VISION2030

Long-Term Management Plan
"To zero, from zero."The origins of the company

The resolution of social issues × the Tokyu spirit
The postwar reconstruction of the capital was the starting
point for Tokyu Construction

Two weeks after the end of World War II, Tokyu Corporation
established a “Temporary postwar reconstruction committee.”
Tokyu Construction Industry Co., Ltd., the predecessor of Tokyu
Construction Co., Ltd., was established from the plan put
compiled for the reconstruction of the capital, Tokyo.
Tokyu’s founder
Keita Goto
Courtesy of Tokyu Corporation

The “Tokyu spirit” at thefounding of Tokyu Construction

If business seems 100% safe to anybody, Tokyu does not need to
do it. The business spirit that we have built up over a long time is
not so relaxed, but rather a brave way of doing things, carrying atorch ahead of all others.
The first president of
Tokyu Construction
Noboru Goto
Copyright(C) Tokyu Construction. All rights reserved.

Courtesy of Tokyu Corporation

1

The history of the company
The company overcame numerous difficulties and passed through a period ofmanagement revival before advancing towards VISION2030.
Founding and growth period
As a member of the Tokyu Group, the company played a role in thedevelopment of Tama Garden City (town planning including railway
construction and residential land development) and worked on anumber of difficult construction projects exceeding its means to build
its business foundations. After developing business across Japan, thecompany expanded overseas, and in the late 1980s, grew to become
one of the leading semi-major general contractors.
25

Management crisis andreconstruction andregeneration period
Tokyu Construction fell into amanagement crisis, holding ahuge amount of nonperforming
loans. The company took astep forward towards
regeneration through theexecution of a painful
restructuring plan and acompany split

Management
revival periodBusiness turned
around underimproved market
conditions and results
recovered due to
Shinka2020, thecompany’s vision. The
foundations forregrowth were
established.

VisionShinka2020

15
10

Operating income(billion yen)

20

5
0

1960

1970

Copyright(C) Tokyu Construction. All rights reserved.

1980

1990

2000

2010

2020
2

Review of VISION2020
a general contractor
that continues to embody Shinka(deepening x evolution = true value)

Deepening: Increase the power of contracting business, our core business.
Evolution: Achieve results by taking on the challenge of new businessareas other than contracting.
True value: Continue to contribute to society as a truly valuable generalcontractor.

1. Deepening: Increase the power of contracting business, our core business.
The company has worked on many large and difficult construction projects that we have neverexperienced in the past, either in Japan or overseas. In particular, efforts towards the redevelopmentof the area around Shibuya Station have produced very significant results that could even be
described as symbolic of the company’s history. Under extremely difficult construction conditions,
during which nothing going on could be stopped, from commercial facilities including congested
railway lines and department stores, to the pedestrian flow lines of Shibuya Station, which boasts
some of the largest numbers in passengers in Japan, and even the underground Shibuya River, thecompany displayed all-out teamwork transcending the boundaries of its strengths in civil engineeringand building construction.
2. Evolution: Achieve results by taking on the challenge of new business areas other thancontracting.
In addition to airport management business (Sendai and Hiroshima), following its first domestic
sewerage management project in Hamamatsu City, the company has achieved results in concession
business such as obtaining priority negotiation rights in Miyagi Prefecture. Further, in real estatebusiness, in addition to accumulating know-how such as leasing operations through the renovationof old buildings, the company has promoted efforts focused on synergies with construction business,
including securing opportunities to participate in future large-scale redevelopment projects, by
acquiring properties jointly with the Tokyu Group.
3. True value: Continue to contribute to society as a truly valuable general contractor.
There are also issues related to the above results. In recent years, results have fallen sharply withthe completion of large-scale construction projects that were the nourishment for “deepening.” The
expansion of new business areas towards “evolution” cannot be described as sufficient. In addition,
during this period, the era of companies pursuing only their own profit ended, and we entered an age
when the relationship with the sustainability of the global environment and society as a whole should
be made the basis of management. The spirit behind the founding of the company, the resolution ofsocial issues and the Tokyu spirit, are required at precisely this time. The company will demonstrate
its true value by deepening and evolving business based on VISION2020 and succeeding to theissues in its new vision.
Copyright(C) Tokyu Construction. All rights reserved.

Shibuya Station area redevelopment project
Jakarta Mass Rapid Transit project3

VISION2030
Redefining what it means to build. Reinventing what lies beyond building.
The challenge is immediate and inescapable.

To zero, from zero.
The environment andthe excitement of the
future.

Our intent is to develop entirely new approaches to sustainable urban
development, aiming at zero carbon and zero waste.
Starting from zero, with no preconceptions, we will research new fields tofind fresh ways to expand and integrate knowledge to make the living
environment safer, more resilient, and more exciting.
As a construction company, we literally build the future, so it is our duty
and our responsibility to lead in innovating the solutions that society sourgently needs.
We already have the people and the technology to be part of innovation's
leading edge. Now we must proactively seek out and welcome thewisdom of multiple specialized disciplines, transcend conventionalboundaries, embrace the latest digital technology and unite as one in our
purpose.
By maximizing these potentials, we can completely redefine what itmeans to build.
And more than that, we can reinvent the framework of what lies beyond
building.
Repeatedly and wholeheartedly taking up this challenge will raise ourcorporate value and allow us to offer a new level of prosperity and wellbeing to our customers, business partners, employees and their families,
and society at large.
1959 was the year of our establishment, with our first project being
development of Tama Garden City, aimed at relieving the populationpressure on Tokyo.
Today, we are faster and more agile than others as we innovate newvalue.
The horizon we are advancing spreads to infinity.

Copyright(C) Tokyu Construction. All rights reserved.

4

Long-term management plan “To zero, from zero”[sustainability strategy]
Five priority strategiesCorebusiness

Tokyu
Construction
brandStrategic
business

Human
resources andorganization

Finance andcapitalSocialvalue

Decarbonization

Zero waste

Human resources

Provision of three values

Sources of competitive
advantage

Management Policy (values)

Disaster prevention
and mitigation

DigitalEconomic
value

Code of Conduct (ways)

Seek out new challenges.
Maximize the potential of our human resources.
Place the customer at the center of our activities.
Be fair and transparent in all our dealings.

Self-reliance
Teamwork

Speed
Reliability

Corporate governance

VISION2030
To zero, from zero, The environment and the excitement of the future.
Supervision of management and business execution

Recognized as a prerequisite for the formulation of management strategies

Materiality

Overall image of VISION2030, the company’s long-term
management plan

PurposeFulfilling each individual’s dreams through the creation of a reassuring and comfortable living
environment.

Copyright(C) Tokyu Construction. All rights reserved.

5

Provision of three values: Taking on the challenge of“decarbonization (zero carbon)”We will focus on the provision of three values as the basis of strategies aimed at theresolution of social issues starting with the SDGs and centered on the reduction ofclimate change risks.
Decarbonization

We will also take on the challenge of zero carbon in theoverall value chain of construction business and new
business areas, not just construction.

Decarbonization

Zero
waste
Zero waste
We will contribute to the realization of a circular
economy and take on the challenge of suppressing CO2
emissions due to the incineration of waste.
Copyright(C) Tokyu Construction. All rights reserved.

Disasterprevention
andmitigation

Disaster prevention andmitigation

We will not only take on the challenge of suppressing thegeneration of CO2, which is also a cause in the occurrence oflarge-scale natural disasters, but will also contribute throughthe establishment of infrastructure.

6

Provision of three values: KPI
We will promote KPI strongly through participation in and support for various initiatives
Provision of threevaluesReduction of climate change risks

Decarbonization

Zero waste

Disasterprevention andmitigation

Main measures
 Promotion of ZEB
 Switch to renewables for all electricity usedin business activities
 Entry into renewable energy-related
business
 Use of non-fossil fuels for heavy machineryand dump truck fuels Decarbonization of construction materials
 Promotion of timber construction business Development and operation of
decarbonization-related technologies
 Reduction of final disposal amounts ofwaste plastic, etc.
 Promotion of the use of recycled materials
 Development and operation of waste
recycling technology
 Contributions to longer life based on the
promotion of infrastructure asset
management
 Longer life of buildings based on the use ofbuilding health diagnosis technology andtorrential rain damage prediction technology
 Building of disaster simulation tools basedon digital twins

Copyright(C) Tokyu Construction. All rights reserved.

Achievement level in 2030

GHG reduction target
Scope 1 and 2, and Scope 3: 30% reduction* Reference year: 2018
* 2050 target: 100% reduction in Scopes 1
and 2

Conversion of all electricity used inbusiness activities to renewable energy* An ambitious initiative that is the first by ageneral contractor in Japan

Financial impact

We will aim to reduce risk and capture
opportunities worth 12 to 16 billion yen.
7

Sources of competitive advantage:
Human resources (human resource strategies)

We will improve employee engagement by promoting human resource strategies toaccelerate innovation in construction and production systems and challenges
towards new business areas.
Handling of structural changes in theconstruction industry

Innovation in construction and production systems+

Labor-intensive
style

Reform of our business portfolio

Knowledge-intensive
style
Capital-intensive style

Challenges towards new business areas

Creation of
innovation
Promotion of diversity and inclusion

Reform of leadership and management
style

Acquisition and development ofhighly specialized human resources

Autonomous and co-creation style
management

Promotion of active female
participation
Evolution of succession planning
Promotion of reskilling
Copyright(C) Tokyu Construction. All rights reserved.

Improvementof employee
engagement

Leadership that supports autonomy
Promotion of work style reform
Promotion of health andproductivity management

8

Sources of competitive advantage:
Digital technology (DX strategies)
We will build a digital platform based on BIM and CIM to accelerate the digital shift.
We will promote the shift to digital human resources at overwhelming speed through the training of
new employees in the digital age, reskilling and the acquisition of human resources.
Digital shift in construction
business

Data management innovation

We will enhance transparency and productivity
by using digital technologies that link value
chains and supply chains.

Tokyu Construction’s DX

Building of new business models
We will build new business models withsynergistic effects based on the improvement ofknow-how in core business and the use of digitaltechnologies.

We will establish a unique platform as a data
foundation that supports construction businessand new revenue models

Digital shift in construction business

Improvement ofcustomer satisfaction

We will create new customer
experiences and strengthen
sales capabilities (digital twins,
data analysis, VR/AR experience,etc.)

Productivity improvement
We will contribute toimprovements in
productivity by reviewing andstrengthening existingprocesses (introduction of frontloading, robotics, etc.)

Data management innovation

Greater sophistication ofmanagement control
We will refine
management decisions
further by using data (data

Building of new business models

New forms of construction
business
Improvementof know-how

analysis, BI dashboard,
construction management)

Services that create newmeaning and empathy forcustomers based on
construction business know-how

Digital platform: A foundation unique to the company that can expand flexibly
and incrementally in accordance with the situation

We will connect services and create synergies.
Tokyu GroupUrban OS

Different industry(energy)
Copyright(C) Tokyu Construction. All rights reserved.

Platforms for local authorities, companies, research institutes,
etc., to collaborate to accumulate, analyze and use the vast
amount of data that exist in cities

Government
Different industry(games, etc.)

9Materialities (priority issues): Links between specific processes andstrategies
We will identify materialities from the perspectives of stakeholders and the degree of impact on
corporate value.
Management Policy (values)

Code of Conduct (ways)

Seek out new challenges.
Maximize the potential of our human resources.
Place the customer at the center of our activities.
Be fair and transparent in all our dealings.

Self-reliance
Teamwork

VISION2030

Speed
Reliability

To zero, from zero, The
environment and theexcitement of the
future.

PurposeFulfilling each individual’s dreams through the creation of a reassuring andcomfortable living environment.

 Scenario planning Sustainability
indicators
 ESG evaluation
institutions

Strategy meeting
CSR Committee↓
Board of Directors

Degree of importance among stakeholders

High

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Five priority
strategies

Identify six materialities
 Climate change (handlingand adaptation)
 Structural changes in theconstruction industry
 Innovation
 Town planning Diversity and Inclusion
 Corporate governance

Degree of impact on improvement of
the company’s corporate value

Decarbonization

Zero
waste

Disasterprevention
andmitigation

High
10

Materialities (priority issues): Future insights based on scenario
planning
We will assume key scenarios from four scenarios based on two-axes.
Macroenvironment
Construction
marketFuture where decentralization advances based on
economic rationality
Future where the attraction of the construction
market decreases gradually

Future where distinctive regions and diverse needs
are created
Future where co-creation with other industries andcompetition intensify

Macroenvironment
Construction
marketFuture where urban efficiency and convenience are
maximized
Future where regional and industry disparities
expandFuture where environmentally friendly city models
are built
Future where the transformation of business models
is required• Society as a whole will start to take events thatchange the ways people live, such as large-scale
natural disasters that occur often globally due tothe impact of climate change and the COVID-19
pandemic, more seriously.

Sustainabilityoriented society

Economyoriented society The poles of the two axes are not in binary opposition, but are compatible, and it is not assumed to be a large bias
towards any of the four quadrants.
Decentralized society

Urban-centered society• As a result, the importance of the SDGs, thesustainable development goals set by the United
Nations, and ESG investment, which plays the roleof linking the SDGs to the activities through which
companies create economic value, will increase.
• The growing awareness of sustainability amongindividuals and companies will also bring changes
to the ways people work, and as dispersion to theregions advance to a certain degree, urban models
more strongly aware of the environment, disasterprevention, and disaster mitigation will be built.
Copyright(C) Tokyu Construction. All rights reserved.

11

Long-term management plan: Basic policy and five priority strategies
Goal = VISION2030
To zero, from zero, The environment and the excitementof the future.
Basic policy
We position domestic civil engineering, building construction and building renewal business as “core business,” and international, real estate andnew business as “strategic business,” practice the “deepening of knowledge” and the “search for knowledge,” and implement five priority strategies
based on the three values we provide using human resources and digital technology as our sources of competitive advantage. By doing so, we
aim for the sustainable improvement of corporate value in both financial and non-financial terms.
Business strategy 1(the Tokyu Construction brand)Corebusiness

Domestic civil engineeringbusiness
Domestic building
construction business
Building renewal business

Establishment of the Tokyu Construction brandthrough the building of competitive advantages
in human resources and digital technology andthe provision of three values

Business strategy 2(core business)

Strengthening of problem-solving skills,
construction and production systeminnovation, and growth through alliances andM&A

Human resource andorganizational strategies

Creation of results and acceleration of
innovation through the strengthening of humanresources and reform of the organization andcorporate culture
Copyright(C) Tokyu Construction. All rights reserved.

Decarbonization
Zero
waste

Disasterprevention
andmitigation

International business
Strategic
Real estate businessbusiness
New businessBusiness strategy 3(strategic business)
The creation of new growth opportunities
through investments in strategic business andsynergies with core business

Financial and capital
strategies
Emphasis on capital efficiency and theconstruction of stable financial foundations by
pursuing the optimal capital structure

12

Five priority strategies: Business strategy 1 _ Promotion andestablishment of the Tokyu Construction brandWe will visualize initiatives and results and promote them internally andexternally together with a new brand message.

Decarbonization

Zero
waste

Disasterprevention
andmitigation

Realization of asustainable society
×
Improvement of corporate
value

Stakeholders

Cooperating Employees’
Customers companies
families

Shareholders

Society

We will create a virtuous cycle of stakeholder awareness andunderstanding and improvement of corporate value
Copyright(C) Tokyu Construction. All rights reserved.

13

Five priority strategies: Business strategy 2 _ Deepening of corebusiness

We will strengthen capabilities through the strengthening of problem-solving skills,
construction and production system innovation, and strategic alliances.
Core
businessstrategies

2021~2023

2024~2026

Positive development of business that
contributes to the provision of the threevalues and creation of successful cases

Shift to proposal-type sales that differentiate
us from competitors based on provision of
the three values

Maximized use of digital platforms based on
BIM and CIM

Leverage BIM and CIM data to expand
business in the value chain and maximize
synergies between businesses

Domestic civil engineering business1. Securing of construction capacity and strengthening of problemsolving skills
2. Strengthening of overall evaluations, expansion of maintenance andrepair areas, and participation in ECI*2
3. Strengthening of sales to other railways, including private railways
and subways in the Tokyo metropolitan area
4. Environment-related initiatives and the commercialization of
infrastructure asset management
5. Promotion of front loading starting from CIM
6. Information sharing, visualization, and training of engineers
7. Promotion of external cooperation that can complement thecompany’s weaknesses

2027~2030

Lead a new construction scheme (IPD,*1
etc.) based on accumulated data andresults, and aim to break away from thecustomer-led contracting industry

Domestic building construction business + building renewal
business

1. Strengthening of relationships with customers based on thedevelopment of proposal-type sales
2. Acquisition and strengthening of design proposal capabilities in
response to customer needs
3. Realization of low cost, short construction periods based on the
improvement of productivity
4. Promotion of front loading starting from BIM
5. Acquisition of maintenance and management know-how andstrengthening of renewal handling capabilities
6. Strengthening of ZEB and other equipment and technology centeredon environment-related issues
7. Strengthening of cooperation with Tokyu Group companies

Decarbonization

Strengthening of capabilities
Zero
waste

Disasterprevention
andmitigation

Open innovation alliances and M&A*1 IPD (integrated project delivery): A project method under which various related parties, such as the ordering party, designer, construction companies and specialized construction companies
advance work under a single contract*2 ECI (early contractor involvement) method: An ordering method that reflects the technical capabilities of constructors in design content from the design stage and aims to achieve “cost reductions”
and “shortening of the construction period”

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14

Five priority strategies: Business strategy 3 _ Growth of strategic
business

We will create new growth opportunities through initiatives and investments withstrong awareness of synergies with core businesses.
 We will make more positive efforts towards railway and transportation
infrastructure and TOD (Transit-Oriented Development) based on ODA inemerging countries centered on Southeast and South Asia using theInternational company’s strengths cultivated through domestic railway construction anddevelopment along Tokyu railway lines.
business  urban
In private construction, we will establish a highly profitable business model
adapted to each country’s market environment through partnerships with local
companies and the use of local human resources.

Real estatebusinessNewbusiness We will expand real estate business from the twin perspectives of“synergies with construction business” and “securing of stable revenue.” We will promote real estate development and real estate value added
business that make the most of synergies with construction business,targeting customers who are highly sensitive and interested in theenvironmental area centered on the three values we provide.

 We will establish a “new business continuity creation function” and develop
new business in areas that can contribute to the expansion of the three values
we provide, such as renewable energy, and areas that use digital technologies
positively in succession.
 We will work actively on concession projects for sewerage systems, airports,
etc., and PPP initiatives such as smart cities (group collaboration).

Copyright(C) Tokyu Construction. All rights reserved.

The construction and realestate value chain
Real estate

DesignConstruction

Building
management

Synergies with construction
business• BIM is established as a platform thatconnects value chains.
• Barriers in the construction and real estatevalue chain are removed.
• The company aims not only to build, butalso to provide value throughout the value
chain.
• Creating synergies based on theacquisition of real estate developmentknow-how and use of general contractor
know-how is an important strategic theme.

Securing of stable revenue• Construction business, which is a flowbusiness, has highly volatile revenue.
• In order to handle this, we will secure astable source of revenue premised on theuse of debt.
• The creation of private REITs will belooked at after the formation of a certain
amount of high-quality stock.

15

Five priority strategies: Human resource andorganizational strategies

Human
resources
Organization

We will accelerate the creation of results and innovation through organizational andcorporate culture reforms linked to Human resource strategy *the above.
Transfer of authority to business divisions and clarificationof responsibilities

Management leadership and responsibility

Reform oforganizational
cultureShift to a flat and simple organizational structure
Building of an autonomous, co-creation-type organization
New establishment of a Value Creation Office
responsible for intellectual exploration

Pursuit of an organization that stimulates
diversity, inclusion and innovation

Strengthening of corporate functions that support
management

Implementation of employee engagement surveys
Dissemination of the corporate philosophy, vision andstrategy through dialogue

Practice of organizational development
Separation ofmanagement andexecution

Organizational development:
A series of activities that strengthens employees’ confidence
in and willingness to contribute to the organization andrelationships within the organization by consciously andsystematically promoting explicit and implicit codes ofconduct, values, etc., within the organization

We will establish a new Value Creation Promotion Office responsible for the important strategic
themes of sustainability, new business and DX under the direct control of the President.
President

Value Creation
Promotion Office

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Sustainability Department

The department will promote a sustainability strategy that balances
social and economic value by disseminating and appealing to the threevalues we provide internally and externally.

Innovation Department

The department will build and establish a system that creates new
business continuously, including investment in new business, basedon the three values we provide.

Digital Innovation
Department

The department will control the ICT-related divisions of each business
unit and promote the conversion of BIM and CIM into platforms and theconversion to digital human resources based on DX.

16

Five priority strategies: Financial and capital strategies _Basic thinking

We will change our previous way of thinking completely and change direction
towards the improvement of capital efficiency (pursuit of the optimal capital
structure).
Way of thinking until now↓
Enhancement of financial
base

Improvement of capitalefficiency
 Pursuit of profit
 Active use of leveraging
 Reduction of inefficient assets

Profitable realestateCrossshareholdings
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Improvement ofshareholder returns

Acceleration of growthinvestment

 Innovation in construction
business
 Diversification of the portfolio New business investment andM&A From dividend payout ratio to
DOE Improvement of the level ofreturns

Way of thinking fromnow on↓Improvement of capitalefficiency(Pursuit of the optimal
capital structure)

We will manage financial and capital strategies basedon capital efficiency and strategic significance(“synergies with construction business,” “securing of
stable revenue,” etc.).

17

Five priority strategies: Financial and capital strategies _Shareholder return policy
We will change the dividend standard to DOE and improve the level ofshareholder returns.
Return policy until now

Future return policy

Easily influenced by results
for a single fiscal year

Dividend payout
ratio standard

Emphasizes enhancementof the financial base

Dividend payout
ratio of 20% or
higherDOE standard(Dividend on equity
ratio)

Dividend amounts are stable

DOE of 4% orhigherImprovement of the level of returns(Aware of capital efficiency)

Past results for dividend amounts

Future return policy

Dividends are influenced by the results for a single
fiscal year and amounts are unstable

Stable returns to shareholders aware ofcapital efficiency
DOE
4%

=

ROE target
10%

Dividend
payout
ratio
✕

40%

We will establish a return policy that balances medium tolong-term results targets and financial and capital strategies.

In addition to returns through dividends, we will acquire
treasury stock flexibly with awareness of capitalefficiency.

Dividend payout ratio of 20%
2.7(billion yen)

3.3

3.2

3.2

1.4

1.1
FY11

2.8

0.3

0

FY12

FY13

FY14

1.1
FY15

FY16

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FY17

FY18

FY19

FY20

 [1] Medium to long-term results [2] Capital situation [3]Growth investment opportunities [4] Consideration ofmarket conditions, etc., including stock prices
18

Corporate governance (medium to long-term direction)
We will aim to improve the effectiveness of the Board of Directors towards the achievementof VISION2030.
FY2004
Number of Directors in the
Articles of Incorporation
Directors

Corporate
Auditors

FY2010FY2015FY2016FY2017Up to 20 people

FY2019FY2020Up to 12 people

Directors

9 people

10 people

Independent Outside Directors

1 person

2 people

8 people

11 people

10 people

3 people

Number of Corporate Auditors in
Up to 5 people
the Articles of Incorporation
Independent Outside Corporate
Auditors

2 people3 people
1 person (Independent Outside
Director)
Introduction of a stockcompensation system

Female executives (gender diversity)
Executivecompensation
Nomination and Compensation Committee

Establishment of the committee

Governance Committee

Establishment of the committee

Concept of the Board of Directors→ → → → → FY2030• Strengthening ofsupervisory functions• Increasing of the ratio ofindependent directors• Promotion of diversity• Improvement of the
independence andeffectiveness ofcommittees• Review of thecompensation system

Concept of nomination and compensation

We will strengthen the separation of supervision and execution andsupervisory functions continuously by improving their structure andoperation.

We will increase the transparency of the Board of Directors in relation tonominations and compensation by increasing the independence andeffectiveness of the Advisory Committee.

 At least one-third of the Board of Directors will consist of
independent outside directors fully equipped with quality.

 We will improve the effectiveness of the Nomination andCompensation Committee by sharing human resources information,
strengthening the involvement of independent outside directors, etc.

 We will review the structure of the Board of Directors basedon knowledge, experience, ability, etc. (disclosure of thestrategic skills matrix).
 We will realize efficient, high-quality discussions anddecision-making by reviewing deliberation methods andresolutions, etc.
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 We will revise performance indicators for executive compensation andincrease their interlocking to promote improvement in corporate value
over the medium to long-term.
 We will improve the operation of succession planning and the system
for fostering next-generation managers based on diversity, etc., toenhance their effectiveness.

19

Review of the 2018-2020 medium-term management plan
Sales trended steadily against the FY2020 target until FY2019.
Results reversed and deteriorated in FY2020.
Targets for
Consolidated FY2020
indicators

Sales

Operatingprofit margin
Total owned
capital

ROE

Top: Initial
Bottom: Aftercorrection

312.0
billion yen
244.0
billion yen

FY2018results

FY2019results

FY2020results

331.4
billion yen

322.1
billion yen

231.4
billion yen

6.6%

6.3%

1.5%

6.3%
2.7%
110.0
billion yen
104.0
billion yen

92.6
billion yen

101.2
billion yen

102.9
billion yen

18.1%

15.4%

2.6%

13%
5%

Copyright(C) Tokyu Construction. All rights reserved.

Achievements
 We completed large-scale projects and difficult
construction projects that we had not experienced inJapan or overseas, including the redevelopment around
Shibuya Station.
 The accumulation of owned capital has advanced andthe soundness of the company’s finances, which has
been an issue since the company’s restructuring andrehabilitation, has improved.

Issues Changes to the portfolio of orders due to thecompletion of large-scale projects such as the
Shibuya redevelopment
 Significant decrease in the operating profit margin Decrease in ROE due to a significant drop in profits
 Insufficient expansion of revenue from business otherthan domestic construction
 Changes in employee awareness and work styles
due to the COVID-19 pandemic
 Fostering of a sense of crisis in response to rapidchanges in the situation20

Implementation of structural reform
There is a strong sense of crisis over the sudden change in results. We will implement
structural reform with awareness that the recovery of results is an urgent priority.
April 2021

Previous medium-term
management plan
Management
revival period

1st yearMarch 2023
2nd
year

March 2031
10th
year

Long-Term Management Plan

[Structural reform period]

Period of change

We will implement a short-term recovery in results and longterm strategies to ensure efforts towards reform.

Implementation of the fivepillars of structural reform

Issues of theprevious
medium-term
management
plan

Enhancement of corporate
governance
Reform of the personnel
system
Structural reform of theorganization
Strengthening of problemsolving skills
Penetration of capitalefficiency

Copyright(C) Tokyu Construction. All rights reserved.

• Separation of the supervision and execution of business andfurther improvement of the effectiveness of the Board of Directors• Promotion of diversity, inclusion and innovation• Implementation of human resource mobilization measures• Organizational reform premised on streamlining andflattening

Interlocking• Overhaul of QCDSE and sales capabilities and rebuilding of
earning capabilities• PL management => penetration of BS management as far as thesite level

21

VISION2030, the company’s long-term management plan:
Image of realization
We will improve corporate value by transforming our construction businessmodel and business portfolio.
Socialvalue

Core business

FY2030 revenue structureCore business 75%
Strategic business 25%

Strategic
businessCorebusiness We will establish an industry-leading brand with the three values
we provide.
 With BIM and CIM as platforms, we will create various added
value in the value chain and transform the construction businessmodel based on human resources and digital technology.
 We will grow the scale of revenue steadily.

Strategic business

FY2019 revenue structure We will realize the transformation of our business portfolio
through innovation in international, real estate and construction
business, and the growth of new business that leads to theresolution of social issues.
 We will continue efforts towards the resolution of new social
issues without slacking off through the penetration of a corporate
culture that creates innovation.

Core business 94%
Strategic business 6%

FY2020 revenue structureCore business 108%
Strategic business -8%
FY2020
Copyright(C) Tokyu Construction. All rights reserved.

FY2030Main KPI
 GHG emissions: Reduce Scope 1, 2, and 3 emissions by30%
 Operating profit of at least 22 billion yen
 Secure stable ROE of at least 10% and ROIC of at least 7%

22

VISION2030, the company’s long-term management plan:
Image of growth

We will achieve growth by investing in core business and strategic business that will
not be beaten by reductions in construction investment.
The company has made its own estimates and assumptions on domestic construction investment from FY2021 with reference to the medium to long-term
outlook for the Japanese economy compiled by think tanks.
The economy will recover moderately after bottoming out in FY2021 following the containment of the COVID-19 pandemic. It will then transition steadily until
around 2025 due to the continuation of national land resilience against natural disasters and a recovery in corporate facility investment. Subsequently, a tendency
towards gradual decline is expected due to a declining population, concerns over state finances, a shift in focusing from flow to stock, and supply capacity issues.

Gross
600 profit on sales(billion yen)

Construction investment(trillion yen)

Long-Term
Management Plan

65

400
40
60

20
200

0

55

FY2018FY2021

FY2023

Core business (domestic civil engineering)Core business (construction RN)
Strategic business (real estate)
Copyright(C) Tokyu Construction. All rights reserved.

FY203050Core business (domestic building construction)
Strategic business (international)
Strategic business (new)23Long-term management plan: KPI
We have set the KPI for the long-term management plan for VISION2030 as follows.
FY2020results

FY2021

FY2023

3.5 billion yen

7.0 billion yen

13.0 billion yen

At least 22.0 billion
yen

Operating profit margin

1.5%

2.4%

At least 4.0%

At least 5.0%

ROIC

3.2%

4.1%

At least 6.0%

At least 7.0%

ROE

2.6%

4.8%

At least 8.0%

At least 10.0%

Management indicator
Operating profit

FY2030

Profitability

Efficiency

Debt-to-equity ratio

0.26 times

0.5 times or lessSoundness

Nonfinancial

Capital adequacy ratio

45.4%

Employee engagement
rating *2

BBB

BBB

A

AAA

5.0% reduction

7.5% reduction

12.5% reduction

30.0% reduction

GHG emissions
FY2018 standard

About 40 to 45%

About 45%

*1 The company has adopted as ROIC calculation formula as follows in order to reflect appropriately the return on invested capital (dividends, etc.) for the acquisition ofshares required in business development. (NOPAT + non-operating revenue) / (owned capital + interest-bearing debt)*2 Engagement rating using Link and Motivation Inc.’s “Motivation Cloud.” Subjects are employees of the Group as a whole, including subsidiaries. Rating is divided
into a total of 11 stages, and the current “BBB” is the fourth rating from the top after “AAA,” “AA” and “A.”Copyright(C) Tokyu Construction. All rights reserved.

24

Long-term management plan: Investment plan
We are planning to invest approximately 170 billion yen over ten years to realize
VISION2030.

Creation ofsynergies Business strategy investment centered on the three values we provide

Investment in domestic civil engineering, building
construction and construction RN business Investment for technological development
 Investment for production system innovation and DX
promotion
 M&A investment



Investment in international, real estate and new
business M&A investment for international business expansion
 Acquisition of real estate focusing on synergies withcore business Investment in new business incubation
 Investment in concession and PPP business Investment in venture companies, venture funds, etc.

Corebusiness

160.0 billion yen
Strat
-egic
business

 Investment in sources of competitive advantage (human resources x DX)
Core
Strategic

 Total investment
over 10 years
Copyright(C) Tokyu Construction. All rights reserved.



10.0 billion yen

Investment for personnel system reform and humanresource development
Establishment of environment and systeminfrastructure for company-wide DX promotion

170.0 billion yen
25

Reference 1: Provision of three values
 Starting with ESR's Kawasaki Ukishima Distribution Centerand Higashi Ogishima Distribution Center, we have begun to
introduce 100% renewable energy-derived electric power
sequentially to its distribution centers.
 ZEB renovation by the company’s Institute of Technology
reduced energy consumption by 78%, the highest level inJapan, and won a “2020 Demand-Side Management Award.”
 First adoption of “CELBIC” low carbon concrete that
reduces carbon dioxide emissions

The perspective is a projected
image and may change

Overall reduction in
CO2 of about 40%

 We have introduced and started commercialization of aconstruction waste sorting robot developed jointly with
Ishizaka Inc., which advocates “Zero Waste Design.”

Courtesy of Grosvenor Limited[We concluded a comprehensive
contract with Tokyo City University]
Copyright(C) Tokyu Construction. All rights reserved.

Industryuniversity
collaboration[Ground frame]
70% ground granulated
blast-furnace slag

[Image of the application of CELBIC in construction on the new Ginza 5chome Project (tentative name)]

Decarbonization[Construction waste sorting robot][Ground frame]
20% ground granulated
blast-furnace slag

Zero
waste

[Co-Creation with
Seikitokyukogyo]

Disasterprevention
andmitigation

 We solved various issues to realize the restoration of the
Chikuma River Bridge on the Uedadentetsu Bessho Line,
which collapsed due to the flooding of the Chikuma River.
 We used the company’s concrete repair technology andthe road maintenance and management know-how of
Seikitokyukogyo to develop “CRACK REPAIR,” a material
for the repair of cracks in concrete pavement.
 Start of operation of “Dr. BC Push,” a solution that enables
efficient building management during normal times, including
structural damage evaluations and restoration support during
earthquakes, at Shibuya Hikarie Demonstration of green infrastructure facilities that contributeto the reduction of torrential rainfall damage[Before restoration of the
Chikuma River Bridge][After restoration of the Chikuma
River Bridge]

26

Reference 2: Accelerating human resources x DX_1
 We implemented the FY2020 female career training for generalemployees in their third to fifth year after joining the company.
 We have received the “Best Motivation Company Award” for two
consecutive years since FY2019.

 We received the outstanding performance award at the 2019 “iConstruction Grand Prizes” for implementation of BIM and CIM on the
Shibuya Station relocation project on the Tokyo Metro Ginza Line.
 Using these results, we started a demonstration test on acceleratingconsensus building at construction sites based on the use of VR incooperation with Ricoh.
 We promoted the greater sophistication of construction management forshield tunnels and mountain tunnels using AI and other advanced
technologies positively.
TabletOperator

Site supervisor

Large corporation
category

OutputOutput(2,000 people or more)

Input
AI assist
tool

Prediction
data

ControldataAIprediction
systemLearning
and control
prediction

Shield machine AI boring system[VR space constructed based on a 3D model]⇄[We received the outstanding performance award at the 2019 “i-Construction Grand
Prizes” _ Shibuya Station relocation project on the Tokyo Metro Ginza Line]
Copyright(C) Tokyu Construction. All rights reserved.

Automatic
control
mode

Controlsupportmode
Controlpanel

Pressureadjustment

CaptureMeasurement
data

Directional
control

Groundpressure[We developed a shield machine AI
boring system][Greater sophistication of construction management using
advanced technologies _ mountain tunnels]

27

Reference 3: Accelerating human resources x DX_2
Simulation of theenvironment

Automation of
estimations

Maintenance,
management
and use (FM)

Automation ofprovisional
planning[Conversion of BIM equipment design into a
subsidiary]

Tokyu
Construction’s
BIM platform
Automation of Pca
production

Robotics

Cooperation
with IoT[BIM first model development]

Construction BIM
cooperation

 We acquired shares in Indochine Engineering Limited(Singapore), a BIM equipment design company, and Kawamura
Sekisan Co., Ltd., an estimate company, and converted them into
subsidiaries towards innovation in construction and production
systems starting from BIM and CIM.
 In addition, we established a joint venture company Iwase Precast
Co., Ltd., that will manufacture and sell precast concrete productsthat contribute to construction efficiency, and promoted
construction DX throughout.
 In order to promote the use of BIM in construction across thecompany, we developed the “first model,” a BIM version ofdesign documents, etc., for construction sites in Japan before thestart of construction.

Copyright(C) Tokyu Construction. All rights reserved.

[Manufacture and sale of PCa concrete at Iwase Precast’s factory]
Conversion into
[Equipment design] ← subsidiaries → [Estimation]

Establishment ofjoint venture→[PC manufactureand sales]28NotesForward-looking statements such as forecasts of the company’s
results contained in this document are based on information
available as of the date of publication and assumptions madeas of the date of publication regarding uncertain factors that
may affect future results.
Except as otherwise provided for by law, the company shallbear no obligation to update these future predictions. Actual
results may differ from future predictions due to various factors.