Prime Market of Tokyo stock exchange : 1959

KYUDENKO CORPORATIONFY ending March 2023
Results briefing

May 18 th ,2023

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

20・21

P/L

4

Trend of dividends

22

Mid-term management plan・growth strategy

23

Numerical targets

24

Road map of sales plan

25

Summary of the third year (FY2022)

26

Key measures for the fourth year (FY2023)

27

Establishment of a system of co-working withengineers

28

Appendix

29

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
Actual results of works
Power generation business

10・11

12
13
14・15

B/S

16

C/F

17

Capital Investment

18

All Rights Reserved. Copyright KYUDENKO CORPORATION

19

1

Overview of business results

All Rights Reserved. Copyright KYUDENKO CORPORATION

2High lights
Orders¥440,507

millionYear-on-year

117.3%

millionYear-on-year

105.1%

Year-on-year

96.8%

Sales

¥395,783
Operating profit¥32,083

millionAll Rights Reserved. Copyright KYUDENKO CORPORATION

3

Outline of P/L March 2023
(Million yen)March 2023

March 2022
ResultResultYear-onyear

Plan (2023.1.31)

Progress

376,563395,783

105.1%

400,000

98.9%

Gross profit

57,361

57,889100.9%

59,00098.1%

Operating profit

33,13732,08396.8%

32,50098.7%

Ordinary project

36,82835,462

96.3%

35,000101.3%Net profit

26,216

26,349100.5%

26,000101.3%

Sales

Net profit per share(100.0%)(15.2%)(8.8%)(9.8%)(7.0%)¥370.05

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(14.6%)(8.1%)(9.0%)(6.7%)¥371.93(100.0%)(14.8%)(8.0%)(8.8%)(6.5%)¥367.004Factors of change in OP March 2023
（billion yen）

36

A

:Increase

Increase in
sales

+1.9

34

32

33.1

:Decrease

D

▲2.7

B

Decrease in
Profit margin

Operatingprofit inMarch,2022

30

C

Power
distribution
line work+0.5

Other business

＋0.8

▲1.6
E

Increase in SG&A
expenses

32.0
Operatingprofit inMarch,2023

28

All Rights Reserved. Copyright KYUDENKO CORPORATION

5

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

Average profit ratio

24.9
19.1
18.0
Total 305,015

25.5

17.8
Total 315,566

14.9

Sales fromNot delivered
items

Project Not delivered（Percentage of completion method）

122,858 40%

116,00437%

Project delivered（Percentage-of-completion method）

Sales fromdelivered items

83,771 27%

109,690 35%

Project delivered（Completed-contract method）

98,386 33%

89,872

26.0

25.6
22.4

Total 289,434

95,302 33%

500,000

19.5

17.9
15.7

25.1

400,000
Construction
sales

16.5
Total 274,526

86,575 32%（Million yen）

15.0
Total 284,059

300,000

98,429 35%
200,000

104,440 36%

88,330 32%

87,615 31%
100,000

28%

89,692 31%

99,621 36%

98,015 34%
0

2019’032020’03

All Rights Reserved. Copyright KYUDENKO CORPORATION

2021’032022’032023’036

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

Average profit ratio
28.8

27.1

25.8

150,000

25.9

25.3

15.4

21.4Construction sales

15.3

Sales from
Sales fromNot delivered items delivered items

Total 47,034

43,502

Total 57,694

Project delivered

14,96731%

22,31934%

44%（Percentage of completion method）（Percentage of completion method）

60%

27,35412%

47,096

Project Not delivered

34,6897,123

100,000

15.7

13.7

54%

59%

10%

Total 106,386（Million yen）

17.1

Total 72,944

4,713

24.5

17%

41,59739%

50,0007%

3,874
19,131

17,69333%

Project delivered（Completed-contract method）

02022’1Q

2022’2Q

All Rights Reserved. Copyright KYUDENKO CORPORATION

2022’3Q

2022’4Q
7

Order received / Sales by department(Million yen)

Sales of each department

March 2023

■2021.3■2021.3■2022.3■2022.3■2023.3■2023.3

159,783
153,773
152,495
123,199(Million yen)Orders of each department

214,668

155,087
142,575

134,156

154,647
131,872
118,699

119,511

48,40954,56446,65939,787

46,62845,79345,77445,65445,64642,86818,229Power
Electrical work
distribution line
work

HVAC work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Solar plant
construction
work

Power
Electrical work
distribution line
work

HVAC work

22,782

Solar plant
constructionwork

8Order received / Sales by customer March 2023

(Million yen)

Sales of each customer■2021.3■2021.3■2022.3■2022.3■2023.3■2023.3

307,216(Million yen)Orders of each customer

358,746
300,437

304,577
290,213

246,43146,743
46,42845,497
24,617 27,798
Kyushu ElectricPower Co,

47,50947,25545,59329,034Govermment/Public

Privatecompanies

All Rights Reserved. Copyright KYUDENKO CORPORATION

Kyushu ElectricPower Co,

33,13334,504
27,526

Govermment/Public

Privatecompanies

9Order received / Sales by region March 2023
(Electrical & HVAC work excluding Solar plant construction work)(Million yen)

Sales of each region■2021.3■2021.3■2022.3 ■2023.3(Million yen)Orders of each region■2022.3 ■2023.3

257,048

199,689

200,263
189,138 186,123

174,679

75,43264,742
63,85470,37065,36017,587

18,213
6,791
15,236
12,4375,806
4,878
Kyushu78,119

Tokyo Tohoku
and Chubu Areas

Osaka Area

All Rights Reserved. Copyright KYUDENKO CORPORATION

Overseas

16,792
14,351 16,560
KyushuTokyo Tohoku andChubu Areas

Osaka Area

5,117
1,873
Overseas10Order received / Sales by region March 2023
(Solar plant construction work)(Million yen)

Sales of each region■2021.3■2022.3 ■2023.3(Million yen)Orders of each region■2021.3■2022.3 ■2023.3

32,54225,39624,01820,362
18,142

18,764

14,82912,403

12,5859,532 9,480
7,787

6,433

7,481

660
KyushuTokyo Tohoku and Chubu
Areas

Osaka Area

All Rights Reserved. Copyright KYUDENKO CORPORATION

2,960
KyushuTokyo Tohoku and Chubu
Areas

793 716

Osaka Area

11

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

New orders in FY ended March 2023

■2021.3 ■2022.3 ■2023.3

178,207
174,417

166,875

156,189
141,706
121,216
110,767
107,940
108,765

Image

3,029
1,375
1,247
Power
Electrical work
distribution line
work

Image

HVAC work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Image

Solar plant
constructionwork
12Actual results of works FY March 2023

All Rights Reserved. Copyright KYUDENKO CORPORATION

13

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 other operations
sales)
Depreciated at the declining balance method(acquire investment securities and record an amount equal to the equity to non-operating
Depreciated at the straight line method
revenues)

Generation capacity(that equal to theequity)Number of
power plants

Generation capacity(the entire operation)

Number of
power plants

In operation

49

92MW

87MW

In operation

51

624MW

169MW

Under
construction

-

-

-

Under
construction

4

697MW

144MW

Plan

-

-

-

Plan

-

-

-

Total

49

92MW

87MW

Total

55

1,321MW

313MWWind Power Plants

Generation capacity(the entire operation)

Generation capacity(that equal to the equity)

Deals through investment in equity

Deals operated by group(make capital investment and record the entire operation to other operations
Depreciated at the Mainly declining balance method
sales)(acquire investment securities and record an amount equal to the equity to nonDepreciated at the Mainly declining balance method
operating revenues)

Generation capacity(that equal to theequity)Number of
power plants

Generation capacity(the entire operation)

Generation capacity(that equal to the equity)

Number of
power plants

Generation capacity(the entire operation)

In operation

6

47MW

46MW

In operation

5

144MW

48MW

Under
construction

-

-

-

Under
construction

1

15MW

4MW

Plan

-

-

-

Plan

-

-

-

Total

6

47MW

46MW

Total

6

159MW

52MW

In this fiscal year, a total of 80 controls on output were issued by Kyushu Electric Power Company.
The average number of controls at our power plants was 12.
The total amount of lost profits for the group was about 183 million yen.
（In the same period of the previous year, it was 570 million yen.）
All Rights Reserved. Copyright KYUDENKO CORPORATION

14

Investment in Power Operations
Deals operated by group■Solar Power Plants ■Wind Power Plants(Million yen)

■ Operating profit

2,205

1,449 1,556

1,748 1,734

Deals through investment in equity(Non-operating income)■Solar Power Plants ■Wind Power Plants

Total 5,124
1,144
Total 5,089
Total 4,878
Total 4,822
Total 4,692(Million yen)

Total 1,593
Total 1,583

Total 4,447

Total 1,469

Total 1,450

Total 1,024
4,205
3,508

4,031

4,050

4,191
3,917

Total 774
1,412

1,447

1,066

876

938

883

2018'032019'03

790

828

2020'032021'03775
2022'03933
2023'03

All Rights Reserved. Copyright KYUDENKO CORPORATION-101

2018'03

1,749

1,280

38

2019'03135

2020'03189-422021'032022'03-156

2023'0315

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.

2022

2023

216,979(57.3%)

278,220(62.3%)

161,416

168,189

378,396446,410

123,446

141,691

13,75441,702

137,201

183,393

241,194

263,017378,396446,410(42.7%)(100.0%)(32.6%)(3.6%)(36.3%)(63.7%)(100.0%)All Rights Reserved. Copyright KYUDENKO CORPORATION(37.7%)(100.0%)(31.7%)(9.3%)(41.1%)(58.9%)(100.0%)

Increase/decrease61,241
6,773

Main factors behindincrease/decrease
Cash on hand and in banks+28,512

Trade notes and accounts receivable +12,226

Raw materials and supplies+8,573

Investments in securities+3,319
Asset for retirement benefits +4,321

68,014
18,244

Advances received on uncompleted
construction contracts +15,087

27,947Long-term debt +27,110

46,192
21,822Retained earnings +19,263

68,01416

Outline of C/F(Million yen)Mar.2022

Mar.2022

Details of statement toMar. 2023
Profit before income taxes＋38,793

Cash flow from operating activities

5,252

17,386

Decrease in costs of uncompleted
construction contracts +15,076
Income taxes paid ▲12,474
Payments into time deposits

Cash flow from investment activities▲7,536▲3,113

Free cash flow

▲2,284

14,273

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▲10,191

11,615▲12,175

26,06049,80037,79137,791

63,851▲3,738Purchase of investments in securities ▲4,817

Proceeds from sales of investments insecurities +5,754

Proceeds from long-term debt +27,000
Repayments of long-term debt ▲7,057

Cash dividends paid ▲7,087

17Capital Investment
FY2022 Mar.
Capital investment

Facility work

FY2023 Mar.

4.4 billion yen

3.4 billion yen

4.3 billion yen

3.0 billion yen

Replacement of branches ,business offices and sanatoriumof Kyudenko

Replacement of branches , businessoffices and sanatorium of
Kyudenko

Machinery and equipment, etc.
for constructions

Machinery and equipment, etc. forconstructions

Lease contracts on specialized
vehicles for construction

Lease contracts on specialized
vehicles for construction

0.1 billion yen
OthersSoftwareDepreciation

All Rights Reserved. Copyright KYUDENKO CORPORATION

0.4 billion yen
Machinery etc.

5.8 billion yen

6.0billion yen
18Plan for fiscal year

All Rights Reserved. Copyright KYUDENKO CORPORATION

19

Plan for March 2024
(Million yen)March 2023

Plan for March 2024
March 2024

ResultYear-on-Year

395,783

460,000

116.2％

Gross profit

57,88964,500111.4%

Operating profit

32,08335,500110.7%

Ordinary profit

35,46238,000107.2%

Current (quarter) net profit

26,34926,500100.6%

Orders440,507441,000

100.1％

Current net profit per stock¥371.93

Sales

Dividends
All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(14.6%)(8.1%)(9.0%)(6.7%)

Interim ¥50110円

Year-end ¥60(100.0%)(14.0%)(7.7%)(8.3%)(5.8%)¥374.05
Interim ¥55¥110

Year-end ¥55

20

Orders & Sales plan by department(Million yen)

Sales of each department■2022.3 ■2023.3

240,000■2024.3（plan）(Million yen)Orders of each department■2022.3 ■2023.3■2024.3（plan）

240,000

214,668

224,000

186,000
159,783
152,495
134,156

155,087

147,000

131,872

119,51149,00046,62845,774

154,647
148,000

64,00046,659All Rights Reserved. Copyright KYUDENKO CORPORATION

42,86822,78220,00039,7870

PowerElectrical work HVAC work
distribution
line work

49,00048,40945,646

Solar plant
construction
work

0

Power
distribution
line work

Electricalwork

HVAC work

Solar plant
construction
work

21

Trend of dividends
・The year-end dividend for the fiscal year ending March 31, 2023, is resolved at 60 yen per share, an increase of
10 yen per share from the latest dividend forecast.
・The annual dividend for the fiscal year ending March 31, 2024 is planned to be 110 yen per share.
Dividend Policy and Reason for Dividend Increase

With regard to distribution of profits, we seek to keep appropriate financial strength and appropriately return profits toshareholders with an awareness of the cost of capital with strengthening management base for improving operating results
and securing internal reserve necessary for further business expansion.
To satisfy expectations of shareholders, we continuously pay a stable dividend with the use of consolidated payout ratio 25%
as a guide, comprehensively taking into account business environment, operating results and financial position.
Based on this basic policy, the year-end dividend for the current fiscal year, which was previously announced as 50 yen per
share, will be 60 yen per share in light of the financial results for the fiscal year ending March 31, 2023 and the record-highvolume of construction work on hand.
For the fiscal year ending March 31, 2024, we plans to pay an annual dividend of 110 yen per share (including an interim
dividend of 55 yen per share) based on the current earnings forecast and other factors.

200
190
180
170
160
150

■ special■ Consolidated dividend payout ratio

25.2

140

110

27.0

28.3

27.0

100

100

100

100

Mar,2019

Mar,2020

Mar,2021

Mar,2022

29.6

29.4

110

110

Mar,2023

Mar,2024(Plan)

21.4

130
120

26.7

16.5

100
90

10

80
70

10

60
50
40
30
20
10

15

60

80

30

0

Mar,2016

Mar,2017

Mar,2018

All Rights Reserved. Copyright KYUDENKO CORPORATION

22

Mid-term management plan

(Published on April 28,2020.)

All Rights Reserved. Copyright KYUDENKO CORPORATION

23

Numerical targets

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

24

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

final year

460

429

396

392

Renewable energy businessSolar plant
67.8 construction (59.3）

61.5 Solar plant

45.8

54.4

Solar plant
construction (46.6）

construction

149.1

157.7

81.0

377

construction (54.5）

Electrical

148.4

Solar plant
construction (39.7）

129.9

143.0

126.1

116.0

108.9

45.8
19.5

45.7
18.9

46.6

Mar.2020

Mar.2021

Mar.2022

Mar.2023

11.7％

10.0％

9.4％

Power distribution line

Others 26.7

ROIC

191.0

155.9

HVAC

46.9

500

50.0
35.0

21.2
Mar.2024

Mar.2025

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

8.1％
25

Summary of the Third year (FY2022)
Theme for FY2022『 Practice business reforms to adapt the environmental changes 』

Most Important Initiatives

Implement Business・ Developed internal digital infrastructure(All employees were provided with smartphones and mobile PCs.)
Reforms

・ Discussed specific initiatives to reduce the workload of engineers.

(Promotion of Work-style Reforms)

Promote pricenegotiations

・Implement initiatives to improve profitability at the time of order receipt.

All Rights Reserved. Copyright KYUDENKO CORPORATION

26

Key measures for the fourth year (FY2023)
Strategies[Excerpt]

The Most Important Issues

Practice Productivity Reform

Rise in cost

Largest amountof work inprogress

Personnel
shortagemaking efficient•Achieve operational efficiency through DX•Promote the plan for work style reform by thedepartment.

Promote human capitalmanagement

Overtime work limit
Establish
regulations
optimalin FY2024
personnel
system•Establish policies to accommodate diverse work
styles•Promote on-the-job training and check theeffects.
•Manage mental health care using the rate ofengagement

Strengthen and expand orders•Build strong community-based system

Develop new business areas

Diverse recruitment
and work styles

Recruitment
and Leaving
prevention
Strategies

DX

Technicians’ workload
reduction

Themes for FY2023『 Improve Productivity for a New Era(Acceleration of work style reform)』

All Rights Reserved. Copyright KYUDENKO CORPORATION•Develop the renewable energy power generation
business areas•Expand business areas through energy
conservation, creation, and storage•Expand business ground through M&A andindustry-academia collaboration

Promote Sustainability
Management•Develop environment-related business•Execute environment-related capital investment
plans

27

Acceleration of Work Style Reform■ In April 2023, "Work Style Reform Department" was established as an organization directed by the President.
⑴Based on the Workplace Reform Action Plan, scrutinize the contents of the implementation plans and manage some progress.
⑵Establish a support system for construction personnel belonging to sales offices.
⑶Plan and execute staffing some administrators to large job sites.

＜ Work Style Reform Action Plan（excerpt）＞
項目

対策

Personnel Measures①Deploy staff to large job sites

実施内容①-1 Deploy technicians①-2 Deploy administrators②Assign staff to sales offices (tohandle small and mediumsized construction projects)②-1 Deploy technical staff②-2 Deploy, train, and hire clericalemployees③-1 Work location selection③Revise the policy to secure personnel ③-2 Contract rehiring③-3 Mid-career hiring

Work Improvement④Transfer task④-1 Transfer construction manager’s
tasks to other departments⑤Reduce workload⑤-1 Engineer’s workload⑤-2 Administrator’s workload⑥Improve productivity (ex. paperless,⑥-1 Operational efficiency through DX
etc.)

All Rights Reserved. Copyright KYUDENKO CORPORATION

・Deploy head office technical staff to branch offices ahead
・Deploy materials staff
・Deploy technical staff
・Deploy safety management staff
・Deploy administrative staff from head and branch
offices to large job sites
・Deploy clerical employees belonging to branch offices totechnical work
・Switch clerical work in branch offices totemporary employees
・Establish area type: new scheme
・Extend reemployment period
・Ease hiring criteria
・Safety (ex. Training, etc.)
・Sales (ex. receive order sheet, and issue invoices, etc.)
・Affairs (ex. manage materials, subcontracting, expenses , etc.)
・Review business processes (ex. Preparing documents, etc.)
・Review the number of meetings and their members
・Review Kyudenko Academy's training programs (ex. enrich andstreamline the contents)
・Review how engagement surveys should be conducted
・Use electronic official seals and review payment process.
・Introduce and utilize P/L management system.
・Digitize construction project documents (including contracts
with subcontractors)

28

Appendix

All Rights Reserved. Copyright KYUDENKO CORPORATION

29

Corporate profile

Company name

Kyudenko Corporation

Established

December 1, 1944

Capital￥12,561 million

Listed market
Code

Prime Market 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, 13 branches in Japan, 109 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: 10,626persons (March 31, 2023)

All Rights Reserved. Copyright KYUDENKO CORPORATION

30

Sales and gross profit (quarterly accounting period)(Sales , gross profit：million yen)(Gross profit ratio：％)

200,000

Sales

Gross profit

Gross profit ratio

20.0

Full-year results Full-year results Full-year results Full-year results Full-year results Full-year results
Sales
Gross profit
Gross profit ratio

360,872
56,65915.7％

408,143
60,56114.8％

428,939
60,09314.0％

391,901
56,631
14.5％

376,563
57,361
15.2％

395,783
57,88914.6％

18.0

150,000

16.0

100,000

14.0

50,000
12.0

0

10.0

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

2018’32019’3

All Rights Reserved. Copyright KYUDENKO CORPORATION

2020’32021’32022’32023’331

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

Gross profit margin
14.0

Works on6,000
hand

14.5

15.2

（Billion yen）

14.6

Total 363.6
Total 315.0

Deliver on after next FY

77.8

227.9

208.9

FY2019157.8（+101.9）

113.1（▲95.7）

Deliver on FY

0.0

55.8

4,000

183.7

99.0

138.2

Total 377.8

3,000

Deliver on next FY

70.1

117.3
FY2020All Rights Reserved. Copyright KYUDENKO CORPORATION

5,000

Total 426.9

Total 415.2
10.0

14.0

2,000

79.2

100.6
FY2021113.1
FY2022

156.0

1,000

（+42.9）FY2023(Plan)

032

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

FY2019FY2020

FY2021

FY2022

FY2023

Total
138.2

Total
117.3

Total
100.6

Total
113.1

Total
156.0

（Billion yen）
55.5

55.0

47.9
39.3

39.0

34.0
31.5 30.6

31.2
26.9
24.1

23.6
20.0

19.3

30.5

31.5

27.0

22.8

19.1
16.4

First quarter

Second quarter

Third quarter

Fourth quarteraccounting period

accounting period

accounting period

accounting period

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33

Orders received for small and medium-sized projects (less than 100 million yen)
(Kyudenko individual: excluding power distribution work) Orders for small- and medium-sized projects (contract amounts of less than 100 million yen), which haveshort construction periods and relatively high profit margins, are shown.

(Million yen)

93,73093,20882,570FY2017FY2018All Rights Reserved. Copyright KYUDENKO CORPORATION

94,962

93,333

FY2021

FY2022

83,574FY2019 201803 FY2020

34

Actual results of recruitment of human resources(Kyudenko individual) and workforce planning≪ Comparison in actual results of recruitment
for April 2023 with other companies≫≪ Actual results of periodic recruitment of engineers andskilled persons≫2017 2018 2019 2020 2021 2022 2023

Total
engineersand skilled
persons

2007～
2016

Around
200

344

384

342

336

387

306

259

High
schoolgraduates

Around
150

248

271

253

253

263

225

University
graduates

Around
50

96

113

89

83

124

81

Kyudenko

Large electricalconstruction
companies

Large HVAC
companies

Super general
constructors

Total in all
professions

292

330～42070～90

210～350187

Highschoolgraduates

194

Around240

Around10

Around10

72

University
graduates

98

90～19070～90200～330

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Mar. 2024

Mar. 2025

Increase or
decrease inplanElectrical work department

2,274

2,359

2,468

2,519

2,750

2,893

About+550

HVAC work department

1,138

1,188

1,212

1,202

1,435

1,517

About+320

Year-end workforce of electricaland HVAC

3,411

3,547

3,680

3,721

4,185

4,410

About+870

Power distribution line
department

1,642

1,566

1,519

1,471

1,641

1,666

About+50

Other

1,446

1,469

1,508

1,516

1,397

1,408

Employees of single
Kyudenko

6,500

6,582

6,707

6,708

7,223

7,484

About+900

Employees of group10,018

10,198

10,528

10,626

12,000

About+2,000≪ Planned year-end workforce until FY2025 March≫ Total 8,600 employees in technical field of total 10,000(Kyudenko)(Subsidiaries)

Number ofsite
technicians

About 2,100+

About 2,100=

About 4,200

Number of
construction
managers

About 3,200+

About 1,200=

About 4,400

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35

Key measures "Promotion of Environmental Management" was added as a new issue to be addressed.
While incorporating environmental management and CSV management into our management strategy,
we will adapt to an environment that is changing at an unprecedented pace.

Three reforms
Reform of construction capability
・Strengthen hiring of engineers based on a long-term workforce plan
・Reduce the turnover rate of young engineers by reviewing technical education
・Establish a system to ensure the timely and optimal deployment of all technicians
・Review the construction management system by strengthening and utilizing theTechnology Management Department
・Promote multifunctional workers

Issues continuing from the previous Mid-term Plan
・Deepen measures to improve profit margins
・Strengthen and expand the order base of the domestic facility work industry
・Strengthen the profitability of power distribution line work
・Develop new business areas
・Create an attractive workplace environment

New Issues to be addressed
Reform of productivity
・Review the company-wide and departmental training systems
・Achieve optimal personnel rotation for the entire company
・Promote rationalization and labor saving through the use of cutting-edge
technology and IT
・Realize business reforms

・Promotion of Environmental Management
・Thorough management of progress in major projects
・Promote human capital management

Reform of governance・Strengthen and thoroughly implement a governance system

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36

Basic Sustainability Policy
Basic Policy

Based on the corporate philosophy, the Kyudenko Group will create a sustainable society and improvethe corporate value of the Group by solving social issues through its business activities.

 Important issues (materialities)

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37

Efforts to Achieve Carbon Neutrality
Medium- and Long-term Objectives for Environmental Management
2030:Reduce CO2 emissions intensity per sales of completed construction by at least 50% (compared to 2013)
2050:Achieve carbon neutrality【Action items toward achieving these goals】
・Introduction of EMS into Kyudenko Academy

・Environmentally friendly capital investment in equipment related to office buildings

・Deployment of EVs and chargers (special vehicles for construction that cannot be replaced are not eligible)
・Utilization of graduate feed-in tariffs (FITs) (assets at the end of project period)
・R&D through industry-academia collaboration

CO2 emissions volume
Unit

FY2013(1)FY2019FY2020

FY2021(2)(2) – (1)FY2030

Scope１

t-CO2

9,059

7,670

6,816

6,947

▲2,112-

Scope２

t-CO2

5,677

5,094

5,163

5,262

▲415

-

Kyudenko (nonconsolidated) / total

t-CO2

14,736

12,764

11,97912,209▲2,527-

Net sales

100 million yen

2,597

3,651

3,374

3,226

+629

-

Intensity

t-CO2／100 million yen

5.67

3.50

3.55

3.78

▲1.89

2.83

Intensity unit reduction rate(compared with FY2013)％－▲38.2％▲37.3％▲33.3％-▲50%

Scope1: Direct greenhouse gas (GHG) emissions generated by business activities
Scope2: Indirect emissions resulting from the use of electricity, heat, and steam supplied by external entities
Scope3: Indirect emissions other than Scope 1 and Scope 2 (emissions by other companies related to theactivities of the Company)

Intensity: (Scope 1 + Scope 2) / Kyudenko’s non-consolidated net
sales (t-CO2/100 million yen)

*The Company will work to expand the scope, including Scope 3

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38

Development of new business areas： Air conditioning/heat source control optimization system『Air conditioning/heat source control optimization systemusing AI optimization technology』
・Jointly developed with Grid Corporation, a company with proprietary cutting-edge AI technology, as a project partner
・An automatic operation system that calculates parameters and performs optimally to conserve energy and reduce CO2 by using AI,
which is to analyze and learn operational data of air conditioning and heat sources. (AI plans optimal operation schedules for air
conditioning heat sources)
・Simulated the performance for multiple large-scale facilities (scheduled to be introduced to a demonstration test at a facility in FY2022)

Support for the introduction of services that can be utilizedin various facilities with central heat source systems
It can be installed in a variety of heat source
configurations for various building applications toautomate and optimize operations.

Facility
Management

系統1
系統2

Monitoring
equipment
operation

系統3

往きヘッダー

還りヘッダー
熱源1
熱源2
熱源3

Provides operation results andoperation plans remotely

Controlling
equipment
operation

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Remotecollection ofoperatingresults

Optimization
system01_Prerequisite information on air
conditioning control
Predicts air conditioning heat load by timeof day by system based on weather
conditions and past operational results

AI plans optimal
operation schedules
for air conditioning
heat sourcesAI

AI will develop an operation
plan for the facility.

02_Input of operation plan conditions
Depending on the input based on the heatsource load factor, the heat rate,
temperature, flow rate, pressure, etc.
Reproduces operation while taking physicalfactors into account
03_Data output after execution ofoperation plan
Data output of planned values such asenergy costs and CO2 emissions as well as
target values for flow and pressure when
executing the entered operation plan
04_Optimal operation planning
Over/Under Heat Generation and Cost and CO2
Savings Planning of operation plan for
optimization with evaluation function.

39

Promoting Diversity
Basic Policy on Diversity Promotion
Based on our Corporate Philosophy and Charter of Corporate Behavior, we believe that our greatest management
resource is our human resources. By respecting and utilizing diversity as a strength of our organization, we aim tocreate new value and enhance our competitiveness. We are committed to promoting diversity by setting thefollowing goals. Through these efforts, we will contribute to the achievement of the SDGs (Sustainable
Development Goals).

Corporate Philosophy

1.We contribute to society through providing agreeable environmental solution.
2.We keep challenging for sustainable development through our engineering strengthand create a new value.
3.We aim to create mutual respecting environment in Kyudenko which utilize
and develop employees’ personality.

Charter of Corporate Behavior

1.・・・・・・・・

4. By realizing employee comfort and affluence, we will ensure a safe, easy-towork-in, and open workplace environment, and create a bright and energetic
corporate culture that respects the personality, individuality, and diversity of
our employees.

What we aim for1.We will create a corporate culture that respects and utilizes diversity.
We will create a corporate culture that respects and recognizes diversity interms of gender, age, disability, race, ability, values, sexual minorities, etc.,
and maximizes its use as an organizational strength.
2.Fostering diverse human resources and promoting their activities.
We will promote the hiring, training, and promotion of diverse humanresources, and support diverse career development and skills development.
3.We will create an attractive work environment that is rewarding andchallenging.
We will strive to improve engagement by creating a workplace environment
in which employees want to work and continue to work, including anenvironment in which each employee can maximize his or her abilities and10.・・・・・・・

in which diverse and flexible work styles are possible.

Basic Policy on Diversity Promotion

Relevance to SDGs

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40

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

41

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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42

【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 Line43

【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 cruisedemand③Hakata Connected

・Connect the vitality andbustle of Hakata Station, thegateway to Kyushu, to thesurrounding area.

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・Over 10-20 years
・Cruise terminal, MICE,
commercial facilities,
hotels※Policy to scale back due to
COVIT-19・Through 2028
・About 800,000㎡ ofabout 500m in radiusfrom Hakata Station
・Reconstruction ofbuildings around
Hakata Station (20 buildings)

44