Pursuing the strategies, we will establish a business foundation capable of generating stable profits with consolidated operating income of 100.0 billion yen as the bottom line, and further improve earnings within the period of the new business plan. We will also establish a path to sustainable growth in corporate value by continuing to make decisive investments.

The Obayashi Group will continue to take on the challenge of ceaseless transformation driven by talent and innovation to keep providing a variety of solutions for the sustainability of places where we reside: spaces, cities, and the environment.

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In the Medium-Term Business Plan 2022 "Strengthening the Business Foundation and Accelerating Company-wide Transformation" announced in March 2022, we had set FY2022 and FY2023 as the period for implementing the measures for strengthening the foundation of construction business and ensuring stability of earnings with a consolidated operating income of 100.0 billion yen as the bottom line, while establishing a path to medium- to long-term growth with measures for accelerating transformation through FY2026.

However, in the situations that more-than-anticipated changes in the business environment such as soaring construction material prices, continued growth in construction demand to levels exceeding production capacity enhancement, and changes in monetary policies overseas, profitability has been underperforming the initial plan. Moreover, in terms of safety and quality, which are essential for the survival of our business, we have been unable to eradicate serious accidents. Given this current situation, we believe that it is necessary to continue implementing thorough measures to strengthen the foundation of the construction business.

On the other hand, we have adopted ROIC as a performance indicator target under the Medium-Term Business Plan 2022, implementing management that emphasizes capital efficiency. To further promote the management, we set a strategic capital policy that sets forth the necessary equity at around one trillion yen and sets forth an ROE performance indicator target of 10% or more by FY2026, as announced on March 4, 2024. In conjunction with this, we judged a partial review of the performance indicator targets including cash allocation and investment plan under the Medium-Term Business Plan 2022 is necessary considering current anticipated performance forecast, taking into account the fact that there is a certain level of success from efforts focusing on cost reduction through productivity improvement and utilization of new technology as well as its initiatives based on order strategies emphasizing profitability, and also given the increasing trend in society as a whole to appropriately pass costs onto prices.

In order to achieve sustainable growth of the Group, we aim to establish a group-wide business structure in the future centered on domestic construction business and other businesses generate performance equal to or greater than that of the domestic construction business and will execute the measures for accelerating transformation for platform development such as organizational and governance structure within the period of the Medium-Term Business Plan 2022.

For these reasons, we will announce the below addendum to the Medium-Term Business Plan 2022 "Strengthening the Business Foundation and Accelerating Company-wide Transformation."

• Continue thorough measures to strengthen the foundations of the construction business
• Partial revision of the performance indicator targets
• Add measures for accelerating transformation for sustainable growth

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