INFRONEER Holdings
FY2024 1st Quarter Financial Presentation
CEO Presentation Material

August 9, 2024•

I will begin my presentation with a summary of Q1 financial results and other topics.

We are capturing market changes and responding strategicallyOur understanding and responses to the market environment, order environment, andmaterial prices, etc.
Segments

Marketcondition

Our
Condition

PointsBuilding
Construction• Although capital investment is strong, there is a challenge in securingsubcontractors.
• By implementing a strategic order acquisition plan, we expect to achieve bothorder volume and the profit margin of orders.

Civil
Engineering• In addition to orders from the Ministry of Defense and NEXCO, there is a robust
demand for renewable energy projects, particularly related to Japan Wind
Development.
• In addition to the above, we have changed our sales and construction structure
to respond to projects related to renewable energy (Japan Wind Development)
and continue to secure profitable orders.

InfrastructureManagement• Demand for green power is on the rise, enhancing environmental value.
PPP(Public Private Partnership) are increasingly materializing in sectors such as
Arena and Water-PPP.
• Consistent results are being achieved through proactive proposals from the
upstream and strategic partnerships.

Road Civil
Engineering• The reorganization of our sales structure is smoothly leading to successful orderacquisition.
• A shift in the sales structure is leading to successful order acquisition.

Machinery• Domestic and international markets are moving steadily.
• We aim to increase value with high-value-added products such as ICT
construction equipment and electric (EV) machinery.

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I would like to explain our perception of the market environment and our strategy for
responding to it.
Firstly, I would like to discuss the building construction segment.
Although capital investment is strong, the market is facing major challenges in securingsubcontractors.
The Company has been relatively successful in securing subcontractors as a result of its
medium- to long-term order-acceptance strategy to date.
We expect to achieve our order volume and profit margin targets for the current fiscal year.
Next, I would like to discuss the civil engineering segment.
In addition to infrastructure investment reflecting policy measures for national resilience,
construction investment by the Ministry of Defense and NEXCO has remained strong in
the market.
In addition to the above, we have changed our sales and construction structure to respondto the renewable energy market related to Japan Wind Development and continue tosecure high profit margins.
With regard to infrastructure operations, demand for renewable energy is increasing, andits environmental value has improved significantly.
In the area of public-private partnerships, arena and water PPP projects have now become
full scaled.
By providing our expertise in line with the needs of local governments from upstream, we
will steadily achieve results through business development that gives us a competitive
advantage.
The market for the road civil engineering segment is particularly robust for maintenanceand repair work for government projects.
Due to the shift in our sales structure, we have steadily received orders for government
projects.
The market for the machinery segment remained firm both in Japan and overseas due inpart to steady construction investment.
We aim to increase profits by incorporating high value-added products, such as ICT
construction equipment and electric (EV) machinery.

Financial Summary
Company

Segments

INFRONEER Holdings

Building
Construction

Civil

Maeda Corp. Engineering

Japan Wind
Development

InfrastructureManagement

MAEDA
ROAD

Road Civil
Engineering

MAEDA
SEISAKUSHO

Machinery

OthersFinancial Highlights• FY24 1Q results were in line with plan (special factors in the civil engineering segment in the previous
fiscal year and higher general and administrative expenses), although revenue increased, and income
decreased YoY.
• Each segment is performing well, and the full-year plan is expected to be achieved• In 1Q, sales and income increased YoY• Orders are progressing smoothly, with a high profit margin secured at the time of order receipt, and theoutstanding construction order amount is expected to reach a record high.
• 1Q results showed a YoY decrease in sales and profit. Progress was as usual, except for special factors related todesign changes in the previous year.
• Orders are generally favorable, and the amount of work in hand at the end of the fiscal year is expected to be thehighest in the last three years.
• Won 3 concession projects (Arena) in 1Q.
• Continue to focus on sports entertainment and water business concessions•

Focusing on project development to enhance future profitability.

•

1Q results showed an increase in revenue and profit compared to the same period last year, achieving the highest
revenue and profit in the past three years.
Orders and sales in both the construction and manufacturing businesses are maintaining high levels, and the fullyear plan is on track to be achieved.

•••

1Q results showed a significant increase in sales compared to the same period last year.
Orders received are progressing smoothly, and the full-year plan is on track to be achieved.

•

1Q results were generally lower YoY, mainly due to construction period delays and inflation. Since the company
expects to be able to recover the cost of sales in 2Q and beyond, the full-year plan is expected to be achieved.

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Next, let me summarize the financial results for Q1.
The results of the INFRONEER Group were in line with the plan, but sales increased andprofits decreased compared to the same period of the previous year.
Each segment is performing well and is expected to achieve its full-year plan.
Next, I would like to explain Q1 results and full-year plan by segment.
In the building construction segment, both sales and income increased YoY due to steadyprogress in the amount of construction work on hand at the beginning of the fiscal year,
which was higher than in the previous fiscal year.
We expect both sales and profits to increase for the full year due to high profit margins on
new construction orders.
In the civil engineering segment, sales and profits were down from the same period lastyear, but progress was made as usual, except for a special factor due to a significant
design change in the previous year.
Orders have been favorable, and the amount of construction work on hand at the end of
the fiscal year is expected to be the highest in the last three years.
The infrastructure management segment was in the red due to preparations for the
opening of the Aichi Arena in Q1 and the sale of Japan Wind Development’s projects after
Q2.
However, Maeda Corporation is expected to sell renewable energy and other projects thatwere postponed in the previous fiscal year, and Maeda Corporation’s full-year profit
contribution is expected to be the highest in its history. In addition, three arena concession
projects were awarded this period. We will continue to focus on sports and water businessconcessions.
In Japan Wind Development, we will continue to develop projects.
In the road civil engineering segment, both sales and profits increased YoY due toabundant carry-over projects in the construction business and an improvement in the
profit margin on orders received.
It has achieved its highest sales and profits in the last three years.
Orders and sales have remained at high levels, and the full-year plan is expected to beachieved. We will continue our sales activities focusing on the profit margin on orders
received, including appropriate price pass-through in response to the external environment.
In the machinery segment, sales of construction equipment products remained strong.
Based on the current order situation, we expect to achieve the full-year plan.

Strategically and reliably acquiring arena concession projects in progress Aim to be a pioneer in the stadium/arena business, anticipated to grow

Our company's
across Japan.
 Build a regional network using the arena as a springboard foraim
infrastructure operations in each region.

Ecosystem for regional revitalization using Stadiums/Arenas as a catalyst
Providing knowledge andstructuring projects in line withlocal government needs

Utilize the established local
network for infrastructure
operations

Conducting sales activities andconstruction of facilities incooperation with local
companies

Creating a lively community
with the Stadium/Arena at its
core

Type１：Metropolis × Global・Large-scale
events

Type2：Metropolitan area × Domestic・Mid-scale events

Type3：Local area × Community-based

National Stadium Concession

Apr. 2024 to Dec. 2024
（Under discussion）
Apr. 2025 to Mar. 2055
Management （30 years）
Renovation

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Construction Sep. 2025 to Jun. 2027

Management Oct. 2027 to Sep. 2057
（30 years）

Renovation

Oct. 2024 to Sep. 2026

Management Oct. 2026 to Sep. 2039
(13 years)

4

I would like to continue with an explanation of the most recent activities of the
INFRONEER Group. The following page explains our strategic approach to concession andarena projects.
We were awarded three concession projects of different types this period.
The first one is a concession project for the new National Stadium.
Profit growth can be expected by taking advantage of its location in a major city topromote its use and efficient management. Rather than maintaining the current stadium,
we will aim to create a global standard of experience value through large-scale
investments, such as the addition of a large screen and a VIP room.
The second project is the BT+ concession project, which is integrated with the new
construction work of the Toyohashi Arena.
In addition to the arena, we will also be responsible for the construction and operation ofsurrounding facilities, aiming to revitalize the community with a park at its core in themetropolitan area.
The facility will also be equipped with high functionality, such as live viewing, which is
expected to attract new events such as sports entertainment.
The third project is a concession project for the Toyama City Gymnasium.
This is the first project of the R-concession method, which integrates the renovation.
By resolving the issues of aging existing facilities and further monetizing them, it can be
expected to become a core facility for new community development. We aim to make thisproject a model for future solutions to local issues.
The INFRONEER Group aims to be a pioneer in the stadium and arena business, which is
expected to expand throughout Japan.
We would also like to use the arena as a foothold to build a regional network and expand
into infrastructure operations in each region.
We believe that this is a unique approach that allows us to take advantage of thestrengths, both construction and de-construction businesses.

Japan Wind Development Steadily implementing development centered on onshore wind power• Steady progress in development, with projects expected to reach around 1,400 MW in
operation by FY30
(MW)
1,800
1,600

1,628

1,129

1,200

454

1,000

1,175
496

633

600

772

429

214

90

161
39
50

161
39

61
258

319

407

179

219

357

179

24

25

26

27

28

29

30

269

314
38

50

In operation-

937

Start ofoperation
this term

800

200

46
284

1,400

400

1,628
Construction
under
to begin thisconstruction
quarter

1,583

(FY)

※ Including oﬀshore wind power generation which acquired FIT within the Kodomari fishing port area.

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Next is Japan Wind Development’s approach to renewable energy projects.
We are steadily advancing development and expect to have 1,400 MW of projects inoperation by FY2030, mainly onshore wind power.
With the contribution of gains on sales and investment income, we expect operating
income from wind power generation alone to exceed JPY20 billion in FY2030.

5

Renewable Energy Strategy

Capital Recycling or Electricity Sales Revenue Model

When considering our renewable energy business strategy, the decision between adopting a capital recycling modelor an electricity sales revenue model can be made based on cost and environmental value as follows:
In practice, the choice will be comprehensively determined by considering the impact on performance, cash flow,
capital efficiency, and the overall business portfolio, among other factors.

Environmental value is increasing.

Impact on revenue.

Electricity sales revenue modelHybridenvironmental value⇧ × cost⇧environmental value⇧ × cost ⇩High costs but potential for increased profits

Low cost with potential for profit expansion.

from electricity sales.

➡Option to choose between electricity sales➡Retain and secure long-term electricity

revenue model or capital recycling model.

Yen
depreciation
High costsales revenue.

current market environment
Suspension of plans

Capital recycling model

environmental value⇩ × cost ⇧environmental value⇩ × cost ⇩High costs make it difficult to expand profits

Electricity sales are unlikely to see athrough either sales or electricity sales.

significant increase in profits.

➡Suspend until environmental value
increases or costs decrease.

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Low cost
Impact on
investment
amount.

➡Capital recycling through sales

No increase in environmental value.
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Yenappreciation

6

Here is our strategy for renewable energy.
I have prepared this document because we are often asked whether we are going to sellthem or keep them.
I believe it is necessary to make a comprehensive decision from various perspectives as towhether to use the so-called capital recycling model, which is mainly based on the sale ofproperty, or the electricity sales revenue model.
For example, in terms of cost and environmental value, a decision could be made, as
shown in the figure.
As shown in the lower right of the figure, if the environmental value does not increase
under the situation of low cost due to the strong yen, the decision may be made to recycle
capital model by selling the property since the profit increase is not expected to besignificant from the sale of the power.
Conversely, as shown in the upper left-hand side of the diagram, when costs are high dueto the weak yen and environmental values are increasing, the strategy is to hold onto theproperty and earn income from power sales over the long term, as the profit increase frompower sales is expected to be greater.
In addition, as shown in the upper right corner of the figure, if the cost is low and theenvironmental value is increasing, both selling the property and selling the electricity canbe highly profitable.
In reality, we need to make a comprehensive judgment from various perspectives,
including the impact on other business performance, cash flow, capital efficiency, andbusiness portfolio, and so we will make decisions based on changes in the market
environment.

Shift to cash flow-focused management.
Recover cash in a few
months to a few years.

Construction
 Small investment amount Cash recovery in a few
months to a few years

Generate cash
for investment.

“De-construction”
business

Investment required over several
years to more than five years.

Renewable energy projects
concession

 Large investment amount Recovery over the
medium to long termhigh expected
investment returns
Investment
phase

Recovery phase

Accelerating high investment return, moving away from contracting to
infrastructure operation⇒Shifting towards more cash flow-focused management.
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7

I will now explain our management strategy.
We are accelerating de-construction and infrastructure operations with a high return on
investment and will therefore aim for a more cash flow-oriented management.
In construction, we will accelerate the cash recovery cycle more quickly and invest
aggressively in de-contracting renewable energy and concession projects.
The de-construction business, which is expected to generate high investment returns, will
be renovated from a medium- to long-term perspective.
To realize our strategy in this way, we need to invest aggressively.

Reduce Cross-Shareholdings to zero by fiscal year 2027
Policy for the sale FY24 target:Sell over 25 billion yen of Maeda Corp.
of Cross(reduce the ratio to net assets to below 20%)
Shareholdings

Final goal Reduce to zero for the entire INFRONEER Group by FY27.

Implement distribution with awareness of financial discipline and capital
Policy for the
allocation ofefficiency.
funds from sales. ➡The specific distribution policy will be announced as soon as it is decided
by the next medium-term management plan.

INFRONEER

Group's transition of policy-held share sales amount and ratio to net asset ownership※The stock price is based on the market value at the end of the ﬁscal year.

140.0

26.4%

120.0
100.0

94

19.8%
72

80.0
60.0
40.0
20.0

11.0

30.0%

25.8%

22.0

Over 25
billion

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•

FY21

FY22

FY23

0.0%
FY24

15.0%
10.0%
5.0%

3.9

0.0
[Billion yen.]

20.0%
Aim for zeroby fiscal year2027.

End-of-period
Holding amountSale amount

25.0%

Reduce the ratio to net
assets to below 20% by fiscal
year 2024.

108

FY25

FY26

FY27

0.0%
8

In order to make better use of its capital, the INFRONEER Group announced today that it
will reduce its policy shareholdings to zero by FY2027.
First, we aim to sell at least JPY25 billion of Maeda Corporation this fiscal year, bringing
the ratio of holdings to net assets to less than 20%.
The policy for the allocation of funds from sales will be announced as soon as it isdetermined by the next mid-term management plan.

[Appendix]
Environmental value is expected to increase as renewable energy supply fails to keep up with demand growth●Share of renewable energy in Japan's
electricity mix

TargetExcerpt from 『6th Strategic Energy Plan』

38％

22％

Renewableenergy1.82 trillion kWh

Wind Power deployment is behind target

Renewableenergy934 billion kWh

92.6

FY2030 【Target】

FY2022【Result】●Target amount of renewable energy
electricity to be introduced in FY30

●Japan's electricity demand is
expected to grow

FY2022
ResultsSolar

34 billion kWh
9.3

OnshoreWind

0

Offshore
Wind

37.1

3.0
Geothermal

Hydroelectric

Biomass●Large shortage of renewable energy
supply relative to demand(billion kWh)

Demand for electric
power is increasing
due to an increasein new data centersand semiconductor
factories.

76.9

17 billion kWh

Demand for renewable energy
by RE100 companies

RE100
924

2021
（Result)

1081

1265

2040
2050
（Estimation） （ Estimation ）International initiative
for companies toobtain 100% of theelectricity they use on
their premises fromrenewable energy
sources

Shortage of
再エネ不足分
renewableenergy（Note: Figures for 2040 and 2050 are estimated for the maximum scenario among the three scenario cases.
(Source: Central Research Institute of Electric Power Industry)9

【Disclaimer】• This financial presentation document is originally in Japanese and has been translated in English. Any
texts, figures and descriptions etc. in Japanese document is the original and the English document is forreference purposes only. In case of any conflict or inconsistency between these two documents, theJapanese documents shall prevail.
•The figures in this document are based on financial results as of August 9, 2024, and rounded to thenearest 100 million yen.

•

While every attempt has been made to ensure the accuracy of the information, the forecasts containedin this document are based on judgments made with information available as of August 9, 2024, and are
subject to risks and uncertainties that may cause actual results to vary.

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