The Story of

the Group's Value Creation

Daiwa House Group at a glance

25

1

Daiwa House Group's centennial anniversary

2

and the history of our "Dream" of ¥10 trillion

26

Strengths generated from the source

3

of value creation

28

Chapter

Business model embodying

3

4

the founder's spirit

29

The Daiwa House value creation process

30

5

Daiwa House Group Integrated Report 2023 24

Message from the CEO

Long-Term Vision

The Story of the Group's

Message from the CFO

and the 7th Plan

Value Creation

Developing

our Businesses

Environmental Vision

Strengthening

our Bases

Governance

Financial Results,

Corporate Information

Chapter 3 The Story of the Group's Value Creation

1 Daiwa House Group at a glance

The Daiwa House Group operates six core segments and generates stable cash flow while developing its businesses both within Japan and overseas. In our business activities, we aim to balance the dual challenges of becoming carbon neutral and achieving corporate profitability in order to contribute to a sustainable society, and we are also actively working to heighten employee engagement by facilitating employee motivation.

Overseas (Europe)

Domestic (Japan)

Overseas (US)

Group companies

Overseas (East Asia)

488

companies

Overseas locations

Overseas (ASEAN, South Asia)

25

countries

Overseas (Australia)

Greenhouse gas emissions throughout the value chain

Scopes 1 and 2

Scope 3 (use of sold buildings)

Scope 3 (procurement)

Scope 3 (other)

(million t-CO)

15.98

0.55 23.5%

12.23

40%

70%

9.68

0.37

9.52

5.87

3.60

0.17

63%

3.14

3.31

3.14

2.61

2.67

2.61

2015

2022

2030

(FY)

(Baseline year)

(Plan)

Renewable energy adoption (cumulative)

Renewable energy generation equipment construction results (EPC)

Renewable energy power plants

Over

development and operating results (IPP)

5,000MW

2,706

Over

MW

2,500MW

9 35.2

602

MW

MW MW

2011

2022

2030

(FY)

(Plan)

Net sales by segment*

Single-Family Houses Rental Housing Condominiums Commercial Facilities Logistics, Business and Corporate Facilities

Environment and Energy Other

1% 18%

3%

4 908.1

22%

¥

billion

24%

,

for overseas: ¥ 673.9 billion

14%

22%

10%

(FY2022)

Operating income by segment*

Single-Family Houses Rental Housing Condominiums Commercial Facilities Logistics, Business and Corporate Facilities

Environment and Energy Other

1%

10 %

1%

21%

¥ 465.3billion

24%

for overseas: ¥ 52.9 billion

11%

29 %

9 %

(FY2022)

Flow business and stock business (Breakdown of sales)

Stock business 34%

(Including Rental management 29% and Sale of development properties 5%)

Flow business

(Construction)

66%

(FY2022)

Society

Employee Motivation Level of

approx. 49,000

Group Employees

82%

  • Daiwa House Modular Europe has been changed from the Single-Family Houses segment to the Rental Housing segment from FY2023, and the results for FY2022 have therefore been restated based on the new reporting segment classification. In addition, the totals include adjustments, which are not shown on the graphs, so the sum of the percentages of each segment composition may not equal 100%.

Daiwa House Group Integrated Report 2023 25

Message from the CEO

Long-Term Vision

The Story of the Group's

Message from the CFO

and the 7th Plan

Value Creation

Developing

our Businesses

Environmental Vision

Strengthening

our Bases

Governance

Financial Results,

Corporate Information

2 Daiwa House Group's centennial anniversary and the history of our "Dream"of ¥10 trillion

With"Don't do things because they will make a profit, but because they will be of service to society" as our byword, we have consistently delivered products and services that anticipate the needs of societal change.

Consolidated net sales and domestic housing starts

Consolidated net sales (Figures prior to FY1985 are non-consolidated)

New housing starts (domestic)

Operating income margin

2012

2015

2018

Sales top

Sales top

Sales top

FY2022

¥2 trillion

¥3 trillion

¥4 trillion

¥ 4.9trillion

1961

Listed on First Section of Osaka Securities Exchange;

1,855 thousand units

New housing starts

subsequently also on Tokyo and Nagoya

(domestic):

stock exchanges

1 million units

1955 (FY)

1960

1970

1980

1990

Our

1995

Sales top ¥1 trillion

2000

2005

"Endless Heart" Group symbol adopted to mark

our 50th anniversary

2010

FY2022

860

thousand units

FY2022

9.5%

2020

founding

Industrialization of construction

Supplier of prefabricated housing

Total lifestyle enterprise

philosophy

Group that co-creates value for individuals, communities, and people's lifestyles

2012 Daiwa House REIT

Investment Corporation

listed on market

1955 Pipe House

Mr. Ishibashi conceived the idea of a steel-pipe structure, which contributed to resolving the problem of a lack of lumber during the postwar reconstruction period.

We aim to "develop people through business" as stated in the Company Philosophy (Corporate Creed).

1959 Midget House

The product was developed as a study room that could be erected in only three hours. It also served as a solution to the housing space shortage caused by a rising birthrate.

1962 Introduced a corporate pension system that aims for a "prosperous retirement for employees."

1962 Habikino Neopolis

With the sale of a large-scale housing complex as Japan's first in the private sector, we devised the nation's first residential mortgage loan system in cooperation with a private financial institution.

Development of

steel-pipe structured construction

1965 Published the first edition of The Future of the Daiwa House Group as a textbook that serves as a guidepost for all employees.

1976 Development of

the LOC System

We launched the Commercial Facilities Business to propose effective use of land alongside major roads.

2003 Start-up of D Project

Embarked on development of large- scale logistics facilities, offering a one- stop service encompassing everything from site proposals, through design, construction and management.

Diversification of tenants

Development of large-scale

commercial facilities

1994

Central Research Laboratory

With the central theme of coexisting with the environment, the laboratory is engaged in research to make a better future for individuals, communities, and people's lifestyles.

2008 Condominium development in China

Introduced Japanese-style condominium sales techniques.

2007 Sadamisaki wind

power generation business

The Company entered the wind power electricity business based on the belief that businesses related to wind, solar, and hydro would be vital in the 21st century.

2007 Start of Work Life Balance Support System (time off related to nursing care and childcare)

Anticipating an acceleration in real estate investment, we devised stronger exit strategies. By developing high-quality properties that generate a stable cash flow, we also contributed to the growth of the market.

2012 Start of solar power

generation business

Commenced first stage of mega solar business, DREAM Solar Kita- kyushu HIbikinada

2011 Development of

D's SMART series

Launched D's SMART offices and factories as next-generation facilities aiming to eliminate impact on the environment.

2008 Opened The Daiwa House Juku, our training program for the next generation of management

Daiwa House Group Integrated Report 2023 26

Message from the CEO

Long-Term Vision

The Story of the Group's

Message from the CFO

and the 7th Plan

Value Creation

Developing

our Businesses

Environmental Vision

Strengthening

our Bases

Governance

Financial Results,

Corporate Information

As a group that co-creates value for individuals, communities, and people's lifestyles, we are expanding our interests into new localities and business domains, which will lead to the further strengthening of our three fundamental business resources (our human resources base, customer base and technology and manufacturing base). This is the source of our value creation. While playing our part in creating the fundamental societal infrastructure and lifestyle culture rooted in regeneration, which we set forth in Our Hopes for the Future, we are forging ahead with the goal of making Daiwa House Group into a ¥10 trillion enterprise by 2055, our centennial year.

2018

2022

Sales top ¥4 trillion

Sales top ¥4.9 trillion

Expanding

2017 The birth of Livness,

2019

our housing stock brand

Livness Town Project

We launched this new Groupwide brand to

To fulfill our responsibility as a builder, we are

establish a quality existing housing market. We

promoting the redevelopment of Neopolis,

offer comprehensive solutions based on the

originally developed by Daiwa House, into a

know-how possessed by Group companies.

town that is attractive and livable.

2020

DPDC Inzai Park

Entered into data center development as a new kind of social infrastructure that will support the internet-dominated society

2021

Launched Telework Style

as a solution that

offers a new way of living

Customer

geographic business area/fields of business

2017 Stanley Martin joined

the Daiwa House Group.

Start of single-family housing business in the United States.

2016 Multi-tenant logistics facilities

developed overseas

Logistics warehouse development started in the ASEAN region, beginning with Indonesia.

2018 Disaster-ready homes

As a response to more frequent natural disasters, the homes were developed as Japan's first housing line engineered to better cope with disasters, and are capable of providing power for about 10 days, even in rainy weather.

2020

Trumark Companies joined

the Daiwa House Group

2021

CastleRock Communities joined

the Daiwa House Group

2020 DREAM Solar Isewan II

The Daiwa House Group constructed and operates its largest mega solar installation.

2021 Established

Daiwa House Logistics Trust

Listed on the Singapore Stock Exchange

2020 Funabashi Grand Oasis

Developed a 100% renewable-powered Community, from construction through to habitation.

2021 Introduction of Parallel

Work System

2022 Redevelopment of

Toyama Public Wholesale Market

Contribution to building the social infrastructure that supports regional "food" and employment

2022

We maximize utilization of "rooftop value" and are accelerating the installation of photovoltaic power generation.

Base

Human

Resources

Base

Technology and

Manufacturing

Base

Daiwa House Group Integrated Report 2023 27

Message from the CEO

Long-Term Vision

The Story of the Group's

Message from the CFO

and the 7th Plan

Value Creation

Developing

our Businesses

Environmental Vision

Strengthening

our Bases

Governance

Financial Results,

Corporate Information

3 Strengths generated from the source of value creation

A diverse value chain to "Create,""Foster," and "Revitalize" in a wide range of business areas

The Group's strengths, which spring forth from its human resources, customer, and technological and manufacturing bases, which are at the heart of its value creation, are its ability to find solutions quickly based on the customer relationships it has built over the years, as well as its strength of close on-site relations critical to addressing customer needs in the field. Given this, we will make the most of our ability to create value through co-creation generated by the addition of our expertise in making comprehensive business ideas through our wide range of business areas and our one-stop-shop system, while creating the fundamental societal infrastructure and lifestyle culture rooted in regeneration.

Individual customers' perspectives

Customer

Build relations with customers

Base

Strength 1

Ability to grasp quickly

what is needed and

provide solutions

Our greatest strengths

Human

Our bottom-up approach

The ability to

Resources

Our positive attitude

create value

Base

through co-creation

Strength 2

Meeting the needs of

local customers

Technology and

Our supply chain network

Manufacturing

Realize high quality

Base

through short construction periods

The Group's comprehensive capabilities cover a broad range of business domains

Strength 3

A diverse value chain for creating the fundamental societal infrastructure

and lifestyle culture rooted in regeneration

The capacity to offer

A comprehensive system that provides total support from planning to after-sales services,

comprehensive business ideas

with data on land and real estate as the starting point.

Create

Proposals for the use of idle land

Foster

Revitalize

Design &

Buy and resell

Selection & acquisition of land

Planning &

Operations, management, leasing and

construction

Renovation and

for development

development

after-sales service

(monozukuri)

Utilization of building rooftops

Real estate securitization

redevelopment

Daiwa House Industry, DesignArc, Daiwa Lantec

Single-Family

Daiwa House Reform

Stanley Martin Holdings, Trumark Companies

Houses

Daiwa House Real Estate

CastleRock Communities, Rawson Group

Daiwa House Industry

Daiwa Living

Rental Housing

Daiwa House Modular Europe

Daiwa House Chintai Reform

Daiwa House Industry, Cosmos Initia

Condominiums

Daiwa LifeNext

Daiwa House Industry, Daiwa Lease

Royal Home Center, Sports Club NAS

Commercial

Facilities

Daiwa House Parking

Daiwa House Realty Mgt.

Logistics, Business

Daiwa House Industry, Fujita

Daiwa House Property Management, Daiwa Logistics,

and Corporate

Daiwa House REIT

Daiwa LogiTech

Wakamatsu KONPOU UNYU SOKO, Kouyama UNYU

Facilities

Daiwa House Global REIT

Daiwa House Industry

Daiwa House Logistics Core Fund

Environment

Daiwa House Logistics Trust

and Energy

Daiwa Energy

Eneserve

Daiwa Royal Golf, Media Tech, Shinwa Agency

Other

Daiwa House Financial, Daiwa House Insurance

Daiwa House Real Estate Investment Management, Daiwa House Asset Management

Daiwa House Group Integrated Report 2023 28

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Daiwa House Industry Co. Ltd. published this content on 17 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 October 2023 08:24:32 UTC.