Notice Regarding Revision of the Medium-Term Management Plan
2022/12/09 on Japan | Page. 1/1

Friday, December 9, 2022

FOR IMMEDIATE RELEASE
Kanamoto Co., Ltd.
Stock Code 9678
Tokyo Stock Exchange Prime Market, Sapporo Securities Exchange

TetsuoKanamoto

President and CEO<Contact Information>

Director and Corporate Officer, Division
Manager, Accounting Division and General
Manager, Public Relations Office

Shun Hirose

Telephone: +81-11-209-1631

Notice Regarding Revision of the Medium-Term Management Plan
We would like to inform you that we have revised the Medium-Term Management Plan “Creative 60”(FY2020-FY2024) announced on December 6, 2019 as follows:
1. Reasons for the revision

When the medium-term management plan was announced public investment remained firm, centering on disasterprevention/mitigation-related construction and maintenance/renewal of aging social infrastructure, and private
construction investment also showed signs of improvement, centering on redevelopment projects in metropolitan areasin the construction industry which the Group is involved in.
However, from the initial year of FY2020, the socio-economic environment changed unexpectedly due to the spreadof COVID-19, and the business environment continued to be more severe than originally anticipated, including rising
construction costs due to shortages in the supply of semiconductors, soaring material and energy prices, and aworsening shortage of skilled construction workers.
Under these circumstances, although the Group has been working to achieve the Medium-Term Management Plan
"Creative 60,” based on the financial results for the fiscal year ended October 2022 and the earnings forecast for the
fiscal year ending October 2023 announced today, as well as the recent business environment, we have decided torevise the medium-term corporate management plan.
In the future, we will also continue to follow the conventional priority measures of expansion of the Kanamoto
domestic base of operations, overseas expansion, optimize internal operational processes. Furthermore, we will further
strengthen the resilience of our business by developing our business with an awareness of sustainability and actively
responding to various changes in the social environment (transformation), and we will further increase our corporate
value.
2. Revised contents(1) Revision of management target figures (consolidated)
Initial Plan
Revised Plan
Fiscal Year Ending
Fiscal Year Ending
October 31, 2024
October 31, 2024
Net sales¥228 billion¥203 billion
Operating profit¥23 billion¥14.6 billion
Equity ratio
48.7%
44.9%
EPS
¥387.54¥250.82
BPS¥4,036.19¥3,973.96
ROA
4.8%
2.9%
ROE
10.0%
6.5%
EBITDA+¥72.7 billion¥61.2 billion

Latest Performance
Fiscal Year Ended
October 31, 2022
¥188 billion¥13.2 billion
43.2%¥224.64¥3,571.98
2.7%
6.4%¥56.2 billion

Notice Regarding Revision of the Medium-Term Management Plan
2022/12/09 on Japan | Page. 2/2(2) Sustainability management promotion
For the Company to sustainably improve corporate value, based on the idea that is necessary to actively andproactively respond to issues related to environmental and social sustainability, we will formulate a basic
sustainability policy, and we are working to develop a framework and system to put this into practice.
In this medium-term management plan, we have included promotion of sustainability management to incorporate
sustainability into management more than ever. We are aiming to solve problems related to environmental and social
issues and further integrate them with the business of the Group and we aim to improve corporate value to achievesustainable growth.
* For details, please refer to the attached document.
EndMedium-Term Corporate
Management Plan“Creative 60”

1
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Medium-Term Corporate Management Plan Progress Status
External Environment Surrounding the Kanamoto Group and Issues RecognizedExternal Environment -World/Domestic EconomyImpact on Economic Activity Due to the Spread of
COIVD-19

Growing Awareness of SDGs and ESG

Increased Uncertainty in World Affairs

Rapid Acceleration of Digitization

External Environment -Domestic Construction IndustryGrowing Importance and Focus on Sustainability
Rise in Construction Costs due to Supply Shortages of
Semiconductors and Soaring Material and Energy Prices

IssuesRecognized

Promotion of Construction DX and Acceleration of
Digital Transformation which Contribute to Labor-saving
and Safety Improvement at Construction Sites
Worsening Shortage of Skilled Construction Workers

We will aim to help combat climate change and other global environmental issues
by capitalizing on the unique sharing economy traits of a rental business.
We will strive to help improve crisis management not only in Kanamoto crisis management measures
but also those of Japan from disaster prevention and mitigation to national resilience.
We will always respect human rights and consider employee health and the labor environment
with the aim of contributing to better labor conditions in society.

We will engage in fair and proper business dealings with our business partners with the aim of fostering mutually sustainable prosperity.
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Medium-Term Corporate Management Plan Progress Status
Priority Measures of the Creative 60 Medium-Term Corporate Management Plan

1

Expansion of the Kanamoto Domestic Base of Operations－ Concentrate the Collective Group Capabilities
・Deeply mine existing areas
・Enter new areas and develop areas where Kanamoto has low market share
・Expand into non-construction sectors

2Overseas Expansion － Upgrade to Overseas Strategy 2.0 (Next Generation)
・Optimize a global portfolio
・Establish a Kanamoto global platform
・Inorganic strategy: Overseas M&A initiatives
・Lay the groundwork to raise overseas sales to 10% of total net sales

3

Optimize Internal Operational Processes － Increase Rental Business Profitability
・Integrate marketing and sales strategies with IT・Invest resources in product planning and research and development to develop thetechnology and systems needed at construction sites
i.e.: Kana Robo Naccident AX Q-een ICT construction equipment
・Improve operational efficiency
・Build an environment to promote Group logistics i.e.: Cost control, stable long-term operations
・Place emphasis on recruiting and developing human resources

3

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Medium-term Corporate Management Plan Priority Measures Progress“Expansion of the Kanamoto Domestic Base of Operations”
Steady expansion of the sales base by developing bases in response to changes in the economic environment.
[TOPICS] 2020 September Made Sooki Holdings Co., Ltd. (Osaka) a subsidiary company
2022 May
Acquisition of business from Central Co., Ltd. by our subsidiaryNEKCo., Ltd.
July
Central Co., Ltd. (Formerly: NEKCo., Ltd.) started business
October 31, 2019

October 31, 2022

Increase/DecreaseNon-consolidated

202

229

27 base increase

Alliance Group

505

551

46 base increase*Excludes overseas branches

Change in number of domestic branches
140
Oct. 31, 2019120

Oct. 31, 2022
115

107 110

103

100

102

102

98

77

80
60

41 43

42

47

40
15 18

20

5

5

14 12

0
Hokkaido

Tohoku

Kanto

Chubu

Kinki

Chugoku
Shikoku
KyushuOkinawa
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Medium-term Corporate Management Plan Priority Measures Progress“Expansion of the Kanamoto Domestic Base of Operations”
Stronger strategic regional promotion and sales as well as share expansion thatprioritize areas without a sales presence.

Hokkaido

FY2022FY2019Kanto &
Koushinetsu

FY2022FY20197.9%West Japan

8.4%

52.8%

FY2022FY201954.4%

TohokuFY2022FY20194.3%

4.7%

Kyushu26.6%

FY202230.6%

FY2019

17.4%

17.7%

Source: Calculated uniformly at 2.5% according to the volume base in the Ministry of Land, Infrastructure, Transport and Tourism Construction Statistics Guidebook.
Note: These figures fluctuate with retroactive revisions of the Construction Statistics Guidebook.

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Medium-Term Corporate Management Plan Priority Measures Progress“Overseas Expansion”
The ratio of overseas rental sales by region in the Construction Equipment Rental Business expandedfrom 0.5% in fiscal year ended October 31, 2019 to 3.9%in fiscal year ended October 31, 2022.
We aim for further development in the medium- to long-term.
[TOPICS] 2020 October Established KANAMOTO AUSTRALIA HOLDINGS PTY LTD in Australia
Made Porter Plant Group (Australia) a subsidiary company

Overseas
Kyushu &Okinawa Region
14.2％
West Japan
Region13.2％％
Hokkaido
Region22.2％

Kyushu &Okinawa Region
14.5％

West Japan
Region13.6％

FY2019Kanto &
Koushinetsu Region
22.5％

Overseas

TohokuRegion27.4％％
Hokkaido
Region23.5％

FY2022

Kanto & Koushinetsu
Region22.3％

TohokuRegion22.2％

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Medium-Term Corporate Management Plan Priority Measures Progress“Optimize Internal Operational Processes”
Completed unification of core systems for major groupcompanies.

Aiming to integrate marketing and sales strategies with IT, and maximize asset efficiency, we have
set up a dedicated team for building a system for strengthening cooperation between purchase,
rental, and sales as well as improving operational
RentalAmountUtilizati
Rentalefficiency of rental assets.
unitof
on ratepriceassetssales

In response to construction DX, we will we will engage in ICT, IoT, etc.
from the research and development stage in cooperation withconstruction companies and manufacturers.
With regard to environmental measures, we will have to wait fortechnological progress in construction machinery, etc., but we will makesteady progress as we will be able to adding solar generation facilities to ourunit housing, which serve as onsite offices, and compatibility to biofuels.
In terms of strengthening human capital, we are making progress on various
training and support systems as well as support for women's empowerment.
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Revision of the Medium-Term Corporate Management Plan
Consolidated Business Results
Overcome growth constraints resulting from changes in the external environment (steep increases inmaterials and labor costs, intensified competition, etc.) and changes in Kanamoto’s own environment(increases in cost of rental equipment, personnel expenses, etc.), and create a strong Kanamoto Group forthe new era.
(Unit: Millions of yen)
250,000

30,000Net sales

Operating profit

200,000

24,000150,000

18,000100,000

12,00050,000

6,000

0

0

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023/E

FY2024/E

Net sales

133,292

144,870

158,428

168,188

180,694

179,053

189,416

188,028

198,000

203,000

Operating profit

16,27015,134

16,665

17,59917,842

14,25014,624

13,22914,00014,600Operating profit
margin

12.2％

10.4％

10.5％

10.5％

9.9％

8.0%

7.7%

7.0%

7.1%

7.2%

Ordinary profit

16,164
9,557
71,998
202,578

14,405
8,098
81,434
220,540

17,193
10,744
91,788227,155

17,925
11,857102,031
241,374

18,277
11,430121,779
268,182

14,268
8,466
126,188
300,362

15,391
8,907
134,917
303,754

13,7808,345
140,611305,320

14,1008,400
144,468
308,592

14,8008,900
149,430
310,354

Profit attributable toowners of parent

Net assets
Total assets

BULL55 Expand operations

Strengthenorganization

Towards a strong Kanamoto Group

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Revision of the Medium-Term Corporate Management Plan
Numerical Targets
Medium-term Corporate Management Plan - “Creative 60” - (FY2020 - FY2024)
Numeric targets(Unit: Millions of yen)

FY2019Net sales

FY2020

FY2021

FY2022

FY2023/E

FY2024/E

FY2024/E(Initial plan)

1,806

1,790

1,894

1,880

1,980

2,030

2,280

178

142

146

132

140

146

230

Equity ratio

43.1%

39.6%

41.8%

43.2%

43.8%

44.9％

48.7%

EPS (yen)295.30221.45235.55224.64231.87250.82387.54

BPS (yen)

2,981.68

3,150.30

3,357.10

3,571.98

3,752.40

3,973.96

4,036.19

ROA

4.5%

3.0%

3.0%

2.7%

2.7%

2.9%

4.8%

ROE

10.8%

7.2%

7.2%

6.4%

6.3%

6.5%

10.0%

563

537

570

562

597

612

727

Operating profit

EBITDA+

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Revision of Medium-Term Corporate Management Plan
Positioning and Sustainability Management
Medium-Term Corporate Management Plan”Creative 60” (FY2020 - FY2024)
TOP5 in the global construction equipment rental industry

Positioning of the Medium-term
Corporate Management Plan
2020

Five years of “strengthening the foundation” for 2030

Emissions from use of fuel/emissions from purchased or acquired
electricity, steam, heat, and cooling
50% reduction by 2030 compared to 20132024

2020 – 2024
Medium-Term Corporate Management Plan “Creative 60”

Sales, profit, ROE, total payout ratio, human resources, etc.

2030

2030
Vision Realization

We will improve corporate value by further strengthen the resilience of our business by developing our business with anawareness of sustainability and by actively responding to various changes in the social environment under the three priority
measures.

Sustainability Management Promotion
Our basic principle of sustainability is striving to continuously improve our own corporate value while also contributing to thesustainable development of society. As such, we are strive to contribute to solving social issues through our main business ofrenting construction machinery.
In July 2021, we also endorsed the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD) as we continue to operate with the SDGs in mind.
In addition, in order to continuously improve corporate value, we believe that it is necessary to actively and proactively
respond to issues related to environmental and social sustainability, we will formulate a basic sustainability policy, and wehave put in place a framework and system to put this into practice.

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Revision of Medium-Term Corporate Management Plan
Basic Sustainability Policy
Basic Sustainability Policy

Everyone working in the Kanamoto Group will aim to build a foundation forsustainable growth, which is part of our Group Vision, and to contribute to thedevelopment of a sustainable society as a member and good corporate citizen ofsociety.
1

We will aim to help combat climate change and other global environmental issues by capitalizing on
the unique sharing economy traits of a rental business.

2

We will aim to help improve labor conditions throughout society by respecting human rights andconsideration toward employee health and work environment.

3

We will aim for sustainable and mutual prosperity by engaging in fair and proper business dealings
with our partners.

4

We will aim to enhance disaster prevention and mitigation and the national resilience of Japan aswell as improve crisis management of natural disasters and other calamities as core principles ofKanamoto's crisis management.

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Revision of the Medium-Term Corporate Management Plan
2030 Vision
2030 Vision

2030 Vision

While aiming to build a foundation for sustainable growth, we will contribute to
the realization of a sustainable society as a good corporate citizen that coexists
with society.
2030 Numerical Targets
Net sales(Consolidated)

Operating profit(Consolidated)

225 billion¥

20 billion

¥

ROE

Over

Total return
ratio
Over

8%

50%
12

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Revision of the Medium-Term Corporate Management Plan
Investment Strategy Cash Allocation
Promote flexible investment strategy that meet actual demand
Cash Allocation
・ In addition to capital investment in rental assets based on demand trends, we will invest resources in growth investmentsfrom a medium to long-term perspective
・ In order to improve capital efficiency, we will implement proactive and continuous shareholder returns
・ We strive to balance operating cash flow and investment cash flow to maintain financial soundness
・ For growth investment opportunities such as M&A, we will use financial leverage while monitoring financial soundness

Rental equipment
investment, etc.

Ascertain demand trends, make strategic
investments to achieve sustainable growth andimprove productivity in core domestic
businesses, and strengthen overseas businesses.

M&A, etc.

Aggressive investment in acquisition of growth
foundation such as new businesses and M&A inorder to improve group value.

Dividend payout andacquisition of treasury
shares, etc.

Continue to pay stable dividends with a target ofa total payout ratio of 50% or more.

Cash flows
EBITDA

13

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Revision of the Medium-Term Corporate Management Plan
Dividend Policy
Year-end dividend of 75 yen for the fiscal year ended October 31, 2022 (35 yen interim dividend)Year-end dividend of 75 yen for the fiscal year ending October 31, 2023 (35 yen interim dividend)Continue to pay stable dividends, acquire treasury stock in a flexible manner（Yen）■Regular dividend ■ Bonus dividend

60

65

65

FY19

FY20

70

75

75

FY22

FY23/E

50
45

20

20

20

20

20

20

FY08

FY09

FY10

FY11

FY12

FY13

35

35

FY14

FY15

FY16

FY17

FY18

FY21

14
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