■ Long-term Growth Strategy

1. Medium-term Management Plan Takashima (8007) announced its medium-term management plan, 'SustainaX (Cross)' with the final year being the 2023 fiscal year. While following the basic strategies of the previous medium-term management plan 'Sustaina2020,' such as 'unrivaled strategy,' 'improvement in productivity,' and 'strengthening of corporate governance,' it has further promoted the formation and expansion of each function from design to construction and support in the value chain through 'further evolution of unrivaled strategy,' 'acquisition of strong cost competitiveness through increased productivity,' and 'strengthening of corporate governance.' At the same time, it has also been working to transform its business structure and portfolio for the establishment of a long-term growth foundation. Specifically, through the 'further evolution of the unrivaled strategy,' it has contributed to the development of a sustainable society by providing energy-saving solutions, lightweighting solutions, and labor-saving solutions. It has improved productivity and reduced costs through a review of all operations and systemization while maintaining an internal control and compliance system as part of 'acquiring strong cost competitiveness through increased productivity.' As part of 'strengthening corporate governance,' the company has been continuously working towards building a more solid 'aggressive governance' structure in consideration of the various principles of the Corporate Governance Code. The system investment implemented in the second quarter of the 2023 fiscal year and the two M&A transactions, the newly established energy distribution system and the Shinbou Edix, which was acquired in December 2022, are based on these policies. After the medium-term management plan 'SustainaX (Cross)' ended in the 2023 fiscal year, the company formulated a new medium-term management plan as 'SustainaV (Value)' (fiscal year 2024-2026) in March 2023. As a super-long-term goal, the company aims to achieve a 'carbon-neutral society' by 2050 and simultaneously realize adaptation to a sustainable society and sustained growth through value creation that captures market growth opportunities. With the goal of achieving net sales of 110 billion yen (building materials segment: 70 billion yen, industrial materials segment: 20 billion yen, electronic and device segment: 20 billion yen), operating income of 2.6 billion yen, net income attributable to shareholders of the parent company of 1.9 billion yen, ROE of 8% or more, ROIC of 6% or more, and total shareholder return of 50% by the end of the 2026 fiscal year as midterm targets, and by leveraging the cash and external funds of each business to increase net income attributable to the parent company and ROE. The midterm performance targets were revised upward in December 2023, with net sales, operating income, and net income attributable to the parent company being revised upward by 10 billion yen, 0.3 billion yen, and 0.2 billion yen, respectively, compared to the time of the medium-term management plan announcement. The upward revision of the target figures for the building materials segment by 10 billion yen reflects the results of the merger and acquisition of Iwasui Development carried out in June 2023 and the strong performance in the construction materials field. In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

Takashima (8007) announced its medium-term management plan, 'SustainaX (Cross)' with the final year being the 2023 fiscal year. While following the basic strategies of the previous medium-term management plan 'Sustaina2020,' such as 'unrivaled strategy,' 'improvement in productivity,' and 'strengthening of corporate governance,' it has further promoted the formation and expansion of each function from design to construction and support in the value chain through 'further evolution of unrivaled strategy,' 'acquisition of strong cost competitiveness through increased productivity,' and 'strengthening of corporate governance.' At the same time, it has also been working to transform its business structure and portfolio for the establishment of a long-term growth foundation. Specifically, through the 'further evolution of the unrivaled strategy,' it has contributed to the development of a sustainable society by providing energy-saving solutions, lightweighting solutions, and labor-saving solutions. It has improved productivity and reduced costs through a review of all operations and systemization while maintaining an internal control and compliance system as part of 'acquiring strong cost competitiveness through increased productivity.' As part of 'strengthening corporate governance,' the company has been continuously working towards building a more solid 'aggressive governance' structure in consideration of the various principles of the Corporate Governance Code. The system investment implemented in the second quarter of the 2023 fiscal year and the two M&A transactions, the newly established energy distribution system and the Shinbou Edix, which was acquired in December 2022, are based on these policies. After the medium-term management plan 'SustainaX (Cross)' ended in the 2023 fiscal year, the company formulated a new medium-term management plan as 'SustainaV (Value)' (fiscal year 2024-2026) in March 2023. As a super-long-term goal, the company aims to achieve a 'carbon-neutral society' by 2050 and simultaneously realize adaptation to a sustainable society and sustained growth through value creation that captures market growth opportunities. With the goal of achieving net sales of 110 billion yen (building materials segment: 70 billion yen, industrial materials segment: 20 billion yen, electronic and device segment: 20 billion yen), operating income of 2.6 billion yen, net income attributable to shareholders of the parent company of 1.9 billion yen, ROE of 8% or more, ROIC of 6% or more, and total shareholder return of 50% by the end of the 2026 fiscal year as midterm targets, and by leveraging the cash and external funds of each business to increase net income attributable to the parent company and ROE. The midterm performance targets were revised upward in December 2023, with net sales, operating income, and net income attributable to the parent company being revised upward by 10 billion yen, 0.3 billion yen, and 0.2 billion yen, respectively, compared to the time of the medium-term management plan announcement. The upward revision of the target figures for the building materials segment by 10 billion yen reflects the results of the merger and acquisition of Iwasui Development carried out in June 2023 and the strong performance in the construction materials field. In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

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Takashima (8007) announced its medium-term management plan, 'SustainaX (Cross)' with the final year being the 2023 fiscal year. While following the basic strategies of the previous medium-term management plan 'Sustaina2020,' such as 'unrivaled strategy,' 'improvement in productivity,' and 'strengthening of corporate governance,' it has further promoted the formation and expansion of each function from design to construction and support in the value chain through 'further evolution of unrivaled strategy,' 'acquisition of strong cost competitiveness through increased productivity,' and 'strengthening of corporate governance.' At the same time, it has also been working to transform its business structure and portfolio for the establishment of a long-term growth foundation. Specifically, through the 'further evolution of the unrivaled strategy,' it has contributed to the development of a sustainable society by providing energy-saving solutions, lightweighting solutions, and labor-saving solutions. It has improved productivity and reduced costs through a review of all operations and systemization while maintaining an internal control and compliance system as part of 'acquiring strong cost competitiveness through increased productivity.' As part of 'strengthening corporate governance,' the company has been continuously working towards building a more solid 'aggressive governance' structure in consideration of the various principles of the Corporate Governance Code. The system investment implemented in the second quarter of the 2023 fiscal year and the two M&A transactions, the newly established energy distribution system and the Shinbou Edix, which was acquired in December 2022, are based on these policies. After the medium-term management plan 'SustainaX (Cross)' ended in the 2023 fiscal year, the company formulated a new medium-term management plan as 'SustainaV (Value)' (fiscal year 2024-2026) in March 2023. As a super-long-term goal, the company aims to achieve a 'carbon-neutral society' by 2050 and simultaneously realize adaptation to a sustainable society and sustained growth through value creation that captures market growth opportunities. With the goal of achieving net sales of 110 billion yen (building materials segment: 70 billion yen, industrial materials segment: 20 billion yen, electronic and device segment: 20 billion yen), operating income of 2.6 billion yen, net income attributable to shareholders of the parent company of 1.9 billion yen, ROE of 8% or more, ROIC of 6% or more, and total shareholder return of 50% by the end of the 2026 fiscal year as midterm targets, and by leveraging the cash and external funds of each business to increase net income attributable to the parent company and ROE. The midterm performance targets were revised upward in December 2023, with net sales, operating income, and net income attributable to the parent company being revised upward by 10 billion yen, 0.3 billion yen, and 0.2 billion yen, respectively, compared to the time of the medium-term management plan announcement. The upward revision of the target figures for the building materials segment by 10 billion yen reflects the results of the merger and acquisition of Iwasui Development carried out in June 2023 and the strong performance in the construction materials field. In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

Takashima (8007) announced its medium-term management plan, 'SustainaX (Cross)' with the final year being the 2023 fiscal year. While following the basic strategies of the previous medium-term management plan 'Sustaina2020,' such as 'unrivaled strategy,' 'improvement in productivity,' and 'strengthening of corporate governance,' it has further promoted the formation and expansion of each function from design to construction and support in the value chain through 'further evolution of unrivaled strategy,' 'acquisition of strong cost competitiveness through increased productivity,' and 'strengthening of corporate governance.' At the same time, it has also been working to transform its business structure and portfolio for the establishment of a long-term growth foundation. Specifically, through the 'further evolution of the unrivaled strategy,' it has contributed to the development of a sustainable society by providing energy-saving solutions, lightweighting solutions, and labor-saving solutions. It has improved productivity and reduced costs through a review of all operations and systemization while maintaining an internal control and compliance system as part of 'acquiring strong cost competitiveness through increased productivity.' As part of 'strengthening corporate governance,' the company has been continuously working towards building a more solid 'aggressive governance' structure in consideration of the various principles of the Corporate Governance Code. The system investment implemented in the second quarter of the 2023 fiscal year and the two M&A transactions, the newly established energy distribution system and the Shinbou Edix, which was acquired in December 2022, are based on these policies. A new medium-term management plan 'SustainaV (Value)' (fiscal year 2024-2026) was formulated in March 2023 as the medium-term management plan 'SustainaX (Cross)' ended in the 2023 fiscal year. As a super-long-term goal, the company aims to achieve a 'carbon-neutral society' by 2050 and simultaneously realize adaptation to a sustainable society and sustained growth through value creation that captures market growth opportunities. With the goal of achieving net sales of 110 billion yen (building materials segment: 70 billion yen, industrial materials segment: 20 billion yen, electronic and device segment: 20 billion yen), operating income of 2.6 billion yen, net income attributable to shareholders of the parent company of 1.9 billion yen, ROE of 8% or more, ROIC of 6% or more, and total shareholder return of 50% by the end of the 2026 fiscal year as midterm targets, and by leveraging the cash and external funds of each business to increase net income attributable to the parent company and ROE. The midterm performance targets were revised upward in December 2023, with net sales, operating income, and net income attributable to the parent company being revised upward by 10 billion yen, 0.3 billion yen, and 0.2 billion yen, respectively, compared to the time of the medium-term management plan announcement. The upward revision of the target figures for the building materials segment by 10 billion yen reflects the results of the merger and acquisition of Iwasui Development carried out in June 2023 and the strong performance in the construction materials field. In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

In addition, the company has set aside 15 billion yen as a growth investment frame. Each business is classified into 'basic expansion-focused businesses,' which aim for aggressive expansion through the company's strengths and growth investment, and 'future investment-focused businesses,' which invest in the long-term market opportunities and develop future core businesses. The company has also invested in M&As for the purpose of strengthening its business portfolio and diversification, as well as factories, facilities, personnel, and IT as investment targets. The company has also made an upward revision to the growth investment framework. Initially, when the medium-term management plan was formulated, a growth investment frame of more than 10 billion yen was set, but with the achievement of 8.95 billion yen by the end of the second quarter of the 2024 fiscal year and steady progress, the target amount for growth investment was further increased. The company will continue to aggressively invest in the investment areas it has identified, while being mindful of capital costs in the future.

In its latest midterm management plan "Sustaina V (Value)" announced in December 2023, the company once again emphasized its strong commitment to management that focuses on capital cost and stock prices. In the past, the company has focused on improving capital efficiency and growth through investment based on its capital allocation policy and setting targets for capital efficiency in compliance plans, as well as emphasizing shareholder return enhancement as a basic principle. Going forward, the company aims to set a new benchmark with a P/E ratio of over 1x, and intends to improve not only the sustainable ROE, but also the PER (price-to-earnings ratio). Specifically, the company will implement efforts such as promoting PMI for M&A companies and strengthening profitability, continuing to make new investments in strategic areas (such as M&A and factories), restructuring and enhancing competitiveness in the industrial materials segment, balancing growth and shareholder return, further enhancing information dissemination to shareholders (foreign investors and individual investors), and improving capital efficiency by reducing policy-owned shares and other measures to strengthen the stock market's expectations of the company's future profit growth.

(Written by FISCO Guest Analyst Yoichiro Shimizu)