Results for Q2, FY March 2019
Takamatsu Construction Group Co.,Ltd.
Securities Code ：1762
November 27, 2018

To our shareholders:If you wish to exchange further information with us,
please do not hesitate to contact us at…
E-mail : ir@takamatsu-const.co.jp
Phone : Hiro Izutsu, IR, Takamatsu Construction Group Co.,Ltd.
81-(0)80-5773-9637

Takamatsu Construction Group
1. Takamatsu Construction Group is comprised of 21 Group companies subdivided into
10 “Takamatsu Group Companies (Takamatsu G)”,
8 “Asunaro Aoki Group Companies (Asunaro Aoki G)”
and “a holding company and 2 other companies”.
2. Mibu Corporation and TCG USA have become our consolidated Group companies from FY March 2019.

Takamatsu
Corporation Co.,Ltd.

TCG USA Inc.

Asunaro Aoki
Construction Co.,Ltd.
(78.4%) (78.4%)

Takamatsu Construction Group Co.,Ltd.

Nihon Owners Credit Co.,Ltd.
(unconsolidated)

Parent company is the company that touches the label of a company. Ownership is 100% if not specifically mentioned.
©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

1

Q2 Results, FY March 2019

By-Group Orders, Revenue and Operating Income (Consolidated)
1. Orders： Record high Q2. Both Groups surpassed both plan and previous year.

2. Revenue ： Surpassed previous years for 7 consecutive years as well as record high for 5 consecutive years.
3. Op.Income ： △0.44BJPY lower than planned 4.0BJPY. △1.86BJPY lower than previous year,△0.46BJPY for Takamatsu G, △1.42BJPY for Asunaro Aoki G.
4. Op.Income % ： 3.1%, lower than the planned figure of 3.5% as well as lower than previous year of 4.8% by 1.7pt.
Op.Income %6% 1600
160
Orders/Revenue(BJPY)

5% 1400
140

Q2, 2018/Mar FY
Actual

Q2, 2019/Mar FYOrders Actual
Plan144.6

1301311204% 1200

112

Takamatsu Gr.

1003% 1000
2%

56.6

800
80

4.8%Revenue

113 114.3

Op.Income

00

73.4

70.9

1412108

Asunaro Aoki Gr.

200
20

3.1%

5.4

600
60
400
40

3.5%（Plan）

64 65.7 43 43.7

41.5

16

Op.Income(BJPY)

2.6
3.3

67 78.9 70 70.6

64

3.5

4

2.3

2.1

2

2.1 1.80

Unit : BJPY. Op.Income #s inside bars don’t match with the total due to admin (TCG unconsolidated)costs.

©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

3By-Segment・By-Group Split (Consolidated)
1. Orders increased by 11.2% to 144.6BJPY. Architecture grew significantly vs last year due to strong Asunaro Aoki Gr.(large size apartments and PFI),
but civil engineering decreased significantly.
2. Revenue increased by 2.0% to 114.3BJPY, +5.7% for civil engineering, △10.5 %for architecture.
Takamatsu G grew by 5.4%. Aoki Asunaro G slightly decreased due to offset of increased civil engineering and decreased architecture.
3. Op. income decreased by 1.9BJPY to 3.5BJPY. Asunaro Aoki G decrease = △1.4BJPY (Architecture △0.8BJPY, Civil eng. △0.3BJPY, others △0.3BJPY).

Takamatsu Construction Group

M’s

48.6
39.6
0.7

18/9(17/9)

65.7 ＋16.2%（56.6）

18/9(17/9)

43.7 ＋5.4%（41.5）

78.9 ＋7.5%（73.4）
70.6 △0.4%（70.9）

2.1 △17.6%（2.6）

1.8 △43.0%（3.3）

Revenue

Op.Income18/9(17/9)

84.8
49.4
2.1（64.7）（55.2） （3.7）+31.1% △10.5% △43.4%

Real Estate※Order（BJPY）※Revenue（BJPY）※Op. Income（BJPY）

2.4
53.0
48.0
（58.7）（50.2） （2.8）△18.2% +5.7% △13.6%

Architecture

10.0
16.1
0.3

Asunaro Aoki Construction

MiraiConstruction

Aoki
MarineTokoGeotech

AsunaroRoad

Niigata
Mirai

ShimadaGumi）

Mibu
Corporation（Nakamura
Shaji

Kongo
Gumi

JP HomeSuminoe
Kogei

Takamatsu EstateTokyo

Takamatsu Estate
OsakaOrders）

Takamatsu
Techno Service(Tokyo)

Takamatsu
Techno Service(Osaka)

Takamatsu
Corp
U T
S C
A G

49.4
29.8 （
1.4

13.4
10.2
0.6

Civil Engineering

Asunaro Aoki Group

Takamatsu Group

Orders Revenue Op.Income
18/9
18/9
18/9(17/9)(17/9)(17/9)

11.7
11.7
0.7（6.5） （6.5） （0.3）+79.8% +79.8% +141.6%
144.6 ＋11.2%（130.0）114.3 ＋2.0%（112.0）3.5 △34.2%（5.4）

Unit: Billion yen. The sum of Op.Income of each segments doesn’t match with the total due to admin costs.

©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

4

Explanation of Shortfall of Operating Income vs. Last Year (Consolidated)
1. Op. income decreased by 1.86BJPY, from 5.41BJPY to 3.56JPY.
2. First reason for shortage vs. previous year is gross profit decrease of 0.34BJPY despite revenue increased of 2.0% (2.2BJPY).
3. Gross profit of Takamatsu G increased by 0.56BJPY. Takamatsu (UNconsolidated) decreased both for revenue and GP %.
However, Mibu Corporation, which newly joined Takamatsu G increased gross profit by 0.74BJPY.
4. Asunaro Aoki dereased its gross margin by 0.91BJPY, of which 0.87BJPY is caused by Asunaro Aoki UNconsolidated.
This is due mainly to gross profit % down caused by backrush of previous year’s highly profitable architecture items.
5. SG&A increased by 1.51BJPY vs previous year.
→ Takamatsu UNconsolidated SG&A increased by 0.33BJPY, out of which 0.36BJPY increased due to personnel expense increase.
→ Out of Asunaro Aoki G’s SG&A increase of 0.50BJPY, Asunaro Aoki UNconsolidated increased by 0.35BJPY,of which 0.26BJPY is personnel expense.
→ Out of 1.51BJPY SG&A increase of TCG consolidated, 0.61BJPY is due to Mibu Corporation’s entry to TCG Group,
resulting in 0.90BJPY increase excluding Mibu. In Q1, increase of SG&A excluding Mibu was 0.59BJPY vs previous year,
which means the increase of SG&A for Q2 was much smaller than Q1.
→ We estimate SG&A amount for Q3 & Q4 to be smaller than Q1 & 2.
Unit : Billion JPY

58
5.8

0.12

△0.95

5.4
54

0.18

0.75

△

△0.21

△5.050

△46
4.6

0.04

0.00
△TK

424.2

TKTKG

(Non(NonGPconsol.) consol.) variance ofGP%Rev.
othervariance variance companies

383.834
3.4+0.56

Takamatsu Group(=TKG)

30
3.0

5.41

Last Q2Operating IncomeAAAA

AAG

1.02

(Non(NonGPconsol.) consol.) variance ofGP%Rev.
othervariance variance companies△0.91

Asunaro Aoki Group(=AAG)△0.34

Gross Profit Variance0.50△+0.00
Others

TKG

AAG

1.51

0.01

TCG
others△SG&A Variance

3.56

Current Q2
Operating Income
5©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

By-Group・By-Quarter Revenue & Op.Income Outlook (Consolidated)
1. Q2 revenue was short vs plan but exceeded previous year. Q1+Q2’s actual revenue exceeded both plan and previous year.
2. Q2 Op. income was below plan by 0.4BJPY but was not bad considering natural disasters (earthquake & typhoon).
3. For Q3 & Q4 we estimate increased revenue, improved gross profit % as well as lower SG&A to push up operating income.
4. Although hurdle to clear Q4 revenue and profit targets are high, we consider the achievement to be feasible and continue
to realize operating income target of 15BJPY.

Q1100

FY 2018/3
Actual

FY 2019/3(Brown=Q1Plan)FY 2018/3
ActualQ4Q3Q2
FY 2019/3(Brown=Q1Plan)FY 2019/3

FY 2018/3
Actual(Left=Q1Plan)

Orders／Revenue（BJPY）

Revenue

Revenue

60 Revenue
52.5

54.1

49.9

Takamatsu Gr.

20

Asunaro Aoki 32.2
Gr.

0

(Left=Q1Plan Red=Full year Plan)
86.0

80

40 20.5

FY 2019/3

FY 2018/3
ActualOp.
Income

1.9
1.1
1.0

20.5
19.9

59.4

63.1 60.1

20.9 Op.

23.1
23.2

Income

3.4
1.4

33.6

30.0

40.0
36.9

38.6

0.8 0.8
0.8 0.8
0.2 0.2

2.2

27.0
Op.
27.0
22.7
Income

1.4

2.7
1.3

1.9 1.7

41.8

1.5

83

28.0

4.1 4.1

42.0 2.2 2.2

42.0

2.2

2.2 2.2

84.8111.0

68.5

69.0 69.0

64.5

3.5

3.1

Revenue

10268.0

7.0

Op.Income（BJPY）

8
7.4 15.0

41.0

Op.
Income 40.3

4.6
2.9

40.6

6
3.9 4.0 8.3

4

157.0
45.0

44.5

2

3.4 3.6 7.7

2.006

Unit : BJPY. Op.Income #s inside bars don’t match with the total due to admin (TCG unconsolidated)costs.

6©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

Future Outlook

Our Market Environment Recognition towards March 2020 andGrowth Image of Takamatsu Construction GroupEnvironment
Recognition
Positive Factors■ We foresee three consecutive years ofdomestic construction investment
exceeding 53TJPY. (FY Mar 2018 thru FYMar 2020)■ We foresee high level of household #s to
be maintained in Tokyo-Nagoya-Osaka
Areas as well as continued high level of
new residence construction start-ups.
■ We foresee continued tight market forTokyo Metro Area’s construction ofcondominiums for rental purposes.

Mid Term Plan was disclosed in May 2017.
We revised a part of the Mid Term Plan and disclosed it in May 2018.
Portions in RED are changed in November 2018.

Negative Factors■ Domestic construction investment will
start to shrink after 2020. Population
decrease will also accelerate.
■ Construction labor cost will increase as #of workers decrease.
■ There is risk of rapid decline of market for
condominiums for rental purpose due tointerest rate hike and / or decrease ofoccupancy rate.
■ Decrease of overall construction start-ups

Growth Image of Takamatsu Construction Group
1. We will create an organization which realizes expansion of orders and continued growth forconstruction of Tokyo Metropolitan condominiums for rental purpose as our core growth segment.
2. On the other hand, for civil engineering and government related businesses where we foresee flator negative growth for future years, we will aim to realize steady growth of market share as wellas to maintain high profit margins.
3. There is no significant change of this growth image, but now is a good chance to review.
8©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

Occupancy Rate of Condominiums Built by Takamatsu Corp.
1. Occupancy rate is continuing to show above 95% for both Tokyo and Osaka+Nagoya for September 2018.
2. We believe rental condominium market is continuing to be tight for Tokyo and Osaka+Nagoya.
3. Although there are views that occupancy rate will drop for Tokyo, Osaka and Nagoya, we believe
Takamatsu Corp. is remote from this view since Takamatsu Corp. concentrates in urban and near-station
locations of the three cities, where population is still increasing.
100.0%
99.0%
98.0%
97.0%
96.0%
95.0%
94.0%
93.0%
92.0%
91.0%
90.0%

Osaka& Nagoya
大阪・名古屋

95.7%

96.0%

95.1%

95.6%

96.4%

FY Mar.2019
FY Mar.2018
FY Mar.2017

Jun.
Definition:

96.0%

Sep.

Dec.

Mar.

100.0%
99.0%
98.0%
97.0%
96.0%
95.0%
94.0%
93.0%
92.0%
91.0%
90.0%

Tokyo
東京

95.8%

96.2%

95.1%

95.4%

95.4%

96.9%

FY Mar.2019
FY Mar.2018
FY Mar.2017

Jun.

Sep.

Dec.

Mar.

“Osaka and Nagoya” = Osaka, Kyoto and Hyogo Prefectures plus Nagoya City.
“Tokyo”= Tokyo, Kanagawa, Saitama and Chiba Prefectures“Occupancy Rate” = (Number of occupied condo apartments built by Takamatsu Corp and managed by Takamatsu Estate at the end ofeach quarter) divided by (Number of condo apartments built by Takamatsu Corp and managed by
Takamatsu Estate at the end of each quarter©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

9

Group Vision and Mid-Term Plan: Takamatsu Group
1. Takamatsu Corp is the foundation company as well as one of the two core companiesof our Group.
2. Takamatsu Corp Grew by building condominiums for rental purpose by thoroughly
responding to the needs of the clients (Consultation and Construction)① One of the first companies to create real estate utilization business model (back in mid 1960s).
② Conducted consultation and proposal activities to wealthy real estate owners（Proposals include taxation, legal, inheritance, construction, real estate and management)③ Built landmark condominiums in front of stations, resulting in high rental fee and occupancy rate

3. Recorded increased orders, revenue and profit for three consecutive years in FY Mar 2018.
4. Completed building totals 4,620, with 1,370 in Tokyo Metro Area and 3,250 in Kinki andNagoya Areas (as of March 31, 2018).
5. Concerning # of households in Japan, during# of Households in Japan(000s)
OthersHusband, wife+ child(ren)One parent + child(ren)Husband + wife

SingleMid-Term Plan years, peak is expected tocontinue. In addition, # of households forsingle, husband+wife, one parent andchild(ren) are expected to still increase.
6. This increasing trend is stronger in Tokyo, Nagoya and Osaka Areas,
especially for Tokyo.
→ In 2017, only four prefectures of Tokyo Metro Area, Aichi, Osaka andFukuoka Prefectures had more inflow of population in comparison tooutflow. (Population change status, Gov’t statistics)
7. Tokyo Metro architecture mkt size is about three times larger than Kinki Area.
8. It is this “Toh-Mei-Han, smaller size families” that are still expected toincrease, and are the main residents of rental condominiums built byTakamatsu Corp.
9. However, now is a good chance to review future growth rate and other items.

Mid Term Plan was disclosed in May 2017. Partial revision was made in May 2018.Portions in RED are changed in Nov. 2018©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

10

Mid Term Plan was disclosed in May 2017.Partial revision was made in May 2018.Portions in RED are changed in Nov. 2018.

Group Vision and Mid-Term Plan: Asunaro Aoki Group
1. Asunaro Aoki Group is a listed company in Tokyo Stock Exchange 1st Section, with Asunaro Aoki Construction
Co.,Ltd. as the core company of the Group and 7 other Group Companies.
2. The ratio of civil engineering vs architecture for both orders and revenue are 50 : 50 for Asunaro Aoki UNconsolidated.
3. For Asunaro Aoki Consolidated, the ratio changes to 70 : 30 for civil engineering vs architecture due to Group
Companies such as Mirai Construction and Aoki Marine majoring in marine engineering, Toko Geotech, Asunaro Roadand Niigata Mirai majoring in slope protection and pavement, Shimada Gumi majoring in excavation / research ofarchaeological resources, and M’s majoring in renovation.
4. Operating income of Asunaro Aoki Construction Co.,Ltd.(UNconsolidated) for FY March 2018 dropped slightly due toprofitable architecture projects of the previous FY. However, Asunaro Aoki Construction Group (Consolidated)
generated record high operating income for FY March 2018, which contributed significantly to TCG’s record highoperating income. Asunaro Aoki Construction Group will try to achieve revenue of 157BJPY for FY March 2019.
5. Asunaro Aoki Group will expand its business areas and improve productivity by tackling with i-construction.
6. However, now is a good chance to review focus areas such as renewable energy, maintenance of public infrastructures and other fields.

(中計資料・2017/5開示、赤字部分のみアップデート)
FY Mar.’18 Major Projects (1)Headquater, Fukushima Prefecture Police（Fukushima Prefecture）

FY Mar.’18 Major Projects (2)Watarai Windfarm Construction（Cosmo Engineering Co.,Ltd.）
11©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

FY March 2019, Current and New Mid Term Plans
1. FY March 2018 ： Revenue and Op. Income exceeded Mid term plan targets.
2. FY March 2019 ： Targets for FY March 2019 are set one year ahead vs. Mid Term Plan targets.
New presidents are assigned to Takamatsu Corporation and Asunaro Aoki Construction.
Accordingly, we decided to formulate a New Mid Term Plan with FY March 2020 as its first year.
Orders
Revenue

280.0

280

（BJPY）

254.8

240

120.0

Takamatsu Gr.

200

106.4
960

268.0

268.0

245.1
111.0

Achieve Targets
One Year Ahead!

（BJPY）
108.0

20

13.6

15.0

15.0

8.3

7.912080Op.Income

92.3

160

148.6

New Mid
Term Plan

153.4

7.0

160.0

1612

160.0

157.0

8

AsunaroAoki Gr.

400

7.7

7.6

2018/3FY

2019/3FY（Mid Term Plan・Actual）（ Annual Plan）「TRY! NEXT CENTURY 2020」

48.0

2020/3FY

2021/3FY

2022/3FY

0（Mid Term Plan）
12©2018 TAKAMATSU CONSTRUCTION GROUP CO., LTD.

Op.Income #s inside bars do not match with the total due to admin (TCG unconsolidated) costs.