3rd Medium-Term Management Plan:
Explanatory Document
Securities Code: 8132 (Prime, Tokyo Stock Exchange)L o o k i n g B a c k o n t h e 2 n d M e d i u m - Te r m M a n a g e m e n t P l a n

Issues with unmet quantitative targets, and improving capital efficiency, including making progresswith execution of investments and reforming the organizational culture

Changes in Quantitative Targets (Return on Equity)

Quantitative
Targets

Improvement of capitalefficiency

Establish business structure forcontinually producing ROE of
6.0% or higher

✕

6.3%

5.9%

5.5%

5.2%

Execution of investments torealize sustainable growth

4.7%

Issues

Qualitative Targets

 Increasing profitability by improving business

management efficiency
 Continuing selection and concentration of existing

businesses

 Maintaining and increasing client numbers
 Strengthening the organization for managing risks

occurring before business start-up△

 Continuing IT investments, including introduction of

new core system for standardization and efficiency
increase

3.4%

0.9%
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Reform of employee
thinking, habits, andbehavior patterns〇

 On the principle that corporate growth = individual

growth, continued promotion of reform in employees’
thinking, habits, and behavior patterns
 Reassessment of human resource education/training

and further strengthening of human resource
investment© 2023 Sinanen Holdings Co., ltd.

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Vi s i o n

Evolving into a comprehensive energy service

provider that helps build a carbon-free world andsupports innovative living© 2023 Sinanen Holdings Co., ltd.

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S u m m a r y o f 3 r d M e d i u m - Te r m M a n a g e m e n t P l a n

Accelerate the shift to a stronger management foundation, implement growth strategies, andachieve our vision

Growth strategies

1

Transform the businessportfolio

23Promoting further reform ofcorporate culture and work
style

4

5

Increased productivity byincreased operational
efficiency, standardization,etc.

6

Shift to a stronger
managementfoundation

Improvement of capitalefficiency

Promotion of human resource
development, andachievement of appropriate
allocation of human resources

Comprehensive
energy service
provider that helps
build a carbon-freeworld and supports
innovative living

Strengthening of groupmanagement organization© 2023 Sinanen Holdings Co., ltd.

3M e d i u m - Te r m M a n a g e m e n t Ta r g e t s

Further advances and breakthroughs on approaching 100th anniversary of founding

1st Medium-Term
Management Plan

2nd Medium-Term
Management Plan

3rd Medium-Term
Management PlanFY 2017-

FY 2020-

FY 2023-FY 2027

Selection and concentrationof businesses
Begin work on capitalefficiency

Preparing foundation for 3rd
Medium-Term Management
Plan

100th
anniversary

 ROE

 Ordinary
Further growth withnew business,mergers, andacquisitions

39
30

At least

8

%

100

(Unit: Hundred millions of yen)

21

Financial goals

profit100

million yen

Non-financial goals
 Transform the business

32
Organic growth ofexisting business

22
12

structure to address
decarbonization
 Raise the market value of

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employees© 2023 Sinanen Holdings Co., ltd.

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N o n - F i n a n c i a l G o a l s 1 : Tr a n s f o r m a t i o n t o B u s i n e s s S t r u c t u r e A p p r o p r i a t e t o
Decarbonized Society

GHG*1 emissions target for in-house operations in FY 2030 (Scope 1 + 2)
50% decrease compared to FY 2016

▍ Achievement of carbon-neutral state by reducing GHG emissions and also promoting CO2 removal
FY 2016

FY 2027

GHG emissions

FY 2030

FY 2050Compared to FY 2016

Compared to FY 2016

-31%

-50%

 Liquefied petroleum gas (LPG) delivery: Increased efficiency of delivery,and switch to electric delivery vehicles
 In-house gas use: Carbon-neutral LPG use, increased efficiency of

consuming equipment, and widespread adoption of low-energy behaviors
 In-house electricity use: Use of a renewable energy menu, setting up solar

0

generators, etc., and widespread adoption of low-energy behaviors
 Carbon capture tackled by business activities involving biocarbon,

seaweed beds, etc.

Quantity
removedCarbon neutral Acquiring environmental value by creation of and investment in forestry

funds, blue-carbon*2 funds, etc.
 Efforts to fit CO2-absorption devices in offices and factories*1 Greenhouse gas, i.e. gases that contribute to global warming, including CO2 and methane*2 Carbon accumulated in marine ecosystems, including areas of seaweed and other marine plants© 2023 Sinanen Holdings Co., ltd.

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N o n - F i n a n c i a l G o a l s 1 : Tr a n s f o r m a t i o n t o B u s i n e s s S t r u c t u r e A p p r o p r i a t e t o
Decarbonized Society

Carbon productivity targets for entire supply chains in FY 2027 (Scope 1 to 3)
6.0% increase compared to FY 2016

As an index of achieving not only financial expansion (sales, profits, etc.), but also decarbonization of the entire supply chain on the basis ofcooperation with stakeholders, carbon productivity (i.e. measurement of productivity per ton of GHG emissions) will be adopted.

Carbon productivity = gross profit / GHG emission. The aim is to convert to a business structure appropriate to a
decarbonized society, i.e. with lower GHG emission and higher profit generated.
Specific approaches
•
•
•
•
•
•

Increase in the gross profit margin in the entire business
Decrease in GHG emission in the entire supply line
Supply of fuels such as bioethanol and sustainable aviation fuelSale of high-efficiency water-heaters
Expansion of renewable energy business
Increase in proportion of renewable energy source
provision/supply

FY 2016

FY 2027 (target)

2.44

2.60
At least +6.0%© 2023 Sinanen Holdings Co., ltd.

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N o n - F i n a n c i a l G o a l s 2 : I n c r e a s e t h e M a r k e t Va l u e o f E m p l o y e e s“Increase in employees’ market value” becomes “Increase in Company’s enterprise value”

 Engagement
 Meaningful work, things worth doing Challenge

 Feeling in line with company policy/mission

Employees

Company

Individuals continuing to be selected:
Employability

The company continuing to be selected:
Employment ability-----------------------------The company being able to improve
employees’ lives------------------------------

Each person being able to improve
his/her life

Relationship ofmutual contribution
to growth

Towards high-market-value humanresources, transferable to any company

 Appropriate evaluation and remuneration
 Job rotation: Putting the right people in the right places Investment ineducation and training

Towards Sinanen Holdings Group
enabling the feeling that “I want to growhere; I want to make a lot of effort here.” Corporate policy/message

 Improvement of working environment

 Diversity andinclusion© 2023 Sinanen Holdings Co., ltd.

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N o n - F i n a n c i a l G o a l s 2 : I n c r e a s e t h e M a r k e t Va l u e o f E m p l o y e e s

Setting targets for items given particular importanceEngagement indices Giving an attractive message about the significance of theCompany’s existence, and its contributions to society, mission,
vision, etc.

Education/training time (years) per employee(excluding on-the-job training) Toward improvement of engagement indices, and corporate support forindividuals’ growth by means of a system Plenty of educational opportunities, to support individuals who wish to
grow
FY 2027 (target)
FY 2022

 Developing and standardizing a career format providing

educational opportunities to employees who want to learn, andestablishing an environment enabling the activities of various
types of employee

FY 2022

FY 2027 (target)

16.4 hours

25.0 hours

Proportion of female managers
 Promoting diversity, and creating new value

3.3
•
•

At least 4.0

Satisfaction indices in organizational culture survey (full score: 5)
Targets: The entire Group, except for four companies involved in building
management and maintenance Enthusiastic appointment of female employees, and reflecting

diverse viewpoints in management activities
FY 2022

FY 2027 (target)

5.1%

20.0%
© 2023 Sinanen Holdings Co., ltd.

8Tr a n s f o r m t h e B u s i n e s s P o r t f o l i o

Promoting development of sustainable business portfolio

Change in business segments (expected during 3rd Medium-Term Management Plan)Transform the business portfolio
Specification of growth areas centered on electricity and environmental solutions
business and lifestyle solutions business, and concentrated investment ofmanagement resources

Withdrawal from low-growth and low-profitability businesses, and promotion of sales,etc.

Creation of new businesses during 3rd Medium-Term Management Plan, andachievement of profitability

B to C Business (Retail/Wholesale Energy & Related
Business)B to B Business (Energy Solution Business)Non-energy Business▍ Charts showing gross profit
Electricity andEnvironmental
Solutions Business

Lifestyle Solutions
Business*The circle size indicates the gross profit

Oil & Gas Business

Oil & Gas Business

Lifestyle Solutions BusinessElectricity and Environmental
Solutions Business

14%

25%

2%

33%

29%
Electrical business, biomass fuelbusiness, new business areas(renewableenergy,waste
recycling), etc.

Home and lifestyle businesses(home renovation, water-heaters,etc.), bicycle businesses, bicyclesharing businesses, antibacterial
businesses, system businesses,
building management andmaintenance business, etc.

Oil and gas business69
FY 202253%%

FY 2027© 2023 Sinanen Holdings Co., ltd.

9I n v e s t m e n t Ta r g e t C a t e g o r yWide assessment of various options, and careful selection of investment targets fromamong them
FY 2023
Investment target category

FY 2027

Screening

Renewable energy: ¥30 billionRecycling business: ¥5 billion






Establishment of factories using woody biomass
Recycling biomass waste
Environmental analysis businesses
Development of products with reduced GHG
emission

Other





Screening

Power plants and electricity storage stations for
CPPA, etc.
Overseas renewable energy business
Biofuels (biocarbon)
Solar sharing

Establishment of adsorbent agent factories
Development of cloud-based total energy
management service
Next mobility
Low-power wide-area network establishment

1. Social value
 Contribution to resolving social problems
 Contribution to carbon neutrality
 Market growth

2. Investment efficiency
 Investment decision assuming that ROE target value

for FY 2027 is 8%

Careful selection forinvestment
By FY 2027,
investment intransforming thebusiness portfolio of¥50 billion

M&A*



LPG business: Acquisition of commercial
rightsBuilding management and maintenancebusiness: Kanto region*Major mergers and acquisitions plannedin a separate frame© 2023 Sinanen Holdings Co., ltd.

10Business Strategy: Overview
Increasing profitability by increasing profits of existing businesses, and creating new businesses using management
resources

Profitability increase
Existing

New businesses

businesses

Taking up

Increase inchallenges in a

profits

decarbonizedsociety Increase in profits by each business‐ Business to consumer: Increasing number of clients, expanding services
menu‐ Business to business: Expansion of electricity and renewable energy
services‐ Non-energy business: Growth with focus on building management andmaintenance business, and bicycle-sharing business Development of new Systems for promoting

businesses‐‐ Renewable energy‐ Waste recycling‐ New fuels with low environmental ‐burden‐‐ Decarbonization of homes andbuildings

decarbonization
Promotion by departments specialized in new
business areas
Making use of decarbonized communities,
using shared offices
Promoting education about decarbonization
to responsible personnel© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: New Business Areas

Promotion of search for and achievement of new business areas contributing to decarbonized society

Renewable energy
EPC contracts*1, operation,
maintenance, inspection, fuel supply,
etc. for power plants generating
electricity from renewable sources*1 Engineering, procurement and construction: The contract is for undertaking
design, obtaining of materials, construction, and trial operation as a single job.

Manufacture and supply of new fuels with low environmental burdens

Manufacture and supply of biofuels,with lower environmental burdens thanfossil fuels, such as bioethanol and
SAF*2

Recycling of waste
Handling of industrial and generalwaste; adoption of technologies forrecycling waste as fuel, rawmaterials, fertilizer, and animal feed;
and participation in validation studies
and projects

Decarbonization of homes and buildings
Provision of products and services,and participation in projects, linked
to decarbonization of existinghomes and other buildings*2 Sustainable aviation fuel© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: B to C business

Achieving high profits by increasing number of customers, and expansion of high -value-added services

Energy business Increasing number of customers, with focus on direct-sales

customers

Home and lifestyle business Expansion of high-value-added services, including home

repair, renovation, etc.

‐ Strengthening sales force by hiring more personnel, and improving
education and training‐ Promotion of M&As from and outsourcing of operations to marketing‐ Acquiring new customers by means of proposal-based sales‐ Sale of high-efficiency devices, contributing to decarbonization‐ Promotion of low-energy repair work

companies‐ Operationalization of safety work, contributing to increase in the number ofcustomers‐ Acquiring new customers by selling carbon-neutral LPG‐ Increasing the number of electricity customers by supplying stable powersources

Other new business Expansion of business area by new business-creation projects© 2023 Sinanen Holdings Co., ltd.

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Business strategy: B to B

Portfolio transformation from oil-centered to integrated energy services, including electricity, renewableenergy, etc.

Electricity and renewable energy business Growth until this becomes one of the main businessareas, ranking alongside oil business‐ Achieving differentiated sales with high added value, taking
the environmental value into consideration, with obtaining ofhighly competitive power sources in the background‐

Entering into a CPPA* and expanding to 50 MW, and starting

Oil business Maximization of income‐ By expanding sales by M&A of fuel-supply facilities, andusing large tanks, etc., increase the kerosene and diesel
market shares‐ Expanding the market by reinforcing and making full use of
the logistics function in Hokkaido

electricity storage business‐ Nationwide expansion of testing of domestic renewableenergy devices
 Extension of the housing products business area to the new-build-housing market

Other Development of the marketing business for biomass fuels, hydrogen, ammonia, etc., and theelectric vehicle storage battery business Overseas expansion of the renewable energy business*Corporate power purchase agreement, i.e. a contract for long-term purchase of electricity from a power-generation company by acorporation, local government body, etc.

© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: Non-energy Business (Building Management and MaintenanceBusiness)

Ensuring stable income and increasing profitability by achieving an integrated, one-stop service

Takara Building
Maintenance Co., Ltd.

Achieving a one-stop service
by integrating corporations

Range of activities

October 2023

Expansion of building and general maintenancebusiness areas from shared and strata-title partsof housing complexes

Indess Co., Ltd.

Ensuring stable profits
and increasing
profitability
GusSystem Co.,Ltd.

SunFeel Co., Ltd.
*Some of the operations

Firm entrenchment in each area of
operations
Further expansion of areas ofoperations
Area© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: Non-energy Business (Bicycle -Sharing Business)

Further increasing profitability and creating new income streams, centered on opening of new
stations

Further increasing profitability

Creating new income streams

 Opening new stations in high-profit areas

 Expansion of maintenance services

 Increasing data-analysis strength, operational

 Establishment of bicycle-sharing business withstrength, and operational cost-effectiveness Increasing frequency of use by energetic

expansion of the campaign

restrictions on users
 Development of next mobility, andmiscellaneous service businesses© 2023 Sinanen Holdings Co., ltd.

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Fundamental Strategy: Basic Policies
 Maintenance and full use of a sound financial base, and flexible and dynamic response to growth investment

opportunities
 Promotion of growth investment for long-term increase in corporate value, and maintenance of stable shareholder return

Growth investment
Investment innewbusinessareas

Shareholder Return
Dividend
payout ratio
at least 30%

Stabledividends

M&A

Establishment of a strong
basis for growth, prioritizingbalance between each

ROE

At least 8%

Net profit
marginAt least
1.5%

Leverage
2.0 to 2.5
times

Financial base
Capitaladequacy ratio
maintained at
40 to 50%

Thoroughmanagement ofinvestment risk

© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: Efficiency

Stable generation of ROE at above cost of shareholders’ equity
 Stable generation of ROE at 8% or higher, above the cost of shareholders’ equity (approx. 3%)
 By increasing profitability and turnover, the aim is to achieve ROE at 8%, and a price book-value ratio exceeding 1.0 times

Increase inprofitability

Increase in asset
efficiency

Maintenance of appropriate
financial structure

Net income

Net sales

Total assets

Net sales

FY 2016

×

Total assets

×

Shareholders’ equity

1.18%

2.21 times

2.00x

1.50 to2.50 to 2.60

2.00 to 2.50

1.60%

times

times

FY 2027

＝

ＲＯＥ

5.2%

At least

8%© 2023 Sinanen Holdings Co., ltd.

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Business Strategy: Shareholder Return Policies

Maintenance of stable dividends, with a target dividend ratio of 30% (¥75 per share as the lower limit),
reaching 40% in the medium term

(yen)

200

150

100

７５.０

７５.０

７５.０

７５.０

７５.０

７５.０

18/3

19/3

20/3

21/3

22/3

23/3

50

0

28/3
© 2023 Sinanen Holdings Co., ltd.

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Disclaimer

 This document contains forward-looking statements on

the plans, policies, management strategies, etc. of
Sinanen Holdings Co., Ltd. (the Company). The basis

Inquiries Concerning This Document

for these statements includes forecasts and plans thatare based on information currently available to theCompany, and there are many uncertainties involved.
As such, actual results may differ significantly from the

Sinanen Holdings Co., Ltd.
IR and SR Team, Corporate Planning Dept.

statements in this document due to various risks andfactors that cause fluctuation.
 Investors who plan to make actual investments are

kouhou@sinanengroup.co.jp
Iijima, Kiryu, Abeadvised to refrain from relying solely on the informationin this document and to use their own judgment when
making decisions. The Company accepts no
responsibility for any losses arising in relation toinvestments.
© 2023 Sinanen Holdings Co., ltd.

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