FY03/2023

Financial Results
Briefing
May 18, 2023

Overview of FY03/2023
Financial Results
FY03/2023 Financial Results Briefing

FY03/2023 Financial Highlights
Net sales increased due to the progress of large-scale construction projects, etc., ordered in past fiscal
years. Profits increased as factors causing the deterioration of profit/loss resulting from quality problems of
FY03/2022 were resolved.

OperatingincomeProfit (loss)
attributable to ownersof parent

billion yen

billion yen

billion yen+ 11.9 ％――OrdersNet Sales

267.7

288.8

Y oY

Y oY

（non-consolidated）

billion yen
ー 2.5 ％

External
environment

5.1
Y oY

5.2
Y oY

• In addition to government construction investment trending steadily, construction
investment increased overall with private construction investment also showing signsof recovery due to a growing desire for capital investment.
• Prices for equipment and materials kept rising, and competitive environment
remained severe.

Building
construction• We were impacted by rising prices, but maintained profit levels through originality and ingenuity at work sites.

Civil
engineering• Profits increased as factors causing the deterioration of profit/loss resulting from quality problems of
FY03/2022 were resolved.

International• Gross profit was negative due to factors such as the deterioration in profitability of some construction
projects and the recording of a provision for construction losses.

Real estate• Gross profit from real estate business, etc., increased in association with real estate sales.
Copyright(C) Tokyu Construction. All rights reserved.

1

Consolidated Financial Results
In addition to the steady progress of net sales, net income improved significantly due to the disappearanceof factors causing the deterioration of profit/loss resulting from quality problems. Dividends increased by 11
yen to 36 yen.

（Millions of yen）

FY03/22Ratio

FY03/23

Ratio

YoY

Orders(nonconsolidated)

274,663―

267,792―(2.5%)（6,870）Net Sales

258,083―

288,867―+11.9%+30,784

9,716

3.8%

21,8797.6%+125.2%+12,162

Selling, general andadministrative
expenses

15,794

6.1%

16,771

5.8%

+6.2%
+976

Operating income(6,078)(2.4%)

5,107

1.8%

―
+11,186

Ordinary income(5,132)(2.0%)

5,020

1.7%

―
+10,153

Profit (loss) attributableto owners of parent(7,459)(2.9%)

5,245

1.8%

―
+12,704

Dividend per share

25yen

―

36yen

―

＋11yenGross profit

Copyright(C) Tokyu Construction. All rights reserved.

2

Factors Affecting Net Income
Net income increased due to completed construction gross profit, increased gross profit from realestate business, gains on sales of investment securities, etc.
（Millions of yen）

＋12,704

Increase ingain on saleof investment
securities

FY03/2022

ー7,459 +7,825 +4,336
Increase inreal estate
incomeIncrease incompleted
Construction
gross profit

ー976

ー327

Increase in
SG&A
expenseDecline in
Decline in
Foreignexchange equity-method gain on sales
investment of fixed assets
profit/loss
gain

ー586

ー418

+2,788+265

ー202

Decline in
Otherstax expenses

FY03/2023

5,245

Profit attributableto owners of parent

・ Increases in labor costs and expenses
・ We recorded R&D, digital and innovation costs
Loss attributableto owners of parent

FY0 3 / 2 0 2 2

FY0 3 / 2 0 2 315,794

16,771
Copyright(C) Tokyu Construction. All rights reserved.

3

Non-consolidated Financial Results
Completed construction sales increased due to the steady progress of projects. Completed construction gross profit
increased as factors that caused the deterioration of profit/loss in the previous fiscal year in civil engineeringbusiness were resolved. Gross profit from real estate business, etc., increased in association with real estate sales.
FY03/2022（Millions of yen）

FY03/2023

Rate of
ChangeResults

243,025

261,529

100％

+7.6%

+18,503

241,294

252,377―+4.6%+11,083

184,407

192,052

73.4％

+4.1%

+7,644

Civ il e n g ineering

56,88660,325

23.1％

+6.0%

+3,438

Real estate sales

1,731
8,108

9,151
20,063

3.5％（Profit rate）7.7％+428.5%+147.4%+7,419+11,9549,601

17,2296.8%+79.4%+7,627

13,132

13,778

7.2％

+4.9%

+646

(3,530)

3,450

5.7％

―

+6,981(1,492)

2,833

31.0％

―

+4,326

14,984

15,665

6.0％

+4.5%

+681

Operating income(6,875)

4,398

1.7％

―

+11,273

Ordinar y income(6,314)

4,426

1.7％

―

+10,740

Net income(7,494)

3,825

1.5％

―

+11,320

Net Sales
Completed
construction sales
Bu ild ing
c o n s t r u c tio n

Gross profit

Co m p le t e d
c o n s t r u c tio n gr o s s
p r o f it
Bu ild ing
c o n s t r u c tio n
Civ il e n g ineering

R ea l e s t a te gr o s s
p r o f it
S e l ling, g e n e ral anda d minist rat ive
e x p e nse s

Ratio

YoY

Results

Copyright(C) Tokyu Construction. All rights reserved.

4

Non-Consolidated ／ Building construction（Completed
construction sales・Completed construction gross profit）
Completed construction sales increased due to the steady progress of projects, including large-scaleconstruction. Gross profit was impacted by price increases, but increased because completed construction
sales increased.

Completed construction sales（Millions of yen）

（Millions of yen）

＋4.1%

Overseas

Profit margin ratio

Tokyu group
General private
Domestic public

184,407

192,052
558

Gross profit

897

20,012

26,03516,000 Profit margin ratio（Excluding
individual factor)
13,132
14,00012,000138,991150

12.0%

13,778
10.0%

11,822
8.5%

9.0%
7.1%

10,00021,101＋0.1pt7.2%

8,000
151,271

165,936

8.0%

6.0%

6,000
4.0%

104,328

4,000
2.0%

2,000
13,411

6,542

5,205

FY03/2021

FY03/2022

FY03/2023

00.0%

FY03/2021

FY03/2022

FY03/2023
Copyright(C) Tokyu Construction. All rights reserved.

5Non-Consolidated ／ Building construction（Orders）
Although we accumulated orders, mainly for large projects, orders decreased due to the lag of someprojects, etc.

Orders（Millions of yen）
Overseas
Tokyu
group

242,920
2,063

GeneralprivateMain orders△17.1%

221,382

25,488

183,550

39,667

Domestic
public343
10,652

209,636
176,417

5,731

10,224

FY03/2021

FY03/2022(4,927)

162,8239,730

FY03/2023

Ordered by

Name of construction

Place ofconstruction

Urban Redevelopment
Association for the East
Area of Kakoi-Cho

Facility and building construction, type1 urban redevelopment project in theeast area of Kakoi-cho

TokyoMaruha Nichiro
Corporation

Expansion construction of Kawasaki
No. 1 Logistics Center (tentativename), Maruha Nichiro Corporation

Kanagawa
Prefecture

TOHTO CO-OP

New construction of Soka Cool Set
Center, TOHTO CO-OP

SaitamaPrefecture

NTT Urban
Development
Corporation

New construction of Nihonbashi 2Chome, Chuo-ku (tentative name)Tokyo

Supreme Court

Construction work of Architecture for a
new courthouse of Tsu District Court,
Tsu Family Court and Tsu Summary
Court

Mie
Prefecture

Ministry of Land,
Infrastructure,
Transport and Tourism

Construction work of the Koishikawa
National government building (22)(tentative name)Tokyo

Kyushu Railway
Company

New construction of Ureshino hot
spring accommodation facilities(tentative name)

Saga
Prefecture

Aoyama Gakuin

Aoyama Gakuin Kindergarten
rebuilding projectTokyo

TOKYU CORPORATION

Renewal construction of Komazawadaigaku Station on the Den-en-toshi
Line (Building Works No. 4)Tokyo

Copyright(C) Tokyu Construction. All rights reserved.

6

Non-Consolidated ／ Civil engineering（Completed
construction sales・Completed construction gross profit）
Completed construction sales increased due to projects progressing steadily, centered on government
construction. In addition to the increase in completed construction sales, gross profit improved
significantly because factors causing the deterioration of profit/loss due to quality problems disappeared.

Completed construction sales

Gross profit（Millions of yen）

（Millions of yen）
Overseas

Profit margin ratio

Tokyu
group
General 75,569
privateDomesti 8,606
c public
8,397

14,545

Profit margin ratio（Excluding
individual factor)

8,000

＋6.0%

6,031
6,000

56,886
4,349
4,517
14,19660,325
4,521
5,036

8.0%

12.0%

＋11.9pt

10.0%

8.1%

8.0%

3,450

4,000

6.0%

5.7%
4.0%

13,686

2,000

2.0%

0.0%

0
44,01933,822

FY03/2021

FY03/2022

FY03/2023

37,080△4.0%(2,000)(6.2%)(4,000)FY03/2021

FY03/2022△2.0%

FY03/2023(3,530)

△6.0%

△8.0%

Copyright(C) Tokyu Construction. All rights reserved.

7

Non-Consolidated ／ Civil engineering（Orders）
Orders increased significantly due to the acquisition of overseas ODA projects (such as subway constructionin the Philippines) using our track record and know-how in railway construction. and orders for domestic
tunnel construction.

OrdersMain orders（Millions of yen）

+58.1%

Overseas

Ordered by

Name of construction

Department ofTransportation,
Republic of thePhilippines

Place ofconstruction

Metro Manila Subway Project (Phase
1) Contract Package 104, Republic of
the Philippines

ManilaDhaka Mass Transit
Company Limited

Dhaka MRT Line 1 Contract Package 01

Dhaka

4,812

Ministry of Land,
Infrastructure,
Transport and Tourism

Construction work of the tunnel of No.
1 in Arida Kainan Road

Wakayama
Prefecture

19,328

Ministry of Land,
Infrastructure,
Transport and Tourism

Construction work of the new Mt.
Tozuka tunnel of No. 57 in Kumamoto,
Ministry of Land, Infrastructure,
Transport and Tourism

Kumamoto
Prefecture

Kanagawa Prefecture

Improvement construction of Sawai
River spillway tunnel of phase No. 204

Kanagawa
Prefecture

Tokyo

Phase III sludge transportation pipe
work between Ochiai Water
Reclamation Center and Miyagi Water
Reclamation Center

Tokyo

Tokyo

Construction of Sumida River trunk
manholeTokyo

TOKYU CORPORATION

Reinforcement construction of
integrated structure with Metropolitan
Expressway Route 3 and Tokyu Denen-toshi Line
(Civil Works No. 4)

TokyoTokyu group
General private

84,242

Domestic public

63,713
1,429
4,432

22,45653,281
985

20,752

9,009
9,978

37,099FY03/2021

33,308

FY03/2022

37,644

FY03/2023

Copyright(C) Tokyu Construction. All rights reserved.

Consolidated Balance Sheets
The equity ratio was at 38.2%, a drop of 0.7 percentage points compared with March 31,
2022. D/E ratio was at 0.23 times, almost flat year on year.

As of March
31, 2022

As of March
31, 2023

Current assets

173,963

187,892+13,928

Non-current
assetsInvestments andother assets

31,06528,700(2,365)32,782

32,571(210)

Total assets

237,811249,164+11,352

Liabilities

115,004

144,743+29,738

Non-current
liabilities

29,742

8,400(21,341)

Total net assets

93,06496,020+2,956

Total liabilities
and net assets

237,811249,164+11,352

Equity ratio(%)

38.9

38.2

(0.7pt)Interest-bearing
debt
D/E ratio（times）

22,431

21,970

(460)

0.24

0.23

(0.01)（Millions of yen）

YoY

Increase/decrease factors− Current assets• Cash and deposits＋20,066• Real estate for sale

－3,780− Non-current assets• Total property, plant andequipment

ー2,455− Liabilities• Short-term borrowings• Electronically recorded
obligations - operating• Provision for loss on
construction contracts• Provision for warranties
for completed
construction+19,986＋7,043＋1,564＋1,377− Non-current liabilities• Long-term borrowings

ー20,446− Total net assets• Retained earnings• Total accumulated othercomprehensive income＋2,802

Copyright(C) Tokyu Construction. All rights reserved.

ー311

9

Consolidated Statements of Cash Flows
Free cash flow is ¥22.7 billion as cash flows from operating activities increased due to adecrease in trade payables, etc.

Year ended
March 31, 2022

Year ended
March 31, 2023

Cash flows from operating
activities

12,201

20,392

Cash increased due to a decrease in notes andaccounts receivable, etc.

Cash flows from investing
activities

(476)

2,398

Cash increased due to proceeds from sales ofinvestment securities, etc.

Free cash flow

11,725

22,790―Cash flows from financing
activities(7,531)(2,762)

Cash decreased due to the payment of dividends
and repayment of long-term borrowings, etc.

Net increase (decrease) incash and cash equivalents

4,474

20,066―

Cash and cash equivalents at
beginning of period

34,17338,648―Cash and cash equivalents at
end of period

38,64858,714―（Millions of yen）

FY03/2023 remarks

Copyright(C) Tokyu Construction. All rights reserved.

10Full-year Forecast for
FY03/2024

FY03/2023 Financial Results BriefingConsolidated Financial Results Forecast
Orders and net sales will progress steadily. Although selling, general and administrative expenses will
increase due to growth investments, etc., operating income is expected to increase by 3.8%.
We anticipate a dividend of 36 yen.

（Millions of yen）

FY03/2023

Ratio

FY03/2024(Forecast)

Ratio

YoY

Orders(nonconsolidated)

267,792―

276,000―+3.1%+8,207

Net Sales

288,867―

307,000―+6.3%+18,132

Gross profit

21,8797.6%

23,300

7.6%+6.5%+1,420

Selling, general andadministrative
expenses

16,771

5.8%

18,000

5.9%

+7.3%
1,228

Operating income

5,107

1.8%

5,300

1.7%

+3.8%
+192

Ordinary income

5,020

1.7%

6,200

2.0%

+23.5%+1,179Profit (loss) attributableto owners of parent

5,245

1.8%

4,000

1.3%

(23.7%)（1,245）

Dividend per share

36円

―

36円

―

－

Copyright(C) Tokyu Construction. All rights reserved.

11Non-consolidated Financial Results Forecast
Completed construction sales increased due to the steady progress of projects. Profit in civil engineering
will increase as profit margins improve. Revenue and profits in real estate business will decrease because
there are no plans for real estate sales this fiscal year.
FY03/2023

FY03/2024

Results

Net Sales

261,529

275,000

100％

+5.2%

+13,470

252,377

274,000―+8.6%+21,622

192,052

196,000

71.3％

+2.1%

+3,947

Civ il engineering

60,32578,00028.4％+29.3%+17,674

Real estate sales

9,151

1,000

0.3％

(89.1%)(8,151)

20,063

20,100（Profit rate）7.3％

+0.2%

+36

17,22919,6007.2%+13.8%+2,37013,77813,7007.0％(0.6%)(78)

Civ il engineering

3,450

5,900

7.6％

+71.0%+2,449R ea l es t a te gr o s s p r o f it

2,833

500

50.0％

(82.4%)(2,333)

15,665

16,800

6.1％

+7.2%

+1,134

Operating income

4,398

3,300

1.2％

(25.0%)(1,098)

Ordinar y income

4,426

3,500

1.3％

(20.9%)(926)

Net income

3,825

2,300

0.8％

(39.9%)(1,525)

Bu ild ing
c o n s t r u c tio n

Gross profit
Co m p let ed
c o n s t r u c tio n gr o s s
p r o f it
Bu ild ing
c o n s t r u c tio n

S e l ling, g e n e ral anda d minist rat ive e x p e nse s

Ratio

YoY

（Millions of yen）

Completed
construction sales

Forecast

Rate of
ChangeCopyright(C) Tokyu Construction. All rights reserved.

12Non-Consolidated Order Forecast
In building construction, we will aim to achieve a level of orders in excess of 200 billion yen by focusing on receiving certain
orders for projects undertaken and projects where we can secure appropriate profits. In civil engineering, there will be areactionary decrease from the previous fiscal year’s large overseas projects, but we will aim to acquire orders centered on
domestic government projects.

（Millions of yen）

FY03/2023

FY03/2024

Results

Forecast

Rate of
ChangeYoY

Domestic public

9,730

21,000+115.8%+11,269

Domestic private

173,476

189,000

8.9%+15,523

162,823

159,000(2.3%)(3,823)

10,65230,000+181.6%+19,347

343―(100.0%)(343)

Building construction

183,550

210,000+14.4%+26,449

Domestic public

37,64440,000+6.3%+2,355

Domestic private

24,141

19,000(21.3%)(5,141)

19,32814,000(27.6%)(5,328)

4,812

5,000

+3.9%

+187

22,4567,000(68.8%)(15,456)

84,24266,000(21.7%)(18,242)

267,792

276,000

3.1%

8,207

General private
Tokyu Group
Overseas

General private
Tokyu Group
Overseas
Civil engineering
Total

Copyright(C) Tokyu Construction. All rights reserved.

13

Non-consolidated Financial Results Forecast／
Building construction

Completed construction sales will increase slightly with the expected progress of works carried over at the
beginning of the fiscal year. The gross profit margin of completed construction will be flat partly due to rising
prices.
Completed construction sales

Construction work

/Gross Profit

carried forward

400,000（Millionsof yen）

10.0%

ー0.2ptOverseas350,000
Tokyu group300,000
General private

192,052
20,0125.0%

196,000
897

29,300800

150,000

100,000

0.0%

165,936

5,205
FY03/2023

Amount brought
forward272,428

263,926

Orders183,550

210,000

Completed
construction sales

192,052

196,000

Amount carriedforward263,926

277,926

157,600

50,0000FY03/2024
Forecast（Millions of yen）

＋2.1%

250,000
Domestic
publicProfit margin ratio
200,000

7.0%

7.2%

FY03/2023

8,300
FY03/2024(Forecast)-5.0%

Copyright(C) Tokyu Construction. All rights reserved.

14

Non-consolidated Financial Results Forecast／
Civil engineering

Large-scale construction carried over from past fiscal years will progress and completed construction sales
will increase. In addition to the increase in completed construction sales, we expect increased profits byincreasing profit margins through the originality and ingenuity of continuous construction management.
Completed construction sales

Construction work

/Gross Profit

carried forward

140,000（Millionsof yen）

10.0%+1.9ptOverseas120,000

40,00020,0000

114,321

Orders84,24266,000Completed
construction sales

60,32578,000

Amount carriedforward114,321102,321

5.0%

5.7%

＋29.3%

60,325
4,521
5,036
13,686

Amount brought
forward78,00012,5000.0%

8,000
16,700-5.0%

37,080FY03/2023

軸ラベル

60,00090,404（Millions of yen）

Domestic public
80,000
Profit margin ratio

FY03/2024
Forecast

7.6%

Tokyu group100,000
GeneralprivateFY03/2023

40,800FY03/2024(Forecast)-10.0%

Copyright(C) Tokyu Construction. All rights reserved.

15

Forecast／ Construction Renewal
The number of business inquiries will tend to increase, and both net sales and orders will recover topre-COVID-19 levels.

External environment• Desire for investment is strong, due partly to the recovery of inbound arrivals
and a reaction to the suppression of investment during the COVID-19 pandemic.

Future policy• We will aim for certain orders for targeted projects and to improve profitability.
16.0%

80,00014.0%

Orders
70,00012.0%

60,00010.0%

50,0008.0%

40,0006.0%

30,00020,000

4.0%

20,00010,0002.0%

10,0000

0.0%

080,000Net
70,000Sales /Gross Profit
ー1.7pt（Millionsof yen）
60,000Net Sales

50,000Gross Profit

10.0%

11.7%

（Millions of yen）

Margin＋6.9%

40,00030,00024,300FY03/2023

25,980FY03/2024(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.

＋8.3%

23,083

FY03/2023

25,000FY03/2024(Forecast)
Copyright(C) Tokyu Construction. All rights reserved.

16

Forecast／ International ・ Real estate
International

Real estate

Revenue and profits will increase on the back of progress inconstruction on large-scale projects ordered in the previous
fiscal year.
External
environment

Futurepolicy•Needs for infrastructure development in Southeast and South
Asia will increase.

•

Using our track record in railway and road-related business in Japan asa strength, we will work on transportation infrastructure-related ODA
projects centered on Southeast and South Asia.

•

We will focus on TOD-type*1 community development in collaboration
with partner companies in various countries.

＋ 32.2pt

Gross Profit
50,000Margin45,00040,00030,00020,00015,00010,000•We will continuously promote the replacement of assets in the Tokyo
metropolitan area, where we have our strengths.

14,000△50.0%

12,000△80.0%△110.0%FY03/2024(Forecast)＋ 19.0pt

Margin△20.0%△140.0%9,680

FY03/2023

We will use our strengths in general construction to promote
environmental real estate initiatives and in-house “TQ” branding toincrease value.

Gross Profit
16,000

5,000
0

•

10.0%

20,24625,000

Environmental real estate needs will expand.

Net Sales＋109.2%35,000Futurepolicy•（Millions of yen）

8.8%

ー23.4%

External
environment

Net Sales /Gross Profit ※3

Net Sales /Gross Profit ※2
Net Sales

We will work on the acquisition of new income-yielding
properties using the profits from sales in the previous fiscal year.
We will promote cyclical real estate business by adding value toenvironmental real estate.

10,0008,000△200.0%0

40.0%△20.0%△50.0%△80.0%

ー82.4%△110.0%1,000
FY03/2023

70.0%
10.0%

9,151

4,000
2,000

50.0%

31.0%

6,000

△170.0%（Millions of yen）

FY03/2024(Forecast)△140.0%△170.0%△200.0%*1 Abbreviation of “Transit Oriented Development.” Urban development aimed at a society based on public transportation that does not rely on cars.
※2 Each of the numbers for Overseas is a simple sum of numbers from overseas subsidiaries and from non-consolidated overseas business of the Company, and no elimination was taken into account.
（Overseas subsidiaries ：TokyuConstructionIndonesia,GoldenTokyuConstruction,IndochineGroup,TokyuPacificConstruction）※3 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.

17

Shareholder returns
We plan to pay an annual dividend of 36 yen per share. While recognizing the importance of capitalefficiency, we will continue our basic policy of paying dividends with a dividend on equity ratio (DOE) of
at least 4.0%, emphasizing stable and continuous profit returns to shareholders.

Dividend per share
（yen）

36
Year-end

25

10
FY03/2021 ※[Reference]
ROE and payout ratio（yen）

FY03/2022

36

18Interim18

FY03/2023

FY03/2024(Forecast)

A “DOE of at least 4.0%” is set in the basic policy of paying dividends, as a balance between themedium to long-term results targets of an ROE of at least 10% and a consolidated payout ratio ofat least 40%.
94.6%

72.0%

ROE
Payout ratio

40.1%

2.6%
FY03/2021 ※1-7.6%
FY03/2022 *2※ 1 Total number of shares of treasury stock for FY03/2021: 1,965,100 shares(total value of acquisition: 999,976,175 yen)
※ 2 Dividend payout ratio for the FY03/2022 is not shown due to the net loss for the year.

5.6%
FY03/2023

4.2%
FY03/2024(Forecast)
Copyright(C) Tokyu Construction. All rights reserved.

18

Progress of Long-Term
Management Plan
FY03/2023 Financial Results BriefingMaterial issues
The starting point of the long-term management plan is the material issues identified from two axes:
importance to stakeholders; and the impact on the Company’s corporate value. We will pursue both
the resolution of social issues and sustainable growth.

ClimatechangeIn association with the government’s policies
and regulations for the realization of adecarbonized society, higher taxes, higher raw
materials costs and the intensification ofcompetition in the development of related
technologies are expected.
There will be increased business opportunities
due to the reduction of the environmental
impact of buildings, renewable energy business,
natural disaster countermeasures and increased
demand for longer infrastructure life.

Structuralchanges in theconstructionindustry

Decreases in engineers and skilled workers,
labor shortages at construction sites caused
by work hour regulations, and a lack oftechnology transmission are concerns. The
structure of the industry has changed
significantly due to the soaring prices ofmaterials and equipment, shortages of goods,
and human rights risks in supply chains, etc.
The transformation to business models using
digital technology and open innovation isaccelerating.

Strategic
business

In addition to advanced risk management under
uncertain international circumstances, it isessential to secure and develop humanresources and foster an organizational culture,
which create innovation.
We will realize business growth by capturing
new value-providing opportunities through DX,
areas surrounding construction, and thedevelopment of overseas emerging countries.

Town planning

The timely provision of value is required for thediversification of building needs in association
with changing lifestyle and workstyle values.
Using unique know-how cultivated in areas
along the Shibuya and Tokyu Line, we willcontribute to the development of high-valueadded, novel community building, including
smart and compact cities.

Human capital

Increased investment costs in the securingof “human resources,” which are sources ofcompetitive advantage, training andreskilling, respect for human rights andhealth management, and the risk of their
non-realization.
We will promote the creation of an environment
and the fostering of an organizational culture
within which diverse human resources, including
young people, can perform and take onchallenges, and increase the engagement of
employees, which will increase corporate value.

Corporate
GovernanceLack of development of our next management
candidates (core personnel), and the lack ofthorough risk management and compliance aremajor management risks.
We will improve the transparency of decisionmaking and our adaptability to change bystrengthening the governance structure, andestablish the foundations for stable growth.

※ We review risks and opportunities every year based on changes in the business environment, and we have recently reconsidered “diversity and inclusion” as the broader concept of “humancapital,” while placing greater emphasis on the decrease in engineers and the reduction of working hours. Apart from that, some notation has been revised.
Copyright(C) Tokyu Construction. All rights reserved.

19

Long-Term Management Plan “To zero, from zero.”
Based on changes in the business environment, we will further promote the strengthening of problemsolving skills, namely the overhaul of QCDSE and sales capabilities, and the restructuring of our earning
power, and aim to return to a growth trajectory. The KPIs for fiscal year 2030 are unchanged.
Business strategy

Three deliverable values

11disasterprevention

Zero waste

Decarbonization

2

Establishment of the Tokyu
Construction brand through thebuilding of competitive
advantages in human resourcesand digital technology and theprovision of three values

3Competitive advantage
humanresources

Profitability
Efficiency
SoundnessNon
financial

44

Digitaltechnology

KPI

Tokyu Construction
brand

5

2

3

Core business

Strengthening of problemsolving skills, construction andproduction systeminnovation, and growththrough alliances and M&A

Human resource andorganizational strategies

5Strategic business

The creation of new growth
opportunities throughinvestments in strategic
business and synergies withcore business

Financial and capital
strategies

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

Creation of results and acceleration of
innovation through the strengtheningof human resources and reform of theorganization and corporate culture

03/FY2023
Results

03/FY2024

03/FY2026

03/FY2031

5.1 billion yen

5.3 billion yen

At least 11.0 billion yen

At least 22.0 billion yen

Operating profit margin

1.8%

1.7%

At least 3.0%

At least 5.0%

ROIC（※1）

3.0%

―

―

At least 7.0%

ROE

5.6%

4.2％

At least 7.0%

At least 10.0%

Operating profit

Debt-to-equity ratio

0.23times

0.5 times or less

0.5 times or less

Capital adequacy ratio

38.2%

About 40%

About 45%

Employee engagement
rating（※2）

BB

A

A

AAA

GHG emissions（※3)―

12.5% reduction

17.5% reduction

30.0％ reduction※1 The ROIC of 7.0% or higher is set as a medium- to longer-term target for FY03/2031.
※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 “BB” is the fifth rating from the top after “AAA,” “AA,” “A” and “BBB ”※3 The baseline is the emissions in FY03/2019. We are scheduled to get a third-party certification to heighten the data credibility on GHG emissions and are planning to disclose the data for FY03/2023 around July 2023.。

Copyright(C) Tokyu Construction. All rights reserved.

20

TOPICS Decarbonization
By responding through business to climate change, which is listed in the material issues, we will aim
to contribute to the resolution of global issues and acquire business growth and profits.

ExamplesGeneral release of approximate
ZEB and energy-saving simulation
tools

Calculation of all CO2 emissions
related to buildings

We will release a tool that allows anybody to
calculate environmental impact reduction
effects and required costs with simple
information entries, and provide
opportunities for customers to work on Net
Zero Energy Building (ZEB) initiatives.

We will provide CO2 emissions related tobuildings (by Scope) to customers
summarized on one sheet. We will respondto needs for decarbonization in building
construction and the grasping of emissions
throughout the supply chain.

 Simulation results screen

 Image of calculation results

Significant reduction of CO2
emissions using low-carbon
concrete
We reduced CO2 emissions by 46.5% using“CELBIC” low-carbon concrete in the new
construction of the Ginza 5-chome Project(building name: CURA GINZA). This was oneof the best results in the domestic industry interms of the rate of reduction derived fromconcrete materials.

 CURA GINZA（External appearance）（Photo©Eaton Real Estate Co.Ltd） Laying of CELBIC

Copyright(C) Tokyu Construction. All rights reserved.

21

TOPICS Digital technology
We will realize the transformation of our construction and production systems, and the creation of new value
provision opportunities through the strengthening of digital technology, the source of competitive advantage
in the long-term management plan.

To p i c s
Acquisition of advanced construction technology andtechnology review certification
First application of PPCa (Partial PreCast) box culvert*
This is a construction method for large box culverts in which the sidewalls and top plate were partially replaced with precast members. This
was applied to underpass construction around Shibuya Station on R2
Route 246 to realize the minimization of lane restrictions and smooth
construction in narrow spaces Overview of a PPCa box culvert

We received the 3rd Civil Engineering Prize at the Japan
Federation of Construction Contractors awards.
Together with Tokyo Metro Co., Ltd., the Company received the award inrecognition of its work in the relocation of Shibuya Station on the Ginza
Line, which was completed within a limited time while continuing railway
operations using BIM/CIM and VR technology.
 3D model prepared during planning

Precast top
plate member

Precast wall
plate member
Cast-in-place concrete(base)

 Construction study meeting using VR

 Construction site after material input※ “PPCa box culvert” is a registered trademark of Asahi Concrete Works Co., Ltd., and Tokyu Construction Co.,
Ltd. (registered trademark No. 6453626).

 Awards ceremony (November 2022)

Copyright(C) Tokyu Construction. All rights reserved.

22

TOPICS Initiatives for open innovation
We are investing positively in domestic and overseas venture companies that contribute to the expansion of the provision of
three values and the source of competitive advantage, which are established in the long-term management plan. We pursue
growth opportunities by strengthening problem-solving skills and creating new businesses that demonstrate synergies.

Main investments
Automatic rebar assembly

Development of AR solutions

Toggle Robotics

Cellid, Inc.

Automation of rebar assembly using robots andsoftware. This technology enables the automatic
generation of rebar assembly diagrams, as well as
automatic welding, assembly and quality
confirmation, contributing to greater work
efficiency and labor savings at construction sites.

The Company developed advanced hardware
technology and visual SLAM software (application)internally that realizes light, high-performance AR
glasses. This is contributing to construction DX
with AR solutions.

Maintenance and management technology forsolar power generation facilities

GIRASOL ENERGY INC.

The Company has developed an AI/IoT platformthat maintains and manages solar power
generation facilities panel-by-panel using original
power line communication technology. By
monitoring the state of operation of power
generation facilities from a remote location on thecloud, it is possible to realize greater systemefficiency and the maximization of power
generation.

（Head office: Tokyo）（Head office: New York）（Head office: Tokyo）

Provision of green power solutions

Clean Energy Connect, Inc.
The Company has developed and owns small andmedium-sized solar power plants, administers
green power, and develops “off-site corporate PPA”
services that provide long-term, stable power andenvironmental value to companies.

（Head office: Tokyo）
Copyright(C) Tokyu Construction. All rights reserved.

23

TOPICS Real estate businessWe are targeting a customer base that is highly sensitive to and interested in the environmental area, centered on medium andsmall-sized properties in the five central wards of Tokyo and along the Tokyu Line, where we have our strengths.
We are expanding real estate business through real estate development and real estate value-added business that makes
maximum use of the synergies of a general construction company.

TopicsWe promote liquidity and cyclical real estatebusiness while increasing added value and securing
stable earnings.
The barriers in the construction and real estate value chain will disappear
due to the expansion of BIM in building business so we will aim for theprovision of value throughout the supply chain, not just building.

3 pillars
1: “TQ,” an environmentallyfriendly brandWe launched our own “TQ” rental brand in
2022. We are promoting the acquisition,
development and certification ofenvironmentally friendly properties.

The “TQ” rental real estate brandWe launched the “TQ” rental real estate brand and will use thecharacteristics of a general construction company to develop a rental realestate brand that provides (1) comfort, functionality and design; (2)peace of mind and trust; and (3) environmental friendliness under theconcept of “TOP QUALITY: Innovations in every space.” The Company started a plan for the first “TQ” rental condominium(developed internally) in Kyoto.
We will aim to acquire ZEH-M Oriented, an environmental certification,and 5-star BELS certification.

2: Renovation business
We renovate existing properties such as
old buildings to regenerate them as highvalue-added properties.

3: Real estate rental anddevelopment businessWe acquire and manage income-producing
properties. Investment and developmentwith a view to future community
development in Shibuya, etc. We also have
many achievements in joint ventures.

 Property acquired in the Shibuya area.
We added value to an office building with a high degree of
freedom by renovating a building more than 30 years old. “TQ
Yoyogi Park (tentative name)”
Copyright(C) Tokyu Construction. All rights reserved.

24

TOPICS Strengthening international business
Using the strengths we have cultivated in domestic railway construction and community development along the Tokyu Line, wewill work on railway and transportation infrastructure and TOD (Transit Oriented Development) through ODA, centered on
Southeast and South Asia. We have received orders for ODA construction projects in various countries to expand business.

Bangladesh

Philippines

Indonesia

We received the order for the firstsubway construction in the country

We received the order for the firstsubway construction in the country

We received an order to rebuild abridgeWe received an order for the construction of the
Dhaka MRT Line 1, the first subway line in
Bangladesh, through ODA. This will contribute toeconomic and social development andimprovement of the urban environment byalleviating chronic traffic congestion and reducing
air pollution.

We received an order worth about 43 billion yen*for construction of the first subway in thePhilippines as an infrastructure project. This willcontribute to the handling of transportation
demand, the alleviation of traffic congestion, andclimate change measures.

We received an order to rebuild the Palu 4 Bridges,
which collapsed due to a major earthquake in
September 2018. This will contribute to therestoration of logistics and the toughening of theroad network.

 Contract signing ceremony (November 2022)* Converted to yen and including reserve funds

 Contract signing ceremony (May 2022)

 Contract signing ceremony (July 2022)

 Image of completion

Copyright(C) Tokyu Construction. All rights reserved.

25

Strengths and Businessmodel
FY03/2023 Financial Results Briefing

Business model and business overview
We take on construction work en masse from government agencies and private companies, and manage construction work
efficiently in cooperation with numerous suppliers. We realize the maximization of added value by implementing integrated
construction management of everything from quality and costs to safety and the environment.

Business development based on strong relationships of trust

Overseas(ODA/private)

Quality

Cost

Delivery

SafetyEnvironment

Cooperatingcompanies

Specialist construction
companies (subcontractors) andlocal general construction
companies

Engagement

Government
offices

OrdersRailway operators andprivate companies

Integrated and consistentconstruction management

Collaboration

We want to beaccompanied by areliable construction
company with a trackrecord.

High value-addedbuildings and good
infrastructure are
required.

Sharingof needs

Customers

Suppliers of materials andconstruction equipment

Built-to-orderconstruction

Buildingof safe andsecure social
infrastructure

Relationships of trust
Business overview

Core business
Building
Construction

Construction of commercial facilities, hotels,
offices, factories, and distribution centers

Civil
Engineering

Railways, roads, tunnels, bridges, andother construction

Construction
renewal

Building renewal work

Strategic business

SynergyRealestateInternational
New
Business

Real estate rental business
Equivalent exchange business, etc
Railways and roads, construction of high risebuildings and factories, etc
PPP / Concession Business such as airports,
water and sewage systems
Copyright(C) Tokyu Construction. All rights reserved.

26

Efforts to Prevent Recurrence of Quality Problems,
Improve Construction Quality, and Restore TrustIn fiscal year 2021, the 3 points below were discovered

The response

Temporary structures left in civilengineering works in past fiscal
years

3

Defects in building work in pastfiscal years

Investigation of the cause and prevention of reoccurrence

2021
July 26

Defects in the tips offoundation piles inconstruction work
( 1 Official announcement)

November 8

Revision of results forecast( 1 - 3 Recording of losses
and expenses)

November 18

2

Defects in the tips offoundation piles inconstruction work
( 1 Follow-up report)

2022
May 19Disclosure of initiatives for theprevention of reoccurrence

Subsequently► Continuation of measures
for the prevention ofreoccurrence► Deepening of reform of theorganizational culture

Cause

1

Defects in the tips of foundation
piles and the falsification of data
during station improvement work

Prevention of reoccurrence

Overview of
the quality
problems

In response to quality problems, we investigated the causes and prevented any reoccurrence thoroughly. Recognizing thatsystemic and cultural issues existed in the foundations of these problems, the Company as a whole has been working together
to reform its organizational culture and improve the quality of construction.

• Lack of awareness and managementof special construction conditions• Dilution of quality awareness andsense of ethics

Improvement ofconstruction quality
management system(Civil Engineering)

Information sharing &Improvement of training
programs for worksite
engineers• Gaps in intergenerational communication in
the field• Lack of on-site support by Head Office andbranches• New establishment of the quality control division of Head Office• Building of a human and technical support system for the field• Introduction of preliminary reporting by e-mail of accidents andproblems directly linked to management• Expansion of the internal reporting system• Review of construction management education and training
programs

Accountability
clarification• Voluntary return of remuneration by Directors and Executive Officers• Of remuneration for directors, the portion of variable compensation,
which is linked to short-term performance, has not been paid tothem in FY03/2023

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

Copyright(C) Tokyu Construction. All rights reserved.

27

Strengths of Tokyu Construction Group
Since its founding, the Company has accumulated know-how and human resource capabilities by continuing to takeon the challenge of community development conscious of consumers. By deepening and fusing these using digitaltechnology, we have established unique “technology, know-how, and teamwork that keep urban functions running.”

Strengths of
Tokyu Construction Group

Tokyu Toyoko Line Shibuya
Station to Daikanyama Station
track switchover

Redevelpment of the areaaround Shibuya Station

Tokyo Metro Ginza Line
Shibuya Station railway
track diversion projectType 1 urban
redevelopment project in
the Itabashi Station
Itabashi-guchi area

Copyright(C) Tokyu Construction. All rights reserved.

28

[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 basedon 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
shall bear no obligation to update these future
predictions. Actual results may differ from future
predictions due to various factors.