Japan Airport Terminal Co., Ltd.
Q2 Financial Results Briefing for the Fiscal Year Ending March 2024
November 17, 2023

Event Summary[Company Name]Japan Airport Terminal Co., Ltd.

[Company ID]

9706-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]

Q2 Financial Results Briefing for the Fiscal Year Ending March 2024

[Fiscal Period]

FY2024 Q2[Date]

November 17, 2023

[Number of Pages]

20[Time]

16:00 – 16:28(Total: 28 minutes, Presentation: 28 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

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5Isao Takashiro
Nobuaki Yokota
Hiroshi Onishi
Kazuhito Tanaka
Masatoshi Akahori

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Chairman and CEO
President and COO
Executive Vice President
Executive Vice President
President & CEO, Tokyo International Air
Terminal Corporation

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Presentation
Moderator: Now that the time has come, we will now begin the financial results briefing for Q2 of the fiscal
year ending March 31, 2024 of Japan Airport Terminal Co., Ltd. Thank you all for taking time out of your very
busy schedules to attend today's meeting.
I would like to introduce today's attendees.
Mr. Isao Takashiro, Chairman and CEO.
Takashiro: My name is Takashiro. Thank you.
Moderator: Mr. Nobuaki Yokota, President and COO.
Yokota: My name is Yokota. Hello.
Moderator: Mr. Hiroshi Onishi, Executive Vice President.
Onishi: My name is Onishi. Thank you.
Moderator: Mr. Kazuhito Tanaka, Executive Vice President.
Tanaka: My name is Tanaka. Thank you.
Moderator: Mr. Masatoshi Akahori, President and CEO of Tokyo International Air Terminal Corporation.
Akahori: My name is Akahori. Nice to be here.
Moderator: That is all who are present.
Then, we would like to begin the presentation.
President Yokota, please begin.
Yokota: I am Yokota, President of the Company. Thank you for your time. We truly appreciate your continued
understanding and support of our business operations.

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Please see page two first.
First, I would like to explain the situation in H1.
In the business environment, the number of foreign visitors to Japan continued to increase significantly due
to the full elimination of behavioral restrictions, including immigration restrictions, following thereclassification of COVID-19 infection under the Act on the Prevention of Infectious Diseases.
On the other hand, the price of goods continues to rise due to high resource prices and the weak yen, and thelabor shortage in the service industry is becoming more serious.
Under these circumstances, passenger volume at Haneda Airport increased by approximately 30% from theprevious fiscal year on domestic flights due to a steady recovery in demand for travel by Japanese and otherfactors. However, this was less than 10% below the initial forecast due in part to a delayed recovery in businessdemand.
On the other hand, international flights were approximately five times higher than the previous fiscal year
due to strong inbound demand, exceeding the initial forecast by more than 10%.

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Please see page three.
In this business environment, consolidated operating revenues for H1 of the fiscal year exceeded those of theprevious year in all segments due to an increase in merchandise sales and facility usage fee revenues, etc., inline with an increase in the number of passengers.
Despite a significant increase in operating expenses, the increase in sales led to a consolidated income for H1
for the first time in four years. Compared to the initial forecast, sales were significantly higher due to strong
international flights, while on the expense side, utilities and repair costs were lower than expected, resulting
in a significant upward revision in profit and loss.
As a result, as shown in the red frame in the document, operating revenues were JPY100.1 billion, operating
income was JPY13.5 billion, ordinary income was JPY12.4 billion, and net income was JPY8.2 billion.

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4See page four. I would like to continue by explaining our full-year earnings forecast.
In terms of the business environment, we expect inbound demand from Chinese and other foreign visitors toJapan to remain strong, partly due to the weak yen.
In addition, price hikes are expected to continue due to higher resource prices and the weaker yen, as well as
higher wages due to labor shortages.
In addition, we will continue to need to pay attention to the effects of concerns about the Chinese economy
and the destabilizing situation in the Middle East.
As for passenger volume at Haneda Airport, we assume that the domestic flight volume will be approximately
90% of the pre-COVID-19 pandemic level, the same level as in H1.
On the other hand, international flights continue to increase strongly and are expected to exceed the preCOVID-19 pandemic level to reach a new record high, approximately 80% of the target level.

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5See page five.
As shown in the red box, we forecast operating revenues of JPY211.5 billion, an operating income of JPY24.7
billion, an ordinary income of JPY22.8 billion, and a net income of JPY15.2 billion for the full year.
Operating revenues are expected to increase in line with passenger volume growth, and operating income
and ordinary income are projected to reach record highs. As for net income, it would be a record high if
onetime extraordinary gains and losses in the fiscal year ended March 31, 2019 were excluded.
Compared to the initial forecast, we expect operating income to be significantly better than the original
forecast, with international flights significantly exceeding the original forecast despite domestic flights fallingshort, and expenses increasing in fuel costs but limiting the increase in other expenses.
The Company has decided to increase the dividend in light of its basic policy for returning profits toshareholders, which is to maintain stable dividends and to target a payout ratio of 30% or more.
The Company plans to pay an interim dividend of JPY25 per share and a year-end dividend of JPY25 per share,
for a total annual dividend of JPY50 per share.

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6See page six. This section shows the forecasts by segment.
Comparing H1 with H2, net sales will improve in all segments, but operating income is expected to increasein the merchandise sales and food and beverage businesses but decrease in the facility management business.
In the current fiscal year, we are planning to install LED lighting, renew conveyor equipment, and others. The
reason for this is that construction progress is concentrated at the end of the fiscal year as a seasonal factor,
so costs will increase, and some repair expenses will be shifted from H1 to H2.

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7See page seven. This section shows the number of passengers at Haneda Airport and our consolidated
quarterly results.
The rapid recovery in the number of international passengers and the effect of the weak yen have led to a
sharp increase in duty-free sales, and we expect sales to continue to be strong.
Compared to before the COVID-19 pandemic, the scale of use has increased due to the expansion of theterminal in conjunction with the increase in international arrival and departure slots in March 2020.
After the COVID-19 pandemic, we have cut costs and introduced new luxury brands, including the opening of
the first Louis Vuitton store in a domestic airport last November, and we have been preparing for the recovery
of usage along with store renovation and reallocation.
In terms of expenses, variable costs have increased in line with increases in passenger volume and revenues,
but other expenses have remained at relatively controlled levels, which is also a part of the good performanceof the current fiscal year.

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Please continue to page eight. This section shows a breakdown of international passenger volume by direction.
The number of passengers by direction is shown as a percentage of the total number of passengers eachquarter, with the number of passengers after the expansion of flight slots in March 2020 as 100%.
In Q2, the number of passengers exceeded the number of those before the COVID-19 pandemic, and we
expect further growth in the future due to increased flights to China and other destinations in the wintertimetable from the end of October onward.
Therefore, we are expanding the operation hours of the Terminal 2 international facilities to accommodate
this change. During the summer timetable, the service was operated only in the morning, but during thewinter timetable, we will take measures to make the service available 24 hours a day.
In addition, there was concern about the shortage of security check personnel due to the increase inpassengers, but we have continued discussions with the airlines and other related parties and have expanded
the number of contractors, so we now have enough personnel to handle the winter schedule.
We will continue to consider strengthening our system in cooperation with airlines to ensure stable operations
in response to further flight increases.

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9See page nine. I would like to explain the personnel situation in our group.
Amid the severe business environment caused by the COVID-19 pandemic, we made efforts to maintain theemployment of full-time employees in anticipation of a recovery in the flow of people, but due to natural
attrition resulting from retirements and other factors, the number of employees decreased by approximately
40% of the total workforce.
As a result, the rapid recovery in airline demand since last fall has resulted in a shortage of personnel atinternational terminal stores and others.
As a response, we are strengthening our recruitment of human resources, actively hiring mid-career and nonregular employees in addition to new graduates, and at the same time, we are working to restore the stable
operating structure that we had before the COVID-19 pandemic by improving compensation to retain our
personnel.
We will also gradually expand the opening hours of international terminal stores to steadily capture passenger
demand.
In addition, selling, general, and administrative expenses are expected to increase in line with increases inpassenger volume, revenues, and prices, while maintenance and repair expenses are also expected to increase.
We will continue to improve productivity to maintain service and quality while controlling cost rebound.

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10Please continue to page 10.
Here, we have shown again the passenger volume forecast for Haneda Airport and the target figures for the
final year of the medium-term business plan.
There is no change in passenger volume from the forecast announced in May for FY2024 onward. The target
figure is expected to be achieved by approximately 80% this fiscal year, compared to the FY2025 target of
JPY30 billion in operating income.
While passenger volume is expected to continue to increase in the next fiscal year and beyond, we see thepossibility that duty-free sales, which are currently growing faster than passenger volume, may slow down.
On the expense side, we anticipate that overhead costs will increase in line with sustained price increases. In
particular, rentals, which are 30% less than the peak for the current fiscal year, are expected to increase, as
the performance-linked portion, which has not been accruing so far due to international flight losses, is certain
to accrue from the next fiscal year onward.
Under these circumstances, we will aim to achieve our income targets by steadily implementing each of themeasures set forth in the medium-term business plan in order to cover the higher-than-expected increase in
expenses with higher revenues.

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Then, see page 11. This section shows the vision of each business in 2025 and the vision of the Group in 2030.
We have set our goals by 2025 for each of our businesses to become an airport terminal company that all
stakeholders trust, which is our vision for 2030.
We will create a plan for each fiscal year toward the vision we aim for in 2025, check progress, and makerevisions as needed according to the situation, as we work toward achieving our goals.
From this point on, we will explain our main initiatives for this fiscal year, business by business.

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First, let's look at page 12, facility management.
From the viewpoint of operations management, the Company will continue to respond to increasing
passenger demand and will sequentially carry out renovation work in preparation for major disasters and thereplacement of equipment that has been installed for a number of years. At the same time, we will adhere toefficient staffing in security, guidance, and other areas to minimize cost rebound.
To this end, we are working on the use of robots to improve operational efficiency, and WHILL, the self-driving
wheelchair that has already been installed on domestic flights, will be deployed in Terminal 3 starting this fall.
From the viewpoint of improving profitability, we are considering remodeling the area for stores to revitalize
the commercial area, and by attracting tenants, such as airline offices and new stores, we are working to
reduce vacancies and at the same time revising rents to appropriate levels for some of the tenants.
From the perspective of facility infrastructure, we will steadily implement our investment plans for the future,including the steady implementation of the construction of connection between the satellite building on thenorth side of Terminal 2 and the main terminal building, as well as the selection of a contractor for theconstruction of the satellite building on the north side of Terminal 1.

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13See page 13. Next, we will explain about the merchandise sales and food and beverage businesses.
From the viewpoint of revenues expansion, the duty-free stores will return its operating hours to levels similar
to those before the COVID-19 pandemic to eliminate missed sales and improve customer service. We continue
to reposition our stores in Terminal 3, including the opening of pop-up stores for Ferragamo, Loewe, andothers.
We are planning to open Japan Mastery Collection, a regional luxury brand, in December, and would like todevelop a collection of products from various parts of Japan, including originals, from the perspectives ofJapanese creators, traditional crafts, fashion, and sundries.
For the domestic terminal, we will open Haneda Sanchoku-kan in Terminal 1 in December. In addition toselling fresh primary and domestic products from all over Japan, we plan to set up a PR corner to promote
regional cooperation and continuously communicate the attractiveness of each region from Haneda Airport.
From the perspective of improving profitability, the Company is improving operational efficiency through theintroduction of RFID-linked cash registers, inventory management systems, and robotic warehouses.

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14See page 14. I would like to explain the new business, know-how business, and the management base.
First, in the EC business, we are working to improve usability by renovating our domestic EC site, expanding
our channels to cross-border EC, sequentially promoting a locker pickup service for pre-ordered merchandise,and others.
In addition, the Haneda Innovation City adjacent to Haneda Airport had its grand opening yesterday. In thislarge-scale complex, we plan to open Terminal.0 HANEDA in January of next year as a research anddevelopment base that will work on cross-industrial collaboration to solve issues at the airport.
We are currently preparing to invite participating companies from various fields to conduct R&D together withus.
From the viewpoint of know-how utilization, with regard to the agency business for Radi-Cool, a radiative
cooling material, and external sales of robots for efficiency and labor saving, we will conduct sales to regional
airports based on the relationships we have cultivated while developing a secondary agency network tocultivate and expand business outside of airports, such as commercial facilities and office buildings.
The DX strategy also includes the use of infrared cameras and others to measure the flow of people in thebuilding, which will be used to distribute congestion information via a Haneda application, as well as fordemand forecasting and proper allocation of personnel.
In terms of organization and human resources, we will enhance our education and training systems torevitalize our existing human resources, and we will continue to implement industry-academia collaboration
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projects and hold seminars to promote women's activities, thereby reforming our corporate culture andpromoting diversity and inclusion.

See page 15.
Last year, we positioned sustainability as the core of our strategic promotion in the medium-term businessplan and established a basic policy.
We have established a promotion system and formulated the medium-term sustainability plan withmateriality, key issues, and KPIs as its framework.
To achieve this goal, from this fiscal year, we will work across the entire company to manage progress andcreate and distribute a sustainability handbook to promote sustainability management among all employees.
At the same time, we strive to disseminate and disclose ESG information by disclosing information based on
TCFD recommendations and responding to various ESG surveys, such as CDP.
In addition, please take a look at the integrated report we published on our website last week, which explainsin detail our approach to each materiality with regard to the sustainability management we are aiming for.

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16See page 16. The KPIs for reducing environmental impact are listed here.
We believe that we need to persistently work on reducing CO2 emissions, which is our biggest challenge, one
by one by combining various means, and we would like to introduce some of them that are currently in the
study stage.
In the area of energy conservation, we have been working to reduce power consumption by installing LED
lighting, motion sensors, and the radiative cooling material Radi-Cool, updating air conditioning equipment,
and others, and we will continue to study the implementation of smart air conditioning using AI.
In the area of renewable energy, we have installed additional solar panels and are currently studying EV
recharging facilities combined with storage batteries.
In the field of new energy, we will investigate the introduction of private power generation facilities fueled byhydrogen, which does not emit CO2 when used as energy.
Although the 46% reduction by 2030 is a high hurdle for us, we will continue to monitor the development ofvarious technologies and the trends of other companies, and we will find a path toward achieving this goal bycontinuing to study it.
Last but not least, as we free ourselves from the COVID-19 pandemic and are returning to our daily lives,
Haneda Airport has entered a phase in which the effects of the expansion of international arrival anddeparture slots, which was implemented in March 2020, will be realized.

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Although we celebrated our 70th anniversary in July of this year, we are facing a confusing businessenvironment with soaring resource prices, China's economic trends, the global situation changes in Europe
and the Middle East, and others.
In such an environment, each and every one of us is working on internal branding activities, Plus One
Promotion, and the Company as a whole is steadily implementing the necessary measures with a frontier
spirit and a long-term goal in mind.
We appreciate your understanding and look forward to your continued support.
That is all for the explanation. Thank you very much.
[END]______________
Document Notes
1.
2.
3.
4.

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TollfreePortions of the document where the audio is unclear are marked with [Inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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