Financial Results Presentation
for the First Half of the Fiscal
Year Ending March 31, 2023
November 30, 2022

Becoming a truly strong corporategroupContents
1

2
3
4

Overview of Financial Results
for the First Half of the Fiscal
Year Ending March 31, 2023

Impact of the COVID-19 Pandemic
Business Environment During the First Half of FY2022
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 Income and Net Income (Consolidated)
Analysis of Factors Affecting Changes in Net Income (Consolidated)
Consolidated Financial Position and Cash Flows
Major Construction Works in Progress(Those We Received Orders for and Those Brought Forward)
Major Completed Construction Works
Compliance
Topics

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

Outlook for the Fiscal YearEnding March 31, 2023

Financial 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(Consolidated and Non-consolidated)

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

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

24
25
26
28

Reference Information

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

31
32
33
34

20
21
22

1

Overview of Financial
Results for the First Halfof the Fiscal Year Ending
March 31, 2023

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 business

Trends in orders for public works projects and product delivery status
both remained steady, and impact on orders received was limited. A
certain number of cases have been confirmed in the Company, but there
has been no direct impact on the business performance.

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 the First Half of FY2022
The impact of the COVID-19 pandemic eased, and there were signs of recovery in economic activities.
In the road construction market, public investment remained strong in relation to disaster prevention andmitigation and general measures to boost national resilience.
The prices of energy and other resources continued to be on the rise due primarily to the impact of the
weak yen in addition to the intensifying situation in Ukraine. We had to deal with a challenging businessenvironment, which made it difficult for us to make a significant profit.

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)
Sales increased but profits decreased year on year on a consolidated and non-consolidated basis.
Sales and profits fell short of the initial forecasts.
The primary reason for the significant drop in profits was the sharp rise in the price of straight asphalt andother raw materials.
(Millions of yen)
1H of FY2021
results

1H of FY2022
results

YoY change(Amount)

YoY change(%)

Initial forecast for 1H of
FY2022(announced on May 11)

vs. forecast(Amount)

vs. forecast(%)

Net sales

38,66341,892

3,229

8.4

42,800

(908)

(2.1)

Gross profit

4,538

3,332

(1,205)(26.6)

4,500(1,168)(26.0)

OperatingincomeOrdinary
income1,753

246(1,507)(86.0)

1,300(1,054)(81.1)

1,737

246(1,491)(85.8)

1,300(1,054)(81.1)Net income

1,191

90

(1,100)(92.4)

800(710)(88.8)

1H of FY2021
results

1H of FY2022
results

YoY change(Amount)

YoY change(%)

Initial forecast for 1H of
FY2022(announced on May 11)

vs. forecast(Amount)

vs. forecast(%)

Net sales

37,04339,7552,711

7.3

40,800(1,045)(2.6)

Gross profit

4,113

2,931

(1,181)(28.7)

4,000(1,069)(26.7)

OperatingincomeOrdinary
income1,661

203(1,457)(87.7)

1,200

(997)

(83.1)

1,641

207(1,433)(87.3)

1,200

(993)

(82.8)Net income

1,162

115

(1,047)(90.1)

800(685)(85.6)

Consolidated

Nonconsolidated

Becoming a truly strong corporate group6

Orders Received, Net Sales and Construction Contracts

1 Brought Forward (Consolidated)

Orders received were at the highest level in the past 10 years. Orders received for construction increased year on year and exceeded the initial forecast.
Net sales of finished goods fell short of the initial forecast but increased year on year.
As extensive construction works in progress made progress, net sales of completed construction contracts increased. Construction contracts brought
forward fell below those for the first half of the previous year, but remained at a high level.
(Millions of yen)Orders received

1H of FY2020

1H of FY2021

AmountAmount1H of FY2022
AmountInitial forecast for
1H of FY2022
vs. forecast vs. forecast(announced on(Amount)(%)
May 11)

YoYchange(%)

34,74633,29435,210

82.2

1,916

5.8

34,850360

1.0Asphalt pavement

24,343

23,83725,223

58.8

1,385

5.8

ー

ー

ー

Concrete pavement

430

254

622

1.6

368

144.5

ー

ー

ー

Civil engineering
works, etc.

9,972

9,201

9,364

21.8

162

1.8

ー

ー

ー

7,084

6,696

7,600

17.7

903

13.5

7,840

(240)

(3.1)

63

68

50

0.1

(17)

(26.2)

40

10

25.0

41,89340,05942,861

100.0

2,802

7.0

42,730131

0.3

Construction Business

Pavement Materials Manufacturing
and Sales BusinessElectricity Sales Business, etc.
Total orders received(Millions of yen)Orders received

Asphalt pavement
Concrete pavement
Civil engineering works, etc.
Pavement Materials Manufacturing and Sales BusinessElectricity Sales Business, etc.

(Millions of yen)
50,00041,89324,34340,05923,83742,861

25,22325,000

430
9,972

0

YoY
Composition change(Amount)
(%)

254

622

9,201

9,364

7,084
63

6,696
68

7,600
50

1H of FY2020

1H of FY2021

1H of FY2022

Net sales

1H of FY2020

1H of FY2021

1H of FY2022

Construction Business

27,802

31,89834,241Asphalt pavement

22,21325,09826,203Concrete pavement

967

261

428

Civil engineering works, etc.

4,621

6,539

7,609

Pavement Materials Manufacturing
and Sales Business

7,084

6,696

7,600

Electricity Sales Business, etc.

63

68

50

34,95038,663

Total

Construction contracts
brought forward

41,892(Millions of yen)

1H of FY2020

1H of FY2021

1H of FY2022

Construction Business

48,33540,21737,507Asphalt pavement

33,436

27,711

25,215

Concrete pavement

696

277

520

14,202

12,228

11,772

48,33540,21737,507

Civil engineering works, etc.

Total

Becoming a truly strong corporate group7

1 Construction Work Orders Received (Non-consolidated)
Trends in orders for construction work held up well, and we constantly received orders in general.
Despite the sluggishness of large-scale construction work orders, orders received from the public agencies as a wholeincreased. Construction work orders from the private sector, which we focus on, were almost the same as those for the
first half of the previous year. As a result, overall construction work orders increased 5.9% year on year.
(Millions of yen)

1H of
FY2020

1H of
FY2021

1H of
FY2022Asphalt
pavement

21,91721,48622,781

1,294

6.0

Concretepavement

430

254

622

368

144.5

Civil
engineering
works, etc.

9,972

9,201

9,364

162

1.8

Orders received bytype of work

YoY change YoY change(%)(Amount)(Millions of yen)
50,00025,0000

Total

32,31930,94332,7691,825

5.9(Millions of yen)Orders received bypublic and private
sector

1H of
FY2020

1H of
FY2021

1H of
FY2022Public sector

12,030

9,973

11,940YoY change YoY change(%)(Amount)

1,967

20,28920,97020,828

(141)

(0.7)

Tokyu Group

961

914

1,663

748

81.9

32,31930,94332,769

1,825

5.9

Total

21,91721,48622,781

430

254

622

9,972

9,201

9,364

1H of FY2020

1H of FY2021

1H of FY2022(Millions of yen)

Public sector

Private sector

40,00019.7

Private sector

Asphalt pavement
Concrete pavement
Civil engineering works, etc.

12,030

9,973

11,94020,28920,97020,828

1H of FY2020

1H of FY2021

1H of FY2022

20,0000Becoming a truly strong corporate group8

Product Manufacturing and Sales Results

1 (Non-consolidated)

In spite of lackluster product demand, we focused our effort on sales activities and secured a year-on-year increase inboth production volume and sales volume of asphalt composites.
Selling prices also increased slightly year on year. As a result, net sales of finished goods increased 13.3% year on year.
(Millions of yen)

YoY change(Amount)

1H of FY2020

1H of FY2021

1H of FY2022

755

713

730

17

2.4

608

524

555

31

6.0

5,454

4,667

5,448

781

16.7

Sales of other products

1,757

2,106

2,228

121

5.8

Total net sales

7,211

6,773

7,677

903

13.3

Production volume(Kilotons)
Sales volume(Kilotons)

Asphalt
composites

Sales

YoY change (%)

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)
800(Millions of yen)

755

9,000

730

713

700
600

Other products

8,000

608
524

555

7,000
6,000

500

5,000
400

5,454

4,000
300

4,667

3,000

200

2,000

100
0

5,448

1,000

1H of FY2020

1H of FY2021

1H of FY2022

0

1,757

2,106

2,228

1H of FY2020

1H of FY2021

1H of FY2022

Becoming a truly strong corporate group9

Net Sales and Profit (Loss)

1 Results by Segment (Consolidated)
In the Construction Business, the margin declined due to the lack of contributions from highly profitable, large-scale construction works during the firsthalf of FY2022 in addition to the impact of rising material prices.
Despite an increase in net sales of completed construction contracts, segment profit fell below the results of the past two years. (Segment profit for the
first half of FY2019: 1,882 million yen)In the Pavement Materials Manufacturing and Sales Business, revision of selling prices did not progress sufficiently to offset the rise in raw material
prices. As a result, we continued to suffer a segment loss, albeit the improvement from the first quarter (loss of 177 million yen).
(Millions of yen)

Net sales

YoY change(Amount)

1H of FY2020

1H of FY2021

1H of FY2022

Construction Business

27,802

31,89834,241

2,343

7.3

Pavement Materials Manufacturing
and Sales Business

12,664

12,61913,922

1,302

10.3

385
(5,903)
34,950421(6,276)
38,663430(6,702)
41,892

9
(425)
3,229

2.2
ー
8.4

1H of FY2020

1H of FY2021

1H of FY2022

Construction Business

2,291

2,532

2,033

(499)

(19.7)

Pavement Materials Manufacturing
and Sales Business

1,522

736

(32)

(768)

ー

(10)
(229)
(1,507)(11.6)
ー(86.0)

Electricity Sales Business, etc.

Adjustments
Total net sales

Operating income

Electricity Sales Business, etc.

Adjustments
Total operating income
Construction BusinessNet sales(Millions of yen)86
(1,665)
2,236

Pavement Materials Manufacturing and Sales BusinessElectricity Sales Business, etc.

40,00030,00034,24127,802

31,89812,664385

12,619421

13,922

10,0000

1H of FY2020

1H of FY2021

1H of FY2022

430

12.0

10

0
(5)

YoY change (%)

Construction Business margin
Pavement Materials Manufacturing andSales Business margin(%)

5

20,000YoY change(Amount)

92
82(1,607)(1,837)
1,753
246
Operating income margin15

50,000YoY change (%)

7.9

5.9

8.2
5.8
1H of FY2020

1H of FY2021(0.2)
1H of FY2022

Becoming a truly strong corporate group10

SG&A, Operating Income, Ordinary Income and

1 Net Income (Consolidated)

Selling, general and administrative expenses increased due to factors, including our effort to raise salaries
more than 3% and head office relocation expenses.
We posted operating income, after having suffered an operating loss of 166 million yen in the first quarter.
However, the impact of rising raw material prices on profits remained significant, and results continued tobe frustrating.
(Millions of yen)

1H of FY2020

1H of FY2021

1H of FY2022

YoY change YoY change(Amount)(%)

AmountComposition(%)

AmountComposition(%)

AmountComposition(%)

Net sales

34,950100.0

38,663100.0

41,892

100.0

3,229

8.4

Gross profit

5,012

14.3

4,538

11.7

3,332

8.0

(1,205)(26.6)

Selling, general andadministrative expenses

2,776

7.9

2,784

7.2

3,086

7.4

302

10.9

Operating income

2,236

6.4

1,753

4.5

246

0.6

(1,507)(86.0)

Non-operating income

44

0.1

31

0.1

71

0.2

39

123.8

Non-operating
expenses

50

0.1

47

0.1

71

0.2

23

48.7

Ordinary income

2,230

6.4

1,737

4.5

246

0.6

(1,491)(85.8)

Extraordinary income

88

0.3

14

0.0

2

0.0

(11)

(83.6)

Extraordinary losses

9

0.0

41

0.1

20

0.0

(20)

(50.4)

2,308

6.6

1,710

4.4

228

0.5

(1,482)(86.7)

Income taxes

301

0.9

518

1.3

137

0.3

(381)

(73.6)Net income

2,007

5.7

1,191

3.1

90

0.2

(1,100)(92.4)

Profit before income taxes

Becoming a truly strong corporate group11

Analysis of Factors Affecting Changes in Net Income

1 (Consolidated)

Net income decreased significantly due to declines in construction work profit and product profit and amultitude of other negative factors, such as an increase in selling, general and administrative expenses.

Profit increased 442

Profit decreased 1,542(Millions of yen)

Extraordinary
income decreased

Net income for the
first half of FY2021

302

Non-operating
expenses increased

Material prices rose
Margins declined

10

Personnel expenses increased,
the head office relocated, etc.

SG&A increased

Profits
declined

Income fromelectricity sales, etc.
decreased

Extraordinary
lossesdecreased

781
Construction work
profit decreased

20
Income taxes
decreased

39
Non-operating
incomeincreased

1,191

413

Product profit
decreased

381

Costs increased, while little
progress was made on costpass-through to prices

23

11

90

Net income for the
first half of FY2022
Becoming a truly strong corporate group12

1 Consolidated Financial Position and Cash Flows
Dividends paid of 1,120 million yen.
Purchase of treasury shares of 799 million yen.
Purchase of property, plant and equipment of 2,902 million yen, including construction costs of the head office building.
The increase in long-term borrowings is attributable to the fund borrowed in FY2021 to finance the reconstruction of
the head office building.

Consolidated financial position(Millions of yen)

As of Sept. As of Sept. AS of Sept.
YoY change
30, 2020
30, 2021
30, 2022
Total assets

70,62971,47275,2893,816

Total liabilities

33,81132,44236,5204,078Interest-bearing debt

557

5,104

7,053

1,948

(Short-term borrowings)

407

104

203

98

(Long-term borrowings)

150

5,000

6,850

1,850

Net assets

36,81839,03038,768(261)

Equity ratio

52.1%

54.6％

51.5％

ー

Consolidated cash flows

Net 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
Cash and cash equivalents at end of period

Interest-bearing debt

Net assets(Millions of yen)

Equity ratio
(%)

54.6
52.1

51.5
39,03040,00038,76850

36,81832,00040

24,00030

16,00020(Millions of yen)

1H of
FY2020

1H of
FY2021

1H of
FY2022

6,615

6,844

5,475

(1,663)(1,993)(2,909)(2,106)(2,882)(1,874)

(10)

3

57

2,835

1,972

748

17,00416,007

13,562

7,053

8,000

10

5,104
557
0

0

FY20202Q

FY2021
2Q

FY20222Q

As of September 30

Becoming a truly strong corporate group13

Major Construction Works in Progress (Those We

1 Received Orders for and Those Brought Forward)
Construction works we received orders for
Customer

Site

Project(Prefecture)

Hokkaido Regional
Development Bureau, MLIT

New Chitose Airport South taxiway to connect to the runway foundconstruction

Kanto Regional Development
Bureau, MLIT

Maintenance work within the jurisdiction of Hachioji National
Highway Branch Office (FY2022 and FY2023)

Tokyo

Central Nippon Expressway
Company Limited

Pavement repair work (large-scale renewal project) within the jurisdictionof Nagoya Operation Office of the Tomei Expressway (FY2022)

Aichi

Hanshin Expressway
Company Limited

Large-scale pavement repair work (2022-1-Kita)

Hyogo

Chugoku Regional
Development Bureau, MLIT

Pavement repair and other work within the jurisdiction of Saijo
Maintenance Branch Office (FY2022)

Hokkaido

Hiroshima

Construction works brought forward from FY2021
Customer

Site

Project(Prefecture)

East Nippon Expressway
Company Limited

Sasson Expressway Hassamu Viaduct floor slab waterproof work

TOKYU CORPORATION and
TOKYU RECREATION CO., LTD.

Construction work on minor road Line 72 and new building
peripheral ward road

Kawasaki City

Replacement work of the No. 2 water pipe (600 mm and 300 mm)
in Chiyogaoka and water pipes (100 mm) in Mukaibara 1-chome

Kanagawa

Pavement repair work (large-scale renewal project) within the jurisdictionof Toyama Operation Office of Hokuriku Expressway (FY2020)

ToyamaPavement repair work within the jurisdiction of Hanna
Expressway Operation Office (FY2020)

Osaka

Central Nippon Expressway
Company LimitedWest Nippon Expressway
Company Limited

HokkaidoTokyo

Becoming a truly strong corporate group14

1 Major Completed Construction Works

Customer

Project

Site(Prefecture)

Kanto Regional Development
Bureau, MLIT

Repair work of a box culvert near the Yaguchi area, Misato City
on Route 298 (FY2021)

Saitama

Japan Racing Association

Nakayama Racecourse roadbed reconstruction work on the front turf
road (4th corner side) and turf replacement work on the turf road

Chiba

Tokyo Metropolitan Government

Surface repair work (FY2021, Kita-Tama South-6, two-layer low-noise
pavement) and road sign installation work (FY2021, Kita-Tama South-1)

Tokyo

Kanto Regional Development
Bureau, MLIT

Second utility tunnel construction work in Midori-cho, Fuchu City
on Route 20 (FY2020)Tokyo

Hanshin Expressway Company
LimitedLarge-scale pavement repair work (2020-3-Kan)

Osaka

Repair work of a box culvert near
the Yaguchi area, Misato City on
Route 298 (FY2021)

Nakayama Racecourse roadbed
reconstruction work on the front
turf road (4th corner side) and turf
replacement work on the turf road

Surface repair work (FY2021,
Large-scale pavement repair work
Kita-Tama South-6, two-layer low(2020-3-Kan)noise pavement) and road sign
installation work (FY2021, KitaTama South-1)
Becoming a truly strong corporate group 15

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 for construction 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)
In January 2020, we filed a lawsuit against the Japan Fair Trade Commission
for revoking some part of their orders to pay surcharges because there weresome divergences of views between the Company and the commission
concerning net sales subject to the calculation of the surcharges.
• August 5, 2021: Tokyo District Court dismissed the Company’s claim.
• June 8, 2022: Tokyo High Court dismissed the Company’s claim.
• November 10, 2022: Supreme Court dismissed the Company’s appeal anddecided not to accept the case as the final appellate court.
By FY2019, the full amount of the surcharges was recognized as
extraordinary losses and paid in full. There will thus be no impact on futurebusiness performance.
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 heldon May 11, 2022
(1) Class of shares to purchase

Common shares of the Company(2) Total number of shares to purchase(3) Total purchase cost of shares

1,200,000 shares (upper limit)(3.21% of the total number of shares issued excluding treasury shares)
800,000,000 yen (upper limit)(4) Purchase period

May 12, 2022 to March 20, 2023

(5) Purchase method

Market purchase on the Tokyo Stock Exchange

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

989,900 shares
799,917,375 yen

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

Common shares of the Company
989,900 shares (Total number of treasury shares purchased as described above)(2.58% of the total number of shares issued before cancellation)
March 31, 2023

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

37,424,507 shares
976,443 shares (*)*The figure was calculated by subtracting the number of shares to cancel indicated above from the number of treasury shares held as of Sep 30, 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

1 Topics
SBT Certification Obtained
The Science Based Targets initiative (SBTi) (*1) certified in August 2022 that the Group’s
greenhouse gas emissions reduction targets for FY2030 are in line with the levels required by
the Paris Agreement (*2) and based on scientific evidence.
To achieve carbon-neutral business operation, we aim to achieve reduction targets that meet
SBT standards and will continue to accelerate preparation for information disclosure in line with
the Task Force on Climate-related Financial Disclosures (TCFD).
*1: Joint initiative by CDP, the United Nations Global Compact (UNGC), World
Resources Institute (WRI), and the World Wide Fund for Nature (WWF)*2: Commitment to curbing global temperature rise to well-below 2°C above preindustrial levels and pursuing efforts to limit warming to 1.5°C

Greenhouse Gas Emissions Reduction Targets (Base year: FY2020)
Reduction targets for the 10 years leading up to FY2030
Scope 1
Scope 2

Reduce total emissions for Scope 1 and Scope 2 by a yearly average of 4.2%, and by
42% in the 10 years leading up to FY2030. [Level of 1.5℃]

Reduce emissions related to purchased products and services, classified into Category 1,
Scope 3by a yearly average of 2.5%, and by 25% in the 10 years leading up to FY2030. [Level ofCategory 1
Well Below 2℃]
Scope 1: Direct greenhouse gas emissions associated with the use of fuels by the Company
Scope 2: Indirect greenhouse gas emissions associated with the use of electricity by the Company
Scope 3: Indirect greenhouse gas emissions from the entire supply chain (except for Scope 1 and Scope 2)
Becoming a truly strong corporate group18

Outlook for the Fiscal Year
2
Ending March 31, 2023

Financial Results Forecast for FY2022

2 (Consolidated and Non-consolidated)

We continue to expect firm underlying demand in the road construction market, such as disaster prevention and disaster mitigation business andbuilding national resilience.
Given the performance for the first half of FY2022, we expect operating income to fall short of the initial forecast. However, we do expect it to be larger
than that for the first half of FY2021.
Net income is expected to reach the initial forecast on a consolidated and non-consolidated basis, as we anticipate a decline in income taxes.
Forecasts at this moment do not factor in further deterioration of the revenue environment caused by geopolitical and other risks.
(Millions of yen)

Consolidated

FY2021

FY2022(Forecast)

YoY change(Amount)

YoY change(%)

Initial forecast forvs. forecast
FY2022(announced on May 11) (Amount)vs. forecast(%)

Ordersreceived

82,85092,90010,05012.1

92,600300

0.3

Net sales

85,132

92,6007,468

8.8

92,600ーー

Gross profit
OperatingincomeOrdinary
income10,231

10,800569

5.6

11,200

(400)

(3.6)

4,418

4,700

282

6.4

5,000

(300)

(6.0)

4,358

4,700

342

7.8

5,000

(300)

(6.0)

Net income

3,304

3,300

(4)

(0.1)

3,300

ー

ー

FY2022(Forecast)

YoY change(Amount)

YoY change(%)

Initial forecast forvs. forecast
FY2022(announced on May 11) (Amount)vs. forecast(%)

Nonconsolidated

FY2021

Ordersreceived

78,57288,000

9,428

12.0

88,000ーー

Net sales

81,16888,000

6,832

8.4

88,000ーー

Gross profit
OperatingincomeOrdinary
income

9,238

9,800

562

6.1

10,100

(300)

(3.0)

4,089

4,400

311

7.6

4,700

(300)

(6.4)

4,025

4,400

375

9.3

4,600

(200)

(4.3)

Net income

3,083

3,100

17

0.6

3,100

ー

ー

Becoming a truly strong corporate group20

Net Sales and Profit (Loss)

2 Forecast by Segment (Consolidated)
Backed by extensive construction works in progress and solid orders received, we expect a year-on-year increase in net sales of completed construction contracts.
As for construction work profit, it should be difficult to improve the margin as material prices are rising and we cannot expect contributions from highly profitable, largescale construction.
In the product business, we will strive to increase sales volume, reasonably pass on costs to selling prices, and improve manufacturing efficiency. Thus, we aim to
improve profit, though manufacturing and transportation costs are expected to remain high.
(Millions of yen)

Net sales

FY2021

FY2022(Forecast)

YoY change(Amount)

YoY change(%)

Initial forecast for
FY2022vs. forecast(Amount)

vs. forecast(%)(announced on May 11)

Construction Business

69,69974,8005,101

7.3

74,800

Pavement Materials
Manufacturing and Sales
Businessーー

28,15931,000

2,841

10.1

31,000ーー

816(13,543)
85,132800(14,000)
92,600

(16)
(457)
7,468

(2.0)
ー
8.8

800
(14,000)
92,600

ー
ー
ー

ー
ー
ー

FY2022 (Forecast)

YoY change(%)

Initial forecast for
FY2022(announced on May 11)

vs. forecast(Amount)

vs. forecast(%)

Electricity Sales Business, etc.

Adjustments
Total net sales

FY2021
AmountAmountMargin (%)

YoY change(Amount)

Construction Business

6,038

6,150

8.2

112

1.9

6,400

(250)

(3.9)

Pavement Materials
Manufacturing and Sales
Business

1,623

1,800

5.8

177

10.9

1,850

(50)

(2.7)

155

150

(5)

(3,398)(3,400)

18.8
ー

(2)

(3.2)
ー

4,418

4,700

5.1

282

6.4

150
(3,400)
5,000

ー
ー
(300)

ー
ー
(6.0)

Operating income

Electricity Sales Business, etc.

Adjustments
Total operating income

Net sales(Millions of yen)
120,000

Construction Business
Pavement Materials Manufacturing and Sales BusinessElectricity Sales Business, etc.

74,357

69,69974,80060,0000Operating income margin
(%)
12

11.3

10

11.0

Construction Business profit margin
Pavement Materials Manufacturing and Sales Businessprofit margin

8.7

8.2

5.8

5.8

FY2021

FY2022 (Forecast)8
6

28,721

28,15931,000

765

816

800

FY2020

FY2021

FY2022 (Forecast)

4
2
0

FY2020Becoming a truly strong corporate group21

Forecast of Construction Work Orders to be Received

2 (Consolidated and Non-consolidated)

We will continue to focus on strengthening the base of receiving construction orders from the private sector, taking into account the gradual downward
trend in the amount of public works in the future and medium- to long-term marketability.
We intend construction work orders from the public sector to exceed the initial forecast, in light of the current status of construction works in progress
and the outlook for orders from the third quarter onward.
As we expect firm underlying demand for construction, we aim to receive orders for construction equivalent to 70 billion yen on a non-consolidated
basis, which is more than we received in FY2020.
(Millions of yen)

Consolidated

FY2022(Forecast)

FY2021

Total construction
work orders received

Non-consolidated

67,417
FY2021

YoY change(Amount)

75,100YoY change (%)

11.4

7,683

FY2022(Forecast)

YoY change(Amount)

YoY change (%)

Initial forecast for
FY2022vs. forecast

74,800300

0.4Initial forecast for
FY2022vs. forecast

vs. forecast(%)(announced on May 11))(announced on May 11))

(Amount)(Amount)

vs. forecast(%)

Public sector

22,18525,000

2,815

12.7

24,640360

1.5Private sector

40,79245,000

4,208

10.3

45,360

(360)

(0.8)

2,005

3,250

1,245

62.1

2,580

670

26.0

62,97770,000

7,023

11.2

70,000ーーTokyu Group
Total

Trend in orders received for construction (non-consolidated)(Millions of yen)
80,00060,000Public sector

Private sector

25,00030,79722,18538,01440,79245,000

FY2020

FY2021

FY2022 (Forecast)

40,00020,0000Becoming a truly strong corporate group22

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 group24

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

78.6

51.7%

Net sales
85.1

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%

13.4%
11.7%
8.1%

8.6%

8.5
6.0 6.5

5.6

5.2

3.5

FY2018FY2019FY2020

4.4

5.8
3.3

3.7

FY2021

FY2023(Plan)

31.5

36.6

40.8

40.5

43.0

FY2018FY2019FY2020

FY2021

FY2023 (Plan)

Becoming a truly strong corporate group25

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 group26

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 group27

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.
*Shareholders’ equity costs: 7.2% < Planned ROE value for FY2023: 8.6% < Target ROE value to achieve in the future: 10.0%
Becoming a truly strong corporate group28

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

90.54

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

33.1

Total shareholders return (%)

12.2

17.7

31.3

30.5

33.5

109.6

ROE (%)

23.8

8.4

11.7

19.2

13.4

8.1

Equity ratio (%)
Net income per share (yen)●Trends of shareholders Return
配当
Dividend

(*1)

57.4

*1: Purchase of treasury shares during FY2022 (totaling 799 million yen) [announced on August 4, 2022]

配当性向 payout ratio
Dividend

31.3%

33.5%

35.4%

33.1%

28.9%

17.7%
12.1%

47 yen12.2%

43 yen27 yen17 yen17 yenFY2015FY201630 yen30 yenFY2021

FY2022 (Forecast)

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 group29

4

Reference 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

2-9-3, Shibakoen, Minato-ku, Tokyo,

Representative

Yoshikazu Taira, Director, President

Share capital

2,000 million yen (March 31, 2022)

Net sales

81,168 million yen (FY2021)

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 - 4) No. 1962

Becoming a truly strong corporate group31

Main Offices, Laboratories,

4 Consolidated Subsidiaries, etc.
Business offices, etc.

53 sites

Material plants, etc.

49 sites

Technology researchlaboratory

Tochigi Prefecture

Testing laboratories

8 sites

Equipment center

Tochigi Prefecture

Training center

Tochigi Prefecture

Consolidated
subsidiaries

11

Hokkaido

・Hokkaido Branch

Head office
Shinetsu/Hokuriku
・Hokuriku Branch

Tohoku・Tohoku Branch

Chugoku/Shikoku

・Chugoku Shikoku Branch
Kanto
・North Kanto BranchTraining center
Tokai・Nagoya Branch

Sakura Material Plant

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

・Kyushu BranchCentral Kanagawa business officeBecoming a truly strong corporate group32

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 group33

4 Consolidated Performance Indicators, etc.
Business term

57th

58th

59th

60th

61st

62nd

63rd

64th

65th

66th

67th

68th

69th

70th

71st

72nd

73rd

Fiscal year

FY2005

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

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(Times)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(Millions of yen)at 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

71,589
4,085
5.7
3,705
3,283
―
8,349
50,348(4.27)
22.48
10.72
16.6
49.0
2.58

59,365
2,109
3.6
1,943
1,715
1,705
8,544
47,339
8.77
11.85
5.80
18.1
20.3
7.51

61,106
2,294
3.8
2,178
1,886
1,887
8,801
49,597
31.50
10.54
7.19
17.7
21.7
6.26

71,091
3,731
5.2
3,551
3,705
3,720
11,344
48,106
51.34
19.36
16.00
23.6
36.8
4.24

71,691
4,779
6.7
4,730
3,793
3,794
12,79150,809316.84
95.48
―
25.2
31.4
6.14

63,542
4,528
7.1
4,487
4,365
4,899
17,08356,079423.19108.13
―
30.5
29.2
4.79

74,634
6,291
8.4
6,261
5,682
4,754
21,23157,544525.96140.78
―
36.9
29.7
3.35

70,075
6,412
9.2
6,338
5,621
5,527
26,072
66,444645.90139.26
―
39.2
23.8
3.81

81,659
6,235
7.6
6,239
2,274
2,712
28,09872,192696.09
56.35
―
38.9
8.4
12.21

74,036
5,564
7.5
5,584
3,480
3,822
31,54370,906780.73
86.16
―
44.5
11.7
6.84

78,63190,025
85,132
5,961
8,470
4,418
7.6
9.4
5.2
6,009
8,395
4,358
6,544
5,180
3,304
6,243
6,010
3,992
36,63240,79040,49774,656
79,40978,295909.13 1,010.99 1,082.33
162.40128.45
84.81
―
―
―
49.1
51.4
51.7
19.2
13.4
8.1
5.02
7.25
8.80

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)(2,919)2,343(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]

* A 1-for-5 reverse stock split was conducted in October 2014. "Net assets per share," "Net income per share," and "Dividend per share" for FY2014 onwards reflect the effects of thereverse 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 equity (%)

50.0

8,000

40.0

6,000

30.0
4,000

20.0

2,000

10.0

0

0.0
FY200860th

FY200961st

FY201062nd

FY2011
63rd

FY201264th

FY201365th

FY201466th

FY201567th

FY201668th

FY201769th

FY201870th

FY201971st

FY202072nd

FY2021
73rd

Becoming a truly strong corporate group34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.
2-9-3, Shibakoen, Minato-ku, Tokyo, 105-8509, 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.