Prime Market of Tokyo stock exchange : 1959

KYUDENKO CORPORATIONFY ending March 2024 2nd Quarter

Results briefing

Nov. 8 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

18・19

P/L

4

Trend of dividends

20

Mid-term management plan・growth strategy

21

Numerical targets

22Road map of sales plan23

Key measures for the fourth year (FY2023)

24

Establishment of a system of co-working withengineers

25

KYOCERA GREEN INNOVATION, LLC

26

Appendix

27

Factors of change in OP

5・6

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

7

2. Orders received/sales by customer

8

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

9・10

11
12・13

B/S

14

C/F

15

Capital Investment

16

All Rights Reserved. Copyright KYUDENKO CORPORATION

17

1

Overview of business results

All Rights Reserved. Copyright KYUDENKO CORPORATION

2High lights
Orders¥245,063

millionYear-on-year

91.7%

millionYear-on-year

119.0%

Year-on-year

132.7%

Sales¥200,617
Operating profit¥13,692

millionAll Rights Reserved. Copyright KYUDENKO CORPORATION

3

Outline of P/L March 2024, 2nd quarter(Million yen)March 2023,
2Q Result

March 2024, 2Q
Increase
Result/decrease2nd-on-2nd

168,522200,617＋32,095

119.0%

Gross profit

23,417

26,860＋3,443114.7％

Operating profit

10,315

13,692＋3,376132.7％

Ordinary profit

12,015

15,766＋3,750131.2％Net profit

11,116

10,160

▲956

91.4％

￥156.92￥143.49

Sales

Net profit per share

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(13.9%)(6.1%)(7.1%)(6.6%)(100.0%)(13.4%)(6.8%)(7.9%)(5.1%)

4

Factors of change in OP
A

15（Billion Yen）

Increase in
sales

▲0.3
B

+4.0

10

Decrease in profit
margin:Increase

▲0.0

▲0.2

▲0.1

Power
distribution
line work

Other business

Ｅ

Ｃ

Ｄ

:Decrease

Increase in SG&A
expenses

13.6
10.3
Operatingprofit inMarch, 2023
2Q endOperatingprofit inMarch, 2024
2Q end5

All Rights Reserved. Copyright KYUDENKO CORPORATION

5

Breakdown of construction sales and average profit Sep.2023(Kyudenko individual : excluding power distribution line work)

Average profit ratio

25.5

25.8

26.7
26.0

18.8

Total 142,645
Project Not delivered

Sales fromNot delivered
items

55%

25.6

22.6

200,000

15.6 Construction sales

14.6(Million yen)

14.8

Total 151,760

150,000

Total 135,645（Percentage of completion method）

78,041

27.2

17.5

15.8

16.3

25.5

76,113

Total 116,006
56%

Total 119,97889,093 59%

100,000

55,96648%

63,80919%

21,981

19%

18,883 16%

25,971 17% 50,000

25%

38,05933%

37,286

36,695 24%

53%

Project delivered

Sales fromdelivered items（Percentage-of-completion method）

25,901

18%

26,242

Project delivered（Completed-contract method）

38,70327%

33,28931%

0

2019’092020’09

All Rights Reserved. Copyright KYUDENKO CORPORATION

2021’092022’092023’096

Order received / Sales by department(Million Yen)

Sales of each department

Sep. 2023■2021.9■2021.9■2022.9■2022.9■2023.9■2023.9

120,000

130,028

120,000

113,486
99,70380,18566,052

56,38848,972

21,487
21,14221,011

94,924

84,581

66,58462,96762,512(Million Yen)

Orders of each department

25,07820,68820,140022,86021,874
21,495

15,716
13,792
8,141

0

Power
Electrical work HVAC work
distribution
line work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Solar plant
construction
work

Power
Electrical work HVAC work
distribution
line work

Solar plant
constructionwork

7Order received / Sales by customer Sep. 2023

(Million Yen)

Sales of each customer■2021.9

180,000

162,531■2022.9■2023.9(Million Yen)

Orders of each customer■2021.9■2022.9

231,720■2023.9

205,691
131,674
123,725

180,000

141,822

21,13821,661

21,00921,806

8,373 9,141

22,931
16,642
21,704

7,902

16,44013,8980

0

Kyushu ElectricPower Co,

Govermment/Public

All Rights Reserved. Copyright KYUDENKO CORPORATION

Privatecompanies

Kyushu ElectricPower Co,

Govermment/Public

Privatecompanies

8Order received / Sales by region Sep. 2023
(Electrical & HVAC work excluding Solar plant construction work)(Million yen)

Sales of each region(Million yen)Orders of each region■2021.9 ■2022.9 ■2023.9■2021.9 ■2022.9 ■2023.9

130,000

165,776
98,180135,489
130,000

81,71077,512

105,047

37,61452,59829,611

41,48624,293

33,634
6,354

8,130

7,240
3,734
5,397 3,324
2,636

0

KyushuTokyo Tohoku
and Chubu Areas

Osaka Area

All Rights Reserved. Copyright KYUDENKO CORPORATION

Overseas

0

KyushuTokyo Tohoku
and Chubu Areas

15,6697,788

14,6803,820 4,653

Osaka Area

Overseas9Order received / Sales by region Sep. 2023
(Solar plant construction work)(Million yen)

Sales of each region■2021.9 ■2022.9 ■2023.9(Million yen)Orders of each region■2021.9 ■2022.9 ■2023.9

16,28910,093

10,396
6,770

10,581

10,195

9,850
8,586
6,099
3,519

3,100
199

Tokyo Tohoku andChubu Areas

Osaka Area

All Rights Reserved. Copyright KYUDENKO CORPORATION

1,596

202

0

Kyushu

4,625
446

509

496

0

KyushuTokyo Tohoku andChubu Areas

Osaka Area

10

Situation of works on hand Sep. 2023

(Million yen)Order stock of each department

New orders in FY ended Sep. 2023

■2021.9 ■2022.9 ■2023.9

200,176

Image

170,047

179,052

164,531

170,000

130,246

168,221
166,209
144,903125,934

4,402
1,859

1,979

0

Power
Electrical work HVAC work
distribution
line work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Solar plant
construction
work

11

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

53

746MW

211MW

Under
construction

-

-

-

Under
construction

2

575MW

102MW

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

5

45MW

44MW

In operation

5

144MW

48MW

Under
construction

-

-

-

Under
construction

1

15MW

4MW

Plan

-

-

-

Plan

-

-

-

Total

5

45MW

44MW

Total

6

159MW

52MW

●From April to September, a total of 60 controls on output were issued by Kyushu Electric Power Company.
（In the same period of the previous year, it was 26 controls.）●The number of issued orders has approximately doubled compared to the same period last year, and our power plants have also
been affected by the output curtailment.
All Rights Reserved. Copyright KYUDENKO CORPORATION

12Investment in Power Operations

Mar.2024 2nd quarter end

Deals operated by group

Deals through investment in equity■Solar Power Plants ■Wind Power Plants■ Operating profit

1,406

1,119 1,097 1,087

Total 2,896(Non-operating income)(Million yen)

1,300

■Solar Power Plants ■Wind Power Plants(Million yen)

971
Total 2,798

Total 2,730

Total 2,627

Total 2,624

Total 700
Total 653

Total 2,478

2,530

2,370

2,263

2,159

Total 639
Total 529

Total 606

2,457

2,221

720

706

593

726

Total 210

656

245

366

360

361

318

341

406

2018'09

2019'09

2020'092021'092022'092023'09

All Rights Reserved. Copyright KYUDENKO CORPORATION-20
2018'09-53
2019'0913
2020'09-35
2021'09-87
2022'09-127
2023'0913

Outline of balance sheet(Million Yen, composition ratio)

End of Mar.
2023
Current assets
Fixed assets
Total assets
Current liabilities
Fixed liabilities
Total liabilities
Total net assets
Total liabilities
and net assets

End of Sep.
2023

278,220284,838

168,189

171,920

446,410456,758

141,691

142,495

41,702

42,126

183,393

184,621263,017272,136

446,410456,758(62.3%)(37.7%)(100.0%)(31.7%)(9.3%)(41.1%)(58.9%)(100.0%)All Rights Reserved. Copyright KYUDENKO CORPORATION(62.4%)(37.6%)(100.0%)(31.2%)(9.2%)(40.4%)(59.6%)(100.0%)

Increase/decrease

Main factors behindincrease/decrease

6,617

Cash on hand and in banks +29,693
Trade notes and accounts receivable▲25,757
Costs of uncompleted construction
contracts +6,164

3,730

Investments in securities ＋4,635

10,347803

Trade notes accounts payable ▲11,622
Electronically recorded obligations ＋6,973
Income taxes payable and other ＋5,177

424

Long-term debt ▲219
Deferred tax liability ＋570

1,227
9,119

Retained earnings +5,908
Unrealized holding gain on securities+3,052

10,34714

Outline of C/F(Million Yen)

Sep. 2022

Sep. 2023

Details of statement to
Sep. 2023
Profit before income taxes ＋15,437

Cash flow from operating activities

7,576

37,863

Decrease in notes and accounts receivable
on completed construction contracts+26,151
Increase in costs of uncompleted
construction contracts ▲6,119

Cash flow from investment activities

1,829▲3,106

Free cash flow

9,405

34,756

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▲5,176▲6,074

4,862

28,79437,791

63,85142,65392,645Purchase of investments in securities ▲808
Purchase of property and equipment ▲609

Cash dividends paid ▲4,251
Repayments of long-term debt ▲684
Purchase of treasury stock ▲499

15

Capital Investment
End of Mar. 2023
Capital investment

Facility work

End of Sep. 2023

3.4 billion yen

1.3 billion yen

3.0 billion yen

1.2 billion yen

・Replacement of branches andbusiness offices of Kyudenko
・Machinery and equipment, etc. forconstructions
・Lease contracts on specialized
vehicles for construction

・Replacement of branches andbusiness offices of Kyudenko
・Machinery and equipment, etc. forconstructions
・Lease contracts on specialized
vehicles for construction

・Software(DX-related)

・Software(DX-related)

0.4 billion yen
Others

Machinery

Depreciation

All Rights Reserved. Copyright KYUDENKO CORPORATION

etc.

0.1 billion yen
Machinery

6.0 billion yen

etc.

3.0 billion yen
16Plan for fiscal year

All Rights Reserved. Copyright KYUDENKO CORPORATION

17

Plan for March 2024
(Million yen)

Plan for March 2024

March 2023
ResultMarch 2024

Year-on-Year

2Q Result

Progress

395,783

460,000

116.2％

200,617

43.6%

Gross profit

57,88964,500111.4%

26,86041.6%

Operating profit

32,08335,500110.7%

13,692

38.6%

Ordinary profit

35,46238,000107.2%

15,76641.5%

26,34926,500100.6%

10,16038.3%

Orders440,507441,000

100.1％

245,063

55.6％

Current net profit
per stock¥371.93

Sales

Current (quarter)
net profit

Dividends(100.0%)(14.6%)(8.1%)(9.0%)(6.7%)¥110

Interim ¥50 Year-end ¥60

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(14.0%)(7.7%)(8.3%)(5.8%)¥374.05(100.0%)(13.4%)(6.8%)(7.9%)(5.1%)¥143.49¥110

Interim ¥55 Year-end ¥55

18

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

19

Trend of dividends
Dividend Policy and Dividends for the Current Fiscal Year
■Regarding profit distribution, we will strive to maintain an appropriate financial structure and return profits to shareholders,
while securing the internal reserves necessary to strengthen our management base and further expand our business for
improved performance, with an awareness of the cost of capital.
■Regarding dividends, we will meet the expectations of our shareholders by paying stable dividends on an ongoing basis,
with a target consolidated dividend payout ratio of 25%, based on comprehensive consideration of the businessenvironment, business performance, financial position, and other factors.
■Based on this basic policy, we plan to pay an annual dividend of 110 yen per share (including an interim dividend of 55 yen
per share) for the current fiscal year based on the current earnings forecast and other factors.

200
190
180
170
160

■ special■ Consolidated dividend payout ratio

150

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

20

Mid-term management plan

(Published on April 28,2020.)

All Rights Reserved. Copyright KYUDENKO CORPORATION

21

Numerical targets

Main theme

Establish a management foundation for sustainable growth～Realization of the three reforms～
Numerical target
Final year（Mar.2025）
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

22

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）

143.0

126.1

116.0

108.9

45.8
19.5

45.7
18.9

46.6

Mar.2022

Mar.2023

Power distribution line

46.9
Others 26.7

ROIC

Mar.2020

Mar.2021

11.7％

10.0％

50.0
35.0

21.2
Mar.2024

The period of the new mid-term management plan

All Rights Reserved. Copyright KYUDENKO CORPORATION

9.4％

191.0

155.9

HVAC
129.9

500

Mar.2025

8.1％
23

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

24

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)

25

KYOCERA GREEN INNOVATION, LLC

Name

KYOCERA GREEN INNOVATION, LLC

Head Office

6 Takeda Tobadono-cho, Fushimi-ku, Kyoto-shi, Kyoto Prefecture (at Kyocera’s Head Office)Business

Renewable energy power generation

Established

June 8, 2023

Representatives
Capital
Ownership Stakes
Roles

Kyocera Corporation

Kyudenko Corporation¥50 million
Kyocera: 51%

Kyudenko: 49%

Kyocera: Procurement of solar power equipment
Kyudenko: Design, construction, and maintenance of renewable energy facilities

Installation of solar carports
Supply of power

Investments

Kyocera Green Innovation,
LLC

Payment for power
Consumers (companies)

All Rights Reserved. Copyright KYUDENKO CORPORATION

26

Appendix

All Rights Reserved. Copyright KYUDENKO CORPORATION

27

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

28

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

200,000

Sales

Gross profit

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

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％

Gross profit ratio

20.0

2Q results
200,617
26,86013.4％

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

2019’32020’3

All Rights Reserved. Copyright KYUDENKO CORPORATION

2021’32022’32023’32024’329

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

Average profit ratio

150,000

40.9
27.8

26.3

Construction sales（Million yen）

16.7
16.0

15.2

100,000

Total 87,477

Total 64,283
Sales from
Sales fromNot delivered items delivered items

Project Not delivered

57,066
54%
41,61350,000

65%

6,605

10%

16,06425%

2023’1Q（Percentage of completion method）

12%

20,63034% Project delivered

2023’2Q

All Rights Reserved. Copyright KYUDENKO CORPORATION

Project delivered

9,779（Percentage of completion method）（Completed-contract method）

2023’3Q

02023’4Q
30

Analysis of works on hand

（Kyudenko individual : excluding power distribution work）
Works on hand

Third quarter opening construction works on hand by delivery schedule timing

Total 466.1
Total 402.5

Total 383.4

121.1

110.2

235.4

Deliver on FY
82.7
FY2019 3Q

183.7

500.0

400.0

300.0

201.2
265.5

Deliver on next FY
123.9

Total 469.3(+62.7)

Total 316.8

Deliver on after next FY（Billion yen）

177.3

200.0

(▲88.1)

93.7

110.5

73.4

71.6

FY2020 3Ｑ

All Rights Reserved. Copyright KYUDENKO CORPORATION

100.0

FY2021 3Ｑ

79.5
FY2022 3Ｑ

108.1(+28.6)0.0

FY2023 3Ｑ
31

Orders for small and medium-sized projects(Kyudenko individual : excluding power distribution work）

Orders for small and medium-sized projects with short construction periods and relatively
high profit margins(Million Yen)

51,6262018.2Q

45,8502019.2Q

All Rights Reserved. Copyright KYUDENKO CORPORATION

52,71352,924

53,1062022.2Q

2023.2Q

43,6782020.2Q

2018.92021.2Q

32

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

33

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

34

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)

All Rights Reserved. Copyright KYUDENKO CORPORATION

35

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

36

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

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.

37

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

38

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
All Rights Reserved. Copyright KYUDENKO CORPORATION

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

39

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.

All Rights Reserved. Copyright KYUDENKO CORPORATION

40

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％

All Rights Reserved. Copyright KYUDENKO CORPORATION

Major competitors
about５０％

General contractor
and developer
about１０％41

【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

All Rights Reserved. Copyright KYUDENKO CORPORATION

10 minutes
to theairport5 minutes
Fukuoka City Subway Nanakuma Line42

【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.

All Rights Reserved. Copyright KYUDENKO CORPORATION

・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)

43