Financial Results Briefing for the First Quarter of the Fiscal Year Ended March 2026（August 22, 2025）

Q1 Financial Results Briefing for the Fiscal Year Ended March 2026 August 22, 2025

(Total: 17 minutes, Presentation: 17 minutes)

Marika Asanuma Executive Officer, Corporate Strategy and Planning Headquarters, General Manager of Corporate Communications Division

I will now explain the financial results for Q1 of FY2025 ending March 31, 2026. As this is an online presentation, please reach us at the contact information on the last page of this document should you have any questions or comments.

Please see page two. I have three points to explain today: Q1 results for FYE March 2026, the progress of the measures in our three-year medium-term plan, and shareholder returns.

First, let me review our Q1 performance for FY2025. Please refer to page four.

In the table below, the gray area on the left side indicates the results for FY2024, the previous fiscal year. The green area on the right side describes the status for FY2025, the current fiscal year.

See the second column from the right in the green table which shows the Q1 results. The first line shows the amount of orders received, which was JPY56,122 million at the end of Q1.

The column on the right indicates progress against the full-year plan which stands at 37%, a YoY increase of JPY3,399 million, or 6.4%. This is mainly due to a YoY recovery in domestic civil engineering. The acquisition of large Integrated Resort (IR) projects also contributed to the increase in orders.

The second line, net sales, amounted to JPY42,707 million in Q1, with a 25.1% progress versus the full-year plan. This represents a YoY increase of JPY10,517 million, or 32.7%, which is trending favorably. Positive net sales were driven by the steady progress of various large-scale carry-over construction projects, mainly for warehouses, factories, and housing complexes.

The third line, gross profit, amounted to JPY4,005 million, with a gross profit margin of 9.4%. The progress versus the full-year plan is 21.9%, with a YoY increase of JPY1.113 million, or 38.5%. This is due to the increase in net sales as I explained, as well as a 0.4 point improvement in the gross profit margin compared to the same period of the previous year.

The next line, the SG&A expenses, amounted to JPY2,893 million in Q1, representing a YoY increase of JPY542 million, or 23.1%. This was due to increases in personnel expenses in Japan and allowance expenses.

As a results of these factors, operating profit amounted to JPY1,112 million, with a profit margin of 2.6%. Profit attributable to shareholders of the parent was JPY712 million. As with gross profit, both operating profit and net profit increased in Q1. We closed the quarter with increased sales and profits.

Please see page five.

From here, I will explain the orders received by customer on a non-consolidated basis. This page shows the breakdown by government and private sector.

The green area in the table below shows Q1 results. Orders received on a non-consolidated basis for building construction and civil engineering totaled JPY55,162 million in Q1, up 7.6% from the same period last year. Of which, government-related orders were JPY7,970 million, a significant YoY increase of 347%.

See the lower part of the table. Building construction orders for government amounted to JPY6,614 million, a YoY increase. Civil engineering orders increased across both customer segments. Again, order momentum in the civil engineering as a whole contributed to the increase in government-related orders.

Please see page six.

Here is a breakdown of orders received by construction type on a non-consolidated basis.

The left chart is for the building construction business. The largest portion, 41%, or JPY20,359 million, is for lodging, such as hotels. This is driven by orders for Integrated Resort (IR) projects, as I mentioned earlier. The second largest is the housing projects including apartments, representing 17%, or JPY8,602 million. This is followed by education and research facilities, representing 14%, or JPY6,856 million.

Moving on the right side, civil engineering business. The largest percentage, 57%, or JPY2,863 million, is for land development work. This is followed by erosion & flood control, representing 19%, or JPY961 million, and water supply & sewerage at 7%, or JPY351 million.

Please turn to page seven for a breakdown of orders for new construction and renovation by type in the building construction business.

The left side is for new construction and the right side is for renovation. I will skip the left side as I already explained in the previous slide.

See the chart for renovation on the right. The largest share at 46% is for factories, followed by educational & research facilities at 15%, and housing such as apartments at 13%.

Let me then explain our three-year medium-term plan. Please see page nine.

This year is the second year of the plan, and we have identified six themes to focus on during the three years of our medium-term plan.

I will review the recent progress in some of the major initiatives, focusing on theme three, acquiring, retaining and developing human resources and theme five, strengthening governance, compliance and risk management.

Please see page 10.

First, I will share some of the initiatives on theme three, acquiring, retaining and developing human resources.

In talent acquisition, we have raised the starting salary to JPY300,000. As part of our efforts to improve monetary compensation, we have also implemented wage increases for four consecutive years and base salary increases of 3% or more.

In addition, as noted below, we have signed a naming rights partnership agreement with Saga University. You can see in the photo on the right. Our goal is to appeal ourselves while also contributing to the education and research space.

We have also introduced a scholarship repayment support program. Recently, we have heard that an increasing number of students are taking advantage of scholarships, so we have introduced such a system to support them and to be chosen as an attractive employer.

Below that, we have introduced a tool for preventing employee turnover. You can see the sample image here. It is a web-based survey tool in which young employees are asked to answer questions about their daily mental state and feelings by using weather stamps.

This is a system designed to visualize the mental status of young employees and to prevent them from leaving us.

In addition, as described below, we are also continuing to promote the campaign of eight days off within a four-week period as part of our responsibilities.

As for human resource development, we have considerably enhanced our training program. One of these is training for new employees. We extended a duration of new hire training and enriched the content to focus more on skills development and qualification acquisition. We have also introduced training programs that promote career development.

We continue to view human resources as an important issue for our company, and we will continue to take firm measures in this area.

Please see page 11.

I will share with you some recent initiatives on theme five, strengthening governance, compliance and risk management.

In the area of strengthening governance, as part of our ongoing efforts to strengthen communication with shareholders and investors, we have hosted various forms of meetings, as you can see in the photo on the right. We have held these briefings in a variety of formats, including on-site sessions and live-streaming. Through these, we hope to appeal our businesses to a broader investor community.

In response to the request for early disclosure of the annual securities report prior to the annual general shareholders' meeting, as described below, we have disclosed the report three business days prior to the AGM.

As for the restricted stock compensation, we have decided to grant it in FY2025 as well, for directors, executive officers and all of our 1,200 plus employees, as we have done so in the past. We have been providing stock-based compensation for all employees for three consecutive years.

To strengthen compliance, we are conducting various compliance training programs. Recently, we have been focusing on IT security training, which is conducted through e-learning.

One area that we have been enhancing in terms of stricter risk management is the reinforcement of BCPs. In light of the increased number of disasters or likelihood of them, we will ensure that rigorous BCPs are established in preparation for disaster response.

We will remain committed to promote measures to strengthen governance, compliance, and risk management.

Please see page 12.

We have set KPIs for each of the six themes here, and we have included the results for FY2024 for your reference. We are making a steady progress across all KPIs.

As a final part of my presentation, I would like to discuss our shareholder returns. Please see page 14.

The three bars on the right of the chart show the actual and planned dividends for the current three-year medium-term plan period. The three bars in the middle show the dividends paid out in the previous medium-term plan period. The leftmost three bars represent the amount prior to that.

As you can see the trends in the past nine years, we plan to increase dividends for nine consecutive fiscal years. As in the previous medium-term plan, our policy for returning profits to shareholders is to maintain a dividend payout ratio of 70% or more, and we plan to pay an interim dividend of JPY16 and a year-end dividend of JPY25.5, for a total of JPY41.5 for FY2025.

Thank you very much for watching the presentation. For more information on our other initiatives, please refer to the integrated report and other resources on our website.

Thank you very much for your time today. [END]

Document Notes

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