FY03/2022
Financial Results Briefing
May 19, 2022

Overview of FY03/2022
Financial Results
FY03/2022 Financial Results BriefingPerformance Variance Analysis（FY03/22 Full-Year Results）
FY03/2022【Consolidated】

A
Results

B
Ratio

Net Sales

258,083

Operating Income(6,078) (2.4%)【Non-

Consolidated】

Net Sales

Civil engineering
Building
construction
Real estate

Results

Building
construction
Real estate

285,000

Ratio

7,000
Forecast

DifferencePt(26,916)
2.5%
Ratio

(13,078)
Difference(4.9pt)Pt

267,000
69,800(23,974)(12,913)

184,407

195,500(11,092)

1,731
8,108

3.3%

1,700
21,60031
8.1% (13,491)(3,530) (6.2%)

6,900

9.9% (10,430) (16.1pt)

13,132

7.1%

13,9007.1%(1,492) (86.2%)

800

Factor(1)11/8Individual
Factor
Factor(2)11/8Otherchanges

Factor(3)5/12Individual
Factor
Factor(4)5/12OtherchangesRatio

243,02556,886Gross profit
Civil engineering

Forecast

2021/11/8

A-B(4.8pt)(Millions of yen)2022/5/12

Factor(1)Factor(2)Factor(3)Factor(4)Individual
FactorOtherchanges

Individual
FactorOtherchanges０(18,000)

0(8,916)(10,250)(350)(3,700)

1,222

AmountAmountAmountAmountIf factor (1)(3)
were excluded

Amountー (17,000)
ー(5,600)ーー(6,974)(7,313)

243,02556,886ー (11,400)

ー

308

184,407

Ratio

ー(10,250)0(50)

ー(3,700)

31
508

1,731
22,058 9.1%

(6,750)(1,550)(1,400)(730)

4,619 8.1%

1,232

16,632 9.0%

8807 46.7%

(767)

0.0pt

(3,500)1,500

47.1% (2,292)

－pt

0

0

(2,300)

Recorded estimated losses related to the “defective ends of piles” disclosed on July 26, 2021
Recorded estimated costs of removing temporary structures for civil engineering projects that were delivered in prior years
Estimated an increase in repair costs for construction defects in some building construction projects that were delivered in prior yearsNet sales impacted by lower completed construction sales due to delays in order receipt and the progress of some construction projects
Decline in gross profit of civil engineering due to a decrease in completed construction sales, lower profit margin of railway civilengineering, and the impact of overseas construction
Increase in gross profit of building construction due to the reduction of construction costs through the ingenuity of construction
management, additional orders obtained, etc.

An estimated loss was recorded because a cost increase was expected due to delays in some overseas projects.
A loss in the Real Estate Business was newly estimated due to a likely cost increase for a development project that has been
carried out for years.

The decrease in net sales is attributed to delayed receipt of orders for domestic projects of the Civil Engineering Business aswell as delays in some construction projects.
The decrease in the gross profit by the Civil Engineering Business is attributed to decreased completed construction sales.
Increase in gross profit of building construction due to the reduction of construction costs through the ingenuity of construction
management, additional orders obtained, etc.

Copyright(C) Tokyu Construction. All rights reserved.

1

Preventing the Recurrence of Construction Defects, etc.
“Notice Concerning Revisions to Full-year Forecast”(November 8, 2021)“Defective Ends of Piles for an Ongoing Construction
Project (follow-up report)” (November 18, 2021)

Accountability clarification



Recorded estimated losses related to “Defective Ends ofPiles for an Ongoing Construction Project” (announced on
July 26, 2021)



The internal examination committee with third party
member examined the “discrepancy between the recordsof piling work and the investigation results,” which was
discovered in the process of investigating the cause of thedefective ends of piles as announced on July 26, 2021. As
a result, it was found that some project site workers had
falsified the record table for concrete placing, etc.







Recorded estimated costs of removing temporary
structures for civil engineering projects that weredelivered in prior years
Estimated an increase in repair costs for construction
defects in some building construction projects that weredelivered in prior years

Causes and Background

Lack of understanding about the particular construction
specs



Age-wise-polarized engineers at worksites; lack ofappropriate management over the construction works;
and low responsibility and ethical awareness about
quality management

Insufficient support from HQ/branches to quality
management and worksites

Copyright(C) Tokyu Construction. All rights reserved.

Prevention of recurrence
Voluntary return of remuneration by Directors andExecutive Officers
Improvement of construction quality management
system (Civil Engineering)

Review/Revision of the distribution of engineers atworksites
Assignment of personnel who take charge of quality
management
Reinforcement of support from HQ/branches toworksites(Creation of a quality management section,enhancement of manpower and technical support at
peak times, etc.)
Review/Revision of training programs to improve thecompetence of junior employees and rapidly develop
their skills

Information sharing & Improvement of training
programs for worksite engineers

Speeding up the sharing of information about defects,
etc.; and introduction of our whistle-blowing system bymore of our subcontractors to enhance our multipleangled check-and-balance

Reform/Reinforcement of leadership skills; andreview/revision of training programs and job rotation to
improve project management capabilities

Reforming corporate cultureCompliance education for all officers and employees
Launch of measures that make communications more
frequent and effective

Of remuneration for directors, the portion of variable
compensation, which is linked to short-term
performance, has not been paid to them in FY03/2023.

2

Overview

Business
environmentDemand was strong by and large, with public-service projects emerging toward thegovernment’s goal of “Building National Resilience” and with private-sector projects(large-scale distribution warehouses, data centers, residence buildings for investment
purposes in the metropolitan area, factories, and hotels) also on the rise, if not entirely.

Prices for equipment and materials kept rising, and competitive environment remained
severe.

Non-consolidated orders

Full-Year
Results

Financialconditions： 274,663million yen（FY2021:306,633million yen,-10.4％ YoY）
Net Sales： 258,083million yen（FY2021:231,483million yen,11.5％ YoY）
Gross Profit: 9,716million yen（FY2021:18,170million yen,-46.5％ YoY）
Gross Profit Margin: 3.8%（FY2021:7.8%,-4.0pt YoY)
Operating Income： -6,078million yen(FY2021:3,549million yen）
 Non-consolidated orders fell 10.4％ year on year. Progress against the full-year forecast
increased by 6.9%.
Consolidated net sales increased due to orders obtained in the previous fiscal year inbuilding construction.

Gross profit fell sharply due to the recording of estimated losses resulting from individual
factors.



Operating income decreased significantly due to lower gross profit.

Equity capital was 92,490million yen, Equity ratio was at 38.9％, a decline of 6.5
percentage points compared to March 31, 2021
The dividend for the year was revised to 25 yen per share in light of the significant net
loss for the fiscal year under review.



Copyright(C) Tokyu Construction. All rights reserved.

3

FY03/22 Full-Year Results (Consolidated)
The Company’s non-consolidated orders fell 10.4% year on year but exceeded the initial
forecast.
Although net sales rose due to an increase in completed construction sales, profit dropped
significantly due to the recording of losses reflecting individual factors.
(Millions of yen)
Items

FY03/21Ratio

FY03/22

Ratio

Differencecompared
to previous
year

Rate ofchangeOrders(non-consolidated)

306,633-

274,663-(31,969)(10.4%)Net Sales

231,483-

258,083-

26,59911.5%

Gross profit

18,170

7.8%

9,716

3.8%

(8,454)(46.5%)

Selling, general andadministrative expenses

14,620

6.3%

15,794

6.1%

1,173

8.0%

Operating income

3,549

1.5%

(6,078)(2.4%)(9,627)ーOrdinary income

4,891

2.1%

(5,132)(2.0%)(10,023)

ー

Profit (loss) attributable toowners of parent

2,647

1.1%

(7,459)(2.9%)(10,106)ー

Copyright(C) Tokyu Construction. All rights reserved.

4

Factors Affecting Net Income (Consolidated)
Completed construction gross profit significantly decreased due toindividual factors
10,000
8,000
6,000
4,000
2,000
0
(2,000)(4,000)(6,000)(Millions of yen)

Increase incompleted
construction
Increasegross profit
in gain on
excludingsales ofindividual factors
fixed
5,678
assets, Others
FY03/22
71
418
2,647
Decline in
Loss attributablecompletedto owners of parent
construction
gross profit due-7,459to individual
FY03/21
factors 13,950
Decline in
Profit attributablereal Increase Increas
to owners of parent
e inestate in tax
Decline inincome expenses SG&A equityexpense method
182553, 1,173
investment
gain 415(8,000)

Profit increase
Copyright(C) Tokyu Construction. All rights reserved.

Profit decline
5

FY03/22 Full-Year Results (Non-Consolidated)
Although net sales rose due to an increase in completed construction sales inbuilding construction, profit dropped significantly owing to individual factors.
Real estate saw profit come under pressure due to deteriorating revenue frommajor development projects undertaken from the previous fiscal year.
(Millions of yen)
FY03/22Items

FY03/21

Results

Ratio

Differencecompared
to previous
year

Rate ofchangeCompleted construction sales
Civil engineering
Building construction

214,560
75,568138,991

241,294
56,886
184,407

100%
23.6%
76.4%

26,733(18,682)
45,415

12.5%(24.7%)
32.7%

Completed construction gross profit

Civil engineering
Building construction

17,854
6,031
11,8229,601(3,530)13,132

4.0%(6.2%)
7.1%(8,252)(9,562)
1,309(46.2%)
ー
11.1%

Real estate sales
Real estate gross profit

1,684(1,336)

1,731(1,492)(86.2%)

47
(155)

2.8%
ー

Net sales

216,245
16,517243,025
8,108

3.3%

26,780(8,408)12.4%(50.9%)

14,043

14,984

6.2%

940

6.7%

Operating income

2,474(6,875)(2.8%)(9,349)ー

Ordinary income

3,054(6,314)(2.6%)(9,368)ー

Net income

1,262(7,494)(3.1%)(8,757)ー

Gross profit

Selling, general and administrative
expenses

Copyright(C) Tokyu Construction. All rights reserved.

6

Completed construction sales・Completed construction
gross profit（ Non-Consolidated ／ Civil engineering ）Completed construction sales: Decreased due to a decline in large-scale projects at
public offices and the Tokyu Group and also due to delayed overseas construction
projects
Gross profit: Declined significantly due to revenue deterioration caused by individual
factors(Millions of yen)

Gross profit

Completed construction sales
88,07875,568

Profit margin ratio

56,886

10,964

9.3%

8.0%

8.1%

Excluding individual
factors ¥8,150 million

8,606

8,218

13,092
7,532

8,397

4,349

14,545

4,517

6,031

△6.2%
-6.2%

14,19656,489Overseas

44,01933,822

Tokyu Group companies
General private
Domestic public

FY03/20

FY03/21

FY03/20

FY03/21

FY03/22-3,530FY03/22

Copyright(C) Tokyu Construction. All rights reserved.

7Orders（ Non-Consolidated ／ Civil engineering ）The amount for the general private decreased compared with the previous fiscal
year when it received a large-scale contract.
The amount for the Tokyu Group companies increased due to the Shibuya
redevelopment project.

(Millions of yen)

Civil engineering

FY03/21

FY03/22

Differencecompared
to previous
year

Rate ofchangeDomestic public

37,09933,308(3,790)(10.2％)

Domestic
private25,184

18,987(6,196)(24.6％)

Generalprivate20,752

9,978(10,774)(51.9％)

Tokyu Group
companies

4,432

9,009

4,577

103.3％

Overseas

1,429

985

(444)

(31.1％)

63,71353,281(10,432)(16.4％)

63,713
1,429
4,432

20,752

985
9,009
9,978

37,099FY03/21

Copyright(C) Tokyu Construction. All rights reserved.

53,281
Overseas
Tokyu Group
companies
GeneralprivateDomestic
public33,308

FY03/228

Completed construction sales・Completed construction
gross profit（ Non-Consolidated ／ Building construction）
Completed construction sales: Increased about 33% year on year as major
projects received in the previous fiscal year progressed
Gross profit: Increased as a result of higher completed construction sales but
profit margin fell due to individual factors(Millions of yen)

Gross profit

Completed construction sales
206,956

138,991

184,407

Profit margin ratio

11.9%

876

8.5%

558

38,4799.0%
individual
factors ¥3,500

24,717

26,035

Excludingmillion

7.1%

150
21,101
151,695

151,271
104,328

11,822

13,132

FY03/21

FY03/22

Overseas
Tokyu Group companies

15,904

13,411

6,542

FY03/20

FY03/21

FY03/22

Copyright(C) Tokyu Construction. All rights reserved.

General private
Domestic public

FY03/209Orders（ Non-Consolidated ／ Building construction）
Orders from the general private sector, which generated several orders for major
logistics projects in the previous fiscal year, declined, while orders from the Tokyu
Group were boosted by major project orders.
The full-year amount, which turned out to be lower than the previous fiscal year,
was nevertheless higher than the year-beginning forecast of 200 billion yen.
242,920

FY03/21

FY03/22(Millions of yen)

2,063

Rate ofchange25,488Differencecompared
to previous
year

39,667

10,224

4,492

78.4％

Domestic
private235,125

216,085(19,039)(8.1％)

Generalprivate209,636

176,417(33,218)(15.8％)

25,48839,667

14,179

55.6%

2,063

※(4,927)(6,990)ー

242,920

221,382(21,537)(8.9％)

5,731

Note: The “Overseas” amount (marked with an asterisk) went negative due tochanges in contracts that had been signed prior to the previous fiscal year.

FY03/21

Building construction

Tokyu Group
companies
Overseas

Copyright(C) Tokyu Construction. All rights reserved.

Overseas
Tokyu Group
companies

5,731

Domestic public

221,382

Generalprivate209,636

Domestic
public

176,417

10,224△ 4,927

FY03/2210

Selling, general & administrative expenses （Consolidated）
Selling, general & administrative expenses increased ¥1,173 million year on
year
Expenses for R&D, digital technology, and innovation promotion increased
SG&A
expenses
15,858

SG&A expenses/Net sales

14,620(Millions of yen)

15,794

6.3%

6.1%

FY03/21

FY03/224.9%

FY03/20

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11

Balance Sheet（Consolidated）
The equity ratio was at 38.9%, a drop of 6.5 percentage points comparedwith March 31, 2021

(Millions of yen)

Liabilities andequityAssets237,811226,568

Notes receivable,accounts receivable fromcompleted construction
contracts and other+21,771

158,454

173,963
Current
assetsCash and deposits＋4,474
Costs on uncompleted
construction contracts-11,004

35,545non-current assets

31,06532,568Other nonCurrent assets

32,782Land△3,082

237,811226,568

95,046

Current
liabilities

115,004

provision for loss
on construction
contracts＋6,97328,012

Noncurrent
liabilities

29,742

Short-term loans
payable -5,075

103,509

Total net
assets

93,064As of March 31,

As of March 31,

2021

2022

2021

2022

45.4％

38.9％

Copyright(C) Tokyu Construction. All rights reserved.

shareholders’equity -9,995

Accumulatedcomprehensive
income -507
As of March 31,

As of March 31,

Equity ratio

Bills payable,
construction
accounts payable,
etc.＋9,350

12Interest-bearing debt, Equity, D/E ratio（Consolidated）
D/E ratio was at 0.24 times, almost flat year on year
Interest-bearing debt

(Millions of yen)

Equity102,963

101,215
26,557

D/E ratio

26,75492,49022,431

As of March 31,

As of March 31,

As of March 31,

2020

2021

2022

0.26
times

0.26
times

0.24
times

Copyright(C) Tokyu Construction. All rights reserved.

13

Cash flow statement（Consolidated）
Free cashflow is ¥11.7 billion as cash flows from operating activities
increased due to an increase in trade payables, decrease in advances
received on construction contracts in progress, etc.

(Millions of yen)

Items

Year ended
March 31,2021

Year ended
March 31,2022

FY03/2022 remarks
A cash increase caused by an increase intrade payables, decrease in advances
received on construction contracts inprogress, etc.

Cash flows from operating
activities

11,62912,201

Cash flows from investing activities△3,753

△476

7,875

11,725ーCash flows from financing activities△3,308△7,531

Decrease in short-term borrowings,
dividends paid, etc.

Net increase (decrease) in cash
and cash equivalents

4,624

4,474

ー

Cash and cash equivalents at
beginning of period

29,54934,173ーCash and cash equivalents at endof period

34,17338,648ーFree cash flow

Copyright(C) Tokyu Construction. All rights reserved.

Revenue from the acquisition anddisposal of fixed assets, etc.

14

Dividend Forecast
The dividend for FY03/2022 at 25 yen per share was lower than the initial forecast,due to the net loss for the fiscal year.
Based on the policy of aiming at a dividend on equity ratio (DOE) of 4.0% or higher,a dividend of 36 yen per share is planned for FY03/2023.

Dividend per share(yen)3130Forecast

36

30

26

25

10

FY03/17

FY03/18

FY03/19

FY03/20

FY03/21

FY03/22

FY03/23(forecast)※Total number of shares of treasury stock for FY03/2021: 1,965,100 shares(total value of acquisition: 999,976,175 yen)
Copyright(C) Tokyu Construction. All rights reserved.

15

Full-year Forecast for
FY03/2023

FY03/2022 Financial Results BriefingP/L Forecast（Consolidated）
Net sales is forecast to increase due to progress in construction projects
contracted in previous fiscal years.
By eliminating individual factors, gross profit is expected to improve significantly,
allowing us to estimate operating income of 4 billion yen.

(Millions of yen)

FY03/22Ratio

FY03/23(Forecast)

Ratio

Differencecompared
to previous
year

Net Sales

258,083-

289,000-

30,916

12.0%

Gross profit

9,716

3.8%

20,600

7.1%

10,883112.0%

Selling, general andadministrative expenses

15,794

6.1%

16,600

5.7%

805

5.1%

Operating income(6,078)(2.4%)

4,000

1.4%

10,078ーOrdinary income(5,132)(1.9%)

4,500

1.6%

9,632

ー

Profit (loss) attributable toowners of parent(7,459)(2.9%)

3,500

1.2%

10,959ー

Items

Copyright(C) Tokyu Construction. All rights reserved.

Rate ofchange16

P/L Forecast (Non-Consolidated)
Net sales are forecast to increase due to higher completed construction sales inbuilding construction and civil engineering.
Operating income is forecast at 2.1 billion yen due to recovery in completed
construction gross profit of civil engineering and real estate gross profit.

(Millions of yen)

Items

FY03/22

FY03/23(Forecast)Differencecompared
to previous
year

Ratio

Rate ofchangeCompleted construction sales
Civil engineering
Building construction

241,294
56,886
184,407258,400
64,400
194,000

100%
24.9%
75.1%

17,105
7,513
9,592

7.1%
13.2%
5.2%

Completed construction gross profit

9,601(3,530)13,132

17,1004,200
12,900

6.6%
6.5%
6.6%

7,498
7,730
(232)

78.1%
ー
(1.8%)

Real estate sales
Real estate gross profit

1,731(1,492)

1,600
700

ー

(131)
2,192

(7.6%)ーNet sales

Gross profit

243,0258,108

260,000
17,800ー
6.8%

18,9749,691

7.0%
119.5%

Selling, general and administrative expenses

14,984

15,700

6.0%

715

4.8%

Operating income(6,875)

2,100

0.8%

8,975

ー

Ordinary income(6,314)

2,100

0.8%

8,414

ー

Net income(7,494)

2,000

0.8%

9,494

ー

Civil engineering
Building construction

Copyright(C) Tokyu Construction. All rights reserved.

17Order Forecast（Non-Consolidated）
Civil engineering: Orders from the Tokyu Group are forecast to decrease but are expected toincrease significantly due to large-scale construction orders in the Philippines.
Building construction: Orders from domestic private are forecast to decline but are expected toachieve the level of the forecast made at the beginning of the previous fiscal year.
(Millions of yen)

Building construction

Civil engineering

FY03/22

FY03/23(forecast)Differencecompared toprevious year

Rate ofchangeDomestic public

33,30837,000

3,691

11.1%

Domestic private

18,98718,000(987)(5.2%)

General private

9,978

13,000

3,021

30.3%

Tokyu Group companies

9,009

5,000

(4,009)(44.5%)

985

20,40019,414ー

53,28175,40022,11841.5%

Domestic public

10,22418,000

7,775

76.1%

Domestic private

216,085

180,000(36,085)(16.7%)

General private

176,417160,000(16,417)(9.3%)

Tokyu Group companies

39,66720,000(19,667)(49.6%)

Overseas(4,927)

2,000

6,927

ー

221,382

200,000(21,382)(9.7%)

274,663

275,400

736

0.3%

Overseas

Total
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18

P/L・Order Forecast（Non-Consolidated／Civil engineering ）The completed construction sales is forecast to increase, as there will be progress inpublic-service and overseas projects.
Completed construction gross profit is forecast to improve as the revenue deterioration
experienced in the previous fiscal year is expected to dissipate.
(Millions of yen)Completed construction sales
・Gross Profit
8.1%

6.5%

OrdersProfit margin
ratio

Exclusive individual factors

△6.2%
-6.2%
56,886
4,349
4,517
14,19633,822

FY03/22

7,300
4,600

FY03/23(Forecast)

Copyright(C) Tokyu Construction. All rights reserved.

GeneralprivateDomestic
publicOverseas

20,400Tokyu Group
companies

5,000
13,00033,30837,000FY03/22

FY03/23

GeneralprivateDomestic
public(Forecast)

Overseas
Tokyu Group
companies

38,10053,281
985
9,009
9,978

64,40014,40075,400【Construction work carried forward】
FY03/22

FY03/23(Forecast)Amount brought forward※94,00990,404

Orders53,28175,400Completed construction sales

56,88664,400

Amount carried forward

90,404

101,404

Note*: Amount Adjusted for the Effect of AccountingStandard for Revenue Recognition, etc.

19

P/L・Order Forecast（Non-Consolidated／Building construction）
Completed construction sales is forecast to increase due to progress in the construction
projects contracted in previous fiscal years.
However, the ratio of completed construction gross profit is forecast to decrease due tohikes in equipment/material prices and intensifying market competition.
(Millions of yen)Completed construction sales
・Gross Profit
Exclusive individual factors

Profit margin
ratio

9.1%

7.1%
184,407558
26,035

Orders

6.6%

1,500

10,224△ 4,927

26,000160,900

Tokyu Group
companies
GeneralprivateDomestic
public

6,542
FY03/225,600

FY03/23(Forecast)

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39,667

176,417

194,000

Overseas

151,271

221,382

FY03/22200,000
2,000
20,000Overseas
Tokyu Group
companies

160,000

GeneralprivateDomestic
public18,000FY03/23(Forecast)【Construction work carried forward】
Overseas

FY03/22

FY03/23(Forecast)

Tokyu Group
Amount brought
forwardcompanies※235,453

272,428

General Orders
privateCompleted construction sales
Domestic
publicAmount carried forward

221,382

200,000

184,407

194,000

272,428

278,428

Note*: Amount Adjusted for the Effect of AccountingStandard for Revenue Recognition, etc.

20

Net Sales・Gross Profit Forecast（Construction Renewal）
Quotation requests are on the rise, and hence net sales and the amount of orders
received will both return to the pre-COVID-19 levels.
The gross profit ratio is forecast to be lower compared with the previous fiscal year as
market competition will intensify.
(Millions of yen)
Net Sales・Gross Profit

OrdersProfit Margin
Ratio

10.6%
9.0%

25,756
14,801

17,170FY03/22

FY03/23(Forecast)

FY03/2223,000FY03/23(Forecast)* Each of the numbers for the construction renewal business is a simple sum of numbers from Tokyu Renewal Co., Ltd. and Token
Industry Co., Ltd., subsidiaries engaged in the business, and no elimination was taken into account
Copyright(C) Tokyu Construction. All rights reserved.

21

Net Sales・Gross Profit Forecast（International・Real estate）
International: Net sales is forecast to increase due to less impact from the COVID-19 pandemic on subsidiaries
and also due to progress in newly-contracted ODA projects. The ratio of gross profit to sales is forecast to
improve, as there is no impact from the provision for loss on construction contracts in the previous fiscal year.
Real estate: Profitability is forecast to improve due to the disappearance of the effects from the development
revenue deterioration experienced in the previous fiscal year
(Millions of yen)International

Real estate
43.8%

6.0% Gross

ProfitMarginGrossProfitMargin-15.4%△15.4%

13,385Net Sales

6,245

Net Sales

FY03/22

FY03/23(Forecast)△86.2%-86.2%
1,731

1,600

FY03/22

FY03/23(Forecast)*Each of the numbers for Overseas is a simple sum of numbers from two overseas subsidiaries (TCI and GTC) and from non-consolidated overseas
business of the Company, and no elimination was taken into account.
TCI: Pt. Tokyu Construction Indonesia/GTC: Golden Tokyu Construction Co., Ltd. (Myanmar)*Numbers for the real estate business are the values of the sales and gross profit of the real estate business on the Company’s non-consolidated
statement of income.

Copyright(C) Tokyu Construction. All rights reserved.

22

Rolling of Long-Term Management Plan
We have updated the Long-Term Management Plan every year to keep strategies viable toward VISION2030.
We revised the outlook for FY03/2025 downward, but made no change to the goals set for FY03/2031.
We also revised the total amount of investments downward because we streamlined the operations of the Real
Estate Business; we will make investments for business growth according to the initial Long-Term Management
Plan.
Changes to the KPIs of the Long-Term Management Plan
(Changes to the KPIs for FY03/2025, but not to those for FY03/2031)

Management indicator

Profitability

Efficiency（※1）
SoundnessNon
financial

FY2021Results

FY2022(6.0 billion
yen)

4.0 billion yen(2.4%)

1.4%

At least 2.6%

ROIC（※2）

－%

－

－

ROE

－%

3.8%

At least 7.3%

Operating profit
Operating profit marginDebt-to-equity ratio

0.5 times or less0.24 times

FY2030（Nochange）
At least 22.0
billion yen
At least
5.0%
At least
7.0%
At least
10.0%
About 45%

Capital adequacy ratio

38.9%

Employee engagement
rating（※3）

BB

BBB

A

AAA

GHG emissions（※4)

－

10.0％
reduction

15.0％
reduction

30.0％
reduction

Changes to the Investment Plan
Total investment
over 10 years

Business strategy
investment
centered on thethree values weprovideFY2024(Newlyannounced)
At least 9.0
billion yen

About 40 to 45％

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

Copyright(C) Tokyu Construction. All rights reserved.

*2: The ROIC, an important metric for measuring businessperformance, has been used since FY03/2022, and the
ROIC of 7.0% or higher is set as a medium- to longer-termtarget for FY03/2031. We are working on the calculation of
the ROIC per Business for the purpose of managing
invested capital more efficiently. The ROIC for FY03/2031 isstated as the target using the previous calculation method.
※3 Engagement rating using Link and Motivation Inc.’s“Motivation Cloud.” Subjects are employees of the Group asa whole, including subsidiaries. Rating is divided into a totalof 11 stages, and the current “BB” is the fifth rating fromthe top after “AAA,” “AA,” “A” and “BBB ”*4: The baseline is the emissions in FY03/2019. We arescheduled to get a third-party certification to heighten thedata credibility on GHG emissions and are planning todisclose the data for FY03/2022 around July 2022.

RevisedInitialMain investment

107.0
billion yen

170.0billion yen(No change in content）

Core business(Domestic civil engineering business,
Domestic building construction business, Building
renewal business)
Strategic business(International business,
Real estate business, New business)*1: The ROIC and ROE (both efficiency metrics) for
FY03/2022 are “- (negative) %” because of the net loss forthe fiscal year.

95.0 billion
yen

160.0 billion
yen

12.0 billion
yen

10.0 billionyen Investment for technological development
 Investment for production system innovation and DX promotion
 M&A investment
 M&A investment for international business expansion
 Acquisition of real estate focusing on synergies with core business Investment in new business incubation
 Investment in concession and PPP business Investment in venture companies, venture funds, etc.
Investment for personnel system reform and human resource
development
Establishment of environment and system infrastructure forcompany-wide DX promotion

We revised the Investment
Plan in order to allow us tomake a shift to a“circulation-oriented realestate business” for the
purpose of managing
invested capital more
efficiently and also allow
us to make a selective
reduction in investments
for acquiring income
properties, trim down thescale of investments, andpostpone someinvestments. We also seek
to improve the efficiency
of capital by promoting
real estate liquidation(turning it into offbalance-sheet properties).

23

Appendix: International business (Infrastructure Project)
We received an order for a subway construction project in the Philippines.
Based on the expertise we have accumulated through railway construction in Japan and urban development along the
Tokyu railway lines, we are going to accelerate our inroads into ODA rail/traffic infrastructure projects and TOD (transitoriented) urban development initiatives, mainly in South-Eastern and Southern Asian countries.

Amount of the order received:
Scheduled construction period:
Project outline:

The Department of Transportation of the Philippines
The joint venture of Tokyu Construction, Tobishima
Corporation, and Megawide Construction Corporation
Approx. 43 billion yen (amount converted into yen,including contingency funds)
July 1, 2022 - January 20, 2028 (290 weeks)
Subway tunnel extension of approx. 3.4 kilometers,
and a set of civil engineering, construction, andutility work for two subway stations

This subway project, aimed at responding to theincreasing demand for transportation and relieving
the serious traffic congestion in the Manila
metropolitan area, is also expected to contributeto reducing air pollution and helping resolve
climate change issues.

Line plan
The existing zone
• Total extension: 6.8 km(underground zone excluding a
portion*)• Number of stations: 4• Number of rail yards: 1*East Valenzuela Station (EVS) is
located semi-underground.

Phase-1 remaining zone(including NAIA T3
extended zone)• Total extension: 20.7 km(underground zone)• Number of stations: 11

Proposed site for Ortigas Station
Copyright(C) Tokyu Construction. All rights reserved.

Signing ceremony*A yen loan is under consideration
for the project concerning theextension of the line to NAIA T3(Terminal 3 of Ninoy AquinoInternational Airport) at the requestof the Philippines.

The existing zone

Ordered by:Ordered to:Metro Manila Subway Project Contract Package 104:
Two underground Stations(Ortigas North and Ortigas
South) and Tunnels

Phase-1 remaining zone

[Project Overview]
Project name：24Appendix：Domestic building construction business（ZEB,ZEH-M）
Decarbonization

We have been working to respond to the request for ZEB (net Zero
Energy Building) and ZEH-M (net Zero Energy House Mansion).

Efforts to respond to the request for ZEB,ZEH-M
ZM2021-00097-DC

PRIME STYLEKAWASAKI
The condominium building in
Kawasaki is the first recipientof the “ZEH-M Oriented”
certification in the city of
Kawasaki. (Construction
completed in the spring of
2021)

Building 7 at Setagaya Campusof Tokyo City University
With a total floor space exceeding 10,000 m2, this
newly-constructed building is one of the largest college
buildings in Japan. The construction work was selected
as a “ZEB Demonstration Project in 2020” of the
Ministry of Economy, Trade and Industry, and thebuilding acquired the BELS (Building-housing Energy
efficiency Labeling System), the highest rating of FiveStar and also, “ZEB Ready (reduction of primary energy
consumption of 50% or more),” making the university
one of the few large-scale colleges with the certification.
(Launched in April 2022)

Copyright(C) Tokyu Construction. All rights reserved.

Head Officeof SEIKITOKYU
KOGYOThis high-rise urban officebuilding designed by us isa ZEB, still a rarity in urban
areas. The building iscertified with the BELS
Five-Star and ZEB Ready.
(Construction to becompleted in the summerof 2022.)

We renovated our Institute ofTechnology into a ZEB in 2016,
and the Institute achieved one of
the country’s highest energy
reductions of 78% in FY03/2020.
We are making use of such
expertise and experiences tooptimally meet the demand from
customers who are interested in
ZEB, ZEH-M, or other green
architecture.
We developed a tool for calculating
carbon dioxide emissions fromconstruction materials.
The original buildup calculation tool
enables us to calculate carbon dioxide
emissions and meet the request from
customers quickly yet accurately.
CO2 emissions related tothe materials of this building

CO2 emissions

25

Appendix：Domestic building construction business (Logistics
Facilities)
As one of the leading players in the construction industry, we have and will provide customers
with a solution meeting their varying and detailed needs.

“GLP Zama” for the development of GLP Japan Inc.
Total floor space: 131,762㎡
Construction in Zama City, Kanagawa Prefecture,completed in 2015

“LOGIʼQ Kyoto Kumiyama” for the developmentof TOKYU LAND CORPORATION.
Total floor space: 26,015㎡
Construction in Kumiyama Town, Kyoto Prefecture,completed in 2021

“Tokyo Rail Gate WEST” for the development ofJapan Freight Railway Company
Total floor space: 75,985㎡
Construction in Shinagawa-ku, Tokyo, completed in
2020“Landport Ageo Ⅱ“ for the development of
Nomura Real Estate Development Co., Ltd.
Total floor space: 75,240㎡
Construction in Ageo City, Saitama Prefecture, to becompleted in 2022

“DPL Chiba Yotsukaido” for a specified purpose
company for the development of the city of
Yotsukaido
Total floor space: 142,497 m2
Construction in Yotsukaido City, Chiba Prefecture, to becompleted in 2022

“ ESR Higashi Ogishima Distribution Centre “ forthe development of ESR LTD.
Total floor space: 350,698㎡
Construction in Kawasaki City, Kanagawa Prefecture,
to be completed in 2023

Copyright(C) Tokyu Construction. All rights reserved.

26

Appendix：Domestic building construction business（Innovation of construction and production systems ）Digital
We are accelerating our initiative to innovate construction and production systems toward theresolution of labor and time shortages, etc.
We are also seeking to establish, as early as possible, a new-value system that enables us toprovide digital twin*1 demos for customers.
Through collaboration with partner companies, we are gaining first-handknow-how for energy minimization and optimization based on BIM andother digital technologies.

Year/
Month

FieldsMain activities

BIM (Design)

Acquired 100% ownership of an overseas BIM facility
design company (Indochine Engineering Limited)

Collaboration
with IoT

Conducted an MR (mixed reality)-based simulation onbuilding completion inspection (with cooperation fromJAPAN ERI Co., Ltd.)

January2021

PCa
production

Established Iwase Precast Inc., a joint venturecompany for manufacturing and selling PCa*2 concrete

May

BIM
(Construction)

Introduced a BIM firm model covering design,
structure, and utility equipment to the Company’s all
pre-launch construction worksites to promote the useof a BIM across the board

September

Robotics

Joined the Construction RX Consortium

November

Maintenance& Control

Digitalized seamlessly the entire process fromconstruction to maintenance by applying a BIM model
to facility management

Estimate

Made it possible to automatically and accurately
estimate construction cost by making use of BIM(design) data available to the Company and provide
customers with quotes and changes thereto with acompetitive speedPCaproduction

Verified, jointly with Iwase Precast, a system for
automatically processing reinforcing steel in the
production of PCa members (balcony plates)

Simulation

Trial-introduced a BIM-based tool for simulatingenergy performance of buildings to popularize andpromote ZEB

Scaffolding
planning

Introduced at full scale a BIM-data-based tool forplanning scaffolding and a trench-shoring tool forunderground construction

October
2020

Automation of
estimations

Simulation of theenvironment

Automation ofprovisional
planning

Maintenance,
management
and use (FM)Tokyu
Construction’s
BIM platform
Robotics

Automation of
Pca production

April 2022

Cooperation
with IoT

Construction BIM
cooperation*1: A digital twin of a building is a virtual version of the building.
*2: Under the PCa (precast concrete) method, concrete products are made at factories
in advance before delivered to and used at construction sites. The use of the method
helps heighten productivity and reduce waste materials compared with the popularmethod under which concrete structures are cast on site.

Copyright(C) Tokyu Construction. All rights reserved.

May

27

Appendix：New business (Initiatives for Innovation 1）【Investment・Fund】
By promoting open-innovation for the value proposition of “decarbonization,” “zero waste,” and “disasterprevention and mitigation” and in the fields of “human resources” and “digital technology,” we seek totransform our construction business and create new businesses.

Industry-first Two-party Partnership CVC Fund
Together with the leading independent venture
capital firm Global Brain Corporation, TOKYUCONSTRUCTION CO., LTD., has founded“TOKYU-CONST GB Innovation Fund L.P.” This
enables the Company to compensate for its
lack of know-how, execute fast-paced
investments, and strengthen the supervisory
function for financial returns by outsourcing theprocedures involved in startup investments tothe VC firm. This also makes it possible forinternal resources to focus their efforts on
maximizing synergies with investee companies.

We invested in Agya Ventures
Fund L.P.
We invested in Agya Ventures Fund L.P., afund operated by Agya Ventures Fund(GP) LLC. By building a business
partnership with a venture company in its
seed/early stage that has not entered
Japan, we accelerate our open-innovation
initiative aimed at transforming ourconstruction business and creating new
businesses.
Brief Info. about Agya Ventures Fund L.P.
The venture capital fund makes investments
specializing in real estate and construction
techs in the U.S. and beyond toward the visionof “making Japan the center of the world in thereal estate and community-building sectors.”Company name
Representatives
Date ofestablishment
Address
Investment
destination

Copyright(C) Tokyu Construction. All rights reserved.

Agya Ventures Fund L.P.
Kunal Lunawat、Nobuhito
Iguchi
December 18, 2020
430 Park Avenue, Floor:
19, New York, NY 10022

It is a venture company in theseed/early phase whose
domains include real estateand construction techs in the
U.S. and beyond.

28

Appendix：New business（Initiatives for Innovation 2）[Developing a Structure and Culture for Innovation]
We are seeking to increase our corporate value by transforming our business portfolio through the creation of new
business.
As a means to develop a structure and culture for encouraging employees to come up with a new business proposal, we
held our first contest on business ideas in FY03/2022.

The “MOON SHOT CONTEST 2021”
Outstanding business ideas selected from 430 entries are now in the process of feasibility verification.
The presentation session of the “MOON SHOT CONTEST 2021,” a business idea contest held with the Group’s employees,
took place at Shibuya Scramble Square on Thursday, March 3. The contest received more than 430 entries, and twelve
teams for shortlisted ideas made presentations in front of executive members. Three ideas won the “Most Valuable MOON
SHOT (MVM)” award. We are going to launch the process to verify the business feasibility of the three awarded ideas.

[Businesses of 12 shortlisted
entries]
•
•
•
•
•
•

QR code for watching videos
https://youtu.be/KThgZNR8mJ8
Copyright(C) Tokyu Construction. All rights reserved.

•
•
•
•
•
•

Disaster-prevention business
Amusement business
Desert-greening businessWell-being business
Re-use business
International engineer
development business
Computer platform business
Women empowerment business
Consulting business
Traffic infrastructure businessGame business
Forestry business29

[Inquiries]
Nishida/Morita
Corporate Planning Department, Corporate Strategy Division
TEL: +81-3-5466-5008
URL: webmaster@tokyu-cnst.co.jp

Notes
Forward-looking statements such as forecasts of thecompany’s results contained in this document are based on
information available as of the date of publication andassumptions made as 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.