Company Overview of Takashima <8007>

1. Company Overview

The company is a functional trading firm founded in 1915 under the corporate mission of "contributing to society through its business." A functional trading firm is characterized by its fundamental stance of not pursuing excessively broad market expansion but focusing on the pursuit of customer value in the target market, offering truly necessary functions and solutions tailored to customers, thus establishing a business model that achieves higher profitability.

Additionally, establishing many business bases both domestically and overseas is also an important point in realizing value provision to customers. As of September 30, 2024, there are a total of 20 group companies (14 domestic and 6 overseas), and in addition, many cooperative factories and partner companies are also located in Japan and Asia, globally supporting customers' businesses. As of the end of March 2024, the number of employees is 1,162 (on a consolidated basis), and the capital is 3,801 million yen.

2. Business Activities

The company operates in three segments: Construction Materials, Industrial Materials, and Electronics & Devices. In the second quarter of the fiscal year ending March 2025, the sales composition by segment was 65.0% for the Construction Materials segment, 18.4% for the Industrial Materials segment, and 16.6% for the Electronics & Devices segment. By designing the flow of commerce according to customer needs across a wide range from upstream processes such as planning and design to downstream construction and support, the company contributes to customers' energy conservation and labor saving while contributing to the realization of a sustainable society. Notably, regarding the rental A-REIT ETF segment, it has effectively disappeared since the fiscal year ending March 2025 due to the sale of rental properties in January 2024.

(1) Construction Materials Segment

This core business accounts for 65.0% of the revenue composition (for the second quarter of the fiscal year ending March 2025, same below) and is composed of four areas: "Construction Materials," "Residential Materials," "Insulation Materials," and "Renewable Energy Materials." It offers a variety of products and solutions related to construction and building, including wall materials for large non-residential buildings and residential buildings, foundation pile methods, insulation materials, materials related to Photovoltaic Technology, interiors, and more. By leveraging a nationwide sales and construction network, the company supports customers across the entire value chain, from planning and design to construction. An example of designing the flow of commerce and creating customer value is the full cut insulation materials for house builders. For each project, detailed drawings are created to determine the positioning and dimensions for the insulation material installation, and processing is performed based on these placement drawings, individually delivering the processed insulation materials to the construction site. By taking responsibility for processing and logistics, the company has achieved labor-saving at construction sites and shortened construction periods. Furthermore, in the future, under the mid-term management plan "SUSTAINA V (Value)," the company aims to focus on renewable energy materials, for which future demand growth is anticipated. Specifically, active investments will be made in Photovoltaic Technology and EV-related sectors. One such example is the acquisition of New Energy Distribution Systems Co., Ltd. in December 2022. By combining the construction execution capabilities that the company possesses with the sales capabilities of Takashima, the company aims to further enhance its solution provision capabilities.

a) Construction Materials

Offering a variety of high-performance construction materials (such as wall materials and fire-resistant coatings) and pile and civil engineering materials (foundation piles, ground improvement methods, EDO-EPS methods, and plastic underground storage infiltration blocks) for non-residential buildings, mainly large logistics facilities and factories, tailored to customer needs. Utilizing a nationwide sales and construction network, solutions are provided that contribute to the efficiency of customer operations at every stage of the value chain, from the design consideration stage to the construction and implementation stages. In June 2023, the company has fully acquired Iwasui Development, a leading company in the Chugoku and Shikoku regions, offering a total solution that can handle everything from design to construction in ground improvement and ground surveys. This M&A enhances the company's design and construction capabilities, thereby increasing the value provided to customers.

b) Residence Materials

In response to the diversification of residences, including ZEH, a variety of essential materials for improving safety, comfort, and energy efficiency in living environments (such as exterior wall materials, roofing materials, all-electric products, and insulation materials) are provided, as well as processing and construction of various counters (artificial marble for kitchen counters and bathroom vanities) and related interior materials. Additionally, by fully pre-cutting insulation materials for house builders and handling layout, processing, and logistics functions, labor-saving measures for measuring, cutting, and waste disposal at construction sites are offered.

c) Insulation Materials

Leveraging extensive knowledge and experience gained through years of achievement in the insulation field, a variety of high-performance insulation materials and methods are proposed. Specifically, insulation panels that create frozen and refrigerated spaces in non-residential buildings such as food factories and logistics warehouses are supplied, along with a diverse range of high-performance insulation materials and methods for residential buildings, contributing to energy savings.

(Written by FISCO Guest Analyst Yoichiro Shimizu)