Securities code：1959

FY ended March 2020, Third quarter end

Outline of balance sheet(Million yen)

End ofMar. 2018

End ofMar. 2019

End of Dec
2019

178,884

206,268

183,727(55.1%)(57.7%)(54.7%)

146,034

151,002

152,459(44.9%)(42.3%)(45.3%)

324,919357,271

336,187(100.0%)(100.0%)(100.0%)Current
liabilities

130,222

142,144

119,796(40.1%)(39.8%)(35.6%)

Fixedliabilities

30,55732,94928,139(9.4%)(9.2%)(8.4%)

Total
liabilities

160,780

175,094

147,936(49.5%)(49.0%)(44.0%)

Total net
assets164,139

182,176

188,251(50.5%)(51.0%)(56.0%)

Total liabilities
and net assets

324,919357,271

336,187(100.0%)(100.0%)(100.0%)Current
assetsFixed assets
Total assets

Increase/decrease▲22,541

Main factors behind increase/decrease

Trade notes and accounts receivable ▲48,244
Costs on uncompleted construction contracts ＋11,653＋1,457▲21,084▲22,348▲4,810Trade notes and accounts payable ▲38,683
Advances received on uncompleted construction contracts＋14,721

Net defined benefit liability ▲3,498▲27,158＋6,074Retained earnings +6,315▲21,0841

Outline of P/L March 2019
(Million yen)March 2019

March 2018
ResultResult360,872

408,143(100.0%)(100.0%)Gross profit

56,65960,561(15.7%)(14.8%)

Operating profit

34,72636,747(9.6%)(9.0%)

Ordinary profit

37,34239,924(10.3%)(9.8%)

25,296

26,691(7.0%)(6.5%)

Sales

Net profit

Net profit per share¥356.89

Year-onyear

Plan (2018.4.27)

113.1%

385,000

106.9%

63,000105.8%

38,000106.9%

41,000105.5%

28,000¥375.17(100.0%)(16.4%)(9.9%)(10.6%)(7.3%)

Progress

106.0%

96.1%

96.7%

97.4%

95.3%

¥393.572

Factors of change in OP March 201940
（Billion Yen）
Depression ofSalesgross profit
increased inratio inelectrical & electrical &HVAC & solar HVAC & solar
plant
plant
construction construction

38

▲1.9

＋4.4

36

34.7
34

32

Operatingprofit in March,
2018

Bonus
increase▲1.0

A

Increase ofother fixed
cost
Power
(overhead Impact of distributioncost) in SG&A, newly
line work
Gross Cost consolidated
subsidiaries

▲0.7

B

＋0.2

C

F

Power Other businessgeneration
business
＋0.2

＋0.3

G

H

36.7

Operatingprofit in March,
2019

E

＋0.6

D
Main factors failed
achieve plan30
3Outline of P/L March 2020, 3rd quarter end(Million yen)March 2019,

March 2020,

3Qend Result

3Qend Result

Change compared to the same
period of the previous year
Increase/decrease

252,083

279,872(100.0%)(100.0%)Gross profit

34,87936,816(13.8%)(13.2%)

Operating profit

16,947

18,761(6.7%)(6.7%)

Ordinary profit

19,282

21,057(7.6%)(7.5%)Net profit

12,501

14,319

(5.0%)(5.1%)¥175.73¥201.80

Sales

Net profit per share

Rate ofchange+27,788

111.0％+1,936105.6％+1,813110.7％+1,774109.2％+1,817114.5％-

4

Factors of change in OP March 2020, 3nd quarter end
25（Billion Yen）

20

Operating profit
in March, 2019
3Q end（revised)

17.8
※

＋0.9

A
▲0.6
Bonus
increase15

16.9
Operatingprofit in March,
2019
3Q end

B
＋0

C
＋0.3

D

E

＋3.2

▲2.3

Sales
increased inelectrical &HVAC & solar
plant
construction

F

Depression ofgross profit
ratio in
＋0.3
electrical &HVAC & solar Other business
plant
construction

Decrease of (=1.2-0.9）
other fixed
cost
Power
(overhead
distributioncost) inline work
SG&A, Gross
Cost※Power distribution line work

18.7
(3Q-on-3Q＋0.9）
Operatingprofit in March,
2020
3Q endAmount to be paid retroactively
・The unit price for power distribution line work in fiscal 2018 was revised

10in January 2019.
・That caused some amount to be paid retroactively from April , 2018
・It has amounted about 0.9 billion yen from April to December.

5Factor of gross profit ratio depression
Breakdown of construction sales(1)（Kyudenko individual：excluding power distribution line work）
Whole construction sales increased 17.9billion yen.
Sales from projects delivered increased 10.7billion yen.
Sales from projects Not delivered increased 7.2billion yen.
Difference of Project profit ratio between delivered items and Not
delivered items is about 3%.

24.9

Average profit ratio of delivered items

Construction sales（Million yen）
300,000

22.1
18.4

Average profit ratio of
Not delivered items

about

Sales from
Sales fromNot delivered items delivered items

17.1
total 202,061

total 184,114

97,12482,012

47%

89,91349%

60,96953%
Composition of

36,992

48%

100,000

52%
Project delivered（Percentage-of-completion method）

51%

50,00054,44657,209Project delivered（Completed-contract method）0

2018’122019’12construction sales

2017’12200,000

150,000
Project Not delivered（Percentage of completion method）

50,491

32,944250,000

3％

16.9
total 175,925

20.1

6

Factor of gross profit ratio depression
Breakdown of construction sales(2)（Kyudenko individual：excluding power distribution line work）（Million yen）
2018’122017’12
Method ofrecognizing revenue

sales

profitProfitratio

89,913

16,572

18.4%

48.8%

36,992

6,644

18.0%

20.1%

Total(percentage-of-completion)

126,905

23,216

18.3%

68.9%

34.7%

Total(completedcontract)

57,20914,159

24.8%

31.1%

100.0%

Total

184,11437,37520.3%

100.0%

sales

profitProfitratio

profitProfitratio

82,012

13,882

16.9%

46.6%

32,944

8,666

26.3%

18.7%

Not
Percentage delivered-ofcompletion
Delivered

Total(percentage-of-completion)

114,956

22,549

19.6%

65.3%

Total(completedcontract)

60,96914,729

24.1%

Total

175,925

37,27821.2%

Not
Percentage delivered-ofcompletion
Delivered

Compositionof salesMethod ofrecognizing revenue

sales

Compositionof sales2019’12 －2018’12

2019’12

Method ofrecognizing revenue
Not
Percentage delivered-ofcompletion
Delivered
Total(percentage-of-completion)
Total(completedcontract)
Total

sales

profitProfit ratio

Compositionof sales97,124

16,586

17.1%

48.0%

50,491

7,199

14.3%

25.0%

147,615

23,785

16.1%

73.0%

54,446

13,904

25.5%

27.0%

202,061

37,69018.7%

100.0%

Method ofrecognizing revenue

Not
Percentage delivered+7,211-ofcompletion
Delivered ＋13,498
Total(percentage-of-completion)+20,709
Total(completedcontract)▲2,762
Total+17,947

Compositionof sales

+14

▲1.4%

▲0.8%

+554

▲3.7%

+4.9%

+569

▲2.2%

+4.1%

▲254

+0.8%

▲4.1%

+314

▲1.7%

-

7

Reasons for decline in profit ratio for each projectand measures (excerpt)
FactorMeasures・Forecasting the peak of busyness in the whole construction
period, make an input plan for workers early and start thearrangement. Review the plan in a timely manner andmake adjustments throughout the company.
・Close relationships with construction cooperation companies,
planned order and allocate appropriate personnel, suppress
B. Measures for increase oflabor costs increase.
construction cooperation（Branch executives present annual order amount, andcompanies’ labor costs.
exchange information with cooperation companies
directly.)
C. Establishment of team・Establishment of a team specialized for supporting
supporting construction.
construction by employee technicians.
D. Material ordering linked
・Technical department check whether each branch andto design change andaffiliated company uses Q-mast for purchasing materials, infurther utilization ofcooperation with “Q-mast”. When utilization does not”Q-mast” which affiliatedadvance, technical department and Q-mast investigate thecompany specialized forcause and solve.
purchasing material.
E. Approach to・Make design changes possible based on budget by building a“Front Loading”
good relationship with design office.
・For additional work, the sales representative and theF. Sales representative’s
construction manager cooperate, and before starting
help to construction site
construction, be sure to submit each estimate and negotiate
after construction starts.
the price・Confirming the delay in building construction work process
G. Dealing to delays inwould be happen at the first construction study meetingthe progress of building
after receiving an order, and teaching the method whichconstruction work
make the facility construction possible in advance ofbuilding construction.
8
A. Forecasting the busyness
peak of construction

１.Cost increase causedby exceeding the plannedlabor and material cost
after receiving an order.

２.Cost increase due tothe compression of facility
construction
process causedby building construction
delay.

Order received / Sales by department
Mar. 2019 Full year

(Million Yen)

Sales of each department■2017.3■2018.3

Impact of newly
consolidated subsidiaries■2019.3

Electrical 857

220,000■2018.3

Impact of newly
consolidated subsidiaries■2019.3

Electrical 1,073■2017.3

220,000

HVAC 12,191

165,667
153,447
137,924(Million Yen)

Orders of each department

172,689
HVAC 9,455
167,040
162,646
150,469

126,573
120,414101,164
94,13596,38449,444
48,37945,15747,41047,706
46,633060,901
50,76447,79347,453
46,53745,3320Powerdistribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
constructionwork

9Order received / Sales by department Dec. 2019

(Million Yen)

Sales of each department(Million Yen)

Orders of each department■2017.12■2017.12

150,000

150,000■2018.12■2018.12■2019.12■2019.12

103,71496,01994,536123,269

118,310
117,818
106,061
95,84990,66987,806

77,84264,23135,27533,81433,58636,90031,56527,834042,51536,57834,55338,57323,42334,0760

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

10

Order received / Sales by customer
Mar. 2019 Full year

(Million Yen)

Sales of each customer(Million Yen)

Orders of each customer

350,000■2017.3■2017.3■2018.3■2018.3

326,676
306,607
298,116350,000

305,300■2019.3■2019.3

263,796249,215

48,79434,72548,652
34,23347,881
31,04849,136

48,65547,981
30,51530,1670

Kyushu ElectricPower Co,

Govermment/Public

30,570Privatecompanies

0

Kyushu ElectricPower Co,

Govermment/Public

Privatecompanies

11Order received / Sales by customer Dec. 2019

(Million Yen)

Sales of each customer■2017.12■2017.12■2018.12

250,000

250,000

235,996
231,345
228,326■2018.12■2019.12

210,763(Million Yen)

Orders of each customer■2019.12

187,007
167,194

36,07135,60934,93235,00733,945
19,25033,74518,28817,92625,401
24,2509,764

0Kyushu ElectricPower Co,

Govermment/Public

Privatecompanies

0

Kyushu ElectricPower Co,

Govermment/Public

Privatecompanies

12Order received / Sales by region Mar. 2019 Full year
(Electrical & HVAC work excluding Solar plant construction work)(Million yen)

Sales of each region■2017.3 ■2018.3 ■2019.3(Million yen)Orders of each region■2017.3 ■2018.3 ■2019.3

240,000

240,000

218,328
198,203
197,665

202,906
178,698
168,191

68,471
62,97456,89568,09543,862
38,59426,852
21,247
17,275

21,567
20,574
5,742
11,811
5,247
2,164

5,198

4,026 3,963
00KyushuTokyo Nagoya
Area

Osaka Area

Overseas

KyushuTokyo Nagoya
Area

Osaka Area

Overseas13Order received / Sales by region Dec. 2019
(Electrical & HVAC work excluding Solar plant construction work)(Million yen)

Sales of each region■2017.12 ■2018.12 ■2019.12(Million yen)Orders of each region■2017.12 ■2018.12 ■2019.12

200,000

200,000

167,243
149,775

144,924130,181
126,193
106,386

52,49647,39040,877

48,39930,45028,836

13,824
13,733
12,034
3,037 4,705
1,934

20,100 13,97810,4153,443 2,949
2,813

0

Kyushu0

KyushuTokyo Nagoya
Area

Osaka Area

Overseas

Tokyo Nagoya
Area

Osaka Area

Overseas14Order received / Sales by region Mar. 2019 Full year
(Solar plant construction work)(Million yen)

Sales of each region■2017.3 ■2018.3 ■2019.3(Million yen)Orders of each region■2017.3 ■2018.3 ■2019.3
50,00050,00041,12940,23240,18927,05927,36526,75815,038

13,611

13,316
9,467

8,630
7,647

4,743
7,057

6,306

4,891

4,650

1,883
0

0

KyushuTokyo Nagoya
Area

Osaka Area

KyushuTokyo Nagoya
Area

Osaka Area

15

Order received / Sales by region Dec. 2019
(Solar plant construction work)(Million yen)

Sales of each region■2017.12 ■2018.12 ■2019.12(Million yen)Orders of each region■2017.12 ■2018.12 ■2019.12

50,00050,00037,32432,68228,931
26,18013,324

13,429
8,080
3,791
2,966

6,324

4,950

1,594
1,251

0

9,191

9,036

907
605
240

0

KyushuTokyo Nagoya
Area

Osaka Area

KyushuTokyo Nagoya
Area

Osaka Area

16

Year-end amount of works on hand(Million yen)Order stock of each department

New orders in FY ended March 2019■2017.3 ■2018.3 ■2019.3

150,000

132,519
129,498
118,676

121,420

97,598Image

100,350
97,304
94,744

63,975

1,184
1,121

840

0

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

17

Situation of works on hand Dec. 2019

Order stock of each department(Million yen)

New orders in FY ended Dec. 2019■2017.12 ■2018.12 ■2019.12
180,000

154,318
147,429
143,975

129,464
125,743
109,424
107,358
83,82690,727

Image

2,143
1,833
1,707
0

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

18

Plan for March 2020
(Million yen)

Plan for March 2020

March 2019
ResultMarch 2020

408,143

418,000(100.0%)(100.0%)60,56162,700(14.8%)(15.0%)

36,74738,000(9.0%)(9.1%)

39,92440,700(9.8%)(9.7%)

Current (quarter) net
profit26,691

27,200(6.5%)(6.5%)

Current net profit perstock¥375.17

Sales

Gross profit

Operating profit

Ordinary profit

Dividends

Year-on-Year

3Q Result

102.4%

279,872103.5%

36,816103.4%

18,761101.9%

21,057101.9%¥382.31(100.0%)(13.2%)(6.7%)(7.5%)

14,319
(5.1%)

Progress

67.0%
58.7%
49.4%
51.7%
52.6%

¥201.80

100円

¥100

Interim ¥50

Interim ¥50

19

Analysis of works on hand
（Kyudenko individual : excluding power distribution work）
Fourth quarter opening construction works on hand by delivery schedule timing

Works on hand（Billion yen）4,000

Total 352.7
Total 329.4

Total 317.1
3,000

142.3
Deliver on after next FY

127.6(▲14.7）

169.8

Deliver on next FY

2,000

154.7

133.8
（▲20.9）

1,000

106.8
Deliver on FY

52.8

FY 2017 4Q

55.7
FY 2018 4Q

55.7
（－）
FY 2019 4Q

020

Analysis by scale of order(Kyudenko individual : excluding power distribution work）(Million yen)■2017.12 ■2018.12 ■2019.12

73,69573,561
64,83438,562
33,63432,476100～300 million yen

Under 100 million yen
21Orders & Sales plan by department(Million yen)

Sales of each department■2018.3 ■2019.3■2020.3（plan）■2018.3 ■2019.3■2020.3（plan）

240,000

240,000(Million yen)Orders of each department

202,500
167,040

170,000
165,667

162,646

153,447

150,469

135,500

135,000

126,573

120,414101,164
50,00048,37945,15747,70647,50046,63350,76445,33240,00047,45347,50046,5370

0Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

Power
distribution
line work

Electricalwork

HVAC work Solar plant
construction
work

22

Investment in Power Operations (Solar Power Plants)
Deals operated by group

Deals through investment in equity(make capital investment and record the entire operation to otheroperations sales)(acquire investment securities and record an amount equal to the equity to nonoperating revenues)
Depreciated at the straight line method

Depreciated at the declining balance method

Number ofpower
plantsGeneration
capacity(the entire
operation)

Generation
capacity(that equal tothe equity)

Number ofpower
plantsGeneration
capacity(the entire
operation)

Generation
capacity(that equal to theequity)In operation

49

92MW

87MW

In operation

46

402MW

130MW

Under
construction

-

-

-

Under
construction

5

246MW

63MW

Plan

-

-

-

Plan

1

50MW

15MW

Total

49

92MW

87MW

Total

52

698MW

208MW

2.0 to 2.4 billion yen at its maximum

1.8 to 2.0 billion yen at its maximum

In the current fiscal year , the suppression of solar power’s output was implemented by KEP
focus on April, May and November.（Total 47 days）

Impacts

Instruction to stop a total of 1,037 power station out of 88 power station in a whole
Loss of profit might be 267 million yen.(assumption)※Projects in above table are old regulation (suppression is up to 30 days rule).
Business plans with 8% suppression instructions incorporated

23

Investment in Power Operations (Solar Power Plants)
Mega solar power plant

Ishikawa

Miyagi
Fukushima

Okayama Hyogo

Gotou

Hiroshima

Deals operated by group- In Operation

Chiba- Under construction- Preparing for construction
Projects for equity investment- In Operation- Under construction

Amami

Nara Mie

Aichi- Preparing for construction

24Investment in Power Operations (Wind Power Plants)
Deals operated by group

Wind power plant(make capital investment and record the entire operation to otheroperations sales)
Depreciated at the Mainly declining balance method
Number of
power plants

Generation capacity(the entire
operation)

Generation capacity(that equal to theequity)In Operation

5

38MW

38MW

Under
construction

-

-

-

Plan

-

-

-

Total

5

38MW

38MW

Deals through investment in equity
Gotou

Deals operated by group- In Operation
Projects for equity investment- In Operation- Under construction(acquire investment securities and record an amount equal to the equity to
non-operating revenues)
Depreciated at the Mainly declining balance method

Aichi

Number of
power plants

Generation capacity(the entire
operation)

Generation capacity(that equal to theequity)In Operation

4

80MW

18MW

Under
construction

1

65MW

32MW

Plan

-

-

-

Total

5

145MW

50MW
25

Axes of the growth strategy and key measures

Axes of the growth strategy“Establish stable foundation in Kyushu”“Strengthening business in the metropolitan area”“The development of human resources”≪ Kyudenko’s Four Strategic Policies≫
１ “ Sales force ” to meet trusts and expectations of clients
２ “ Technological force ” to win the cost & quality competition
３ “ On-site Capabilities ” to obtain more projects and profit efficiency
４ “ Growing Force ” for future success26

Numerical target≪ Main theme ≫Challenge to a Further Growth～To the next growth stage～≪ Numerical target at March 31, 2020≫(Results in March 2019)

S

a

l

e s

400 BillionYen

408 BillionYen

Gross Profit Ratio

Over
％
15

14.8 ％

Operating Profit Ratio

Over
％
9

9.0 ％

R O E

Over
％
14

15.6 ％

27

Road map of sales plan
(Billion yen)
400

48

50

166

170

127

136

45
50

Solar plant
construction

48

66
138
Electrical construction

153

127

111

HVAC
80

94

101

47

47

47

48

48

15

13

15

20

15

2016.32017.32018.32019.32020.375

Power distribution line
45
Others0

14
2015.3(plan)
Medium-term management plan（2016.3～2020.3）

28

Review of present mid-term management plan
※Figures are from internal management materials
Tokyo headquarters
result

FY2018resultIncrease or decrease
from FY2014

74.8B Yen

＋41.4B Yen

Group companies

16.2B Yen

＋15.2B Yen

Number of engineers
and technicians

756 ppl＋391 ppl

Group companies

223 ppl＋154 ppl

Sales

Designproject

Electrical

FY2018result
93.5%

HVAC

94.1%

＋18.5%

Estimates
project

Electrical

50.9%＋18.8%

HVAC

63.1%

＋29.3%

Electrical

20.3%

＋2.5%

HVAC

17.2%

＋3.7%

Kyudenko(Individual)

Orderprobability

project
profitIncrease or decrease
from FY2014＋13.5%

Number of engineers
and technicians

FY2018resultIncrease or decrease
from FY2014

Kyudenko(individual)

3,310 ppl

＋785 ppl

Group companies

1,572 ppl

＋402 ppl

Ｍ＆Ａ
Total

220 ppl＋220 ppl

4,882 ppl

＋1,187 ppl

・Established a sales office in Tokyo.
・Reinforcement of Yokohama and Nagoya sales offices
・ Shift construction personnel to Tokyo headquarters
・Strengthening construction capabilities using M & A※Ergotech co. 、Shoeidensetsu co. etc
・Company-wide horizontal deployment ofexperience and know-how through thorough cost
control and personnel rotation in the technicalmanagement department
・Reduction of material costs(new establishment of Q-mast)
・Transfer of Quatec co employees to improve ourdesign and design change capabilities
・Introduction of QC method
・Increase in new graduate recruitment
・Extended employment period for engineers(up to 67 years)
・Utilization of mid-career recruitment and M & A※Engineers and technicians dedicated to domestic electrical and HVAC
(excluding power distribution line and other business)29

Actual results of recruitment of human resources (single Kyudenko) and workforce planning≪ Comparison in actual results of recruitment
for April 2019 with other companies≫≪ Actual results of periodic recruitment of engineers andskilled persons≫
2007～2014

2015

2016

2017

2018

2019
Kyudenko

Large electricalconstruction
companies

Large HVAC
companies

Super general
constructors

Total in all
professions

362

320～33060～90

250～330

Total
engineers andskilledpersons

Around 200

241

262

344

384

342

High
schoolgraduates

Around 150

163

177

248

271

253

High
schoolgraduates

253

Around 190

Around 10

Around 10

University
graduates

Around 50

78

85

96

113

89

University
graduates

109

130～14060～80

250～320≪ Planned year-end workforce until FY2020 March≫
Increase or
Mach 2016

Mach 2017

Mach 2018

Mach 2019

Mach 2020

decrease in plan

Electrical work department

1,728

1,826

2,090

2,203

2,228

About +500

HVAC work department

921

990

1,052

1,107

1,160

About +240

Year-end workforce of electricaland HVAC

2,649

2,816

3,142

3,310

3,388

About +740

Power distribution line department

1,869

1,816

1,741

1,669

1,647

About ▲220

Other

1,394

1,408

1,418

1,420

1,433

About +40

Employees of single Kyudenko

5,912

6,040

6,301

6,399

6,468

About +560

Employees of group

8,976

9,287

9,843

9,954

10,000

About +1,000

Total 8,100 employees in technical field of total 9,900.
(Kyudenko )(Subsidiaries)

Number ofsite
technicians

About 2,100+

About 2,000=

About 4,100

Number of
construction
managers

About 3,000+

About 1,000=

About 4,000

30

Promotion of Development of Human Resources
Established the education base of Kyudenko group “Kyudenko Academy”
Training in power distribution and rising pillars

Training in wiringAppearance of Kyudenko Academy

Place for psychological training “Hogakuan”

31

Expansion of business area and acceptance of brand≪ Strengthening of organizations in areas excluding Kyushu≫
Promote expansion of business area andstrengtheningⒶ 2008Ⓑ 2012

Do capital ties with companies seeking such at
local-based operational activities in the Tokyo
Metropolitan Area and newly entering areas andcompanies that can technically supplement usⒸ 2012Ⓓ 2014Ⓔ 2015Ⓕ 2017
Network of headquarters, branches andregional offices in areas excluding Kyushu≪ New participant companies of Kyudenko group≫Year ofparticipation■ : Headquarters■ : Branch and regional office
Ⓒ
Ⓕ⑦
Ⓐ ⑨
Ⓓ⑧④

①③

⑥②
⑤

Ⓑ

Reorganized Tokyo organization and establishedTokyo Headquarters
Reorganized Osaka branch to Kansai branch to expand
its business territory
Established Tohoku regional office
Reorganized Yokohama business office to Yokohama
regional office
Established Nagoya regional office
Reorganized Saitama business office to Saitama
branchName ofCompany

Location

Sales for FY2018 Employees

①

2014

Koderadengyo

Osaka

1,932 million yen

50

②

2014

Kakusokukeisou

Fukuoka

1,153 million yen

57

③

2015

Kawachikougyou

Osaka1,488 million yen

18

④

2015

Syoueidensetu

Chiba

983 million yen

28

⑤

2016

Kyusetukougyou Nagasaki

571 million yen

9

⑥

2017

Jinnouchikoumutenn

Saga

450 million yen

34

⑦

2018

Sanyudensetu

Fukushima

857 million yen

47

⑧

2018

Ergotech

Yokohama 10,427 million yen

144

⑨

2018

Seiwakougyou

Ibaragi

32
32
36

Ⓔ

1,763 million yen

Photovoltaic power generation facility construction
We constructed a tight connection with partners in other industries as a result of appreciation of abilities to develop deals and judge investments.
There is a huge volume of information on large deals requiring much time for development, and we now expect orders directly nominated frompartners.
（The following expectations exclude the Ukujima project）

We seek to gain demand for replacing power conditioning system 10 years later and replacement demand 20 years later as a previous
constructor.

Bar chart
Amount (million yen)
100,000
80,00060,00040,00020,0000Line chart
Number of deals of solar power facility construction works worth 100 million yen or more by deal

Actual and expected results of orders received

150
100
50
0

2013.32014.32015.32016.32017.32018.32019.32020.32021.32022.3

Sales will be generated at around 40
150
billion yen per year by 2022.3 to2023.3.

Actual and expected results of sales

80,000The business will contribute around 10 to 20
billion yen per year to orders received owing to
demand for maintenance and decennial
replacement of power conditioning systems
despite a gradual reduction in contribution.
Demand for replacement is expected 20 years
later.

60,000100

40,00050

20,000002013.3150,000

2014.32015.32016.32017.32018.32019.3

Actual and expected results of works in hand

100,000

2020.32021.32022.3100

Larger deals will reduce the workforce
necessary in amount.

50
50,000002013.32014.32015.32016.32017.32018.32019.32020.32021.32022.333

Post-2020 Prediction about industry
Construction demand will be supported by large-scale projects and renovation of aging infrastructure
built more than 50 years ago. The labor shortage will accelerate with the decline in the working age
population, with a rapid falloff in supply capability.
No. of construction
Real construction
investment(Trillions of yen)

Tokyo Olympic (2020)

Past construction
investment amountNo. of constructionindustry employees

industry employees(Ten thousands)

Correspondence to earthquake resistant structure ·Rebuilding / renewal demand of buildings
over 50 years after construction
Tenjin Big Bang Project (through 2024)
Waterfront Next (over 20-30 years)
Hakata Connected(through 2028)
Osaka・Kansai Expo(2025)

90
80

800

700

Linear Shinkansen Line
opened to Osaka
600(2045)

70
60

500
50
400
40

Supported by redevelopment demand
Buildings constructed during the period of higheconomic growth have passed their useful lives

30
20

Working age population
Peak: 87.26 million

10(1995)

Working age population
Base: 74.05 million

Working age population
Forecast: 45.29 million(2065)(2020 forecast)

0

年1960

1970

1980

1990

2000

2010

2020

2030

2040

300

200

100

0

2050

度

34

【Positional relationship】
Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected
Relaxation of height restriction
38 hectares in the waterfront area (70m→100m)
1.7 hectare in Tenjin area (67m→115m at maximum)
Floor area ratio relaxation
Tenjin area (800%→1,400%)
Hakata Station area (Up to 50% extra)
Request for relaxation of height restriction
Hakata Station area (50m→60m)

Waterfront area

Sanyo Shinkansen line

空港まで10
10 minutesby 分
highway
to the airport

Fukuoka urban expressway
10
minutes
15 minutes
空港まで10by highway
分
to the airport

5 minutes

Hakata Station area

Showa Street
Meiji Street

Tenjin area
Fukuoka City Subway Airport Line
Nishi-Nippon Railroad
Fukuoka(Tenjin)station

10
minutes tothe airport

5 minutes

Fukuoka City Subway Nanakuma Line35

【Project contents】
Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected
Project

Purpose

Period and scale①Tenjin Big Bang・By promoting theredevelopment of the Tenjin
area, which is the center of
Fukuoka, enhance the roleand function as a hub city in
Asia and create jobs

・Through 2024
・Total floor area
757,000㎡
・Reconstruction ofbuildings in Tenjin
area (30 buildings)②Fukuoka
Waterfront Next

・Create bustle around Hakata
Port, the gateway to Kyushu
・Improved urban functions tomeet MICE and cruisedemand・Over 20-30 years
・Cruise terminal, MICE,
commercial facilities,
hotels・Connect the vitality andbustle of Hakata Station, thegateway to Kyushu, to thesurrounding area.

・Through 2028
・About 80ha of about
500m in radius from
Hakata Station
・Reconstruction ofbuildings around
Hakata Station (20buildings)③Hakata Connected36

Details of diverse business models (facility work)business
model
item

Ⓐ Proposal and originalcontract type(Local based）Ⓑ Sub-contract type

Ⓒ Capital participation type・Capital participation in a project・Mainly small- and med-

① Feature

sized deals
・Order directly from the owner（prime contractor)

・Large sized deals
・Subcontractor of a generalof collaboration with different
industries, and receiving an orderfor construction
・Construction profit + Business

contractor

profit according to the amount ofinvestment

Mainly Kyushu② Business
area

Urban areas such as
Kanto and Kansai
Fukuoka urban area

To Kanto and Kansai by M & A

Nationwide development

Business area expansion
to the whole country③ Sales④ Profit rate

⑤ Differentiation
strategy⑥ Rival⑦ Composition
ratio

Sales by project are small

Sales by project are large

Relatively higher

Relatively lower（Order directly from the owner）（Mainly subcontracted）

Sales by project are large
Different for each project

By having 110 sales offices throughout Overwhelming ability to collect

By participating from the project

Kyushu and Okinawa, we develop

workforce and ability of directplanning stage, we definitely

local-based sales by engineersconstruction

receive an order for construction

Local small and mediumsized enterprises
about４０％

Major competitors
about５０％

General contractor
and developer
about１０％37

“Kyudenko EMS” can distribute renewable energy stably
Energy management system○ Movement of the spread of renewable energy accelerates globally,
but there are many electricity instability areas including a remote islandand the distant place in the developing country and exists.
The Kyudenko EMS is the system which can raise efficiency of therenewable energy generation to the maximum.
○ In 2016, the Kyudenko EMS was adopted as "low-carbon innovation
creation business for developing countries" from Ministry of the Environment
and installed ENS proof facilities in the Indonesian eastern part, SUMBA Island,
population is approximately 650,000. It supplies electricity to a local micro gridstably now.

By stable electricity distribution in
Kyudenko EMS, We enlarge an
opportunity to create local industry andcontribute to carbon footprint reduction.
In March, 2018, Kyudenko EMS was
adopted by "private technical spreadpromotion business" of the Japan
International Cooperation Agency(JICA).
We will aim at the spread of the
Kyudenko EMS in future in Indonesia.

38

＜As regards to misconducts of employee concerning Chikujyo town water and waste sewage treatment facility＞

・ Recurrence prevention measures

The KYUDENKO Group has formed an investigation committee, which includes outside directors andlawyers, and thoroughly investigated the causes, such as the opportunities and the motivation for the
fraud. The recurrence prevention measure based on this survey is as follows.

President’s Declaration to Stop Misconducts『 The Kyudenko Group will comply with laws and regulations thoroughly in all its business activities』

1. Enhance compliance awareness3. Review of outsourcing order scheme(1) Reform employee’s awareness to create a corporate
culture in which misconducts can be detected(1) Thoroughly pursue a scheme to avoid misconducts
in outsourcing orders(2) Reeducate compliance thoroughly(2) Enhancement of verification of validity of theoutsourcing order amount(3) Formulate and disseminate “sales representatives
action guidelines” thoroughly(3) Enhancement of misconduct monitoring function for
construction orders(4) Raise awareness for the prevention of misconducts

4. Thorough prevention of misconducts at
outsourcing companies

2. Enhance in-house check functions(1) Request for cooperation of outsourcing companies
to prevent misconducts(1) Thorough scrutiny of costs(2) Review the items of the contract with outsourcing
companies(2) Thorough implementation of new personnel andevaluation system

5. Enhancement of reporting systems andstricter internal disciplinary action(3) Enhancement of check functions in businessprocessing(1) Dissemination and enhancement of the reporting
system(4) Enhancement of verification using systems(2) Stricter internal disciplinary action

39