June 12, 2024
TAKUMA Co., Ltd.
Transcription of Financial Briefing for FY2023 (ended 3/2024), held on May 24, 2024

＜Speaker＞
Hiroaki Nanjo, the President, Representative Director and CEO of TAKUMA Co., Ltd.

Thank you for taking time out of your busy schedule to join us today for TAKUMA’s FYE March 2024
financial results briefing. My name is Hiroaki Nanjo, the President, Representative Director and CEO.
Today’s explanation will follow this table of contents.

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1. Financial Results of FY2023 (Ended 3/2024)

First, let’s look at the consolidated results for FYE March 2024. Sales were up, but profit was down, withnet sales of JPY 149.1 billion and operating profit of JPY 10.2 billion. The main factor for the decline inprofit was a change in the EPC project mix in the Domestic Environment and Energy Business.
Orders received came in at JPY 160.5 billion due to decreased orders in the Overseas Environment andEnergy Business and the Equipment and Systems Business.

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Meanwhile, the order backlog reached JPY 482.6 billion. This was mainly from steady orders for longterm O&M, such as municipal solid waste treatment plant (waste treatment plant) construction andoperation projects, which currently account for around 55% of the order backlog.
In addition, ordinary profit was JPY 11.1 billion, and profit attributable to owners of parent was JPY 8.7
billion, both down from the previous year.

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The slide shows the analysis of variance in profit. The decline in profit was due to changes in the EPC
project mix, increased depreciation at the new Harima Factory associated with operations, and increases inpersonnel and R&D expenses.

These are the results by segment. The details are provided on pages 7 to 18.

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2. Financial Forecast for FY2024 (Ending 3/2025)

Next, we will look at the forecast for FYE March 2025 results and shareholder returns. In terms of market
conditions, we expect demand to remain strong, centered on waste treatment plant renewals and measures
to extend their service life. The target for orders received is set at a record high of JPY 230 billion,
exceeding the previous high of JPY 192.2 billion recorded in FYE March 2022.
We expect net sales to fall to JPY 143 billion, but due primarily to a change in the EPC project mix,
operating profit, ordinary profit, and profit attributable to owners of parent will each be up at JPY 11.2
billion, JPY 12 billion, and JPY 8.8 billion, respectively.
Due to the nature of our business, plant construction progress varies from year to year. As such, there arealso fluctuations in our performance from year to year, but the market environment is strong.
By expanding our human and other resources and continuing to steadily receive orders while focusing on
recurring revenue model businesses, we believe we can continue to achieve sustainable growth.

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As for profit, although we expect an increase in expenses such as personnel and R&D expenses, we also
expect an increase in profit due to higher gross profit on sales in the EPC Business and recurring revenue
model businesses.

By segment, we are forecasting the figures you see on the slide. We will work steadily to achieve thesetargets.

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We will continue investing aggressively in human and other resources to achieve sustainable growth.

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As for shareholder return, we established a new quantitative shareholder return policy in the 14th MediumTerm Management Plan, which we launched in April of this year. Based on this, we plan to provide anannual dividend of JPY 56 per share in FYE March 2025, an increase of JPY 8 from the previous year.
In addition, as announced on May 14 this year, we will execute share repurchases totaling up to JPY 4
billion in FYE March 2025 and retire all shares purchased this fiscal year. We expect this to bring the total
return ratio to 95.7%.
Under the 14th Medium-Term Management Plan, we will execute share repurchases totaling JPY 12billion, including the JPY 4 billion this year. We expect the three-year cumulative total return ratio to bearound 95%. I will go over the details in the explanation of the 14th Medium-Term Management Plan.

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3. 14th Medium-Term Management Plan (FY2024-2026)

Next, I will explain the 14th Medium-Term Management Plan, which we launched in April of this year.
The Takuma Group has established a Long-Term Vision, “Vision 2030”, which culminates in 2030. Under
this vision, 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 and reach an ordinary profit levelof JPY 20 billion by FYE March 2031

9 / 31As you see on the slide, by promoting ESG management, we hope to achieve sustainable growth for ourcompany and contribute to creating a sustainable society.

10 / 31For the three years from FYE March 2022 to FYE March 2024, we promoted business activities in linewith the 13th Medium-Term Management Plan (the previous medium-term management plan) to achieve
our long-term vision.
Under the previous Medium-Term Management Plan, we worked to strengthen our managementfoundation to lay the groundwork for further growth. This involved securing and developing humanresources while also enhancing our business activities to contribute to solving the issues of our customers
and society. The main initiatives and results are shown on the slide.

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In the previous Medium-Term Management Plan, we set a numerical target of JPY 36 billion for the threeyear total of ordinary profit. We achieved that target, securing ordinary profit of JPY 36.4 billion. The
three-year total for orders received was JPY 521.3 billion.

These are the segment results for the previous medium-term period. Each segment is performing favorably.

12 / 31This slide provides details on the Group’s business portfolio. As for the strategy, recurring revenue modelbusinesses are the drivers of the Group as growth businesses.
In addition, we will maintain and expand our position as a leading company by positioning the EPC
Business, which is the foundation of our recurring revenue model businesses, as the core business of theGroup.
We have positioned the Overseas Environment and Energy Business as a future business that will develop
into one of the Group’s pillars in the medium to long term.
We have positioned the Package Boiler Business and Equipment and Systems Business as ongoing
businesses to continue steadily expanding profits.

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Looking back on the previous Medium-Term Management Plan, we worked to strengthen our managementfoundation by expanding employee recruitment and investing in equipment for the new Harima Factory,
viewing it as a period for sowing the seeds of growth.
In light of this, the 14th Medium-Term Management Plan, which is the current medium-term management
plan, will prioritize allocating management resources to steadily increase orders received for municipal
solid waste treatment plant renewals and primary equipment improvement projects. We will work on
establishing a revenue model for our recurring revenue model businesses, which are the growth drivers.
Strengthening our management foundation in the previous Medium-Term Management Plan andexpanding orders received in the current medium-term management plan has allowed us to put together agrowth story that will finally bear fruit in terms of sales and profits in the 15th Medium-Term ManagementPlan, achieving ordinary profit of JPY 20 billion by FYE March 2031.

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In the current Medium-Term Management Plan, we have set a new target of JPY 600 billion in total orders
received over three years. As mentioned earlier, we will prioritize the allocation of management resources
to the Municipal Solid Waste Treatment Plant Business to achieve this target.
The target for ordinary profit is JPY 38 billion over the three-year period. Due to the nature of our businessmodel, an increase in orders received will not immediately contribute to profits. However, we aim toachieve significant growth of JPY 20 billion in ordinary profit on a single-year basis by FYE March 2031
by expanding our recurring revenue and steadily developing our profitability during the period of thisMedium-Term Management Plan.
We have also set a new ROE target. We aim to achieve an ROE of at least 9% in FYE March 2027, thefinal year of this Medium-Term Management Plan, and at least 12% in FYE March 2031 by strengthening
our profitability and streamlining our balance sheet through measures such as share repurchases.

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As for profit variance during the period of this Medium-Term Management Plan, we expect an increase in
SG&A, such as personnel expenses to secure resources and R&D expenses for essential decarbonization
technologies in the Environment and Energy Business.
On the other hand, we expect the core EPC Business and recurring revenue model businesses, which are
the growth drivers, to remain strong. As such, we forecast an increase in ordinary profit over the three-year
period compared to the previous Medium-Term Management Plan.

16 / 31This slide shows the financial targets by segment. Starting from the current Medium-Term Management
Plan period, we are disclosing annual plans by segment. We will work diligently to achieve the plannedfigures for each segment.

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Next, I will explain our business strategies. Our recognition of the market environment is shown on theslide.
In particular, we expect the Municipal Solid Waste Treatment Plant Business to continue to perform
favorably for the Company, with continued demand for renewals and service life extension, as well as anincrease in demand for operation projects.

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Next is the basic policy regarding the mainstay Domestic Environment and Energy Business.
The first point of our basic policy is to maintain and expand our market position in the EPC Business. In
particular, we plan to around double the number of orders received for renewals and primary equipment
improvements at municipal solid waste treatment plants compared to the previous Medium-Term
Management Plan period.
In addition, in the Energy Plant Business, we will steadily win orders for small- and medium-sized biomass
power plants, which are our specialty.
The second point is to establish a revenue model that fully utilizes recurring revenue. We aim to maintainand expand orders for operation management, maintenance, and long-term O&M projects, as well as
reduce costs and improve quality through the use of data.

19 / 31The third point is steadily expanding revenue in the Package Boiler Business and the Equipment andSystems Business. In Package Boiler Business, which handles general-purpose boilers, we aim to keep
receiving orders for renewal projects by expanding our product lineup for low-carbon and decarbonization.
The fourth point is to build a track record for the future in our international business. Based out of Thailand
and Taiwan, where we have local subsidiaries, we are working to win orders for energy from waste plants
and biomass power plants, mainly in Southeast Asian countries.

20 / 31The fifth point is to actively look into M&A, alliances, and new businesses. We will consider projects thatwill lead to the strengthening of existing businesses, the expansion of personnel, and the expansion ofperipheral businesses, especially in the Domestic Environment and Energy Business.

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Let’s look at how we will strengthen the management foundation. The first point of our basic policy is tosecure and develop human resources. To expand the resources of our recurring revenue model businesses
and the EPC Business, which are the pillars supporting our growth, we will strengthen our human capitalby securing human resources and implementing measures to improve job satisfaction and ease of work.

22 / 31The second point is the promotion of knowledge management. Continuing from the previous MediumTerm Management Plan, we will accelerate digital transformation (DX) using offensive and defensive
approaches to enhance the competitiveness of the Group.

In particular, under the current Medium-Term Management Plan, we seek to improve operational
efficiency by focusing on visualizing data related to technology and plants and making use of data assets.

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Next, I will explain our capital policy. To improve our corporate value over the medium to long term andachieve sustainable growth, and thereby meet the expectations of our stakeholders, the Group has
established measures to realize management that is conscious of cost of capital and stock price.

First, in regard to the current situation, we recognize our cost of equity as around 6%. On the other hand,
ROE has remained at or above 8%, and PBR is stable at 1x or higher.

24 / 31Over the past 15 years, we have enhanced our equity capital to stabilize management and improvecreditworthiness. As a result, ROE has been low.

To solve this issue, we have established the policy shown on the slide within the current Medium-Term
Management Plan. As explained, we seek to improve our profit margin by creating a virtuous cycle
between the EPC Business and recurring revenue model businesses at municipal solid waste treatment
plants.

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Under the current Medium-Term Management Plan, we have established a new quantitative policy forcapital aimed at improving the efficiency of our balance sheet.
The first element of this is the establishment of ROE targets that are conscious of cost of capital. We haveset a minimum target of 9% for FYE March 2027, the final year of this Medium-Term Management Plan,
and 12% for FYE March 2031.
Of course, the entire Group will continue working diligently to achieve an even higher ROE and meet theexpectations of our stakeholders.

26 / 31The second element of our capital policy is setting an appropriate cash allocation to promote understandingof our efforts to improve our corporate value. As priority items during the period of this Medium-Term
Management Plan, we plan to invest JPY 21 billion in growth investments and JPY 26 billion inshareholder returns, including JPY 12 billion in share repurchases.
Of particular note is the JPY 6 billion R&D investment within our growth investments. We arestrengthening our research for realizing a decarbonized society, starting with CCUS (carbon dioxide
capture, utilization, and storage). During the period of this Medium-Term Management Plan, we areaccelerating development by such means as installing demonstration equipment at customer facilities.
Today, as the world moves toward carbon neutrality, we believe that acquiring decarbonization technology
is essential for us to continue in the Environment and Energy Business and ensure our survival as acompany. We will do our utmost to put decarbonization technologies to practical use as soon as possible,
while also making use of partnerships with outside parties.

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As the third element of the capital policy, we established a new shareholder return policy. For dividends,
we will set the target at the higher of either a 50% dividend payout ratio or a 4.0% dividend on equity(DOE).
In addition, we plan to repurchase a total of around JPY 12 billion in shares over the three-year period toimprove capital efficiency. By strengthening shareholder returns alongside growth investments, we hope tomeet the expectations of our shareholders.

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Next, I would like to look at our ESG management initiatives. As part of our environmental initiatives,
during the period of the previous Medium-Term Management Plan, we set KPIs centered on Takuma nonconsolidated performance and worked to reduce CO2 emissions falling under Scope 1 and Scope 2.
During the period of the current Medium-Term Management Plan, we will calculate CO2 emissions underScope 3 and look into establishing a target value that includes group companies to further promote climatechange measures and environmental conservation initiatives.

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As part of our social initiatives, we added employee engagement and customer satisfaction as new KPIs.
We will also continue our efforts to strengthen corporate governance.
This concludes my explanation of the 14th Medium-Term Management Plan, which was launched in Aprilof this year.

4. Reference Material
An overview of the market environment surrounding our business is provided on pages 53 to 67 of thematerial, so I will skip that.

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Finally, in the 14th Medium-Term Management Plan, we will prioritize the allocation of management
resources towards establishing a revenue model that fully utilizes municipal solid waste treatment plantorders and recurring revenue to achieve Vision 2030. We will tie this into achieving results in the 15thMedium-Term Management Plan and future plans.
Continuing to focus on environment and energy-related businesses, we will pursue sustainable growth
together with our customers and society via ESG management. Thank you for listening.

-END-(Disclaimer)
Information related to performance forecasts, business plans, and related topics included in this document
is based on data currently available to the Company and on certain assumptions that are deemed to bereasonable. This information includes elements of risk and uncertainty.
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 to forward-looking statements inthis document following its publication, except as required by applicable laws and regulations.
Takuma holds the copyright to this document and prohibits its duplication or reuse for any purpose without
its prior consent.

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