment plants

6

New businesses

3

Energy plants

7

Package boilers

4Power retail business8

Equipment and systems

Strengthening
conventional businesses

Responding toenvironmental changes

Strengthening the management foundation
Human resources

Digital technologies

R&D
Manufacturing and engineering capabilities

Partnerships

Capital investment

Compliance

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③-1 Implementing ESG Management
Striving to satisfy all stakeholders and realize the Group’s sustainable growth
while strengthening ESG initiatives through business activities

 Takuma Group Materiality ※EEnvironment• Helping combat climate change• Conserving resources
and protecting the environment

SRealization of a sustainable society

Social• Strengthening relationshipsof trust with customers and communities• Pursuing partnerships and innovation• Promoting activities of human resources• Ensuring safety and health

GGovernance• Strengthening corporate governance※Medium- to long-term ESG issues identified as priority issues for the Takuma Group.
We sorted out them from the perspectives of both importance to stakeholders and importance to us.

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③-2 Strategies by Business (1 of 4)
Provide products and services that resolve challenges faced by customers and society in every business.

1Municipal solid waste treatment plants

 Improving quality and strengthening
profitability in the plant operation business andafter-sales service business Maximizing profitability by extending theservice life of existing facilities
 Ensuring a sustained flow of orders by creating
customer valueDeveloping structures that will allow us to provide newservices, for example private sector outsourcing, privatesector partnerships and Regional Circular and Ecological
Sphere (Regional CES) businesses

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2Water treatment plants

 Ensuring a sustained flow of orders forsludge incineration plants
 Expanding the after-sales service business Accommodating replacement demand
from existing facilities
 Developing structures that will allow us toaccept long-term comprehensive
contracts6③-2 Strategies by Business (2 of 4)

3

Energy plants

4Power retail business Expanding our market presence throughsteady orders for biomass power plants
 Expanding our business throughadditional proposals of after-sales service
solutions Expanding the scale of the business byenhancing products in areas such as
renewable energy and CO2-free powerand developing new sales channels
 Realizing additional expansion in the local
production and consumption of power Capturing demand for fuel conversions inindustrial boilers

 Examining expansion of our service menu
to provide the power demanded bycommunities and customers

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③-2 Strategies by Business (3 of 4)

5

Overseas businesses

 Ensuring a sustained flow of orders forbiomass power plants
 Expanding the flow of orders formaintenance6

New businesses

 Developing businesses that help enhance
the Group’s services in order to realize adecarbonized, carbon-neutral society
 Investing in renewable energy businesses Capturing orders for Energy from Waste
plants and developing associatedstructures
 Implementing global procurement

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③-2 Strategies by Business (4 of 4)

7Package boilers

 Maintaining and expanding the scale of orders
in the existing domestic package boiler market
 Expanding overseas businesses Building and expanding a basis for profit bydeveloping a new market for heating systems
based on a decarbonized society

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8Equipment and systems

 Expanding the flow of orders by
improving sales and construction
capability (equipment) Expanding market share by improving
products’ competitiveness (systems)
 Improving functionality and expanding
business opportunities through alliances(systems)

9③-3 Strengthening the Management Foundation (1 of 3)
Steadily implement our business strategies by allocating management resources and making investments.

Human resources
1. Strengthening recruiting activities and reviewing
employment systems• Reviewing programs to make use of older workers and tohiringe specialized workers

Partnerships
1. Creating new value through alliances• Pursuing robust partnerships with non-group companies andother stakeholders in a variety of contexts

2. Reviewing the human resources development
system
• Implementing career development support measures suchas job rotation programs to help train engineers and otherpersonnel, programs to follow up on the development ofyoung workers, etc.

3. Pursuing workstyle reforms and enhancing theworkplace environment• Examining a diverse range of workstyles that allow workers
to do their jobs without regard to time or place• Implementing health-focused management

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③-3 Strengthening the Management Foundation (2 of 3)

Digital technologies
1. Bringing digital technologies to products andservices• Rolling out digital technologies to reduce manpower requirements
and streamline operations at plants, improve maintainability andfunctionality, and realize more stable operations

Compliance
1. Increasing the effectiveness of compliance and risk
management• Improving and enhancing educational programs• Continuing and improving risk management activities

2. Improving management efficiency• Implementing paperless workflows and Robotic Process Automation(RPA)• Sharing knowledge and expertise on a companywide basis

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③-3 Strengthening the Management Foundation (3 of 3)

R&D,
manufacturing and engineering capabilities
1. Strengthening R&D• Creating products and services required in this new era byutilizing open innovation

2. Strengthening manufacturing and engineering
capabilities• Refining and improving the quality of core technologies, theoverall plant and main equipment

Capital investment
1. Pursuing Plans for the new Harima Factory• Developing a sustainable plan that aims to achieve virtually zeroCO2 emissions• Improving boiler manufacturing capabilities (quality andefficiency)• Examining ways to utilize the Supply Chain Lab• Increasing intrinsic safety in design and construction, andpreventing occupational accidents

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