Takuma Co., Ltd.

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

May 25, 2022

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

1

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2

Financial Results Summary for FY2021(Ended 3/2022)

FY2021 results

Forecasts for
FY2022

Achieving Vision
2030•

Both sales and profit were down with net sales of ¥134.0 billion and ordinary
profit of ¥10.6 billion.

•

Orders received were a record high of ¥192.2 billion.

•

The order backlog also increased substantially to ¥445.3 billion.
Long-term O&M accounts for around 50% of this.

•The forecast for orders received is ¥170.0 billion as we expect strong demand
for municipal solid waste treatment plants, biomass power plants, etc.

•

Both sales and profit are expected to be up with net sales of ¥143.0 billion
and ordinary profit of ¥12.5 billion.

•

Recurring revenue model businesses such as municipal solid waste treatment
plant operations are growing steadily.

•

While aiming for steady growth in each business centered on maintenanceand expansion of the EPC business and expansion of recurring revenue modelbusinesses, we will expand out business in the environment and energy field
through new businesses and M&A.

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

3

Financial Highlights for FY2021(Ended 3/2022)•

Both sales and profit were down due primarily to changes in the project mix and rising prices ofmaterials and machinery in the Domestic Environment and Energy Business.

•

Orders received reached a record high, trending at high levels against a backdrop of strong demand
for municipal solid waste treatment plants, biomass power plants, etc.

•

The order backlog also increased substantially owing to steady orders for EPC projects and long-term
O&M.

(Millions of yen)

FYE 3/2022 FYE 3/2022(FY2021)(FY2021)Beginning of Plan after Q3year plan
revision

FYE 3/2021(FY2020)

Orders received

148,830

188,563

180,000

180,000

192,244

3,680

12,244

Order backlog

345,315

387,152

430,152

432,152

445,304

58,15215,152

Net sales

134,454

146,726

137,000

135,000

134,092(12,633)(2,908)9,600

10,473

10,400

9,700

9,928

(544)

(472)

7.1%

7.1%

7.6%

7.2%

7.4%

0.3pt

(0.2)pt

Ordinary profit

10,30011,02811,00010,30010,647

(381)

(353)

Profit attributable to owners of parent

7,445

7,529

7,600

7,300

7,434

(94)

(166)

Profit per share (yen)

90.36

92.73

93.57

89.83

91.53

(1.20)(2.04)

Operating profit
Operating margin

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

FYE 3/2022(FY2021)

YoYchangeChange vs.
beginning ofyear plan

FYE 3/2020(FY2019)

4

FY2021(Ended 3/2022) | Breakdown by Segment(Millions of yen)
FYE 3/2020(FY2019)FYE 3/2021(FY2020)FYE 3/2022(FY2021)Beginning ofyear plan

FYE 3/2022(FY2021)
Plan after Q3
revision

FYE 3/2022(FY2021)

Total

148,830

188,563

180,000

180,000

192,244

3,680

12,244

Domestic Environment and Energy

123,154

160,591

151,500

152,200

164,865

4,273

13,365

Overseas Environment and Energy

1,351

883

3,000

1,800

2,035

1,152

(965)

Package Boiler

17,925

17,52418,00017,50016,830(693)(1,170)Equipment and Systems

6,790

10,166

8,000

9,000

8,917

(1,248)

917

Total

134,454

146,726

137,000

135,000

134,092(12,633)(2,908)Domestic Environment and Energy

108,123

120,770

110,000

109,600

108,657(12,113)(1,343)

Overseas Environment and Energy

1,143

1,188

500

900

1,005

(183)

505

Package Boiler

17,86816,931

18,00017,00016,498(433)(1,502)Equipment and Systems

7,840

8,271

9,000

8,000

8,590

319

(410)

Total

9,600

10,473

10,400

9,700

9,928

(544)

(472)

Domestic Environment and Energy

10,61911,475--

10,906(568)-

Overseas Environment and Energy

(202)

(140)

-

-

(218)

(77)

-

Package Boiler

966

640

-

-

672

32

-

Equipment and Systems

384

876

-

-

656

(220)

-

Orders received

YoYchangeChange vs.
beginning ofyear plan

Net sales

Operating profit

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

5

FY2021(Ended 3/2022) | Domestic Environment and Energy Business
Orders Received / Order Backlog•

Demand was steady, and stable orders received were secured for the full year.

•

Around 50% of the order backlog was for long-term operations (O&M). Orders received are also
increasing steadily in after-sale service overall.
(Millions of yen)

148,892

Orders received

Order backlog

Approx. ¥4.3 billion increase

Approx. ¥56.0 billion increase

160,591

153,628

164,865

433,351

123,154322,292

337,322

2018

2019

377,143

262,388

2017
2017

2018

2019

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2020

2021

Order backlog

Long-term
operations
Approx. 50%

2020

2021

O&M(10 years or more)

6

FY2021(Ended 3/2022) | Domestic Environment and Energy Business
Net Sales / Operating Profit
Both sales and profit were down due primarily to changes in the project mix and rising prices of materials
and machinery in the EPC business despite steady growth of recurring revenue model businesses.

(Millions of yen)

Net sales

Operating profit

Approx. ¥12.1 billion decrease

Approx. ¥600 million decrease
13.2%

20,000120,770

11.6%
12.0%

108,657

108,123
90,07518,00014.0%

93,7249.8%

16,00012,40514,00012,00010,61910,48710.0%

9.5%
11,47510.0%

10,9068.0%

10,000

6.0%

8,000

6,000
4.0%

4,000

2.0%

2,000

0

0.0%

2017
2017

2018

2019

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2020

2021

2018

2019

Operating profit

2020

2021

Operating margin

7

FY2021(Ended 3/2022) | Overseas Environment and Energy Business•A stoker upgrade order was received for Taiwan in the midst of restrictions on operating activities
and postponed plans due to COVID-19.

•

The majority of net sales over the past 3 years has been maintenance. We will build a structure fortaking continuous orders for new construction and upgrade projects.
(Millions of yen)Orders received / Net sales
3,873

Operating profit

Orders received: Approx. ¥1.2 billion increase
Net sales: Approx. ¥200 million decrease

Approx. ¥100 million decrease
300

10.0%

3,401

5.3%

3,057

200

2.3%

5.0%

100

78

2,035

163

0.0%

0

-202

-140

-218

-5.0%

-100

1,351
1,143

799

1,188
883

-11.8%

-200

1,005

-10.0%-17.7%-15.0%-300-21.7%-20.0%

-400

-500

2017

2018

2019

2020

Orders received

Net sales

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2021-25.0%

2017

2018

2019

Operating profit

2020

2021

Operating margin

8

FY2021(Ended 3/2022) | Package Boiler Business•

Demand remains sluggish, primarily for lodging, due to COVID-19.

•

Although sales were down, restrictions on operating activities resulted in a decrease in operating
expenses, leading to a slight increase in profit.
(Millions of yen)Orders received / Net sales

Operating profit

Orders received: Approx. ¥700 million decrease
Net sales: Approx. ¥500 million decrease

Approx. ¥30 million increase
1,400

7.0%

5.9%
17,696

17,321

17,476

16,954

17,925 17,868

1,200

17,524

5.3%

16,931 16,830 16,498

5.4%

6.0%

1,000

5.0%

3.8%

4.1%

800

4.0%

600

3.0%

400

2.0%

200

1.0%

1,015

904

966

640

672

0

2017

2018

2019

2020

Orders received

Net sales

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2021

0.0%

2017

2018

2019

Operating profit

2020

2021

Operating margin

9

FY2021(Ended 3/2022) | Equipment and Systems Business•

Orders received for semiconductor industrial equipment were favorable.
In the building equipment business, orders received were low due to sluggish demand arising fromplans postponed as a result of COVID-19 and intensification of competition.

•

Sales were up owing to semiconductor industrial equipment, but profit was down due tosluggishness in the building equipment business.

Orders received / Net sales(Millions of yen)

Operating profit

Orders received: Approx. ¥1.2 billion decrease
Net sales: Approx. ¥300 million increase

Approx. ¥200 million decrease
1200

12.0%

10.6%

10,166
8,567
7,141

8,836
7,840

7,696

8,271

8,917

8,590

1000

10.0%

7.6%

6,790

800

8.0%

600

4.1%
400

4.9%

6.0%

3.0%

4.0%

200

2.0%

228

361

384

876

656

0

2017

2018

2019

2020

Orders received

Net sales

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2021

0.0%

2017

2018

2019

Operating profit

2020

2021

Operating margin

10

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

11

Progress on 13th Medium-Term Management Plan
We fell slightly short of the plan in the first year, but our aim is to achieve ordinary profit of ¥36.0 billion bysteadily accumulating orders.
2021-2023
Target ordinary profit(cumulative)¥36.0 billion

2021-2023
Orders received(cumulative) *Reference¥450.0 billion(Millions of yen)

Ordinary profit

Orders received
12,50012,334
10,30011,028

10,647

188,563 192,244

179,829

170,000

148,830

2018

2019

2020

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2021

2022
(Forecast)

2023

2018

2019

2020

2021

2022
(Forecast)

2023

12

13th Medium-Term Management Plan | Main Orders Received (FY2021)
Orders were steady, including 3 waste treatment plant DBO (design, build, operate) projects and 6 biomass power
plants.
Segment
Municipal solid waste
treatment plant

Delivered to:

Location

Capacity

Scheduled Completion

Q1

Uwajima Public Association (O&M*1)

Ehime

120 t/day

3/2031 (10 years)

Q2

Hakodate City (DBO*2)

Hokkaido

300 t/day

3/2029 (22 years of operations starting 4/2022)

Q4

Okayama City (DBO)

Okayama

200 t/day

3/2027 (20 years of operations starting 4/2027)

Shida Public Association (DBO)

Shizuoka

223 t/day

12/2026 (20 years of operations starting 1/2027)

Energy plant

Q1

Company A (Biomass power plant, FIT*3)･Biomass power plant･Industrial waste treatment
plant

Q2

Kumamoto Clean Energy Co. (Biomass power plant, FIT)

Kumamoto

1,990 kW

Autumn 2023

Q3

Sanko Inc. (Industrial waste treatment plant)

Tottori

93.6 t/day

07/2024

Q4

Aizu Komorebi Power Plant (Biomass power plant, FIT)

Fukushima

7,100 kW

11/2024

Chugoku Mokuzai Co., Ltd. Noshiro Plant(Biomass power plant, Heat utilization)

Akita

2,090 kW

03/2024

1,990 kW

Company B (Biomass power plant, FIT)

9,990 kW

Company C (Biomass power plant, FIT)

9,990 kW

Company D (Biomass power plant, O&M)
Water treatment plant
Overseas businessQ3

Ochiai Water Reclamation Center (Sand filtration)

Tokyo

130,000m3/day

01/2025

Q3

TA-HO LU-TSAO ENVIRONMENT CO., LTD. (Stoker upgrade)

Taiwan900 t/day

11/2024*1 O&M: Operation & Maintenance*2 DBO: Stands for Design, Build, Operate. A method of contracting private companies for the design, construction, and operation of facilities, paid for by public funds.
*3 FIT: Feed-in Tariff
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

13

13th Medium-Term Management Plan | Preparation for Growth
In addition to enhancing our hiring and training of human resources for sustainable growth, we will work on R&D
including CO2 separation, capture, and utilization technology, as well as increasing added value through theutilization of digital technology.

R&D･CO2 separation,
capture, andutilization
technology

Participation in C2X

We will participate in the C2X open innovation platform, which seeks to commercialize CCUS technology.
https://www.takuma.co.jp/news/2021/20210610.html

Carbon solidification

Together with Shizuoka University, we are promoting R&D on technology for creating carbon for use as araw material in chemical products by capturing the CO2 contained in flue gas from waste incineration
facilities.
https://www.takuma.co.jp/news/2021/20211124.html

NEDO study

We were commissioned by NEDO (New Energy and Industrial Technology Development Organization) fora study on energy-saving separation and capture of CO2 at biomass power facilities.
https://www.takuma.co.jp/news/2021/20211011.html

Biomethanation

We are promoting R&D such as methane generation technology using technology for fermenting
methane from kitchen waste.
March 3, 2022 edition of Nikkan Kogyo Shimbun

Digital technology

Capital investment

Improving value
offered by utilizing AI
and Solution Lab

We reduced manual waste incinerator operations by 99% using an AI-based combustion control system.
This system and the remote technology we established allow continuous and stable waste treatment
operations even with small numbers of workers.

Construction of new
Harima Factory

Steady progress is currently being made for launch of operations in December 2022.

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

https://www.takuma.co.jp/news/2021/20210628.html

1413th Medium-Term Management Plan |Human Resources Investment, R&D, and Capital Investment••

We will step up our hiring efforts in our Construction, Engineering, and Maintenance divisions to expand ourresources.
In addition to R&D for further fine tuning of our core technologies and decarbonization, we are making
progress on construction of the new Harima Factory as a part of our capital investment.

Human resources investment (people)

2016

2017

2018

2019

2020

2022
(Forecast)

2021

3,447

3,609

3,619

3,816

3,925

4,145

Number of employees (non-consolidated)

824

837

852

875

894

958

New graduate hires (non-consolidated)

18

24

21

20

25

26

Mid-career hires (non-consolidated)

11

10

22

25

37

53

R&D expenses

972

928

960

1,154

1,047

1,006

1,600

Capital investment

342

505

638

1,564

2,420

3,844

9,000

Number of employees (consolidated)

R&D/capital investment (millions of yen)

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

15

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

16

Market Environment | Municipal Solid Waste Treatment Plant(Domestic Environment and Energy Business)••

Demand for renewal and lifetime improvement will continue due to the aging of facilities, and the market sizefor renewal demand is expected to remain at 3,000-4,000 tons/day for the time being.
DBO orders are on the rise from the standpoint of utilizing the private sector, so we seek to continue capturing
demand.

Number of facilities (1,056 facilities)
Percentages by age

Market size forrenewal demand

Order scale(t/day)DBO percentage
(%)

6,000

100

5,000
4,000

20 years old or
less
43%

Over 20 years
old

57%

3,000

50

3,0004,000tons/
day

2,000
1,000
0

2010

2011

2012

2013

2014

2015

2016

2017

Order scale
Source: Prepared by the Company based on the “2020 Survey ofMunicipal Solid Waste Treatment” by the Ministry of the Environment.
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

2018

2019

2020

2021

2022

2023

2024

2025

0

DBO ratio*Based on research by the Company

17Market Environment | Municipal Solid Waste Treatment Plant(Domestic Environment and Energy Business)••

Our operation business is increasing steadily, and as of the beginning of FY2022, we have received orders for 18 facilities, 12 ofwhich are in operation. *DBO only
We will continue working to capture after-sales service demand and O&M.

Ordering party

Operations
period

2007

-

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Okayama City, Okayama●FY2021 order

20 years-2046

Shida Public Association(Yaizu City and Fujieda City, Shizuoka)●FY2021 order

20 years-2046

Sapporo City, Hokkaido

20 years-2044

Saitama City, Saitama

15 years

Nishichita Medical Service and Public Welfare Association(Tokai City and Chita City, Aichi)

20 years

Osaka Wide Area Environmental Facility Association(Osaka City, Yao City, Matsubara City, and Moriguchi City, Osaka)

20 years

Hakodate City, Hokkaido

22 years-2043

Machida City, Tokyo

19 years,
3 months-2040

Nanetsu Seiso Kumiai (Sanitation Association)(Echizen City, Minamiechizen Town, and Ikeda Town, Fukui)

20 years-2040

Regional Cleaning Union of the city of Ota and three towns(Ota City, Gunma, Chiyoda Town, Oizumi Town, Ora Town)

20 years-2040

Miyazu Yoza Union Environment(Miyazu City, Ine Town, and Yosano Town, Kyoto)

19 years,
8 months-2039

Imabari City, Ehime

20 years-2037

Lake Administrative Affairs Association(Okaya City, Suwa City, and Shimosuwa Town, Nagano)

20 years-2036

Hokutan Administrative Association(Toyooka City, Kami Town, and Shinonsen Town, Hyogo)

20 years

Kurume City, Fukuoka

20 yearsAnan City, Tokushima

20 years

Hitachinaka City, Ibaraki

19 years,
11 months

Fujisawa City, Kanagawa

20 years

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

●FY2021 order

12 facilitiesin
operation

-2039
-2043

-2042

-2036
-2036

-2033
-2031

18

Market Environment | Enegry Plants(Domestic Environment and Energy Business)••

Small and medium-sized biomass power generation centered on domestic materials and post-delivery
maintenance demand are trending steadily. Fuel conversion demand has also increased against a backdrop of
soaring energy prices and CO2 reduction initiatives, so we will work to capture this demand.
FIT*1 plans expected to continue for biomass power generation of less than 10 MW. About FIP*2, for the time
being, we expect a cautious stance with respect to use.

FIT price trends

Number of orders for energy plants (cumulative)

2021

2022

2023

Less than 2,000 kW

40 yen40 yen*40 yen*Less than
10,000 kW

32 yen32 yen*FIP

10,000 kW or more

32 yenFIP

FIP

Less than 2,000 kW

24 yen24 yen*24 yen*Less than
10,000 kW

24 yen24 yen*

FIP

Bid

FIP
(Bid)

FIP
(Bid)

71

48

54

60

64
Unused wood
・Timber fromthinning

39
32
19

25

7
3

5

6

8

8

13

14

14

17

19

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Non-FIT

FIT*Non-FIT refers to plants that do not engage in FIT-based power generation. Heat
utilization, in-house power generation, and industrial waste treatment plants.
*1 FIT: Feed-in Tariff*2 FIP: Feed-in Premium
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

Regular wood・Mill ends
・Imported fuel10,000 kW or more

*Regional utilization requirement
Source: Compiled by Takuma based on the website of the Agency for Natural Resources andEnergy (Ministry of Economy, Trade and Industry).

19

Market Environment | Overseas Environment and Energy Business••In emerging countries, there is potential robust demand for waste power. We will continue to work on
establishing a system (including partnerships with local companies) for acquiring orders with local subsidiaries
as our bases of operations.
In Thailand, we will continue to focus on acquiring orders for new construction and maintenance projects as
demand for biomass power generation for sugar factories and others remains firm against the backdrop ofgovernment policies promoting the introduction of generation of renewable energy.

Takuma Co., Ltd.

TaiwanPrimary equipment improvement and renewal
demand associated with aging facilities thatgenerate energy from waste

Taiden Environtech Co., Ltd.
(Local subsidiary)Siam Takuma Co., Ltd.
(Local subsidiary)

Thailand• Demand for new installation, renewal, andexpansion of bagasse (sugar byproduct) fuelboilers at sugar factories• Demand for biomass power generation based on
government policy

Emerging countries
There is demand for energy from waste as populations
grow and urbanization
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

20

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

21

Forecasts for FY2022(Ended 3/2023)•

We expect an increase in both sales and profit owing to an improvement in the EPC project mix in theDomestic Environment and Energy Business.

•

We expect demand to remain strong for municipal solid waste treatment plants and biomass power plants.
Our aim is to keep orders received at a high level even if lower than the previous year.

•

Although there is concern over further increases in the prices of machinery and materials and delayeddeliveries, we aim to achieve our target profit by implementing measures to mitigate the impact, including
placing orders earlier and proposing inflation adjustments (indexation).

•

We do not expect a substantial improvement in the impact of COVID-19.

•

We are not directly impacted by the Russia/Ukraine situation.
(Millions of yen)

FYE 3/2021(FY2020)FYE 3/2022(FY2021)FYE 3/2023(FY2022)
Beginning ofyear forecasts

YoYchangeOrders received

188,563

192,244

170,000(22,244)

Order backlog

387,152

445,304

472,304

27,000Net sales

146,726

134,092

143,000

8,908

Operating profit

10,473

9,928

11,800

1,872

7.1%

7.4%

8.3%

0.8pt

Ordinary profit

11,028

10,647

12,5001,853

Profit attributable to owners of parent

7,529

7,434

8,800

1,366

Profit per share (yen)

92.73

91.53

109.2917.76

Operating margin

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

22

FY2022(Ended 3/2023) | Results Forecasts by Segment(Millions of yen)Orders received

FYE 3/2021(FY2020)FYE 3/2022(FY2021)FYE 3/2023(FY2022)
Beginning of year
forecasts

YoYchangeTotal

188,563

192,244

170,000(22,244)

Domestic Environment and Energy

160,591

164,865

141,500(23,365)

Overseas Environment and Energy

883

2,035

3,000

965

Package Boiler

17,524

16,83017,000170

Equipment and Systems

10,166

8,917

9,000

83

Total

146,726

134,092

143,000

8,908

Domestic Environment and Energy

120,770

108,657

117,500

8,843

Overseas Environment and Energy

1,188

1,005

1,000

(5)

Package Boiler

16,931

16,49817,000502

Equipment and Systems

8,271

8,590

8,000

(590)

Total

387,152

445,304

472,304

27,000

Domestic Environment and Energy

377,143433,351

457,351

24,000Overseas Environment and Energy

427

1,457

3,457

2,000

Package Boiler

4,521

4,852

4,852

0

Equipment and Systems

5,348

5,676

6,676

1,000

Net sales

Backlog

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

23

Shareholder Return• Takuma has adopted a policy of returning profits to shareholders founded on the principle of maintaining astable dividend while working to strengthen its constitution to ensure competitiveness in an increasingly
challenging market and taking into account a comprehensive range of factors, including businessperformance.
• The purchase of treasury stock is one of our options, and we execute such purchases flexibly after making acomprehensive judgment based on the stock price and other factors.
(Millions of yen)
Fiscal year2022
(Forecast)

2016

2017

2018

2019

2020

2021

Net sales

116,309

118,198

121,950

134,454

146,726

134,092

143,000

Ordinary profit

11,605

10,66912,334

10,30011,028

10,647

12,500

Dividend per share (yen)

13.00

16.00

22.00

31.00

36.00

36.00

36.00

Interim dividend per share (yen)

6.00

7.00

10.00

13.00

18.00

18.00

18.00

Dividend payout ratio (%)

12.6

16.9

20.5

34.3

38.8

39.3

Amount of treasury stock
purchased

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

1,999

Up to 2,000 in
747 FY2021 & FY2022
in total

24

In Closing

We are steadily expanding recurring revenue by such means as entering comprehensive contracts
for municipal solid waste treatment plant operations and new deliveries of biomass power plants, so
we expect recurring revenue model businesses to grow as a stable revenue foundation.
We also believe the role that our Group, which offers technologies and services primarily in thefields of environment and energy, plays will become more and more important for achieving adecarbonized society and sustainable society.
Continuing to focus on environment and energy-related businesses as a major growth field, we will
pursue sustainable growth together with our customers and society via ESG management. Thankyou in advance for your understanding and support.
May 2022
Takuma Co., Ltd.

President and CEO
Hiroaki Nanjo
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

25

Table of Contents▶

1 Overview of FY2021(Ended 3/2022) Financial Results▶

2 Progress on 13th Medium-Term Management Plan (2021-2023)▶

3 Market Environment▶

4 Financial Forecast for FY2022(Ended 3/2023)▶

5 Reference Material

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

26

Reference Material | Management Principles•••

In 1912, founder Tsunekichi Takuma invented the first boiler in Japan using purely Japanese technology.
He founded the company in 1938 with the founding spirit "Serve society through boiler manufacturing". The
Management Principles of the Takuma Group are found in this founding spirit, which entails contributing to theworld through the goods and services we create.
This approach, which also translates to sustainability, remains at the core of our business activities today.

Founding Spirit"Serve society
through boiler
manufacturing"

Management
Principles
Founder
Tsunekichi Takuma
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

Serving the country, in other words, contributing to thesociety through business activities including the
manufacture and sale of and services related to boilers*This was the mission statement of Takuma (Takuma Boiler Manufacturing Co., Ltd. atthat time) established by founder Tsunekichi Takuma, who was one of the ten
great inventors of Japanese during the period of Meiji and Taisho.

Takuma will strive for social contribution, corporate valueenhancement, long-term corporate development and thesatisfaction of all stakeholders by providing goods andservices that are needed and recognized as valuable insociety.

27

Reference Material | History••

In 1912, founder Tsunekichi Takuma invented a boiler using purely Japanese technology, and in 1938, hefounded Takuma as a boiler manufacturing company. While improving boiler technology, the Company
cultivated combustion and water treatment technologies and utilized them in waste incineration. In 1963, theCompany delivered Japan’s first 24 hour operating waste incineration plant and expanded its business as amanufacturer of environmental facilities.
Since then, the Company has provided technologies and services for solving customer and societal challenges,
primarily in the field of environmental/energy plants.

Japan’s largest waste
incineration plant delivered

Company renamed

Bagasse-fired
boiler,the first product ofits kind to beexported
The Takuma boiler was launchedby Tsunekichi Takuma.

1938
1912

1949

TAKUMA CO., LTD.

1963

1972

1975

1998

1999

2010

Takuma Boiler
Manufacturing Co., Ltd.,was founded
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

Feed-in tariff (FIT)
program launched.

Act on Special
Measures against
Dioxins enacted.

Japan's first 24 hour
operating waste
incineration plantdelivered
Mass production began on “Vacotin
Heater” the world’s first vacuumtype hot water heater
Supply to hotels and hospitals
nationwide

2012

2014

Energy from Waste plantdelivered in Europe (U.K.)

Takuma's first biomass power
plant under Japan’s FIT program
was launched. Thereafter, many
more plants were delivered.

28

Reference Material | Performance Trends••

A significant amount of renewal/remodeling work on municipal solid waste treatment plants was concentrated
in the period up to around the year 2000. We developed our overseas business to make up for the diminisheddemand following this work, but we still recorded a significant loss.
In the latter half of the 2000s, we focused on establishing its footing in Japan and after-sales service, which
would provide its earnings base. Demand for biomass power plants also increased rapidly, restoring stability toboth net sales and profits.
Net sales(Hundredmillions of yen)

1999

Ordinary profit(Hundredmillions of yen)

2012
Feed-in tariff system for renewable energy(FIT system)

Establishment of Act on Special
Measures against Dioxins

2,000

240

1,500

180

1,000

120

500

60

0

1999

2000

2001

2002

2003

2004

▲ 500

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

0

▲ 60
Net sales

Ordinary profit▲ 1,000
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

▲ 120

29

Reference Material | Long-Term Vision towards 2030 (Vision 2030)
We aim to maintain our role of being an indispensable presence in society as a leading company in the field of
renewable energy utilization and environmental protection by promoting ESG management together withcustomers and society for sustainable growth.

Target ordinary
profit for FY2030

Business Structure¥20.0 billion

Ordinary profit

Recurring
revenue modelbusinesses

Further expansion as a core driver ofgrowthMaintenance, operation management, O&M, energy services, etc.

(Millions of yen)
EPC* Business
20,000Overseas
Business

11,028 10,647

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Maintain and expand position as leading company
Various plant design, procurement, and construction

Expand primarily in emerging countries in Asia
to become a business pillar
Energy from Waste plant and biomass power plant EPC andafter-sale service

Package Boiler
Business

Expand business domain as specialized
manufacturer of broad range of heat source
equipment

Equipment andSystems Business

Steady growth through enhancement ofcorporate capability

New businesses

Create new business opportunities centeredon fields of renewable energy andenvironment*EPC: Engineering, Procurement, and Construction

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

30

Reference Material | Business Segment••

Out of our four segments, the Domestic Environment and Energy Business accounts for roughly 80% of net
sales. Profits were also driven by this business.
Out of these net sales, the Municipal Solid Waste Treatment Plant Business accounts for around 60%, theEnergy Plant Business 30%, and the Water Treatment Plant Business 10%.

Equipment andSystems
6%
Package Boiler
12%
Overseas
Environment andEnergy1%
Water

Domestic Environment
and Energy
81%
Municipal Solid Waste
Treatment(EPC)23%

FY2021Treatment,
etc.
Net sales6%134.0 billion yen
Energy22%

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

Municipal Solid Waste
Treatment (After-sales service)30%

Municipal Solid Waste Treatment Plant
Business
Municipal solid waste treatment plant EPC
and after-sale service for municipalities

Domestic
Environment andEnergyEnergy Plant Business
Large boiler, biomass power plant, andindustrial waste treatment plant EPC andafter-sale service for private enterprises
Water Treatment Plant Business
Sewage treatment facility EPC and after-saleservice for municipalities

Overseas
Environment andEnergyEnergy from Waste plant and Energy plant EPC
and after-sale service

Package Boiler

Manufacture and sale of and after-sale service
related to heat source equipment such as
general-purpose boilers and vacuum-type water
heaters

Equipment andSystems

Sale of and after-sales service related tobuilding equipment (air conditioning, watersupply and drainage work, etc.) and products forthe semiconductor manufacturing industry

31

Reference Material | Business Model(Domestic Environment and Energy Business)••

Plants delivered by the Company are required to operate in a stable manner long term for 20 and 30 years asimportant infrastructure that supports regional waste treatment and supplies electricity and heat.
By constructing plants that operate in a stable manner long term and providing ongoing after-sale services, wewill support the administrative services and business activities of our customers and build relationships of trust.

EPC
Approx. 2-5 years

Engineering (E)Procurement/
manufacturing(P)

Recurring revenue model businesses (after-sale services)
Approx. 20-30 years
Construction/
trial operation(C)

Engineering
Specialists in various fields, including overall plant systems,
combustion technology and flue gas treatment work together to
finalize detailed specifications for the plant.
Procurement/manufacturing
Placement of orders with suppliers for necessary equipment or inhouse manufacturing
Construction
Control and supervision of equipment installation, plumbing, andelectrical work as a construction manager

After-sale services

After-sale services• Maintenance and improvement of performance throughongoing plant operation management, maintenance, andremodeling work.
• At municipal solid waste treatment plants, O&M (Operation &Maintenance) and DBO (Design, Build, Operate) contracts inwhich operation management is combined with maintenancefor long periods of 10 or 20 years are increasing.

Commissioning
Inspection of equipment after plant completion and check plant
performance
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

32

Reference Material | Illustration of Recording of Net Sales/Order Backlog
in DBO Business••

The EPC portion is recorded as sales according to progress on the project. More tends to be recorded in thelatter half of a project as construction progresses.
The O&M portion is recorded as orders when contracts are signed, and after plants are completed, they arerecorded as net sales over the business period.

Completion

Order

EPC
Approx. 2-5 years

Recurring revenue model businesses (after-sale services)
Approx. 20-30 years

Net sales

Orderbacklog

EPC(Construction business)
O&M(Operation business)

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

33

Reference Material | Financial Data (Quarterly)
In the core business of municipal solid waste treatment plants, the amount of each order is substantial, so theamount of orders received fluctuates depending on the timing of the contract when looking at the data by quarter.
(Millions of yen)
E 3/2020 (FY2019)

E 3/2021 (FY2020)

E 3/2022 (FY2021)

Orders received

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Total

27,51142,731

25,424

53,16477,30841,62537,88531,74535,53156,602

16,322

83,789Domestic Environment and Energy

20,29336,10519,03247,72469,70033,822

32,347

24,72228,65848,896

9,241

78,070Overseas Environment and Energy

694

106

264

287

221

174

(5)

493

231

164

1,115

525

Package Boiler

5,012

4,807

4,523

3,583

4,978

4,937

3,871

3,738

5,063

4,276

4,070

3,421

Equipment and Systems

1,570

1,805

1,733

1,682

2,602

2,830

1,868

2,866

1,664

3,381

1,900

1,972

Total

332,181343,416

335,713345,315

390,334

393,896396,549

387,152

395,571

420,052

401,929445,304

Domestic Environment and Energy

321,651

332,693

325,547

337,322

379,819

381,937

386,058

377,143

383,408

406,554

388,058

433,351

Overseas Environment and Energy

898

866

641

733

713

375

138

427

534

364

1,247

1,457

Package Boiler

5,455

5,430

5,257

3,928

5,694

6,406

5,948

4,521

6,391

6,316

6,054

4,852

Equipment and Systems

4,353

4,545

4,401

3,453

4,372

5,471

4,701

5,348

5,440

6,930

6,588

5,676

Backlog

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

34

Reference Material | Financial Data (Quarterly)
As for net sales, much work is delivered at the end of the fiscal year, and progress and deliveries tend to increase
going into the fourth quarter, so net sales tend to be higher in the fourth quarter.
(Millions of yen)
E 3/2020 (FY2019)

E 3/2021 (FY2020)

E 3/2022 (FY2021)

Net sales

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Total

26,26931,49633,12743,56232,28938,06335,232

41,142

27,11232,122

34,44540,413

Domestic Environment and Energy

20,93325,064

26,17835,94827,20331,70528,22533,63722,39325,74927,73832,777

Overseas Environment and Energy

321

137

490

195

241

512

231

204

124

335

231

315

Package Boiler

3,429

4,831

4,696

4,912

3,212

4,225

4,329

5,165

3,192

4,351

4,333

4,622

Equipment and Systems

1,720

1,612

1,877

2,631

1,682

1,732

2,638

2,219

1,572

1,891

2,243

2,884

Total

1,261

2,469

2,378

3,492

2,217

3,609

2,533

2,114

1,045

1,893

2,368

4,622

Domestic Environment and Energy

1,858

2,508

2,644

3,609

2,776

3,766

2,405

2,528

1,610

1,981

2,384

4,931

Overseas Environment and Energy

(65)

(46)

(67)

(24)

(53)

43

(63)

(67)

(98)

12

(55)

(77)

Package Boiler

(83)

390

214

445

(97)

137

269

331

(129)

239

331

231

Equipment and Systems

53

122

85

124

95

197

479

105

169

155

241

91

Total

4.8%

7.8%

7.2%

8.0%

6.9%

9.5%

7.2%

5.1%

3.9%

5.9%

6.9%

11.4%

Domestic Environment and Energy

8.9%

10.0%

10.1%

10.0%

10.2%

11.9%

8.5%

7.5%

7.2%

7.7%

8.6%

15.0%

Overseas Environment and Energy-20.2%-33.6%-13.7%-12.3%-22.0%

8.4%-27.3%-32.8%-79.0%

3.6%-23.8%-24.4%

Package Boiler

-2.4%

8.1%

4.6%

9.1%

-3.0%

3.2%

6.2%

6.4%

-4.0%

5.5%

7.6%

5.0%

Equipment and Systems

3.1%

7.6%

4.5%

4.7%

5.6%

11.4%

18.2%

4.7%

10.8%

8.2%

10.7%

3.2%

Operating profit

Operating margin

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

35

Reference Material | Breakdown of Consolidated Results for Domestic
Environment and Energy Business(100M yen)Orders received
Domestic Environment and Energy

E 3/2020(FY2019)

E 3/2021(FY2020)

E 3/2022(FY2021)

1,231

1,605

855

1,414

Energy

319

54

329

Water Treatment, etc.

56

136

103

1,081

1,207

1,086

706

911

Energy

282

208

291

Water Treatment, etc.

92

87

83

3,373

3,771

4,333

2,426

2,928

Energy

884

730

771

Water Treatment, etc.

62

112

128

Municipal Solid Waste Treatment (EPC)
Municipal Solid Waste Treatment (After-sales service)

1,648
425
787

Net sales
Domestic Environment and Energy
Municipal Solid Waste Treatment (EPC)
Municipal Solid Waste Treatment (After-sales service)

301
405

Backlog
Domestic Environment and Energy
Municipal Solid Waste Treatment (EPC)

Municipal Solid Waste Treatment (After-sales service)

1,215

2,217

* The breakdown and the total do not match due to rounding down of fractions.
* Adjustments are omitted.
Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

36

Handling of this document

Information related to performance forecasts, business plans, and related topics
included in this document or otherwise provided during financial briefings isbased on data currently available to the Company and on certain assumptions
that are deemed to be reasonable. This information includes elements of risk anduncertainty.
Please note that actual performance may diverge significantly from these
forecasts for a variety of reasons.
Takuma is under no obligation to update, revise, or announce changes toforward-looking statements in this document following its publication, except as
required by applicable laws and regulations.
Takuma holds the copyright to this document and prohibits its duplication orreuse for any purpose without its prior consent.

Copyright 2022 TAKUMA Co.,Ltd. All Rights Reserved.

37