KAJIMA : Integrated Report 2021

CONTENTS

To Our Stakeholders

2 Message from the President

Kajima's Envisioned Future

8 History of Kajima

1. The Kajima Group's Businesses

1. Value Creation Process

1. Business Model

1. Kajima Group Vision

1. Material Issues

20 Review of Previous Medium- Term Business Plans

22 Medium-Term Business Plan (FY2021-2023)

- Forward-Looking Investment

26 Message from the General Manager of the Treasury Division

Growth Strategies and Sustainability

30 Civil Engineering

1. Building Construction

1. Real Estate Development

1. Overseas Operations

1. Engineering

39 Domestic Subsidiaries and Affiliates

1. Research and Development
2. Digital Transformation (DX)
3. Human Resources

44 Environment

50 Human Rights, Supply Chain and Framework for Ensuring Safety

Corporate Governance

52 Dialogue between the Chairman and an Outside Director

1. Corporate Governance

1. Risk Management

1. Compliance

Financial and Corporate Information

1. Directors and Auditors
2. Executive Officers
3. Financial and Non-Financial Highlights

1. 10-YearHighlights

1. Principal Subsidiaries and Affiliates

1. Social Contribution Activities
2. SEQ Policy
3. Company Information
4. Stockholder Information

1. Financial Review

Management Approaches

As the new president appointed in June 2021 to lead the Kajima Group forward, I am keenly aware of the responsibilities and expectations that have been placed on my shoulders. I will build on the strategies and management foundation that Yoshikazu Oshimi, the former president and current chairman, put in place and work to deepen existing businesses and expand the business portfolio with the objective of long-term growth for the Kajima Group.

• The Kajima Group Medium-Term Business Plan (FY2021- 2023) has just started, and we will work to steadily achieve the business targets for the initial year. Management and employees are committed to vigorously promoting the plan's measures, meeting the expectations of stakeholders, and making sure Kajima remains a company that is trusted by society and our customers.
• Ever since the start of Kajima's business in 1840, people and technology have been central to its efforts to resolve

Hiromasa Amano

President, Representative Director

social and customer issues. We continuously attract and retain customers by drawing on our technologies to conscientiously meet expectations. Taking a long-term perspective rather than focusing on immediate profits, we grow together with customers by earning their trust through solid proposals and outstanding work. Kajima has operated this way throughout its history, and will continue to do so. Our corporate value is a function of the trust we have earned by nurturing and passing on over many years the technologies that have made us a leader. Our corporate culture embraces continuous technological innovation, a commitment to quality, and sincerity.

• In formulating our new Medium-Term Business Plan, we also drafted the Kajima Group Vision to share the Group's targeted direction both internally and externally. We need to attract diverse people and co-create value in collaboration with external resources to grow sustainably given the major changes in the business environment. In recognition of this, our Vision expresses Kajima's ideal of being a company that

energetically incorporates external capabilities such as open innovation into its corporate culture, attracts diverse people who maximize their capabilities, proactively creates new value, and takes on challenges for the future.

• Based on our Vision, we will address medium- to long-term issues such as human resource development, response to climate change and reform of our multilayer subcontracting structure. At the same time, we will strengthen our core construction and real estate development businesses, enhance our value chain, and expand into new business areas. In these ways, we will achieve growth qualitatively and quantitatively.

Previous Medium-Term Business Plan Review and Market Environment Outlook

During Kajima Group Medium-Term Business Plan (FY2018- 2020), which culminated on March 31, 2021, we diligently implemented initiatives and made investments relevant to medium- to long-term management issues such as concentrated research and development to enhance productivity, applying research findings to and conducting projects for new technologies, and expansion of the distribution warehouse business in the United States and Europe. Achieving our earnings targets for three consecutive years highlighted our performance.

• ESG and sustainability are increasingly important management issues. I believe that efforts to address environmental and energy issues, among others, including securing construction personnel and ensuring strict compliance, must be ongoing. Moreover, the global COVID-19 pandemic is not over, so we are placing the highest priority on preventing the spread of infection and protecting our stakeholders in Japan and around the world as we maintain the continuity of our operations.
• Regarding the outlook for construction demand, public investment in Japan should continue to be firm due to measures to help the country deal with intensifying natural disasters and aging infrastructure. The outlook for private capital investment in Japan is also favorable. While it will take time for the effects of COVID-19 to dissipate and some projects have been canceled or postponed, demand has been firm, partly due to needs related to redevelopment and renewable energy. Plans for large-scale redevelopment projects in Tokyo are still in place, demand remains significant in Osaka (the city that will host World Expo 2025), and redevelopment projects are scheduled for other major cities. We also see a strong push for capital investment in semiconductor-related projects and markets such as data centers.
• We do not expect demand for office building construction to cool suddenly, but the use of space is changing significantly because of social distancing, contactless design, and free address workspaces. Space allocations will have to be expanded to accommodate social distancing if that becomes

a normal work style in the post-COVID-19 era. We are

cooperating in research led by RIKEN using the Fugaku supercomputer, and intend to explore what technologies we can provide based on our experience with COVID-19 and what society requires.

• Overseas, we anticipate that the Southeast Asian market will need time to return to pre-COVID-19 levels, but economic growth will resume once the pandemic dissipates. The United States still has excellent economic growth potential and remains an important market for the Group. Our construction and real estate development businesses will aggressively serve markets such as rental apartments and distribution warehouses, for which the rise in e-commerce has been driving demand.

Digitalization

Digitalization is of the utmost importance in strengthening the construction business, which is the backbone of the Kajima Group. We will ramp up digitalization in terms of both hardware and software.

• Construction industry engineering is more reliant on experience than manufacturing industries are because structures and conditions differ from site to site, with no two exactly the same. Digitalizing the implicit and personal knowledge of the construction process will enable Kajima's people to efficiently share internal wisdom and experience.
• Aggregating experiential construction case data and using it effectively improves day-to-day work and the quality of the database. Doing so therefore has a positive effect on safety, environment, quality, delivery, and cost (SEQDC) because it results in faster construction with higher quality and lower cost. That enables employees and the Company to grow, which in turn attracts outstanding people. I would like to create this virtuous cycle. At the same time, aggregating and sharing failure data and examples of troubleshooting can create a key risk management tool.
• It is essential that we aggregate and organize the enormous amount of data generated in each construction process and use it throughout the entire construction value chain, from upstream design and development to downstream maintenance and management. We intend to use this valuable data to create new, next-generation businesses.

Medium-Term Business Plan (FY2021- 2023) - Forward-Looking Investment

The subtitle of our new Medium-Term Business Plan is Forward-Looking Investment. It highlights our intention to make aggressive forward-looking investments amid an intensely competitive market for the Group's future growth.

• We are targeting consolidated net income of ¥95 billion for fiscal 2023, about the same as for fiscal 2020, to account for the expected impact of the COVID-19 pandemic. Longer term, we are aiming for further growth, with a net income target for fiscal 2024 and beyond of ¥100 billion or more, and ¥130 to