FYE June 2024 (66th Term)First Half Financial Results
2024.02.22

https://www.kke.co.jp/

https://www.kke.co.jp/
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1

Agenda1. Overview of Financial Results

2. Overview of Results by Segment
3. Forecast for Fiscal Year Ending June 30, 2024 (66th term)
4. Innovating for a Wise Future
Note pertaining to this data:- In principle, monetary amounts included in this document are rounded down to the nearest million yen.
- The forward-looking statements included in this document are based on information currently available to the Company and on certain preconditions
that the Company deems reasonable. The Company provides no guarantee that what is stated will actually be realized.
- The names of companies, systems, and products included in this document are, as a general rule, trademarks or registered trademarks of companies,
including KOZO KEIKAKU ENGINEERING Inc.

https://www.kke.co.jp/

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2

1
https://www.kke.co.jp/

Overview of Financial Results

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3

Income Statement(Million yen)Item

FYE June 2023
(65th term) H1

FYE June 2024
(66tth term) H1

Change fromprevious FY

Rate of change
from previous FY

6,617

7,090

472

7.1%

3,811

4,148

336

8.8%

Gross profit

2,805

2,941

135

4.8%

(Gross margin)(42.4%)(41.5%)

3,004

3,290

286

9.5%

-198

-348

-150

ー

(-3.0%)(-4.9%)

-59

195

254

ー

-257

-153

104

ー

(-3.9%)(-2.2%)

－

0

0

ー

-257

-152

104

ー

-70

-19

50

ー

Profit (loss)

-186

-132

53

ー

(Net margin)(-2.8%)(-1.9%)Net sales
Cost of sales

SGA expenses
Operating profit (loss)(Operating margin)
Non-operating income (expenses)

Ordinary profit (loss)(Ordinary margin)
Extraordinary income (loss)
Profit (loss) before taxes

Income taxes

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Trends in H1 Results
Profit (Million yen)

Operating profit (loss)

Ordinary profit (loss)

Profit (loss)

Net sales

1,200

Net sales (Million yen)
7,090

8,000

6,617
5,552

900
4,610
4,039

3,672

600

3,985

4,554

6,000

4,974

3,706

4,000

300

2,000

0

0

-300

△2,000-600△4,000-900△6,000FYE June
2015(57th term)
H1

FYE June
2016(58th term)
H1

https://www.kke.co.jp/

FYE June
2017(59th term)
H1

FYE June
2018(60th term)
H1

FYE June
2019(61st term)
H1

FYE June
2020(62nd term)
H1

FYE June
2021(63rd term)
H1

FYE June2022(64th term)
H1

FYE June2023(65th term)
H1

FYE June2024(66th term)
H1

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5Balance Sheet (Comparison with the End of the Previous
Fiscal Year)
Item

FYE June 2023 FYE June 2024
(65th term)(66th term) H1

Change

Item

1,800

958

482

-475

1,197
1,750
1,791
5,697
650
2,316
342
3,308

1,358
249
1,733
5,623
430
2,387
388
3,206

160
-1,501
-57
-74
-220
71
46
-102

9,006

8,829

-176

0 Share capital

1,010

1,010

ー

73 Capital surplus-3 Retained earnings
78 Treasury shares

1,353
7,121
-613

1,367
6,388
-285

14
-732
328

430

318

-112

9,301
18,307

8,799
17,629

-501
-678

1,036

Notes / accounts receivable trade and contract assets

2,780

2,970

190 borrowings

Work in process

22
1,751

57
2,133

34 Advances received
381 Accrued expenses-1,363 Short-term borrowings
Current portion of long-term

Other

Investment securities

6,954
5,427
378
5,547
2,777

6,198
5,461
337
5,631
2,791

Shares of subsidiaries andassociates

1,109

1,109

Investments in capital ofsubsidiaries and associates

56

56

1,177
425
11,353

1,251
421
11,431

Property, plant and equipment
Intangible assets
Investments and other assets

Deferred tax assets
Other[Non-current assets]-756 [Current liabilities]
34 Long-term borrowings-40 Provision for retirement benefits
83 Other
13 [Non-current liabilities]
ー[Liabilities]

Valuation difference on
available-for-sale securities[Net assets][Assets]

18,307

17,629Change

1,800

2,399

[Current assets]FYE June 2023 FYE June 2024
(65th term) (66th term) H1

ーCash and deposits

Other(Million yen)

-678 [Liabilities and net assets]*1 Capital ratio FYE June 2023: 50.8%; FYE June 2024 H1: 49.9%*2 Impact of introducing ESOP: FYE June 2023: 410 million yen included in treasury shares, and 393 million yen included in current portion of long-term borrowings.
FYE June 2024 H1: 136 million yen in treasury shares, and 42 million yen in current portion of long-term borrowings.
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[Reference] Balance Sheet (Comparison with the End of thePrevious H1)
Item

FYE June 2023 FYE June 2024
(65th term) H1 (66th term) H1

Change

Item

746

1,036

290 Short-term borrowings

Notes / accounts receivable trade and contract assets

2,606

2,970

363 borrowings

Work in process

79
1,904

57
2,133

-22 Advances received
229 Accrued expenses

Cash and deposits

Current portion of long-term(Million yen)FYE June 2023 FYE June 2024
(65th term) H1 (66th term) H1

Change

400

1,800

1,400

690

482

-207

1,358
249
1,733
5,623
430
2,387
388
3,206

132
29
-65
1,288
-1,13848
72-1,016

5,336
5,495
360
4,838
2,218

6,198
5,461
337
5,631
2,791

[Current liabilities]
861-33 Long-term borrowings-22 Provision for retirement benefits
793 Other573 [Non-current liabilities]

1,225
219
1,799
4,334
1,568
2,339
315
4,222

Shares of subsidiaries andassociates

967

1,109

142

8,557

8,829

272

Investments in capital ofsubsidiaries and associates

55

56

0 Share capital

1,010

1,010

ー

1,175
420
10,693

1,251
421
11,43175 Capital surplus
0 Retained earnings
737 Treasury shares

1,350
5,539
-716

1,367
6,388
-285

16
849
430

288

318

30

7,473
16,0308,799
17,629

1,326
1,598

Other

Other

[Current assets]
Property, plant and equipment
Intangible assets
Investments and other assets
Investment securities

Deferred tax assets
Other[Non-current assets][Liabilities]

Valuation difference on availablefor-sale securities[Net assets][Assets]

16,03017,6291,598 [Liabilities and net assets]*1 Capital ratio FYE June 2023 H1: 46.6%; FYE June 2024 H1: 49.9%*2 Impact of introducing ESOP:FYE June 2023 H1: 494 million yen included in treasury shares, and 698 million yen included in long-term borrowings.
FYE June 2024 H1: 136 million yen included in treasury shares, and 42 million yen included in current portion of long-term borrowings.
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KOZOKEIKAKUENGINEERING
Inc. Inc.
All Rights
Reserved.
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KOZOKEIKAKUENGINEERINGAll Rights
Reserved.

7

Cash Flow Statement Highlights(Million yen)FYE June 2023
H1

FYE June 2024
H1

(65th term)(66th term)

ChangeBalance at the beginning of FY

2,560

2,399

-160

CF from operating activities-1,640-2,009-368

CF from investing activities

-248

-262

-13

-1,888-2,271-382

CF from financing activities

74

908

833

Balance at the end of FY

746

1,036

290

Free CFhttps://www.kke.co.jp/

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Cash Flow Statement - Changes(Million yen)

2,399

Breakdown of CF from operating activities- Loss before taxes-152- Depreciation
153- Increase in provision for share-based payments
27- Increase in provision for bonuses
567- Increase in provision for bonuses for directors (andother officers)
41- Increase in provision for retirement benefits
71- Increase in trade receivables-190- Increase in inventories-128- Decrease in accrued expenses-1,501- Increase in prepaid expenses-188- Income taxes paid
-215

-2,009908

1,036
Breakdown of CF from investing activities- Purchase of property, plant and equipment- Purchase of intangible assets- Loan advances

-69
-33
-143

Breakdown of CF from financing activities- Net increase in short-term borrowings- Repayments of long-term borrowings- Disposal of treasury shares- Dividends paid

1,800
-645
407
-599

-262

Cash anddeposits at the
beginning of FY
https://www.kke.co.jp/

CF from
operatingactivities

CF from
investingactivities

CF fromfinancing
activities

Cash anddeposits at theend of FY

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2
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Overview of Results by Segment

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Engineering Consulting (EC)

Provide society with thepower to minimize thedamage caused bydisasters and get back to
our daily lives

Provide support basedon scientific andtechnologicalperspectives where data
is effectively used

Accelerate innovation
using manufacturing anddigital technologies

Effectively use data to
support scientific andreasoned decisionmaking

Ensuring safety
and security

Accuratetransmission of
information

Supporting
manufacturing

Scientificdecision-making

Manufacturing

Support for
decision-making
and consensusbuilding

Construction anddisasterprevention

https://www.kke.co.jp/

Information andcommunication

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11

Overview by Segment(Engineering Consulting: Changes over the past two terms)(Million yen)

Net salesFYE June 2022 FYE June 2023 FYE June 2024
(64th term) H1 (65th term) H1 (66th term) H1

Year-on-year
Change

8,000

5,851

287

6,000

Orders

5,270

5,564

Gross profit

Gross margin
60.0%

7,000
45.0%

5,000
Net sales

3,470

3,968

3,987

Gross profit

1,483

1,862

1,732

18

(42.7%)(46.9%)(43.5%)

Backlog oforders

6,838

6,807

7,134

30.0%

3,000

-129
(Grossmargin)

4,000

2,000

15.0%

1,000

326

0

0.0%
FYE June 2022
(64th term) H1

FYE June 2023
(65th term) H1

FYE June 2024
(66th term) H1

Analysis
 Having received many inquiries regarding structural design and quake resistance examinations, the Company
steadily received an increasing number of orders and fulfilled them.
 Having impacts such as delay in construction as a whole postponing the Company’s posting of sales to thesecond half.

 Gross margin dropped due to an increase in projects for which revenue is recognized on a costs-incurred basis.
However, the gross margin of projects for which sales have been posted remained nearly the same as in thesame period of the previous year.
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12

Product Service (PS)
Industry segment

Examples of package-sales type

Examples of cloud service-provision type*

Manufacturing-related markets*

CAE, thermal flow analysis,
particle-based simulation,
granular simulation, sales
support solutions, etc.

Architecture- andcivil-engineeringrelated markets**

Architectural building analysis,ground analysis, etc.

Telecommunication-related
markets**

Radio propagation analysis

Others/Crossindustrial markets*

Social simulation, risk
assessment, cloud-based
entry/exit control platform,
and others
https://www.kke.co.jp/* Products developed in-house and sold externally

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13

Overview by Segment(Product Service: Changes over the Past Two Terms)(Million yen)FYE June 2022 FYE June 2023 FYE June 2024 Year-on-year(64th term) H1 (65th term) H1 (66th term) H1
ChangeOrders

2,117

2,460

3,076

616

Net sales

2,082

2,649

3,103

454

Gross profit

805

943

1,208
264

(Grossmargin)(38.7%)(35.6%)(39.0%)

Backlog oforders

1,257

1,470

1,899

428

Net sales

Gross profit

Gross margin

4,000

40.0%

3,000

30.0%

2,000

20.0%

1,000

10.0%

0

0.0%
FYE June 2022
(64th term) H1

FYE June 2023
(65th term) H1

FYE June 2024
(66th term) H1

Analysis The cloud service provision-type business drove the growth of net sales and increased the gross margin.
 The cloud-based entry/exit control system (RemoteLOCK) was steadily introduced in the hotel market and by
local governments. More than 90 local governments have begun using it.
 Package sales to manufacturers were brisk.

https://www.kke.co.jp/

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14

Changes in Orders by Quarter
Orders by quarter(Million yen)

18,00016,905
15,36016,00013,581

14,00012,00014,05012,823
11,653

11,512

11,892

4Q

4,581
4,516

11,699
3,526

4,420

3,700
10,000

2,820

2,925

3,188

4,298

3,562
3,455
3,242

8,000
2,836

2,808

3,103

2,960

3,311
4,618

3,046
6,000

3,726

2,971
4,000

3,139

3,134

3,139

2,846
3,841

2,643

2,604

2Q

3,966

3,182

3,288

2,000
2,857

3Q
8,927

2,243

2,730

3,136

3,661

4,057

1Q

4,308

0

FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
(57th term) (58th term) (59th term) (60th term) (61st term) (62nd term) (63rd term) (64th term) (65th term) (66th term)
https://www.kke.co.jp/

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15

Changes in Net Sales by Quarter

Net sales by quarter(Million yen)

18,00016,58014,74815,00013,432
11,852
12,00011,003

10,947

11,50011,966

9,000

4,146

3,571

4,039

5,240

4Q

4,722

3Q

4,774
5,021

3,318

13,631

4,787

3,916

7,090

4,422
6,000

3,645

3,703

3,720

3,439

3,856

3,868

3,754
3,835

3,000

2,043

1,877

1,995

1,794

1,872
2,113

2,056
1,650

2,861

1,748

2,008

2,546

4,033

2Q

3,170
3,064

1,909

2,382

2,781

3,056

1Q

0
FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June FYE June
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
(57th term) (58th term) (59th term) (60th term) (61st term) (62nd term) (63rd term) (64th term) (65th term) (66th term)
https://www.kke.co.jp/

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16

Trend in Order Backlog
Backlog of orders(Million yen)

12,000

9,000

6,000

8,535
3,000

5,923

6,722

6,939

6,605

7,771

8,096

8,278

9,033

6,829

0
FYE JuneFYE JuneFYE JuneFYE June
2015
2016
2017
2018
(57th term) (58th term) (59th term) (60th term)
H1
H1
H1
H1
https://www.kke.co.jp/

FYE JuneFYE JuneFYE JuneFYE JuneFYE JuneFYE June
2019
2020
2021
2022
2023
2024
(61st term) (62nd term) (63rd term) (64th term) (65th term) (66th term)
H1
H1
H1
H1
H1
H1
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17

3
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Full-Year Forecasts

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18

Trends in Results and Results Forecasts
Profit (Million yen)

Net sales (Million yen)

Operating profit

Ordinary profit

ProfitNet sales

18,00018,00016,5802,400

16,00014,7482,100
1,800

13,432
11,852
11,003

10,947

11,50013,631

14,00011,966

12,0001,500

10,000

1,200

8,000

900

6,000

600

4,000

300

2,000

0

0
FYE June
2015(57th term)

FYE June
2016 (58thterm)

FYE June
2017(59th term)

FYE June
2018(60th term)

FYE June
2019(61st term)

FYE JuneFYE June
2020
2021(62nd term) (63rd term)

FYE June2022(64th term)

FYE June2023(65th term)

FYE June2024(66th term)
Forecast

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19

Forecasts for FYE June 2024 (66th Term)(Million yen)FYE June 2024
(66th term)
Forecast

FYE June 2023
(65th term)

Change fromprevious FY

Rate ofchange fromprevious FY

Net sales

16,58018,000

1,419

8.6%

Operating profit

2,189

2,350

160

7.3%

Ordinary profit

2,101

2,470

368

17.5%

Profit

1,613

1,700

86

5.4%

(Yen)

Year-end dividend

*

140

140

* Common dividend: 120 yen Special dividend: 20 yen

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20

Actual Dividends in the Past and Dividends for theSecond Quarter of FYE June 2024 (66th term)(Yen)

Quarterly dividend per share
140

140

140
120

120

20

120

Specialdividend120
20

Specialdividend

20

Specialdividend

20

Specialdividend

100
60
80

40

40

4Q

40

3Q

60
20

20

20

20
30

40

2Q

20

20

20

20

20

20

20

20

FYE June 2020
(62nd term)

FYE June 2021
(63rd term)

FYE June 2022
(64th term)

FYE June 2023
(65th term)

20
30

1Q

0

https://www.kke.co.jp/

FYE June 2024
(66th term)

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21

Risk Factors
Factors that may impact the forecasts

Difference in thetiming of therecording of sales

The Company has been receiving many inquiries regarding
structural design and other matters, and it will steadily receive
orders, but an overall delay in construction will postpone theposting of sales.

Segmentalize contracts and take other actions to avoid being
affected by external factors.
An increase in person-hours and the deterioration of quality due to
deficiencies in contract details and project management may
result in a significant decrease in profitability or have other
Unprofitability of impacts.
projects
Carry out companywide quality management for each processfrom before the reception of an order for a project to the final
deliverables.
https://www.kke.co.jp/

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22

4
https://www.kke.co.jp/

Creating a Wiser Future

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23

The Future Vision We Aim to Share and Achieve with Society(“Thought”)

KKE strives to innovate a wiser future together with
its stakeholders through dissemination of beneficial
engineering-based technologies to society.

Our vision
A knowledge-intensive company that represents Japan in the 21st century

https://www.kke.co.jp/

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24

Provision of Diverse Value

https://www.kke.co.jp/

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25

Founding Spirit

1956: Kozo Keikaku Structural Engineering Firm isfounded.
1959: KOZO KEIKAKU ENGINEERING Inc. isestablished.

Create an organization of a wide variety of experts in all domains tooperate an engineering business handling all kinds of problems in society

https://www.kke.co.jp/

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26

Value We Seek – Engineering Knowledge
Engineering knowledge is created by combining academic knowledge producedin collaboration with universities and research institutions with empiricalknowledge nurtured through practical operations with businesses.

Engineeringknowledge

Universities
and research
institutions

Academic
Empirical
knowledge Organizational knowledge

Customers

climateOrganizational
knowledge
Implicit
knowledge

https://www.kke.co.jp/

Staff
members

Explicit
knowledge

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27

Use of Computers

1961: Computers are introduced to the architecturaldesign industry.
Engineering software development business that
capitalizes on experience of using computers in thearea of structural calculation
Expansion to the operations research area

https://www.kke.co.jp/

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28

Expansion of Business Domains Served
Utilization of information technologies based on engineering knowledge
expanded business domains.

NatureBusiness, society and communities

Wind environment assessment
Earthquake mechanisms
Analysis of the propagation of seismic
vibrations
Ocean and river current assessment
Flood and tsunami simulation

Decision-making support
Disaster evacuation simulation
Human flow measurement and behavior analysis
Radio wave propagation and electromagnetic
field analysis
Optimization planning
Supporting business continuity management
Structures(BCM)
Structural design
Cloud email distribution
Design of seismic isolation and damping systems
Disaster control facility design
Structural design of bridges and viaducts

https://www.kke.co.jp/

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29

Provision of Diverse Value

Provision ofdiverse value

Customers indiverse sectors

Diversetechnologies
and diverse
value

Diversemethods ofprovision

Diverse partners
Various talent

https://www.kke.co.jp/

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30

Business Structure Providing Diverse Value

Diversecustomers

Construction anddisaster prevention

Information andcommunication

Developers
General contractors
Architectural design
offices
Energy facilities, etc.

Government offices,
communication
research
institutions,communication
carriers etc.

Manufacturing
Housing
manufacturers,
automobile
manufacturers etc.

Support for decisionmaking andconsensus-building

Government offices

Cross-industrial markets

Diversetechnologies
and diverse
value

Structural design,
structure analysis,
seismic motion
assessment, windcondition analysis
etc.

Radio propagation
analysis,electromagnetic
field analysis,
network analysis,
email distribution
support etc.

Thermo-fluid
analysis, powder
analysis,
optimization andother services

Data mining,
optimization andother services

Consulting

Diversemethods ofprovision
https://www.kke.co.jp/

System development
Product Service

Cloud services
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31

Provision of Diverse Value – Wind Power Business
Provision of diverse value combining diverse technologies

Structural design
Structural design of foundations foronshore wind turbines
Tower examination based on Japanesestandards

Analysis of windconditions

Detailed study on earthquakes and the ground
Structural design of foundations foroffshore wind turbines
Total load analysis

Structural monitoring

Analysis of wind conditions
Study on observation tower positioning
Management and organization ofobservation data
Feasibility assessment

Operations research

Study on optimal wind turbine layouts
Structural design

Assessment for certification

Operations research

Structural monitoring

Submarine cable layout

Utilization for preventive maintenanceSupport for the development ofconstruction and transport processes

Utilization in remaining life assessment

https://www.kke.co.jp/

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32

Basis of Provision of Diverse Value
An engineering approach that connects the digital world with the real world(modeling and simulation)

Incorporation

RealityReal

Simulation

Identifying issues
Verification
Analysis andsynthesis

DigitalModel

Developing
hypotheses

https://www.kke.co.jp/

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33

Provision of Diverse Value➢ Engineering Consulting

https://www.kke.co.jp/

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34

Consulting – Radio Propagation
A failure to receive radio waves causes problems.
Move to a place
When will the problem
be solved?

Where to go?

Move

Measurement

Is the place or theenvironment essentiallysuited to the solution?

Reality

Simulation

Analysis andsynthesis

Model

Solution

Develop a hypothesis after hearing about the situation
based on expert knowledge and experience
Move to a place

Move

Measurement

Will we be connected if wemove to building ABC?

Solution
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

35

Consulting – Radio Propagation
Propose a method for solving the issue together
based on the results of simulations
Along roads, radio waves
travel a long distance.

Reality

Simulation

Design optimal simulations suited tocustomers’ purposes
Analysis andsynthesis

3D models

Simulation model

Model
Category

Electromagnetic
field analysis

Method(package handled by the Company)

FDTD method, etc.
(A method of solving a Maxwell
equation with differential andintegral equations)

Calculation
accuracy

Calculation
speed

Scope ofcalculation

High precision

Low speed

Small areas

Several tensof meters

Opticalapproximation

Ray trace method- Imaging method- Ray-Launching method

Estimatedequation

https://www.kke.co.jp/

Severalkilometers

Tow-Ray (two-ray model)
Walfish-Ikegami
COST-HATA, etc.
Wide-area radio pr
opagation simulator

Low accuracy

High speed

Wide area

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

36

Consulting – Powder Analysis
When mixing multiple types of powder with different densities, ahigher rotation speed results in a lower degree of mixing.
Mixing index passement depending on rotation speed

1,000 rpm

2,000 rpm

Physical time (seconds)

A decline in the mixing index is observed.

Reality

Simulation

Analysis andsynthesis

ModelHigh density

Low density

Analysis and speculation of causes of the decline in
mixing index
State of mixing

It is observed that low-density powdermaterials separate in the surface layer.
https://www.kke.co.jp/

Speed distribution

A check of the rotation speed in the vertical direction finds thatno vertical circulation occurs during high speed rotation.
 Particles in the surface layer stay.
Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

37

Consulting – Powder Analysis
Exploration of the positive effect of adding a ceiling component
State of mixing

Speed distribution

Improvement of the mixing index due tothe use of a ceiling component

Addition of aceiling component

Stopping the decline of themixing index

Not separated

Reality

Simulation

Check of the falling speed
Physical time (seconds)

Consideration of a proposal for changing the form of
the mixer to increase the mixing index
Analysis andsynthesis

A ceiling component

Model

Adding a mechanism thatbrings particles in the surface
layer back to the center
Improved model
https://www.kke.co.jp/

Improved model (cross section)

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

38

Consulting – Social Simulation
e.g. Support for the development of an evacuation plan
Visualize the state of an evacuation to support
Identify issues
the consideration of disaster reduction measures
Areas, roads and other congested areas or areas thatwould require evacuations that take a long time

Input: Collect data necessary for
analyzing the actual situation
Resident data
(population, age distribution, place ofresidence, offices, family compositions,
whether or not nursing care is needed andother data)
Map data(roads, buildings, evacuation sites,
traffic signals and other data)

Study response measures
Reality

Simulation

Widening of roads, changing of
evacuation routes and providing
instructions on evacuation start times

Different measures
are simulated toassess their effects.
Analysis andsynthesis

Altitude [m]ModelWater depth [m]Evacuation site L

Evacuation site M

Evacuation site C

Evacuation site M
Evacuation site C

Means of transportation(Access to private cars, and other information)

Information about hospitals and other facilities

Evacuation site
EvacueeWeather
Hours…
https://www.kke.co.jp/

TsunamiEvacuation site M

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

39

Consulting – Social Simulation
Example: Support for measures to reduce
congestion in an amusement park

Provide congestion

Scenario setting information to reduce it(Scope)• All visitors• Some of the visitors (10% or
20% or another percentage)

Problem: Congestion occurs at
one attraction or another.
State of use of individual attractions

Reality

Effect verification
Simulation

It is most effective to provide
congestion information toaround 40% of the visitors.

Visitors’ walking speeds
Number of lines that people are waiting in

Number of people waiting in line

Duration of visitors’ stay at an
attraction

Model

Number of steps
Number of people waiting in line…

Reproductionof facts

Number of lines that people are waiting in

Analysis andsynthesis

Percentage of visitors with information: 40%

Number of steps

Number of lines that people are waiting in

How people tour attractions(order of preference, proximity
and other factors)

Percentage of visitors with information: 0%→ Congestion occurs at popular attractions only.

Number of people waiting in line

Percentage of visitors holding information: 100%
→ A hunting oscillation (fluctuation) occurs.

Number of steps

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

40

Consulting – Social Simulation
Example: Exploration of two passengers
standing on the same step of an escalator
Simulations of standing on both sides of an
escalator and of standing on either side

Scenario setting

Simulation

Escalator data(speed, width, number of steps
and other information)…
(1) Walking oneither sideStanding
passenger
Walking
passenger

https://www.kke.co.jp/

Analysis andsynthesis(2) Standing on
both sides• Average individual
travel time
• Total travel time ofall passengers

Effect verification
It is safer to stand on bothside than to keep either sideclear. Standing on both side
results in a smaller total
travel time for all people.

State of use of escalators

Train schedule×

Problems: Long waiting lines occur due tothe practice of keeping either sideclear and there safety concerns
Realityregarding walking on escalators

Three riding patterns• Standing on both sides• Keeping one side clear• WalkingModel

Reproductionof facts(1) Walking oneither sideStanding
passenger
Walking
passenger(2) Standing on
both sides

7 min 35 sec

6 min 49 sec

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

41

Uniqueness of KKE
Engineering knowledge
Academic knowledge
cultivated through joint researchwith universities and research
institutions

Empirical knowledge
cultivated in collaborations
with customers

Use of Computers
Ideas and endeavors generated only by first-rate engineers

A unique entity providing extensive technological consulting basedon its wide-ranging, cross-sectoral new knowledge

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

42

Uniqueness of KKE
Engineering knowledge
Academic knowledge
cultivated through joint researchwith universities and research
institutions

Empirical knowledge
cultivated in collaborations
with customers

Use of Computers

Collaboration withoverseas partners

Ideas and endeavors generated only by first-rate engineers

Extensive technological consulting
based on its wide-ranging, crosssectoral new knowledge• Product Service• Subscription-type cloudservices

An entity with increasing uniquenesshttps://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

43

Provision of Diverse Value➢ Product Service

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

44

Diverse Overseas Partners

Munich, Germany

Munich, Germany
California, USA

California, USA

Pennsylvania, USA

New York, USA

Saarbrücken, Germany

Karlsruhe, Germany
Pennsylvania, USA

Karlsruhe, Germany
Pennsylvania, USA

Karlsruhe, Germany
Colorado, USA

https://www.kke.co.jp/

Colorado, USA

Colorado, USA

Colorado, USA

Florida, USA

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

45

Expansion of Products Service
The package business launched in the 1960s and the subscription-type cloud services
started in the 2010s now make up one third of the Company’s net sales.
Sales
breakdown(Based on results
for the 65th term)
2010s
1960s
EC
65%
PS

The software package business is started in the
1960s leveraging the pioneering introduction ofcomputers.

Packages
Knowledge basedon engineeringdeveloped byconsulting
KKE
Packagesdeveloped byothercompanies

Cloud services arestarted in the2010s.

Use them as a tool

35%
KKE

Useful services fromoverseas partnercompanies

Providing uniqueservices with added
value intended for theJapanese market

Subscription-type
cloud services
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

46

New Businesses

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

47

New Product Services
KKE provides unique services with added value intended for the Japanese market.
High growth is achieved through synergy between KKE’s impressive ability to provide
value and subscription model.

Useful overseas services

TwilioSendGrid
RemoteLOCKNavVisSubscription model

KKE

Providing uniqueservices with added
value intended for theJapanese market(KKE’s strength)High retention rate

Exponential growth(Background)A long-nurtured spirit of winning the highest-level customer
satisfaction as professionals, which has been cultivated at KKE
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

48

Growth of New Products Services
The growth of the products services is driven by three new businesses in collaboration
with overseas partners, SendGrid, RemoteLOCK and NavVis.
Trend
in sales of new products service
新規プロダクツサービス売上推移

Reference: Forecast at theend of the 66th term
20% growth
Reference: Ratio to companywide sales:
17.8% forecast at the end of the 66th term

55

56

https://www.kke.co.jp/

57

58

59

60

61

62

63

64

65

End of the
66th term(forecast)

66末(予想）Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

49

New Product Services
Form a capital alliance where appropriate.

TwilioSendGrid

Cloud-based e-mail delivery service

RemoteLOCK

Cloud-based entry/exit control system

NavVishttps://www.kke.co.jp/

3D site data platform

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

50

Development of New Businesses: RemoteLOCK
Collaborative creation with many different partners through open innovation.

Any Brands, Any credential, Any Software
System collaboration withdifferent types of services

Hardware collaboration• Our lock system
Managing at least• Other companies’
100,000 entries per day
lock systems• Gate into the facility• Gate into the parking place• Lockers, etc.

Expansionof domain• Reservation system• Settlement system• Hotel system, etc.

In collaboration
with more than
50 open services

BtoBtoC business
Customers

Accommodation
facilities

Local governments

Commercial
facilities

User
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

51

Development of New Businesses: RemoteLOCK
Featuring remote management and automation, it will be a key to customers’ businesses.
Subscription-type cottage

Fully unmanned bookstore

Fully private saunas

SANU 2nd Home

Hontasu

ROKU SAUNA

https://2ndhome.sa-nu.com/

https://hontasu.com/

https://rokusauna.com/

Examples fromaccommodation facilities

Introduced by local
governments across the country

Additional investment

Luxury villa in the Hokkaido Ball ParkVILLA BRAMARE

Introduced by at least

90 local governments

January 2024
In RemoteLock, Inc., whichdeveloped RemoteLOCK

Series B
4 million dollars additionallyinvested
https://villa-bramare.com/

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

52

Development of New Businesses: NavVis
Providing unique value of KKE with steady progress in the development oftechnology to improve convenience and expand applications

3D site data platform
for further acceleration in the acquisition of 3D site data
Simplified measurementwith a 360-degree camera
Efficiency improvement of
walk-through recording

3D-CAD add-in

NavVis IVION
SurveyRealized 3D verification
using photos and CAD

Maintenance

Quickly capturing
3D data of large andcomplex locations

Working with drones
and other equipment
Creating 3D overhead
view data of the location

Working with other systems
On siteDesignHead office At home
Construction

Improved efficiency of
update measurement of
narrow and high places

Businessdevelopment

Hardware

Customers

Construction andcivil engineeringhttps://www.kke.co.jp/

Centralized management ofrelated information, including
information from daily
inspections, in a 3D space

Cloud

Consulting

industry

Measurement

×
Manufacturing

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

53

Sowing New Business Seeds – RiverCast
RiverCast is a flood prediction system incorporating a cutting-edge mathematicalengineering technology jointly developed with the University of Tokyo. It can also
be used to estimate storm surges and an water inflow into a dam.

RainfallRiver levels

Dams

Tide levels✓ Storm surge estimation: Supporting theoperation of flood gates and drainage pumps
Rain

Typhoons

Acquiring real-time data

Mechanism behindthe occurrence ofstorm surges

Internal revetments
Fall of atmospheric pressure
High waves
Flood
gate

Water is pushed onshore
by wind.
Water is pulled up by the
reduced atmospheric pressure.
Normal sea level• Can be used to estimate water levels in
the event of unprecedented flooding• The use of historical data makes it
possible to quickly introduce thesystem at a price that is around one
tenth of the price of conventional
prediction systems.

Drainage pump site

River

Cloud

SeawallHigh tide

Levees and seawalls✓ Dam inflow estimation:
Support for discharge operations
Flood control capacity
Inflow

Capacity for use

In heavy rain

The system is in operation at 50 or more locations across the country.
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

54

Various talent

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

55

Diverse Collaborative Professionals Supporting Diverse
Business Domains
Scope: Existing KKE members at theend of the 66th term H1

Value the diversity of collaborative professionals to secure
the capabilities to address any problem in society
Academic background
Masters and PhD
Approx. 60%

Sex
Percentage of
employees thatare women 26%

5% 7%

34%

54%

PhD
博士
Masters
修士
Bachelor
学士
Other
その他

74%
Men
男性
Women
女性

Type ofrecruitment

Nationality
7%
Foreign nationals
7%

Mid-career
recruitment
21%

93%
https://www.kke.co.jp/

26%

Japan
日本
Overseas
外国

21%

79%

New
新卒graduates
Careerキャリア

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

56

Recruitment Status
Breakdown of personnel recruited in the past five years
New graduate recruitment
Major

Mid-career recruitment
Civil engineering andarchitecture
Machinery and electronics
Physics and chemistry

39%

Mathematics

7%
9%

Agriculture and biology

14%

製造
Manufacturing

Arts and humanities
Earth science

6%

24%

26%

Other

建築
Construction

7%

17%

7%
9%

情報・通信 and communication
Information
建設
Construction

11%

ソフトウェア開発
Softwaredevelopment
流通
Distribution

By nationality (excluding Japan)

その他
Other

31%

34%

China

Number of new graduate employees
expected to join the Company in 2024:

India

14%

7%
14%

Indonesia

33

South Korea
Other

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

57

Diverse Opportunities for Growth
Encouraging self-improvement through activities
at external organizations

 Activities as lecturers at universities
and other institutions:
26 employees engaged in a
total of 41 activities
 Activities at committees, study
groups and others of outside
associations:
83 employees participating
in a total of 202 groups Academic papers presented publicly
Presentations at academic
conferences
69
Papers16
Contributions
13
Publication
4
https://www.kke.co.jp/

Transfer on loan to Japanese and overseas locations

⚫
⚫
⚫
⚫
⚫

NavVis GmbH
RemoteLock, Inc.
Kyushu TLO Company, Limited
PARA-SOL K.K.
Electricity and Gas Market
Surveillance Commission, Ministryof Economy, Trade and Industry⚫ Institute of Industrial Science, theUniversity of Tokyo⚫ AK Radio Design, Ltd.
Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

58

Transformation into
Holding Company

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

59

Purpose and Background1956: Kozo Keikaku Structual Engineering Firm is founded.
1959: KOZO KEIKAKU ENGINEERING Inc. is established.
Commissioned engineering consulting services

1980s

The software package sales business is launched.
2010s

Subscription-type cloud services are launched.

Actions aligned with the diversification of business:• Autonomous and quick decision-making and business
operation
Transformation• Clarification of mission
into Holding• Appropriate distribution of management resources
Company
focused on human resources Aim to achieve the continuous growth of the Group
2056 To be a knowledge-intensive company that represents
Japan on the 100th anniversary of its foundation
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

60

Structure after Transformation into Holding Company
Structure (planned)
Before the transformation
PARA-SOL K.K.
KOZO KEIKAKUENGINEERING Inc.

KKE Smile Support Inc.
International Logic Corporation
RemoteLock Japan Co., Ltd.

After the transformation (planned)

KOZO KEIKAKU ENGINEERING Inc.
KOZO KEIKAKUENGINEERINGHOLDINGS Inc.

PARA-SOL K.K.

KKE Smile Support Inc.
International Logic Corporation

RemoteLock Japan Co., Ltd.
Newly established by independent share transfer (planned)
https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

61

Missions of Individual Companies

KOZO KEIKAKU ENGINEERING Inc.

Earn stable revenue from the existing
consulting business
PARA-SOL K.K. (Kumamoto)
Providing diverse work styles
KOZO KEIKAKUENGINEERINGHOLDINGS Inc.

KKE Smile Support Inc.
Providing diverse work styles
International Logic Corporation
RemoteLock Japan Co., Ltd.
Continuously accelerate growth

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

62

Outline of Share Transfer✓ Schedule
Extraordinary General Meeting of Shareholders

March 18, 2024 (plan)

Date of delisting of the Company’s shares

June 27, 2024 (plan)

Date of registration of establishment of theholding company

July 1, 2024 (plan)

Listing dateJuly 1, 2024 (plan)✓ Method of share transfer
Independent share transfer in which the Company will be a wholly
owned subsidiary and the holding company will be a wholly owningparent company✓ Details of allocation in the share transfer (share transfer ratio)

Share transfer ratio
https://www.kke.co.jp/

KOZO KEIKAKUENGINEERING HOLDINGS Inc.
(Wholly owning parent company
incorporated in a share transfer)

KOZO KEIKAKUENGINEERING Inc.
(Wholly owned subsidiary company
resulting from a share transfer)1

1
Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

63

To Realize the Future Vision We Aim to Share and Achieve withSociety (“Thought”)

Wise Future: With the aim of creating a future society full of human wisdom
Innovating: We will keep innovating to provide value to society in a sustainable way.

KKE strives to innovate a wiser future together with its stakeholders
through dissemination of beneficial engineering-based technologies tosociety.

https://www.kke.co.jp/

Copyright© KOZOKEIKAKU ENGINEERING Inc. All Rights Reserved.

64

Contact:
Investor Relations Section
E-MAIL: ir@kke.co.jp
Website: https://www.kke.co.jp

https://www.kke.co.jp/

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65