FUTURE LANDSCAPE -

CELEBRATING THE JOYS OF LIFE.

Creating the fundamental societal infrastructure and lifestyle culture rooted in regeneration, ensuring a world where we live together in harmony embracing the Joys of Life

FY2023 ２Q

Presentation on Management Policies

November 13, 2023

Daiwa House Industry Co., Ltd. Code No: 1925 (Prime market of the Tokyo Stock Exchange)

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

Index

  • Performance Highlights
    -Current Business Conditions

• FY2023 2nd Quarter Results

P.4

•

FY2023 Full-Year Plan

P.5

• The Progress of the 7th Medium-Term

P.6

Management Plan

• Capital Policy and Shareholder Return

P.7

•

Portfolio Optimization

P.8

  • Progress of 7th Medium-Term Management Plan

• Expand Our Circular Value Chain

P.10-12

• Accelerating Growth Through Overseas

P.13-16

Business

P.17

•

Carbon-Neutral Strategy

• Business Development From the

P.18-20

Perspective of Social Issues

P.21

• Strengthen Cost Competitiveness and

Establish a Stable Supply System

•

Digital Transformation

P.22

• Improving the Value of Human Capital

P.23

• Response to the "2024 Problem"

P.24

  • Appendix１
    Progress of the Strategies by Business Segments
    • Single-FamilyHouses Business
    • Rental Housing Business
    • Condominiums Business
    • Commercial Facilities Business
    • Logistics, Business & Corporate Facilities Business
    • Environment & Energy Business
  • Appendix２ Carbon Neutral Indicators

Human Capital Indicators

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

2

Performance Highlights

Current Business Conditions

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

3

FY2023 2nd Quarter Results

FY2023 2nd quarter results were record high with sales of 2,544.8 billion yen (+12.5% YOY)

and net income* of 154.4 billion yen (+45.8% YOY).

Operating income also increased sharply to 191.1 billion yen, up 36.5 billion yen YOY(+23.6% YOY).

:Net sales

Topics

Steady progress of sale of development

2,544.8

FY2023 2Q Results

:Operating income

:Net income*

(billion yen)

1,809.7

properties

Recovery of hotel business affected by

COVID-19

Steady progress of US Single-Family

Houses Business

Sale of shares of Daiwa Resort Co., Ltd.

2,179.3

2,042.1

1,983.31,966.4

2,261.3

(billion yen)

Net sales

Single-Family

442.7

Houses

Rental Housing 609.2

Condominiums 217.8

Commercial

Facilities 581.9

Logistics, Business& Corporate Facilities 643.4

Environment

73.5

and Energy

(YOY)

(+5.9％)

(+5.1％)

(+25.1％)

(+10.6％)

(+29.6％)

(-15.8％)

Operating Income (YOY)

14.2 (-29.8％)

60.1 (+13.1％)

16.6 (+84.1％)

71.8 (+14.8％)

57.2 (+48.7％)

6.3 (+169.3％)

180.4

189.5

209.3

160.3

191.1

156.0

154.6

123.5

131.4

147.3

91.3

107.5

105.9

154.4

FY17 2Q

FY18 2Q

FY19 2Q

FY20 2Q

FY21 2Q

FY22 2Q

FY23 2Q

Other

38.6

Total

2,544.8

(-3.8％)

(+12.5％)

0.8 (-68.1%)

191.1 (+23.6％)

*Attributable to owners of the parent

Confidential

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

4

FY2023 Full-Year Plan

FY2023 full-yearsales plan was revised up by 100 billion yen from the previous plan, increasing significantly to 5.02 trillion yen. Operating income was revised to 385 billion yen (+4.4% YOY) and net income was revised to 263 billion yen (+9.5% YOY)*1.

FY2022

(billion yen)

Results

Net sales

4,908.1

Operating income

465.3

Operating income

368.7

(Excluding actuarial differences)

Net income*2

308.3

Net income *2

240.2

(Excluding actuarial differences)

Annual dividend

130 yen

Dividend payout ratio

35.6%

(Excluding actuarial differences)

FY2023

Pre. forecasts

(YOY)

4,920.0 (＋11.8)

380.0 (-85.3)

380.0 (＋11.2)

  1. （-58.3)
  1. (＋9.7)

135 yen (＋5 yen)

35.6%

FY2023

Rev. forecasts

(vs pre. forecasts)

5,020.0 (＋100.0)

385.0 (＋5.0)

385.0 (＋5.0)

  1. (＋13.0)
  1. (＋13.0)

140 yen (＋5 yen)

35.0%

*１YOY excluding actuarial differences on retirement benefits *2 Attributable to owners of the parent

Confidential

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

5

The Progress of the 7th Medium-Term Management Plan

FY2023 sales forecast exceeds 5 trillion yen, showing steady progress

Aim to achieve sales of 5.5 trillion yen in FY2026 while striving to achieve both profit growth and

improvement of capital efficiency and profitability

:Net sales :OP income :Net income*１

(billion yen)

*1 Attributable to owners of the parent

*2 Amortization of actuarial differences in operating income

*3 Amortization of actuarial differences in net income4,908.1

*4 After taking the equity credit attributes of hybrid financing into account

*5 Excluded actuarial differences

ROE

14.3

%

465.3

96.6*2

308.3

368.7

68.1*3

240.2

5,020

Previous forecasts 4,920

385

Previous forecasts

380

263

Previous forecasts

250

5,500

ROE

13%

or

higher

500

340

FY2021 Results

Final year of 6th Plan

D/E ratio: 0.61 times*4 Dividend payout ratio: 36.6%

FY2022 Results

1st year of 7th Plan

D/E ratio: 0.72 times*4

Dividend payout ratio: 35.6%*5

FY2023 Rev. Forecasts 2nd year of 7th Plan

D/E ratio: -

Dividend payout ratio: 35%

Confidential

FY2026 Targets

Final year of 7th Plan

D/E ratio: Around 0.6 times

Dividend payout ratio: 35% or higher

6

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

Capital Policy and Shareholder Return

Maintain financial stability and improve capital efficiency to achieve sustainable revenue growth

by pursuing proactive real-estate and strategic investment while improving capital turnover and profitability

Profit growth through

growth investment

Real estate development investment

  • 2.2 trillion yen

  • Build up prime assets that are a source of growth
  • Implement strategic investments,such as overseas business, carbon neutral and CVC

Maintenance of

financial stability

D/E ratio around 0.6 times

  • Investment precedent in the first halfof the 7th plan
  • Steadily pursue returnand maintain financial discipline

Capital efficiency

improvement

ROE at least 13%

Dividend payout ratio 35％ or higher

  • Equity spread above cost of equity
  • Achieving stable shareholder returns

Create profits from real estate development D/E ratio changes in the 7th Plan*2

investment (billion yen)

ROE transition over cost of capital

Invest-

7th plan ment

(5 years)

Return

Invest-

FY2023 Sept. ment Cumulative

results*1

Return

2,200

1,500

0.72times

0.75times

Around

0.61times

0.60 times

525.7

Progress

Proactive

Steady

23.9%

investment

return

383.2

(FY) 2021

2022

2023

2026

Sept.

(Targets)

15.5％

14.3％

At least

14.1％

11.0％11.7％

13％

Equity

Recognized

Recognized

spread

cost of capital

cost of capital

Around 7.0%

Around 6.5%

(FY) 2018

2019

2020

2021

2022

2026

(Targets)

*1 Cumulative results from April 2022 to the end of September 2023 *2 After taking the equity credit attributes of hybrid financing into account

Confidential

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

7

Portfolio Optimization

Promote portfolio management to implement aggressive growth investments in the face of capital constraints

At the same time as responding to reconstruction business, we will focus management resources on

businesses that drive growth, such as large-scale development and overseas Single-Family Houses business.

Business Portfolio (Image)

Major Investments

（

Marketgrowth

External

rate,competitive

market

environment etc.

advantage,

）

Create new businesses

Prepare for new business

Condo-

miniums

Recon-

struction Business

Single-

Family

Houses

Commercial

Facilities

Logistics,

Business &

Corporate

Facilities

Rental

Housing

Notes:

  • Each dotted circle: Business direction
  • Each thick arrow: Cash flow (Image)
  • Bubble size: Sales

Logistics, Business &

Corporate Facilities

Scale

expan Commercial

-sion Facilities

Single-Family

Houses

Stable

Rental Housing

growth

Create new businesses

Profit-

ability Condominiums

improve-

ment

Focused investment in large-scale development

Logistics facilities, data centers, redevelopment of public wholesale markets

Focused investment in large-scale development including stock business

Hotels, home centers, revitalizing for aging facilities, etc.

Focused investment in overseas Single-Family Houses mainly in US

Domestic business began fundamental restructuring

Increase investment for stable profits growth

Domestic built-for-sale business, US rental housing, etc.

Creation of new businesses through CVC fund

Specialized investments in highly profitable projects

Internal quantitative assessment

（Capital profitability, growth of sales, etc.）

Respond to reconstruction

businesses

Restraining investment, reviewing business restructuring

Confidential

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

8

Progress of 7th Medium- Term Management Plan

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

9

Expand Our Circular Value Chain① Company-Wide Initiatives

Leveraging a Group strength-our broad range of businesses-to build one of the sector's largest circular value chains

In company-wideengagements, we are focusing on community regeneration to local revitalization by extending to properties

built by other companies as well as ones we built, the scope of our revitalization and circular businesses.

Strategies for Expanding Our Circular Value Chain

From Community Regeneration to Local Revitalization

Create

-Step up lifestyle infrastructure development -Real estate development investments ¥2.2 trillion

Design and construction

Planning and development

Operations

Management

Redevelopment of suburban residential

complexes we developed (61 locations

nationwide/over 60,000 lots)

• "Neopolis Summit" symposiums to discuss

the revitalization of suburban housing

complexes with residents

Land

Foster

information

Maintenance

Strengthen operations

After-sales

services

and management

Increase the value of

through cooperation

"living infrastructure"

among Group companies

permanently

Revitalize

and

Purchase and

resale

Renovation

Buying and reselling land from the Urban

Renaissance Agency for community

revitalization (52 locations/approx. 3,300

lots nationwide)

Promotion of exchange between residents in

vacation home sites we developed (14 locations

nationwide)

Regional revitalization through revitalization of

aging public wholesale markets

Expand Livness Business

redevelopment

Revitalization of local communities through

FY2026 Sales ¥400 billion

purchasing and enhancing the value of aging

commercial facilities operated by other companies

© 2023 Daiwa House Industry Co., Ltd. All rights reserved.

10

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Daiwa House Industry Co. Ltd. published this content on 14 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 14:01:21 UTC.