Asahi Kogyosha Co., Ltd. · TSE:1975
Asahi Kogyosha — Q2 FY3/2025 Earnings Presentation
42 slides from Asahi Kogyosha's earnings presentation, Nov 28, 2024
Slide 1: Financial results briefing materials for Q2 (first half) of fiscal year ending March 2025
Asahi Kogyosha Co., Ltd. (Securities Code: 1975) Financial results briefing materials for the second quarter (first half) of the fiscal year ending March 2025 November 28, 2024 Making comfort a standard feature
Slide 2: Agenda
Agenda 1 Company overview P.3 Overview of financial results for the second quarter 2 P.6 (first half) of the fiscal year ending March 2025 Performance forecast for the fiscal year ending March 3 P.15 2025 4 Capital policy P.19 5 Progress on the 18th Medium-term Management Plan P.23 6 Asahi Kogyosha’
Slide 3: 1. Company overview
1. Company overview © ASAHI KOGYOSHA CO.,LTD. 3
Slide 4: What Asahi Kogyosha is
What Asahi Kogyosha is An engineering company applying manufacturing capabilities and technologies for air, water, and heat to create optimal and comfortable spaces and environments MISSION SPIRIT POLICY We create optimal spatial We, as engineering constructors, [Company] environments and contribute
Slide 5: Company information
Company information ▎ Engaged in two businesses: Installation work and Manufacture and sale of equipment ▎ Nationwide network in Japan ▎ Overseas businesses (Taiwan and Malaysia) Basic company information Basic financial information (FY 3/24 consolidated results) Net sales 91,676 million yen Ordinar
Slide 6: 2. Overview of financial results for the second quarter (first half)
2. Overview of financial results for the second quarter (first half) of the fiscal year ending March 2025 © ASAHI KOGYOSHA CO.,LTD. 6
Slide 7: Overview of financial results for the second quarter (first half)
Overview of financial results for the second quarter (first half) of the fiscal year ending March 2025 ▎ While both orders and carryovers for the subsequent fiscal year declined, with orders in the fiscal year ended March 2024 concentrated in the first half, they continue to progress according to th
Slide 8: Orders, net sales, and operating income by segment
Orders, net sales, and operating income by segment ▎ While both orders and net sales for the Installation Work Division declined, operating income grew. ▎ Both orders and net sales for the Equipment Division grew significantly. FY 3/23 FY 3/24 FY 3/25 (Unit: million yen) Cumulative 2Q Cumulative 2Q
Slide 9: Trends in quarterly results
Trends in quarterly results ▎ Despite fewer orders than in the first quarter, net sales increased in the second quarter. ▎ Profit at each stage also grew due to an increase in net sales and an improvement in the gross margin. FY 3/24 FY 3/25 (Unit: million yen) Cumulative 1Q 2Q 3Q 4Q 1Q 2Q 2Q Orders
Slide 10: Actual results by segment: Orders
Actual results by segment Orders ▎ Overall orders declined, with orders in the previous fiscal year concentrated in the first half. ▎ Orders for the Installation Work Division declined, except for orders for business environment facilities. ▎ Equipment Division orders for products for FPD manufactur
Slide 11: Actual results by segment: Net sales
Actual results by segment Net sales ▎ While overall sales declined modestly, they remained strong. ▎ Sales at the Installation Work Division to business environment, living/cultural environment, and production environment facilities declined, while sales to transportation/communication environment f
Slide 12: Carryovers for the subsequent fiscal year
Carryovers for the subsequent fiscal year ▎ Overall carryovers for the subsequent fiscal year declined but remained high. ▎ Carryovers for business environment, living/cultural environment, and production environment facilities declined; however, carryovers for transportation/communication environme
Slide 13: Balance sheet
Balance sheet ▎ Total assets declined by 17,784 million yen from the end of the preceding fiscal year due primarily to declines in cash and deposits, accounts receivable from completed construction contracts, and electronically recorded monetary claims. ▎ Total liabilities declined by 18,197 million
Slide 14: Statement of cash flows
Statement of cash flows ▎ Cash flow from operating activities was negative 401 million yen due primarily to payments of consumption tax and income taxes. ▎ Cash flow from investing activities was positive by 802 million yen, due primarily to cancellations of time deposits and income from sales of in
Slide 15: 3. Performance forecast for the fiscal year ending March 2025
3. Performance forecast for the fiscal year ending March 2025 © ASAHI KOGYOSHA CO.,LTD. 15
Slide 16: Forecast for the fiscal year ending March 2025
Forecast for the fiscal year ending March 2025 ▎ Profit at each stage was revised significantly higher due to overall improvement in the profitability of construction works. ▎ For orders and carryovers, we plan to proceed with systematic and strategic order solicitation activities that account for q
Slide 17: Outlook by segment
Outlook by segment ▎ In the Installation Work Division, the forecast for orders represents figures based on systematic, strategic order solicitation activities; however, steady progress is expected on the work order backlog and net sales are expected to generally remain flat. ▎ Buoyed by renewed act
Slide 18: Long-term performance trends (past 10 years)
Long-term performance trends (past 10 years) ▎ Net sales have grown steadily following the Lehman Brothers collapse, with significant growth in the fiscal years ended March 2019 and March 2020, due in part to the impact of demand related to the Olympics. ▎ Both net sales and operating income decline
Slide 19: 4. Capital policy
4. Capital policy © ASAHI KOGYOSHA CO.,LTD. 19
Slide 20: Promoting management keenly aware of the cost of capital
Promoting management keenly aware of the cost of capital ▎ ROE for the fiscal year ended March 2024 exceeded 10% and remained above the Company’s perceived cost of shareholders’ equity (7%– 8%). ROE for the fiscal year ending March 2025 is expected to improve still further due to a significant incre
Slide 21: Returns to shareholders
Returns to shareholders ▎ We set the targets of maintaining an ordinary dividend of 40 yen per share and a consolidated dividend payout ratio of 40% or more. ▎ We implemented two stock splits, one each in 2022 and this year, to expand our investor base and to improve share liquidity. ▎ We expect to
Slide 22: Share price and trading value
Share price and trading value ▎ Our stock price has risen significantly due to solid business performance and the continuing implementation of IR measures. ▎ Liquidity improved significantly due to the two stock splits and other measures. Average daily trading value has improved significantly and co
Slide 23: 5. Progress on the 18th Medium-term Management Plan
5. Progress on the 18th Medium-term Management Plan © ASAHI KOGYOSHA CO.,LTD. 23
Slide 24: Overview of the 18th Medium-term Management Plan
Overview of the18th Medium-term Management Plan ▎ Formulated as the final stage (plan period: April 2023 to March 2026) of the long-term vision ASAHI-VISION 100: Taking on Challenge to Change Transformation ▎ With roughly half of the plan period completed, we have steadily driven our initiatives for
Slide 25: Progress on key numerical targets
The 18th Medium-term Management Plan: Progress on key numerical targets ▎ Due to strong capital investments, orders, net sales, and profit at each stage exceeded targets in the fiscal year ended March 2024. Profits in particular improved significantly due to efforts to improve construction profitabi
Slide 26: Human resource strategy: investing in human capital
Human resource strategy: investing in human capital ▎ We believe people represent our greatest asset and the source of our competitiveness. We recognize securing and developing human resources as a key issue. ▎ We will promote diversity and a work-life balance, focusing on developing human resources
Slide 27: 6. Asahi Kogyosha's Technologies and Initiatives
6. Asahi Kogyosha’s Technologies and Initiatives © ASAHI KOGYOSHA CO.,LTD. 27
Slide 28: Initiatives leading to sustainability
Initiatives leading to sustainability ▎ Leveraging our technological capabilities, we’re implementing various initiatives through our business activities to achieve sustainability. ▎ Two examples of using renewable energy in our Installation Work division are presented below. Case 1: Exhaust heat Ca
Slide 29: Examples of technology promotions and solutions proposals
Examples of technology promotions and solutions proposals ▎ Since our founding, we’ve accumulated experience in developing and proposing safe, optimal technologies to address the diverse needs and challenges of our customers. ▎ We draw on strong technological capabilities to respond to the growing s
Slide 30: 100th anniversary on April 3, 2025
Asahi Kogyosha will mark its 100th anniversary on Thursday, April 3, 2025. ▎ The 100th Anniversary Logo was selected through internally solicited design ideas. ▎ The 100th Anniversary Website is scheduled to go live in 2025. ▎ To commemorate the 100th anniversary of the Company’s founding, a commemo
Slide 31: Appendix
Appendix © ASAHI KOGYOSHA CO.,LTD. 31
Slide 32: Asahi Kogyosha's strengths
Asahi Kogyosha’s strengths ▎ Our core competences lie in technical capabilities cultivated since our founding in air conditioning, sanitation, and water supply and drainage. ▎ Based on these core competences, we develop competitive advantages by operating as an integrated entity, in close contact wi
Slide 33: Advanced technological capabilities responsive to market trends
[Technological capabilities related to air, water, and heat cultivated over 100 years since our founding] Advanced technological capabilities responsive to market trends ▎ Technologies responding to various trends have been developed as demands for industrial construction rise with the development o
Slide 34: Comprehensive proposal capabilities merging air, water, and heat technologies
[Integrated, project-based business operation] Comprehensive proposal capabilities that merge technologies related to air, water, and heat ▎ We respond to corporate sustainability initiatives as an environment-creating company to develop domestic production bases amid the continuing shift toward lab
Slide 35: Virtuous cycle driven by grasp of customer needs
[Operating in close contact with customers] Virtuous cycle driven by grasp of customer needs ▎ Operating in close contact with customers makes it possible to grasp diverse customer needs. ▎ We have established a virtuous cycle in which we leverage identified customer needs to develop technologies an
Slide 36: SDGs (1/4) Basic Policy on SDGs
SDGs (1/4) Asahi Kogyosha Group’s Basic Policy on SDGs ▎ The Group's corporate philosophy is to contribute to the development of culture by creating optimal spaces, drawing on advanced technologies based on the science of air, water, and heat while taking good care of the global environment and reso
Slide 37: SDGs (2/4) Initiative themes and specific measures
SDGs (2/4) Themes of initiatives related to SDGs and specific measures in FY 2024 Priority issues addressed by Related SDG goal Initiative theme Specific measures the Group Reducing energy consumption at business sites Reducing environmental impact through environmental Recycling recovered fluorocar
Slide 38: SDGs (3/4) Initiative themes and specific measures
SDGs (3/4) Themes of initiatives related to SDGs and specific measures in FY 2024 Priority issues addressed by Related SDG goal Initiative theme Specific measures the Group Reducing statutory overtime hours Promoting work-life balance Encouraging employees to take paid leave Encouraging employees to
Slide 39: SDGs (4/4) Initiative themes and specific measures
SDGs (4/4) Themes of initiatives related to SDGs and specific measures in FY 2024 Priority issues addressed by Related SDG goal Initiative theme Specific measures the Group Strengthening relationships with partner companies to Strengthening cooperation with maintain appropriate relationships and to
Slide 40: Installation Work Division: business content and domains
Installation Work Division: business content and domains ▎ The Installation Work Division performs air-conditioning installation and sanitation installation work using air, water, and heat technologies and provides one-stop engineering for customer facilities, from planning and proposal to construct
Slide 41: Equipment Division
Equipment Division ▎ We develop, manufacture, and sell precision environmental control equipment to leading-edge industries, including manufacturing equipment for semiconductors, FPDs, and electronics. ▎ By supplying primarily on an OEM-basis, we have focused on development, design, and manufacturin
Slide 42: Inquiries
This document contains forward-looking statements regarding industry trends and the activities undertaken by Asahi Kogyosha based on current plans, estimates, expectations, and forecasts. Various risks and uncertainties are inherent in these forward-looking statements. Risks, uncertainties and other