Prime Market of Tokyo stock exchange : 1959

KYUDENKO CORPORATIONFY ending March 2022
Results briefing

May 13 th ,2022

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

Numerical targets

26

Road map of sales plan

27

Promotion of Environmental Management

28

Kyudenko “EMS”

29

Key measures for the third year (FY2022)

30

Appendix

31

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

21

17～20

1

Overview of business results

All Rights Reserved. Copyright KYUDENKO CORPORATION

2High lights
Orders¥375,474million

Year-on-year 115.5％

・The increase was due to solid orders for projects inthe private sector, mainly in Kyushu.

Sales
・Sales decreased due to the relatively large number¥376,563million
Year-on-year 96.1％

of large projects in the early stages of the process,which prevented sales from being booked, as well as
delays in construction on some large projects.

Operating profit¥33,137million

Year-on-year 100.4％

All Rights Reserved. Copyright KYUDENKO CORPORATION

・The profit margin improved and income increased asa result of ongoing measures to improve profit
margins.

3

Outline of P/L March 2022
(Million yen)March 2022

March 2021
ResultResultYear-onyear

Plan (2021.4.28)

Progress

391,901

376,56396.1%

410,000

91.8%

Gross profit

56,631

57,361101.3%

60,00095.6%

Operating profit

32,99833,137100.4%

35,00094.7%

Ordinary project

35,90636,828102.6%

37,70097.7%

Net profit

25,042

26,216104.7%

25,500102.8%

Sales

Net profit per share(100.0%)(14.5%)(8.4%)(9.2%)(6.4%)¥353.48

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(15.2%)(8.8%)(9.8%)(7.0%)¥370.05(100.0%)(14.6%)(8.5%)(9.2%)(6.2%)¥359.944

Factors of change in OP March 2022
（billion yen）

36

:Increase:DecreaseA

34

Increase in
SG&A
expenses

▲0.6
32

32.9

E

B

Increase in fixed
costs included inconstruction costs▲1.1

Operatingprofit inMarch,2021

30

D

Improvement inProfit margin

C

Decrease in
sales

▲1.8

+3.0

Power
distribution
line work

+0.7

▲0.0
F

Other business

33.1
Operatingprofit inMarch,2022

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

24.2

24.9

25.5

25.6

26.0

22.4

21.8

Construction sales（Million yen）

19.1

18.3

Sales fromNot delivered
items

40%

Sales fromdelivered items

83,771

Project delivered（Completed-contract method）

103,54637%

300,000

Total 289,434

116,00437%

95,302

Total 274,526

33%

86,575 32%
200,000

Project delivered（Percentage-of-completion method）

27%

16.5

Total 315,566

Project Not delivered
122,858（Percentage of completion
method）

74,202400,000

15.7

14.9

Total 305,015

102,046 36%

17.9

17.8

18.0
Total 279,794

500,000

98,38627%

109,69035%

104,440

36%

88,330 32%
100,000

33%

89,872

28%

89,692

31%

99,62136%
0

2018’032019’03

All Rights Reserved. Copyright KYUDENKO CORPORATION

2020’032021’032022’036

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

Average profit ratio

150,000

30.4

27.2

26.4

26.1

27.7
24.4Construction sales

24.4

Total 98,634（Million yen）
100,000

19.0
18.6

39,276

17.8

Total 65,555
Sales from
Sales fromNot delivered items delivered items

Total 50,451

28,885

16.1

54%

8,068

12%

58%

5,755

11%

15,811

31%

22,248

Project Not delivered（Percentage of completion method）

Total 59,886

35,23934%

11.936,226
4,611
19,049

40%

60%

8%

32%

16,845

17% 50,000

42,51343%

Project delivered（Percentage of completion method）

Project delivered（Completed-contract method）
02021’1Q

2021’2Q

All Rights Reserved. Copyright KYUDENKO CORPORATION

2021’3Q

2021’4Q
7

Order received / Sales by department(Million yen)

Sales of each department

March 2022

■2020.3■2020.3■2021.3■2021.3■2022.3■2022.3

166,344
153,773
152,495
134,955

176,545
156,104

155,087
142,575
126,801 131,872
118,699

123,199
119,51159,30654,56446,65946,90045,793 45,774(Million yen)Orders of each department

47,57445,65445,64642,86818,229Power
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

Solar plant
constructionwork

8Order received / Sales by customer March 2022

(Million yen)

Sales of each customer■2020.3■2020.3■2021.3■2021.3■2022.3■2022.3

331,538
307,216(Million yen)Orders of each customer

442,510

300,437

290,213
246,43147,53946,42845,49728,42847,50947,30645,593

27,79824,617
Kyushu ElectricPower Co,

Govermment/Public

33,133
17,208

Privatecompanies

All Rights Reserved. Copyright KYUDENKO CORPORATION

Kyushu ElectricPower Co,

27,526

Govermment/Public

Privatecompanies

9Order received / Sales by region March 2022
(Electrical & HVAC work excluding Solar plant construction work)(Million yen)

Sales of each region■2020.3■2020.3■2021.3 ■2022.3

199,179■2021.3 ■2022.3

199,689

194,445

189,138
186,123

174,679

77,59370,37065,36064,96964,742
63,854
19,268
6,791
18,213
5,259
4,878
15,236
Kyushu(Million yen)Orders of each region

Tokyo Tohoku
and Chubu Areas

Osaka Area

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Overseas

17,485 16,792
14,351
6,004

5,117
1,873

KyushuTokyo Tohoku andChubu Areas

Osaka Area

Overseas10Order received / Sales by region March 2022
(Solar plant construction work)(Million yen)

Sales of each region■2020.3■2021.3 ■2022.3(Million yen)Orders of each region■2020.3■2021.3 ■2022.3

155,891

48,67232,54224,01825,39618,142

14,8296,301
KyushuTokyo Tohoku and Chubu
Areas

19,60812,403
4,332

6,433

Osaka Area

All Rights Reserved. Copyright KYUDENKO CORPORATION

7,787
Kyushu

9,532

7,481
Tokyo Tohoku and Chubu
Areas

2,960
1,045

793

Osaka Area

11

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

New orders in FY ended March 2022

■2020.3 ■2021.3 ■2022.3

214,542
178,207
174,417
Image

113,266
121,216
110,767
108,765
107,940

119,138

1,514
1,375 1,247
PowerElectrical work
distribution line
work

HVAC work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Solar plant
constructionwork
12Actual results of works FY March 2022

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.

2021

2022

212,574(58.0%)

216,979(57.3%)

153,957

161,416

366,532

378,396

125,361

123,446

19,42913,754

144,790

137,201

221,741

241,194366,532

378,396(42.0%)(100.0%)(34.2%)(5.3%)(39.5%)(60.5%)(100.0%)All Rights Reserved. Copyright KYUDENKO CORPORATION(42.7%)(100.0%)(32.6%)(3.6%)(36.3%)(63.7%)(100.0%)

Increase/decrease
4,405
7,458

Main factors behindincrease/decrease
Raw materials and supplies +8,211

Trade notes and accounts receivable +5,970

Cash on hand and in banks ▲11,883
Asset for retirement benefits +5,570
Investment securities ▲2,019

11,863▲1,915Current portion of long-term debt
+5,090
Advances received on uncompleted
construction contracts ▲3,918▲5,674Long-term debt ▲6,646▲7,58919,453Retained earnings +19,054

11,86314

Outline of C/F(Million yen)Mar.2021

Mar.2022

Cash flow from operating activities

9,184

5,252

Cash flow from investment activities▲4,232▲7,536

4,951▲2,284▲10,064▲10,191▲5,164▲12,175

54,96449,80049,80037,791

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

Details of statement toMar. 2022
Profit before income taxes＋36,833
Income taxes paid ▲11,350
Increase in inventories ▲8,266
Purchase of investments insecurities ▲4,817

Cash dividends paid ▲7,086

15

Capital Investment
FY2021 Mar.
Capital investment

Facility work

FY2022 Mar.

3.6 billion yen

4.4 billion yen

3.3 billion yen

4.3 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

0.3 billion yen
OthersSoftwareDepreciation

All Rights Reserved. Copyright KYUDENKO CORPORATION

0.1 billion yen
Software

5.9 billion yen

5.8billion 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

All Rights Reserved. Copyright KYUDENKO CORPORATION

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

51

624MW

169MW

Under
construction

-

-

-

Under
construction

3

602MW

110MW

Plan

-

-

-

Plan

-

-

-

Total

49

92MW

87MW

Total

54

1,227MW279MW

In this fiscal year, a total of 99 controls on output were issued by Kyushu Electric Power Company.
The average number of controls at our power plants was 25.
The total amount of lost profits for the group was about 570.0million yen.

All Rights Reserved. Copyright KYUDENKO CORPORATION

18

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

Wind power plant
Fukui

Miyagi
Fukushima

Ibaraki(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

39MW

39MW

Under
construction

-

-

-

Plan

-

-

-

Total

5

39MW

39MW

Deals through investment in equity
Gotou

Deals operated by group- In Operation
Projects for equity investment- In Operation- Under construction- Preparing for 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■Solar Power Plants ■Wind Power Plants■ Operating profit

1,449
962

1,556

Deals through investment in equity(Million yen)

1,748 1,734(Non-operating income)■Solar Power Plants ■Wind Power Plants

1,144(Million yen)

Total 5,089

Total 4,447
Total 4,282

Total 4,878
Total 4,822
Total 4,692

Total 1,583
Total 1,469

Total 1,450

Total 1,024
3,233

3,508

4,205

4,031

4,050

Total 774

3,917

1,412

Total 1

938

883

2017'032018'032019'03790
2020'03

828

775

2021'032022'03

All Rights Reserved. Copyright KYUDENKO CORPORATION-368
2017'03

1,280
1,066

876

369
1,048

1,447

-101

2018'0338

2019'03135

189

2020'032021'03-422022'0320

Plan for fiscal year

All Rights Reserved. Copyright KYUDENKO CORPORATION

21

Plan for March 2023
(Million yen)March 2022
ResultPlan for March 2023
March 2023

Year-on-Year

376,563460,000

122.2％

Gross profit

57,361

63,000109.8%

Operating profit

33,13734,500104.1%

Ordinary profit

36,82837,000100.5%

Current (quarter) net profit

26,21625,00095.4%

Current net profit per stock¥370.05¥352.88

100円

¥100

Sales

Dividends

All Rights Reserved. Copyright KYUDENKO CORPORATION(100.0%)(15.2%)(8.8%)(9.8%)(7.0%)

Interim ¥50(100.0%)(13.7%)(7.5%)(8.0%)(5.4%)

Interim ¥50

22

Orders & Sales plan by department(Million yen)

Sales of each department■2021.3 ■2022.3

240,000■2023.3（plan）(Million yen)Orders of each department■2021.3 ■2022.3■2023.3（plan）

240,000

202,100
183,000
153,773
152,495

155,087
142,575

139,000

123,199
119,511

147,500
131,872
118,699

77,00048,00045,79345,77454,56446,6590

PowerElectrical work HVAC work
distribution
line work

All Rights Reserved. Copyright KYUDENKO CORPORATION

Solar plant
construction
work

48,00045,65445,6460

Power
distribution
line work

42,86829,40018,229
Electricalwork

HVAC work

Solar plant
construction
work

23

Trend of dividends
For the fiscal year ending March 31, 2023,
we plan to pay an annual dividend of 100 yen per share.
Dividend policyWithregard to distribution of profits, we seek to keep appropriate
130
financial strength and appropriately return profits to shareholders withstrengthening
management base for improving operating results and120
securing internal reserve necessary for further business expansion.
To satisfy
expectations of shareholders, we continuously pay a stable
110
dividend with the use of consolidated payout ratio 25% as a guide,comprehensively
taking into account business environment, operating
100
results and financial position.

100

100

100 100 100

Mar,2019

Mar,2020

Mar,2021

90

90

10
80

70
10

■ Special■ Memorial

70

60

45

50

40

15

30

10

13
3

Mar,2013

Mar,2014

20

10

25
2
7

0

Mar,2011

Mar,2012

Mar,2015

All Rights Reserved. Copyright KYUDENKO CORPORATION

Mar,2016

Mar,2017

Mar,2018

Mar,2022

Mar,2023(Plan)

24

Mid-term management plan

(Published on April 28,2020.)

All Rights Reserved. Copyright KYUDENKO CORPORATION

25

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

26

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

final year

500
460

429

Solar plant
construction(17.0）

392

Renewable energy businessSolar plant
67.8 construction (59.3）

377

61.5 Solar plant

54.4

construction (54.5）

Electricalconstruction

149.1

157.7

81.0

Solar plant
construction (46.6）

191.0

148.4

HVAC

143.0

129.9

116.0

108.9

45.8
19.5

45.7
18.9

Mar.2020

Mar.2021

Mar.2022

11.7％

10.0％

9.4％

Power distribution line

46.9
Others 26.7

ROIC

50.0
35.0
Mar.2023

Mar.2024

Mar.2025

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

All Rights Reserved. Copyright KYUDENKO CORPORATION

27

Promotion of Environmental Management
１

Setting medium- to long-term environmental management goals




※1

Reduce CO2 emissions intensity per sales of completed construction by at least 50% by 2030(compared to 2013)
Achieve carbon neutrality by 2050

※1 Since total CO2 emissions are expected to increase as a company grows, we used the unit emissions (total emissions divided by sales), which ismore easily comparable from year to year than total emissions.

２

Endorsement of TCFD recommendations■ In December 2021, as part of its commitment to environmental management, the company expressed its support for the

TCFD recommendations.
 Going forward, we will analyze the risks and opportunities that climate change presents for our businesses, and disclose
information on its financial impacts.

３

Establishment of new organization■Established the Environmental Management Promotion Office as a dedicated department to promote environmental management.
■Established the Sustainability Promotion Committee, headed by the president, to implement management that takes into

consideration "environment" "society" and "governance".

All Rights Reserved. Copyright KYUDENKO CORPORATION

28

Development of new business areas： First introduction of Kyudenko EMS in Japan➤ First case in the nation for a municipality
Ogi City, Saga Prefecture
Project to Strengthen Disaster Prevention Functions of Ogi City Hall
・Use of electricity generated by photovoltaic power generation equipment in the building (off-grid system using renewable energy)・Installation of energy-efficient air conditioning and lighting equipment (CO2 emissions reduction through energy conservation)

Solar Power Generation, Lead-acid Battery, EMS Equipment
Generated and stored power is automatically controlled by EMS.
All electricity in government buildings is provided byrenewable energy.

Parking lot on thewest side of thecity hall・Solar carporttype photovoltaic
facility
・Lead-acid batteries
・Control device
systemAir Conditioning Equipment, Lighting Equipment, BEMS Equipment"Yumeria (shelter)“Ogi City Hall

(Disaster Prevention Base)・BEMS
・Conversion of lighting
equipment to LED
・Power saving of air
conditioning equipment

The equipment with BEMS saves energy. This reduces the loadon solar power generation equipment.

Electricity is transmitted tolighting, air conditioning
equipment, and someelectrical outlets.

自営線「Yumeria」

The generated electricity is charged into lead-acid batteries.
The EMS controls its output to meet the demand. The poweris supplied to the power receiving and transforming facilities
within the agency.

Solar
Power Generation
太陽光発電
538.2kWp
538.2kWp

BEMS

電力系統
Electric
Power System

EMS
flow of electricity
電気の流れ・The system supplies power charged in storage batteries.
・It can supply power to government buildings for 72 hours.
・Electricity is also supplied to the welfare center "Yumeria",which serves as an evacuation center.

Lead-acid
Battery
鉛蓄電池

Data communication and control
データ通信・制御All Rights Reserved. Copyright KYUDENKO CORPORATION

3,456kWh
3,456kWh

29

Key measures for the Third year (FY2022)
Theme for FY2022『 Practice business reforms adapted to changes in the environment 』

Strategies[Excerpt]
The most important issues we face in the third year (FY2022)

Receive domestic orders, strengthen andexpand revenue base•Secure large-scale projects in Japan•Systematic staffing for large projects•Continuation of profit margin improvement measures

Large-scale
projects

Soaring material
・Tenjin Big Bang・Urban Area Redevelopment
and labor costs
・Semiconductor-related plants, etc.

Development and expansion of business areas
・Expansion of renewable energy power generation business area
•Strengthening the capture of clean energy demand•Participation in smart cities and urban development

Implementation of training plans and use of the
LMS for training to ensure steady growth•Promotion of OJT training and verification of effectiveness•Steady operation and utilization of the LMS

Secure order acquisition

Secure profits

Reliable construction progress《Most Important Initiatives》
 Improving Productivity by Implementing Business Reforms
１．Thorough review of business processes
２．Promotion of fundamental work style reform (optimal operation of all
departments throughout the company)
３．Effective utilization of construction forces (strengthening of personnel
structure to enable company-wide cross-function)
 Promote price negotiations to reflect rising material and labor costs

All Rights Reserved. Copyright KYUDENKO CORPORATION

Pursuit of productivity and strengthening ofbusiness foundation through DX•Efficient operation through DX•Research and study of BIM and advanced digitaltechnologies•Creation of new innovations

Strengthen governance structure and adhere
to compliance•Development of governance standards with prime market
transition•Consideration of system audits through DX

30

Appendix

All Rights Reserved. Copyright KYUDENKO CORPORATION

31

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: 10,528persons (March 31, 2022)

All Rights Reserved. Copyright KYUDENKO CORPORATION

32

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

341,771
51,95115.2％

360,872
56,65915.7％

408,143
60,56114.8％

428,939
60,09314.0％

391,901
56,631
14.5％

Gross profit ratio

20.0

Full-year results
376,563
57,361
15.2％

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

2017’32018’3

All Rights Reserved. Copyright KYUDENKO CORPORATION

2019’32020’32021’32022’333

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

14.8

Gross profit margin

6,000

14.0

14.5

15.2
13.7

Works on hand

Total 415.2

Total 302.1

Total 315.0

Deliver on after next FY
81.3
Deliver on next FY
115.7
Deliver on FY
105.1
0.0

（Billion yen）

Total 363.6

10.0

FY2018

77.8

227.9

Total 377.8

4,000

55.8

（▲127.8）
3,000

183.7
208.9

99.0
70.1

5,000

（＋129.6）

2,000

79.2
1,000

138.2

FY2019All Rights Reserved. Copyright KYUDENKO CORPORATION

117.3
FY2020100.6
FY2021113.1（+12.4）FY2022(Plan)

034

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

FY2018FY2019FY2020

FY2021

FY2022

Total
105.1

Total
138.2

Total
117.3

Total
100.6

Total
113.1

（Billion yen）
55.5

45.3
39.0
31.5 30.6

31.2

26.9
23.6
20.0
16.4

23.0

24.1

22.8

19.3

30.5

39.3
31.5

27.0
20.4

16.4

First quarter

Second quarter

Third quarter

Fourth quarteraccounting period

accounting period

accounting period

accounting period

All Rights Reserved. Copyright KYUDENKO CORPORATION

35

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.
 Orders decreased temporarily due to the impact of COVID-19, but are now on the road to recovery.

(Million yen)

100,000

94,72393,73093,20894,962
82,57083,574FY2018 201703 FY2019

FY202050,0000FY2016FY2017All Rights Reserved. Copyright KYUDENKO CORPORATION

FY202136

Actual results of recruitment of human resources(Kyudenko individual) and workforce planning≪ Comparison in actual results of recruitment
for April 2022 with other companies≫≪ Actual results of periodic recruitment of engineers andskilled persons≫2016 2017 2018 2019 2020 2021 2022

Total
engineersand skilled
persons

2007～
2015

Around
200

262

344

384

342

336

387

306

High
schoolgraduates

Around
150

177

248

271

253

253

263

University
graduates

Around
50

85

96

113

89

83

124

Kyudenko

Large electricalconstruction
companies

Large HVAC
companies

Super general
constructors

Total in all
professions

332

310～41080～100200～360

225

High
schoolgraduates

230

Around220

Around10

Around10

81

University
graduates

102

90～19070～100190～340

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Mar. 2024

Mar. 2025

Increase or
decrease inplanElectrical work department

2,274

2,359

2,468

2,599

2,750

2,893

About+550

HVAC work department

1,138

1,188

1,212

1,355

1,435

1,517

About+320

Year-end workforce of electricaland HVAC

3,411

3,547

3,680

3,954

4,185

4,410

About+870

Power distribution line
department

1,642

1,566

1,519

1,632

1,641

1,666

About+50

Other

1,446

1,469

1,508

1,402

1,397

1,408

Employees of single
Kyudenko

6,500

6,582

6,707

6,988

7,223

7,484

About+900

Employees of group10,018

10,198

10,52812,000

About+2,000≪ Planned year-end workforce until FY2025 March≫ Total 8,500 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 3,200+

About 1,300=

About 4,500

All Rights Reserved. Copyright KYUDENKO CORPORATION

37

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

・Promotion of Environmental Management

・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

Reform of governance・Strengthen and thoroughly implement a governance system

All Rights Reserved. Copyright KYUDENKO CORPORATION

38

Summary of the Second year (FY2021)■Human resource development through the introduction of the LMS to complement OJT, and productivity improvement andefficiency enhancement through the DX project are progressing well.
■On the other hand, we recognize that we need continued efforts due to concerns regarding future profitability as ordercompetition gets more intense and construction projects become larger in scale.

Reform of Construction Capability

Reform of Productivity

・Prioritized new graduates’ talents through our stricter selection
process when hiring them.
・Reviewed on-the-job training (OJT) system for young
employees
・Introduced LMS, Learning Management Systems: our new
digital education support tools.

・Developed our internal infrastructure and the data
・Promoted reviewing business processes through multiple DX
projects

Construction
capability
Governance

Productivity

Continued
IssuesReform of Governance・Resolved to adopt the policy of transitioning to the company
with Audit and Supervisory Committee.
・Reviewed internal audits to make our measures more effective.

All Rights Reserved. Copyright KYUDENKO CORPORATION

Continued issues from the previous mid-term
management plan・Project profit margin is improving because of the penetration of
profit margin improvement measures.
・The amount of orders increased by the solid orders for target
projects.
・Established Green Innovation Business Division andimplemented M&A
・Introduced Kyudenko EMS for the first time in Japan.

39

Development of new business areas
Green Innovation Business Unit
Strategy1 Strengthen energy services

Strategy2 Deployment for PPA solar●In addition to urban redevelopment projects, the company
will strengthen its proposals for hospitals and factories.

●Proposals for large private sector electricity consumers●By winning orders for ES, the company will be able to win
subsequent orders for electrical and air conditioning andsanitation work.

■Image of the business scheme（SPC）
Energy Supply
kyudenko

Company Ａ■ Image of the business scheme
Customer

Customer（Large private sector electricity consumers
Local governments etc.）

urban
redevelopment
projects

Electricity, city gas, etc.
Implementing a highly
efficient system

SPC

hospitals（Customer・Kyudenko・Etc）

EV CarCharging
centerAll Rights Reserved. Copyright KYUDENKO CORPORATION

etc.

Off-siteand maintenance

PPA

factories

On-siteEquipment operation

Kyudenko
EMS

Heat source equipment, powerreceiving and transforming
equipment, etc.

Energy management

Company Ｃ●Proposal for the introduction of Kyudenko EMS

PPACompany Ｂ●Proposals to local governments to convert public facilities
to renewable energy

40

M&A and capital alliances
CENTRAL GENERALCHUORIKA KOUGYO Co.,Ltd.

DEVELOPMENT

Company Profile

Company Profile

Company Profile

・Location: Idabashi, Chiyoda-ku, Tokyo

・Location: Sugamo, Toshima-ku, Tokyo
・Business activities: Construction of disaster prevention
equipment, etc.
・Capital: 99 million yen

・Business activities: Real estate sales

・Number of employees: Approximately 160 (Group total)
・Business locations: Kanto area and nationwide
・Shareholding ratio: 100% (subsidiary)

・Location:Kawasaki-City,Kanagawa
・Business activities:
Recycling businessbusiness, etc.

Technology licensing business・Capital: 1,008 million yen

Environmental Consulting

・Establishment: 1959
・Number of employees: Approximately 160

・Establishment: 1948

JEPLAN,INC.

CO.,LTD.

(Group total)

Business
・Business locations:
Kitakyushu Hibikinada Factory

・Business locations: Expand to the wholecountry

Kawasaki Plant
・Establishment: 2007

・Shareholding ratio: 20.0%(Affiliates accounted for by the equity method)

Purpose of share acquisition

 Expansion of the Group's business domain（Acquisition and utilization of know-how in the disaster prevention field）
 Creation of new order opportunities through mutual collaboration（Synergy effects）
 Prevention of outflow of disaster prevention-related costs in the Company（Maintenance orders placed with target companies for properties constructedby the Company）

Purpose of share acquisition Purpose of share Tie-up of the residential portion of urban redevelopment
acquisition（Participation in PFI projects and other development
projects）


Expansion of orders and accumulation of construction
know-how in the condominium fieldProposing environmentally friendly new equipment forexisting condominiums undergoing large-scale repairs（Proposals for the introduction of the latest equipment,
including solar power generation, air conditioning control
equipment, information and communications

 Expansion of the Group's business（Contribution to the achievement of the goals of the medium-term

infrastructure, and disaster prevention equipment）



The company's efforts are in line withthe direction of "promoting
environmentally friendly urban
development," a key issue in our midterm management plan.



We believe that our technologicalcapabilities and know-how inrenewable energy and energy
conservation can greatly assist thecompany in its efforts to achieve zeroCO2 emissions at its plants and otherfacilities.

management plan）

All Rights Reserved. Copyright KYUDENKO CORPORATION

41

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.

42

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

Commitment video by the president

43

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

44

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

45

【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 Line46

【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)

47