Tokyu Construction : Presentation material, 1H Financial Results Briefing for the fiscal year ended March 31, 2022

FY03/2022

The First Half

Financial Results Briefing

November 18, 2021

FY03/2022

Revision to the Full-Year Forecast

The First Half FY03/2022 Financial Results Briefing

Factors Contributing to Revisions to Full-year Forecast

"Notice Concerning Revisions to Full-year Forecast" (November 8, 2021)

• Recorded estimated losses related to "Defective Ends of Piles for an Ongoing Construction Project" (announced on
  July 26, 2021)
• Recorded estimated costs of removing temporary structures for civil engineering projects that were delivered in prior years
• Estimated an increase in repair costs for construction defects in some building construction projects that were delivered in prior years

"Defective Ends of Piles for an Ongoing Construction Project (follow-up report)" (November 18, 2021)

• The internal examination committee with third party member examined the "discrepancy between the records of piling work and the investigation results," which was discovered in the process of investigating the cause of the defective ends of piles as announced on July 26, 2021. As a result, it was found that some project site workers had falsified the record table for concrete placing, etc.
• It is absolutely unacceptable that we, a construction company whose business is built on the trust of customers, let such an issue happen. We recognize and seriously and sincerely accept that there was a problem with the quality control system as part of an organization.

Copyright(C) Tokyu Construction. All rights reserved.

[Prevention of recurrence]

Strengthen the quality control system at construction sites

• Improve the system for the head office and branch offices to support project sites
• Set up an expert committee and introduce other measures for specific projects
• Reinforce training for engineers and technicians on core operations including safety, quality, and process control

Ensure thorough compliance education

• Provide compliance education for all officers and employees

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Impact on Earnings

(Millions of yen)

	FY03/2022 Forecast		Difference compared
【Consolidated】	Revised(Nov 8)	Previous(May 12)	to previous
	Forecast	Ratio	Forecast	Ratio	Forecast	pt
Net Sales	267,000		285,000		(18,000)
Operating	(3,600)	(1.3%)	7,000	2.5%	(10,600)	(3.8pt)
Income
【Non-	Forecast	Ratio	Forecast	Ratio	Forecast	Pt
Consolidated】
Net Sales	250,000		267,000		(17,000)
Civil	64,200		69,800		(5,600)
engineering
Building	184,100		195,500		(11,400)
construction
Real estate	1,700		1,700		0
Gross profit	11,300	4.5%	21,600	8.1%	(10,300)	(3.6pt)
Civil	(1,400)	(2.2%)	6,900	9.9%	(8,300) (12.1pt)
engineering
Building	11,900	6.5%	13,900	7.1%	(2,000)	(0.6pt)
construction
Real estate	800	47.1%	800	47.1%	0	0.0pt

Factor (1)	Factor (2)
Changes resulting
from individual	Other changes
factors

Forecast	pt	Forecast	pt
０		(18,000)
(10,250)	(3.8pt)	(350)	(0.0pt)
Forecast	pt	Forecast	pt

0		(17,000)
0		(5,600)
0		(11,400)
0		0
(10,250)	(3.6pt)	(50)	(0.0pt)
(6,750)	(9.8Pt)	(1,550)	(2.3pt)
(3,500)	(1.1pt)	1,500	0.5pt
0	0.0pt	0	0.0pt

If factor (1) were excluded

Forecast pt

250,000

64,200

184,100

1,700

21,550 8.6%

5,350 8.3%

15,400 8.4%

800 47.1%

Factor (1)

Changes

resulting from

individual factors

Factor (2)

Other changes

(Impact

excluding the above factors)

• Recorded estimated losses related to the "defective ends of piles" disclosed on July 26, 2021
• Recorded estimated costs of removing temporary structures for civil engineering projects that were delivered in prior years
• Estimated an increase in repair costs for construction defects in some building construction projects that were delivered in prior years
• Net sales impacted by lower completed construction sales due to delays in order receipt and the progress of some construction projects
• Decline in gross profit of civil engineering due to a decrease in completed construction sales, lower profit margin of railway civil engineering, and the impact of overseas construction
• Increase in gross profit of building construction due to the reduction of construction costs through the ingenuity of construction management, additional orders obtained, etc.

Copyright(C) Tokyu Construction. All rights reserved.

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Dividend Forecast

Based on the policy of aiming to achieve a dividend on equity ratio (DOE) of 4.0% or more, we will pay dividends steadily and consistently in a manner not easily affected by short-term profit volatility

						Dividend per share(yen)				40
					31	30	30
25	26																					Year-end
																			20
																									（forecast）
													10												Interim
																					20
		FY03/16		FY03/17		FY03/18		FY03/19		FY03/20	FY03/21				FY/03/22
																	(Forecast)
Treasury stock acquisition

Total number of shares of treasury stock for FY3/2021: 1,965,100 shares

(total value of acquisition: 999,976,175 yen)

Copyright(C) Tokyu Construction. All rights reserved.

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