Takuma Co., Ltd.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

May 24, 2024

Table of Contents

1. Financial Results of FY2023 (Ended 3/2024)

P.2

2. Financial Forecast for FY2024 (Ending 3/2025)

P.19

3. 14th Medium-Term Management Plan (FY2024-2026)

P.25

4. Reference Material

P.52

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

1

Table of Contents

1. Financial Results of FY2023 (Ended 3/2024)

P.2

2. Financial Forecast for FY2024 (Ending 3/2025)

P.19

3. 14th Medium-Term Management Plan (FY2024-2026)

P.25

4. Reference Material

P.52

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2

FY2023 (Ended 3/2024)

Summary

FY2023 Results
Orders received

Net sales

Operating profit¥160.5 billion¥149.1 billion¥10.2 billion

Orders received were down due primarily toa decrease in orders received in the Overseas
Environment and Energy Business and theEquipment and Systems Business, despiteorders received for Energy Plants and Water
Treatment Plants in addition to DBO projects
for municipal solid waste treatment plants.

Sales up for municipal solid waste treatment
plants (after-sale services) in the Domestic
Environment and Energy Business and threeother segments.

Profit was down mainly due to the change inthe EPC project mix in the Domestic
Environment and Energy Business

Domestic Environment and Energy Business
Municipal solid waste treatment plants
Energy Plants
Water Treatment Plants

Domestic Environment and Energy Business
Municipal solid waste treatment plants
Energy Plants
Water Treatment Plants

Overseas Environment and Energy Business
Package Boiler Business
Equipment and Systems Business

Overseas Environment and Energy Business
Package Boiler Business
Equipment and Systems Business-¥7.9 billion(-4.7%) YoY

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

+¥6.5 billion(+4.6%) YoY-¥3.5 billion(-25.9%) YoY

Domestic Environment and Energy BusinessChange in EPC project mix
Cost of O&M measures
Operating expenses (Personnel, R&D, etc.)
Depreciation (New Harima Factory, etc.)
Overseas Environment and Energy Business
Package Boiler Business
Equipment and Systems Business3

FY2023 (Ended 3/2024)

Financial Highlights

Orders received were down due primarily to a decrease in orders received in the Overseas Environment and Energy Business and the Equipment
and Systems Business, despite orders received for DBO projects for municipal solid waste treatment plants.
Net sales were up in all segments, but profit was down due mainly to the change in the EPC project mix in the Domestic Environment andEnergy Business as well as an increase in depreciation at the new Harima Factory associated with operations, increases in personnel and R&D
expenses.

(Millions of yen)

FYE 3/2022(FY2021)FYE 3/2023(FY2022)FYE 3/2024(FY2023)

YoY change

Orders received

192,244

168,558

160,568(4.7%)

Order backlog

445,304

471,211482,612

2.4%

Net sales

134,092

142,651

149,166

4.6%

Operating profit

9,928

13,813

10,229(25.9%)

Operating margin

7.4%

9.7%

6.9%

(2.8pt)Ordinary profit

10,647

14,684

11,166(24.0%)

Profit attributable to owners of parent

7,434

9,621

8,754

(9.0%)

Basic earnings per share (yen)91.53

120.22109.43(9.0%)* EPC: Engineering, procurement, and construction; one approach we use in our plant construction business. * O&M: Operation and maintenance; one approach we use in our plant operation business.
* DBO: Design, build, and operate; one approach we use in our plant construction and operation businesses (EPC + O&M).

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

4

FY2023 (Ended 3/2024)

Profit Variance Analysis

Profit was down due to the change in the EPC project mix in the Domestic Environment and Energy Business as well as an increase indepreciation at the new Harima Factory associated with operations, increases in personnel and R&D expenses.
Breakdown of ordinary profit variance(Billions of yen)

SG&A
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Gross profit

5

FY2023 (Ended 3/2024)(Millions of yen)Orders received
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems

Net sales
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems

Operating profit
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems

Financial Highlights by Segments

FYE 3/2022(FY2021)FYE 3/2023(FY2022)FYE 3/2024(FY2023)

YoY change

192,244

168,558

160,568(4.7%)

2,035

5,922

2,280

(61.5%)

164,865

130,280

131,567

1.0%

16,83018,40018,666
8,403(41.4%)

134,092

142,651

149,166

4.6%

1,005

1,351

2,440

80.6%

8,917

108,657

14,328

115,985

119,190

1.4%

2.8%

16,49817,312

18,492

9,437

12.9%

9,928

13,813

10,229(25.9%)

(172)

184

8,590

8,360

10,906

14,875

672

915

(218)
656

826

6.8%

11,228(24.5%)

1,177

28.6%

341

-

(58.7%)* Adjustments are omitted.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

6

Domestic Environment and Energy Business

Orders received /Order backlog

Orders received were up owing to orders for Energy Plants and Water Treatment Plants in addition to a DBO projects for a municipal solid waste
treatment plant, despite contract cancellations for some energy plant projects.
 Orders received: Up owing to orders for 2 waste treatment plant DBO projects, 8 Energy Plants (6 FIT projects, 1 self-consumption project, and 1 industrial waste
treatment project), a large-scale renewal of a sand filtration system for a sewage treatment plant, and a sludge treatment facility DBM project.
 The order backlog is on the rise owing to steady orders for long-term O&M (such as DBO and BTO projects). Around 55% of the backlog is long-term O&M.
* DBM: Design, Build, and Maintenance. These projects take the form of EPC + long-term maintenance agreements.
* BTO: Build, transfer, and operate; one approach we use in our plant construction and operation businesses (EPC + O&M).

Orders received(Millions of yen)

Approx. ¥1.2 billion increase
160,591(Millions of yen)

Approx. ¥12.3 billion increase

Order backlog

164,865

Long-term O&M (10 years or more)

130,280

123,154

FYE 3/2020

Order backlog

131,567

337,322

377,143433,351447,646

460,023
Long-term
O&M

Approx. 55%

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

7

Domestic Environment and Energy Business

Net Sales /Operating Profit

Sales were up, but profit was down due to a change in the EPC project mix as well as an increase in depreciation at the new Harima Factory
associated with operations, increases in personnel and R&D expenses.
 Net sales: Up owing to an increase in municipal solid waste treatment plants(after-sales service).
 Operating profit: Down due to changes in the EPC project mix, increased depreciation at the new Harima Factory associated with operations, and increased operating expenses
such as personnel and R&D expenses as well as the recording of costs for measures at a waste treatment plant (gasification melting furnace) under O&M contract in Q2.

Net sales(Millions of yen)

Operating profit

Approx. ¥3.2 billion increase

Approx. ¥3.6 billion decrease(Millions of yen)operating profit

operating margin

12.8%
108,123

120,770

108,657

115,985

119,190

25,00012.0%

20,000

9.8%

9.5%

10.0%

9.4%
10.0%

14,87515,00010,61911,475

8.0%

11,228

10,9066.0%

10,000

4.0%

5,000

2.0%

0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

0.0%

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

8

Domestic Environment and Energy Business

Breakdown by
Product / Service

Orders received were up for municipal solid waste treatment plants (after-sale services) and Water Treatment Plants, etc.
Sales were up, mainly owing to an increase in a municipal solid waste treatment plant.
Net sales

Orders received
Water Treatment Plants, etc.
Energy Plants
Municipal Solid Waste Treatment Plants (After-sales service)
Municipal Solid Waste Treatment Plants (EPC)(100M yen)

2,000

1,400

1,600

103
329

1,200

1,200

1,302
107
322

800

787
529

400

0

425

340

FYE 3/2022

FYE 3/2023* Adjustments are omitted.
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

1,315

1,000

280

800

257

600

(100M yen)

1,086
83
291

405
578

400

FYE 3/2024

1,159
121
335

418

1,191
111
288

453

5,000

4,000

4,476

4,600

115

284

758

728

2,329

2,454

1,215

1,273

1,133

FYE 3/2022

FYE 3/2023

FYE 3/2024

4,333
128
771

3,000

2,000

2,217

1,000
200

196

Water Treatment Plants, etc.
Energy Plants
Municipal Solid Waste Treatment Plants (After-sales service)
Municipal Solid Waste Treatment Plants (EPC)

Water Treatment Plants, etc.
Energy Plants
Municipal Solid Waste Treatment Plants (After-sales service)
Municipal Solid Waste Treatment Plants (EPC)(100M yen)

1,648

Order backlog

0

301

282

335
0

FYE 3/2022

FYE 3/2023

FYE 3/2024

9

Domestic Environment and Energy Business

Main Orders Received

FY3/2024, orders were received for 2 municipal solid waste treatment plant DBO projects and 1 large-scale renewal of a sand filtration system
for a sewage treatment plant, and 1 sludge treatment facility DBM project.
Year

FYE
3/2022

Municipal
solid
waste
treatment
plantsFYE
3/2023FYE
3/2024Water
treatment
plantsFYE
3/2022FYE
3/2024

Delivered to:

Q1

Uwajima Public Association

After-sales service

Q2

Hakodate City

Q4

Notes

Capacity

Long-term O&M

120 t/day

EPC & After-sales service

DBO

300 t/dayOkayama City

EPC & After-sales service

DBO

200 t/day

Shida Public Association

EPC & After-sales service

DBO

223 t/day

Scheduled Completion

4/2021-3/2031 (10 years)
3/2029 (22 years of operations
starting 4/2022)
3/2027 (20 years of operations
starting 4/2027)
12/2026 (20 years of operations
starting 1/2027)

Senboku Environmental
Improvement Facilities Association
Okinoshima-cho
Kohoku Wide Area Administrative
Affairs Center

After-sales service

Primary equipment
improvement work
Long-term O&M

EPC & After-sales service

BTO※1

124 t/day

Q3

Ashikaga City

EPC & After-sales service

DBO

152 t/day

Q4

Sapporo City

DBO

140 t/5h

Q3

Ochiai Water Reclamation Center-

80units

Jan 2025

Q2

Ochiai Water Reclamation Center-

128units

Feb 2028

Q3

Osaka Prefecture Chuo Mizu Mirai
Center

Q1
Q3
Q4

EPC

EPC & After-sales service(Crushing facility)
EPC(Sand filtration system)
EPC(Sand filtration system)
EPC (sludge treatment plant)& After-sales service

DBM※3

300 t/day

3/202425 t/day

4/2023-3/2038 (15 years)
3/2030 (18 years of operations
starting 4/2028※2)
3/2028 (20 years of operations
starting 4/2028)
3/2028 (20 years of operations
starting 4/2028)

sewage sludge
incineration

100 t/dayJun 2027 (About 11 years of long-term maintenance starting 7/2027)*1. BTO is an acronym for “Build, Transfer, Operate.” It refers to a business method based on a private finance initiative (PFI) in which a private business operator procures funds and engages in EPC of the facility, transfers ownership of the facility to the
public upon completion, and then the private business operator operates the facility.
*2. Start of overall facility operations, including heat recovery facility*3. DBM: Design, Build, and Maintenance. These projects take the form of EPC + long-term maintenance agreements.
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

10

Domestic Environment and Energy Business

Main Orders Received

FY3/2024, orders were received for 6 biomass power plants (FIT), 1 self-consumption project, and 1 EPC project for an industrial waste treatment
plant.
Year

FYE
3/2022

Delivered to:
Q1
Q2
Q3
Q4

Company A
Kumamoto Clean Energy Co.
Sanko Inc.
Aizu Komorebi Power Plant LLC.
Chugoku Mokuzai Co., Ltd. Noshiro Plant
Regional power Co.
Sanyo-Onoda Green Energy Co.

EPC
EPC
EPC
EPC
EPC
EPC
After-sales service(Long-term O&M)
EPC

Power Aid MIE LLC.

EPC

Yonezawa Bio Energy LLC.
Soga Biomass Power Generation Co.
Katsuta Co., Ltd.
Regional power Co.
Furusato FIC Energy LLC.
Mogami Biomass Power Generation2 (KK)

EPC
EPC
EPC
(Fuel conversion)
EPC
EPC
EPC
EPC

Shin Tokai Paper Co., Ltd. Shimada Plant

EPC

Company C
Green Power Tono (KK)
Tochigi High Trust Co., Ltd.
Hachimantai Next Energy Co.
Company D

EPC
EPC
EPC
EPC
EPC

Nihonkaisui TTS Kanda Power Co.
Q1

EnergyplantsFYE
3/2023

Q2
Q3
Q4
Q1

FYE
3/2024

Q2
Q3
Q4

Notes

Company B

Power generation business (Biomass, FIT)
Power generation business (Biomass, FIT)
Industrial waste treatment
Power generation business (Biomass, FIT)
Self-consumption (Biomass, Non-FIT)
Power generation business (Biomass, FIT)

1,990kW
1,990kW93.6 t/day
7,100kW
2,090kW
9,990kWPower generation business (Biomass, FIT)

50,000kW

Power generation business (Biomass, FIT)
Power generation business(Biomass and others, Non-FIT)
Power generation business (Biomass, FIT)
Power generation business (Biomass, FIT)

1,990kW

Self-consumption (Biomass and others, Non-FIT)
Industrial waste treatment
Power generation business (Biomass, Non-FIT)
Power generation business (Biomass, FIT)
Power generation business (Biomass, FIT)
Self-consumption(Biomass and others, Non-FIT)
Power generation business (Biomass, FIT)
Power generation business (Biomass, FIT)
Industrial waste treatment
Power generation business (Biomass, FIT)
Power generation business (Biomass, FIT)

*Self-consumption: Steam (heat) and electricity produced by a plant installed within the factory are used within the factory without being supplied externally.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Capacity

1,990kW
7,100kW
1,990kW-

ScheduledCompletion
Autumn 2023
7/2024
11/2024
3/20243/20252023-2043(20 years)
6/2024WinterFYE 3/2025
11/2025
11/2024-150t/day
9,990kW
1,990kW
7,100kW2/20268/2026
1/2026
10/2026-

1/2027

7,100kW
1,990kW
93.6t/day
7,100kW
1,990kW

11/2026
2/2027
12/2026-

11

Quarterly trend in
Orders received /Net sales (Reference material)

Domestic Environment and Energy Business

Orders received vary significantly depending on the timing that projects are recorded. Net sales tend to increase going into the fourth quarter.
Orders received (quarterly)

Net sales (quarterly)

The amount of each EPC project is large, so orders received tend to varysignificantly depending on the timing of the contract.

Although net sales vary depending on progress on construction of EPC
projects for the period, municipal solid waste treatment plants(after-sales service) increases going into the fourth quarter, so overall net
sales also tend to increase going into the fourth quarter.

Water Treatment Plants, etc.
Energy Plants
Municipal Solid Waste Treatment Plants (After-sales service)
Municipal Solid Waste Treatment Plants (EPC)(100M yen)
1,000

Water Treatment Plants, etc.
Energy Plants
Municipal Solid Waste Treatment Plants (After-sales service)
Municipal Solid Waste Treatment Plants (EPC)(100M yen)
400

800

300

600
200
400
100

200

0

0
Q1

▲ 200

Q2

Q3

Q4

Q1

FYE 3/2022

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Q2

Q3

FYE 3/2023

Q4

Q1

Q2

Q3

FYE 3/2024

Q4

Q1

Q2

Q3

FYE 3/2022

Q4

Q1

Q2

Q3

FYE 3/2023

Q4

Q1

Q2

Q3

Q4

FYE 3/2024

12

Overseas Environment and Energy Business

Orders received /Order backlog

Orders received were down due to orders for new plants being limited to the additional order for the waste treatment plant project in Vietnam
received the previous year.
We will continue going after new construction and renewal projects in addition to maintenance services.
Orders received（Millions of yen）

Order backlog

Approx. ¥3.6 billion decrease（Millions of yen）

Approx. ¥0.15 billion decrease

7,000
7,000

5,922

6,000

6,028

5,868

FYE 3/2023

FYE 3/2024

6,000

5,000
5,000

4,000
4,000

2,280

3,000

2,035

3,000

1,457

2,000
2,000

1,351
1,000

883

1,000

733

427

0
0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

13

Overseas Environment and Energy BusinessNet sales /Operating profit

Net sales were up owing primarily to progress on EPC projects previously ordered in addition to maintenance services. Operating profit also
improved.
Net sales（Millions of yen）

Operating profit

Approx. ¥1.0 billion increase（Millions of yen）
operating profit

Approx. ¥0.35 billion improve
operating margin

184

3,000

200

2,440

2,500

7.6%

100

15.0%

10.0%

5.0%

0
2,000

0.0%

1,351

1,500

1,143

1,188

-100

1,005

(140)

-200

(202)

1,000

-5.0%

(218)
(11.8%)-300

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024-15.0%(17.7%)-20.0%(21.8%)0

FYE 3/2020-10.0%(12.8%)

500

-400

(172)

-500

FYE 3/2020

FYE 3/2021

FYE 3/2022-25.0%FYE 3/2023

FYE 3/2024

14

Package Boiler Business

Orders received / Order backlog

Orders received were up owing primarily to orders for large-scale projects.

Orders received（Millions of yen）

Approx. ¥0.26 billion increase

18,40020,00017,92518,000Order backlog

17,524（Millions of yen）

18,666

16,830Approx. ¥0.17 billion increase

7,000

5,940

6,115

6,000

16,000

4,521

5,000

14,00012,000
4,000

4,852

3,928

10,000

3,000

8,000

6,000

2,000

4,000

1,000

2,000

0
0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

15

Package Boiler BusinessNet sales / Operating profit

Net sales and operating profit were up owing primarily to progress on projects for which orders were already received and completion of largescale projects.
Net sales（Millions of yen）

Operating profit

Approx. ¥1.1 billion increase（Millions of yen）
operating profit

20,00017,86818,00016,931

16,49817,312

18,492

Approx. ¥0.26 billion increase
operating margin

6.4%

1,600

5.3%

1,400

5.4%

16,0001,200

14,000

1,000

966

3.8%

7.0%

6.0%

1,177
5.0%

4.1%

12,000

915
4.0%

800

10,000

640

672
3.0%

8,000

600

6,000
2.0%

400

4,000

1.0%

200

2,000

0

0.0%

0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

16

Equipment and Systems Business

Orders Received / Order Backlog

Orders received were down due to the absence of the large-scale order received in the building equipment business in Q2 of the previous year
and a decrease in orders for equipment for the semiconductor industry.
Although demand for semiconductor industrial equipment is expected to increase in the medium to long term, it is currently stagnant.
Orders received（Millions of yen）

Order backlog

Approx. ¥5.9 billion decrease（Millions of yen）

16,000Approx. ¥1.0 billion decrease

14,00014,328

11,64414,00012,00010,61012,00010,00010,166
8,917

10,000

8,000

8,403

6,790

8,000

5,348

6,000

5,676

6,000

4,000

3,453

4,000

2,000

2,000

0
0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/202417

Equipment and Systems BusinessNet sales / Operating profit

Net sales were up owing to progress on projects for which orders were already received. However, operating profit was down due to therecording of additional costs for some projects in the building equipment business.
Net sales（Millions of yen）

Operating profit

Approx. ¥1.0 billion increase（Millions of yen）
1,400

operating profit

9,437

10,000

8,000

7,840

8,271

8,590

operating margin

13.0%

10.6%

1,200

9,000

Approx. ¥0.48 billion decrease

9.9%

8,360

11.0%

1,000

9.0%

876
7,000

7.6%

800

826
7.0%

656

6,000

5,000

600

3.6%

4.9%

4,000

400

384

341

3,000

5.0%

3.0%

2,000

200

1.0%

0

-1.0%

1,000

0

FYE 3/2020

FYE 3/2021

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2022

FYE 3/2023

FYE 3/2024

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

18

Table of Contents

1. Financial Results of FY2023 (Ended 3/2024)

P.2

2. Financial Forecast for FY2024 (Ending 3/2025)

P.19

3. 14th Medium-Term Management Plan (FY2024-2026)

P.25

4. Reference Material

P.52

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

19

FY2024 (Ending 3/2025)

Results Forecast

Our aim is to achieve a record high of 230.0 billion yen in orders received, up from 192.2 billion yen in FY2021 (ended 3/2022).

While sales are expected to be down, profit will be up owing mainly to changes in the EPC project mix.

 Orders received: Demand will be stable for renewal, and service life improvement of waste treatment plants and other projects, and we will go after these orders.
 Net sales: Down due to a decrease in sales in the Domestic Environment and Energy Business.
 Profit and loss: Profit up owing mainly to a change in the EPC project mix. ➡ See “Profit Variance Analysis Forecast” on p. 21(Millions of yen)

FYE 3/2023(FY2022)FYE 3/2024(FY2023)

FYE 3/2025(FY2024)
Beginning of year
forecast

YoY change

Orders received

168,558

160,568

230,000

43.2%

Order backlog

471,211482,612569,61218.0%

Net sales

142,651

149,166

143,000(4.1%)

Operating profit

13,813

10,229

11,2009.5%

Operating margin

9.7%

6.9%

7.8%

0.9pt

Ordinary profit

14,684

11,166

12,000

7.5%

Profit attributable to owners of parent

9,621

8,754

8,800

0.5%

Profit per share (yen)120.22109.43111.56

1.9%

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

20

FY2024 (Ending 3/2025)

Profit Variance Analysis Forecast

Although we expect an increase in SG&A expenses such as personnel and R&D expenses, we also expect an increase in profit due to higher grossprofit in the EPC Business and recurring revenue model businesses.
Breakdown of ordinary profit variance (forecasts)(Billions of yen)

SG&A
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Gross profit

21

FY2024 (Ending 3/2025)(Millions of yen)Order received
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems

Net sales
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems

Operating profit
Total
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems* Adjustments are omitted.
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Results Forecast by Segment

FYE 3/2023(FY2022)FYE 3/2025(FY2024)
Beginning of year
forecast

FYE 3/2024(FY2023)

YoY change

168,558

160,568

230,000

43.2%

5,922

2,280

4,000

75.4%

9,000

7.1%

130,280

131,567

198,700

51.0%

18,40018,66618,800142,651

149,166

143,000

1,351

2,440

5,000

104.9%

14,328

115,985

8,403

119,190

109,400

0.7%(4.1%)(8.2%)

17,312

18,492

18,60010,50011.3%

13,813

10,229

11,200

9.5%

(172)

184

300

62.5%

8,360

14,875
915

826

9,437

11,22812,300

1,177

1,000

341

700

0.6%

9.5%

(15.1%)

105.0%

22

Human resources investment, Capital investment and R&D
Actively invest in further business expansion in the future.
 Human resources investment: Strengthen hiring and training of human resources, especially in Engineering, Construction and Maintenance divisions.
 Capital investment: Expected to decrease YoY as capital investment at the new Harima Factory was completed in FY2023 (ended 3/2024).
 Depreciation: Up due to operations at the new Harima Factory. Expected to gradually decrease going forward.
 Research and development expenses: We engaged in R&D, primarily in relation to decarbonization technology. Expenses are expected to increase compared to theprevious year due to experiments and installation of testing equipment.
Human resources investment
Number of employees (people, consolidated)
Hires (people, non-consolidated)(Millions of yen)

Capital investment

FYE 3/2022

FYE 3/2023

FYE 3/2024

3,816

3,925

4,145

4,247

4,278

45

62

79

69

83

60-70
FYE 3/2025(Forecast)Research and development expenses(Millions of yen)

Selling, general and administrative expenses (consolidated)

894

958

1,002

1,054

-

-

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

1,564

2,420

3,844

7,100

3,527

1,154

1,047

1,006

1,150

1,629

2,200

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

FYE 3/2024

16,261

16,326

16,254

17,741

19,309FYE 3/2025(Forecast)

917

Depreciation

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FYE 3/2021

875

Number of employees (people, non-consolidated)

FYE 3/2025(Forecast)

FYE 3/2020

1,036

961

1,136

1,797

1,600

2,000

-

23

Shareholder Return
Under the 14th Medium-Term Management Plan launched in April 2024, we have established new shareholder return policy as below.

The annual dividend for FY2024 (ending 3/2025) is to be increased by 8 yen to ¥56 per share. Share repurchase totaling up to JPY 4 billion will
be done.
1 Enhancing shareholder returns and improving capital efficiency through stable dividends and share repurchase

2 Dividend Policy: Establish as a target amount whichever is higher calculated based on dividend payout ratio of 50% or dividend on equity (DOE)

Shareholder return
policyratio of 4.0%

3 Share Repurchase Policy: Share repurchase totaling approximately JPY 12 billion over three years to improve capital efficiency

Purchase of treasury stock andTotal return

Dividend per share and Payout ratio
56

60.00

Q2

Q4

Payout ratio

(yen)
50.00

43
40.00

31
30.00

20.00

10.00

4

5.4%

2

0.00

FYE
3/2013

6

5.6%

3

3

FYE
3/201499.3% 5

11
11.6%

6

4

5

FYE
3/2015FYE
3/2016

13
12.6%

16

16.9%

7

9

6

7

22
20.5%

12

34.3%

36
38.8%

18

36
39.3%

18

48

80.0%

70.0%

Purchase of treasury stock
Total return ratio

60.0%

50.2%

4,000

4,000

120.0%

43.9%
35.8%

24

50.0%

95.7%

3,500

28

90.0%

30.0%

1,999

80.0%

70.0%

2,000

18

100.0%

3,000

2,500

24

110.0%

40.0%

20.0%

1,500

60.9%

38.8%

49.3%

747

1,000

48.7%

1,252

43.9%

60.0%

50.0%

40.0%

30.0%

10.0%

20.0%

10

13

18

18

19

24

28

500

10.0%

0.0%

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

(Millions of yen)

FYE
3/2017FYE
3/2018FYE
3/2019FYE
3/2020FYE
3/2021FYE
3/2022FYE
3/2023FYE
3/2024FYE
3/2025(Forecast)

0.0%

0

FYE
3/2020FYE
3/2021FYE
3/2022FYE
3/2023FYE
3/2024FYE
3/2025(maximum)24

Table of Contents

1. Financial Results of FY2023 (Ended 3/2024)

P.2

2. Financial Forecast for FY2024 (Ending 3/2025)

P.19

3. 14th Medium-Term Management Plan (FY2024-2026)

P.25

4. Reference Material

P.52

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

25

Takuma Group Management Principles and Long-Term Vision
Management Principles
Takuma will strive for social contribution, corporate value enhancement,
long-term corporate development and the satisfaction of all stakeholders
by providing goods and services that are needed and recognized as
valuable in society.
We will address social andenvironmental issues (ESG issues)
through businesses that leverage theGroup’s strengths, viewing theresolution of these issues as anopportunity for growth,

while also increasing ourcompany’s economic value.

Vision2030
We aim to maintain our role of being an indispensable presence in society
as a leading company in the field of renewable energy utilization andenvironmental protection and reach an ordinary profit level of JPY 20.0
billion.
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Keywords for realizing Vision2030
A great partner toour customers

Innovation oftechnologies andservices
Solving issues facedby our customers
and society

26

Value Creation Process for Realizing the Long-Term Vision

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

27

Reflections on the 13th Medium-Term Management Plan
Rolling Out Business Activities Contributing to Solutions to
Issues Faced by Our Customers and Society
EPC Business(Japan)Overseas
Business
Package Boiler/
Equipment andSystems Business

Strengthening the Management Foundation

 Municipal solid waste
treatment plants

7 orders received (Including primary equipment improvement)

Securing and development of human resources Energy plants

21 orders received (total power generation of 60 MW)
9 orders received (order amount of at least JPY 500.0 million)

 Group employees 3,925 (FY3/21)➡ 4,278 (FY3/24)

 Water treatment plants

Recurring
revenue modelbusinesses

Main Initiatives and Results

 Long-term O&M inoperation
 Number of energy plants
delivered Power retail business Energy plants, etc.
 Recovery from decreased
demand package boilers
 Semiconductor industrial
equipment

Municipal solid waste treatment plants
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

23 facilities (Number as of end of March 2024)
65 facilities (Since start of Japan’s FIT program)
216GWh (Power supply in FY3/24)
4 orders received (2 in Thailand, 1 in Vietnam, and 1 in Taiwan)
JPY 16.8 billion in orders(FY3/22) ➡
JPY 18.6 billion (FY3/24)
3-year order amount of JPY 17.8 billion

Biomass power plants

 Enhancement of training menu andeducation system by rank and field Effective utilization of diverse humanresources and improvement of job
satisfaction

Partnerships
 Participating in the C2X project andcollaborating with partners on
decarbonization solutions
 Investing in venture funds for strategic returns
 Looking into M&As to help improve corporate
value(No results during period of 13th MediumTerm Management Plan)

Biomass boilers/Hydrogen-fired vacuum-type water heaters(Package Boiler)

R&D, manufacturing capabilities, and digitaltechnology
 Development of carbon capture and utilization
technology for realizing a decarbonized society Launch of operations at new Harima Factoryand Supply Lab Development of digital technology for
products and services to reduce manpower
requirements at waste treatment facilities

Compliance Reexamination of safety management inconstruction divisions and at operations
offices Ongoing educational activities

New Harima Factory

28

Reflections on the 13th Medium-Term Management Plan

Numerical Targets and Results

3-year total ordinary profit target

Achieved the financial targets of
the 13th Medium-Term Management Plan

JPY 36.0 billion

JPY

3-year total orders received (reference)

36.4 billion(JPY billions)

Orders received (left axis)

Net sales (left axis)

Ordinary profit

JPY 468.0 billion

191.0

200
9.6

150
100

Orders received

JPY 31.9 billion

250

99.9

113.0

Ordinary profit (right axis)

116.3

Orders received

JPY 33.6 billion

JPY 517.2 billion

12.3

10.6

118.1

JPY

Ordinary profit

Orders received

JPY 36.4 billion

JPY 521.3 billion
16

179.8

177.1

11.6

Ordinary profit

521.3 billion

JPY 450.0 billion

121.9

148.8
10.3 134.4

192.2

188.5
11.0

146.7

168.5
10.6 134.0

14

14.6

142.6

160.5

149.1

11.1

12
10
8
6
4

50

2
0

2015

2016

2017

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

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2018

2019

2020

12th Medium-Term Management Plan

Strengthening of corporate capability to facilitate steady growth

2021

2022

2023

0

13th Medium-Term Management Plan
Preparation for further growth29

Reflections on the 13th Medium-Term Management Plan

Results by Segment

Although results fluctuate from year to year depending on the number of EPC projects and the timing of completion, orders received,
net sales, and operating income have all remained strong.
12th Medium-Term Management Plan
Equipment and Systems(JPY billions)

Package Boiler
Overseas Environment and Energy

6%

Municipal solid waste treatment plants(Engineering, Procurement, and Construction)

13%

1%

Water Treatment Plants, etc.

6%13th Medium-Term Management Plan

27%

Net sales

JPY 403.1

Package Boiler

Domestic Environment
and Energy

80%billionOverseas Environment and Energy

7%

Municipal solid waste treatment plants(after-sale service)

20%

Orders received
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems
Net sales
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems
Operating profit
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems*Adjustments omitted

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FY2019
148.8
123.1
1.3
17.9
6.7
134.4
108.1
1.1
17.8
7.8
9.6
10.6
(0.2)
0.9
0.3

FY2020
188.5
160.5
0.8
17.5
10.1
146.7
120.7
1.1
16.9
8.2
10.4
11.4
(0.1)
0.6
0.8

3-year total
517.2
437.3
3.0
52.9
25.5
403.1
322.6
5.3
51.7
24.9
31.6
34.4
(0.1)
2.5
1.6

Municipal solid waste treatment plants(Engineering, Procurement, and Construction)

22%

Net sales

JPY 425.9

81%(FY2021-2023 total)
Municipal solid waste treatment plants(after-sale service)22%

Orders received
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems
Net sales
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems
Operating profit
Domestic Environment and Energy
Overseas Environment and Energy
Package Boiler
Equipment and Systems*Adjustments omitted

Domestic Environment
and Energy

billionEnergy plants

27%

FY2018
179.8
153.6
0.7
17.4
8.5
121.9
93.7
3.0
16.9
8.8
11.6
12.4
0.1
0.9
0.3

1%

6%

12%

Water Treatment Plants, etc.

(FY2018-2020 total)
Energy plants

Equipment and Systems(JPY billions)30%

FY2021
192.2
164.8
2.0
16.8
8.9
134.0
108.6
1.0
16.4
8.5
9.9
10.9
(0.2)
0.6
0.6

FY2022
168.5
130.2
5.9
18.4
14.3
142.6
115.9
1.3
17.3
8.3
13.8
14.8
(0.1)
0.9
0.8

FY2023
160.5
131.5
2.2
18.6
8.4
149.1
119.1
2.4
18.4
9.4
10.2
11.2
0.1
1.1
0.3

3-year total
521.3
426.7
10.2
53.8
31.6
425.9
343.8
4.7
52.3
26.3
33.9
37.0
(0.2)
2.7
1.8

30

Business Portfolio

Vision2030: Our Vision for 2030

Achieve further expansion with recurring revenue model businesses as the core driver of growth for Vision2030.
Work on expanding the EPC business at the same time as recurring revenue will increase to achieve ordinary profit of JPY 20.0 billion by
FY3/2031.
Vision2030: Growth of net sales
13th MTP

14th MTP

15th MTP

Ordinary profit(JPY billions)

Ordinary profit
JPY 11.1 billion
ROE 8.3%

Ordinary profit
JPY 14.0 billion
ROE at least 9.0%

149.1
9.4
18.4
2.4
56.3

62.8

FY3/2024*Adjustments omitted

Vision 2030

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

165.0
11.8
19.7
4.0

JPY 20.0 billion
ROE at least 12.0%

200.0
13.0
22.0
10.0

FY3/2027

Equipment and Systems Business
Package Boiler Business
Overseas Environment and Energy Business

Positioning

6.5%

Ongoing business

11.0%

Ongoing business

5.0%

Expand primarily in Thailand, Taiwan, and emerging countries,
developing it into a pillar of the Group’s business(Steady expansionof revenue)(Steady expansionof revenue)

Future business(Medium- to long-term
perspective)

70.0

62.0

68.0

Share

85.0

Domestic Environment and Energy Business

77.5%

Maintain and expand position
as a leading company

35.0%Core business

42.5%

Growth business

EPC
Business

Recurring
Further expansion as a core
revenue model
driver of growthbusinesses

FY3/2031(Growth driver)31

14th Medium-Term Management Plan

Positioning and Policies

Challenges for achieving Vision 2030 include a lack of human resources. In the 13th Medium-Term Management Plan, we paved the way toward growth toresolve these challenges by assessing the business environment and strengthening recruitment. The 14th Medium-Term Management Plan is positioned tomaterialize the growth story for realizing the vision by prioritizing investment of management resources into receiving orders for municipal solid waste
treatment plants (renewals and primary equipment improvement) and establishing a revenue model that maximizes the use of recurring revenue while
formulating and implementing measures to solve various challenges.
13th MTP

2021

2022

Planting seeds

2023

2024

14th MTP

2025

Development

2026

2027

15th MTP

2028

Obtainment

2029

Vision20302030

Orders received

400

Net sales
Ordinary profit

350

25

Preparation for further growthMaterialization of the growth story

20.0
20

(JPY billions)
300

14.6

250

192.2
10.6

200

134.0

150

168.5
142.6

11.1
160.5
149.1

230.0
12.0

180.0 12.0

143.0

14.0
190.0

Obtaining
results

165.0

152.0

200.0

15

10

100

5

50

0

0

2021

2022

2023

Business Strategy

Further strengthening of existing
businesses

2024

2025

2026

2027

2028

2029

2030

Basic Policy
1 Maintaining and expanding our market position in the EPC Business
2 Establishing a revenue model that fully utilizes recurring revenue
3 Steadily expanding revenue in the Package Boiler Business andAddressing future changes in theenvironment

Equipment and Systems Business

4 Building a track record for the future in international business
5 Promoting strategic M&As and creating new businesses
1 Securing and development of human resources

Management foundation enhancement
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2 Knowledge management
3 Compliance and risk management32

14th Medium-Term Management Plan

Financial Targets (Summary)In addition to ordinary profit, new targets for orders received and return on equity (ROE) are set in the 14th Medium-Term
Management Plan.
:Main target

13th MTP

Vision2030

14th Medium-Term Management Plan

FY2031(3-year total)

3-year total

FY2024FY2025

FY2026

Ordersreceived

521.3

600.0

230.0

180.0

190.0

Net sales

425.9

460.0

143.0

152.0

165.0

Operatingprofit

33.9

35.6

11.2

11.2

13.2

Ordinary
profit

36.4

38.0

12.0

12.0

14.0

20.0

ROE

8.3%

at least 9%

8.0%

8.0%

9.1%

at least 12%(JPY billions)(FY3/2024)(FY3/2027)

200.0(FY3/2031)

ROE = Profit / Equity capital
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

33

14th Medium-Term Management Plan

Profit Variance Analysis

Although we expect an increase in SG&A expenses such as personnel and R&D expenses, we also expect an increase in profit due tohigher gross profit in the EPC Business and recurring revenue model businesses.
Increased profit
mainly in Package
Boiler, etc.

Breakdown of ordinary profit variance (3-year total)(JPY billions)Overall strong
growth in Domestic
Environment andEnergyIncrease in personnel
and pay raises
Promotion ofdevelopment oftechnologies for capture
and use of CO2
Increased businessactivity expenses,
costs, etc.

SG&A
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Profitability improved
across the EPC business

Increased burden
from construction of
new Harima Factory

Gross profit

34

14th Medium-Term Management Plan
(JPY millions)

Financial Targets Forecasts by Segment

FY2024FY2025

FY20263-year total

Orders received
Total

230,000

180,000

190,000

600,000

Domestic Environment and Energy

198,700

146,700

155,000

500,400

Overseas Environment and Energy

4,000

4,000

4,000

12,000

Package Boiler

18,80019,30020,00058,100Equipment and Systems

9,000

10,50011,50031,000

Total

143,000

152,000

165,000

460,000

Domestic Environment and Energy

109,400

118,900

130,000

358,300

Overseas Environment and Energy

5,000

4,000

4,000

13,000

Package Boiler

18,60019,10019,70057,400Equipment and Systems

10,50010,50011,80032,800Total

11,200

11,20013,20035,600

Domestic Environment and Energy

12,30012,60014,40039,300Overseas Environment and Energy

300

0

0

300

1,000

1,050

1,100

3,150

700

700

900

2,300

Net sales

Operating profit

Package Boiler
Equipment and Systems*Adjustments omitted

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

35

14th Medium-Term Management Plan Business Strategies

Market Environment

We expect the market environment for our business to be generally favorable and strong.
14th Medium-Term Management Plan period (FY2024-2026)

Municipal solid
waste treatment
plantsDomestic
Environment andEnergyEnergy plants++

Steady demand for renewal (rebuilds)
Ongoing demand for service life extension (primary equipment
improvement)

After-sale services+

Increase in operations businesses (DBO Business and O&M contracts)

EPC: FIT/FIP/Non-FIT－ Decrease in large-scale projects due to changes in the FIT program+

Ongoing demand for small to medium-sized FIP and non-FIT projects+ Ongoing renewable energy policy support for achieving carbon neutrality

EPC: For private consumption andindustrial waste treatment+

Ongoing demand for renewal due to aging plants and decarbonization+ Certain level of ongoing demand

After-sale services+

Increase in maintenance demand associated with increase in deliveries+ Ongoing maintenance demand at facilities in operation+++

Ongoing demand for renewal due to aging plants
Increased demand for products with high environmental performance
Progress and increase in private sector utilization+

Increased demand for renewable energy and non-fossil fuel-based power
associated with decarbonization

EPC

Water treatment plants
Power retail business－ Continued intense competition in the biomass power generation market

Overseas Environment and Energy * Southeast Asia+

Increased needs for utilization of diverse fuels－ Sluggish start in waste power generation market(Caused by system, funding, and other issues)

Package Boiler

Equipment and Systems
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Future++Japan: Certain level of ongoing renewal demand despite market maturity
Emerging countries: Increased demand for energy-saving products+

Certain level of ongoing demand from construction demand andincreased semiconductor capital investment－ Decreased demand for renewal due to low birth rate and aging society+ Increased demand for decarbonized facilities－ Decrease in number of facilities in operation (reorganization)+ Ongoing demand for operations businesses+ Further development of projects outsourced to the private sector+ Ongoing needs for energy conservation, energy creation, and resource
utilization+ Increase in comprehensive contracting of plant construction andoperation+ Certain level of ongoing demand+ Increased demand for waste disposal and electric power due to economic
growth and urbanization－ Japan: Market shrinkage due to low birth rate and aging society alongwith population decline+ Japan: Ongoing demand for energy-saving and decarbonization products+ Emerging countries: Market expansion with economic growth+ Certain level of ongoing demand (building equipment)+ Expansion of demand for semiconductor equipment with utilization anddevelopment of AI, etc.

36

14th Medium-Term Management Plan Business Strategies

Basic Policy ① and ②

In the Domestic Environment and Energy Business, which is a pillar supporting growth, we will increase EPC orders and link them tooperation management and maintenance to achieve a virtuous cycle between the EPC Business and recurring revenue model businesses.
▍ Priority measures bybusiness/field

Municipal solid
waste treatment
plantsDomestic
Environment
and Energy

Energy plants
Water treatment
plantsPower retailbusiness

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Basic policy 1

Maintaining and expanding
our market position in the
EPC Business Expansion of orders for renewal and primaryequipment improvement projects
 Review of measures to address market changes• 3 or more renewal project orders per year
• Steady response to primary equipment improvement projects• Support for decarbonization models and private sector
utilization

Basic policy 2

Establishing a revenue modelthat fully utilizes recurring
revenue Maintenance and expansion of orders for operation
management, maintenance, and long-term O&M
projects• Steady orders for regular maintenance work and DBO projects• Cost reduction and quality improvement with data utilization

 Ongoing orders for new small and medium-sized biomass
power generation plants and renewal of plants for private
consumption and industrial waste treatment plants

 Ongoing maintenance orders for delivered projects
 Enhancement of solution proposals, such as functional
improvements and energy savings

 Acquisition of orders for sewage sludge incineratorsand sand filtration facilities
 Expansion of share through technological superiority

 Ongoing maintenance orders, including regular
maintenance work- Expansion of revenue by expanding relative powersources, securing new customers, and expanding
service lineup37

14th Medium-Term Management Plan Business Strategies

Basic Policy ③ and ④

We will focus on expanding our product lineup, developing overseas operations, and securing and developing human resources tomaintain and expand orders in each business.
▍ Priority measures bybusiness/field

Package Boiler

Equipment and Systems

Basic policy 3

 Ongoing orders for renewal projects from expansion of product lineup, including low-carbon and decarbonization products
 Strengthening of maintenance business and overseas development

 Building equipment business (air conditioning, water supply and drainage sanitation equipment work): Strengthening of sales
capabilities, securing and development of engineers, and cost reductions
 Semiconductor industrial equipment business: Maintenance and expansion of domestic sales and strengthening of overseas sales

Basic policy 4

Overseas Environment andEnergyCopyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Steadily expanding revenue in the Package Boiler Business and Equipment and Systems
Business

Building a track record for the future in international business Acquisition of orders for biomass power plants through expansion of supported fuels
 Acquisition of orders for energy from waste plants, primarily in Thailand and Taiwan

38

14th Medium-Term Management Plan Business Strategies

Basic Policy ⑤ M&As andAlliances / New Businesses

We will gather information with a focus on the business fields below to actively look into projects that match our business strategy.
Priority field

Segment(Business field)

Purpose/category
Functional enhancement

Expansion of business domain

Strengthening of existing businesses
and expansion of personnel

Expansion of peripheral businesses
and creation of new businesses

In-house production of key devices

Municipal solid
waste treatment
plantsDomestic
Environment andEnergyWater treatment
plantsManufacturers and engineering
companies

Energy plants
Power retailbusiness

Overseas Environment and Energy

Package Boiler

Equipment and Systems
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Expansion of service lineup and personnel

Local partners in EPC BusinessSupplementation of producing functions

New heat source systems

Securing of human resources andarea expansion(Equipment business)39

14th Medium-Term Management Plan
Strengthening the Management Foundation

Basic Policy ① Securing andDevelopment of Human Resources

We will promote various human resources measures to expand resources in recurring revenue model businesses and the EPC Business.

Challenges

Human resources measures linked to management strategy

 Elimination of human resources gap(quantity and quality) to achieve
Vision 2030
 Establishment of internal
environment where diverse humanresources can play active roles overthe long term Fostering of a corporate culture that
accepts change
while passing down a good
corporate climate

Securing of diverse human resources matching
our business strategy
 Assumed number of necessary personnel*1(People)

784

943

1,200

NeutralStrengthening of foundation forhuman resources development

Further improvement of job satisfaction
and pleasant work experience Enhancement of training system by rank
and field, etc.

 Effective use of senior human resources
 Establishment of a personnel systemthat enables work-life balance

Sales
MaintenanceConstruction
Engineering

FY3/21

FY3/24

FY3/31(forecast)

Personnel to handle
EPC projects andmaintenance

Main KPI
Number of main career track andmanagement positions filled by women*2

At least

35*1. Non-consolidated basis, main career-track (does not include factory work positions, general
positions, or secondment). Each of the figures is for the beginning of the year.
*2. Cumulative total for April 1, 2021 to March 31, 2026.
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Utilization of parenting support programs*3

At least

25%

Employee engagement

Highest rating

50% or more

*4

*3. Average for FY3/2022 to FY3/2026.
*4. The percentage of respondents giving the highest rating for each question (on a 5-point scale) on job satisfaction and pride in thecompany in the Employee Attitude Survey.

40

14th Medium-Term Management Plan
Strengthening the Management Foundation

Basic Policy ② Knowledge Management“Offensive” digital transformation (DX) has had some success in areas such as automated plant operation (AI development). We willcontinue efforts to create new value for further strengthening our competitiveness. Regarding “defensive” DX, the entire Group will further
promote digitalization to improve productivity and ensure smooth technology succession with limited resources (human resources andtime).

Establishment of competitive advantage using “offensive” and “defensive” approaches
Offensive DX

Defensive DX

Digitalization of products and services

Digitalization of operations

Providing new value to customers through the use of digital technology in plant
construction, operation, and other businesses

Business fields

Planning, design, procurement,
construction, operation, etc.

Enhancement ofwaste pit
management

MeasurePromotion of knowledge
management(Collection, storage, sharing, andutilization of knowledge and data)• Increase in work volume• Working hour control anddiversification of work styles• Establishment of systems and data
assets that are easy to utilize

Measure• Early development of new hires• Elimination of waste and control oferrors in business processes• Maintenance and improvement oftechnical capabilities

Time
Challenges

AI combustion control
SystemChallenges

Automatic sorting of glass bottles

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

General Affairs, HR, Accounting, etc.

Human Resources

3D layer model

Solution Lab

Office field

Improved operational efficiency
through automation andproject/task management

41

14th Medium-Term Management Plan
Strengthening the Management Foundation

Basic Policy ② Knowledge Management

We are systematizing (visualizing) technical data, plant data, problem information, etc. as data assets to promote knowledge
management.

Harima Factory
Production control

EPC

Inventory control

Process control

Technical information
management

Cost control

O&M
Order control

Quality control

Operational
data control

Inspection history
management

Cost control

Promote visualization, utilization of data assets, and operational efficiency
by linking systems in each process of business fields.
Knowledge
management

Database creation• Standard specifications• Problem examples• Additional cost results, etc.

• Technology transfer• Individualization→Visualization

Coordination
Automation/
Standardization• Utilization of RPA• Utilization of 3D CAD andBIM/CIM

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Visualization ofproject and task
management
・Adjustment of workload

42

Management that is Conscious of Cost of Capital and Stock Price

Analysis ofcurrent
situation

 We recognize our cost of equity as around 6%.
 ROE has remained at or above 8%, and a certain equity spread has been secured*1.
 PBR is also stable at 1x or higher, but equity spreads are declining..
 The decline in spreads is due to an increase in equity capital and a decrease in financial leverage*2.
 We also recognize that there was incomplete understanding regarding the feasibility of the growth strategy and that efforts
to enhance balance sheet efficiency were not effectively communicated due to insufficient disclosure of cash allocations.

Policies

 Maintain and increase ROE in excess of cost of equity (FY3/2027: at least 9%; FY3/2031: at least 12%).
 To achieve the target ROE, we will increase balance sheet efficiency while improving profitability and maintaining a solid
financial foundation.
 At the same time, we will promote initiatives to reduce the cost of capital.

Initiatives

 Steady implementation of the 14th Medium-Term Management Plan to achieve Vision 2030.
(Working especially to maintain and expand our market position in the EPC Business, the source of our recurring revenue
model businesses)
 Optimal cash allocation to achieve both our growth strategy and capital efficiency.
 Specification of a quantitative policy on shareholder return.
 Further enhancement of IR activities, including effective dialogue with investors and enhanced disclosure information.
*1 Equity spread = ROE - Cost of equity*2 Financial leverage = Total assets / Equity capital

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

43

Management that is Conscious of
Cost of Capital and Stock Price

Analysis of Current Situation (1/2)

ROE has remained above cost of equity, and a certain equity spread has been secured.
PBR has also remained above 1.0x, but equity spreads are declining.
PBR*1 over time

ROE / Cost of equity*2 / Equity spreads over time
Cost of equity
Equity spread

1.6

ROE

16.8%

1.4

1.4

1.4

14.1%

1.3
1.2

13.6%

1.2
1.2

1.2

10.9% 11.1%

10.9%

1.1

8.5%

1.0

7.2%
5.2%

4.9%

8.9%
3.9%

2014

2015

2016

2017

2018

2019

2020

2021

2022

*1 PBR = (Average month-end stock price over 12 months) / (Year-end net assets per share)

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2023

5.9%

5.6%

FY3/15

FY3/16

6.4%

5.7%

6.2%

FY3/17

FY3/18

FY3/195.0%

FY3/20

9.9%
8.6%
2.6%

8.1%

8.3%
3.8%

2.4%

2.1%

6.0%

5.7%

6.1%

6.2%

FY3/21

FY3/22

FY3/23

FY3/24*2 Cost of equity calculated based on CAPM.
Beta values are measured over multiple time periods (weekly 1 year, weekly 2 years, monthly 3 years,
monthly 5 years, monthly 10 years), and the median value is used.

44

Management that is Conscious of
Cost of Capital and Stock Price

Analysis of Current Situation (2/2)

Over the past 15 years, we have enhanced our equity capital while providing a certain level of shareholder return to stabilize
management and improve creditworthiness. As a result, financial leverage decreased, and capital efficiency (ROE) declined.
ROE＝Net profit on sales × Total asset turnover × Financial leverage
FY3/10FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

1.9%

7.8%

16.3%

19.7%

22.7%

16.8%

14.1%

13.6%

10.9%

11.1%

8.9%

8.6%

8.1%

9.9%

8.3%

Net profit on sales

0.5%

2.0%

4.2%

6.4%

9.2%

7.7%

6.9%

7.4%

6.6%

7.3%

5.5%

5.1%

5.5%

6.7%

5.9%

Total asset turnover

1.0

0.9

1.0

0.9

0.9

0.9

0.9

0.9

0.8

0.8

0.8

0.9

0.8

0.8

0.8

Financial leverage

4.3x

4.2x

4.0x

3.4x

2.8x

2.4x

2.3x

2.2x

2.0x

1.9x

1.9x

2.0x

1.9x

1.8x

1.8x

Net sales

95.1

89.1

101.0

96.3

96.3

103.8

113.0

116.3

118.1

121.9

134.4

146.7

134.0

142.6

149.1

Profit

0.4

1.8

4.2

6.1

8.8

8.0

7.8

8.5

7.8

8.8

7.4

7.5

7.4

9.6

8.7

Total assets

97.5

100.8

107.0

106.7

108.5

123.1

132.6

140.2

151.4

155.9

163.4

177.7

174.5

179.6

191.1

Equity capital

23.0

23.6

28.0

34.3

43.6

52.2

58.5

67.4

76.4

82.6

84.6

90.1

93.9

100.6

110.3

Equity ratio

23.6%

23.5%

26.2%

32.2%

40.2%

42.4%

44.1%

48.1%

50.3%

53.0%

51.8%

50.7%

53.8%

56.0%

57.7%

0

0

0.1

0.3

0.4

0.7

0.9

1.0

1.3

1.8

2.5

2.9

2.9

3.4

3.8

0

0

0

0

0

0

0

0

0

0

1.9

0

0.7

1.2

0

ROE

Financial figures (JPY billions)

Total dividends
Purchase oftreasury stock

Net profit on sales

22.7%

4.3

ROE
Asset turnover
Financial leverage

1.8

9.2%
1.0

5.6%

1.9%

0.8

0.5%
FY3/108.3%

FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/16* The product of the three components of ROE may not equal ROE because the figures are rounded to the second decimal place.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/2445

Management that is Conscious of
Cost of Capital and Stock Price
PolicyImprovement of
profitability

Policy and Main Initiatives

Main Initiatives
 We will expand EPC orders, which is a prerequisite for further growing recurring revenue model businesses.
 In particular, we will give priority to investing management resources in municipal solid waste treatment plants,
for which a large amount of renewal demand is expected during the Medium-Term Management Plan period.
See “Business Portfolio” on p. 31 and “Positioning and Basic Policy of the 14th Medium-Term Management Plan” on p. 32

 Over the last 15 years, we’ve enhanced our financial foundation by building up a substantial internal reserve.
Looking ahead, we will maintain a solid financial foundation to back our EPC and long-term O&M businesses, all
the while ensuring a balanced distribution of profits between investments for growth including M&As andshareholder returns.
 Specify a new, quantitative policy on shareholder return.
 We will maintain the equity ratio at the 50% level with cash and deposits at a minimum level of roughly two to
three months’ worth of sales (JPY 30-40 billion).

Enhancement ofbalance sheet
efficiency

See “Capital Policy | Cash Allocation” on p. 48 and “Capital Policy | Shareholder Return” on p. 49

Reducing cost of capital Through proactive investor relations, we will carefully explain our business environment and corresponding
business strategy to our investors so that they can expect stable returns over the long term, thereby bridging the
gap between cost of equity and the future business outlook.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

46

Capital Policy
We will establish a quantitative policy based on an analysis of the current situation related to cost of capital and stock price.
We will enhance corporate value by balancing business growth and shareholder returns that meet market expectations with a solid
financial foundation.
1

2

3

Establishment of ROE targets
mindful of cost of capital

Establishment ofappropriate cash allocation

Establishment of newshareholder return policy

Establish target ROE based on therecognition that the cost of equity
over the past 10 years has beenaround 6%.

Secure a working capital and businessrisk buffer of roughly 2-3 months’
worth of sales (JPY 30-40 billion).

FY3/2027 ROE

At least 9%
FY3/2031 ROE

At least 12%

For cash and deposits above that level(operating CF + cash and balance inaccount), implement appropriate
allocation between investment ingrowth and shareholder return.

4

Maintenance of solid
financial foundation

to support the EPC and long-term O&M
businesses

Dividends

Establish as a target amountwhichever is higher calculated
based on dividend payout
ratio of 50% or dividend on
equity (DOE) ratio of 4.0%
Share repurchase

Equity ratio

Maintain at

the 50% level

Share repurchase totaling

approximately JPY 12 billion
over three years to improve
capital efficiency

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

47

Capital Policy

Cash Allocation

Focus on growth investments and shareholder returns and execute appropriate cash allocation to increase corporate value.

13th Medium-Term Management Plan period(JPY billions)14th Medium-Term Management Plan period
Sale of crossshareholdings

Sale of crossshareholdings, etc.

Capitalinvestment

OperatingCF*(13.0)+35.0

Operating
CF*

44.0

R&D
investment
(4.0)

SPC
investments
in capital

2.0

Actualcash anddeposits

42.0

End of
FY3/2021*Before R&D expenditure

21

+3.0

+2.0

+33.0

GrowthinvestmentsbillionJPY

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Capital investment(5.0)
R&D investment(6.0)
M&A / business investments(10.0)(10.0)

(5.0)

45.0

Dividends(14.0)

SPC
investments
in capital

Actualcash anddeposits

42.0

End of
FY3/2024

26

Purchase oftreasury stock(12.0)

Dividends

Purchase oftreasury stock Repaymentof(2.0)
borrowings

Shareholder
returnbillion
JPY

3.0

36.0
SPC
investments
in capital(11.0)

Actualcash anddeposits

5.0

31.0

End of
FY3/202748

Capital Policy
Shareholder return
policyShareholder Return

1

Enhancing shareholder returns and improving capital efficiency through stable dividends and share repurchase2

Establish as a target amount whichever is higher calculated based on dividend payout ratio of 50% or dividend on equity (DOE) ratio of 4.0%

3

Share repurchase totaling approximately JPY 12 billion over three years to improve capital efficiency

6.00

Interim dividend

Year-end dividend

Purchase of treasury stock

Dividend payout ratio

80.0%

Total return ratio

6,000(JPY YEN)(JPY millions)

48

5.00

120.0%

110.0%

70.0%

43

5,000

100.0%

60.0%
90.0%

4.00

36

36

4,000

80.0%

50.0%

31
38.8%

3.00

22

1.00

2
3.9%

2
2011

4

5.4%

2
2
2012

9

6
3
3

9.3%
5.6%

2013

5
4

11.6%

6

13
12.6%

7

16.9%

9

20.5%

35.8%

24
18

16
11

39.3%

34.3%

2.00

0.00

43.9%

18

Dividend payout
ratio of 50%
or DOE of 4.0%

24

70.0%

60.9%
3,000

49.3%
30.0%

1,252

20.0%

20.5%

12

Approx.
JPY 12 billion

60.0%

50.0%

40.0%

38.8%

18

48.7%

43.9%

1,999

2,000

30.0%

747

1,000

20.0%

10.0%

10.0%

5

6

7

10

13

18

18

19

24
0.0%

2014

3-year total

40.0%

2015

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

0

0.0%

2018

2019

2020

2021

2022

2023

2024

2025

2026

49

ESG Initiatives

Environmental Initiatives

Continue to promote initiatives to address ESG issues through business activities by leveraging the Group’s strengths.
During the period of the 14th Medium-Term Management Plan, we will calculate Scope3 CO2 emissions and look into establishing a target
value that includes group companies.

Key issues (materiality)

Main Initiatives
 Provision of biomass power
plantsHelping combat climate
1change Proposals to improve energy
efficiency of customer facilities
and equipment Supply of renewable energy andCO2-free electric power Reduction of in-house CO2
emissionsE

14th Medium-Term Management Plan KPI

1. Reduction of CO2 emissions through our products and services
Amount of CO2 emissions that can be reduced through newly delivered power plants*1
FY2026Conserving resources
2 and protecting theenvironment

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

 Provision of high-efficiency
products and services with low
environmental impact
 Establishment of technology for
combustion of unused biomass
 Development of technologies
for capture and use of CO2

FY20302.5 million tons per year

*1 Biomass and energy from waste plants (including sludge) delivered by Takuma between FY2021 and FY2030

2. Reduction of in-house CO2 emissions
FY2026
FY2030Initiatives forEnvironmental

1.25 million tons per year

Net zero CO2 emissions at Takuma head office, Harima Factory, and branches
Net zero CO2 emissions*2 at all Takuma workplaces in Japan*2*3*2 Net zero CO2 emissions under Scope 1 and Scope 2*3 Takuma head office, branches, factories, and construction sites

3. Establishment of KPIs, including Scope 3 and group companies
Look into setting targets for important items falling within the scope that were estimated during the 14th
Medium-Term Management Plan period
Scope 1: CO2 directly emitted by the company through the use of fuel, etc.
Scope 2: CO2 indirectly emitted through the use of electric power, etc. supplied by other companies
Scope 3: CO2 generated within the supply chain, including suppliers and product users

50

ESG Initiatives

Social and Governance Initiatives

Add employee engagement and customer satisfaction as new KPIs.

Key issues (materiality)
Strengthening
relationships of trust with3
customers andcommunities

S

Initiatives forSocietyPursuing partnerships
4and innovation

5

Promoting activities ofhuman resources

Main Initiatives

14th Medium-Term Management Plan KPI
1-4 are for Takuma only

 Provision of high-quality
products and services thatsatisfy customers
 Development of technologies
and products sought after bysociety and customers
 Securing and development ofdiverse human resources Improvement of employee
satisfaction

1. Number of main career-trackand management positions filled by women
2. Utilization of parenting
support programs

G

Initiatives for
Governance

7 Strengthening corporate
governance

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

 Promotion of work style reform Enhancement of effectivenessof the Board of Directors
 Ongoing compliance education

At least

35 (total for FY2021-FY2025)

25% (average for FY2021-FY2025)

3. Employee engagement New

Highest rating

50% or more*1

4. Customer satisfaction New

Highest rating

60% or more*2

 Reduction of work accidents

Ensuring health and6safetyAt least

5. Number of fatal accidents

0

6. Number of serious compliance violations

0*1. The percentage of respondents giving the highest rating for each question (on a 5-point scale) on job satisfaction and pride in
the company in the Employee Attitude Survey.
*2. The percentage of respondents giving the highest rating for questions (on a 4-point scale) about customer service and overall
product quality in the Customer Satisfaction Survey.

51

Table of Contents

1. Financial Results of FY2023 (Ended 3/2024)

P.2

2. Financial Forecast for FY2024 (Ending 3/2025)

P.19

3. 14th Medium-Term Management Plan (FY2024-2026)

P.25

4. Reference Material

P.52

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

52

Business Segment
Our business is centered on engineering, procurement, and construction (EPC) and after-sales service of waste treatment facilities, biomass
power plants, etc. based on the primary themes of “environment” and “energy”.
Municipal Solid Waste Treatment Plant Business

Overseas
Environment andEnergy2%

Equipment
andSystems
6%
Package
Boiler12%

Water Treatment
Plants, etc.

8%

Municipal solid waste treatment plant EPC and after-sales
service for municipalities

Energy Plant Business
Municipal Solid Waste
Treatment Plants
(EPC)

23%

19%

Large boiler, biomass power plant, and industrial waste
treatment plant EPC and after-sale service for private enterprises

Water Treatment Plant Business

Sewage treatment facility EPC and after-sale service formunicipalities

Power Retail Business

FY2023
Net sales
149.1 billion yen

Energy Plants

Domestic
Environment andEnergySupply of electric power procured from delivered power plants
and other facilities to public facilities and private companies

Municipal Solid
Waste
Treatment Plants(After-sales
service)30%

Overseas
Environment andEnergyEnergy from Waste plant and Energy plant EPC and after-saleservice

Package Boiler

Manufacture and sale of and after-sale service related to heatsource equipment such as general-purpose boilers andvacuum-type water heaters

Equipment andSystems

Sale of and after-sales service related to building equipment(air conditioning, water supply and drainage work, etc.) andproducts for the semiconductor manufacturing industry*EPC: Engineering, Procurement, and Construction
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

53

History
In 1912, we invented the first boiler in Japan using purely Japanese technology. While improving boiler technology, the company cultivatedcombustion and water treatment technologies and utilized them to enter the environmental field, such as waste incineration plants. Since then,we have provided technologies and services for solving customer and societal challenges, primarily in the fields of environment and energy.
1958
Business expanded into the environmental
facility sectors, including waste incineration
and water treatment plants
1963Japan's first 24 hour operating waste
incineration plant delivered

Domestic

1938
Takuma Boiler
Manufacturing Co., Ltd.,was founded

2014
Takuma‘s first biomass power
plant under Japan’s FIT
program was launched.
Thereafter, many more plants
were delivered

1972
Company renamed TAKUMA CO., LTD.

1912
The Takuma boiler
was launched by
Tsunekichi Takuma.

Overseas

1949
Bagasse-fired boiler, thefirst product of its kind to
be exported*Biomass boiler

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2010
Energy from Waste plant delivered inEurope (U.K.)

1986
The first overseas delivery of a waste
treatment facility completed (U.S.A.)

54

Performance Trends
In the latter half of the 2000s, we focused on after-sales service, which would provide its earnings base. There has been steadydemand for renewal and service life improvement of waste treatment plants and an increase in demand for biomass power plants,
resulting in stable net sales and profits.
Net sales

1999(Hundredmillionsof yen)Ordinary profit

2012

Establishment of Act on Special Measures against Dioxins

Feed-in tariff system for renewable energy(FIT system)(Hundred millionsof yen)

2,000

300
250

1,500

200

1,000

150
100

500

0

50
1999 2000

2001

2002 2003 2004 2005 2006 2007 2008 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 2023

0
▲ 50

▲ 500

▲ 100

▲ 1,000▲ 150
Net sales

Ordinary profit

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

55

Business Model

Domestic Environment and Energy Business

Revenue comes primarily from engineering and construction (EPC*) and after-sales service (operational management, maintenance, O&M*, etc.)
of plants.
Approx. 2-5 years

Completion

Business Model

EPC Plant design, procurement of necessary
equipment, on-site construction andcommissioning• The EPC portion is recorded as sales according toprogress on the project.

• More tends to be recorded in the latter half of a
project as construction progresses.

Approx. 20-30 years

after-sales service

Recurring revenue
model businesses Plant operation management, maintenance, and improvement work
 O&M (for completely outsourcing operation and maintenance)• Normal maintenance and improvement work recorded as revenue as work is completed and progress is made• Operation management (mostly one to several years) recorded as revenue over contract term

• The O&M portion is recorded as orders when contracts are signed, and after plants are completed, they are recorded as net sales overthe business period.

Illustration of Recording of Net
Sales/Order Backlog in DBO
Business

DBO Business* (simultaneous orders for EPC and O&M)

Net sales

Orderbacklog

EPC
O&M*EPC:Engineering, Procurement, and Construction*O&M: A comprehensive contract for Operation & Maintenance of facilities
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

56

Domestic Environment and Energy
Municipal solid waste treatment plants

Situation by Segment

Business
Environment

Demand for renewal and service life improvement will continue due to the aging of waste treatment facilities. We expect renewal demand tocontinue for the time being. DBO* orders are on the rise utilizing know-how from the private sector. We expect this to continue.
*DBO: Stands for Design, Build, Operate. A method of contracting private companies for the design, construction, and operation of facilities, paid for by public funds.

Market size for renewal demandand DBO percentage

Number of waste incineration facilities in operation(1,016 facilities, by operating year)(Facilities)

70

Order placed
Scale(tons/day)

60

6,000

Facility renewal andimprovement work wasconcentrated in the 1990s

50

Around 400 facilities became
operational over a 10-year
period40

Stable renewal demandof around 15-20 facilities
per year is expected toemergePlant life is 15-20 years

100

Scale of orders received is
expected to be around3,000-4,000 tons/day

4,000
50

2,000
1,000

10
0

DBO
percentage

DBO percentage is on the rise

3,000

30
20

5,000

Order scale

DBO
percentage
(%)

0
1985

1990

1995

2000

2005

2010

2015

2020

2025

Source: Prepared by the Company based on the “2022 Survey of Municipal Solid Waste Treatment” by the Ministry of the Environment.
*Includes facilities under construction and where operations have been suspended.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2030

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

0*Based on internal research *DBO percentage does not include PFI method such as BTO (four BTO projects since 2010)57

Domestic Environment and Energy
Municipal solid waste treatment plants

Situation by Segment

Business
Strategy

Focus on winning ongoing orders through comprehensive proposals tailored to diversifying needs.
Results

Steadily landing orders for EPC/O&M. The long-term O&M (contract period of 10 years or more) ratio in the order backlog for municipal solid waste
treatment plants is over 60%. Along with maintaining and expanding the EPC Business, we expanded our recurring revenue model businesses.

FuturepolicyWe aim to win at least three renewal orders per year on an ongoing basis and steadily meet the demand for service life extension by enhancing our
proposal capabilities through differentiation in areas other than price based on our technological strengths and expanding our ability to respond toprojects by increasing resources and improving operational efficiency.

EPC orders
Aiming to build up orders throughexpansion of resources in addition tosteady orders(Projects)
Primary equipment improvement work
New construction/renewal

2

5
1

4

FYE
3/2013FYE
3/20142

2

FYE
3/2015FYE
3/20163
FYE
3/2017

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

(100M yen)

57%

59%

60%

2,217

2,329

64%

2,426

2

3

3

2

Order backlog

2,454

2
2
FYE
3/2018Long-term O&M ratio
increasing with constantinflux of orders for DBO
and O&M

After-sale services
EPC

3

1

4

3

1
FYE
3/2019FYE
3/20201
1

FYE
3/2021FYE
3/2022FYE
3/20232
FYE
3/2024FYE
3/2021

1,215

1,273

1,133

FYE
3/2022FYE
3/2023FYE
3/2024Long-term O&M percentage(Municipal solid waste treatment
plant business)58Domestic Environment and Energy
Municipal solid waste treatment plants

Situation by Segment

Business
Strategy

Aim for sustainable growth of recurring revenue model businesses by strengthening O&M proposals and proposals for regular maintenance work.
Results

The Company received orders for long-term O&M (contract period of 10 years or more) at 27 facilities (as of the end of FY3/2024). By the end of
FY3/2025, 20 of the facilities under contract will be in operation. Operations at the remaining facilities will be launched one after another. Orders at
non-contracted facilities also increased as a result of promoting proposal-based sales.

FuturepolicyThrough proposal-based sales, we will maintain and expand orders for after-sale services every year. In addition, we aim to achieve growth ofrecurring revenue model businesses by enhancing O&M proposals for non-contracted facilities and initiatives to reduce costs through data utilization.

Number of municipal solid waste treatment facilities
in operation at beginning of FY2024

Directly managed
and others

Approx. 40%(Facilities)

DBO

Strengthen long-term
O&M and O&M
proposals to noncontracted facilities

13

11%

Long-term O&M

6

5

4%

facilities

22 facilities

25 facilities

16 facilities
15

10 facilities

10

5 facilities

5

Operation management

Approx. 40%

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

in operation

20

O&M(Less than 10 years)

120

20 facilities
Aiming for more orders forlong-term O&M

25

5%
Approx.

Number of long-term O&M(more than 10 years, including DBO and BTO projects etc. ) contracts (results and forecasts)

1 facility02007 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

*Accumulation based on contract period of existing projects. The total does not come to 27 facilities because the contracts forsome projects will expire before others begin operations.

59Domestic Environment and Energy
Energy plants

Situation by Segment

We contribute to stabilizing our customers’ businesses and maximizing their revenues through biomass power plants and large-scale plants that
supply electricity and heat to their factories.
Business
Environment

Demand for small- and medium-sized biomass power plants, mainly from domestic fuels (such as unused timber), continues, driven primarily by policies topromote renewable energy and decarbonization. In particular, we expect to see demand for renewal of existing plants (fuel conversion) in the paper and lumber
industries and demand for new small- and medium-sized power plants (FIT*1, Non-FIT, FIP*2).

Future policy

In the EPC Business, the aim is to continue winning orders, particularly for small- to medium-sized biomass power generation plants, including renewal ofexisting plants and proposals for new power plants. In after-sales service, we aim for recurring revenue model business growth by proposing solutions forenergy savings, functional improvement, and service life extension, in addition to maintenance.

Japan’s energy-derived carbon dioxide emissions*3

Orders received (cumulative)(Projects)

Aiming for steadyordersFIT
Non-FIT

19
7
4
3

FYE
3/2013

14

25
19

32
24

5

6

8

FYE
3/2014FYE
3/2015FYE
3/20163931
8FYE
3/2017

48
35

54

40

60

46

63

47

69

51

13

14

14

16

18

FYE
3/2018FYE
3/2019FYE
3/2020FYE
3/2021FYE
3/2022

76

84
Transportation
19%

54

60

Public10%

10% (approx. 100 million
tons) of emissions

Utility
thermal39%

There is demand forswitching from fossil fuels tobiomass fuels (fuelconversion).

Manufacturing
15%

22

24

FYE
3/2023FYE
3/2024Agriculture,
forestry,and fisheries
2%

Industry-owned thermal

4%

Other Industry-owned steam
conversion
6%5%*1. Feed-in Tariff *2. Feed-in Premium is where a certain premium (subsidy amount) is added to the price of electricity sold on the market. *3. Source: 2022 results from “Comprehensive Energy Statistics” by Ministry of Economy, Trade and Industry
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

60

Domestic Environment and Energy
Water Treatment Plants

Situation by Segment

Contribute to the effective use of energy and decarbonization of sewage treatment facilities through greenhouse gas-reducing and highly
energy-saving products.
Business
Environment

In addition to renewal and service life improvement demand due to aging sewage treatment plants, demand for reduction of greenhouse gas emissions and effective utilizationof biomass sewage sludge is growing in the sewage treatment field.
Our step grate stoker type sewage sludge incineration and power generation system received two awards in FY2022 for CO2 reduction, energy saving, and energy creation.

Future policy

Focus on securing ongoing orders with mainstay products (step grate stoker type sewage sludge incineration and power generation system and sand filtration systems) thathave high environmental performance and meet customer needs.
Also promote establishment of a system for receiving orders for DBO projects, which are expected to continue increasing.

Sewage treatment flow and theCompany’s main products

Reaction tank facility

Initial settling pond

Low power agitator
Bio Blade Mix

Final settling pond

Inflow/
Pre-treatment

Sand filter

Disinfection tank

Discharge

Drawn-off sludge

Separated liquid
treatment facility
Fixed-bed
anammox process

Digestertank

Sludgetreatment facility
Rotating drum-typeconcentrator

Upflow moving-bed sand filtration systems
Uniflow Sand Filter
Features: Supports high-speed filtration,
simple and space-saving
Over 2,800 systems delivered

Incinerator

Step grate stoker type sewage sludge incineration and power
generation system
Generator

Features: Energy creation through power
generation, low power
consumption, reduction ofgreenhouse gas emissions
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Return water

Features: Energy creation through power generation, low power consumption,
reduction of greenhouse gas emissions
Awards: Director-General Prize of the Agency for Natural Resources and Energy, of the2022 New Energy Grand Prize
Institute Award (Technical Division), of the Japan Institute of Energy 2022 Award

61

Domestic Environment and Energy
Power Retail Business

Situation by Segment

Contribute to stabilizing customers’ electricity rates and reducing greenhouse gas emissions through the procurement and supply of electricity
generated from renewable energy and non-fossil fuels.
Business
Environment

Demand is increasing for renewable energy and CO2-free electricity for decarbonization. Demand is also increasing for local production of electric
power for local consumption.

Future policy

Leverage strength in stable power procurement to promote the supply of electric power to areas near power sources and to environmentallyconscious customers. We will also promote expansion of our lineup of related services such as supply and demand management services andenvironmental value transactions to expand our customer base.

Example of services provided(local production of electric power for local consumption)

Main project during period of 13th Medium-Term Management Plan

Takuma Energy Co., Ltd.
Electric power
procurement

Delivered plants

Waste power generation,
biomass power generation

Cycle of local
production andconsumption of power

Waste
emissions/biomass
fuel supply

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Electric power
supplyCustomers

Offices, plants, public facilities

Local production for
local consumption/
supply of CO2-freeelectric power

Provided toMain supplierStart

Kunohe Village, Iwate

Iwate-Kenpoku Clean Co., Ltd.

Apr 2022-

Imabari City, Ehime

Imabari City Clean CenterApr 2022-

Machida City, Tokyo

Machida City BioEnergy CenterApr 2022-

Kurume City, Fukuoka

Miyanojin Clean Center

Jan 2023-

Kitahiroshima-cho,
Hiroshima

Kawakoda Micro Hydro Power
Plant*Not delivered by us

Aug 2023-

Rikyuu Co., Ltd.

Mar 2024-

Fujisawa City,
Kanagawa

62

Situation by Segment

Overseas Environment and Energy

Business
Environment

 In addition to population and economic growth, the trend toward decarbonization in Southeast Asia has increased demand for biomass power generation andEnergy from Waste plants.
 In Thailand, demand for Energy from Waste and for biomass power generation, including fuel conversion, is expected to grow against the backdrop of government
promotion of renewable energy.
 In Taiwan, demand for facility renewal and service life extension is expanding due to the aging of Energy from Waste plants.
 In Taiwan and Vietnam, the need for in-house processing of industrial waste generated in manufacturing plants is also increasing.

Renewable Energy Policy in Thailand*
Alternative Energy
Development Plan (Thailand)
Increase share of renewable energy in（MW）
30,00025,000

Number of Waste Treatment Facilities in Thailand and Method of Treatment (2022)

Landfill3%2037
targetfinal energy consumption to

30.0% by 2037

Improperprocessing(incineration)
8%

29,411
975
1,565

2,074

5,790

20,00015,000Waste
treatment
Biogas

11,831318
527

10,0003,390

Biomass

5,000
0

2016
2017
2018
*Alternative Energy Development Plan (AEDP)
Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Incinerationor other2%

facilities

Expected to shift fromdumping outside to recycling
and incineration in the future

Improper processing(dumping outside)
87%

Wind
2019

2037

*Source: “General Research Report: Waste Situation in Thailand,” Bangkok Industrial Information Center,
Aichi prefecture (November 10, 2023)
Ministry of Natural Resources and Environment of Thailand

63

Situation by Segment

Overseas Environment and Energy

Business
Strategy

Focus on securing continuous orders for biomass power generation plants and Energy from Waste plants and improving the system.
Results

Promoted the development of a system to win orders via local subsidiaries in Thailand and Taiwan, and won 3 orders in FY2021-2023.

FuturepolicyAim to expand collaboration with local subsidiaries and partnerships with local companies to increase orders in Southeast Asia and Taiwan. In addition to
reducing costs and shortening construction periods, the Company aims to differentiate itself in terms of performance and quality, including stable operation andhigh-efficiency technology, and to achieve stable profitability and growth by continuing to receive at least one to two new construction orders per year.

Deliveries (cumulative)

Local subsidiaries (2 companies)
Taiwan, China,
South Korea, England

ThailandOf these, biomass plants

Energy plants

158

120

TaiwanTaiden Environtech Co., Ltd.

Waste treatment plants

16

Energy from Waste plant andenergy plant sales andmaintenance

Main project during period of 13th Medium-Term Management Plan
Year

Delivered to(Honorifics omitted)

Description

Scale

ScheduledCompletion

Energy from
Waste plant

FYE
3/2022

Q3

TA-HO LU-TSAOENVIRONMENT CO.,LTD. (Taiwan)

Stoker upgrade

900 t/day

Nov 2024

Waste treatment
plant

FYE
3/2023

Q4

Company A(Vietnam)New
construction

427 t/day

Sep 2025

Energy plant

FYE
3/2023

Q4

Company B(Thailand)New
construction

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Mar 2025

ThailandSiam Takuma Co., Ltd.

Energy from Waste plant andenergy plant sales, construction
supervision, and maintenance64Situation by Segment

Package Boiler Business /Equipment and Systems

Package Boiler Business
Domestic market has matured, but we expect a certain level of demand forrenewal and other work to continue for the time being.
In addition to new heating businesses (hydrogen, biomass, electric heatsources, decarbonized products, etc.), the Company aims to expand thescale of orders by expanding its overseas business in Southeast Asia,
particularly in Thailand.

Equipment and Systems
Building equipment business

Strong demand is expected to continue
due to urban redevelopment and new
construction and renewal of medical andwelfare facilities. The Company willcontinue to further strengthen its sales
and construction capabilities by securing
and training human resources, thereby
maintaining and expanding the scale.

Semiconductor industrial equipment business

The semiconductor and electronic device
manufacturing equipment market is growing
over the medium to long term due to the trend
toward digitalization. Aim to maintain andexpand the scale by providing products thatcreate and maintain a highly clean environment
required for the manufacturing process.

Group companies

Group company
Nippon Thermoener Co., Ltd.
Manufacture and sale of and after-sale services for steam boilers, hot water
heaters, and other heating products
Main products

Sun Plant Co., Ltd.
Design and construction of air conditioning
and plumbing equipment for buildings

Sale of and after-sale services for various
semiconductor industrial systems

Main products

Characteristics
Temperature

Once-throughboilers

Vacuum-typewater heaters

Hybrid hot
water supply
systems

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Biomass
boilers

Hydrogen-fired CO2 capturing
compact oncevacuum-typewater heaters through boilers

Custom development of
optimal environments foreach building

Humidity

Ventilation

Chemicalfilters

AMC environmental
concentration analyzers

65

Human Resources
Investment

Strengthening the management foundation

Strengthen hiring and training of human resources to pass on our greatest strength, our technological capabilities, and expand our resources.
Continue hiring and training efforts in the Engineering Division, as well as the Construction and Maintenance divisions.
Number of employees

Number of new hires

Number of employees (consolidated)(People)(People)Number of employees (non-consolidated)

3,447

3,609

3,619

3,816

Mid-career hires (non-consolidated)

New graduate hires (non-consolidated)

3,925

4,145

4,247

4,278

69

62

29
11
824

837

852

875

894

958

1,002

FYE 3/2017

FYE 3/2018

FYE 3/2019

FYE 3/2020

FYE 3/2021

FYE 3/2022

FYE 3/2023

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

83

79

1,054

FYE 3/2024

18
FYE 3/2017

43

45

22

25

34
10
24

21

20

FYE 3/2018

FYE 3/2019

FYE 3/2020

53
37

48
41

25

26

28

FYE 3/2021

FYE 3/2022

FYE 3/2023

35

FYE 3/2024

66

Strengthening the management foundation

R＆D

In addition to fine tuning existing technologies, we will strengthen R&D focusing on CCUS and carbon recycling technologies to realize adecarbonized society.
R&D roadmap for decarbonization technologies
Fuel decarbonization

Carbon recycling

Capture and use of CO2 after incineration

Direct conversion

Examples of our technology/R&D
Agricultural use of CO2 from flue gas purification
Delivered a t-CarVe® CO2 supply system with a customer (SARA Inc. and F Bit Communications Corp.)that directly utilizes purified flue gas generated from burning woody biomass as fuel, after removing
components harmful to plant growth, in a green house.

Solid carbonization

Technology for recovering CO2 from the flue gas of waste incineration facilities as solid carbon. Can beused as a raw material for chemicals, such as carbon black.

Direct use of
CO2

Chemicals

Fuel

Methanation at biogas recovery plant
Methanefermentation

Ore

OxygenChemical
combustion absorption Solid carbon Biomethanation
methodmethod conversion

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Technology that supplies hydrogen to biogas generated by methane fermentation of food waste andconverts CO2 into methane using microorganisms. Methane can be used as fuel for city gas, etc.
Storage

Use

Supply of
CO2 togreenhousehorticulture

Biomethanation

Separation and capture of CO2

Gasification

Hydrogen andammonia
combustion
technology

Food waste(Biomass resource)

CH4
MethaneBiogasCO2synthesis
H2

CH4
Methane

Usage

City gas, etc.

Biomethanation

67

Appendix

Illustration: Sales Progress / Sales Composition
Illustration: Sales Composition ofDomestic Environment and Energy Business

Illustration: Sales Progress of Project Orders
100

Order backlog(1 years ago)

80

EPC
Business
60

Order backlog(3 years ago)

Order backlog(2 years ago)

Order backlog(4 years ago)40

20

design/procurement

designconstruction

trial
operation

DBO

0

order

Recurring
revenue modelbusinesses

after-sales service(excluding DBO)

1-year later

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

2-year later

3-year later

completion

68Appendix

Illustration: Orders Received/Net Sales
Illustration: Orders Received/Net Sales

240,000

220,000

230,000

14th MTP

15th MTP
Net sales target
around 200 billion yen

Order(EPC)

200,000

190,000
180,000

180,000

Order(EPC)

160,000

Sales(EPC: Order onor after FYE 3/28)

Order(EPC)

Orderbacklog(EPC)(on or after
FYE 3/27)

165,000

152,000
143,000

Order
backlog(EPC)(FYE 3/25)

140,000

Order
backlog(EPC)(FYE 3/26)

Orderbacklog(EPC)(FYE 3/27)

Sales(EPC: Order on FYE 3/27)
Sales(EPC: Order on FYE 3/26)
Sales(EPC: Order on FYE 3/25)
Sales(EPC: Order backlog
on or before FYE 3/24)
Net Sales(excluding EPC)

120,000

Order
backlog(EPC)(on or before
FYE 3/24)

100,000

80,000Order SalesFYE 3/25

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

Order SalesFYE 3/26

Order SalesFYE 3/27

Sales

Sales

Sales

FYE 3/28

FYE 3/29

FYE 3/30

Sales
FYE 3/31

69

In closing

In the 14th Medium-Term Management Plan (FY2024-2026), we will
formulate and implement measures to realize our long-term vision "Vision
2030,“ while prioritizing investment of management resources into
receiving orders for municipal solid waste treatment plants (renewals andprimary equipment improvement) and establishing a revenue model thatmaximizes the use of recurring , which will lead to the achievement of
results in the 15th Medium-Term Management Plan and beyond.

May 24, 2024

TAKUMA Co., Ltd.
President and CEO

Hiroaki Nanjo

Continuing to focus on environment and energy-related businesses, wewill pursue sustainable growth together with our customers and society
via ESG management.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

70

Handling of this document

Information related to performance forecasts, business plans, and related topics included in this document
is based on data currently available to the Company and on certain assumptions that are deemed to bereasonable. This information includes elements of risk and uncertainty.

Please note that actual performance may diverge significantly from these forecasts for a variety of reasons.
Takuma is under no obligation to update, revise, or announce changes to forward-looking statements inthis document following its publication, except as required by applicable laws and regulations.

Takuma holds the copyright to this document and prohibits its duplication or reuse for any purpose
without its prior consent.

Copyright 2024 TAKUMA Co., Ltd. All Rights Reserved.

71