Slide 1: FY ending March 2020 2nd Quarter Results briefing
1st section of Tokyo stock exchange : 1959 KYUDENKO CORPORATION FY ending March 2020 2nd Quarter Results briefing Nov. 12 th ,2019 All Rights Reserved. Copyright KYUDENKO CORPORATION 0
Slide 2: Table of contents
Table of contents Overview of business results 2 Plan for fiscal year 22 Highlights 3 Plan for fiscal year 23 P/L 4 Orders/sales by department 24 Factors of change in OP 5~9 Power distribution line work 25 Sales, Orders and Works on hand Trend of dividends 26 1. Orders received/sales by department 1
Slide 3: Overview of business results
Overview of business results All Rights Reserved. Copyright KYUDENKO CORPORATION 2
Slide 4: Highlights
High lights Sales ¥195,870million 2nd-on-2nd 118.6％ Operating profit ¥13,820million 2nd-on-2nd 127.0％ Orders ¥194,086million 2nd-on-2nd 89.4％ All Rights Reserved. Copyright KYUDENKO CORPORATION 3
Slide 5: Outline of P/L March 2020, 2nd quarter
Outline of P/L March 2020, 2nd quarter (Million yen) March 2019, March 2020, 2Q Increase 2Q Result Result 2nd-on-2nd /decrease Sales 165,111 195,870 ＋30,759 118.6% (100.0%) (100.0%) Gross profit 23,033 26,324 ＋3,291 114.3% (14.0%) (13.4%) Operating profit 10,886 13,820 ＋2,934 127.0% (6.6%) (7.1%) Or
Slide 6: Factors of change in OP
Factors of change in OP 20 （Billion Yen） D E 15 ＋3.7 ▲2.1 Operating profit Sales F in March, 2019 increased in Depression of ＋0.2 electrical & gross profit 2Q end（revised) HVAC & solar ratio in C plant electrical & Other business 11.5 A construction HVAC & solar 13.8 B plant construction ＋1.0 ※ ＋0.6
Slide 7: Factor of gross profit ratio depression: Breakdown of construction sales (1)
Factor of gross profit ratio depression Breakdown of construction sales(1) （Kyudenko individual：excluding power distribution line work） Whole construction sales increased 21.6billion yen. Sales from projects delivered increased 7.5billion yen. Sales from projects Not delivered increased 14.1billion
Slide 8: Factor of gross profit ratio depression: Breakdown of construction sales (2)
Factor of gross profit ratio depression Breakdown of construction sales(2) （Kyudenko individual：excluding power distribution line work） （Million yen） 2017’09 2018’09 Method of Profit Composition Method of Profit Composition sales profit sales profit recognizing revenue ratio of sales recognizing rev
Slide 9: Reasons for decline in profit ratio for each project and measures (excerpt)
Reasons for decline in profit ratio for each project and measures (excerpt) Factor Measures ・Forecasting the peak of busyness in the whole construction A. Forecasting the busyness period, make an input plan for workers early and start the peak of construction arrangement. Review the plan in a timely
Slide 10: Gross profit margin transition
Equipment construction company・General contractor Gross profit margin transition 15.3 14.8 13.9 14.0 13.8 13.7 13.1 13.4 13.0 Kyudenko 12.4 12.3 Major general Major equipment contractor construction company simple average simple average 2016’09 2017’09 2018’09 2019’09 All Rights Reserved. Copyright
Slide 11: Order received / Sales by department Sep. 2019
Order received / Sales by department Sep. 2019 (Million Yen) (Million Yen) Sales of each department Orders of each department ■2017.9 ■2017.9 120,000 120,000 ■2018.9 ■2018.9 ■2019.9 ■2019.9 88,679 86,194 83,912 73,196 75,656 70,509 67,205 60,903 65,040 62,092 51,467 44,964 35,247 26,353 33,919 12,77
Slide 12: Order received / Sales by customer Sep. 2019
Order received / Sales by customer Sep. 2019 (Million Yen) (Million Yen) Sales of each customer Orders of each customer 175,408 ■2017.9 ■2017.9 180,000 ■2018.9 180,000 164,305 ■2018.9 168,331 ■2019.9 ■2019.9 147,952 123,094 116,535 23,352 22,961 24,038 22,639 13,859 22,438 19,139 21,601 12,797 19,04
Slide 13: Order received / Sales by region Sep. 2019
Order received / Sales by region Sep. 2019 (Electrical & HVAC work excluding Solar plant construction work) (Million yen) (Million yen) Sales of each region Orders of each region ■2017.9 ■2018.9 ■2019.9 ■2017.9 ■2018.9 ■2019.9 130,000 130,000 115,548 105,627 103,417 87,825 78,433 71,475 39,788 33,44
Slide 14: Order received / Sales by region Sep. 2019 (Solar plant)
Order received / Sales by region Sep. 2019 (Solar plant construction work) (Million yen) (Million yen) Sales of each region Orders of each region ■2017.9 ■2018.9 ■2019.9 ■2017.9 ■2018.9 ■2019.9 50,000 50,000 28,816 26,715 24,211 17,018 11,434 8,021 8,028 5,363 5,078 2,642 4,875 889 2,000 1,440 503 1
Slide 15: Situation of works on hand Sep. 2019
Situation of works on hand Sep. 2019 (Million yen) New orders in FY ended Sep. 2019 Order stock of each department ■2017.9 ■2018.9 ■2019.9 170,000 154,339 142,377 140,171 131,025 114,495 Image 121,714 110,200 83,725 84,366 1,798 1,663 1,474 0 Power Electrical work HVAC work Solar plant distribution
Slide 16: Actual results of works Sep. 2019
Actual results of works Sep. 2019 Image All Rights Reserved. Copyright KYUDENKO CORPORATION 15
Slide 17: Outline of balance sheet
Outline of balance sheet (Million Yen, composition ratio) End of Mar. End of Sep. Increase Main factors behind 2019 2019 /decrease increase/decrease 206,268 184,761 Current assets ▲21,507 Trade notes and accounts receivable ▲23,313 (57.7%) (55.1%) 151,002 150,700 Fixed assets ▲302 (42.3%) (44.9%) 35
Slide 18: Outline of C/F
Outline of C/F (Million Yen) Details of statement to Sep. 2018 Sep. 2019 Sep. 2019 Income before income taxes and minority interests +15,102 Cash flow from operating activities 8,771 5,318 Decrease in trade notes and accounts receivable ＋23,286 Decrease in trade notes and accounts payable ▲26,507 Pu
Slide 19: Capital Investment
Capital Investment End of Mar. 2019 End of Sep. 2019 Capital investment 4.3 billion yen 1.8 billion yen 3.7 billion yen 1.7 billion yen Replacement of branches , Replacement of branches , business business offices and sanatorium offices and sanatorium of of Kyudenko Kyudenko Facility work Machinery
Slide 20: Investment in Power Operations (Solar Power Plants)
Investment in Power Operations (Solar Power Plants) Mega solar power plant Miyagi Fukushima Ishikawa Okayama Hyogo Gotou Hiroshima Deals operated by group - In Operation - Under construction Chiba - Preparing for construction Projects for equity investment - In Operation Amami Aichi - Under construc
Slide 21: Investment in Power Operations (Solar Power Plants)
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 (acquire investment securities and record an amount equal to the equity to non- operations sales) operating revenues) Depre
Slide 22: Investment in Power Operations (Wind Power Plants)
Investment in Power Operations (Wind Power Plants) Wind power plant Deals operated by group (make capital investment and record the entire operation to other operations sales) Depreciated at the Mainly declining balance method Generation capacity Generation capacity Number of (the entire (that equal
Slide 23: Plan for fiscal year
Plan for fiscal year All Rights Reserved. Copyright KYUDENKO CORPORATION 22
Slide 24: Plan for March 2020
Plan for March 2020 (Million yen) March 2019 Plan for March 2020 Result March 2020 Year-on-Year 2Q Result Progress 408,143 418,000 102.4% 195,870 46.9% Sales (100.0%) (100.0%) (100.0%) 60,561 62,700 103.5% 26,324 42.0% Gross profit (14.8%) (15.0%) (13.4%) 36,747 38,000 103.4% 13,820 36.4% Operating
Slide 25: Orders & Sales plan by department
Orders & Sales plan by department Order plans are biased toward the second half of electrical. (Million yen) (Million yen) Sales of each department Orders of each department ■2018.3 ■2019.3 ■2020.3（plan） ■2018.3 ■2019.3 ■2020.3（plan） 240,000 240,000 202,500 170,000 167,040 165,667 162,646 153,447 15
Slide 26: Power distribution line work: Present condition, tasks and actions
Power distribution work Present condition Four of Kyushu Electric's nuclear power plants are scheduled for periodic inspections, but have been in operation since the beginning of the period. Compared to the previous first half, work efficiency improved in the first half because orders were made
Slide 27: Trend of dividends
Trend of dividends With regard to dividends for the fiscal year ending March 2020, we plan to pay an annual dividend of ¥ 100 per share, based on a consolidated payout ratio target of 25%. 100 110 Decision on acquisition and cancellation of 100 treasury 100 stocks (June 10, 2019) special We execute
Slide 28: Actual results of recruitment of human resources and workforce planning
Actual results of recruitment of human resources (Kyudenko individual) and workforce planning ≪ Actual results of periodic recruitment of engineers and ≪ Comparison in actual results of recruitment skilled persons≫ for April 2019 with other companies≫ 2007～2014 2015 2016 2017 2018 2019 Large electri
Slide 29: Mid-term management plan growth strategy
Mid-term management plan growth strategy All Rights Reserved. Copyright KYUDENKO CORPORATION 28
Slide 30: Numerical target
Numerical target ≪ Main theme ≫ Challenge to a Further Growth ～To the next growth stage～ ≪ Numerical target at March 31, 2020≫ (Results in March 2019) S a l e s 400 BillionYen 408 BillionYen Over Gross Profit Ratio ％ 14.8 ％ 15 Over Operating Profit Ratio ％ 9.0 ％ 9 Over R O E ％ 15.6 ％ 14 All Rights R
Slide 31: Road map of sales plan
Road map of sales plan (Billion yen) 400 48 50 45 50 Solar plant construction 48 170 166 66 153 138 Electrical construction 127 111 127 136 HVAC 94 101 75 80 Power distribution line 45 47 47 48 48 47 Others 15 13 15 20 15 0 14 2015.3 2016.3 2017.3 2018.3 2019.3 2020.3 (plan) Medium-term management p
Slide 32: Review of present mid-term management plan
Review of present mid-term management plan ※Figures are from internal management materials Tokyo headquarters FY2018 Increase or decrease ・Established a sales office in Tokyo. result result from FY2014 ・Reinforcement of Yokohama and Nagoya sales offices Sales 74.8B Yen ＋41.4B Yen ・ Shift constructio
Slide 33: Environmental prediction surrounding Kyudenko
Environmental prediction surrounding Kyudenko Large-scale projects in metropolitan areas and local Fukuoka will support construction demand. The labor shortage will accelerate with the decline in the working age population, with a rapid falloff in supply capability. No. of construction Real construc
Slide 34: Recurrence prevention measures
＜As regards to scandal of employee concerning Chikujyo town water and waste sewage treatment facility＞ ・ Recurrence prevention measures KYUDENKO Group has formed an investigation committee, which includes outside directors and lawyers, and thoroughly investigated the causes, such as the opportunitie
Slide 35: Appendix
Appendix All Rights Reserved. Copyright KYUDENKO CORPORATION 34
Slide 36: Corporate profile
Appendix(1) Corporate profile Company name Kyudenko Corporation Established December 1, 1944 Capital ￥12,561 million Listed market 1st Section of Tokyo Stock Exchange, Fukuoka Stock Code Exchange 1959 Head office 1-23-35 Nanokawa, Minamiku, Fukuoka city Tokyo head office Sunshine 60 3-1-1 Higashi-Ik
Slide 37: Analysis of works on hand
Appendix(2) Analysis of works on hand （Kyudenko individual : excluding power distribution work） Third quarter opening construction works on hand by delivery schedule timing Works on hand Total 359.9 （Billion yen） Total 318.0 Total 316.8 132.4 110.2 Deliver on after next FY (▲22.2） 157.0 123.9 Delive
Slide 38: Analysis by scale of order
Appendix(3) Analysis by scale of order (Kyudenko individual : excluding power distribution work） (Million yen) ■2017.9 ■2018.9 ■2019.9 50,090 51,626 45,850 25,426 26,626 22,265 100～300 million yen Under 100 million yen All Rights Reserved. Copyright KYUDENKO CORPORATION 37
Slide 39: Details of diverse business models (facility work)
Appendix(4) Details of diverse business models (facility work) business Ⓐ Proposal and original model contract type(Local based） Ⓑ Sub-contract type Ⓒ Capital participation type item ・Capital participation in a project ・Mainly small- and med- of collaboration with different ・Large sized deals indust
Slide 40: Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected
Appendix(5) 【Positional relationship】 Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected Relaxation of height restriction 38 hectares in the waterfront area (70m→100m) 1.7 hectare in Tenjin area (67m→115m at Sanyo Shinkansen line maximum) Waterfront area Request for relaxation of height rest
Slide 41: Project contents
Appendix(6) 【Project contents】 Fukuoka Waterfront Next, Tenjin Big Bang, Hakata Connected Project Purpose Period and scale ・By promoting the ・Through 2024 redevelopment of the Tenjin ・Total floor area area, which is the center of 757,000㎡ ①Tenjin Big Bang Fukuoka, enhance the role ・Reconstruction of