Financial Briefing for the Second Quarter of
the Fiscal Year Ending March 2024
Progress towards Compliance with thePrime Market’s Continued ListingCriteria
November 22, 2023

1. Summary of results for the second quarterof the fiscal year ending March 2024
Consolidated
carried-overconstruction
balance

95,254 million yen (+11.0% from the end of the previous fiscal year)
The carried-over construction balance remained high, rising 11.0% from the end of the previous fiscal year to95,254 million yen.
Reference: Construction balance carried over from previous fiscal year + order balance completed construction balance = Construction balance carried over to next
fiscal year

91,26995,25485,781

69,878■Order balance■Completed
construction balance■Carried-overconstruction balance

Fiscal year ended
March 2022

Consolidated
operatingincome44,772 35,299

27,144 32,631

59,814 38,422(Millions of yen)

22/9

Fiscal year ended March 2023

23/9

233 million yen (consolidated operating margin: 0.6%)
Consolidated operating income fell 74.9% from the corresponding period of the previous year to 233 million
yen as a result of factors including a failure to make progress as initially envisioned on efforts to adjust pricing
to take account of the soaring cost of construction materials and rising labor costs, particularly projects forwhich orders were booked during the previous fiscal year.
(Millions of yen)

3.4%

2.4%
Operating income
0.6%
1,124

931

Operating margin

233
2021/92022/92023/92*Figures have been rounded down to the nearest million yen.

2-1. Trend in consolidated sales
36,252 million yen, down 6.6% from the corresponding period of the previous year
We expect to see full-year consolidated sales of 76,000 million yen thanks to robust orders during thequarter under review.
(Millions of yen)

76,000 *80,00071,834

69,645

1,377
3,110

809

874
5,780

7,839
21,93560,0004.1％

18,30018,37028.9％

38,81840,00032,713

9,076
20,00036,252

402
3,543

1.3％

430
2,216

8.3％

1.3％
44,6196.8％
27.7％
20,99064.2％

10,762

1.0％

26.4％

9.1％

64.0％

27.7％

24,1091.8％

44,885

1.1％

962
1,228

10.9％

9,265

65.2％

2.7％
3.4％

25.5％

49,576

25.6％

62.5％
24,796

68.3％

62.2％

0
2021/9Fiscal year ended
2022/9Fiscal year ended
March 2022
March 2023
■Residential ■Non-residential ■Renovation ■Other

2023/9Fiscal year ending
March 2024 (outlook)

Breakdown*The full-year performance outlook was revised on October 26, 2023.

33

2-2. Principal completed construction
Residential

Pressance Loger Kusatsu Grace Court
Pressance Corporation (Shiga Prefecture)

Proud Yokohama Bandobashi
Nomura Real Estate Development Co., Ltd.
(Kanagawa Prefecture)

Duo Veel Hakata Station
Hoosiers Corporation (Fukuoka Prefecture)

Non-residential

OK Kaijinminami BranchPremistYokohama-Tammachi
OK Store
OwnershipCo., Ltd. (Chiba Prefecture)

3-chome Sotokanda, Chiyoda-ku Project

LOGI’Q Wangan Narashino

Daiwa House Industry Co., Ltd. (Tokyo)

Tokyu Land Corporation (Chiba Prefecture)44

3-1. Trend in gross margin on sales and factors
affecting operating income
Gross margin on sales fell 21.5% from the corresponding period of the previous year to 2,093 million yen
while operating income fell 74.9% to 233 million yen, reflecting factors including a lack of progress in efforts
to adjust pricing to reflect soaring material costs.
Trend in gross margin on sales
Factors affecting operating income
10.0%(Millions of yen)

(Millions of yen)

8.5%

9.0%
Operating margin

Operating margin

2.4％

0.6％

8.0%

6.9%

Decrease in gross margin
on sales: -574

7.0%
5.8%

2,772

2,667

110
261
314

98

5.0%

931
4.0%

2,093

373
162
4.0％

3.7％

9.4％

14.0％

2,032

Operating income: -698

6.0%

665

2,085

Increase in selling,
general andadministrative
expenses: -124

11.4％

6.1％

75.2％

76.2％

31.8％
197
43
1,187

3.0%

▲167

9.4％ 2.0%
2.1％

233

1.0%

▲124

56.7％
0.0%

2021/92022/9■Residential ■Non-residential ■Renovation ■Other

2022/92023/9
Breakdown

Operatingincome552023/9Completed
construction
balance▲975

568

Construction
profitRealestate, etc.

Selling,
general andadministrative
expenses

Operatingincome3-2. Factors behind the decrease in profitability
and improvement initiatives
The decline in profitability resulted from our inability to adjust prices to reflect soaring material costs as effectively as initially envisioned.
Orders are currently strong, and profitability at the time of order receipt is improving compared to the previous fiscal year. We expect tosee a recovery during the next fiscal year and beyond.

Adverse factors: Pricing issues
Favorable factors: Improved profitability at time of orderProfitability fell for multiple projects, particularly thosebooked during the previous fiscal year or before, due toour inability to adjust prices to reflect soaring material
costs and increasing labor unit costs as effectively as we
had envisioned.

Construction material price index (nationwide)*1
150

145

143

142

Illustration of order balance andprofitability at the time of order
receipt

140
130

Remains highafter peaking inAugust 2022

120

We expect to see a recovery starting during the next fiscal
year in both residential and non-residential projects
thanks to factors including improved profitability of new
projects, even if profitability at the time of order declines
due to the impacts of soaring material costs and laborcosts.

Order balance (residential)
Order
受注高（非住宅）
balance (non-residential)

Profitability at the time oforder receipt (residential)

110

Profitability at the time of order
receipt (non-residential)

Material costs startrising in July 2021

100

Improvement
trend inprofitability attime of order

900

We’re currently bolstering structures so we can deal with pricefluctuations in a timely manner (through more aggressive pricenegotiations in times of inflation, sales DX, etc.).

Fiscal year ended
22/3期
March 2022

*1: Compiled based on data released by the Economic Research Association; April 2020 = 100.

6
6

Fiscal year ended
23/3期
March 2023

Fiscal year ending
24/3（予想）
March 24 (outlook)4-1. Trend in consolidated order balance
The order balance rose to 44,772 million yen thanks to strength in condominium buildings, a flagship businessarea. The full-year order balance rose to 81,100 million yen, up 3,400 million yen from the initial plan of 77,700
million yen.
(Millions of yen)

86,95890,00036
5,213

81,100 *24,526

15,33316
3,658

71,453
19
6,662

59,81410
3,240

60,00018,91844,772

10,10331,56330,000

10
3,041

0.0％

11,697

9.6％

16,813

0.0％

0.0％

11
2,290

0.0％

9.3％

6.0％

5,990

4.5％

26.5％
45,85364.2％

0.0％
46,46057,181

5.4％

37.1％

16.9％

53.3％

77.7％

28.2％

0.0％

65.8％

5.1％
36,47962,090

18.9％
76.6％

13.4％
81.5％

0
2021/9Fiscal year ended
March 2022

2022/9Fiscal year ended
March 2023

■Residential ■Non-residential ■Renovation ■Other
7
7

Breakdown

2023/9Fiscal year ending
March 2024 (outlook)* The full-year order outlook was revisedon November 07, 2023.

4-2. Breakdown of the consolidated orderbalanceByapplication

Robust orders for condominiums and apartmentbuildings, a flagship business area
Increases in medical, welfare, and elderly(Millions of yen)housing
2021/92022/9

Breakdown
構成比
Condominiums and apartment
マンション・集合住宅
buildings
Logistics warehouses and物流倉庫・工場
factories

2023/9

Breakdown
構成比

Breakdown
構成比18,926 60.0%

47,121 78.8% 36,681 82.0%

5,712 18.1%

5,790

9.7%

3,192

7.1%

Government buildings and offices
庁舎・オフィス

2,678

8.5%

1,877

3.1%

1,990

4.4%

医療・福祉・高齢者住宅
housing

21

0.1%

179

0.3%

1,614

3.6%

Commercial facilities
商業施設

2,284

7.2%

4,049

6.8%

1,149

2.6%

Education, culture and sports
教育・文化・スポーツ

1,049

3.3%

525

0.9%

74

0.2%

879

2.8%

248

0.4%

56

0.1%

10

0.0%

20

0.0%

12

0.0%

Medical, welfare and elderly

Event halls
イベントホール
Other
その他
Total
合計

31,563 100.0%

59,814 100.0%

Medical, welfare and elderly housing
Government buildings
and offices
Logistics
warehouses andfactories

2023/9

Breakdownbyapplication
Condominiums
and apartmentbuildings

44,772 100.0%*Renovation work is classified on the basis of building application.

KyushuBy region

Significant growth in the Chubu region(Millions of yen)2021/92022/92023/9

Breakdown
構成比

Breakdown
構成比

Breakdown
構成比

Kanto
関東

14,533 46.1%

24,856 41.5%

12,105 27.0%

Kinki
近畿

8,277 26.2%

21,642 36.2%

7,350 16.4%

Chubu
中部

2,346

7.4%

5,945

9.9% 13,785 30.8%

183

Tohoku
東北

0.6%

2,734

4.6%

1,971

Chugoku and Shikoku
中国・四国

3,399 10.8%

2,843

4.8%

4,643 10.4%

Kyushu
九州

2,823

1,791

3.0%

4,915 11.0%

Total
合計

31,563 100.0% 59,814 100.0% 44,772 100.0%

8.9%

Chugoku andShikokuTohoku2023/9

Breakdown
by region

4.4%

8
8

Kanto

Chubu

Kinki

4-3. Principal ordered construction
ClientBuilding (project)

Prefecture

Use

Kyudenkita Condominium
Rebuilding Association

Kyudenkita Rebuilding PlanTokyo

Condominium/apartmentbuilding

Nomura Real Estate
Development Co., Ltd.

PMO Akihabara III

Tokyo

Office building

Hannan City

Hannan Municipal School Lunch
CenterOsaka
Prefecture

School lunch center(renovations)Super Tool Co., Ltd.

Super Tool Distribution Warehouseand Finishing Plant

Osaka
Prefecture

Logistics warehouses
and factories

Anabuki Kosan Inc.

Alpha States Kudamatsu Station III

Yamaguchi
Prefecture

Condominium/apartmentbuilding

Itochu Property
Development, Ltd.

Kumamoto Residential Private
Nursing Home

Kumamoto
Prefecture

Medical, welfare andelderly housing*In order of prefectural code

99

5. Outlook for the fiscal year ending March 2024
*The full-year performance outlook was revised on October 26, 2023.

Consolidated
sales

76,000 million yen (+5.8% year-on-year)
We expect sales for the fiscal year ending March 2024 to rise 5.8% from the corresponding period of theprevious year to 76,000 million yen thanks to factors including an increase in the carried-over construction
balance from large project orders booked during the fiscal year ended March 2023.
(Millions of yen)

76,000Consolidated
operatingincome69,64571,834

Fiscal year ended March 2022

Fiscal year ended March 2023

Fiscal year ending March 2024

1,030 million yen (consolidated operating margin: 1.4%)
We expect consolidated operating income to fall 857 million yen (45.4%) from the corresponding period of
the previous year to 1,030 million yen as a result of a failure to make progress as initially envisioned onefforts to adjust pricing to take account of the soaring cost of construction materials and rising labor costs.
(Millions of yen)

3,000

3.9%

4.0%

2.6%
2,000

1.4%

1,000
0

2,708

1,887

1,030

Fiscal year ended March 2022

Fiscal year ended March 2023

Fiscal year ending March 2024

10

Operating income
2.0%
Operating margin

0.0%

6. Consolidated balance sheet
With regard to assets, among current assets, trade receivables (notes receivable, unpaid income fromcompleted construction, contract assets, and electronically recorded monetary claims) rose compared to theprevious fiscal year. Turning to liabilities and net assets, accounts payable (accounts payable forconstruction work and electronically recorded liabilities) and other current liabilities rose.
 Assets +5,466

 Liabilities and net assets+5,466(Millions of yen)

(Millions of yen)

Total assets

Total
liabilities andnet assets

Total assets

51,091Cashand deposits
現預金
Trade
receivables
売上債権
Inventory
assets
棚卸資産
Current
assets
流動資産

2,337
3,764

51,091

45,62545,62539,523

Total liabilities
and net assets

1,545
4,708
▲ 1,000
5,145

Tangible and intangible
有形・無形固定資産
fixed
assets

238

Investments and other
投資その他の資産
assets82

21,982Current
liabilities
流動負債Interest-bearing
有利子負債 debt

44,668Fixedliabilities
固定負債

5,015
765
115
5,356

27,339

▲ 13
9
2,115

2,105
Retainedearnings
利益剰余金■ Current assets■ Tangible and intangible fixed
assets■ Investments and other assets

Fiscal year ended March2023

Accounts
payable
仕入債務
Advances received on
未成工事受入金
constructionin progress
Incometaxes payable
未払法人税等Net
assets
純資産

▲ 79
100
21,637

21,536■ Current liabilities■ Fixed liabilities■ Net assets

2,576

3,847
Fiscal year ended March
2023

2023/9

Capital adequacy
自己資本比率ratio

112023/9Fiscal year ended
2023/3期
March 2023

47.2%

2023/942.4%

7. Consolidated cash flows
The balance of cash and cash equivalents at the end of the quarter rose 1,545 million yen to
11,531 million yen as factors including increases in accounts payable (accounts payable forconstruction work and electronically recorded liabilities) and advances received on
construction in progress offset increases in trade receivables (notes receivable, unpaid income
from completed construction, contract assets, and electronically recorded monetary claims).
(Millions of yen)

11,531
9,986

9

▲414

1,950

Balance of
cash and cash
equivalents atthe beginningof the fiscal
year

Quarterly net income
税引前四半期純利益468
beforetaxes
Tradereceivables
売上債権▲ 4,708
Expenditures on
未成工事支出金
517
constructionin progress
Accounts
payable
仕入債務
5,015
Advances received on
未成工事受入金
765
constructionin progress
Income
taxes
法人税等
▲ 48

Fiscal year ended March 2023

Sales cash flow

Fixed
assets
固定資産
Investment
securities
投資有価証券▲ 257
261

Investment cash flow

12

Borrowing
借入金
Dividend
payments
配当金支払

▲ 58
▲ 352

Financing cash flow

Balance of
cash and cash
equivalents at
the end of thequarter

2023/9

8. SDG initiatives(from the Medium-term Business Plan)

Area

Resolvingenvironmental
problems

2022/9Performance

2023/9Performance

Extending the service life Value of update andof existing buildings
renovation orders

2.8 billion yen

2.02 billion
yen

Number of earthquake
Making existing buildings
resistance renovation
more resilient
orders received

20Conducting R&D into
construction
technologies

Number of newtechnology
development initiatives

1

1

Improving productivity

Per capita sales
improvement rate

―

―

7

8

Example initiative

Target

SDG targets

Environment

Resolving social
issuesSocial*Versus fiscal year ended
March 2020

Corporate
governance

Kuda Matsu

Raising complianceawareness

Number of educationalsessions for officers
and employees

1313

Progress towards Compliancewith the Prime Market’sContinued Listing Criteria

Compliance with the Prime Market’s
continued listing criteria
We will continue to work to achieve compliance with the Prime Market's criteria by the end of the fiscal year ending March 2025.
Fiscal year ended Fiscal year ended
March 2022
March 2023
*3
*3

As of transitionreference date*1

Compliance plan*2Market capitalization

6.48 billion yen

7.4 billion yen

9.45 billion yen

At least 10 billion
yen

Trading value

9 million yen per 20 million yen per 20 million yen per 70 million yen per 60 million yen per
day
day
day
day
day

At least 20 million
yen per day

8.63 billion yen

7.71 billion yen

23/9
*4

Fiscal year ending Fiscal year ending
March 2024
March 2025

Reference: Progress towards targets listed in our compliance plan
Dividend ratio

26.2%

―

34.6％

50.7％

―

ROE

8.7%

―

9.1%

6.3%

―

At least 10%

ROIC

7.8%

―

9.1%

6.2%

―

At least 10%

Consolidated sales

56.4 billion yen―

69.6 billion yen

71.8 billion yen

36.2 billion yen

80.0 billion yen

Consolidated current
net profit(Consolidated
operating income)1.6 billion yen(2.21 billion yen)―

1.81 billion yen(2.7 billion yen)

1.32 billion yen(1.88 billion yen)

270 million yen(230 million yen)

2.8 billion yen(4 billion yen)

At least 50%*1 From “Primary Decision Results Concerning Compliance with New Market Section Continued Listing Criteria.”*2 From “Plan for Achieving Compliance with New Market Section Continued Listing Criteria,” as disclosed on December 15, 2021. Market capitalization as of November 30, 2021; trading volume has been calculated as the average value from January 2021 toNovember 2021.
*3 Market capitalization has been calculated by multiplying the average final share price on the Tokyo Stock Exchange during the three months leading up to the last day of the business year by the number of outstanding shares as of the last day of thebusiness year; trading volume has been calculated as the average value from January through December for each year.
*4 Market capitalization has been calculated by multiplying the average final share price on the Tokyo Stock Exchange from July through September 2023 by the number of outstanding shares as of September 30, 2023; trading volume has been calculated as
the average value from July 2022 through June 2023.
The number of outstanding shares as of March 31, 2021, was used to calculate *1 and *2.

15
15

Businessstrategy

Capital strategy

ESG

Business growth and investment policies
In addition to strengthening the business platforms that underpin our existing businesses, we will invest a total of 10 billion
yen by the fiscal year ending March 2025 as we move forward that spending from the Medium-term Business Plan in aneffort to accelerate our entry into peripheral and new segments.

5 billion yen

5 billion yen

Increasing the technical capability andprofitability of existing businesses

Entering peripheral businesses and new
segments

Residential

Nonresidential

Civil
engineering

Renovations

Real estate

Environment

Moving investment forward to the period from thisfiscal year to the fiscal year ending March 2025

• Implementing the DX(sales, construction, and design)• Reentering the civil engineering businessas a domain where we can build
competitive advantages in a business that’s
not impacted by market conditions

P17-18• Entry into super-high-rise buildings
and super-large projects worth at least
5.0 to 10.0 billion yen• Entering the real estate business in aneffort to increase added value for client
proposals through techniques such asincorporating land offerings into the sales
process• Developing and acquiring zero-energy
technologies like ZEB, ZEH, andwood construction techniques• Aiming to capture orders in growth domains
while contributing to the achievement of theSDGs in areas such as renewable energy

16

P19-21

Businessstrategy

Capital strategy

ESG

Strengthening existing businesses: DX goals
Approach to DX for realizing the Medium-term Business Plan for
the fiscal year ending in March 2025 and 2030 Vision
Issues for realizing the Medium-term Business Plan for the fiscal year ending in March 2025 and 2030 Vision
Using DX to resolve issues and working
 Expanding orders and strengthening construction capabilities inorder to achieve sales of 100 billion yen
to make reforms with an overwhelming Preparing young employees to make an immediate contribution
sense of speedby passing on veterans’ technical skills and expertise

Sales DX: Strengthening sales

Construction DX: Strengthening site

capabilities

management capabilities• Strengthening sales capabilities by using DX
systems to apply veteran salespeople’s
expertise horizontally across the company• Increasing quotation speed by developing
systems• Strengthening site management capabilities byusing DX systems to apply veteran sitemanagers’ expertise horizontally across thecompany• Improving productivity by using ICT tools to
streamline work

Implementing the DX to enable knowledge
to be passed on from veterans to young
employees and to allow use of integrated
information throughout the company

Reforms tofacilitate therealization of the2030 Vision

Design DX: Improving the precision

Management DX: Acceleratingof design work

decision-making• Increasing the precision of design drawings
through the use of BIM• Improving “buildability” by visualizing drawings
with BIM• Supporting prompt countermeasures andimprovement activities through the timely
assessment and analysis of administration- andmanagement-related data, for example
construction progress17

Businessstrategy

Capital strategy

ESG

Strengthening existing businesses: DX
implementation structures and schedule
Companywide DX implementation structures
DX as a way to aggregate and evolve companywide capabilities
Timely decisionmaking by having
various teams report
directly to thepresident

Overall DX schedule▼TodayDevelopment phase

Reaping of benefits

Fiscal year ending March 2024

Fiscal year ending March 2025

1Q

1Q

Design phase
Fiscal year ended March 2023
1Q
Sales DX
Construction
DX
Management
DX
Design DX

Robust systemdevelopment partners(FPT)

Composition of a DX
team that cuts acrossdepartments

2Q

DX system
concept
formulationand definitionofrequirements

3Q

4Q

2Q

Development
Phase IDX system
generaldesignFormulation of BIM implementation
plan

3Q

4Q

2Q

Operation
Phase I

Detailed
designDevelopment
Phase II

Development
Phase I

Operation
Phase I

Strengthening of proposal
capabilities through use of BIM

Start of operation
Reaping of
benefits

3Q

4Q

Evaluati
on andimprovementplan

BIM human resource education

We're currently making progress according to schedule as we work to progressively
start operation and reap benefits from this fiscal year.
18Businessstrategy

Capital strategy

ESG

Strengthening existing businesses: DX in sales• DX in sales: DX system overview (progressive release, starting in October 2023)

Strengthening sales and estimation capabilities by revamping
our approach to sales

Sales DX: Strengthening sales
capabilities
System functionality

Function overview• Super-approximate
estimation function• VECD searchfunction

Sales
information
system• Super-approximate estimation system: Allows us to offer proposals immediately whencustomers request an approximate estimate.
• VE/CD system: Allows us to search past projects while meeting with customers and offer
VE and CD proposals.

Proposal of superapproximate estimate

Current approach
ClientSales rep

Estimation

Approach after launch of DX system

Sales Department
managerPresentation of
estimated cost

ClientRequestStudy

Review

Submission of superapproximate estimate:
Immediate

Sales rep

Approximate estimate
and detailed quote
data
VE/CD data from past
projects

Submission

VE/CD proposal

Submission of super-approximate estimate: 8 days

Client VE/CD study request

Considerationof estimate

DX system database

Presentation of VE/CD
amountRequestWeb conference

Estimatecoordinator

VE/CD proposal: 7 days

19

VE/CD proposal: Immediate

Businessstrategy

Capital strategy

ESG

Strengthening existing businesses:
DX in construction• DX in construction: DX system overview (progressive release, starting in October 2023)
Passing on knowledge to young employees so that they can serve as
managers and strengthening their ability to contribute

Construction DX: Strengthening sitemanagement capabilities

System functionality
Integrated
construction
management
systemFunction overview• Construction VE/CDfunction• Worksite assignment
management function• We manage quality and safety while improving profitability and loweringcosts by utilizing VE/CD data from past projects.
• We work to increase productivity by studying how personnel are assigned
to worksites, including qualifications requirements and construction
schedules, in an appropriate manner.

Approach at worksites after launch of DX system

Current approach
Experienced worksite
manager

Construction
Department manager

Safety and quality
coordinator

Experienced managers’ VE/CD expertise
Safety and quality management expertise

VE/CD information

Management of
personnel
assignments

DX system database

Safety and quality
management instructions

Young worksite
manager

Young worksite
manager

20

Businessstrategy

Capital strategy

ESG

Entry into the civil engineering business: Welcoming
two civil engineering companies to the GroupWe've identified expanding our business domains as an initiative for increasing our corporate value around the central considerations ofgrowth investments, shareholder returns, and strengthened governance, and accordingly we've welcomed two companies to the Group
with the goal of reentering the civil engineering business: Kamisima Corporation, which is a high-profit entity, and Kawanishi Civil
Engineering Inc., which has a large staff of engineers. We will strive to secure consistently high profits driven by businessdiversification thanks to synergistic effects between the two companies.
Overview of Kamisima

Background against which we acquired shares of Kamisima
To effect our return to the civil engineering business as a growthinvestment, we acquired all shares of Kamisima Corporation,
making the company part of the Group.
Kamisima, which has developed technologies that limit
vibration, noise, and other undesirable effects of rock-breaking* tomake that process more environmentally friendly and whosestrengths include a diverse portfolio of proprietary patented
techniques, boasts high profitability and an extensive domestic
track record in the special civil engineering domain of rockbreaking.
We will boost the Group’s overall profitability by investing
management resources in Kamisima to shore up its businessbase and accelerate growth. We will use the incorporation ofKamisima into the Group as a foothold for effecting our return tothe civil engineering business and thereby to increase ourcorporate value with the goal of strengthening the businessfurther.

Name

Kamisima Corporation

Location

Nishinomiya City, Hyogo Prefecture

Business areas

Civil engineering business

Capital20 million yen

Established

June 6, 1952

Performance and financial standing over the most recent 3 years*What is rock-breaking?
Rock-breaking involves using special technologies to crush and remove rockand boulders from civil engineering work in mountainous areas (for example,
dam and tunnel construction), river dredging work, and site preparation work inmountainous and hilly areas.

21

Financial year

Year ended May
2021

Year ended May
2022

Year ended May
2023

Net assets

1,585 million yen

1,631 million yen

1,922 million yen

Total assets

1,658 million yen

1,663 million yen

2,146 million yen

Net sales

402 million yen

414 million yen

944 million yen

Operatingincome57 million yen

92 million yen

515 million yen

Ordinary profit

86 million yen

126 million yen

591 million yen

Current net
income50 million yen

65 million yen

291 million yen

Businessstrategy

Capital strategy

ESG

Entry into the civil engineering business: Welcoming
two civil engineering companies to the Group■Principal proprietary techniques used by Kamisima Corporation
 Super Kachiwari-kun

 Triple SeriyaRock-crushing technique withoutstanding crushing ability
Destructive force: 21,000 t
Noise: 83 dB (10 m from machine)
Vibration: 55 dB (10 m from machine)

This vibration- and noise-free rockcrushing technique is ideal forcrushing rocks, boulders, andconcrete.
Crushing force: 12,700 to 17,000 t

 Kachiwari-kun

 Half-mite techniqueIn this technique, holes are drilledusing Shizumaru-kun, a noiselessdrilling machine. Then Kachiwari-kun
super-low-noise breaker devices areinserted into the holes. Indirect
impacts expand the holes, fracturing
the rock with tensile force.
Crushing force: 4,700 to 6,800 t

This technique uses a static fracturing
agent to crush rock without generating
vibration or noise.
Compared to conventional static
fracturing techniques, insertion of halfsteel devices uses only half thematerial while allowing control of thedirection of fracture. It also yields
greater crushing force.
* Information about techniques was
taken from the Kamisima website.

22

Businessstrategy

Capital strategy

ESG

Entry into the civil engineering business: Welcoming
two civil engineering companies to the Group■Example Kawanishi Civil Engineering projects

Background against which we acquired shares of
Kawanishi Civil Engineering Inc.

Project name: Amagasaki Nishinomiya
Ashiya Port Seacoast
Edagawa-cho District Seawall
Repair Project
Customer:
Amagasaki Port Management
Office, Hyogo Prefecture
Completed: May 2023

To strengthen our civil engineering business, we acquired
all shares of Kawanishi Civil Engineering Inc. to make thecompany part of the Group.
Kawanishi Civil Engineering, which has an extensive
track record centering on Hyogo Prefecture, has many
employees who have earned professional
certifications, for example as first-class civilengineering construction management engineers.
Most of the company’s sales come from public civilengineering projects in Hyogo Prefecture (including
seawall repair work, water main and sewer pipe repair
work, river repair work, and road repair work).

Project name: Kako River Takino District
Dredging Project
Customer:
Kinki Regional Development
BureauHimeji River and National
Highway OfficeCompleted: March 2023

Overview of Kawanishi Civil Engineering
Name

Kawanishi Civil Engineering Inc.

Head Office

Nishinomiya City, Hyogo Prefecture

Business areas

Civil engineering business

Capital

51 million yen

Established

September 6, 1971

Memberships

General Contractors Association of Hyogo,
Nishinomiya Construction Association, etc.

Project:
Customer:Completed:Muko River Low-water Seawall
Construction Project
Hanshin-minami Prefecture
Residents’ Center, Hyogo
Prefecture
Nishinomiya Civil Engineering
OfficeMarch 2023

*Past project information was taken from the Kawanishi Civil Engineering website.

23

Businessstrategy

Capital strategy

ESG

Our vision for the civil engineering businessWe will strive to realize a portfolio that doesn’t depend exclusively on the condominium andconstruction business by entering general and special civil engineering domains and strengthening
collaboration among group companies in order to expand the scale of profitability in the civil engineeringbusiness.
 Providing assistance withfunding for human resources
investments and otherpriorities

Daisue Construction

 Strengthening management
by providing managementhuman resources Providing technicalassistanceSpecial civil engineering domain

・・・Rock-breaking
domain(Kamisima
Corporation)

General civil engineering domain

・・・

・・・

Resource
facilitation

Building a high-profit
business base24

Kawanishi Civil
Engineering

・・・

Pursuing scale and securingresources
Expanding public generalcontractor channels

Businessstrategy

Capital strategy

ESG

Dividend policy geared to increase shareholder value
We’ve maintained a dividend ratio of at least 50% since the fiscal year ended March 2023,
and we will continue to actively return profits to shareholders.

at least 50%

We adopted a dividend ratio ofstarting with the fiscal year ended March 2023.
34.6%

50.7%

Annual dividend (yen)70 (planned)

22.1%

5.9%

11.3%

7.4%

20

20

20

26.2%

40

60

64
Dividendratio of atleast 50%

40

4.6%

10

Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
Fiscal year
ended March ended March ended March ended March ended March ended March ended March ended March ending March
2016
2017
2018
2019
2020
2021
2022
2023
2024

1.3%

2.0%

1.9%

2.2%

5.2%

4.2%

4.8%

5.5%

Dividendyield* The annual dividend during the fiscal year ending March 2024 is determined in accordance with current quantitativeplans. Actual dividend amounts will vary with the extent to which the plans are being achieved.

25
25

Businessstrategy

Capital strategy

ESG

Treasury stock TOBs and issuance of warrants
Increasing our market capitalization, a part of the continued listing criteria for the Prime Market that we havenot at present satisfied, is an urgent priority, and we will issue treasury stock tender offer bids (TOBs) andwarrants to do so.
Treasury stock TOBs and issuance of warrants
By supplying shares owned by business corporations and banks (fixed stock), which are not counted as outstanding shares, to themarket while taking into account the supply and demand environment (i.e., the impact on our share price) through the issue of recap
warrants, we expect the number of outstanding shares to increase, driving up our market capitalization.
The warrants will cover shares held by two companies: Sojitz Corporation and MUFG Bank, Ltd. We plan to use funds procured via thewarrant issue to underwrite DX-related investments to strengthen existing business and improve productivity and to expand businesses
in peripheral sectors and new fields.
■ Profile of the two companies whose shareholdings arecovered by the warrants
Number ofshares held

Shareholding
ratio

Business strategy and investment policy

Marketcapitalization

Sojitz Corporation

618,000

5.8％

890 million yen

MUFG Bank, Ltd.

387,000

3.6％

560 million yen

1,006,000

9.4％

1.46 billion yen

We will move up our investment plans from the schedule set forth in the Medium-term Business Plan
to invest a total of 10 billion yen by the fiscal year ending March 2025 in an effort to strengthen thebusiness base that underpins existing businesses while accelerating our entry into peripheral sectors
and new fields. The funds procured under this initiative will be used to strengthen DX and real-estateareas of our operations.

5 billion yen
Total

Increasing the technological capabilities
and profitability of existing businesses* Shareholding ratio figures have been calculated as of September 30, 2023, while market
capitalization figures have been calculated using the share price as of September 29, 2023.

71.54%
62.21%

Fiscal year ended
March 2023

2023/9Residential

Nonresidential

Renovations

Allocating funds
procured under thisinitiative

Bidding on super-high-rise and super-large projects
valued at 5 to 10 billion yen and higher
Developing and acquiring zero-energy technologies
such as ZEB, ZEH, and wood construction

We expect anincrease of 9.4 points.

Civil
engineering

Real estate

Environment

We will move up the timing of investments to thisfiscal year and the fiscal year ending March 2025
Implementing a DX
(sales, construction, and design)

62.06%

Percentage of outstanding shares

5 billion yen
Entering peripheral businesses
and new fields

Reentering the civil engineering sector whiletargeting domains where we can build
advantages and where operations are lesssusceptible to economic fluctuations
Entering the real-estate business with goals
such as increasing added value for proposals
to clients, for example through land-paired
sales

Strengthening
through M&As

Allocating funds
procured under
this initiative

Aiming to contribute to the realization of theSDGs, for example in terms of renewableenergy, while seeking orders in growth domains

After warrant issue(forecast)26

Businessstrategy

Capital strategy

ESG

Progress of initiatives to strengthen governanceWe've completed the implementation of various policies according to schedule.
CG CodeInitiative

4

Transitioning to a corporate structure with
an Audit and Supervisory Committee

4-10 (1)

4-6

Establishing a Nomination andRemuneration Committee and ensuring its
independence
Revising operating officer structures (toreflect officers’ status as contractors rather
than employees)

Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
March 2016
March 2017
March 2022
March 2023

Complete

Complete
Introducing aperformance-linked stockcompensation program(complete)

Introducing a performance-linked
compensation program

4-1 (3)

Formulating a succession plan

Complete

1-2 (4)

Implementing a platform allowing voting
rights to be exercised electronicallyComplete

3-1 (2)Disclosing information and providing
materials in English

4-8

Ensuring independent outside directors
comprise at least one-third of the Board of
Directors(Formulating a skill matrix)

Complete

4-11 (1)Promoting female directors

Complete

3-1 (3)

Implementing TCFD disclosures

Revitalizing our IR activities(Strengthening dialog with investors)

Fiscal year
ending March
2025

Complete

4-2 (1)

5-1

Fiscal year
ending March
2024

Complete

Complete for earnings
summaries andconvocation notices(Gradually increasing the scope of disclosure)

Declaration of
support made in
November 2023
Disclosing
supplemental
end-of-year
financialinformation

Hosting briefings for
institutional and private
investors

27(Strengthening implementation)

A company that creates spaces richin security and joy

Inquiries concerning this document
Management Strategy Department
DAISUE CONSTRUCTION CO., LTD.
Phone: 06-6121-7127
E-mail: dai-info@daisue.co.jp
The information in this document is based on Daisue’s best judgment as of the time of its
compilation. It should not be construed as representing a commitment or guarantee concerning therealization or implementation of future planned performance or policies.