Company history

The company exists because a customer needed one. Japan’s Nippon Telegraph and Telephone Public Corporation began its first five-year expansion plan in fiscal 1953, and the volume of work it released at once outran what the existing contractors could build. In May 1954 Kyowa Densetsu was incorporated in Tokyo with $86,111 (¥31m) of capital for the express purpose of meeting that plan; four months later it absorbed two established contractors, Kyodo Kogyo and Nippon Denwa Kogyo, lifting capital to $138,889 (¥50m). From the outset it held first-class certification from the public corporation across communications lines, civil works, switching equipment and radio transmission.

The “leading private companies” that put up the money were the corporation’s own suppliers. The 1962 register is headed by NEC, Sumitomo Electric, Furukawa Electric, Fujikura, Oki Electric and Fuji Tsushinki — the makers of the switches and cable the network was built from — with just 264 shareholders in all. Revenue therefore tracked a government budget rather than a market: completed works rose from $1.7M (¥620m) in the year to October 1955 to $5.7M (¥2bn) five years later, and in 1962 the public corporation supplied 98% of orders. Against the corporation’s ¥20bn of tendered work the company took ¥3.3bn, or 16.5% — the largest share in the industry.

Listing followed the work. Kyowa Densetsu joined the second section of the Tokyo Stock Exchange in February 1963 at ¥1,500 a share, moved to the first section in 1972, and in 1973 merged with Kyowa Tsushin Kogyo — a deal that pushed its registered date of incorporation back to 1946 even though the business had actually begun in 1954. New lines were bolted onto the articles of association as the network grew: design and surveying in 1975, information processing in 1982. As late as 1968, private-sector demand was still about 3% of the total.

NTT was privatized in April 1985, and for the contractor the visible consequence was a longer list of business objects: building services and plumbing, environmental and waste-water plant, then surveying, real estate, security work. In 1991 the name itself changed — Kyowa Exeo, dropping the “densetsu” (electrical construction) it had carried for 37 years. The revenue mix did not move with it. NTT group capital expenditure kept climbing through the 1990s to a peak of ¥3.09tn in the year to March 1999, then fell below ¥2tn by fiscal 2002; consolidated completed works slipped from ¥203.3bn to ¥186.3bn in a single year and ordinary profit halved.

The next decade’s growth line was optical fibre. Takashima Seiji, an NTT engineer who had worked on optical transmission, became president in 2003 and set out to hold first place in NTT’s fibre work, predicting that within five years most access lines would be fibre broadband. The economics were harder than the volumes suggested: unlike the monopoly telephone era, fibre services competed on price, NTT pressed its contractors accordingly, and the work was technically demanding with little accumulated experience to make it efficient. Revenue nevertheless rose from ¥203.9bn in the year to March 2004 to ¥303.5bn by March 2007, with ordinary profit up from ¥9.1bn to ¥21.1bn.

Then the customer stopped spending. NTT group capex fell to ¥1.87tn by March 2011; group revenue slid back to ¥273.1bn by March 2012 and operating profit from ¥20.4bn to ¥8.9bn. Smartphones were making the carriers record profits, but they no longer needed towers costing tens of millions of yen — most work was swapping equipment in existing base stations, jobs worth a few hundred thousand yen apiece. Kyowa Exeo answered on two fronts: buying order flow through subsidiaries (Daiwa Densetsu and Wako Engineering in 2004, Ikeno Tsuken in 2010, Icom Systec in 2011) and running an internal job-posting scheme to move staff off NTT work and onto private clients. Meanwhile the east of Japan consolidated around it — Mirait Holdings was formed in 2010 — while the west stayed untouched.

Earnings turned first. Kozono Fuminori, who had transferred in from NTT as executive vice-president in 2012 and was promoted a year later, presided over a recovery from ¥273.1bn of revenue and ¥8.9bn of operating profit in the year to March 2012 to ¥318.5bn and ¥20.7bn two years on. Much of it came from the customer: NTT began levelling out orders that had traditionally piled into the second half, and first-quarter operating profit — as little as ¥0.3bn in some years — reached ¥3.8bn by mid-2018. Smoothing the work raised utilization in the slack months and cut overtime in the busy ones, and operating profit hit ¥25.6bn in the year to March 2018, the highest the company had reached on its own.

Then, between late April and early May 2018, ten telecom-construction companies announced mergers within days of each other — the three majors among them. Six of the seven targets were based in NTT West territory, the ground left untouched by the eastern consolidation of the 2000s. Kyowa Exeo announced share exchanges for three listed contractors on 9 May 2018 and completed them that October: C-Cube in Chubu, Nippon Densetsu in Kansai and Seibu Electric Industry in Kyushu. A company built around the Tokyo region acquired a construction network covering the whole country, and did it without cash.

The arithmetic showed up immediately: revenue rose 35% from $2.8B (¥313bn) to $3.9B (¥424bn) in one year, operating profit from ¥25.6bn to ¥31.7bn, and headcount from 8,331 to 13,151. So did the cost of buying growth — goodwill went from ¥0.6bn to ¥10.2bn and interest-bearing debt from ¥1.0bn to ¥17.7bn. A first move abroad followed in March 2019, when the group took control of DeClout in Singapore, and Funahashi Tetsuya — again an NTT executive promoted a year after arriving as vice-president — became president that June. By March 2021 revenue was ¥573.3bn, up 83% in three years, but the segment disclosure was still simply the four regional groups sitting side by side.

In October 2021 the company became Exeo Group, removing “Kyowa” — the last word inherited from the 1954 founding — 67 years on; “exeo,” the Latin for going out of one’s shell, was also easier to say abroad. The reorganization behind the name mattered more. The regional segments were dismantled and replaced from April 2021 with three customer categories — Telecom Carrier, Urban Infrastructure and System Solutions — and Funahashi set the long-term goal of an equal third of revenue in each by fiscal 2030. His reasoning was blunt: after the price cuts, the carriers would not keep investing as they had, and 5G competition was shifting to services, with base stations increasingly shared between operators rather than owned.

Non-telecom scale was bought rather than grown. Close to ten acquisitions and investments followed from 2021 — a water-pipe contractor in Shizuoka, an electrical contractor from the Mitsubishi group, a stake in an Indonesian tower-sharing operator — because, as Funahashi put it, M&A was the only way to keep pace with the plan’s revenue targets. A $91.1M (¥10bn) green bond at the end of 2021 funded entry into biomass generation in Tochigi and Fukushima. The group moved to the TSE Prime market in 2022 and folded its ICT subsidiaries together twice, in 2022 and 2024, while the number of group companies approached 150 and the audit function was made independent.

What finally carried the new segments was data-centre construction. Revenue rose from ¥594.8bn in the year to March 2022 to ¥670.8bn in March 2025 with record profits, though the path was uneven — operating profit fell to ¥32.6bn in the year to March 2023 before recovering. Kajimura Keigo, another NTT Communications executive promoted a year after arriving, succeeded Funahashi in June 2025. In the year to March 2026 revenue reached $5.0B (¥788bn) against a mid-term plan of ¥630bn and operating profit ¥52.0bn against a target of ¥47.0bn, with the next plan expected to raise the ROE target from 9% into double digits. The segment split came out at 36% System Solutions, 32% Telecom Carrier and 32% Urban Infrastructure: for the first time since 1954, carrier work was no longer the company’s largest business.