Investor Relations

Medium-Term Management Plan

Toda Corporation has established a New Medium-term Management Plan to be carried out over the three years FY 2009 through FY 2011.

During the previous three years (FY 2006 through FY 2008), Toda Corporation used selection and concentration to identify priority areas (types of construction) while promoting its Medium-term Management Plan. This action successfully maintained sales size and increased the share of priority areas within the company's orders.

During this period, however, competition intensified and raw materials prices soared, worsening the earnings environment at an unanticipated pace and causing profits to stagnate. Furthermore, the impact of the worldwide recession is expected to constrain new capital investment, requiring a shift in the construction industry to business models that emphasize existing stock.

Aware of these factors, Toda Corporation has established the following New Medium-term Management Plan to restore profits and ensure future growth.

1. Basic concept (direction) of the plan

Toda Corporation and the companies of the Toda Group will realize their individual strengths and achieve sustainable growth by serving clients more deeply over longer periods as a solutions company in the construction industry.

2. Earnings targets and major policies

In accordance with the above "Basic concept (direction) of the plan," rolling earnings targets (for three years later) will be designated during each fiscal year, and steps to meet them will be developed.

  • Earnings targets
FY 2011
Consolidated sales Approx. 500 billion
Current income Approx. 12 billion
  • Major policies
  • 1) Rebuilding earnings structure (long-term strategy)
    • (i)By strengthening relationships among clients, Group companies and sectors, promote efforts that address the entire construction lifecycle. In particular, rethink the current system for architectural remodeling construction, bringing it up to a 25 percent share of completed work (from its current 15 percent).
    • (ii)Work to deepen involvement in priority areas (types of construction), maintaining their current share of overall orders (about 70 percent).
      Priority areas:Building Construction:medical/welfare facilities, educational facilities, office buildings, production facilities
      Civil Engineering:urban infrastructure (roads, railways, water supply and sewer systems)
    • (iii)With the establishment of the International Branch (in April 2009), upgrade overseas business, building it up to 20 billion in consolidated orders (from its current approximately 10 billion).
    • (iv)For items currently in planning, carry out a total of \23 billion in real estate investment. Furthermore, study and carry out investment mainly in tenant buildings in Tokyo's three central wards (Chiyoda-ku, Chuo-ku, and Minato-ku) in order to supplement the construction business with a stable income base.
    • (v)Along with raising the Tokyo metropolitan area's share of domestic sales to 60 percent (from its current approximately 50 percent), promote better and more efficient personnel placement and organizational structures.

      The "Tokyo metropolitan area" 'refers to the combined sales of the four branches in the Kanto area (Tokyo, Chiba, Kanto, and Yokohama)

  • 2) Thorough risk management
    • (i)Carry out thorough compliance.
    • (ii)Address contract and credit risk and internal controls organizationally, working to balance work and maintain a sound financial structure.
    • (iii)Through tie-ups between marketing and construction, carry out early incorporation of construction costs, while ensuring transparency through painstaking cost management.
    • (iv)Prepare for changes in the financial environment to ensure stable capital procurement.
  • 3) Human resources strategy and corporate social responsibility (CSR)
    • (i)Rethink various human resources systems to promote the creation of workplaces where diverse personnel can find satisfaction in their work.
    • (ii)While passing along techniques to the next generation, promote initiatives to enhance skilled manufacture (quality, cost, safety, environment, customer satisfaction).
    • (iii)Work to upgrade the Toda brand.

3. Shareholder return

As for the fruits of this Plan, Toda Corporation will work to spread the profits in order to secure the satisfaction and trust of all stakeholders. Regarding per-share dividends, founded on payment of sustained, stable dividends, if FY 2011 earnings targets are achieved, Toda Corporation will consider a 9.0 per share dividend.