Mid-Term Management Plan

Mid-Term Management Plan for 2021

Established on April 2015

1. Goals of the CTI Engineering Group

As investment in building national resilience (disaster prevention and mitigation) projects increases, domestic public works projects are expected to shift to rebuilding and utilizing existing assets, in addition to updating, maintaining, and extending the service life of these assets.

Overseas, there is great demand for infrastructure development, especially in Southeast Asia and Africa, and consulting engineers are expected to play an active role there.

In such a business environment, the CTI Engineering Group has been expanding its construction management-related areas and Group companies, as well as collaborating with ICT-related companies and others, under the Mid-Term Management Plan 2018. Over the next three years, we will further enhance our capabilities as a group and accelerate the expansion of our business areas and markets. We will also expand our overseas market by collaborating with Waterman Group Plc (joined the Group in 2017; headquartered in London, UK) and by strengthening our overseas production locations.

In addition, we will improve the stability of management for the entire Group by ensuring stable management of NISSOKEN Architects/Engineers and Environmental Research & Solutions Co., Ltd., which we have been rebuilding steadily since they joined the Group in 2015, and by enhancing our ability to handle overseas projects, including country risks such as political instability and terrorism.

Last but not least, we will strengthen governance of the entire Group, including quality and safety management in new areas and markets, and risk controls for the adoption of diverse work styles.

2. Goals of CTI Engineering Co., Ltd.

CTI Engineering Co., Ltd. (CTIE), which is the pillar of the CTI Engineering Group, will accelerate the transformation of its business structures to take on new business areas and markets in order to drive the Group’s business expansion.

At the same time, we will reform our production and HR systems in order to improve productivity, achieve diverse work styles, and become a more fulfilling company to work for.

We will also strengthen Group-wide governance in order to control risks in new areas and markets and to promote greater compliance, quality control, and safety management across the Group.

3. Management Targets

In 2018, the target year of the Mid-Term Management Plan 2018, we achieved our Mid- to Long-Term Vision’s 2025 target for orders received. Going forward, we will continue to promote investments aimed at “transforming three areas and strengthening one area” in order to achieve sustainable growth and set the following management targets for the Mid-Term Management Plan 2021.
*The 2021 targets were partially revised in January 2020 to reflect 2019 results.

(1) CTI Engineering Group Management Targets

Targets for sales, operating income, ROE, ROA, and dividend payout ratio

(2) CTIE Management Targets

Sales and operating income targets

(3) Number of CTIE employees

Target number of employees

4. Material Issues

4.1 Transforming business structures

We will strategically expand our business to new clients while maintaining our existing clients, focusing on the following priority business areas: national resilience-building, operation of existing assets, client support, PPP, comprehensive urban development and redevelopment, and local management.

4.2 Transforming production systems

(1) Achieving diverse work styles through IT innovation
We will improve our ICT infrastructure by upgrading ICT equipment and networks; expand the use of diverse communication channels such as information-sharing and web conferencing systems; promote remote work and improve information security and work rules; reinforce the AI Solutions Section; and improve BIM/CIM technology, thereby enhancing our team structures and human resources.
(2) Developing priority business areas and building production systems for business development
In addition to reinforcing our business promotion structures, we will improve our technical services by actively promoting personnel at the engineering management level and providing technical backup to on-site engineers in order to expand into dynamic areas. We will also promote external collaboration such as M&As and capital alliances, in addition to Group collaboration.

4.3 Transforming HR systems

We will rebuild our HR system into one that enables employees to continue working with fulfillment and peace of mind by shifting the basis for evaluation and compensation from “seniority” to “responsibilities” and shifting to a personnel evaluation framework that encourages personnel to take on challenges from a long-term perspective.

4.4 Strengthening governance

We will strengthen governance by promoting the following initiatives.

• ・Improve the functions of CTIE’s headquarters to enhance governance of the entire CTI Engineering Group.
• ・Enhance our control systems to be able to handle project expansion and diverse work styles.
• ・Increase the effectiveness of resource-matching activities and expand our team structures and human resources to enable them to function effectively in new situations, such as external collaboration and new markets.