Kondotec Inc. · TSE:7438
Kondotec — Q1 FY2021 Earnings Presentation
60 slides from Kondotec's earnings presentation, Aug 6, 2020
Slide 1: Financial Results Q1 FY2021
Financial Results Q1 FY2021 August 6, 2020 Securities Code : 7438
Slide 2: Contents
Contents 1. Summary of Q1 FY2021 Financial Results and Full-year P.3 Forecasts 2. Company overview P.6 3. Main Products and Merchandise P.14 4. Q1 FY2021 Financial Results and Analysis P.20 5. Q1 FY2021 Financial Results by Segment and Analysis P.26 6. Response to ESG Issues P.34 7. Growth Strategie
Slide 3: Summary of Q1 FY2021 Financial Results and Full-year Forecasts
1. Summary of Q1 FY2021 Financial Results and Full-year Forecasts
Slide 4: Summary of Q1 FY2021 Consolidated Financial Results
Summary of Q1 FY2021 Consolidated Financial Results Net sales decreased due to the sales contribution from TOKAI STEP was unable to offset the drop in sales caused by the impact of the COVID-19 infection. Operating income decreased. Although we worked to cut SG&A expenses and improve efficiency,
Slide 5: FY2021 Full-year Forecasts
FY2021 Full-year Forecasts FY2021 forecasts are made based on projections and information available at the time of release. (million yen) Actual Forecast YoY FY2020 FY2021 amount % Net sales 60,599 62,000 ＋1,400 ＋2.3％ Gross profit 13,564 14,300 ＋735 ＋5.4％ SG&A expenses 9,479 10,600 ＋1,120 ＋11.8％ O
Slide 6: Company Overview
2. Company Overview
Slide 7: Performance Trends
Performance Trends We achieved our 9th consecutive year of record sales and profit as a result of efforts to supply products and merchandise to various industries in response to changes of the times and customer needs since establishment in 1953. Acquired shares （trillion yen） Acquired shares of TEC
Slide 8: Company Overview
Company Overview Company name KONDOTEC INC. Sanwa Denzai Co., Ltd. KONDOTEC INTERNATIONAL (THAILAND) CO., LTD. Group companies CHUOH GIKEN Co., Ltd. TECBUILD CO., LTD. TOKAI STEP CO., LTD. Established January 1953 President and Representative Katsuhiko Kondo Director 2-2-90 Sakaigawa, Nishi-ku, Osak
Slide 9: Company History and Business Areas
Company History and Business Areas Company history Business areas January 1953 Construction industry wholesale Established Kondo Shoten Co., Ltd. Other than January 1989 Field Categorization of merchandise construction Changed the company name to KONDOTEC INC. KONDOTEC INC. April 1995 Shipbuilding L
Slide 10: Net Sales by Segment
Net Sales by Segment Segment Main customers Main products & merchandise Net sales by segment（FY2020） Turn buckles Shackles Hardware stores Scaffolding chains Wholesalers Industrial Hooks and clips Materials Home Screws Electrical improvement Container bags Equipment center Tarpau
Slide 11: Distribution Channels
Distribution Channels Suppliers Manufacturers, etc. related construction & Overseas Electrical equipment In-house Civil engineering factory procurement manufactures 50％ 15％ 20％ 15％ ※ Manufacturer function （In-house manufactured products and OEM products） Approximately 40％ Sales contribution ratio by
Slide 12: Segment Overview
Segment Overview （As of end March 2020) Industrial Structural Electrical Consolidated Materials Steel Materials Equipment 60,599 million yen 35,459 million yen 16,429 million yen 8,710 million yen In- In- In- house house house Net sales 16％ 13％ 32％ Domestically- Imported Imported Domestically- Domes
Slide 13: Market Size for Main Products and Merchandise
Market Size for Main Products and Merchandise Market size for main products, merchandise and corresponding market shares （As of end March 2019) We offer an extensive range of products including higher market shares products and merchandise (such as wire ropes, nets, sheets and screws) and products
Slide 14: Main Products and Merchandise
3. Main Products and Merchandise
Slide 15: Sales Fields
Sales Fields We supply roughly 50,000 products and merchandise to various industries in response to changes of the times and customer needs. Wind power generation Agriculture and horticulture Railroad and railroad bridge Agriculture and forestry Prefabricated wooden construction construction Slope C
Slide 16: Turnbuckle Braces
Turnbuckle Braces Turnbuckle braces are connected cornerwise to prevent the collapse of buildings exposed to lateral pressure. Turnbuckle braces are used as seismic bracing products in prefabricated steel-frame houses and steel constructions such as shopping centers, factories and warehouses. Th
Slide 17: Anchor Bolts
Anchor Bolts Anchor bolts are important materials used to connect a building structure to a concrete foundation. Their main purpose is to prevent the building connected to the concrete foundation from tilting and falling over. After constructions work Anchor bolts Anchor frame（Kon-base Eco） 16
Slide 18: Container Bags
Container Bags Container bags are used in a wide range of settings such as 1) transportation and storage of feedstuff, fertilizer, plastic pellets, and industrial waste; 2) rubble disposal and decontamination work; and 3) post-disaster reconstruction work (used as large sandbags). 17
Slide 19: Scaffolding Installation
Strengthened Business and Products for Last Year Scaffolding Installation TOKAI STEP and TECBULID handle assembly and disassembly of Scaffolding is used for construction and repairs such as warehouses, detached homes and condominiums. Overpass repair Condominium construction 18
Slide 20: Q1 FY2021 Financial Results and Analysis
4. Q1 FY2021 Financial Results and Analysis
Slide 21: Q1 FY2021 Consolidated Financial Results
Q1 FY2021 Consolidated Financial Results (million yen) Q1 Q1 YoY FY2020 FY2021 Amount % Net sales 14,313 14,112 △ 200 △ 1.4％ Gross profit 3,216 3,218 ＋1 ＋0.0％ SG&A expenses 2,341 2,557 ＋216 ＋9.2％ Operating income 875 660 △ 214 △ 24.5％ Ordinary income 901 678 △ 223 △ 24.7％ Profit attributable to owne
Slide 22: Operating Income Analysis (consolidated)
Operating Income Analysis (consolidated) Operating income analysis (million yen) Quarterly GPM Conslidated Parent 23.5% △199 23.3% 16 23.0% △29 △1 23.0% 22.8% 22.8% 875 The impact of 22.6% making TOKAI 660 22.5% STEP a subsidiary 22.1% 22.0% Q1 FY2020 Net sales Gross Profit SG&A Other Q1 FY2021 Marg
Slide 23: Progress for FY2021 Forecast
Q1 FY2021 Consolidated Financial Results Progress for FY2021 Forecast Progress for FY2021 forecast (million yen) Net sales and Operating income (million yen) ■ Q1 FY2021 ■ Full-year forecast Net sales Operating income Net sales Full-year forecast Progress 16,053 15,585 14,112 62,000 22.8％ 14,313 14,
Slide 24: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2020 Q1 FY2021 Change Cash and deposits 8,305 8,187 △118 Notes and receivable –trade 13,207 12,109 △ 1,098 Current assets Electronically recorded 1,695 1,692 △3 monetary claims operating Inventories 5,026 5,486 ＋460 Other 672 869 ＋196 Total current
Slide 25: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2020 Q1 FY2021 Change Notes and accounts payable – trade 3,333 3,508 ＋174 Electronically recorded 8,400 7,132 △ 1,267 obligations – operations Current liabilities Breakdown Electronically recorded obligations–operations 10,006 8
Slide 26: Q1 FY2021 Financial Results by Segment and Analysis
5. Q1 FY2021 Financial Results by Segment and Analysis
Slide 27: Q1 FY2021 Financial Results by Segment
Q1 FY2021 Financial Results by Segment (million yen) Change Full-year Q1 FY2020 Q1 FY2021 Progress (%) forecast Industrial Materials 8,371 8,758 ＋4.6％ 38,900 22.5％ Structural Steel Materials 3,835 3,467 △ 9.6% 14,800 23.4％ Net sales Electrical Equipment 2,107 1,886 △ 10.5％ 8,300 22.7％ Adjustments -
Slide 28: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 9,175 9,227 Segment profit or loss 8,758 YoY 8,685 8,371 8,371 8,758 +4.6％ 672 544 YoY 472 421 393 421 393 △ 6.8％ Q1 FY2020 Q1 FY2021 Q1 Q2 Q3 Q4 Q1 FY2020 FY2020 FY2020 FY2020 FY2021 Factors affectin
Slide 29: Industrial Materials segment profit analysis
Segment profit or loss analysis (million yen) Quarterly GPM 29.9% 28.6% 27.0% 27.3% manufactured 23.4% in-house Products 39 △9 △13 △146 Major increase/decrease 101 factors related to subsidiaries 29.2% Goodwill 27.6% 27.8% amortization： △ 56 million yen 26.2% merchandise 421 Imported KONDOTEC 393 24
Slide 30: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 4,412 4,322 Segment profit or loss 3,835 3,859 3,835 YoY 3,467 3,467 497 482 △ 9.6％ 399 399 338 240 YoY 240 △ 39.8％ Q1 Q2 Q3 Q4 Q1 Q1 FY2020 Q1 FY2021 FY2020 FY2020 FY2020 FY2020 FY2021 Factors
Slide 31: Structural Steel Materials segment profit analysis
Segment profit or loss analysis (million yen) Quarterly GPM 32.2% 32.3% manufactured 30.9% in-house Products 29.3% △62 28.6% △29 △59 35.4% 35.7% 35.5% △7 merchandise 399 34.2% Imported 33.5% 240 20.8% 20.7% 20.0% 20.1% merchandise Domestically Q1 FY2020 Sales volume Sales price Gross Profit SG&A Exp
Slide 32: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,465 2,107 YoY 1,886 2,107 2,035 2,101 △ 10.5％ 1,886 106 52 YoY 63 59 52 26 △ 48.5％ 26 Q1 Q2 Q3 Q4 Q1 Q1 FY2020 Q1 FY2021 FY2020 FY2020 FY2020 FY2020 FY2021 Factors affecting n
Slide 33: Electrical Equipment segment profit analysis
Segment profit or loss analysis (million yen) Quarterly GPM and number of projects 17.5% Gross Profit Margin 16.8% 16.8% 16.6% 16.6% △32 Q1 Q2 Q3 Q4 Q1 52 0 7 FY2020 FY2020 FY2020 FY2020 FY2021 26 15 13 Number of project※ Q1 FY2020 Net sales Gross Profit Margin SG&A Expenses Q1 FY2021 9 7 7 Gross Pr
Slide 34: Response to ESG Issues
6. Response to ESG Issues
Slide 35: ESG Basic Policy
ESG Basic Policy In engaging in corporate activities, we recognize that management promoting response to ESG(environment, social and governance) issues will lead to sustainable growth. Materiality Relevant SDGs Provision of optimal products Expansion of the handling of environment-related and me
Slide 36: Initiatives
Initiatives We have established our ESG basic policy and link it to sustainable corporate growth by incorporating it in the management strategy. Current Specific Initiatives Cost Reduction and Risk Management Enhancement of Corporate Value Implementation of energy-saving measures(LED Sale of e
Slide 37: Initiatives: Environment
Initiatives: Environment Environment Provision of optimal products and merchandise Business activities paying attention to the for environment measures environment Green Sweeper Initiatives for environmental protection and energy-saving This is a biodegradable high-performance cleaner, ISO1400
Slide 38: Initiatives: Social
Initiatives: Social Social Human resource development and diversity We aim to create a working environment in which employees with diverse backgrounds fully demonstrate their respective abilities and are motivated to work. Male-female ratio of new employees with main career track Benefit progr
Slide 39: Initiatives: Governance
Initiatives: Governance Governance Corporate governance KONDOTEC recognize that strengthening and enhancing corporate governance through increasing soundness, transparency and efficiency of management and maximizing corporate value is one of the most important management objectives. A performance-
Slide 40: Growth Strategies
7. Growth Strategies
Slide 41: Toward Achieving Billion yen Sales Target
Toward Achieving 100 Billion yen Sales Target We target consolidated sales of 100 billion yen in the 2020s by strengthening the earnings capability of existing core businesses and expanding into fields with growth prospects. M&A strategies 100 billion yen 1,000 Accelerate growth with current KONDO
Slide 42: Four Growth Strategies: New Customers and Products
Organic Growth ① Four Growth Strategies ～ Cultivation of New Customers and Offer of New Products and Merchandise ～ Cultivation of new customers Offer of new products and merchandise We achieve a monthly average of one new customer per sales For the purpose of developing new merchandise, joint Ne
Slide 43: Four Growth Strategies: Flexible Sales and Distribution Routes
Organic Growth ① Four Growth Strategies ～ Adoption of Flexible Sales Methods and Cultivation of Distribution Routes ～ Adoption of flexible sales methods Cultivation of distribution routes Differentiation strategies We are working to expand our business into new sectors, such Launch of website,
Slide 44: Expansion of Operating Sites
Organic Growth ② Expansion of Operating Sites We strive for expansion of operating sites which maintained a local-community-oriented sales structures in order to respond quickly to customer needs. Recently we established the “E-commerce Group” in July 2017 and opened the Okayama office of the Comp
Slide 45: Response to Natural Disasters
Organic Growth ③ Response to Natural Disasters Response to “New stage” published by Response to natural disasters Ministry of Land, Infrastructure, Transport and Tourism We have established a structure that allows it to rapidly The Ministry of Land, Infrastructure, Transport and Tourism respond
Slide 46: Increasing Presence in Foreign Markets
Periphery-strengthening Growth Increasing Presence in Foreign Markets Based on our view that increasing presence in foreign markets where growth is expected will contribute to enhancing our earning capability, we established a subsidiary in Thailand in November 2012. We executed a capital increase
Slide 47: M&A strategies
Toward Accelerating Organic Growth Strategies and Periphery-strengthening Growth Strategies M&A Strategy (Corporate Acquisitions and Capital/Business tie-ups ) We view that pursuing corporate acquisitions and capital/business tie-ups is an important strategy to strengthen our business platform. Fo
Slide 48: Shareholder Return
8. Shareholder Return
Slide 49: Dividends and Shareholder Incentive Plan
Dividends and Shareholder Incentive Plan we target ROE of 10% or more and DOE of 2.5% or more with the aim of continuing to increase dividends. Shareholders receive the rice certificate per share once a year. Dividend yield Transition in dividends Closing price on July 31, 2020: 1,121 yen 31yen
Slide 50: Transition of Stock Price
Transition of Stock Price Transition of stock price Ranking among listed companies stock price(after stock split) Nikkei average stock price KONDOTEC stock price (yen) Trading volume(thousand shares) Nikkei average stock price (yen) 1,250 30,000 Among 3,816 listed companies … 1,210 1,000 24,000 ROE
Slide 51: Highlights of Results
9. Highlights of Results
Slide 52: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 14,112 660 Progress Progress Net sales Operating income （million yen） million yen 22.8％ (million yen) million yen 17.9％ 62,000 60,599 4,085 57,828 3,907 3,700 52,811 50,211 50,410 3,441 3,516 3,537 3,271 3,303 47,991 49,168 41,153 2,664 38,745 35,548 1,92
Slide 53: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net assets（million yen） 28,203 million yen ROE （％） Target 10 ％ or higher 11.1 10.9 11.4 26,756 28,387 28,203 10.8 10.7 10.7 10.4 10.0 24,745 22,719 21,102 20,231 10％ or higher 18,783 7.1 16,990 15,097 5.8 14,381 4.7 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3
Slide 54: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 Q1 21/3 21/3 (forecast) Result of Operations（million yen） Net sales 35,548 38,745 41,153 47,991 49,168 50,211 50,410 52,811 57,828 60,599 14,112 62,000 Operating profit 1,275 1,926 2,664 3,271 3,303 3,441
Slide 55: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 15,665 16,053 15,585 14,350 14,199 14,313 14,647 14,050 14,112 13,220 13,613 12,660 13,058 12,924 13,108 12,433 11,767 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Operating income (million yen) 1,268 1
Slide 56: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,175 9,227 8,919 8,685 8,758 8,371 8,052 7,968 7,907 7,757 7,694 7,607 7,664 7,297 7,228 7,373 7,083 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss（million yen) 653 672 640
Slide 57: Quarterly Highlights: Structural Steel Materials
Quarterly Highlights Structural Steel Materials Net sales (million yen) 4,597 4,412 4,322 4,225 3,991 3,913 4,019 3,720 3,835 3,859 3,349 3,330 3,420 3,467 3,277 3,032 2,720 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss（million yen) 552 4
Slide 58: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,196 2,156 2,148 2,125 2,080 2,107 2,101 2,013 1,970 2,005 2,035 2,035 1,963 1,927 1,886 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss（million yen) 106 97 86 8
Slide 59: Notes on forward-looking statements
Notes on forward-looking statements This document contains forward-looking statements including operating forecasts and business plan. Future operating performance projections that the company releases are based on data available at the time of release. Actual results may differ considerably from pr
Slide 60: Contact details
2-2-90 Sakaigawa, Nishiku, Osaka 550-0024 Japan Telephone: +81-6-6582-8441 Website: https://www.kondotec.co.jp E-mail：kikaku@kondotec.co.jp