Supplementary Materials for theSummary of Financial Reports
1Q, FYE June 30, 2018
November 13, 2017

Nippon Koei Co., Ltd.
This presentation is provided for informational purposes only and is not intended to solicit any action. Presentation in the materials(including forecasts of financial Results) is based on credible information available at the time of publication and certain assumptions
Nippon Koei believes to be reasonable. Various factors may cause actual results to differ from the projected numbers or otherexpectations implied or expressed in this presentation.

1Q Results for FYE June 30, 2018
Reference
YoY Change
ValuesFYE18/6
Amount%1Q*

FYE17/6
1Q
Results

FYE18/6
1Q
Results

Amount%Orders35,91526,713- 9,202

74.4%---Net sales

12,282

14,1681,886

115.4%

12,094

- 188

98.5%

Gross profit

3,903

4,470

566

114.5%

3,897

-6

99.8%

Operating Income- 1,663- 1,557106-- 2,130- 466-

Ordinary Income- 1,569- 1,189380-- 1,762- 192-Profit attributable toowners of parent- 1,2088

1,216-

- 564

643

-

(Millions of yen)

YoY Change The amount of orders fell short of last year’s result, which included the receipt of big-project orders by InternationalConsulting.
 As a whole, the sales amount, when excluding the effect of a change in the revenue recognition method, is at a level nearly
equivalent to the previous year due to a decrease in carried-forward orders of Power Engineering, in spite of an increase in
the sales of Domestic and International Consulting.
 Operating income and ordinary income exceeded the results for the previous year; however, when excluding the effect of
the change in the revenue recognition method, they fell short of the previous year.
Gain on sales of real estate contributed to the substantial growth of quarterly net income.
* Starting FYE June 30, 2018, the Group has changed the primary method of revenue recognition from the completedcontract method to the percentage of completion method. For this reason, the results for the 1st quarter of FYE June 2018,
which were calculated using the former method (method used until FYE June 2017), are presented for reference purposes.
1Results by Business Segment (Orders)
FYE17/6 1Q
Results

YoY Change

FYE18/6 1Q
Results

Amount(Millions of yen)Orders%35,91526,713- 9,202

74.4%

Domestic Consulting

15,58913,383- 2,20585.9%

International Consulting

13,6486,595- 7,052

48.3%

Power Engineering

3,866

4,069

202

105.2%

Urban & Spatial Development

2,806

2,660

- 145

94.8%

44088.9%

Others* Starting FYE June 30, 2018, the Group has changed the primary method of revenue recognition from the completed-contract method to thepercentage of completion method. However, orders received are not affected by this change.

 Domestic Consulting

 International Consulting Power Engineering Urban & Spatial Development2Results by Business Segment (Net sales)
Reference
YoY ChangeValues
FYE18/6
Amount%1Q*

FYE17/6
1Q
Results

FYE18/6
1Q
Results

Amount12,282

14,1681,886

115.4%

12,094

- 188

98.5%

Domestic Consulting

1,246

1,974

728

158.4%

1,566

319

125.7%

International Consulting

3,467

5,837

2,370

168.3%

4,286

818

123.6%

Power Engineering

4,134

3,103

- 1,031

75.1%

3,013

- 1,121

72.9%

Urban & Spatial Development

3,260

3,104

- 156

95.2%

3,104

- 156

95.2%

Real Estate Leasing

116

113-396.7%

113-396.7%Others5535- 20

63.5%

11- 4420.1%(Millions of yen)

Net sales

YoY Change%* Starting FYE June 30, 2018, the Group has changed the primary method of revenue recognition from the completed-contract method to thepercentage of completion method. For this reason, the results for the 1st quarter of FYE June 2018, which were calculated using the former
method (method used until FYE June 2017), are presented for reference purposes.

 Domestic Consulting.

 International Consulting Power Engineering Urban & Spatial Development3

Results by Business Segment (Operating income)
ReferenceYoY Change
ValuesFYE18/6
Amount%1Q*

FYE17/6
1Q
Results

FYE18/6
1Q
Results

AmountOperating Income- 1,663- 1,557106-- 2,130- 466-

Domestic Consulting- 2,145- 1,982163-- 2,057

87-

International Consulting

75

678

603

902.4%

202

127 269.9%

Power Engineering

806

240

- 565

29.8%

220

- 585

27.4%

Urban & Spatial Development

76

41

- 35

54.0%

41

- 35

54.0%

Real Estate Leasing

91

105

13114.5%

105

13 114.5%

- 568

- 641

- 72-- 642- 74(Millions of yen)

Others/Reconciliations

YoY Change%-* Starting FYE June 30, 2018, the Group has changed the primary method of revenue recognition from the completed-contract method to thepercentage of completion method. For this reason, the results for the 1st quarter of FYE June 2018, which were calculated using the former
method (method used until FYE June 2017), are presented for reference purposes.
 Domestic Consulting
 International Consulting Power Engineering Urban & Spatial Development

4Overview of Performance by Business Segment
Domestic Consulting– The amount of orders fell short of last year’s result, which included by big-project orders of the Group company.
– The sales amount increased due to an increase in orders carried forward from the previous year.
– Operating income, when excluding the impact of the change in the revenue recognition method, is at a level nearly
equivalent to the previous year due to a revenue increase and cost reduction efforts.

International Consulting– The amount of orders fell short of last year’s result, which included big-project orders, while the business environment
continues to be favorable.
– The sales amount increased due to an abundance of orders received and the Group company’s steady business.
– Operating income margin improved owing to the efforts toward profitability improvement, such as project risk management.

Power Engineering– The amount of orders exceeded the result for the previous period, with an increase in small hydroelectric-related orders
and the receipt of orders delayed from the previous year end.
– The sales amount fell short of the previous year’s result for the same period, in which there were a number of projects
carried forward from the year before.
– Operating income decreased due to a drop in revenue and increase in expenses related to establishment of a newbusiness unit and personnel increase.

Urban & Spatial Development– Both orders and sales are at a level nearly equivalent to the previous year, when excluding the effect of exchange rates.
– Operating income decreased due to an increase in selling, general and administrative expenses.
****

The fixed exchange rate applied to the results for the 1st quarter of FYE June 30, 2016: 1 GBP = 146.26 JPY (the rate used in the plan for FYE June30, 2018 was 1 GBP = 139.56 JPY)
The amount of amortization expense of Urban & Spatial Development business for FYE June 30, 2018 is approx. 1 billion JPY (goodwill: approx.
400 million JPY; other intangible fixed assets: approx. 500 million JPY).
The results of BDP’s transactions from April to June 2016 are consolidated into the results of Urban & Spatial Development for the 1st quarter ofFYE June 30, 2017.
BDP has already used the percentage of completion method in its accounting, and therefore, the results of Urban & Spatial Development business
are not affected by the change in the revenue recognition method.
5FYE June 2018 Forecast
No changes have been made to the forecast for the entire FYE June 2018 period.
(Millions of yen)Orders
Net sales
Domestic Consulting
International Consulting
Power Engineering
Urban & Spatial Development
Energy/Real Estate/Others

Operating Income
Domestic Consulting
International Consulting
Power Engineering
Urban & Spatial Development
Energy/Real Estate/Others

Ordinary Income
Profit attributable to owners of parent

FYE18/6
Forecast

103,000
114,000
47,20031,80021,20012,000
1,800
7,700
3,500
2,400
3,500
50
- 1,750
7,800
4,900

Operating margin (%)

6.8

ROE (%)

8.7

FYE17/6
Results

117,442
101,338
43,51624,491
17,577
14,347
1,405
5,464
3,298
1,887
2,683
81
- 2,485
5,958
3,288

YoY Change
AmountFYE18/6
Reference*%- 14,442

87.7%

12,662112.4%

3,684

108.4%

7,309

129.8%

3,623

120.6%- 2,347

83.6%

395

128.1%

2,236

140.9%

202

106.1%

513

127.1%

817

130.4%

- 31

61.7%

735

-1,842130.9%

1,612

149.0%

103,000
104,000
43,00028,20019,10012,000
1,700
5,800
2,700
2,000
2,800
50
- 1,750
6,000
3,600

5.4 * Estimated budget target June 2018, based upon
6.2 previous standard (completed-contract method)* Starting FYE June 30, 2018, the method of revenue recognition has been changed. See p.10 of this document for details.
6Project Highlights
Domestic Consulting:Participated in a demonstration experiment of an automated driving
systemParticipated in the “Automated driving
system/large-scale demonstration experiment ofStrategic Innovation Promotion Program (SIP)”
promoted by the Government.
Nippon Koei accepted an order for thedemonstration experiment, focusing on “thereduction of pedestrian-car accidents” and“cultivation of social acceptability”.
Will start implementing technical validation on a
public road from 2018.

Alert passenger
device holders

Assist a driver who isentering theintersection with poor
visibility

Roadside-Vehiclecommunication

International Consulting: Expansion of Dhaka International Airport, Bangladesh
Four companies including Nippon Koei jointly
received an order for the design and construction
management of the expansion of ShahjalalInternational Airport in Bangladesh.
A passenger terminal and cargo terminal will be
newly constructed to be in place by 2022. The
project aims to increase the airport’s capacity byup to 12 million passengers per year (a 50%
increase from the current level).
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Project Highlights
International Consulting: Phase II of Reconstruction of Hartha Thermal Power Plant of Iraq
Accepted an order for a reconstruction project concerning
the 1st equipment of Hartha Thermal Power Plant in Basra
Governorate, Iraq.
Provides the Iraq Ministry of Electricity with technical andproject management support, conducts construction
management of the EPC contractor, and monitors theimplementation of initiatives that are environmentally andsocially conscious.
The second project following the reconstruction of the 4thequipment.

Power Engineering:Construction work for a power plant utilizing a water-system,mountain height and hydraulic energy

Construction of a small hydraulic power facility at anenergy dissipating tank located upstream of the Horiguchi
purification plant managed by the Water and Sewerage
Bureau of Koriyama City in Fukushima Prefecture.
Entered the first public-private partnership-led electric
power selling business in Koriyama City by leveraging theFIT Act and taking advantage of unused energy generated
by the height difference between Lake Inawashiro (source)
and the energy dissipator. Part of the profit will be returnedto the Bureau as a waterworks facility usage fee.

LakeInawashiro

Newly equipped power plant(600kW)

Tunnel77 mNippon Koei's proprietary small
hydraulic generator
To purification
plant
Dedicatedwater tank8

Project Highlights
Urban & Spatial Development: Great Ormond Street Hospital (GOSH)
Accepted an order for a reconstruction
project concerning a children’s hospitalin the UK.
Reconstruction of the entire facility andnew development of a clinical area
including examination rooms and patient
rooms, training rooms for doctors, aschool, an area for teenage patients anda roof-top garden.

Urban & Spatial Development: Palace of Westminster Refurbishment Project
Won a contract for refurbishment of the Palace ofWestminster in July 2017.
BDP was awarded the contract due to its performancerecord and Europe’s top-level BIM technology, whichenables higher productivity among the global
competitors.

9(Reference) On changes in calculation standards for
Sales (from June 2018)* Effective from the Fiscal Year Ending June 30, 2018, the Group has changed the primary methodof revenue recognition from the completed-contract method to the percentage of completion
method.

Calculation by “Percentage of Completion Method”(Sales Amount) = (Estimated Total Revenue) x Progression Rate - (Cumulative Sales by the End ofPrevious Period)

Progression Rate =Costs occurred (labor cost, subcontract cost, costs, etc.)
Total Estimated Costs

Sales Recording by “Percentage of Completion Method”
Case: Project of 3-year contract period, JPY 30-million value
1st year
2nd year
3rd year
Progression Progression Completion
Rate: 25% Rate: 70%

Total

Project carried forward from theprevious year
FormerSales amount is bookedat the end of the Project

Completedcontract method

00

3,000

3,000

Project started in current year
Sales amount is bookedin proportion to the progress% of completion
method

750

1,350

900

3,000New

3,000 x 25%

3,000 x 70%ｰ750

3,000 x 100% - 750 - 1,350* For projects that were awarded or started before FYE June 30, 2017, the completed-contract method is used.
* For the amount of effect, see “Changes in accounting policies” on p.9 of the Summary of Financial Reports .
10