1st section of Tokyo stock exchange : 1959

KYUDENKO CORPORATIONFY ending March 2021
Results briefing

May 12 th ,2021

All Rights Reserved. Copyright KYUDENKO CORPORATION

0Table of contents
Overview of business results

2

Plan for fiscal year

Highlights

3

Plan for fiscal year

22・23

P/L

4

Trend of dividends

24

Mid-term management plan・growth strategy

25

Factors of change in OP

5～7

Sales, Orders and Works on hand
1. Orders received/sales by department

8

2. Orders received/sales by customer

9

3. Orders received/sales by region
4. Year-end amount of works on hand

10・11

12

Actual results of works

13

B/S

14

C/F

15

Capital Investment

16

Power generation business

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Summary of the first year (FY2020)

21

26・27

Key measures for the second year (FY2021)

28

Numerical targets

29

Key measures

30

Road map of sales plan

31

Recruit of human resources

32

Appendix

33

17～20

1

Overview of business results

All Rights Reserved. Copyright KYUDENKO CORPORATION

2High lights
Orders・The decrease was due to the postponement of orders for several¥325,158million
Sales

Year-on-year 64.1％

projects due to the spread of the COVID-19 infection, in addition to
the reactive decline from the super-large solar power projects
ordered in the previous fiscal year.

・The decrease was due to fewer large projects to be¥391,901million
Year-on-year 91.4％

completed toward the end of the fiscal year
compared to the previous fiscal year, and delays in
the construction of some large projects.

Operating profit¥32,998million
Year-on-year 91.6％

All Rights Reserved. Copyright KYUDENKO CORPORATION

・Although profit decreased due to thedecrease in sales, the profit margin
improved.

3

Outline of P/L March 2021
(Million yen)March 2021

March 2020
ResultResultYear-onyear

Plan (2020.7.31)

Progress

428,939

391,901

91.4％

413,000

94.9％

Gross profit

60,09356,631

94.2％

56,400100.4％

Operating profit

36,022

32,99891.6％

32,000103.1％

Ordinary project

38,64335,90692.9％

34,000105.6％Net profit

26,24525,042

95.4％

22,500111.3％

Sales

Net profit per share(100.0%)(14.0%)(8.4%)(9.0%)(6.1%)¥370.00

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(14.5%)(8.4%)(9.2%)(6.4%)¥353.48(100.0%)(13.7%)(7.7%)(8.2%)(5.4%)¥317.594

Factors of change in OP March 2021
（billion yen）

38

36

:IncreaseA・Bonus decrease・Increase of other fixed cost(overhead cost) in SG&A
Gross Cost

▲0.1

▲0.1

:DecreaseC

Decrease in
sales

B

Power
distribution
line work

34

36.0

E

▲4.0

Improvement in profit
margin(Except D)

F

Operatingprofit in

32

＋3.2

March,2020

▲1.6
30

All Rights Reserved. Copyright KYUDENKO CORPORATION

▲0.5

D

Other business

32.9
Operatingprofit inMarch,2021

Decline in profit due to somelarge projects with worsening
profitability caused by tightprocess at the end of theprevious fiscal year5

Breakdown of construction sales and average profit margin(Kyudenko individual : excluding power distribution line work)

Average profit ratio

23.4

21.8

24.2

24.9
19.1

18.3

Sales fromNot delivered
items

Total 262,902

31%

Total 279,794

102,04636%

122,858

17.9

17.8
14.9

Total 305,015

15.7

Total 315,566
40%

116,004

400,000

37%

Total 289,434 300,000

95,302 33%
200,000

Sales fromdelivered items

Project delivered（Percentage-of-completion method）

30%

74,202

Project delivered（Completed-contract method）

102,534

Construction sales（Million yen）

18.0

Project Not delivered（Percentage of completion method）

79,870500,000

21.8

17.7

80,498

26.0

25.5

39%

103,546

27%

83,771

27%

109,69035%

104,440 36%
100,00037%

98,38633%

89,872

28%

89,692 31%
0

2017’032018’03

All Rights Reserved. Copyright KYUDENKO CORPORATION

2019’032020’032021’036

Breakdown of construction sales and average profit margin(by quarterly accounting period)(Kyudenko individual : excluding power distribution line work)

Average profit ratio

26.2

25.5

15.4

150,000

28.3
26.6

16.2

25.3
22.7
17.5 Construction sales

16.0（Million yen）

15.6

14.8

Total 90,772

Total 78,189

38,370Total 63,017
Sales from
Sales fromNot delivered items delivered items

35,72166%

62%39,103

62%
11%

7,036

12%

7,838

10%

6,722

14,69926%

18,59024%

17,1912020’1Q

42%

Project Not delivered（Percentage of completion method）

Total 57,456

51,760100,000

27%

13,19015%

39,21243%

50,000

Project delivered（Percentage of completion method）

Project delivered（Completed-contract method）
0

2020’2Q

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2020’3Q

2020’4Q
7

Order received / Sales by department

March 2021

Net sales decreased due to fewer large-scale projects coming to completion compared to the previous fiscal year.
Orders received decreased due to a reactionary decline in orders received in the previous fiscal year for very large
solar panels and postponement of orders for multiple projects due to the impact of COVID-19.
(Million yen)

Sales of each department■2019.3■2019.3■2020.3■2020.3■2021.3

176,545■2021.3

166,344
165,667
153,773

162,646

126,801
118,699

59,30654,564
48,37945,793

156,104

150,469
142,575

134,955
126,573
123,199

47,706
46,900(Million yen)Orders of each department

47,57447,45345,65445,332

18,229Power
Electrical work
distribution line
work

HVAC work

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Solar plant
construction
work

Power
Electrical work
distribution line
work

HVAC work

Solar plant
constructionwork

8Order received / Sales by customer March 2021
Sales of government works decreased due to a decrease in the number of works on hand at the beginningof the period, but orders received are on a recovery trend.
In general private-sector construction, both sales and orders decreased.
(Million yen)

Sales of each customer(Million yen)Orders of each customer■2019.3■2019.3■2020.3■2020.3■2021.3■2021.3

331,538
307,216
305,300

442,510

326,676

246,431

48,79447,53948,65547,30634,23345,497

Kyushu ElectricPower Co,

28,428 24,617
Govermment/Public

Privatecompanies

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45,593Kyushu ElectricPower Co,

30,57033,133
17,208Govermment/Public

Privatecompanies

9Order received / Sales by region March 2021
(Electrical & HVAC work excluding Solar plant construction work)
Net sales decreased in all regions due to fewer large-scale projects coming to completion compared tothe previous fiscal year.
Orders received decreased, especially in Kyushu, due to the postponement of orders for several projects
due to COVID-19.
(Million yen)

Sales of each region■2019.3■2019.3■2020.3 ■2021.3(Million yen)Orders of each region■2020.3 ■2021.3

218,328
202,906 199,179
189,138

194,445
174,679

77,59368,09564,742

68,47164,96919,26818,213 5,259
17,275
3,963 4,878
KyushuTokyo Tohoku
and Chubu Areas

70,370

Osaka Area

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Overseas

20,574
17,485
6,004
14,3515,742
1,873
KyushuTokyo Tohoku andChubu Areas

Osaka Area

Overseas10Order received / Sales by region March 2021
(Solar plant construction work)
Sales progressed steadily with the exception of some large projects.
Orders received decreased due to a reactionary decline from the previous fiscal year.
(Million yen)

Sales of each region■2019.3■2020.3 ■2021.3(Million yen)Orders of each region■2019.3■2020.3 ■2021.3

155,891

48,67240,18927,36524,01818,142
6,306
Kyushu6,301

Tokyo Tohoku and Chubu
Areas12,403

19,60813,316

7,787

1,883 4,332
Osaka Area

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Kyushu7,481
Tokyo Tohoku and Chubu
Areas

4,650
1,045 2,960
Osaka Area

11

Year-end amount of works on hand
Sales of electrical and HVAC work decreased due to postponement of orders due to infectious diseases.
Despite a decrease in solar plant work, the company has a wealth of work in hand.
(Million yen)Order stock of each department

New orders in FY ended March 2021

■2019.3 ■2020.3 ■2021.3

214,542

178,207

129,498

119,138 121,420
107,940

Image

113,266
108,765
97,304

1,514
840

1,375

Power
Electrical work
distribution line
work

HVAC work

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Solar plant
constructionwork
12Actual results of works FY March 2021
Image

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13

Outline of balance sheet（Million yen, composition ratio）

Current assets
Fixed assets
Total assets
Current liabilities
Fixed liabilities
Total liabilities
Total net assets
Total liabilities
and net assets

End of Mar.

End of Mar.

2020

2021

216,269

212,574

152,212

153,957

368,482

366,532

142,723

125,361

28,316

19,429171,039

144,790

197,442

221,741

368,482

366,532(58.7%)(41.3%)(100.0%)(38.7%)(7.7%)(46.4%)(53.6%)(100.0%)All Rights Reserved. Copyright KYUDENKO CORPORATION(58.0%)(42.0%)(100.0%)(34.2%)(5.3%)(39.5%)(60.5%)(100.0%)

Increase/decrease

Main factors behindincrease/decrease▲3,695

Raw materials and supplies +13,433
Trade notes and accounts receivable▲9,041

1,745

Investment securities +7,163
Deferred tax assets ▲3,032▲1,950▲17,361▲8,887

Trade notes and accounts payable ▲10,024
Advances received on uncompleted construction
contracts ▲8,058

Net defined benefit liability ▲6,663▲26,249
24,298Retained earnings +17,958▲1,95014

Outline of C/F(Million yen)Mar.2020

Cash flow from operating activities

38,222

Mar.2021

9,184

Details of statement toMar. 2021
Income before income taxes and minority
interests ▲1,639
Decrease in costs of uncompleted
construction contracts ▲18,722
Increase in inventories ▲13,035

Cash flow from investment activities
Free cash flow
Cash flow by financial activities
Increase/decrease of cash andcash equivalents
Cash and cash equivalents at the
beginning of the period
Cash and cash equivalents at theend of the period
All Rights Reserved. Copyright KYUDENKO CORPORATION▲12,136▲4,232

26,086

4,951▲11,250▲10,064

14,833▲5,16440,19254,96454,96449,800

Sale of investments in securities +5,458(Mar.2020)
Acquisition of treasury stock

998

15

Capital Investment
FY2020 Mar.
Capital investment

4.1 billion yen

3.6 billion yen

3.9 billion yen

3.3 billion yen

Replacement of branches ,business offices and sanatoriumof Kyudenko

Facility work

FY2021 Mar.

Machinery and equipment, etc. forconstructions

Lease contracts on specialized
vehicles for construction

Replacement of branches , businessoffices and sanatorium of
Kyudenko

Machinery and equipment, etc. forconstructions

Lease contracts on specialized
vehicles for construction

0.2 billion yen
OthersSoftwareDepreciation

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0.3 billion yen
Software

6.0 billion yen

5.9 billion yen
16

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

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17

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

49

540MW

156MW

Under
construction

-

-

-

Under
construction

5

687MW

141MW

Plan

-

-

-

Plan

-

-

-

Total

49

92MW

87MW

Total

54

1,227MW297MW

In this fiscal year, a total of 60 controls on output were issued by Kyushu Electric Power Company.
The average number of controls at our power plants was 20.
The total amount of lost profits for the group was about 500.0million yen.

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18

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

Wind power plant
Fukui

Miyagi
Fukushima(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

All Rights Reserved. Copyright KYUDENKO CORPORATION(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

5

145MW

50MW

Under
construction

1

7MW

2MW

Plan

1

15MW

3MW

Total

7

167MW

55MW
19

Investment in Power Operations
Deals operated by group(Million yen)

■Solar Power Plants ■Wind Power Plants■ Operating profit

1,449
962
616

1,556

Deals through investment in equity(Non-operating income)

1,748■Solar Power Plants ■Wind Power Plants

1,144
Total 5,089
Total 4,822

Total 4,447(Million yen)

Total 4,878
Total 1,583
Total 1,469
Total 1,450

Total 4,282
Total 3,619

4,205
3,233 3,508

4,031

Total 774

4,050

1,412

2,702

Total 1
Total 292
215

917
2016'032017'03938
2018'03883
2019'03

790

828

2020'032021'03

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1,280

135

189

2020'032021'03

876

369

76
1,048

1,447

-101

38

-368
2016'032017'032018'032019'0320

Plan for fiscal year

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21

Plan for March 2022
(Million yen)March 2021
ResultPlan for March 2022
March 2022

Year-on-Year

391,901

410,000

104.6％

Gross profit

56,63160,000105.9%

Operating profit

32,99835,000106.1%

Ordinary profit

35,90637,700105.0%

Current (quarter) net profit

25,04225,500101.8%

Current net profit per stock¥353.48¥359.94

100円

¥100

Sales

Dividends

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(14.5%)(8.4%)(9.2%)(6.4%)

Interim ¥50(100.0%)(14.6%)(8.5%)(9.2%)(6.2%)

Interim ¥50

22

Orders & Sales plan by department(Million yen)

Sales of each department■2020.3 ■2021.3

240,000■2022.3（plan）(Million yen)Orders of each department■2020.3 ■2021.3■2022.3（plan）

240,000

180,000

165,000

166,344
153,773

176,545

156,104
142,575

134,955 132,000
123,199

118,699

59,306
46,90046,00045,793

126,801 137,000

55,00054,56447,57446,00045,65430,00018,2290

PowerElectrical work HVAC work
distribution
line work

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Solar plant
construction
work

0

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

23

Trend of dividends
For the fiscal year ending March 31, 2022,
we plan to pay an annual dividend of 100 yen per share.
130

Dividend policy

120
With
regard to distribution of profits, we seek to keep appropriate
financial strength and appropriately return profits to shareholders with110strengthening
management base for improving operating results andsecuring internal reserve necessary for further business expansion.
To100satisfy expectations of shareholders, we continuously pay a stabledividend with the use of consolidated payout ratio 25% as a guide,90
comprehensively
taking into account business environment, operating
results and financial position.

100

100

100

100

Mar,2019

Mar,2020

Mar,2021

Mar,2022

90

10

80

70

70
10

■ Special■ Memorial

60

45

50

40

30

10

13
3

Mar,2013

Mar,2014

20

10

25
2
7

15

0

Mar,2011

Mar,2012

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Mar,2015

Mar,2016

Mar,2017

Mar,2018

24

Mid-term management plan

(Published on April 28,2020.)• With the spread of the COVID-19 infection on a global scale, the risk of an economic downturn is increasing. At thistime, it is difficult to estimate the impact on the Group's business performance in terms of scale and duration, so
this medium-term management plan does not reflect this impact.
• We will closely monitor future trends and review this medium-term management plan as necessary.

All Rights Reserved. Copyright KYUDENKO CORPORATION

25

Summary of the First Year (FY2020)【Environmental Changes】■ Unexpected environmental changes (spread of COVID-19)
・The expansion of COVID-19 has had various effects on our business activities.
・In particular, the drop in orders was serious, and we recognized the need to take immediate measures to secure
profits in the future.

Decline in orders•We were unable to visit customers in small and medium-sized
projects through community-based sales until the beginning ofJune.
•As business confidence worsened, orders were postponed andplans were revised.

Delay in progress of construction•For some of the larger projects, access to the site was restricted toprevent the spread of infectious diseases. This resulted in delays inconstruction.
•As a result, net sales were significantly behind the initial plan.

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26

Summary of the First Year (FY2020) 【Key measures】
The recruitment of human resources is proceeding almost as planned. In terms of human resource development,
we are currently considering the establishment of an education system. We believe that it is necessary to establish
an education system as soon as possible, as the development of human resources who will be responsible for the
future is the most important issue. As a result of thorough measures to improve profit margins, profit margins areon an improving trend. However, we recognize that the declining trend in small and medium-sized projects, mainly
in community-based sales, is an alarming situation that could shake the business foundation of our group.

Reform of construction capability

Reform of productivity

・Recruitment of human resources is generally on track.
・Consider establishing an education system for humanresource development.

・Formed a task force team led by the DX Promotion
Department
・Identified issues for rationalization and labor saving.

construction
capability

productivity

Governance

Issuescontinuing

Reform of Governance

Issues continuing from the previous mid-term
management plan・April 2021 Established Business Administration
Department.
・Continued to implement measures to prevent
recurrence in order to eradicate fraudulent activities.

・Profitability is on an upward trend due to thoroughmeasures to improve profit margins.
・Decreasing trend in small- and medium-scale projects.

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27

Key measures for the second year (FY2021)
Matters to be focused on[Excerpt]

Theme for FY2021

Strengthen and expand the order base『Application to environmental
changes and realization of recovery』•Secure orders and construction of large-scale projects
in Japan•Expansion of small and medium-sized projects

Group sales:

Deepen measures to improve profitability

500 billion•Re-enforcement of measures to improve profit margin•Strengthen cost management and construction support
by the Engineering Management Department

yen

Strengthen human resource development•Strengthen OJT (on-the-job training) for young
employees•Introduction of digital education support tools

Promotion of DX•Improvement of operations and review of processes•Research and study of BIM and advanced technologies

Strengthen governance•Ensuring the implementation of measures to prevent
recurrence in order to eradicate fraudulent activities•Further enhancement of compliance education

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28

New mid-term management plan(2020～2024）

Main theme

Establish a management foundation for sustainable growth～Realization of the three reforms～
Numerical target
Final year（Mar.2024）
Sales
Ordinary profit
margin

ＲＯＩＣ（Breakdown of construction sales）

500 billion yen
50 billion yen
Over 10.0 ％Power distribution line work
Electrical･HVAC work

50 billion yen
334 billion yen

Renewable Energy Business,etc.

81 billion yen

Other business

35 billion yen

Over 10.0 ％※ROIC is used as an accurate measure of a company's capital eﬃciency.

All Rights Reserved. Copyright KYUDENKO CORPORATION

29

New mid-term management plan(2020～2024）
Establish a management foundation forsustainable growth～Realization of the three reforms～

Strong and muscular
corporate structure
Three reform
construction capability

productivity

governance

Issues continuing from the previous mid-term management plan
Deepen measures to improve profit
margins

Development of new business areas

Strengthen and expand the order

Creating an Attractive Workplacebase of the domestic equipment

Environment

Strengthen the profitability of power
distribution line work
All Rights Reserved. Copyright KYUDENKO CORPORATION

Improving corporate value

30

Road map of sales plan
Goals for the(Billion yen)

final year

500
429
392

Renewable energy business

81.0

410

Solar plant
construction(17.0）

Solar plant

67.8 construction (59.3）

61.5 Solar plant

construction (54.5）

Electricalconstruction

191.0

149.1

157.7
HVAC

143.0

129.9

116.0

Power distribution line

46.9
Others 26.7

ROIC

50.0

45.8
19.5

Mar.2020

Mar.2021

11.7％

10.0％

35.0
Mar.2022

Mar.2023

Mar.2024

Mar.2025

The period of the new mid-term management plan(2020－2024）

All Rights Reserved. Copyright KYUDENKO CORPORATION

31

Actual results of recruitment of human resources(Kyudenko individual) and workforce planning≪ Comparison in actual results of recruitment
for April 2021 with other companies≫≪ Actual results of periodic recruitment of engineers andskilled persons≫2015 2016 2017 2018 2019 2020 2021

Total
engineersand skilled
persons

2007～
2014

Around
200

241

262

344

384

342

336

387

High
schoolgraduates

Around
150

163

177

248

271

253

253

University
graduates

Around
50

78

85

96

113

89

83

Kyudenko

Large electricalconstruction
companies

Large HVAC
companies

Super general
constructors

Total in all
professions

411

300～390

90～100250～350263

High
schoolgraduates

263

Around200

Around10

Around10

124

University
graduates

148

90～18080～90

190～330

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Mar. 2024

Mar. 2025

Increase or
decrease inplanElectrical work department

2,274

2,359

2,475

2,599

2,750

2,893

About+550

HVAC work department

1,138

1,188

1,269

1,355

1,435

1,517

About+320

Year-end workforce of electricaland HVAC

3,411

3,547

3,744

3,954

4,185

4,410

About+870

Power distribution line
department

1,642

1,566

1,618

1,632

1,641

1,666

About+50

Other

1,446

1,469

1,407

1,402

1,397

1,408

Employees of single
Kyudenko

6,500

6,582

6,769

6,988

7,223

7,484

About+900

Employees of group10,018

10,19812,000

About+2,000≪ Planned year-end workforce until FY2025 March≫

Total 8,200 employees in technical field of total 10,000(Kyudenko)(Subsidiaries)

Number ofsite
technicians

About 2,000+

About 2,000=

About 4,000

Number of
construction
managers

About 3,100+

About 1,100=

About 4,200

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32

Appendix

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33

Corporate profile

Company name

Kyudenko Corporation

Established

December 1, 1944

Capital￥12,561 million

Listed market
Code

1st Section of Tokyo Stock Exchange, Fukuoka Stock Exchange
1959

Head office

1-23-35 Nanokawa, Minamiku, Fukuoka city

Tokyo head officeSunshine 60 3-1-1 Higashi-Ikebukuro, Toshima-ku, Tokyo

Bases

Head office, Tokyo head office, 10 branches in Japan, 120 sales
offices, / 5 overseas subsidiaries

Approval for
construction

Approved by Minister of Land, Infrastructure, Transport and Tourism(Sp. 29) No. 1659

Number of
employees

Consolidated: 10,198 persons (March 31, 2021)

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34

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 generalcontractor

of collaboration with different
industries, and receiving an orderfor construction
・Construction proﬁt + Businessprofit 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％

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General contractor

Major competitorsand developer

about５０％

about１０％3535Front-loading initiatives
Benefits of being involved from the design stage・[Design Phase] Design changes can be made from the initial design stage(Effective suggestions and cost savings can be anticipated.)・[Contract Stage] Orders can be received with cost savings factored in・[Construction Phase] It allows for a smooth handover to the field<Image in our company><The Concept of Front Loading>（conventional）

Ease of change／
Cost

Aim to participate inprojects at the basic andimplementation design
stage

Ease ofchangeEarly in the projectstage, design changes
are easy

A design processthat incorporates
front-loading

Ahead ofschedule

Cost ofchangeImplementing designchanges at the end of a
project is time-consuming
and costly.

Traditional Design
Processinvestigati
onPlanning and
Designbasic
designdetailed design

Project Progress
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procurement

construction（Use of front-loading）

investigation

design office

investigation

design officePlanning and
Designdesign officePlanning and
Designdesign officebasic design

design officeorder strategy

Kyudenkodetailed design

design officebasic design

design office・Kyudenko※Technical Proposal

order strategy

construction

Kyudenkodetailed design

Kyudenko

construction

design office・Kyudenko※Technical Proposal

Kyudenkoadministration

36

Specific measures to improve the profit margin (excerpt)
Factor

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.

Measures・Forecasting the peak of busyness in the whole construction
A. Forecasting the busyness
period, make an input plan for workers early and start thepeak of construction
arrangement. 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.

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37

【Positional relationship】
Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected

Relaxation of height restriction
380,000 ㎡ in the waterfront area (70m→100m)
193,000 ㎡ in Tenjin area (67m→115m at maximum)
Request for relaxation of height restriction
Hakata Station area (50m→60m)

Sanyo Shinkansen line

Waterfront area

空港まで10
10 minutes by
分 tohighway
the airport

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

5 minutes

Hakata Station area

Showa Street
Meiji Street

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

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10 minutes
to theairport5 minutes
Fukuoka City Subway Nanakuma Line38

【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 2026
・About 193,000㎡ of about
500ｍ in radius from
Tenjin intersection
・Total floor area
About 800,000㎡
・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 10-20 years
・Cruise terminal, MICE,
commercial facilities,
hotels・Connect the vitality andbustle of Hakata Station, thegateway to Kyushu, to thesurrounding area.

・Through 2028
・About 800,000㎡ ofabout 500m in radiusfrom Hakata Station
・Reconstruction ofbuildings around
Hakata Station (20 buildings)③Hakata Connected

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39

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.
Real construction
investment(Trillions of yen) 非住宅建設
90
80

Past construction
investment amountNo. of constructionindustry employees

住宅建設

No. of constructionindustry employees(Thousands)

Tokyo Olympic (2021)

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)

民間土木
政府土木

70

70
700

Linear Shinkansen Line 60
600
opened to Osaka(2045)

60

50
500

50

40
400

40

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

30

30
300
20
200

20

Working age population Working age population Working age population
Base: 74.1 million
77.28 million
Peak: 87.26 million

10(2015)(1995)(2020)

0

年1960

80
800

1970

1980

1990

2000

2010

2020

2030

Working age population
Forecast: 45.29 million(2065)

2040

10
100
00

2050

度
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40

Digital Transformation
・The DX Promotion Department was established to strengthen the Group's DX promotion
structure. (October 1, 2020)
・Initiate the development of new technologies such as IT and IoT to improve productivity.
・Create new innovations across the business.

Promotion of DX
Transforming the way we work.
『Promoting digitalization at
the workplace level』● Streamline and automate current
systems and operations with thelatest IT technology.
● Utilize IT to connect the head officewith the work site in real time toshare information on various aspects
such as safety, construction quality,≪Main Initiative Themes≫■We will create a database of the projects we have worked
on so far. We will also develop AI and use it to support
design changes.
■Improving productivity through the development of newtechnologies such as AI, IoT and BIM.
■Promotes telework by using mobile devices and implements
innovations in the way we work.

Create new
business models.
『Established a competitive
advantage』●Creation of new businesses.
●Business Model Transformation.
●Establishing new businesses by
providing high quality, highvalue-added services.

and construction management.
● change in the way we work.

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41

Digital Transformation ～directionality～
Introduce advanced technologies such as AI and IoT to increase the sophistication, labor savings, andefficiency of work, education, and training related to design and construction management, etc., and tocreate new businesses and business models that utilize digital technologies.
AI Surveying and Construction
Management Drones
Preparation of construction
drawings（AI.BIM/CIM）

AI Construction
Management System

Drones for material transport
Remote operation
Robots and powered suits(construction equipment
for construction work
and work vehicles)

Advancement of business operations
Collection, storage and analysis of and creation of new business
Virtual hands-on training facilities.
building and equipment data
through
digitaltechnology
Training on the installation
Detection and diagnosisof power distribution lines
using VR gogglesof signs of failure
Health Support Services

Construction Management
Training Using AR Smart Glasses

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42

Energy Service Business・Established an independent and exclusive subsidiary to develop the ES
business, which is set out in the Medium-Term Management Plan.
Overview of the new company and ES business scheme
Capital

5 million yen

Investor

Kyudenko

Establishment

July 2020.

Start of businessAugust 1, 2020.

Business Area

throughout Japan

社名
Business
Description

Japan Energy Consulting Co.
Provision of technical and operational know-how on energy use in buildings, etc. andconsulting

customer
consulting
information
consulting fee

Japan Energy Consulting Co.

(100% owned by theCompany)

matching

EPC order

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information
know-howenergy supplier

Design estimate support fee

design fee

ES BusinessCompany43

Energy Service Business ～directionality～
We will expand our business beyond the construction of electricity, water, communications
and other infrastructure for daily life to include the development of smart cities and othercomfortable urban areas and the provision of local public services, and we will evolve into a
company that provides total support for the energy infrastructure and services of local
communities.
Participation in urban development
such as smart cities
Pursuit of electrical, HVAC
and distribution line installation

Provision of local energy supply
and public services

Construction of wastewaterand garbage treatment facilities

Step 4
Step 3
Step 2
Step 1
Community Energy
Equipment
Company
Leave the energy
equipment
to Kyudenko.

Regional Utility
Facility Company
Leave public
infrastructure
facilities to Kyudenko.

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Local Community
Development
Company
We can also help
you build
your community.

Regional total
service company
Please contact Kyudenko
for anything in the area.

44

Analysis of works on hand
（Kyudenko individual : excluding power distribution work）
Opening amount of construction works on hand by delivery schedule timing and
Gross profit ratio for each year

（Billion yen）

Total
415.2

14.8％
Total
302.1
81.3

14.0％
Total
315.0
77.8

14.5％

183.7

（▲44.2）

70.1

79.2

（+9.2）
138.2

117.3

Deliver on FY

FY2018

14.6％

99.0

Deliver on next FY

105.1

Total
363.6

227.9

Deliver on after next FY

115.7

Works on hand

FY2019All Rights Reserved. Copyright KYUDENKO CORPORATION

FY2020100.6（▲16.6）FY202145

Scheduled delivery amount by quarterly accounting period [Opening time](Kyudenko individual : excluding power distribution work)
Opening amount of construction works on hand of quarterly accounting period
Scheduled delivery amount

FY2018FY2019

Total
105.1

Total
138.2

FY2020

FY2021

Total
117.3

Total
100.6

（Billion yen）

55.5
45.3
39.0

31.2
24.1 22.8

31.5
30.6

31.5
27.0

23.6
20.0
19.3
16.4

23.0

First quarter

Second quarter

Third quarter

Fourth quarteraccounting period

accounting period

accounting period

accounting period

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20.4

46

Analysis by scale of order (Kyudenko individual : excluding power distribution work）(Million yen)
■2019.3 ■2020.3 ■2021.3

93,20882,570 83,574
49,22339,223 37,808

100～300 million yen
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Under 100 million yen
47