Slide 1: Takuma Co., Ltd May 25, 2023
Takuma Co., Ltd May 25, 2023 Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved.
Slide 2: Table of Contents
Table of Contents 1. Corporate Information 2. Overview of FY2022 (Ended 3/2023) Financial Results 3. Progress on 13th Medium-Term Management Plan (2021-2023) 4. Financial Forecast for FY2023 (Ended 3/2024) and Shareholder Return Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved. 1
Slide 3: 1. Corporate Information
1. Corporate Information 2. Overview of FY2022 (Ended 3/2023) Financial Results 3. Progress on 13th Medium-Term Management Plan (2021-2023) 4. Financial Forecast for FY2023 (Ended 3/2024) and Shareholder Return Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved. 2
Slide 4: Business Segment
Business Segment Our business is centered on engineering, procurement, and construction (EPC) and after-sales service of waste treatment facilities, biomass power plants, etc. based on the primary themes of “environment” and “energy”. Overseas Municipal Solid Waste Treatment Plant Business Environme
Slide 5: History
History In 1912, we invented the first boiler in Japan using purely Japanese technology. While improving boiler technology, the company cultivated combustion and water treatment technologies and utilized them to enter the environmental field, such as waste incineration plants. Since then, we have pr
Slide 6: Performance Trends
Performance Trends In the latter half of the 2000s, we focused on after-sales service, which would provide its earnings base. There has been steady demand for renewal and service life improvement of waste treatment plants and an increase in demand for biomass power plants, resulting in stable net sa
Slide 7: Business Model
Business Model Domestic Environment and Energy Business Revenue comes primarily from engineering and construction (EPC*) and after-sales service (operational management, maintenance, O&M*, etc.) of plants. Completion Approx. 2-5 years Approx. 20-30 years EPC after-sales service Recurring revenue mod
Slide 8: 2. Overview of FY2022 Financial Results
1. Corporate Information 2. Overview of FY2022 (Ended 3/2023) Financial Results 3. Progress on 13th Medium-Term Management Plan (2021-2023) 4. Financial Forecast for FY2023 (Ended 3/2024) and Shareholder Return Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved. 7
Slide 9: FY2022 (Ended 3/2023) Financial Highlights
FY2022(Ended 3/2023) Financial Highlights Orders received have decreased but remain at a high level. Both sales and profit were up owing to a change in the EPC project mix. Orders received: In the Domestic Environment and Energy Business, although we received one order for the construction and ope
Slide 10: FY2022 Breakdown by Segment
FY2022(Ended 3/2023) Breakdown by Segment FYE 3/2021 FYE 3/2022 FYE 3/2023 (Millions of yen) YoY change (FY2020) (FY2021) (FY2022) Orders received Total 188,563 192,244 168,558 (12.3%) Domestic Environment and Energy 160,591 164,865 130,280 (21.0%) Overseas Environment and Energy 883 2,035 5,922 191
Slide 11: Domestic Environment and Energy Business: Orders Received / Order Backlog
Orders received / Domestic Environment and Energy Business Order backlog Orders received have declined due to fewer orders for waste treatment plant construction and operation projects. The order backlog is on the rise owing to orders for long-term O&M. Orders received were down YoY due to the abs
Slide 12: Domestic Environment and Energy Business: Net Sales / Operating Profit
Net Sales / Domestic Environment and Energy Business Operating Profit Sales and profit were up owing to a change in the EPC project mix and an increase in recurring revenue model businesses such O&M and power retail businesses. Net sales Operating profit (Millions of yen) Approx. ¥7.3 billion increa
Slide 13: Domestic Business Breakdown by Product / Service
Breakdown by Domestic Environment and Energy Business Product / Service Orders received have declined due to fewer orders for municipal solid waste treatment plant construction and operation projects (3 DBO projects →1 BTO project). Net sales were up owing to an increase in energy plants, water trea
Slide 14: Domestic Business Quarterly Trend (Reference material)
Quarterly trend in Domestic Environment and Energy Business Orders received / Net sales (Reference material) Orders received vary significantly depending on the timing that projects are recorded. Net sales tend to increase going into the fourth quarter. Orders received (quarterly) Net sales (quarter
Slide 15: Overseas Business: Orders Received / Order Backlog
Orders received / Overseas Environment and Energy Business Order backlog Both orders received and the order backlog increased significantly owing to orders for new plants. We will continue going after new construction and replacement projects in addition to maintenance services. Orders received Orde
Slide 16: Overseas Business: Net Sales / Operating Profit
Net sales / Overseas Environment and Energy Business Operating profit Sales were up, and operating profit improved with progress on equipment replacement work at energy from waste plants ordered in the previous year in addition to maintenance services. Net sales Operating profit (Millions of yen) Ap
Slide 17: Package Boiler Business: Orders Received / Order Backlog
Package Boiler Business Orders received / Order backlog Orders received increased owing to a recovery in equipment utilization rates and demand for new equipment, which had declined during the COVID-19 pandemic. The order backlog increased owing primarily to an increase in orders and an increase in
Slide 18: Package Boiler Business: Net Sales / Operating Profit
Package Boiler Business Net sales / Operating profit Sales and profit were up owing to an increase in orders received despite the increase in projects with longer delivery periods. Back at pre- COVID-19 levels. Net sales Operating profit (Millions of yen) Approx. ¥810 million increase (Millions of y
Slide 19: Equipment and Systems Business: Orders Received / Order Backlog
Equipment and Systems Business Orders Received / Order Backlog Demand for semiconductor industrial equipment was steady, and demand for building equipment is recovering. Orders received increased significantly with orders for large projects in the building equipment business (Q2). Orders received Or
Slide 20: Equipment and Systems Business: Net Sales / Operating Profit
Equipment and Systems Business Net sales / Operating profit Net sales were on par with the same period of the previous year, due in part to longer lead times. Operating profit and the profit margin were up owing to improvement in losses posted in the building equipment business. Net sales Operating
Slide 21: 3. Progress on 13th Medium-Term Management Plan
1. Corporate Information 2. Overview of FY2022 (Ended 3/2023) Financial Results 3. Progress on 13th Medium-Term Management Plan (2021-2023) 4. Financial Forecast for FY2023 (Ended 3/2024) and Shareholder Return Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved. 20
Slide 22: 13th Medium-Term Management Plan: Positioning and Financial Targets
13th Medium-Term Management Plan (2021-2023) FY2020 FY2030 Previous vision Vision2030 12th Medium-Term management Plan 13th Medium-Term Management Plan Positioning and Financial Targets First steps towards realizing the vision 2030 Laying the foundations for Ordinary profit Our financial foundations
Slide 23: 13th Medium-Term Management Plan Progress
13th Medium-Term Management Plan Progress • Steady progress is being made toward achievement of targets. Cumulative 3-year ordinary profit is to go higher than target of 36.0 billion yen. • Lead times in the EPC Business are long, between three and five years, so single-year performance varies, but
Slide 24: Municipal Solid Waste Treatment Plants: External Environment
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Strategy Demand for renewal and service life improvement will continue due to the aging of waste treatment facilities. We expect renewal demand to continue for the time being. DBO* orders are on
Slide 25: Municipal Solid Waste Treatment Plants: Situation by Segment
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Strategy Focus on winning ongoing orders through comprehensive proposals tailored to diversifying needs. Steadily landing orders for EPC/O&M. Long-term O&M (contract period of 10 years or more) ratio
Slide 26: Municipal Solid Waste Treatment Plants: Long-term O&M
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Business Strategy Aiming for sustainable growth of recurring revenue model businesses by strengthening O&M proposals. As of the beginning of FY2023, we had received orders for long-term O&M (contract period o
Slide 27: Municipal Solid Waste Treatment Plants: Main Orders Received
Domestic Environment and Energy Situation by Segment Municipal solid waste treatment plants Main Order Received Received orders mostly for DBO. We will continue going after steady orders in FY2023 and beyond. Year Delivered to: Notes Capacity Scheduled Completion Q1 Uwajima Public Association Long-t
Slide 28: Energy Plants: External Environment
Domestic Environment and Energy Situation by Segment Business Environment Energy plants Demand for small- and medium-sized biomass power generation, mainly from domestic fuels (such as unused timber), continues, driven by government policies for decarbonization and soaring energy prices. Despite
Slide 29: Energy Plants: Situation by Segment
Domestic Environment and Energy Situation by Segment Energy plants Business Strategy Focus on steady orders for biomass power plants and other energy plants. Since the start of the FIT program in 2012, we have received orders for 78 facilities nationwide. Results Maintenance orders have been receive
Slide 30: Energy Plants: Main Orders Received
Domestic Environment and Energy Situation by Segment Main orders received Energy plants In FY2022, we steadily increased orders, mainly for small- and medium-sized biomass power generation plants. We also won fuel conversion projects. Scheduled Year Delivered to: Notes Capacity Completion Q1 Company
Slide 31: Water Treatment Plants: Situation by Segment
Domestic Environment and Energy Situation by Segment Water Treatment Plants Since entering the water treatment field in 1962, we have contributed to solving our customers’ challenges with unique products based on our accumulated technology and expertise. Business In addition to renewal and service l
Slide 32: Power Retail Business: Situation by Segment
Domestic Environment and Energy Situation by Segment Power Retail Business Contributing to stabilizing customers’ electricity rates and reducing greenhouse gas emissions through the procurement and supply of electricity generated at delivered plants. Business Demand is increasing for renewable energ
Slide 33: Overseas Environment and Energy: External Environment
Situation by Segment Business Overseas Environment and Energy Environment Population growth and economic growth in Southeast Asia have increased demand for biomass power generation and waste treatment plants. Demand for the construction of bagasse* combustion boilers for sugar mills is particula
Slide 34: Overseas Environment and Energy: Situation by Segment
Situation by Segment Business Overseas Environment and Energy Strategy Focus on securing continuous orders for biomass power generation plants and Energy from Waste plants and improving the system. Results Promoted the development of a system to win orders via local subsidiaries in Thailand and Taiw
Slide 35: Package Boiler and Equipment and Systems Business
Package Boiler Business / Situation by Segment Equipment and Systems Package Boiler Business Equipment and Systems Domestic market has matured, but we expect a certain level of demand for Building equipment business Semiconductor industrial equipment renewal and other work to continue for the time b
Slide 36: Strengthening the Management Foundation: Outline
Strengthening the management foundation Outline Actively invest in further business expansion in the future. Human Resources Partnerships/ R&D Capital investment Investment Digital technologies FY3/2023 (results) FY3/2024 (forecast) FY3/2024 (forecast) 69 people hired 2.0 billion yen 3.6 billion yen
Slide 37: Strengthening the Management Foundation: Human Resources
Human Resources Strengthening the management foundation Investment Strengthen hiring and training of human resources to pass on our greatest strength, our technological capabilities, and expand our resources. Continue hiring and training efforts, especially in Construction, Engineering, and Maintena
Slide 38: Strengthening the Management Foundation: R&D
Strengthening the management foundation R＆D In addition to fine tuning existing technologies, we will strengthen R&D focusing on CCUS and carbon recycling technologies to realize a decarbonized society. R&D roadmap for decarbonization technologies Examples of our technology/R&D Carbon recycling Fuel
Slide 39: Partnerships / Digital Technologies
Partnerships / Strengthening the management foundation Digital technologies Aiming to develop new businesses and add value to existing businesses by actively using partnerships and digital technology. Partnerships Utilizing digital technology Deepening collaboration with other companies and organiza
Slide 40: Medium-to Long-term Roadmap
Medium-to long-term Roadmap Aiming to maintain and expand the EPC business, while striving for steady growth in each business with recurring revenue model businesses as the core drivers. Aiming to expand business in the environment and energy field through new businesses and M&A. Ordinary profit Net
Slide 41: 4. Financial Forecast for FY2023 and Shareholder Return
1. Corporate Information 2. Overview of FY2022 (Ended 3/2023) Financial Results 3. Progress on 13th Medium-Term Management Plan (2021-2023) 4. Financial Forecast for FY2023 (Ended 3/2024) and Shareholder Return Copyright 2023 TAKUMA Co.,Ltd. All Rights Reserved. 40
Slide 42: FY2023 (Ended 3/2024) Results Forecasts
FY2023(Ended 3/2024) Results Forecasts Our aim is to maintain orders received at a high level. Net sales are expected to be up, profit will be down due to changes in the EPC project mix, increased R&D and human resources investment, and other factors. Orders received: Demand will be stable for new
Slide 43: FY2023 Results Forecasts by Segment
FY2023(Ended 3/2024) Results Forecasts by Segment FYE 3/2024 (Millions of yen) FYE 3/2022 FYE 3/2023 (Beginning of year YoY change forecast) Order received Total 192,244 168,558 170,000 0.9% Domestic Environment and Energy 164,865 130,280 141,500 8.6% Overseas Environment and Energy 2,035 5,922 3,00
Slide 44: Shareholder Return
Shareholder Return We expect to achieve our medium-term target (36 billion yen in ordinary profit for the three-year period) despite the expected decrease in profit. Accordingly, we plan to increase the annual dividend by 5 yen to 48 yen per share. Determined based on a comprehensive consideration t
Slide 45: In closing
In closing Recurring revenue model businesses is growing steadily with the delivery of new plants and orders for long-term O&M. We will continue to focus on these businesses as a growth driver and stable revenue foundation for the Group. May 25, 2023 Furthermore, we aim to lay the groundwork for the
Slide 46: Handling of this document
Handling of this document 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 be reasonable. This information includes elements of risk and uncerta