Toda Group Medium-term Management Plan 2024

1. Target direction

Continuous evolution of business activities and enhancement of corporate value through high added-value competition - Resilient -

(i)Globalization: Establishment of world-class management, human resources, operations, and organizational systems
(ii)Branding: Dissemination of information to stakeholders and self-reform through evaluation
(iii)Innovation: Creation of differentiated value through the formation and utilization of intangible assets, etc.

* Intangible assets, etc.: Assets that are useful to society and indispensable for strengthening the Group’s brand power, such as information, technology and know-how, human resource development, and the results of ESG/SDGs management initiatives

2. FY2024 Group performance targets

1) Consolidated net sales, operating income, etc.
  FY2020 results FY2024 targets
Consolidated net sales 507.1 billion yen Approximately 600.0 billion yen
Operating income 27.6 billion yen At least 42.0 billion yen
Operating margin 5.5% At least 7.0%
Return on equity (ROE) 6.8% At least 8.0%
Labor productivity
15.28 million yen At least 17.50 million yen
* Labor productivity = Amount of added value (operating income + total personnel expenses) ÷ number of employees (average for the period, including temporary employees, etc.)
2) Net sales and profit by business
FY2020 results
(Billions of yen)
FY2024 targets
(Billions of yen)
Consolidated net sales 507.1 600.0
Architectural construction business 328.6 380.0
Civil engineering business 136.3 140.0
Investment development / new fields 15.0 45.0
Group companies 55.8 48.5
Consolidated elimination (28.0) (13.5)
Operating income 27.6 [5.5] 42.0 [7.0]
Architectural construction business 9.1 [2.8] 22.0 [5.8]
Civil engineering business 14.1 [10.3] 13.0 [9.3]
Investment & development / new fields 3.1 [21.2] 4.0 [8.9]
Group companies 2.2 [4.1] 3.0 [6.2]
Consolidated elimination (1.0) [-] - [-]
* New fields include energy-related business and other new businesses.
* Profit margins are shown in brackets [].
3) Shareholder returns
The Company will provide continuous and stable shareholder returns, while comprehensively taking into account the dividends on equity ratio (DOE) and the dividend payout ratio.
  FY2020 results FY2024 targets
Dividends on equity ratio (DOE) 2.1% Around 2.0%
Dividend payout ratio 31.1% Around 30.0%
* DOE (dividends on equity ratio) = total dividends ÷ equity
4) Investment plan
The Company will provide continuous and stable shareholder returns, while comprehensively taking into account the dividends on equity ratio (DOE) and the dividend payout ratio.
Field Investment policy Total for period of the plan
Investment development Generation of new revenue through the adoption of smart technologies 130.0 billion yen
New fields Solving global social issues and expanding business domains 25.0 billion yen
Technology and ICT Promoting high added value and a revolution in safety and productivity 5.0 billion yen
Dividend payout ratio 160.0 billion yen
* DOE (dividends on equity ratio) = total dividends ÷ equity

3. Business policies

1) No.1 in safety and productivity
Conduct thorough prior verification through front-loading at the design and planning phases.
Implement measures based on mechanized construction, use of new technologies and ICT, behavioral analysis and visualization, etc.
Provide safety education that reaches the subconscious mind (hazard prediction, brain science, behavioral psychology, etc.).
2) Provision of high added value
(i)Construction business (architectural construction business and civil engineering business)
Create differentiated value in focus areas.
Architectural construction business Hospitals and schools, high value-added offices, redevelopment, logistics facilities
Civil engineering business Tunnels and shields, renewable energy, lot development, large-scale infrastructure
Create new business models through digital transformation (BIM/CIM, i-Construction, etc.).
Improve construction capabilities and profitability on a company-wide basis, through the development of a system for expanding overseas construction projects.

(ii)Strategic business
Make our businesses and earnings base more globalized, multidirectional and diversified by making focused investments in “investment development,” “new fields,” and “Group companies.”
 Promote smart offices at the New Toda Building (tentative name; under construction, scheduled to be completed in 2024) and realize the provision of new value (BaaS: building as a service) through this approach.
Business Key initiatives
Investment development ·Acquire real estate for development and effective use of held assets
·Strengthen the leasing business through portfolio management
·Promote smart offices at the New Toda Building
New fields ·Participate in development projects in North America, Southeast Asia, etc.
·Commercialize floating offshore wind power generation and wind farms
·Invest in renewable energy projects and agricultural sixth industrialization projects
·Establish new revenue streams through data utilization (sales and use)
Group companies ·Demonstrate the comprehensive capabilities of the Group throughout the construction life cycle
·Acquire special technologies through M&A, etc.

(iii) Practicing ESG/SDGs management to enhance corporate value
Implement problem-solving activities aimed at decarbonization, resource recycling, environmental conservation, and regional revitalization
Strengthen our organizational capabilities by nurturing and securing diverse and talented human resources, while promoting the development of the working environment and working style reform
Strengthen risk management (environment, natural disasters, investment, compliance, etc.) and leverage the knowledge obtained from it to promote technological development, products and services.
Quantitative evaluation indicators FY2024 targets
Environment (E) CO2 emission reduction rate (compared to FY2019) A 10% reduction or more
Social(S) Total frequency rate A 10% reduction or more
Work sites: rate of 8 closures in 4 weeks 1.00 or lower
Construction career advancement registration rate 100%
Employees’ average total actual working hours 1,900 hours or less
Governance(G) Proportion of Outside Directors and Outside Corporate Auditors 50% or more
Proportion of non-Japanese employees (non-consolidated) 1.5% or more
Risk assessment implementation rate 100%
Serious violations of laws and regulations 0 cases
* Total frequency rate = total occupational accidents ÷ total working hours (1,000,000 hours)
* Risk assessment implementation rate: Implementation and execution status of quantitative and qualitative assessments of investment projects (projects approved by the Management Meeting), as well as exit strategies by the Investment Committee