Takuma Co., Ltd.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

May 26, 2021

Contents▶ 1

Consolidated Results for the FY2020▶2

Reflections on the Previous Medium- and Long-Term Vision andthe 12th Medium-Term Management Plan

▶3

New Long-Term Vision and 13th Medium-Term Management
Plan

▶4

Consolidated Earnings Forecast for the FY2021

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

1

Contents▶ 1

Consolidated Results for the FY2020▶2

Reflections on the Previous Medium- and Long-Term Vision andthe 12th Medium-Term Management Plan

▶3

New Long-Term Vision and 13th Medium-Term Management
Plan

▶4

Consolidated Earnings Forecast for the FY2021

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

2

Consolidated Results• The Group realized sales and profit growth.
• It achieved its ordinary profit target of at least 10 billion yen.
• The backlog remained high thanks to robust orders.
FY2019FY2020

FY2020ChangeResults

Initial outlook

Results

vs. FY2019

Orders received

100M yen

1,488

1,800

1,885

397

Backlog

100M yen

3,453

3,793

3,871

418

Net sales

100M yen

1,344

1,350

1,467

123

Operating profit

100M yen

96

108

104

8

Ordinary profit

100M yen

103

115

110

7

Profit attributable to owners of parent

100M yen

74

84

75

1

Profit per share

Yen

90.36

103.52

92.73

2.37

Dividend per share

Yen

31.00

36.00

36.00

5.00

50.7%

(1.1pt)Capital adequacy ratio
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

51.8%

3

Orders received
Orders received remained high because we steadily captured orders for robust demand,
primarily from municipal solid waste treatment plants.
(100M yen)
2,000

1,885

1,798

101
85
1,500

174
7

1,488

175
8

67
179
13

vs. FY2019
Domestic Environment andEnergyOverseas Environment andEnergy

1,000

1,605

1,536
1,231

Package Boiler
Equipment and Systems

500

+ 397
+ 374

(4)
(4)

+ 33

* Totals and broken-out figures may differ
due to inter-segment eliminations andconsolidated adjustments.
0

FY2018

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

FY2019FY20204

Backlog
The backlog remained high thanks to robust orders in our municipal solid waste
treatment plant EPC and DBO businesses.
(100M yen)

3,871

4,000

3,309

3,453
vs. FY2019

2,000

3,222

3,373

3,771

+ 418

Domestic Environment andEnergy+ 398

Overseas Environment andEnergy(3)

Package Boiler+5

Equipment and Systems+ 18* Totals and broken-out figures may differ
due to inter-segment eliminations andconsolidated adjustments.
0

FY2018

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

FY2019FY20205

Net sales
Net sales rose thanks to steady progress in the construction of previously orderedplants, primarily municipal solid waste treatment plants.
(100M yen)

1,467

1,500

1,000

500

1,344
1,219

78

88

178

169

82
169
11

+ 123

11

30

937

vs. FY2019

1,081

1,207

Domestic Environment andEnergy+ 126

Overseas Environment andEnergy+0

Package Boiler(9)Equipment and Systems+4* Totals and broken-out figures may differ
due to inter-segment eliminations andconsolidated adjustments.
0

FY2018

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

FY2019FY20206

Operating profit
Operating profit rose thanks to sales growth and cost reductions.
That said, we posted provision for loss on construction contracts for some projects.
(100M yen)
140

116
3
9
1

104
96
3
9

8
6

70

124
106

114

vs. FY2019+8

Domestic Environment andEnergy+8Overseas Environment andEnergy+0

Package Boiler(3)

Equipment and Systems+4* Totals and broken-out figures may differ
due to inter-segment eliminations andconsolidated adjustments.
0

FY2018

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

FY2019FY20207

Contents▶ 1

Consolidated Results for the FY2020▶2

Reflections on the Previous Medium- and Long-Term Vision andthe 12th Medium-Term Management Plan

▶3

New Long-Term Vision and 13th Medium-Term Management
Plan

▶4

Consolidated Earnings Forecast for the FY2021

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

8

Medium- and Long-Term Vision andMedium-Term Management Plans to Date
In order to achieve our vision of JPY 10.0 billion yen in ordinary profit in FY2020, we have worked tobuild structures capable of consistently earning ordinary profit of at least JPY 10.0 billion through three
Medium-Term Management Plans even as the business environment undergoes major changes.
Medium- andLong-Term Vision
Through FY2011

Previous Medium- and Long-Term Vision (Corporate Vision)
FY2012 to FY2020

New Long-Term Vision
FY2021 to FY2030

The Group will strive to maintain its role of being an
indispensable presence in society as a leading company in thefield of renewable energy utilization and environmental
protection and achieve 10 billion yen in ordinary profit in FY2020.
We will work to build structures capable of consistently earning
ordinary profit of at least JPY 10.0 billion even as the businessenvironment undergoes major changes
9th Medium-Term
Management Plan

10th Medium-Term
Management Plan

11th Medium-Term
Management Plan

12th Medium-Term
Management Plan

13th Medium-Term
Management Plan

(FY2009 to FY2011)(FY2012 to FY2014)(FY2015 to FY2017)(FY2018 to FY2020)(FY2021 to FY2023)

Profitability through selection
and concentration of
resources

Reinforcement of businessfoundation for stability andprofitability

Steady expansion in termsof both quantity and quality

Strengthening of corporate
capability to facilitate steady
growthLaying the foundations for
additional growth

Cumulative ordinary
profit results

Cumulative ordinary
profit results

Cumulative ordinary
profit results

Cumulative ordinary
profit results

JPY 13.7 billion JPY 25.7 billion JPY 31.9 billion JPY 33.6 billion
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

9

Reflections on the 12th Medium-Term Management Plan (1 of 3)
 Positioning of the 12th Medium-Term Management Plan
• Final stage of the medium- to long-term vision that began in FY2012.
• Strive to build a resilient business and management foundation enabling Takuma to respond to future changes inthe business environment.

 Policies & key initiatives
3. Increasing productivity, for example by reforming businessprocesses

1. Strengthening and expanding our revenue foundation•

Strengthening our boiler maintenance business and enhancing our ability topropose solutions•

Strengthening the profitability of our waste treatment facility operations businessand applying operational expertise to our boiler and water treatment businesses(in order to expand the business domain of Takuma Technos)•

Maximizing profits by supplying optimal solutions to existing waste treatment
facility customers•

Increasing package boiler and equipment & systems business profits

2. Achieving sustained growth•

Maintaining and expanding our market position in the EPC business•

Creating competitive advantages in the overseas boiler business•

Refining core technologies and developing proprietary technologies and services

Financial targets•

Reviewing and rebuilding our business processes•

Outsourcing non-core operations•

Actively utilizing information and communications technologies

4. Using human resources effectively•

Hiring human resources via a variety of methods•

Fostering human resources development (skill-building)•

Reviewing programs that encourage human resources to prosper and putting inplace an environment conducive to the same

5. Continuing to pursue compliance management

ordinary profit of JPY 33.0 billion (3-year cumulative targets)

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

10Reflections on the 12th Medium-Term Management Plan (2 of 3)
 12th Medium-Term Management Plan results and issues• We implemented our business strategies in accordance with our basic policies and priority measures.
• We achieved a certain measure of success, despite the fact that some issues remain, as we built a tenacious
business and management foundation.

 Results and issues
1. Strengthening and expanding our revenue foundation• Orders increased as we proposed solutions based on customers’ needs
through recurring revenue model businesses (equipment improvements
and service life extensions).
• Progress was made in initiatives designed to reduce Life Cycle Costs(LCC), for example by using POCSYS.
• We received multiple orders in our O&M business, including from theprivate-sector for the first time; began operations and broadened therange of services we offer.
• Firm orders secured for package boilers as well as equipment andsystems helped to contribute to stable consolidated-basis profits.

2. Achieving sustainable growth• In the EPC business, we maintained our market position thanks to anincrease in orders for domestic waste treatment and energy plants.
• Initiatives to improve our position in sludge incineration and expand theoverseas business are ongoing.
• Progress in efforts to refine core technologies and development ofproprietary technologies has generally been smooth.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

3. Increasing productivity, for example by reforming
business processes• Initiatives to improve productivity, for example by utilizing ICT,
have delivered results but remain ongoing.

4. Promoting activities of human resources• The workforce situation remains tight despite significant
expansion in the number of hires as we work to secure thenecessary human resources we need.

5. Continuing to pursue compliance management• Awareness of the importance of compliance has permeated theGroup thanks to ongoing educational activities. Developing
even more effective measures remains an issue.

11

Reflections on the 12th Medium-Term Management Plan (3 of 3)
 Financial targets and results under the previous Corporate Vision and the 12th Medium-Term
Management Plan
: FY2020 ordinary profit JPY10.0 billion• Previous Corporate Vision• 12th Medium-Term Management Plan : Total three-year ordinary profit JPY33.0 billion
1,600

Sales

JPY11.0 billion→ JPY33.6 billion→（left axis）

160
1,467

Ordinary Profit（right axis）
Unit: JPY 100 Million

1,345

1,220
1,200

1,131

1,163
116

1,039

1,010
100

964

891

123

120
110

107

963
94

1,182

103

96
91

800

80
73

400

0

72

44

2010

40

2011

2012

2013

2014

10th Medium-Term Management Plan
Reinforcement of business foundation
for stability and profitability
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2015

2016

2017

11th Medium-Term Management Plan
Steady expansion in termsof both quantity and quality

2018

2019

2020

0

12th Medium-Term Management Plan
Strengthening of corporate capability
to facilitate steady growth

12

Contents▶ 1

Consolidated Results for the FY2020▶2

Reflections on the Previous Medium- and Long-Term Vision andthe 12th Medium-Term Management Plan

▶3

New Long-Term Vision and 13th Medium-Term Management
Plan

▶4

Consolidated Earnings Forecast for the FY2021

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

13

Long-term Vision “Vision 2030” (1 of 2)
Sustainable growth by implementing ESG management
Resolving challenges faced by customers and society,with a focus on renewable energy utilization and environmental protection
Technologies and services••••

Expanding clean energy
Reducing greenhouse gases
Saving energy
Improving energy efficiency

•
•
•
•

Realizing stable treatment of waste
Utilizing unused resources
Capturing and effectively utilizing CO2
Providing decarbonization
technologies• Realizing local production andconsumption of energy• Reducing power and manpower
requirements of plant facilities while
making them more resilient

Takuma Group business
EPC

Recurring revenue model businesses

Overseas businesses

Engineering, Procurement, and Construction(EPC) of a variety of plants

Maintenance, operation management,
O&M, energy services, etc.

EPC and after-sales service for Energy
from Waste plants and biomass power plants

Maintenance and expansion of position
as a leading company

Additional expansion
as a core driver of growth

Expansion with a focus on developing nations in
Asia and its development into a core business for
the Group

Package boiler business

Equipment and systems businessNew businesses

Expanding business domain as amanufacturer specializing in heating
systems

Aim for steady growthby strengthening corporate strength

Creating new business opportunities centeredon the renewable energy and environmental
fieldsCopyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

14

Long-term Vision “Vision 2030” (2 of 2)
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.

Sustainable growth alongside our customers and society

FY2030Technologies and services
Resolutionof challenges

Innovation

Customer

Ordinary profit

20.0

JPY
billionFY2020
TakumaGroup

SocietyOrdinary profit
JPY

11.0

billionCreative R&D

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

Sharingof needs andissues15

Financial Targets of the 13th Medium-Term Management Plan
Lay the foundations for additional growth and take the first steps under the 13th Medium-Term
Management Plan as we prepare to realize the Vision 2030 target of ordinary profit of JPY 20.0 billion.

FY2020

FY2030Vision2030

Previous vision
12th Medium-Term Management Plan

13th Medium-Term Management PlanFirst steps
towards realizing the vision 2030

The Group’s financial
foundations were
strengthened prior to the12th Medium-Term
Management Plan.

Laying the foundations
for additional growth

JPY 20.0 billion

Cumulative 3-year
ordinary profit
JPY 36.0 billion

Ordinary profit

Ordinary profit

13th Medium-Term Management Plan
financial targets (cumulative 3-year targets)

JPY 11.0 billion

Ordinary profit JPY 36.0 billion
Orders received JPY 450.0 billion (for reference)

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

16

Policies of the 13th Medium-Term Management Plan
Strengthening conventional businesses by reinforcing the Group's management foundation andat the same time accelerating its response to future environmental changes.
Strive to realize sustainable growth alongside customers and society
by implementing ESG management through these business activities.

Implementing ESG management

Pursuit of business activities that resolve challenges faced by customers and society
1

Municipal solid waste treatment plants

5

Overseas businesses

2

Water treatment plants

6

New businesses

3

Energy plants

7

Package boilers

4Power retail business8

Equipment and systems

Strengthening
conventional businesses

Responding toenvironmental changes

Strengthening the management foundation
Human resources

Digital technologies

R&D, Manufacturing and engineering
capabilities

Partnerships

Capital investment

Compliance

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17

Implementing ESG Management
Striving to satisfy all stakeholders and realize the Group’s sustainable growth
while strengthening ESG initiatives through business activities
 Takuma Group Materiality ※E

Environment• Helping combat climate change• Conserving resources
and protecting the environment

S

Realization of a sustainable society

Social• Strengthening relationshipsof trust with customers and communities• Pursuing partnerships and innovation• Promoting activities of human resources• Ensuring safety and health

G Governance• Strengthening corporate governance※Medium- to long-term ESG issues identified as priority issues for the Takuma Group.
We sorted out them from the perspectives of both importance to stakeholders and importance to us.

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18

Strategies by Business (1 of 4)
Provide products and services that resolve challenges faced by customers and society in every business.

1

Municipal solid waste treatment plants

2

Water treatment plants

 Improving quality and strengthening
profitability in the plant operation businessand after-sales service business Maximizing profitability by extending theservice life of existing facilities
 Ensuring a sustained flow of orders bycreating customer value Ensuring a sustained flow of orders for
sludge incineration plants
 Expanding the after-sales service
business Accommodating replacement demand
from existing facilities

 Developing structures that will allow us
to accept long-term comprehensive
contracts

Developing structures that will allow us to provide
new services, for example private sector
outsourcing, private sector partnerships andRegional Circular and Ecological Sphere (Regional
CES) businesses

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19

Strategies by Business (2 of 4)

3

Energy plants

4Power retail business Expanding our market presence
through steady orders for biomass
power plants
 Expanding our business throughadditional proposals of after-sales
service solutions

 Expanding the scale of the business byenhancing products in areas such as
renewable energy and CO2-free power anddeveloping new sales channels
 Realizing additional expansion in the local
production and consumption of power Capturing demand for fuel conversions
in industrial boilers

 Examining expansion of our service menu toprovide the power demanded bycommunities and customers

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20

Strategies by Business (3 of 4)

5

Overseas businesses

 Ensuring a sustained flow of orders forbiomass power plants
 Expanding the flow of orders formaintenance Capturing orders for Energy from
Waste plants and developing
associated structures
 Implementing global procurement

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6

New businesses

 Developing businesses that help
enhance the Group’s services in orderto realize a decarbonized, carbonneutral society
 Investing in renewable energy
businesses

21Strategies by Business (4 of 4)

7

Package boilers

 Maintaining and expanding the scale oforders in the existing domestic package
boiler market
 Expanding overseas businesses Building and expanding a basis for profit bydeveloping a new market for heating
systems based on a decarbonized society

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8

Equipment and systems

 Expanding the flow of orders by
improving sales and construction
capability (equipment) Expanding market share by improving
products’ competitiveness (systems)
 Improving functionality and expanding
business opportunities throughalliances (systems)

22

Contents▶ 1

Consolidated Results for the FY2020▶2

Reflections on the Previous Medium- and Long-Term Vision andthe 12th Medium-Term Management Plan

▶3

New Long-Term Vision and 13th Medium-Term Management
Plan

▶4

Consolidated Earnings Forecast for the FY2021

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

23

Consolidated Earnings Forecast for FY2021• We expect to see continued robust demand for waste incineration plants and biomass
power plants.
• We will strive to secure profits on par with FY2020, even as revenue declines due tochanges in the mix of projects in the EPC business.
*The forecast does not take into consideration effects of the COVID-19 pandemic.

FY2020

FY2021

ChangeResults

Forecast

vs. FY2020

Orders received

100M yen

1,885

1,800

(85)

Backlog

100M yen

3,871

4,301

430

Net sales

100M yen

1,467

1,370

(97)

Operating profit

100M yen

104

104

0

Ordinary profit

100M yen

110

110

0

Profit attributable to owners of parent

100M yen

75

76

1

Profit per share

Yen

92.73

93.57

0.84

Dividend per share

Yen

36.00

36.00

0

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24

Anticipated Effects of the COVID-19 Pandemic during FY2021
While the pandemic impacted some businesses during FY2020, the impact on overall
operations during FY2021 will be slight.
All businesses• We will reduce the impact of the pandemic on orders and sales by switching to remote work, shift work, or
smaller teams for sales activities and operations at ordered projects.
Package Boiler Business• Sales will decline as capital investment and maintenance demand fall, primarily in the hotel industry.

Equipment and Systems Business• Increased demand for air purification systems, which we began selling in 2016, will help bolster sales.

 Impact on results during FY2021
We have not incorporated the effects of the pandemic into our forecast at the present time,
although we continue to monitor the risks it poses.
Should the effects of the COVID-19 pandemic broaden or last longer than anticipated, our performance
could be affected, for example in the form of a decline in new orders due to contracting demand or
delayed orders or a slowdown in sales as a result of delays in deliveries of previously ordered projects.
In the event it becomes necessary to revise the earnings forecast, we will make that information
available in a timely and appropriate manner.
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

25

Conclusion

Reflecting its goal of maintaining its role of being an indispensable
presence in society as a leading company in the field of renewable energy
utilization and environmental protection, the Takuma Group will continue tocontribute to the resolution of social issues and the realization of asustainable society by providing new value in the world.
Going forward, we will work to realize sustained growth together withcustomers and society by becoming an even better partner for ourcustomers, thinking creatively, and actively pursuing initiatives that go
beyond the conventional wisdom as a leading company while taking pridein our ability to contribute to the protection of the Earth’s environment.

Thank you for your attention.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

26

Supplementary Materials

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27

Company Outline

Name
Established
Representative
Head officelocation

Takuma Co., Ltd.
June 10, 1938
Hiroaki Nanjo, President and CEO
2-2-33 Kinrakujicho, Amagasaki-shi, Hyogo Prefecture

Capital13.3 billion yen

Main
Business

EPC and after-sales service for environmental and energy plants, including waste
treatment facilities and biomass power plants

Directory

Head Office, Osaka Office, Tokyo Branch, Hokkaido Branch, Tohoku Branch,
Chubu Branch, Kyushu Branch, Okinawa Branch, and Harima Factory
Overseas: Taipei Branch

Employees(Non-consolidated) 894(Consolidated)
3,925 (as of March 31, 2021)

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

28

Management Principles
Company Motto

Value Technology, Value People, Value the EarthManagement Principles

Takuma will strive for social contribution, corporate value enhancement,
long-term corporate development and the satisfaction of all stakeholders

by providing goods and services that are needed and recognized as
valuable in society.

Our Founder
Tsunekichi Takuma

In 2006, as the management principles of Takuma and the Takuma Group, we have organized and clarified the values of “Service to thenation through boiler manufacturing,”* which is the founding spirit of our company (Takuma Boiler Manufacturing Co., Ltd. at that time).
We aim to contribute to society by supplying goods and services that we provide. This spirit can also be applied to the concept of
Sustainability and ESG that in recent years has become a vital issue for corporate management.
*Service to the nation through boiler manufacturing,
It was the mission statement of Takuma, then Takuma Boiler Manufacturing Co., Ltd., founded by Tsunekichi Takuma, one of the ten great inventors
of Japan during the period of Meiji and Taisho (1868 - 1926).

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29

Takuma’s Origins
Founder Tsunekichi Takuma invented the Takuma boiler in 1912 based on a unique design following a period of
painstaking research, making a significant contribution to the development of Japanese industry through its
performance that overwhelmed the foreign technologies that dominated the field at the time. Tsunekichi founded
Takuma Co., Ltd in 1938 with the philosophy of “Serve society through boiler manufacturing” in an effort to spurthe further development of boiler technology through an approach based solely on domestic manufacturing.

Harima Factory under construction

Houroku (unglazed pot)
used in boiler water circulation experiments
along with a corresponding sketch
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

Tsunekichi posing with his boiler

Band performance celebrating the first shipmentof the Tsunekichi Model A boiler

30

History

Japan’s largest waste
incineration plant delivered

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

2014
2012

Mass production began on “Vacotin
Heater” the world’s first vacuumtype hot water heater
Supply to hotels and hospitals
nationwide

2010
1999
1998

1986

Feed-in tariff (FIT)
program launched.

Act on Special
Measures against
Dioxins enacted.

1975
1963

1949
1938
1912

Japan's first 24 hour
operating waste
incineration plantdelivered

Takuma Boiler
Manufacturing Co., Ltd.,was founded

The first overseas delivery
of a waste incineration
plant completed (U.S.A.)

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.

1912 to 1950

1951 to 1971

1972 to 1999

2000 and beyond

Tsunekichi Takuma adopted the founding
spirit of “Serve society through boiler
manufacturing,” marking the birth of the
stance and philosophy that would become
the cornerstone of Takuma’s operations.

Takuma established its position as amanufacturer of not only boilers, but also
environmental and hygienic equipment.
• The company developed heat recovery
boilers that use waste heat from plants.
• It also developed modern waste
incineration technology.
• It entered the water treatment market.

In 1972, Takuma changed its name to
Takuma Co., Ltd. As it grew, the company
worked to develop technologies in response
to a variety of needs.
• Demand for energy savings in industry• Accommodation of growing and diversifying
municipal waste• Improvement of water quality by water
treatment equipment

Takuma continues to provide technology for
utilizing and rendering harmless a variety of
waste and biomass energy sources throughits businesses in the renewable energy andenvironmental protection fields. We
established local subsidiaries overseas andcontinue to bring our technologies tocustomers not only in Japan, but alsoworldwide, particularly in Asia.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

31

Takuma Group Strengths
Along with the technologies and expertise that the Takuma Group has improved and accumulated since its founding, the relationshipsof trust that the Group has developed with longstanding customers by providing after-sales service and solutions are its greatest
strengths and the source of its ability to compete successfully.

Municipal solid waste
treatment plants

Water treatment
plants• Waste incineration plants
360+ facilities• Uniflow sand filters: 2,700+ units• Sludge incinerators: 20+ facilities

Energy plants• Boilers: 3,200+ units
Of which, biomass boilers: 620+ units• Industrial waste treatment plants: 120+
facilities

Building equipment and equipment
for the semiconductor industries

Package boilers• Vacuum-type Hot Water Heaters(Vacotin Heater)• Once-through Boilers (Equos)• Heat-transfer Boilers (Thermoheater)• Air-conditioning, water, wastewater,and hygienic equipment installation services• Equipment for the semiconductor and electronic device
industries

Takuma Group Strengths

Technology and expertise

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

Relationships of trust with customers

32Segments

Domestic Environment
and Energy Business• Municipal Solid Waste Treatment Plant
Waste incineration plants
Biogas recovery plants
Recycling plants• Water treatment plants

Overseas Environment
and Energy Business• Waste treatment plants
Energy from Waste plants.

• Energy plants
Biomass power plants

Sewage sludge power plants
Sand filtration systems• Energy plants
Biomass power plants
Industrial waste treatment plants

Package Boiler Business

Equipment and Systems Business• Vacuum-type Hot Water Heaters• Building equipment

Vacotin Heater• Once-through Boilers
Equos• Heat-transfer Boilers
Thermoheater• Hybrid hot water systems
Qpit

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

Air-conditioning, water,
wastewater,and hygienic equipment
installation services• Equipment for thesemiconductor
industries
Clean system etc.

33

Domestic Environment and Energy Business Municipal Solid Waste Treatment Plant Business(Related SDGs)

We supply the following products and services
to local governments:•••

EPC*1 and DBO*2 businesses for waste treatment
facilities
Stoker-type incinerators (waste incineration plants)
Methane fermentation systems (biogas recovery plants)
Crushing and sorting systems (recycling plants)
Primary equipment improvement projects and service
life extension projects
O&M, operation management, and maintenanceWe supply products and services that meet the needsof various communities based on the technology andexpertise we’ve accumulated through the construction
and provision of after-sales service for numerous
plants over more than half a century.

*1 EPC: Project construction contracts that include design,
procurement, and construction (engineering, procurement,
construction)*2 DBO: An approach in which the public sector provides funding
for a private-sector entity to design, build, and operate a facility(design, build, operate).

No. of waste incineration plants delivered: More than 360(Most of any manufacturer in Japan)
DBO business projects: 15 (FY2020, including projects under construction)
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

34

Market Environment - Municipal solid waste treatment plants
Replacement and service life extension demand continues due to aging.
 Facility age

 Market size
(Tons per day)More than
40

5,000

5% More than30
20 or less2020 and beyond:
Takuma forecast
4,000

17%

37%

3,000

2,000

More than 20

42%

1,000

0
FY2010Percentage of facilities
Source: Compiled by Takuma based on “Municipal Solid Waste Treatment
Survey Results, FY2019” (Ministry of the Environment).
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

FY2015

FY2020

FY2025Treatment capacity of total order in the market

Based on a study by Takuma.

35

Market Environment - Municipal solid waste treatment plants
The DBO approach is gaining traction in bidding for facility construction.
Treatment capacityof total order in the market(Tons per day)DBO ratio
(%)

5,000

100

4,000
75

3,000

50
2,000

25
1,000

0

0
2010

2011

2012

2013

DBO (publicly built, privately operated)

2014

2015

2016

2017

Publicly built, publicly operated* DBO: An approach in which the public sector provides funding for a private-sector entity todesign, build, and operate a facility (design, build, operate).
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

2018

2019

2020
(Fiscal year)
Percentage of DBO projects

Based on a study by Takuma.

36

Market Environment - Municipal solid waste treatment plants
The number of DBO projects which Takuma received is rising steadily.
Operation FY

Ordersreceived in
FY2020Name

Duration ofoperation

Nishichita

20 yr.

Komaoka

20 yr.

Saitama

15 yr.

Suminoe

20 yr.

Machida19 yr.
3 mos.

Nan’etsu

20 yr.

Ota

20 yr.

Miyazu19 yr.
8 mos.

Imabari

20 yr.

Suwako20 yr.

Hokutan

20 yr.

Kurume20 yr.

Anan

20 yr.

Hitachinaka

20 yr.

Fujisawa

20 yr.

2007

2012

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

37

Topic - Municipal solid waste treatment plants
 Takuma received a DBO project order for Komaoka Incineration Plant from the City of
Sapporo.
Contributing to sustainable community development througha DBO project designed to realize Sapporo’s concept of theSDG-compliant city of the future•••

Stable waste treatment using state-of-the-art technology (high-performance
stoker incinerators, advanced exhaust gas treatment technology, and remotemonitoring operational support from Solution Lab, etc.)
Reduced CO2 emissions through high-efficiency generation of electricity andsupply of heat to the surrounding area
A phase-free facility that serves as both a base for community activities
involving residents during normal times and as a disaster prevention base intimes of emergency

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

Treatment capacity:

600 tons per day (300 tons
per day × 2 incinerators)

Power output:

16,550 kW

Contract value:

60,716,000,000 yen(excluding consumption tax)

Scheduled completion: March 2025
Operation period:

April 2025 to March 2045

38

Domestic Environment and Energy Business Energy plants(Related SDGs)

We supply the following products and services toprivate-sector businesses:•

Biomass power plant EPC*1•

Industrial waste treatment plant EPC•

O&M, operation management, and maintenance

We have extensive experience in constructing
plants using various types of fuel. We propose
the combustion furnace types*2 and plantsystem best suited to the fuel to be used ateach facility and plant on a custom-order basis.

*1 EPC: Project construction contracts that include
design, procurement, and construction (engineering,procurement, construction).
*2 Primarily the following four methods: Step gratestoker, traveling stoker, bubbling fluidized bed (BFB),
and circulating fluidized bed (CFB).

No. of boilers delivered: More than 3,200, of which more than 620 are biomass-fueled*Including overseas projects.

No. of plants delivered under FIT program: Most of any manufacturer in Japan
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

39

Market Environment - Biomass power plants
 Trends in biomass power generation under the FIT program• In FY2016, the government adopted a purchase price reduction (from 24 yen to 21 yen) for the category of plants
using general wood fuel with output of at least 20,000 kW for FY2017. The number of facilities being certified under
the FIT program grew rapidly as numerous businesses obtained certification in that category during FY2016. At thesame time, some projects failed despite having passed the certification and contract stages when favorable
conditions, for example concerning fuel procurement, failed to materialize.
• As of December 2020, operational facilities had a combined output of about 4.9 million kilowatts. Numerous certified
projects are currently in the design or construction phase. The workload on equipment manufacturers and contractors
is high, and costs remain high.

 Growth in the combined output of biomass power plants certified and brought
online under the FIT program (cumulative totals)
Power output (unit:10MW)

1,800

Total output of certified plants
Total output of operational plants

1,470
1,070

1,200

1,130

1,080

1,030

Fifth Energy Basic Plan
Energy mix

602 to 728
600

600
320

280

360

400

450

490

0
End of FY2015

End of FY2016

End of FY2017(1) If an order cannot be placed within 2 years of certification→ Loss of certification(2) If the facility is not operational by November 30, 2024
→ Shorter power purchase period
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

End of FY2018

End of FY2019

December 2020

(1) If the facility is not operational within 4 years of certification→ Shorter power purchase period(2) If the facility is not operational within 1 year of the operational
start deadline and satisfies certain conditions→ Loss of certification

FY2030Source: Compiled by Takuma based on thewebsite of the Agency for Natural Resources andEnergy (Ministry of Economy, Trade and Industry).
Figures in graph have been rounded. Figuresreflect biomass ratios. Figures include 2.30 million
kW of plants brought online prior to theintroduction of the FIT program.

40

Market Environment - Biomass power plants
 Transition of some plants from the FIT program to the FIP program• During FY2022, biomass power plants with output of 10,000 kW or greater will transition from the FIT program toa feed-in premium (FIP) program. The program, which reflects a midpoint in the drive to establish independent
renewable energy power sources, will implement market and arm’s-length transactions, rather than purchases atfixed prices. It will serve as a mechanism to offer subsidies to power producers by allocating premium prices thatare calculated on the basis of factors such as average market prices.
• The FIP program will target biomass power plants with output of 50 kW or greater. Since biomass power plants
with output of less than 10,000 kW will be able to obtain FIT certification if they satisfy certain regional activity
requirements, demand under the FIT program is expected to continue. Takuma continues to observe trends inprogram changes.

 Procurement pricing under the FIT program
FY
Timberfromthinning,
etc.

Generaltimber2015

2016

Less than
2,000 kW

2017

2018

2019

2020

2021

2022

40 yen40 yen, subject to regional activity
requirements

2,000 kW or
greater

32 yen32 yen, subject to regional activity
requirements*Plants with output of 10,000 kW or
greater will migrate to the FIP
program.

Less than
10,000 kW

24 yen24 yen, subject to regional activity
requirements

10,000 kW or
greater

24 yen24 yen(less than 20,000 kW)
21 yen(20,000 kW or greater)

As bidPlants will transition to
the FIP program.

Source: Compiled by Takuma based on the website of the Agency for Natural Resources and Energy (Ministry of Economy, Trade and Industry)
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

41

Domestic Environment and Energy Business Water treatment plants(Related SDGs)

We supply the following products and services,primarily to water treatment plants operated by local
governments:• Sewage sludge power generation system EPC(Step grate stoker incinerators)• Moving-bed sand filtration systems• Maintenance and operation management
A sewage sludge power plant

Helping solve customers’ issues with unique
technologies• Energy-saving/energy-creating
sludgepower
generation systems with low greenhouse gas(N2O) emissions• Moving-bed sand filtration systems (Uniflow Sand
Filter), etc., of which we've delivered about 2,700
systems.

Sand filtration systems

Sewage sludge incinerator deliveries More than 20 facilities
Moving-bed sand filtration system deliveries More than 2,700 systems
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

42

Topic - Energy plants and water treatment plants
 Takuma received a biomass power plant EPC orderfrom SGET Toki Biomass Godo Kaisha.
The customer made a favorable evaluation of Takuma based on our
extensive experience in delivering more than 620 systems, ourproducts’ ability to accommodate a diverse range of fuels, and theoperational performance of a biomass power plant we delivered to
SGET Green Power Sanjo Godo Kaisha.
Power output: 7,100kW
Scheduled completion: December 2022

 Takuma received a sewage sludge power generation
system EPC order from the City of Sapporo.
The system combines a stoker furnace, which is a type of energysaving incinerator, with a generating facility that will create energy.
The project will help save energy, make effective use of sewage
sludge, and reduce greenhouse gas (N2O) emissions.
Treatment capacity:

100 tons per day × 1 incinerator(power output: about 200 kW)

Order value:

4.38 billion yen

Scheduled completion: March 2024

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

43

Topic - Initiatives to realize a carbon-free society CO2 supply system (t-CarVe®) delivered to Sara Inc.
received the Japan Machinery Federation’s
Chairman’s Award
Takuma’s system supplies large volumes of safe,
economical CO2 by removing hazardous components
from the combustion gases from a biomass power
plant.
• The technology comprises a biomass tri-generation systemthat uses heat, electricity, and CO2 to cultivate vegetables.
• The carbon-negative system helps reduce CO2 emissions.

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

44

Other segments(Related SDGs)

 Overseas Environment and Energy Business
Sales and after-sales service of biomass power plants, waste
treatment plants

 Package Boiler Business
Manufacturing and sales of package boiler•

Vacuum-type Hot Water Heaters (Vacotin Heater)•Once-through Boilers (Equos)•Heat-transfer Boilers (Thermoheater) Equipment and Systems Business Air-conditioning, water, wastewater, and hygienic equipment
installation services
 Equipment for the semiconductor and electronic device industries
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

45

Topic Capital investment - New TAKUMA Building [Training Center] Bolstering Takuma’s offices andtraining facility (2018 to 2020)
We built the New TAKUMA Building next to the
Head Office to address issues including
insufficient office space.
••

Creating a sustainable facility that makes extensive use oflumber such as cross-laminated timber (CLT)
Developing a training floor that can accommodate largescale training with up to 150 participants

 Enhancing plant remote monitoring andoperational support facility (Solution Lab)
Contributing to stable facility operation•••

Providing 24-hour remote monitoring of operating conditions
and operational support
Using big data to resolve operational issues
Using simulators to improve operational technologies

Total investment
Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

About 2 billion yen
46Topic Capital investment - New Harima Factory Increasing production capacity
Accommodating a diverse range of needs
against the backdrop of increasing use ofrenewable energy• High boiler demand• Larger boiler size
• Higher-temperature, higher-pressure (higherefficiency) designs, etc.

Purpose•Passing down our commitment tohigh-quality manufacturing•

A sustainable factory designed toeffectively eliminate CO2 emissions

 Establishing an after-sales service facility(Supply Chain Lab)
Contributing to stable facility operation• Plant component inventory• Utilizing information and communication
technologies (ICT)• Collaborating with the Solution Lab

Planned completion

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

December 2022

Total investment

About 13 billion yen
47

Topic Growth investments - M&As
 Acquisition of Techno Links Inc.
Techno Links is a manufacturer whose operations encompass the design, manufacture, installation,
and after-sales service of environmental recycling equipment*. We’re striving to build sorting
systems that can achieve a higher recycling rate by adding the company’s ability to design custommade equipment based on the properties of the waste being recycled with Takuma’s overall plantdesign capabilities.
*Equipment that makes up the recycling plants that Takuma builds as part of its EPC business.

• Equipment for crushing, sorting,compacting, and transporting beveragecontainers like bottles, cans, and plastic
bottles• Equipment for manufacturing andtransporting RPF• Equipment for sorting and compacting
other plastics• Belt conveyors and other equipment

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

48

Supplementary Material• Breakdown of Consolidated Results for Domestic Environment and Energy Business(100M yen)

FY2020Ordersreceived

Net sales

Backlog

1,414

911

2,928

Energy Plant

54

208

730

Water Treatment Plant, others

136

87

112

1,605

1,207

3,771

Municipal Solid Waste Treatment Plant

Total

Copyright 2021 TAKUMA Co.,Ltd. All Rights Reserved.

49

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 2021 TAKUMA Co.,Ltd. All Rights Reserved.

50