Toa Road Corporation · TSE:1882
Toa Road — FY2023 Earnings Presentation
56 slides from Toa Road's earnings presentation, Mar 31, 2024
Slide 1: Financial Results Briefing Material
Fiscal year ended March 31, 2024 Financial Results Briefing Material Ahead of the Curve On Top of the Market
Slide 2: Contents
Contents Summary of financial results 1 for the fiscal year ended March 31, 2024 Financial results forecasts 2 for the fiscal year ending March 31, 2025 3 Topics FY2024–FY2026 4 Medium-term Management Plan 5 Corporate profile
Slide 3: Summary of financial results for the fiscal year ended March 31, 2024
1 Summary of financial results for the fiscal year ended March 31, 2024
Slide 4: Major initiatives in FY2023
Business environment in FY2023 ■The economy remained on a recovery trend, backed by social and economic activities regaining a greater degree of normalcy after COVID-19 was reclassified to a Class 5 infectious disease, improvement in the employment and income environment, and increasing demand from
Slide 5: Financial results summary
Financial results summary (consolidated and non-consolidated) (Millions of yen) YoY change YoY change Initial Achievement Consolidated FY2022 FY2023 (Amount) (%) forecast ratio Net sales 118,721 118,060 ▲661 ▲0.6% 120,000 98.4% Gross profit 12,343 13,483 1,140 9.2% ― ― SGA expenses 7,607 8,009 402 5
Slide 6: Results of net sales and profit/loss by segment
Results of net sales and profit/loss by segment (consolidated) (Millions of yen) YoY change YoY change Achievement Net sales FY2021 FY2022 FY2023 (Amount) (%) Initial forecast ratio Construction 68,754 70,045 70,247 202 0.3% ― ― Asphalt Products, Environment and Other 43,363 48,675 47,813 ▲862 ▲1.8%
Slide 7: Analysis of factors for changes in profit
Analysis of factors for changes in profit (consolidated) (Millions of yen) Profit increased by 1,285 Profit decreased by 653 1,140 107 4 53 194 402 extraordinary income Decrease in 3,793 extraordinary losses Decrease in operating expenses Increase in non- 3,160 income taxes Increase in SGA expenses
Slide 8: Consolidated financial position and consolidated cash flows
Consolidated financial position and consolidated cash flows ■ Interest-bearing ■ Net assets －●－ Equity-to- Consolidated financial position (Millions of yen) liabilities asset ratio (Millions of yen) (%) FY2021 FY2022 FY2023 YoY change 65,000 57.9 58.9 58.8 60.0 Total assets 84,691 87,184 92,895 5,71
Slide 9: Financial results forecasts for the fiscal year ending March 31, 2025
2 Financial results forecasts for the fiscal year ending March 31, 2025
Slide 10: Financial results forecasts for FY2024
Financial results forecasts for FY2024 (Millions of yen) FY2024 YoY change YoY change Consolidated FY2023 (Forecast) (Amount) (%) Net sales 118,060 126,000 7,940 6.7% Operating profit 5,473 6,000 527 9.6% Ordinary profit 5,707 6,100 393 6.9% Profit attributable to owners of parent 3,793 3,900 107 2.
Slide 11: Shareholder returns
Shareholder returns – dividend forecast and purchase of treasury shares Actual dividend per share (FY2023) : 42 yen Forecast divided per share (FY2024) : 42 yen Note 1 Note 1: The amount is calculated a post-split basis following the 5-for-1 stock split of common stock on March 29, 2024. The actual
Slide 12: Consolidated management indicators
Consolidated management indicators (Capital investment, R&D, depreciation, shareholder returns, etc.) Consolidated management indicator trends Term 107th 108th 109th 110th 111st 112nd 113rd 114th 115th 116th 117th 118th Fiscal year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Net sale
Slide 13: Consolidated management indicators trends
Consolidated management indicators (Capital investment, R&D, depreciation, shareholder returns, etc.) Consolidated management indicator trends ■ Ordinary profit ■ Profit (loss) attributable to owners of parent －●－ Equity-to-asset ratio －●－ Return on equity (ROE) (%) 57.9 58.9 58.8 53.2 60 50.4 42.3
Slide 14: Topics
“TOA RBBBTERASAH E TOPICS
Slide 15: Topics for FY2023 Stock split (1)
Topics for FY2023 1 Stock split (1) Purpose By reducing the amount per unit of investment in the Company’s stock through a stock split, the Company aims to create an environment in which investors can invest more easily, thereby expanding the investor base and increasing the liquidity of the Company
Slide 16: Topics for FY2023 Stock split (2)
Topics for FY2023 2 Stock split (2) Purpose By reducing the amount per unit of investment in the Company’s stock through repeated stock splits, the Company aims to create an environment in which investors can invest more easily, thereby expanding the investor base and increasing the liquidity of the
Slide 17: Announcement on retirement of treasury shares
Topics for FY2023 3 Announcement on retirement of treasury shares The Company conducted the retirement of treasury shares on April 30, 2024, the scheduled date decided upon in the “Decision on the retirement of treasury shares” dated November 8, 2023 and the “Decision on the scheduled date of the re
Slide 18: Establishment of a new plant to produce cold-mix asphalt mixtures
Topics for FY2023 4 Establishment of a new plant to produce “cold-mix asphalt mixtures” (August 7, 2023) The Company established a new plant of cold-mix asphalt mixture for research and development in Tsukuba City, Ibaraki. Cold-mix asphalt mixtures eliminate the heating process during production th
Slide 19: Medium-term Management Plan FY2024–FY2026
4 FY2024–FY2026 Medium-term Management Plan
Slide 20: Contents
Contents Corporate philosophy, 100th anniversary vision and 1 medium-term management plan 2 Review of the previous medium-term management plan 3 Outline of the medium-term management plan 3-1 Shift to CSR-oriented management 3-2 Establishment of a foundation for sustainable growth 4 Performance goal
Slide 21: Corporate philosophy, 100th anniversary vision and medium-term management plan
1 Corporate philosophy, 100th anniversary vision and medium-term management plan 〇Corporate philosophy Corporate philosophy Support peoples’ lives from the road they stand on with our own Vision (What we should be) will and growth 〇100th anniversary vision Medium-term management plan (Basic policies
Slide 22: TOA ROAD Vision 2030 and step plans
1 Corporate philosophy, 100th anniversary vision and medium-term management plan (Consolidated financial result) “TOA ROAD Vision 2030,” the 100th anniversary vision Net sales (target) GOAL ¥150.0 billion Operating profit (target) Refine the TOA Style to be the Only One Company always chosen by the
Slide 23: Six growth strategies
2 Review of the previous medium-term management plan Six growth strategies (TOA ROAD Sustainable Plan 2023) Build a firm foundation for profitability Promote digital transformation (DX) Expand the business domains Improve engagement Promote technology development Strengthen governance Un
Slide 24: TOA ROAD Sustainable Plan 2026
3 Outline of the medium-term management plan TOA ROAD Sustainable Plan 2026 Ahead of the Curve On Top of the Market Shift to CSR-oriented Establishment of a foundation management for sustainable growth Amid the changes in social demands to companies, we While responsive actions to environmental prob
Slide 25: Shift to CSR-oriented management: WE COMMIT!
3-1 Shift to CSR-oriented management Employees Shareholders Society WE COMMIT! Customers Environment Through construction, maintenance and management of roads, we play our part in developing infrastructure for industries and technology innovations, as well as in building sustainable cities and commu
Slide 26: Commitment to our employees
3-1 Shift to CSR-oriented management Commitment Commitment to Commitment to to our Commitment to Commitment to communities our employees environment our customers and society shareholders Introduce and Ensure compliance Reduce emission of Guarantee reliable Strengthen the improve objective
Slide 27: Shift to CSR-oriented management
3-1 Shift to CSR-oriented management Health & Environment Day Initiative for employee engagement Company 5 4 AAA 3 AA 2 A FY2026 (target) 1 Workplace Job BBB 0 BB B FY2022–FY2023 CCC CC FY2021 C Supervisors DDD FY2023 FY2026 taget DD We have set the third Friday of November as the “Health & By quant
Slide 28: Positioning of business strategies
3-2 Establishment of a foundation for sustainable growth, “Positioning of business strategies” Construction Asphalt Product Consulting Back-office business business business strategies strategies strategies strategies Management strategies with a keen eye on capital costs Strategies of each business
Slide 29: Identification of materialities
3-2 Establishment of a foundation for sustainable growth, “Identification of materialities” The Company’s business is based on orders mainly for public constructions. It depends on demands and needs of the society and many of its materials are natural resources procured domestically and internationa
Slide 30: Our strength
3-2 Establishment of a foundation for sustainable growth, “Our strength” TOA ROAD CORPORATION is known as the first company in Japan that successfully produced asphalt emulsion1) and provided it to pavement service providers Free and open culture of a totally nationwide in the early days of modern p
Slide 31: Research and Development (R&D) strategies
3-2 Establishment of a foundation for sustainable growth, “Research and Development (R&D) strategies” Our R&D strategies, which are based on the “TOA Style” and achievement from years of researches, are forward-looking strategies that precisely reflect social and market needs. We will work on develo
Slide 32: R&D strategies
3-1 Establishment of a foundation for sustainable growth, “Research and Development (R&D) strategies” “R&D strategies” Global environmental problems Preventive maintenance technologies (cold-mix asphalt mixtures) for infrastructure (LCC optimization) CAM seal (Thin-layer surface treatment method) Fo
Slide 33: R&D strategies (Advanced innovation)
3-1 Establishment of a foundation for sustainable growth, “Research and Development (R&D) strategies” “R&D strategies (Advanced innovation)” Pavement w ith a solar pow er generation Technology for w ireless EV function(Wattw ay) charging w hile driving The photo is for illustrative purposes only. Co
Slide 34: Integrated business strategies
3-2 Establishment of a foundation for sustainable growth, “Integrated business strategies” In order to build a management foundation to achieve sustainable growth, it is necessary to share materialities the Company is facing among the businesses, and manage and optimize strategies and investments of
Slide 35: Construction business strategies
3-2 Establishment of a foundation for sustainable growth, “Construction business strategies” The 2024 problem and the associated necessity to secure workers is an urgent issue the Company is facing. We will address this issue by introducing and promoting DX to improve operational efficiency and redu
Slide 36: Asphalt Product business strategies
3-2 Establishment of a foundation for sustainable growth, “Asphalt Product business strategies” With experience and track record over 100 years since the early days of pavement in Japan, our Asphalt Product business aims at being a “road concierge” who not only sells products but also commits to cus
Slide 37: Consulting business strategies
3-2 Sustainable growth strategies, “Consulting business strategies” We have been working for development of pavement management system (PMS) for years. PMS, a system that maintains and manages huge accumulation of road assets in an optimal manner, minimizes life cycle cost and serves as an essential
Slide 38: Back-office strategies
3-2 Establishment of a foundation for sustainable growth, “Back-office strategies” Our back-office strategies are to improve operational efficiency by utilizing the latest DX technologies and generative AI technologies to improve productivity, and thereby to improve competitiveness in markets as a c
Slide 39: Construction business
3-2 Establishment of a foundation for sustainable growth Construction business Sports facilities Machine control We will propose solutions that are consistently optimal from We strive to improve productivity and reduce dependency on planning and design to construction from an expert viewpoint to hum
Slide 40: Asphalt Product business and Consulting business
3-2 Establishment of a foundation for sustainable growth Asphalt Product business and Consulting business Asphalt Product business Consulting business (LCC optimization) (alternative materials for asphalt) High-performance waterproofing construction method (ToughShut RA) MWD plus We will actively pr
Slide 41: Management strategies with a keen eye on capital costs
3-2 Sustainable growth strategies “Management strategies with a keen eye on capital costs” Having a precondition that we will ensure resilient management foundation to address the era of uncertainty, we will strive to improve our corporate value with a keen eye on capital cost, by setting a KPI for
Slide 42: Cash flow allocation
3-2 Cash flow allocation We plan to invest ¥○ billion in CSR activities, R&D and M&As as an aggressive investment in growth. As for renewal of existing facilities, we plan to invest ¥○ billion in three years for improvement of production capability and efficiency, renewal of existing facilities by c
Slide 43: Trend of shareholder returns
3-2 Trend of shareholder returns The policy on shareholder returns is an important theme of management. We will work to provide shareholder returns with a baseline dividend payout ratio of 50% or more, while striving to achieve continuous growth of business. (We may consider stock repurchase in resp
Slide 44: Performance goals (consolidated)
4 Performance goals (consolidated) FY2026 (FY2030) Net sales ¥130.0 billion (¥150.0 billion) Operating profit ¥7.5 billion (¥10.0 billion) Net sales (10 millions of yen) Operating profit (Millions of yen) Net profit (Millions of yen) Sustainable Plan 2026 Net sales Operating profit Profit ROE 43
Slide 45: Affiliated companies
5 Affiliated companies TOA-TONE BORING CO., LTD. ART ENGINEERING CO., Ltd. A vehicle that measures pavement surface profiles Diaphragm wall trencher Enzan Plant Mobile deflection measurement equipment MWD plus Established in 1917, TOA-TONE BORING CO., LTD. is a ART ENGINEERING CO., Ltd. is a member
Slide 46: Initiatives for SDGs and Society 5.0
6 Initiatives for SDGs and Society 5.0 Initiatives for SDGs Challenge to Society 5.0 Resolve social issues through Realize a future society through business activities business activities Our target year, 2030, is also the target year of SDGs. To achieve The Company will challenge the possibilities
Slide 47: Initiatives for WISENET 2050
7 Initiatives for WISENET 2050 Based on insights and technologies we have developed as a road construction company, we will create innovations for future and actively commit to an establishment of WISENET 2050*1) . Establishment of a seamless network U nd er W IS EN ET 2 0 5 0 , t he w o rk i s o n
Slide 48: Corporate profile
(TOA RBS RCSRAKSAt Corporate profile
Slide 49: Corporate philosophy and corporate profile
Corporate philosophy and corporate profile Corporate philosophy Support peoples’ lives from the road they stand on with our own will and growth Corporate name TOA ROAD CORPORATION Date of establishment November 28, 1930 Head office 7-3-7 Roppongi, Minato City, Tokyo Representative Kyouichi Morishita
Slide 50: Major consolidated subsidiaries
Major consolidated subsidiaries Net sales Reportable (Before Company name Head office Business description segment consolidation adjustment) Supervising and work for road construction, general civil FUJIKENSETSU CORPORATION Construction Muroran City, Hokkaido ¥3,010 million engineering, sports facil
Slide 51: Major offices, research institute, consolidated subsidiaries, etc.
Major offices, research institute, consolidated subsidiaries, etc. Branch offices, sales 40 offices offices, etc. Technical Research 1 location Institute Hokkaido Product factories 24 factories • Hokkaido Branch Asphalt mixing 45 plants plants Subsidiaries 25 subsidiaries Tohoku Shin-etsu and Hokuri
Slide 52: Our track record in construction
Our track record in construction FY2022 Shizuma Nima Road pavement construction Improvement and pavement construction work at Hokuriku Shinkansen work in Isotake district Kammuriyama Toge Road in Tsuka district (Chugoku Regional Development Bureau, MLIT) (Kinki Regional Development Bureau, MLIT) Fuk
Slide 53: Our new technologies
Our new technologies MWD plus (a pavement inspection vehicle that measures deflection Development of photovoltaic road surfacing system (Wattway) volume and pavement surface conditions at the same time） In order to achieve the SDG goals, the Company is working jointly with The Company developed and
Slide 54: Our products
Our products ECO Binder series Fast-As ECO Binder series are environmentally-friendly modified Fast-As is a road surface repair material developed for easier asphalt that can be produced at approximately 30℃ lower use for small-scale work. It is made of modified asphalt than the temperature for prod
Slide 55: Forward-looking statements notice
Forecasts, plans and any other forward-looking statements contained herein are based on the information currently available and assumptions and hypothesis deemed to be reasonable by the Company. Actual results may differ from these statements due to future changes in the business environment and var
Slide 56: Inquiries
Inquiries Administration Division / Corporate Planning Office TEL +81-3-3405-1811 FAX +81-3-3405-9800 URL https://www.toadoro.co.jp