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Summary of President's speech / Main questions and answers 4Q FY2016

Financial Results Briefing for the fiscal year ended March 2017

Summary of President's speech

New orders

  • This financial year, non-consolidated civil engineering was able to secure broadly the same level of new orders as in FY2015. This is because domestic civil engineering increased by approximately 20% on a year-on-year basis due to bullish orders from the public sector in the Tokyo Metropolitan Area. Building construction was also able to secure almost the same level of new orders as FY2015 due to its successfully receiving new orders for large-scale projects, such as the Hotel Okura Tokyo Main Building reconstruction and the construction of the New National Stadium.
  • New orders in FY2017 are expected to be almost at the same level as FY2016, because the strong demand in the Tokyo Metropolitan Area is forecast to continue, despite concerns such as the decline caused by the downturn after the rush of orders for large-scale projects.

Profit forecast

  • We have decided to make a share repurchase of 25 billion yen, following last year’s share repurchase of 20 billion yen, in addition to increasing the dividend per share from 16 to 20 yen. The payout ratio and ROE are also expected to achieve the targets in the Medium-term Business Plan.

Shareholder return

  • From the viewpoint of consolidated profits, we recorded our highest operating income in 24 years, while net income continued to set an all-time record for the second consecutive year. The FY2017 profit plan is from the final year of the Medium-term Business Plan (FY2015-2017), and it is forecast that we will achieve the profit targets in that plan, although profits will be lower than last year due the exclusion of the influence of factors such as the acquisition of additional construction work in FY2016.


  • There are several points of interest in the business environment. The first is the increase in design-build contracts. It appears that our proposal capabilities during the project planning phase, which provide innovations such as shorter schedules and lower costs, are thought of highly by our customers. If we assume that this trend will continue, this will be one of the periods of change in the long history of construction industry. That is a matter of both great interest to me, and something that I am watching with anticipation.
  • The second point of interest is that it appears that the trend toward higher productivity is accelerating. As the decline in the number of construction workers is difficult to avoid, the construction industry is taking on the challenge of automation and other construction technologies that employ ICT and AI. I also recognize that a review of how employees, who are extremely busy, work is vital to enhance the attractiveness as a career.
  • As we head toward 2020, there is the chance now, while we are busy, to seize the opportunity to come up with bold ideas. I feel a sense of crisis that, if we let this slip by, we will lose the chance to make our industry more attractive. Without getting swamped in our work, toward 2020, we at Taisei will take on the weighty role of proactively endeavoring to raise our productivity with a keen sense of mission, and while having a long term viewpoint.

Main questions and answers

What is the net sales outlook going forward?
Due to the intense construction work in the Tokyo Metropolitan Area becoming even busier in FY2018, we foresee that net sales will increase to a step above this year’s level.
What factors caused the improvement in the gross margin ratio for building construction, and what are your views on the current period?
With regard to the previous financial year, factors including acquisition of additional construction work caused the improvement in the gross margin ratio. Initial forecasts for this year do not make allowances for the pending acquisition of additional construction work.
Following on from last year, what are the circumstances that led up to the share repurchase?
Our recognition of the fact that our number of issued shares is large remains unchanged. We are making decisions from a comprehensive perspective taking into our performance and the balance between the investment environment and shareholder return.
Is the impact of the accident during the extension work of the subway Nanakuma Line in Hakata reflected in the previous period’s results?
It has been reflected in the results based on certain assumptions.
Tell me about your initiatives to reform your employees’ working styles.
I’m sending the president’s message to all of our executives and employees that, of course, we will be making further use of IOT, and without being limited by conventional ways of proceeding with and thinking about work, we are to aim to raise productivity while having the courage to change the way we work and to cease doing unnecessary tasks.