Nippon Densetsu Kogyo Co., Ltd. · TSE:1950

Nippon Densetsu Kogyo — Q2 FY2024 Earnings Presentation

40 slides from Nippon Densetsu Kogyo's earnings presentation, Nov 25, 2024

  1. Slide 1: Briefing on the Financial Results for Q2 of FY2024

    Briefing on the Financial Results for Q2 of FY2024 (the Six Months Ended September 30, 2024) November 25, 2024 Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved

  2. Slide 2: Table of Contents

    Table of Contents 1 Company Overview 2 Financial Results Overview Q2 of FY2024 (Consolidated) 3 Segment Overview 4 Efforts Toward Sustainability 5 Financial Results Forecast FY2024 (Consolidated) 6 Implementing Management That Is Conscious of Cost of Capital and Stock Price 1 Copyright(C)2024 NIPPON

  3. Slide 3: 1 Company Overview

    1 Company Overview Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 2

  4. Slide 4: Company Overview

    1 Company Overview Covers a wide range of construction, including Leading company in the field of construction of electrical facilities for buildings construction of electrified railway (Buildings), construction of information and Nationwide business operations equipment (Railways) communication sys

  5. Slide 5: 2 Financial Results Overview Q2 of FY2024 (Consolidated)

    2 Financial Results Overview Q2 of FY2024 (Consolidated) Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 4

  6. Slide 6: Key Points in the Financial Results

    2 Financial Results Overview Q2 of FY2024 (Consolidated) Key Points in the Financial Results  Orders increased in the construction of information and communication systems segment and the construction for environmental energy segment, which are our focus areas.  Net sales increased as construction

  7. Slide 7: Financial Results Overview Q2 of FY2024 (Consolidated)

    2 Financial Results Overview Q2 of FY2024 (Consolidated) (Unit: million yen) Orders Compared to Q2 of FY2023: +¥5.0 bn Net sales Compared to Q2 of FY2023: +¥4.5 bn 100,000 93,678 100,000 88,637 81,897 71,576 75,625 68,644 71,039 63,683 60,889 59,067 50,000 50,000 0 0 Q2 of FY2020 Q2 of FY2021 Q2 of

  8. Slide 8: Summary by Business Segment

    2 Financial Results Overview Q2 of FY2024 (Consolidated) Summary by Business Segment Construction of Electrified Railway Equipment Construction of Electrical Facilities for Buildings  As we had abundant construction work in hand,  While there were some delays in orders from JR we continued to take

  9. Slide 9: Summary by Business Segment

    2 Financial Results Overview Q2 of FY2024 (Consolidated) Summary by Business Segment Construction of Information and Construction for Environmental Energy Communication Systems  Orders were received for large-scale construction  Orders significantly increased due to a successful related to a wind

  10. Slide 10: Trends in Quarterly Financial Results

    2 Financial Results Overview Q2 of FY2024 (Consolidated) Trends in Quarterly Financial Results (Unit: million yen) 22,000 205,160 200,000 195,695 194,031 18,000 173,569 172,100 150,000 14,188 14,670 14,000 13,448 117,511 Ratio of Q2 105,263 sales to Q4 101,722 9,658 10,000 97,163 sales (%) 100,000 (

  11. Slide 11: Factors for Changes in Operating Profit

    2 Financial Results Overview Q2 of FY2024 (Consolidated) (Unit: million yen) Factors for Changes in Operating Profit (Year on year) Trend in Core System-related expenses (Non-Consolidated) 2,500 Increase in Increase in 2,147 Increase in system expenses: Core systems profit on fixed (Introduction of

  12. Slide 12: 3 Segment Overview

    3 Segment Overview Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 11

  13. Slide 13: Financial Results for Construction of Electrified Railway Equipment Segment

    Financial Results for 3 Construction of Electrified Railway Equipment Segment (Unit: million yen) Orders Compared to Q2 of FY2023: -¥1.6 bn Net sales Compared to Q2 of FY2023: -¥1.2 bn 60,000 60,000 48,683 45,764 44,134 38,886 41,024 39,768 40,000 37,765 40,000 37,659 34,282 31,502 20,000 20,000 0 0

  14. Slide 14: Electrified Railway Orders and Net Sales (Disaggregated)

    Financial Results for 3 Construction of Electrified Railway Equipment Segment Orders and Net Sales (Disaggregated) (Unit: billion yen) FY2021 FY2022 FY2023 FY2024 FY2021 FY2022 FY2023 FY2024 19.9 20.7 29.2 26.4 Public railway 5.4 1.4 1.0 0.4 JR Orders (forecast) companies Orders (forecast) Data not

  15. Slide 15: Financial Results for Construction of Electrical Facilities for Buildings Segment

    Financial Results for 3 Construction of Electrical Facilities for Buildings Segment (Unit: million yen) Orders Compared to Q2 of FY2023: -¥1.1 bn Net sales Compared to Q2 of FY2023: +¥6.8 bn 40,000 40,000 28,351 27,195 21,835 22,906 22,532 23,391 20,000 20,000 18,123 16,495 14,764 13,486 0 0 Q2 of F

  16. Slide 16: Financial Results for Information and Communication Systems Segment

    Financial Results for 3 Construction of Information and Communication Systems Segment (Unit: million yen) Orders Compared to Q2 of FY2023: +¥5.2 bn Net sales Compared to Q2 of FY2023: -¥0.2 bn 20,000 20,000 16,879 11,679 10,515 10,155 10,685 10,000 10,000 8,026 8,880 8,425 8,791 8,499 0 0 Q2 of FY20

  17. Slide 17: Financial Results for Environmental Energy Segment

    3 Financial Results for Construction for Environmental Energy Segment (Unit: million yen) Orders Compared to Q2 of FY2023: +¥2.5 bn Net sales Compared to Q2 of FY2023: -¥0.4 bn 4,000 4,000 3,462 2,190 2,000 2,000 1,735 914 0 0 Q2 of FY2023 Q2 of FY2024 Q2 of FY2023 Q2 of FY2024 Operating profit Comp

  18. Slide 18: Financial Results of Associated Business Segment

    Financial Results of Associated * Associated Business includes real estate business, total building management, maintenance and 3 Business Segment inspection of electrical facilities, sale of materials, software development, and design of electrical facilities. Figures for real estate leasing, manag

  19. Slide 19: Major Railway-Related Construction Projects

    3 Construction Overview by Segment Major Railway-Related Construction Projects FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 Name of the construction Haneda Airport Access Lines (East Yamanote Route and New Access Lines) Works to relocate obstructions Scheduled to start operation in FY2031 (JR East) Wir

  20. Slide 20: Major Orders Received (First Half)

    3 Construction Overview by Segment Major Orders Received (First Half) Name of the construction FY2024 FY2025 FY2026 Preparatory Renovation Work on TEPCO Underground Equipment Scheduled for JR East between Hatogaya and Warabi completion in FY2030 Work to Newly Install ATACS Devices and Other Work on

  21. Slide 21: Major Orders Received (First Half)

    3 Construction Overview by Segment Major Orders Received (First Half) Work to Replace Panelboards and Other Work at Six Yakult’s New Chiba Plant Construction Work Locations on Tohoku Shinkansen, including Shin Utsunomiya Substation Kyoto City Central Wholesale Market: Redevelopment Tokyo Big Sight (

  22. Slide 22: 4 Efforts Toward Sustainability

    4 Efforts Toward Sustainability Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 21

  23. Slide 23: Efforts Toward Sustainability

    4 Efforts Toward Sustainability Basic Policy on Sustainability Issuance of Integrated Report Based on our corporate philosophy, “We execute our We started issuing an Integrated Report this duties safely, reliably, and with a customer-first spirit to fiscal year (September 2024) for all strengthen cu

  24. Slide 24: Efforts Toward Sustainability: Society

    4 Efforts Toward Sustainability Society Materiality Achievements (First Half)  Serious workplace injuries and serious accidents: 0 3. Pursuit of maintaining and  Prompt responses to requests for emergency restorations from railway improving safety and quality companies and others 4. Maintaining co

  25. Slide 25: 5 Financial Results Forecast FY2024 (Consolidated)

    5 Financial Results Forecast FY2024 (Consolidated) Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 24

  26. Slide 26: Key Points in the Financial Results Forecast

    5 Financial Results Forecast FY2024 (Consolidated) Key Points in the Financial Results Forecast  Having JR East and other customers as our foundation, we will secure a high level of orders by monetizing new domains and strategically taking orders with a focus on profitability.  We expect net sales

  27. Slide 27: Forecast: Backlog, Orders, Net Sales, Operating Profit

    5 Financial Results Forecast FY2024 (Consolidated) (Unit: million yen) Backlog Compared to FY2023: +¥16.9 bn Orders Compared to FY2023: -¥10.9 bn 250,000 250,000 208,036 197,100 200,000 173,719 200,000 172,335 182,693 156,811 144,252 144,574 150,000 150,000 100,000 100,000 88,637 93,678 50,000 50,00

  28. Slide 28: Forecast for Electrified Railway Equipment Segment

    Financial Results Forecast for 5 Construction of Electrified Railway Equipment Segment (Unit: million yen) Backlog Compared to FY2023: +¥7.1 bn Orders Compared to FY2023: -¥4.3 bn 150,000 150,000 115,832 111,510 101,371 97,936 100,000 82,760 100,000 77,860 79,117 75,638 50,000 50,000 45,764 44,134 3

  29. Slide 29: Forecast for Electrical Facilities for Buildings Segment

    Financial Results Forecast for 5 Construction of Electrical Facilities for Buildings Segment (Unit: million yen) Backlog Compared to FY2023: +¥6.3 bn Orders Compared to FY2023: -¥9.3 bn 80,000 80,000 69,818 63,467 57,797 59,247 47,061 47,222 49,870 42,507 40,000 40,000 28,351 27,195 22,906 22,532 0

  30. Slide 30: Forecast for Information and Communication Systems Segment

    Financial Results Forecast for 5 Construction of Information and Communication Systems Segment (Unit: million yen) Backlog Compared to FY2023: -¥0.5 bn Orders Compared to FY2023: +¥1.5 bn 40,000 40,000 26,697 28,280 23,654 25,180 22,405 20,000 18,115 17,263 16,666 20,000 16,879 10,155 10,685 11,679

  31. Slide 31: Forecast for Environmental Energy Segment

    Financial Results Forecast for 5 Construction for Environmental Energy Segment (Unit: million yen) Backlog Orders Compared to FY2023: +¥1.2 bn 6,000 6,000 4,279 4,000 4,000 3,146 2,983 3,462 2,000 2,000 914 0 0 FY2024 FY2023 FY2024 Forecast Net sales Compared to FY2023: -¥1.1 bn Operating profit Com

  32. Slide 32: Forecast for Associated Business Segment

    Financial Results Forecast for * Associated Business includes real estate business, total building management, maintenance and 5 Associated Business Segment inspection of electrical facilities, sale of materials, software development, and design of electrical facilities. Figures for real estate leas

  33. Slide 33: 6 Management Conscious of Cost of Capital and Stock Price

    6 Implementing Management That Is Conscious of Cost of Capital and Stock Price Copyright(C)2024 NIPPON DENSETSU KOGYO CO., LTD. All Rights Reserved 32

  34. Slide 34: Understanding the Current Status for Enhancing Capital Efficiency

    Implementing Management That Is Conscious of Cost of Capital and 6 Stock Price Understanding the current status for enhancing capital efficiency ROE and Profit (million yen) (%) 25,000 10.00 20,000 7.12 8.00 6.48 5.73 5.53 15,000 6.00 11,274 4.10 9,823 9,546 10,042 10,000 4.00 3.04 7,171 5,222 5,000

  35. Slide 35: Understanding Current Status of ROE

    Implementing Management That Is Conscious of Cost of Capital and 6 Stock Price Understanding current status of ROE  While our financial soundness is solid, we recognize that we need to improve efficiency and further enhance profitability. (%) Profitability (profit margin) Profitability (profit marg

  36. Slide 36: Target ROE and Target Market Capitalization in NDK Vision90

    Implementing Management That Is Conscious of Cost of Capital and 6 Stock Price Target ROE and Target Market Capitalization in NDK Vision90  We aim for an ROE of 10% or higher by expanding our revenue base, growing our business through growth investments, and improving capital efficiency.  We also

  37. Slide 37: Toward Further Enhancing Profitability

    Implementing Management That Is Conscious of Cost of Capital and 6 Stock Price Toward Further Enhancing Profitability  Based on the solid revenue base we have established, we will make growth investments in areas of human resources, productivity improvement, and business.  We aim to balance the pr

  38. Slide 38: Return Profit to Shareholders

    6 Return Profit to Shareholders Toward Further Enhancing Efficiency  We will promote the reduction of net assets by various measures, including accelerating the sale of strategically-held shares.  With a basic policy of a three-year total dividends of ¥10.0 billion, we will consider and carry out

  39. Slide 39: Three-year Management Plans

    6 NIPPON DENSETSU Three-year Management Plans V-shaped recovery achieved in FY2023 Secure profit to grow sustainably Three-year management Three-year management Three-year management Three-year management Three-year management Three-year management plan 2009 plan 2012 plan 2015 plan 2018 plan 2021 p

  40. Slide 40: Forecast Notice and Inquiries

    Please note that the forecast figures presented in this document were prepared based on the information available to the Company at the time they were prepared, and actual results may differ from the forecasts in the document due to fluctuation of the levels of various risks and uncertainties and ch

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