Integrated Report 2024

PU RP O SE

Building a Better

Tomorrow

with Environmental

Technologies

The Tsukishima Group's articulated Purpose-Building a Better Tomorrow with Environmental Technologies-embodies our commitment to going beyond preserving the environment through environmental technologies to help establish a society of wellbeing and vital, prosperous lives.

Over the 119 years since the Group's founding, we have applied technology to advance industry and deliver environmental solutions. By adapting to the changing times and needs and creating solutions, powered by our technologies, to global environmental challenges, we're committed to building a society in which all can enjoy healthy, vital, and prosperous lives.

INTRODUCTION

Helping to build a comfortable and sustainable society

The Tsukishima Group's Long-Term Vision leading up to 2030, the target year set for the

Sustainable Development Goals (SDGs), calls for Realizing a comfortable,

sustainable society while contributing to lives and culture.

In recent years, climate change, sustainability, and other such social challenges have emerged as important management topics that corporations must address through their business activities. Our mission is to harness environmental technologies and to deliver solutions to society's challenges by creating and providing products and services that offer the value needed to satisfy customers. The Group will help establish a sustainable society through sustainability management. Through our business activities, we will strive to establish a society in which all stakeholders and people around the world can live more vital and prosperous lives.

Helping to build a sustainable

society through environmental technologies

01 Developing safe, dependable water infrastructure

The water infrastructure business, including water and sewer services, faces issues such as aging infrastructure and fewer qualified technicians. It also needs to be made more resilient to disasters such as earthquakes and frequent torrential downpours.

The Tsukishima Group will contribute to efforts to establish a safe water supply and optimal water environment.

Efficient and cyclical use of resources and energy is essential to establishing a sustainable society.

The Tsukishima Group will deliver the technologies and services needed to build cyclical social infrastructures that allow effective use of the earth's limited resources and energy.

●Sewage sludge-to-fuel systems

Our environmental technologies ●Energy recovery from wastes ●Resource recovery from waste gases and

production, and biodiversity.

The Tsukishima Group will contribute to a decarbonized society through energy conservation and renewable energy supply technologies.

●Next-generation sludge incineration systems, energy-creating sludge incineration systems

Our environmental technologies ●Biogas power generation business ●Machinery and plants for secondary lithium-

ion battery materials

Contents

Contents

INTRODUCTION

Tsukishima Holdings' value creation

Editorial policy

Social and economic conditions in Japan and worldwide remain increasingly uncertain due to COVID-19. Under these circumstances, we have published this Integrated Report in light of our responsibility to shareholders, investors, and all other stakeholders, seeking to clarify our strategies and the roles we should play to guide the Company and our partner suppliers through these difficult circumstances.

In preparation of this Report, we referred to the International Integrated Reporting Framework of the International Integrated Reporting Council (IIRC) and the Guidance for Collaborative Value Creation issued

by the Ministry of Economy, Trade and Industry of Japan.

Public Relations Office,

Tsukishima Holdings Co., Ltd.

Medium- to long-term growth strategies

Foundations of value creation

Sustainability Promotion Structure ···························· 41

Environment

Note on prospects

This Report includes forward-looking statements which present numerous potential risks, uncertainties, and assumptions. The contents of this Report, both explicit and implicit, may differ substantially from actual figures and conditions. We advise readers not to make decisions based solely on these statements. In addition, the Company is not obligated to update or revise the information provided in this Report in the event of any future developments.

Period covered by this Report

This Report covers the period April 1, 2023 - March 31, 2024.Where appropriate, information from before or after this period may be referenced.

Disclosure structure

https://www.tsk-g.co.jp/en/ir/file/

Tsukishima Holdings' value creation

Policy and Strategic Structure

Tsukishima Holdings:

Building the future

With its migration to a holding company structure in April 2023, the Group clarified its course of action and reason for being and defined its Purpose as Building a Better Tomorrow with Environmental Technologies. It also redefined its Corporate Policy as the Group Corporate Policy and established a new Long-Term Vision for 2030: Realizing a comfortable, sustainable society while contributing to lives and culture.

As we strive to achieve continuing growth, we have formulated a Medium-term Management Plan (FY2023-2026) based on the basic policies of Promoting sustainability management, Enhancing business domains and strengthening the Group's earning capabilities, and Improving capital efficiency and enhancing returns to shareholders. We will strive to strengthen corporate value by promoting this plan.

The meaning behind our logo

Embodying the concept of learning from history, our logo is based on the Japanese character for tsuki (the Moon) in Tsukishima, the name of our hometown. The color scheme has a keynote of blue, our corporate color, accented with green to represent the environment and ecology. The circular outline represents circularity and recycling, made up of the three elements of customers, employees, and our suppliers and partners.

Basic policies

1. Promoting sustainability management
2. Enhancing business domains and strengthening the Group's earning capabilities
3. Improving capital efficiency and enhancing returns to shareholders

Tsukishima Holdings' value creation

Message from the Chairman

Contributing to

a decarbonized society and maximizing corporate value through business activities

The international situation has been unstable in recent years, with rising geopolitical risks such as the protracted invasion of Ukraine by Russia and rising tensions in the Middle East. Against this backdrop, continuing economic uncertainty such as the rapid depreciation of the yen and inflationary pressures in addition to economic slowdown in China make corporate management increasingly challenging.

Under such business conditions, we have carried out large-scale reforms to achieve our Long-Term Vision for 2030. In April 2023 we established Tsukishima Holdings Co., Ltd. and transitioned to a holding company structure. In May 2023 we announced a new Medium-term Management Plan for the period through FY2026, and we are making progress on Companywide initiatives toward our three basic policies of Promoting sustainability management, Enhancing business domains and strengthening the Group's earning capabilities, and Improving capital efficiency and enhancing returns to shareholders. Furthermore, in October 2023 we launched Tsukishima JFE Aqua Solution Co., Ltd. through the merger of Tsukishima Aqua Solution Co., Ltd. with JFE Engineering Corporation's domestic water engineering business. As a result of these efforts, in FY2023 we recorded new record highs on all three accounts of orders received, backlog of orders received, and net sales.

Since its founding in 1905 with domestic production of sugar refining machinery, the Tsukishima Group has applied the technologies it has accumulated to the chemicals and steel fields, helping modernize Japanese industry through its businesses. Since the 1960s, we also have helped to solve society's challenges related to the water environment by deploying our underlying technologies such as dewatering, drying, and incineration in the water and sewage businesses to promote sewer systems, alleviate shortages of water resources, and prevent water pollution, among other activities. In recent years, as climate change and global warming become increasingly severe, we are actively expanding use of clean energy and developing AI and IoT technologies to address issues resulting from Japan's low birth rates and ageing population.

In 2025 the Group will mark its 120th anniversary. As an environmental enterprise as expressed in our Purpose-Building a Better Tomorrow with Environmental Technologies, we will focus on further increasing our corporate value by contributing to a decarbonized society in businesses such as use of sewage sludge for energy and facilities related to secondary battery production, in addition to our specialty in water environmental solutions.

We are grateful for the continuing support and understanding of all our stakeholders.

Kazuhiko Yamada

Chairman & Representative Director

Tsukishima Holdings' value creation Medium- to long-term growth strategies Foundations of value creation Data

Tsukishima Holdings' value creation

Message from the President

Tsukishima Holdings' Purpose

Tsukishima Holdings' value creation

Since getting its start with the domestic production of sugar refining machinery, the Tsukishima Group has grown while adapting to the needs of customers and society. A major turning point occurred in the 1960s when it entered the water environmental business. In addition to underlying technologies accumulated up to that point in manufacturing industrial machinery, the water environmental business utilizes an entire series of technologies from sludge dewatering through incineration, secured and enhanced through international technological alliances and in-house development. By manufacturing machinery to process sludge and tanks to store gases, we have contributed solutions to reduce pollution, a major issue in Japan at that time, and developed environmental infrastructures.

While the Tsukishima Group has grown alongside society and delivered solutions drawing on its environmental technologies, I believe our responsibility is to enable future generations to live in a healthy society. Based on this belief, in 2023, we formulated a Purpose to express the Tsukishima Group's reason for being: Building a Better Tomorrow with Environmental Technologies. Today, one year later, awareness of this Purpose is steadily growing among our employees. Nevertheless, the extent of this permeation varies among our related businesses and job positions. Employees who have worked in the water environmental

business up to this point are proud of its central focus on human lifelines and demonstrate strong motivation to contribute to society through water processing technologies. Employees in other businesses and employees of companies that have joined the Group recently through mergers and acquisitions and other activities increasingly understand this Purpose, too, but the results of an engagement survey show room for improvement in connecting the Purpose to everyday operations and tasks. I believe there is a need for even broader-based permeation of the Purpose and the Policy Structure to promote a more thorough understanding among all employees.

The phrases Building a Better Tomorrow in the Purpose and a comfortable society in the Long-termVision reflect the sense of building a society in which all of us can experience wellbeing and the sense of contributing not just to the environment, but to healthy, vital, and prosperous lives. Based on this perspective, we plan to contribute to healthier and more vital and prosperous lives not just through the businesses of Tsukishima Kikai in food products and chemicals, but through the technologies and products of PRIMIX Corporation, which joined the Group in 2020. PRIMIX brings to the group clear strengths in the high-speedmixers used for pharmaceuticals, chemicals, and cosmetics.

Medium- to long-term growth strategies Foundations of value creation Data

Marking our first year as a holding company, we are striving to create new value under our new Purpose-Building a Better Tomorrow with Environmental Technologies.

Jun Kawasaki

President, Representative Director

Our Purpose is a message that calls for providing value and contributing to society. The transition to a holding company and business consolidation represent our approach to realizing this Purpose, which is the foundation of our decision-making. Our vision from a long-term perspective is to strive to grow our environmental businesses while deploying, as environmental technologies in pursuit of our Purpose,

the technologies that we have built up through now in our operating companies. We will continue working toward solutions to social challenges, centered on the environment, using the Purpose as a roadmap in Group decision-making. We will increase our corporate value by using our technologies and solutions to help establish a sustainable society.

Tsukishima Holdings' value creation

Message from the President

Applying proprietary technologies to address climate change and the shrinking workforce

The Tsukishima Group has established its Long-Term Vision for the years leading up to 2030: Realizing a comfortable, sustainable society while contributing to lives and culture. We consider climate change and the shrinking workforce to be two social issues to which the Group's proprietary technologies and solutions can contribute as we move closer to establishing progress toward a comfortable and sustainable society.

In response to intensifying climate change, the Group has identified Contributing to a decarbonized society as a key materiality issue. In addition to reducing our own greenhouse gas emissions, we will help reduce total emissions through various solutions, including expanded use of energy-creating incineration systems and use of energy from sewage sludge. We also face the need to enhance readiness for natural

disasters, which grow increasingly severe. Securing safe water is essential to lives and health in the event of various emergencies. We expect to assume an ever- growing role in maintaining a clean, sanitary society through our water environmental business.

With Japan's productive population shrinking alongside low birth rates and an aging society, we expect labor shortages in the maintenance and operation of vital water infrastructures, including sewer systems and water purification plants. One reason for establishing Tsukishima JFE Aqua Solution Co., Ltd. is to address this issue. We will strive to achieve more efficient maintenance and operations of water infrastructures by adopting automation and other labor-saving systems based on AI, digital transformation (DX), and other technologies.

Enhancing our technologies and human resources, the two important business resources

We consider our technologies and human resources to be important business resources that must be continually strengthened. In the area of technologies, we are developing a grand design for achieving the goals of the Long-Term Vision and clarifying the technologies

Improving capital efficiency and managing corporate value

we currently lack. Additionally, we will consider whether to seek solutions through in-house developments or procurement from outside the organization. The newly established Tsukishima JFE Aqua Solution Co., Ltd. combines newly secured water treatment technologies with existing wastewater treatment technologies to provide comprehensive upgrade solutions for water purification plants. We will continue to secure the technologies needed to achieve the goals of the Long-Term Vision by considering mergers and acquisitions and technological alliances, where necessary.

Human resources are central to developing technologies and building practical solutions based on these technologies. The Group is focusing on hiring and

13 Tsukishima Holdings Integrated Report 2024

The Medium-term Management Plan calls for Improving capital eciency and enhancing returns to shareholders. The Group has identified ROIC and ROE as financial KPIs and is moving forward with its management of corporate value with a keen awareness of capital efficiency and shareholder returns. To achieve the targets, the new policies announced in April 2024 revised capital allocation under the Medium-term Management Plan, clarifying our goals

in improving PBR by reducing cross-shareholdings and increasing target dividend returns and goals in other areas.

We will also continue to enhance our disclosure efforts and fulfill our accountability to the markets. We believe the transition to a holding company structure has resulted in further progress toward the management independence of Group operating companies. For example, ROE and

ROIC are being verified separately for each operating company. The management at each company is striving autonomously to improve these figures to boost corporate value. The holding company respects the autonomy of each operating company while providing the support it needs. We will enhance Group governance based on close communication with the management team of each operating company, reflecting its level of maturity and the scale and characteristics of its businesses, in place of adopting a one-size-fits-all approach.

We ask for the continuing support of our stakeholders as Tsukishima Holdings moves forward to strengthen corporate value by realizing the Long-term Vision with an understanding of its own Purpose.

Tsukishima Holdings' value creation

Tsukishima Holdings at a Glance (FY2023 Data)

Group organizational structure

Financial highlights (consolidated)

Net salesOperating profitOperating profit margin

Tsukishima Holdings' value

Segment ❶

Water

Environmental Building comfortable water environments

Business

• Manufacture, construction, operations and management, and maintenance of water and sewer facilities

EPC, equipment

• Tsukishima JFE Aqua Solution Co., Ltd.

Operations management,

maintenance, project management

• Tsukishima & J Technology Maintenance Service Co., Ltd.
• Tsukishima & J Aqua Machine and Service Co., Ltd.
• Special-purposecorporations (SPCs) in PFI and other businesses

• Manufacture and construction of industrial machinery, environmental protection equipment, etc.
• Waste processing business

● Tsukishima Kikai Co., Ltd. ● PRIMIX Corporation

● BOKELA GmbH (Germany)

● TSK Engineering (Thailand) Co., Ltd., etc.

● Tsukishima Kankyo Engineering Ltd. ● SANSHIN KOGYO Co., Ltd.

● DAIDO CHEMICAL ENGINEERING CORP. ● SUN ECO THERMAL Co., Ltd.

Support for operating

companies

Segment ❸

Other

businesses

• Real estate management, leasing (logistics facilities, etc.)
• Printing and binding drawings and documents

Logistics facility

• Tsukishima Business Support Co., Ltd.

Group position (market shares based on Tsukishima Holdings research)

creation Medium- to long-term growth strategies Foundations of value creation Data

Water Environmental

Business

81.0billion yen

*Activities involving the operation of logistics facilities began in FY2022. Figures for the FY ended March 2023 were affected by free-rent periods under the lease terms. The business will contribute to earnings from the fiscal year ending March 2024.

Non-financialhighlights (figures other than employees based on the former Tsukishima Kikai Co., Ltd. [Tsukishima Holdings Co., Ltd.,

Tsukishima JFE Aqua Solution Co., Ltd., Tsukishima Kikai Co., Ltd.])

3,51770％

Tsukishima Holdings' value creation

Tsukishima Holdings' value creation Medium- to long-term growth strategies Foundations

1900S-

Contributing to the domestic production of industrial machinery, when most of which were imported

We were among the first companies to succeed in domestic production of machinery for the foodstuffs and chemical industries, at a time when Japanese industry relied on machinery imported from overseas.

Machinery manufacturing business (our original business)

-Our founding spirit-

Contributing to industrial promotion in areas such as the chemical industry and refining of metals from the foundations of our start in the sugar industry, through the domestic production of industrial machinery and equipment largely imported up to that time.

1905 Founded as Tokyo Tsukishima Kikai Seisakusho

1915 Success in the domestic production of sugar refining equipment Responded to increasingly advanced market needs by building on our core technologies, including crystallization and filtration

Centrifuge for sugar refining (used to separate sugar crystals)

We have delivered more than 1,000 sets worldwide.

1930S-

Contributing to the modernization of industrial machinery

We contributed to the modernization of Japanese industry by growing our business through advancing into fields such as textiles, fertilizer, and paper pulp.

Industrial Business (chemicals, iron & steel, etc.)

We deployed our crystallization, separation, and drying technologies accumulated in the sugar refining field in the areas of chemicals and iron & steel.

1931 Success in the domestic production of equipment for producing fertilizer (ammonium sulfate)

Double-propeller (DP) crystallizer

Tsukishima Kikai is Japan's leader in crystallization technology, and this model is representative of its crystallization line up.

Large-scale industrial dryer (Steam tube dryer)

1960S-

Supporting the improvement of the environmental infrastructure in response to pollution problems

As adoption of water supply and sewer systems grew, volumes of sludge also increased. As sludge disposal shifted from landfill to treatment, we boasted the top market shares in the dehydration of service water sludge and drying and incineration of sewage sludge.

Water Environmental Business (water supply and sewer systems)

We deployed our filtration, drying, and incineration technologies accumulated in industrial fields in sludge treatment of water purification and sewage treatment plants.

Vertical filter press

Greatly reduces the water content of sludge at water purification and sewage treatment plants across Japan

Sewage sludge dryer Dryer designed for a wide conditions and properties Deployed overseas as well

2000S-

Providing comfortable water environments and clean energy, along with high-quality and efficient industrial machinery

As environmental destruction due to causes such as climate change and water pollution has been a growing concern, we have contributed to society by applying our accumulated technologies to the fields of the environment and energy.

Deployment into the fields of the environment and energy

2006 Started operation of Japan's first PFI business in the water supply and sewer systems field (Samukawa Water Service Co.)

Sewage sludge-to-fuel systems

Other major equipment

• Waste liquid combustion systems
• Digestion gas power generation system

Melting kiln

Most recent initiatives Deploying technologies developed and refined since our founding in the battery business and other new domains

Ultrafine particle crystallization equipment

(CRYSTALLEX Type DD)

of value creation Data