Financial Results Presentation
for the Fiscal Year Ended
March 31, 2022
June 3, 2022

Becoming a truly strong corporate group

Contents

1

2

3

Overview of Financial Results
for the Fiscal Year Ended
March 31, 2022

Outlook for the Fiscal YearEnding March 31, 2023

Reference:
Medium-term Management Plan
(FY2021–2023)

4 Reference Information

Impact of the COVID-19 Pandemic
Business Environment During FY2021
Financial Results (Consolidated and Non-consolidated)
Orders Received, Net Sales and Construction Contracts
Brought Forward (Consolidated)
Construction Work Orders Received (Non-consolidated)
Product Manufacturing and Sales Results (Non-consolidated)
Net Sales and Profit (Loss) Results by Segment (Consolidated)
SG&A, Operating Income, Ordinary Profit and Net Income (Consolidated)
Analysis of Factors Affecting Changes in Net Income (Consolidated)
Consolidated Financial Position and Cash Flows
Major Construction Works We Received Orders for
Major Completed Construction Works
Compliance
TopicsFinancial Results Forecast for FY2022(Consolidated and Non-consolidated)
Net Sales and Profit (Loss) Forecast by Segment (Consolidated)
Forecast of Construction Work Orders to be Received(Non-consolidated)

4
5
6
7
8
9
10
11
12
13
14
15
16
17

19
20
21

Overview of the Medium-term Management Plan (FY2021–2023)
23
Key Performance Indicators (consolidated)(final year of the plan)
24
Individual Strategies / Key Strategies
25
Capital Policy (Investment Plans, Financial Plans and Shareholder Returns) 27

Corporate Philosophy / Company Profile
Main Offices, Laboratories, Consolidated Subsidiaries, etc.
Our Technology
Consolidated Performance Indicators, etc.

30
31
32
33

1

Overview of Financial
Results for the Fiscal Year
Ended March 31, 2022

1 Impact of the COVID-19 Pandemic

Preventive
measures

We take thorough measures to prevent the spread of COVID-19 andcontinue construction works and plant operations to stably and constantly
operate our business and provide our services while ensuring the safety
and health of executives, employees, suppliers, and other relevant parties.

Impact on
our businessWe suspended some of the construction works, but neither trends ofpublic work orders nor product delivery status showed any significant
changes. Impact on orders received for our domestic business waslimited.
Meanwhile, as the world economy recovers from the COVID-19
pandemic, we saw a significant impact on our profit due to a marked risein raw material prices caused by tight crude oil and material supplies.

Financialconditions

We ensure a necessary cash position. We observe no impact on ourbusiness activities in terms of working capital. We will continue tomaintain financial soundness while paying close attention to changes intrends of construction work orders that may be influenced by COVID-19
preventive measures.
Becoming a truly strong corporate group4

1 Business Environment During FY2021
Spread of COVID-19 continued to affect our business.
Production activities slowed down due to supply shortages of semiconductors and other parts.
In the road construction market, public investment remained strong in relation to disasterprevention and mitigation and general measures to boost national resilience.
Global demand recovery increased crude oil prices, and straight asphalt and other raw
material prices were in the stratosphere.
Increased tension in Ukraine further pushed up crude oil prices.
We continued to operate in a challenging business environment, which made it especiallydifficult for us to make a significant profit.

Key Initiatives in the Fiscal Year Ended March 31, 2022
We promote strategies in the Medium-term Management Plan (FY2021–FY2023)
1 Expand stable earnings by further strengthening the competitiveness of our core businesses
2 Rise to the challenge of expanding business areas and developing new business fields
3 Create a virtuous cycle in the recruitment, retention, and development of human resources
4 Establish new ways of working that help improve productivity
5 Build a strong and sound management and financial baseBecoming a truly strong corporate group that can respond to any
future environmental changes
Becoming a truly strong corporate group5

1 Financial Results (Consolidated and Non-consolidated)
Neither sales nor profits avoided a year-on-year downturn. (For the previous fiscal year, net sales exceeded 90 billion yen for the firsttime since the fiscal year ended March 31, 2002, and we posted record high operating income and ordinary profit, significantly higher
than the previous records, on both consolidated and non-consolidated bases.)
Net sales were at the highest level in the past 10 years, apart from the results for the previous year.
Overall, the results were for the most part in line with the initial forecast (consolidated net sales of 86.4 billion yen, operating income of
4.8 billion yen, ordinary profit of 4.7 billion yen, and net income of 3.1 billion yen).
(Millions of yen)

Consolidated

FY2019 results FY2020 results FY2021 results YoY change(Amount)

YoY change(%)

Net sales

78,63190,025

85,132(4,892)(5.4)

Gross profit

11,003

14,111

10,231(3,879)(27.5)

Selling, general andadministrative expenses

5,042

5,640

5,812

172

3.1

Operating income

5,961

8,470

4,418

(4,051)(47.8)

Ordinary income

6,009

8,395

4,358

(4,037)(48.1)Net income

6,544

5,180

3,304

(1,875)(36.2)FY2019 results FY2020 results FY2021 results YoY change(Amount)

YoY change(%)

Non-consolidated
Net sales

74,176

84,69981,168(3,530)(4.2)

Gross profit

9,990

12,971

9,238(3,732)(28.8)

Selling, general andadministrative expenses

4,584

4,982

5,148

166

3.3

Operating income

5,405

7,988

4,089

(3,899)(48.8)

Ordinary income

5,546

7,960

4,025

(3,934)(49.4)Net income

6,145

4,784

3,083

(1,700)(35.6)

Becoming a truly strong corporate group

6

Received, Net Sales and Construction Contracts
1 Orders
Brought Forward (Consolidated)
Both construction work orders and product sales decreased. Overall orders received declined by 7.5%.
While construction works for the contracts in progress at the beginning of FY2021 steadily progressed, orders received, including product sales, declined. As aresult, net sales fell short of those for the previous year.
Changes in accounting standards (application of new revenue recognition standards) increased net sales by 11.1 billion yen and cost of sales by 14.4 billion yen.
Construction contracts brought forward fell short of those for the previous year but maintained a sufficient level.
(Millions of yen)Orders received

FY2019FY2020

AmountAmountFY2021
AmountComposition (%)

YoY change(Amount)

YoY change(%)

71,09559,415
1,747
9,932

73,94457,724845
15,37467,41751,034682
15,700

81.4
61.6
0.8
19.0

(6,526)(6,690)
(162)
326

(8.8)
(11.6)(19.3)
2.1

Pavement Materials Manufacturing
and Sales Business

15,641

15,55915,326

18.5

(232)

(1.5)

Real Estate Business, etc.

153
86,889107
89,611

105
82,850

0.1
100.0

(1)
(6,761)

(1.8)
(7.5)

Construction Business
Asphalt pavement
Concrete pavement
Civil engineering works, etc.

Total orders received(Millions of yen)Orders received

Net sales

Asphalt pavement
Concrete pavement
Civil engineering works, etc.
Pavement Materials Manufacturing and Sales Business
Real Estate Business, etc.
(Millions of yen)
90,00060,00086,88959,41589,611

82,85057,72451,03430,000

0

845

682

FY2020

FY2021

Construction Business

62,83674,357

69,699Asphalt pavement

50,75458,61553,810Concrete pavement

1,707

1,770

640

Civil engineering works, etc.

10,375

13,972

15,249Pavement Materials Manufacturing
and Sales Business

15,641

15,55915,326

153

107

105

78,63190,025

Real Estate Business, etc.
Total

1,747

FY2019Construction contracts
brought forward

85,132(Millions of yen)

FY2019FY2020

FY2021

Construction Business

41,392

40,97836,538

9,932

15,374

15,700Asphalt pavement

31,30630,41626,195

15,641153
FY201915,559107
FY202015,326105
FY2021

Concrete pavement

1,233

308

325

Civil engineering works, etc.

8,851

10,253

10,01741,392

40,97836,538

Total

Becoming a truly strong corporate group7

1Construction Work Orders Received (Non-consolidated)

Construction work orders from the private sector, which we focus on, increased by 7.3%.
While construction work orders from the public sector grew in the second half of the fiscal year, overall construction work orders received
failed to reach the initial forecast of 65 billion yen.
One of the reasons for the decrease in construction works for the public sector is the restricted construction capacity in activities to receive
orders during the first half of the fiscal year, despite a large number of construction contracts in progress at the beginning of FY2021.
Some construction orders, mainly those from the private sector, were shelved due to the COVID-19 pandemic.
This had minimal direct impact on orders received but raised concerns about intensified competition.
(Millions of yen)Orders received bytype of work

Asphalt
pavement
Concretepavement
Civil
engineering
works, etc.
Total

FY2019FY2020

FY202153,822

52,592

46,594

YoY change YoY change(Amount)(%)(5,998)60,00052,59240,000

1,747

845

682

(162)

Asphalt pavement
Concrete pavement
Civil engineering works, etc.

(11.4)
53,82220,0009,932

15,374

15,700326

2.1
068,812

62,977(5,834)FY2019FY2020

FY2021(8.5)

YoY change YoY change(Amount)(%)

34,77130,79722,185(8,612)(28.0)

Private sector

30,73038,01440,792

2,778

7.3(Millions of yen)

FY2019Public sector

15,374

15,700

FY2020

FY2021

Private sector

60,00030,79722,18540,00020,000

Total

682

34,771

Public sector

Tokyu Group

845
1,747
9,932

65,502

46,594(19.3)(Millions of yen)Orders received bypublic and private
sector(Millions of yen)

2,732

2,737

2,005

(732)

(26.8)

65,502

68,812

62,977(5,834)(8.5)

30,730038,01440,792FY2019FY2020
FY2021
Becoming a truly strong corporate group8

1

Product Manufacturing and Sales Results (Non-consolidated)

Demand continued to be sluggish, and production volume and sales volume of asphalt composites fell short of those for theprevious year.
Prices of raw materials and other materials, including those related to crude oil, remained high, significantly increasing
manufacturing and transportation costs. This, however, was not reflected in selling prices, and unit selling prices remained
unchanged on the whole.
(Millions of yen)
FY2019Asphalt
composites

FY2020

FY2021

YoY change

YoY change(Amount)(%)

Production volume(Kilotons)
Sales volume(Kilotons)

1,659

1,680

1,642

(38)

(2.3)

1,307

1,293

1,230

(62)

(4.9)

Sales

11,847
4,555
16,402

11,528
4,378
15,906

11,0894,476
15,566

(438)
98
(340)

(3.8)
2.2
(2.1)

Sales of other products
Total net sales

Notes 1. The difference between production volume and sales volume of asphalt composites is the quantity used for construction works we received orders for.
2. Sales of other products were generated by the sales of asphalt emulsion, crushed stone, etc.

Production volume and sales volume
Production volume

Net sales

Sales volume

Asphalt composites(Kilotons)(Millions of yen)
18,000

2,000
1,800

1,680

1,659

16,000

1,642

1,600
1,400

Other products

14,000

1,307

1,293

1,230

1,200

12,00010,00011,847

11,52811,089

4,555

4,378

4,476

FY2019FY2020

FY2021

1,000
8,000

800

6,000

600
400

4,000

200

2,000

0

FY2019FY2020

FY20210

Becoming a truly strong corporate group9

1

Net Sales and Profit (Loss) Results by Segment (Consolidated)

The Construction Business remained firm, with extensive construction works in progress at the beginning of FY2021 making steady progress.
However, net sales and segment profit decreased, showing a year-on-year downturn. (Up to the previous year, a series of highly productive, largescale construction works markedly increased net sales of completed construction contracts and improved the margin. As a result, we posted decadehigh profits in FY2019 and FY2020. Segment profit for FY2018 was 5,122 million yen.)In the Pavement Materials Manufacturing and Sales Business, net sales decreased slightly. Meanwhile, costs remained at high levels throughout the
fiscal year, significantly reducing the margin. Segment profit fell below two billion yen, marking the lowest in the past 10 years.
(Millions of yen)

Net sales

FY2019FY2020YoY change(Amount)

FY2021

YoY change(%)

Construction Business

62,83674,357

69,699(4,657)(6.3)

Pavement Materials Manufacturing
and Sales Business

28,57028,721

28,159

(562)

(2.0)

Real Estate Business, etc.
Adjustments
Total net sales

778(13,553)
78,631

765(13,819)
90,025816(13,543)
85,13251
276(4,892)

6.7
–
(5.4)

Operating income

FY2019FY2020YoY change(Amount)

FY2021

YoY change(%)

Construction Business

6,173

8,428

6,038

(2,390)(28.4)

Pavement Materials Manufacturing
and Sales Business

2,586

3,163

1,623

(1,540)(48.7)

Real Estate Business, etc.
Adjustments
Total operating income

166(2,964)
5,961

154(3,275)8,470

155(3,398)
4,418

1
(122)
(4,051)1.0–(47.8)Net sales(Millions of yen)

Construction Business
Pavement Materials Manufacturing and Sales Business
Real Estate Business, etc.

100,000

62,83674,357

0

11.3

12

8

69,69940,00020,000(%)
10

80,00060,000Operating income margin
9.8
11.0

28,721
765

28,159816

FY2019FY2020

FY2021

8.7

9.1

6

5.8

4

28,570778

Construction Business margin
Pavement Materials Manufacturing andSales Business margin

2
0

FY2019FY2020

FY2021

Becoming a truly strong corporate group10

1

SG&A, Operating Income, Ordinary Profit and Net Income(Consolidated)

Costs to invest in securing and developing human resources, such as personnel costs and training expenses, increased.
Extraordinary losses decreased mainly because our subsidiary in Myanmar had incurred impairment losses of 1,150 million
yen in the previous year.
We sold the assets for which we had incurred accounting loss on valuation in the past. This actualized the loss, and theloss was included in tax deductible expenses.
Preferential tax treatment (R&D tax credit, tax credit for promotion of securing human resources) was applied.
(Millions of yen)

FY2020
AmountFY2021

Composition(%)

AmountComposition(%)

YoY change(Amount)

YoY change(%)

Net sales

90,025100.0

85,132100.0(4,892)(5.4)

Gross profit

14,111

15.7

10,231

12.0(3,879)(27.5)

Selling, general andadministrative expenses

5,640

6.3

5,812

6.8

172

3.1

Operating income

8,470

9.4

4,418

5.2

(4,051)(47.8)

Non-operating income

108

0.1

77

0.1

(31)

(29.0)

Non-operating expenses

183

0.2

137

0.2

(45)

(25.0)

8,395

9.3

4,358

5.1

(4,037)(48.1)

Extraordinary income

94

0.1

98

0.1

4

4.3

Extraordinary losses

1,389

1.5

128

0.2

(1,260)(90.7)

Profit before income taxes

7,100

7.9

4,327

5.1

(2,772)(39.0)

Income taxes - current

1,332

1.5

1,123

1.3

(209)

(15.7)

Income taxes - deferred

586

0.7

(100)

(0.1)

(687)

–

5,180

5.8

3,304

3.9

(1,875)(36.2)

Ordinary income

Net income

Becoming a truly strong corporate group11

1Analysis of Factors Affecting Changes in Net Income(Consolidated)

While there were positive factors, such as year-on-year increase in extraordinary income and decrease in
extraordinary losses, marked declines in construction work profit and product profit resulted in a decreaseof 1,875 million yen in net income.

Profit increased 2,207

Profit decreased 4,083(Millions of yen)

Profit decreased, preferential tax treatment applied, and past loss
on valuation actualized and included in tax deductible expenses

896 2,379
Organized a syndicated loanin the previous year

172
SG&A increased

31

3,304

Non-operating
income decreased

0Real estate profit
decreased

Net sales ofcompleted construction
contracts increased
and margin lowered

Product profit
decreased

Net income for FY2020

Invested in human resources,
paid rent for the temporary head office,enhanced information disclosure, etc.

1,500
Construction work
profit decreased

Extraordinary
Incomeincreased

Subsidiary in Myanmar
incurred impairment losses
in the previous year

Production and sales volumes decreased,
costs increased, etc.
Income taxes decreased

4
Extraordinary
lossesdecreased45
Non-operating
expensesdecreased

5,180

1,260

Net income for FY2021
Becoming a truly strong corporate group12

1 Consolidated Financial Position and Cash Flows
Purchase of property, plant and equipment of 3,516 million yen, including expenses for office rebuilding
Purchase of treasury shares of 2,500 million yen
Dividends paid of 1,731 million yen
Borrowing increased by 1,999 million yen (Borrowed 2,000 million yen to secure funding for the rebuilding of the head office)While profit before income taxes decreased, net cash provided by operating activities significantly increased year on year due toincrease/decrease in trade receivables, advances received on uncompleted construction contracts, etc.

Consolidated financial position(Millions of yen)

As of Mar. As of Mar. As of Mar.
YoY change
31, 2020
31, 2021
31, 2022
Total assets

74,656

79,40978,295(1,113)

Total liabilities

38,02338,61937,797(821)

Interest-bearing debt

772

5,007

7,007

1,999

(Short-term borrowings)

472

7

107

99

(Long-term borrowings)

300

5,000

6,900

1,900

Net assets

36,63240,79040,497(292)

Equity ratio

49.1%

51.4%

51.7%

–

Consolidated cash flows

Cash and cash equivalents at end of period

Net assets

Equity ratio(Millions of yen)(%)

40,79042,00040,49770

36,63236,00060

51.4
30,000

51.7

49.1

50

24,00040

18,00030

12,00020(Millions of yen)

FY2019Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Increase in cash and cash equivalents
resulting from inclusion of subsidiaries in
consolidation

Interest-bearing debt

FY2020

FY2021

4,461

1,138

4,646

(3,808)(3,622)(3,668)(2,919)2,343(2,232)3

6

33(2,262)(133)(1,220)696––

14,16914,035

12,814

7,007
5,007

6,000

10

772
0

FY2019FY2020
FY2021
As of March 31

0

Becoming a truly strong corporate group13

1 Major Construction Works We Received Orders for
Customer

Site

Project(Prefecture)

TOKYU LAND CORPORATION

Artificial ground work for BRANZ Kita 24-jo West

East Nippon Expressway Company
LimitedPavement repair work within the jurisdiction of Morioka
Management Office of Tohoku Expressway (2022)

Iwate

Tohoku Regional Development
Bureau, Ministry of Land,
Infrastructure, Transport andTourism (MLIT)

Maintenance and repair work on Route 6 in Soma area

Fukushima

Hokkaido

Kanto Regional Development Bureau, Second utility tunnel surface restoration work on Route 4
MLIT
Shitaya (2) (2021)

Tokyo

Tokyo Metropolitan Government

Surface repair work (2021, 5-6, two-layer low-noise pavement)

Tokyo

Kawasaki City

Construction work (switch) on Setagaya Machida Line,
Tama-ku urban planning and road

Kanagawa

Hokuriku Regional Development
Bureau, MLIT

Third other utility tunnel construction work in Owaricho (2021)

Ishikawa

Central Nippon Expressway
Company Limited

Pavement improvement work in the Komagatake service area
on Chuo Expressway (outbound line)

NaganoHanshin Expressway Company
LimitedLarge-scale pavement repair work (Kobe Line, January 2021)

Hyogo

West Nippon Expressway Company
LimitedPavement repair work within the jurisdiction of Yonago
Operation Office of Yonago Expressway (FY2021)

Tottori

Becoming a truly strong corporate group14

1 Major Completed Construction Works
Site

Customer

Project(Prefecture)

East Nippon Expressway Company Limited

Pavement repair work within the jurisdiction of Towada Management Officeof Tohoku Expressway

AomoriTohoku Regional Development Bureau,
Ministry of Land, Infrastructure, Transport
and Tourism (MLIT)

Route 45 Ube Ashigasawa area pavement construction work

Iwate

Kanto Regional Development Bureau, MLIT

New Line 4 Koushu area pavement construction work (2020)

IbarakiEast Nippon Expressway Company Limited
Central Nippon Expressway Company
LimitedWest Nippon Expressway Company Limited

Pavement repair work within the jurisdiction of Mito Management Office ofJoban Expressway
Pavement construction work between Nagoya-nishi Junction and Asuka
Junction on Mei-Nikan Expressway
Pavement repair work within the jurisdiction of Kyoto Operation Office(2019)Hanshin Expressway Company Limited

Large-scale pavement repair work (loop line road, January 2019)

Kinki Regional Development Bureau, MLIT

Route 42 pavement repair and other work in TanabeWest Nippon Expressway Company Limited
Kyushu Regional Development Bureau, MLIT

Pavement repair work within the jurisdictionof Towada Management Office of Tohoku
Expressway

Pavement construction work between Okayama Junction and Ukan
Interchange on Okayama Expressway
Fourth other runway expansion and taxiway construction work at Fukuoka
Airport (FY2020)

Pavement construction work between
Nagoya-nishi Junction and Asuka Junction
on Mei-Nikan Expressway

Ibaraki
Aichi
Kyoto
Osaka
Wakayama
Okayama
Fukuoka

Pavement construction work between
Okayama Junction and Ukan Interchange
on Okayama Expressway
Becoming a truly strong corporate group15

1 CompliancePrevent recurrence of violation of the Anti-Monopoly Act
In response to the violations of the Anti-Monopoly Act that had taken place in the period up to
January 2015, we will continue to implement measures laid out to prevent recurrence acrossthe Company and strive to regain trust early.

Outline ofmeasures toprevent
recurrence

Lawsuit forrevoking anorder to pay
surcharges(issued on
July 30, 2019)

Announced on March 25, 2016
Measures to Prevent the Recurrence of Anti-Monopoly Act Violations(Mainly includes measures against violations in bidding forconstruction works)
Announced on January 24, 2020
Specific Measures to Prevent Recurrence Compiled in Response to
the Recommendations in the Investigation Report (Additional
measures against violations in deciding mixture prices)
As we announced on January 23, 2020, we filed a lawsuit against theJapan Fair Trade Commission for revoking one of their orders to pay
surcharges because there were some divergences of views between the
Company and the commission concerning net sales subject to thecalculation of the surcharges.
On August 5, 2021, the Tokyo District Court rejected the Company’s
claim. However, the Company was dissatisfied with the judgment andappealed to the Tokyo High Court. The lawsuit is still ongoing. We willcontinue to seek a fair judgment in court.
Becoming a truly strong corporate group16

1 Topics
Purchase of treasury shares
1 Resolution to purchase treasury shares approved at the Board of Directors meeting
held on May 12, 2021
(1) Class of shares to purchase(2) Total number of shares to purchase(3) Total purchase cost of shares(4) Purchase period(5) Purchase method

Common shares of the Company
3,500,000 shares (upper limit)(8.67% of the total number of shares issued excluding treasury shares)
2,500,000,000 yen (upper limit)
May 13, 2021 to March 31, 2022
Market purchase on the Tokyo Stock Exchange(discretionary investment method by a securities company)

2 Cumulative total of treasury shares purchased based on the above resolution by
the Board of Directors (Result of purchase)(1) Total number of shares purchased(2) Total purchase cost of shares

2,973,900 shares
2,499,998,712 yen

Cancellation of treasury shares(1) Class of shares to cancel(2) Number of shares to cancel(3) Scheduled date of cancellation

Common shares of the Company
2,000,000 shares(4.95% of the total number of shares issued before cancellation)
June 30, 2022

Reference
Total number of shares issued after cancellation
Number of treasury shares after cancellation

38,414,407 shares
996,909 shares (*)*The figure was calculated by subtracting the number of shares to cancel indicated above from the number of treasury shares held as of March 31, 2022.

Policy for holding and cancellation of treasury shares
We will continue to hold treasury shares of up to roughly 3% of the total number of shares issued, taking into consideration that they
can be used for our restricted stock compensation plan, future strengthening of business foundation and flexible capital policy,
demand for sale of shares less than one unit, and other purposes. Treasury shares exceeding the threshold will in principle becancelled.
Becoming a truly strong corporate group17

2

Outlook for the Fiscal YearEnding March 31, 2023

2

Financial Results Forecast for FY2022(Non-consolidated)

We continue to see firm underlying demand in the road construction market, such as disaster prevention and mitigation
business and greater national resilience.
Net sales, operating income, and ordinary profit are expected to increase.
Forecasts for net income remain at the same level as the previous year’s results, given an increase in the tax burden fromthe previous fiscal year, when measures to reduce the corporate tax burden were in place.
Forecasts at this moment do not factor in further deterioration of the business environment caused by the spread of
COVID-19 or geopolitical risks.
(Millions of yen)

Consolidated

FY2020

FY2021

FY2022(Forecast)

YoY change(Amount)

YoY change(%)

Orders received

89,611

82,85092,600

9,750

11.8

Net sales

90,025

85,132

92,6007,468

8.8

Gross profit

14,111

10,231

11,200969

9.5Operating income

8,470

4,418

5,000

582

13.2

Ordinary income

8,395

4,358

5,000

642

14.7

Net income

5,180

3,304

3,300

(4)

(0.1)

YoY change(Amount)

YoY change(%)

Non-consolidated

FY2020

FY2021

FY2022(Forecast)

Orders received

84,74778,57288,000

9,428

12.0

Net sales

84,69981,16888,0006,832

8.4

Gross profit

12,971

9,238

10,100862

9.3

Operating income

7,988

4,089

4,700

611

14.9

Ordinary income

7,960

4,025

4,600

575

14.3

Net income

4,784

3,083

3,100

17

0.6

Becoming a truly strong corporate group19

2

Net Sales and Profit (Loss) Forecast by Segment (Consolidated)

In the Construction Business, we expect higher net sales of completed construction contracts and construction work profit,
backed by solid orders received.
While we continue to face a challenging business climate due to consistently high material prices, we expect to maintainthe margin by improving productivity.
In the Pavement Materials Manufacturing and Sales Business, we will strive to increase sales volume, reasonably pass on
costs to selling prices, and improve manufacturing efficiency. Thus, we aim to recover profit despite concerns over further
increases in manufacturing and transportation costs.

(Millions of yen)

Net sales

YoY change(Amount)

FY2022

FY2021(Forecast)

YoY change(%)

Construction Business

69,69974,8005,101

7.3

Pavement Materials Manufacturing andSales Business

28,15931,000

2,841

10.1

816

800

(16)

(2.0)

Adjustments(13,543)(14,000)(457)–

Total net sales

85,132

92,6007,468

8.8

Other Businesses

FY2021
AmountOperating income

6,038
1,623
155
(3,398)4,418

Construction Business
Pavement Materials Manufacturing andSales Business

Other Businesses
Adjustments
Total operating income

Net sales(Millions of yen)

Construction Business
Pavement Materials Manufacturing and Sales Business
Other Businesses

FY2022(Forecast)AmountMargin (%)

6,400
1,850
150
(3,400)
5,000
(%)

11.3
74,357

69,69974,80010

28,721

28,15931,000

5

765

816

800

0

FY2020

FY2021

FY2022(Forecast)

60,0000

YoY change
(%)

362
227
(5)
(2)
582

6.0
14.0
(3.2)
–
13.2

8.6
6.0
18.8
–
5.4

Operating income margin

120,000

YoY change(Amount)

Construction Business profit margin
Pavement Materials Manufacturing and Sales Businessprofit margin

8.7

8.6

5.8

6.0

FY2021

FY2022(Forecast)

11.0

FY2020Becoming a truly strong corporate group20

2Forecast of Construction Work Orders to be Received(Non-consolidated)

As we expect a gradual decrease in public works in the future, we will continue to focus on strengthening the base of receiving
construction orders from the private sector, taking into account medium- to long-term marketability.
While uncompleted construction works in progress remain at a high level, concerns over construction capacity will ease comparedwith the beginning of the previous fiscal year.
We will strive to secure construction work orders from the public sector from the beginning of the fiscal year, as we expect firm
underlying demand for construction.
We aim to receive construction work orders equivalent to 70 billion yen, which is more than we received in FY2020.
(Millions of yen)Orders received by public
and private sector

FY2022

FY2021(Forecast)

YoY change(Amount)

YoY change(%)

Public sector
Private sector

22,18524,640

2,454

11.1

40,79245,360

4,567

11.2

Tokyu Group

2,005

2,580

574

28.7

62,97770,000

7,022

11.2

Total
(Millions of yen)
80,000Public sector

Private sector

70,00060,00050,00024,64030,79722,18538,01440,792

FY2020

FY202140,00030,00020,00045,36010,0000

FY2022(Forecast)
Becoming a truly strong corporate group21

3

Reference:
Medium-termManagement Plan
(FY2021–2023)

3 Medium-term Management Plan (FY2021–2023)
Overview of the Medium-term Management Plan (FY2021-2023)
Corporate
Philosophy

An infrastructure building company that helps create affluent
communities

VisionA truly strong corporate group that pursues personal and corporate growthin tandem and helps realize a sustainable society

Becoming a truly strong corporate group
Basic
Policies

Individual
Strategies

For achieving our vision (Where We Should Be in 2030), we have started to take actions under the fivebasic policies: “Expand stable earnings,” “Diversify revenue sources,” “Execute people-centricmanagement,” “Establish new ways of working,” and “Enhance management and financial base,” totransform into a “truly strong corporate group” resilient to environmental changes.

Expand stable earnings by further strengthening the competitiveness of our core businesses
Rise to the challenge of expanding business areas and developing new business fields
Create a virtuous cycle in the recruitment, retention, and development of human resourcesEstablish new ways of working that help improve productivity
Build a strong and sound management and financial base

Maintain and improve financial soundness *Consider appropriate balance with capital efficiency
Stable and consistent shareholder returns with a targeted dividend payout ratio of roughly 30%
and total shareholders return of 50% or more
Becoming a truly strong corporate group

23

3
3 Medium-term Management Plan (FY2021–2023)
Key Performance Indicators (consolidated)(final year of the plan)
FY2020
ActualFY2021
ActualFY2023Plan

Net sales

90.0 billion yen

85.1 billion yen

91.6 billion yen

Operatingincome8.5 billion yen

4.4 billion yen

5.8 billion yen

Net income

5.2 billion yen

3.3 billion yen

3.7 billion yen

13.4%

8.1%

Approx. 8.6%

Equity40.8 billion yen

40.5 billion yen

Approx.
billionyen
43.0

Total assets

79.4 billion yen

78.3 billion yen

Approx.
billionyen
86.0

Indicator

ROE

51.4%

Equity ratio

OperatingincomeNet income
90.0

74.0

51.7%

Net sales

Approx. 50%

Operating income is assumed at the same level as FY2018 andFY2019, while projecting revenue growth. We estimate a decreasein large-scale projects to construct new roads awarded by public
offices. To solidify the profit base during the period of the Plan, we
will focus on private works (including subcontracted public works)
which are less profitable than directly contracted public works, given
the market trends in the medium- to long-term.
Lower tax burden generated by carry-forward losses ended in
FY2020, and net income decreased as a result of income tax
payment returning to a normal level.
[FY2023 net sales plan by business segment]
・Construction (non-consolidated)
67.0 billion yen
・Product business (non-consolidated)18.0 billion yen
・Domestic affiliates
8.8 billion yen
・Overseas affiliates
1.0 billion yen
・Elimination of transactions between
consolidated companies -3.2 billion yen（単位︓億円）（Billionsof yen)

⾃⼰資本
Equity91.6

Gross profit: 11.7 billion yen(12.8%)
SG&A expenses: 5.9 billion yen
Operating income: 5.8 billion yen（単位︓億円）（Billionsof yen)

ＲＯＥ
ROE

19.2%

85.1

78.6
13.4%
11.7%
8.1%

8.6%

8.5
6.0 6.5

5.6

5.2

3.5

FY2018FY2019FY2020

5.8
4.4

3.3

3.7

FY2021

FY2023(Plan)

36.6

40.8

40.5

43.0

31.5

FY2018FY2019FY2020

FY2021

FY2023 (Plan)

Becoming a truly strong corporate group24

3 Medium-term Management Plan (FY2021–2023)
Individual Strategies / Key Strategies
Strategy 1 Expand stable earnings by further strengthening the competitiveness of our core businesses【Construction Business】
 Increase competitiveness to win construction orders from the Ministry of Land, Infrastructure, Transport and Tourism andexpressway companies, by building construction track record and strengthening our response capacity.
 Allow all construction sites (business offices) in Japan to support and sustain themselves in the local area to raise the levelof infrastructure figures.
 Focus on addressing aging and deteriorating infrastructure where solid demand is expected, and developing sales in theareas of disaster prevention/mitigation, and renewable energy.
【Pavement Materials Manufacturing and Sales Business】
 Secure sales volume in metropolitan areas with a large market size, by allocating sites to cover our construction works, andenhancing facilities and sales staff.
 Further expand market share by responding to customer needs such as enhancing the offering of eco-friendly products andproduct quality.
【Technological Development】
 Create new added value by developing technologies foreseeing future changes in the role and function of road pavement.

Strategy 2 Rise to the challenge of expanding business areas and developing new business fields
 Gain a competitive advantage to win orders of comprehensive maintenance works by further honing our technology. etc. toinspect and analyze road conditions.
 Set overseas business on a growth path, and create a new revenue pillar resilient to changes in the domestic construction
market.
 Accelerate laying foundations for growth by pursuing M&A and partnership, etc., which help create synergies with existing
businesses and expanding business fields and markets.

Becoming a truly strong corporate group25

3 Medium-term Management Plan (FY2021–2023)
Individual Strategies / Key Strategies
Strategy 3 Create a virtuous cycle in the recruitment, retention, and development of human resources Secure talents necessary to grow our business scale under the Plan, by hiring diverse human resources and strengthening
ties with educational organizations.
 Drive employee engagement by further creating an “attractive workplace” where employees feel comfortable and motivated.
 Enhance capability of each employee by creating career paths for diverse talents and rebuilding the educational framework.

Strategy 4 Establish new ways of working that help improve productivity
 By leveraging ICT and implementing efficient operations, enhance productivity, correct long working hours, and realize eightholidays in four weeks.
 Enhance efficiency by digitalizing business processes and further promote the development of an environment to achieve
work-life balance.

Strategy 5 Build a strong and sound management and financial base
 Fully implement measures to prevent violation of Anti-Monopoly Act and ensure strict compliance with other laws andregulations, to regain trust and confidence from stakeholders.
 Continue initiatives to strengthen corporate governance and promote management transparency by enhancing disclosure of
information.
 Respond appropriately to changes in the accounting standards and taxation system, by further standardizing our accounting
process and strengthening internal training on accounting practice.

Becoming a truly strong corporate group26

3 Medium-term Management Plan (FY2021–2023)
Capital Policy (Investment Plans, Financial Plans and Shareholder Returns)
Consistent and strategic investment to build sustainable business foundation
FY2021
Maintenance, renewal, acquisition of factories, offices,
construction machinery, etc.

Approx. 3.4 billion yen

15.0 billion yen (5.0 billion yen/year)–

1.5 billion yen (0.5 billion yen/year)

Approx. 3.4 billion yen

16.5 billion yen (5.5 billion yen/year)

Strategic investment (M&A, etc.)
Total

Over three-year plan

Consistent strategic capital expenditure and technological development are essential for achieving future sustainable growth. We are currently
orchestrating a qualitative turning point in our business assets designed to reduce environmental impact and improve productivity, and we
intend to continue annual capital expenditure of approximately 5.0 billion yen as planed.

Maintain and improve financial soundness / Capital efficiency / Consider appropriate balance with capital efficiency
End of FY2021
Equity40.5 billion yen

End of FY2023
Approx. 43.0 billion
yen

Return on Equity(ROE)

End of FY2021
8.1％

End of FY2023
Approx. 8.6％

Obtain an A credit rating to maintain and improve financial soundness• Target equity is approx. 43.0 billion yen and achieve an equity ratio of roughly 50％
Maintain solid liquidity on hand worth approx. two–month net sales• Incorporate the impact of an upfront cost business model (time difference between the payment of trade payables and recovery of tradereceivables) and construction projects becoming larger in size
• Unable to fulfill our social responsibility if running for financing in emergency• Utilize overdraft facility agreement and commitment lines as cash buffer
During our revitalization phase that began in the early 2000s when our equity had suffered significant damage, ROE has remained
consistently high at an average of 20% or above. However, as we have developed greater financial soundness and shifted into the renewed
growth phase, ROE is expected to decline somewhat as our tax burden returns to regular levels. We aim to achieve ROE of 10.0% in the
future while also ensuring ROE exceeds shareholders’ equity costs in the meantime.

Becoming a truly strong corporate group27

3 Medium-term Management Plan (FY2021–2023)
Capital Policy (Investment Plans, Financial Plan and Shareholder Returns)
Stable, consistent shareholder returns with a targeted dividend payout ratio of roughly 30% and total shareholders return of 50% or more

●Trends of relevant indicators
FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022(Forecast)

Equity (million yen)

26,07228,09831,54336,63240,79040,497

Net assets per share (yen)645.90696.09780.73909.13

1,010.99

1,082.33

39.2

38.9

44.5

49.1

51.4

51.7

139.26

56.35

86.16

162.40128.45

84.81

88.19

Dividend per share (yen)

17

10

27

47

43

30

30

Dividend payout ratio (%)

12.2

17.7

31.3

28.9

33.5

35.4

34.0

Total shareholders return (%)

12.2

17.7

31.3

30.5

33.5

109.6 (*1)

57.2

ROE (%)

23.8

8.4

11.7

19.2

13.4

8.1

Equity ratio (%)
Net income per share (yen)*1 We have been purchasing treasury shares in FY2022 (up to 0.8 billion yen in total or 1.2 million shares) [Announced on May 11, 2022]●Trends of shareholders Return
配当
Dividend

配当性向 payout ratio
Dividend

31.3%

33.5%

35.4%

34.0%

30 yen30 yenFY2021

FY2022 (Forecast)

28.9%

17.7%
12.1%

47 yen12.2%

43 yen27 yen17 yen17 yenFY2015FY2016

10 yenFY2017［Medium-term Management Plan (FY2014-2017)］
A stable dividend payment of 10 yen per share＋special
dividend

FY2018FY2019FY2020［Medium-term Management Plan (FY2018-2020)］
Total shareholders return of roughly 30％［Current Medium-term Management Plan］
Dividend payout ratio of roughly 30％,
Total shareholders return of 50％ or more

Becoming a truly strong corporate group28

4Reference Information

4 Corporate Philosophy / Company Profile
Corporate Philosophy

An infrastructure building company that helps create
affluent communities
Company name

SEIKITOKYU KOGYO CO., LTD.

Established

January 16, 1950

Head office location

3-13-16 Mita, Minato-ku, Tokyo

Representative

Yoshikazu Taira, Director, President

Share capital

2,000 million yen (March 31, 2021)

Net sales

84,699 million yen (FY2022)

Number of employees

931 (March 31, 2022)

Listing

Prime Market of the Tokyo Stock Exchange

Construction business license

Special construction business license issued by the Minister ofLand, Infrastructure, Transport and Tourism(Special - 29) No. 1962
(Special - 30) No. 1962

Becoming a truly strong corporate group30

4Main Offices, Laboratories, Consolidated Subsidiaries, etc.

Business offices, etc.

53 sites

Material plants, etc.

49 sites

Technology researchlaboratory

Tochigi Pref.

Testing laboratories

8 sites

Equipment center

Hokkaido

・Hokkaido Branch

Tochigi Prefecture
Iwate Branch Office

Training center

Tochigi Prefecture

Consolidated
subsidiaries

11
Shinetsu/Hokuriku
・Hokuriku Branch

Tohoku・Tohoku Branch

Chugoku/Shikoku

・Chugoku Shikoku Branch
Kanto
・North Kanto BranchTraining center

Tokai・Nagoya Branch

Akita Material Plant

・East Kanto Branch・Tokyo Branch
・Yokohama Branch・Kanto Product Sales &Marketing Branch OfficeKansai・Kansai Branch
Kyushu/Okinawa

・Kyushu Branch

Sakura Material Plant
Becoming a truly strong corporate group31

4 Our Technologies

CRACK REPAIRCRACK REPAIR is an ultra-low viscosity polyurethane-based
repairing material that can be flown naturally and injected into
concrete cracks. Its superior performance enables to open roads
to traffic approximately one hour after construction works.
The product, jointly developed with TOKYU CONSTRUCTION CO.,LTD., helps to extend the life of infrastructure.

Road Surface Properties Measuring Vehicle
The vehicle records the status of road surface using cameras in
the survey unit, which can be installed on a passenger car. The
vertical and horizontal laser scanners check the conditions of roadsurface and provides crack percentages and other data. Using AI,
the product also calculates rutting percentages and detects
potholes and fading lines.

Mible-eco (generic term: foamed asphalt mixture)
Asphalt and aggregate can be mixed easily with an additive tofoam fine bubbles in asphalt, which enables mixing and application
at a temperature approx. 30℃ lower than that of general asphalt.
This contributes to the expansion of supply areas, improvement ofasphalt workability in winter season and in cold areas, reduction of
the traffic restriction time, and alleviation of environmental impact.

Cold asphalt mixture “Ecomix”
Ecomix is an environmentally friendly cold asphalt mixture, whichcontains 50% or more aggregate recycled from asphalt. It is an
Eco Mark certified product that ensures a certain level ofworkability and demonstrates a high level of strength.

Becoming a truly strong corporate group32

4 Consolidated Performance Indicators, etc.
Business term

57th

58th

59th

60th

Fiscal year

FY2005

FY2006

FY2007

FY2008

61st

62nd

63rd

64th

65th

66th

67th

68th

69th

70th

71st

72nd

73rd

Net sales(Millions of yen)
Operating income(Millions of yen)
Operating profit ratio(%)
Ordinary income(Millions of yen)
Net income(Millions of yen)Comprehensive income(Millions of yen)
Net assets(Millions of yen)
Total assets(Millions of yen)
BPS
(yen)
EPS
(yen)
Diluted EPS(yen)
Equity ratio(%)
Return on equity(%)
Price-earnings ratio(X)
Cash flows from operating(Millions of yen)
activities
Cash flows from investing(Millions of yen)
activities
Cash flows from financing(Millions of yen)
activities
Cash and cash equivalents at(Millions of yen)
the end of year
Dividend per share(yen)
Dividend payout ratio(%)
Employees(persons)[plus average number of part-time staff]

64,20438
0.1-770-15,218―
3,980
53,649-43.02-151.19―7.4-277.1―70,442
617
0.9
220
752
―
4,626
49,082-37.70
5.39
2.47
9.4
17.5
17.44

71,172
822
1.2
493
224
―
4,780
49,237-36.43
1.61
0.74
9.7
4.8
45.34

62,598
825
1.3
489
326
―
5,065
48,069-32.07
2.30
0.77
10.5
6.6
13.04

4,306

4,137

496

2,040

6,372

1,217

2,945

4,796

5,433

2,862

6,679

6,949

6,303

4,781

4,461

1,138

4,646

-875

-46

-932

-1,184

-997

-361

-130

-608

-1,407-1,234-1,658-4,896-2,231-1,777-3,808-3,622-3,668-3,182-4,703-629-794-1,580-2,525-2,610-4,828-1,551-1,604-1,603

1,815-1,684-2,005-2,9192,343-2,232

1,819

1,220

819

880

4,675

3,006

3,206

2,566

5,041

5,064

8,482

12,35014,737

15,735

14,16914,035

12,814

―
―
803
[317]

―
―
798
[311]

―
―
869
[235]

―
―
865
[230]

―
―
860
[236]

―
―
840
[240]

―
―
824
[245]

―
―
797
[251]

15
15.0
792
[268]

15
13.9
825
[279]

17
12.1
863
[275]

17
12.2
904
[275]

10
17.7
896
[274]

27
31.3
907
[274]

47
28.9
1,031
[289]

43
33.5
1,043
[293]

30
35.4
1,098
[277]

FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
71,58959,365
61,106
71,091
71,69163,542
74,63470,07581,65974,03678,63190,025
85,132
4,085
2,109
2,294
3,731
4,779
4,528
6,291
6,412
6,235
5,564
5,961
8,470
4,418
5.7
3.6
3.8
5.2
6.7
7.1
8.4
9.2
7.6
7.5
7.6
9.4
5.2
3,705
1,943
2,178
3,551
4,730
4,487
6,261
6,338
6,239
5,584
6,009
8,395
4,358
3,283
1,715
1,886
3,705
3,793
4,365
5,682
5,621
2,274
3,480
6,544
5,180
3,304
―
1,705
1,887
3,720
3,794
4,899
4,754
5,527
2,712
3,822
6,243
6,010
3,992
8,349
8,544
8,801
11,344
12,791
17,083
21,231
26,07228,09831,54336,63240,79040,49750,34847,33949,597
48,10650,80956,07957,544
66,444
72,19270,90674,656
79,40978,295
-4.27
8.77
31.50
51.34
316.84423.19525.96645.90696.09780.73909.13 1,010.99 1,082.33
22.48
11.85
10.54
19.36
95.48
108.13140.78139.26
56.35
86.16
162.40128.45
84.81
10.72
5.80
7.19
16.00
―
―
―
―
―
―
―
―
―
16.6
18.1
17.7
23.6
25.2
30.5
36.9
39.2
38.9
44.5
49.1
51.4
51.7
49.0
20.3
21.7
36.8
31.4
29.2
29.7
23.8
8.4
11.7
19.2
13.4
8.1
2.58
7.51
6.26
4.24
6.14
4.79
3.35
3.81
12.21
6.84
5.02
7.25
8.80

* A 1-f or-5 rev erse stock split was conducted in October 2014. "Net assets per share," "Net income per share," and "Div idend per share" f or FY 2014 onwards ref lect the ef f ects of therev erse stock split.
（Millions of yen)

10,000（％）

Consolidated performance indicators
Ordinary income (Millions of yen)

Net income (Millions of yen)

Equity ratio (%)

60.0

Return on equit y (%)

50.0

8,000

40.0
6,000
30.0
4,000

20.0

2,000

10.0
0.0

0
FY200 860th

FY200 961st

FY201 062n d

FY201 1
63rd

FY201 264th

FY201 365th

FY201 466th

FY201 567th

FY201 668th

FY201 769th

FY201 870th

FY201 971st

FY202 072n d

FY202 1
73rd

Becoming a truly strong corporate group33

This material contains financial results forecasts, projections, and other forward-looking statements,
which are based on available information and certain assumptions that are considered reasonable at thetime of preparation. Various factors including changes in future business environment may cause actual
results to be materially different from those expressed in these forward-looking statements.

Contact
SEIKITOKYU KOGYO CO., LTD.
9F, Mita 43 MT Building, 3-13-16, Mita, Minato-ku, Tokyo,108-8309, Japan
Inquiries: https://www.seikitokyu.co.jp/contact (in Japanese)

STand K
(Seiki Tokyu Kogyo
mascot characters)
ST and K, our mascot characters, were bornin January 2020 on the occasion of our 70th
anniversary.
They will help promote safety at construction
sites and asphalt plants across the country,
improve the industry’s image, and conduct
public relations activities.