Nippon Air Conditioning Services Co., Ltd. · TSE:4658
Nippon Air Conditioning Services — Investor Presentation (June 2024)
36 slides from Nippon Air Conditioning Services's investor presentation, Jun 7, 2024
Slide 1: The 2024 Five-Year Mid-Term Management Plan SustaiNACS
© 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. The 2024 Five-Year Mid-Term Management Plan SustaiNACS ～ Improving the happiness of all stakeholders in a sustainable manner～ June 7, 2024 Nippon Air Conditioning Services Co., Ltd. TSE Prime Market, NSE Premier Market Securities
Slide 2: Thrive, for growth
© 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Thrive, for growth Contributing to the sustainability of customer businesses activities 2
Slide 3: Contents
Contents © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan Ⅱ．The 2024 Five-Year Mid-Term Management Plan Ⅲ．Shareholder Returns 3
Slide 4: Review of the 2019 Plan: KPI results
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 1/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. While financial KPIs were generally achieved, there were periods during which ROE fell below 10.0%. In addition, some non-financial KPIs were not achieved or correlated
Slide 5: Employee numbers and net sales growth
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 2/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. The number of employees, our greatest asset, has grown at a CAGR of 0.9%. Net sales have grown at a CAGR of 4.7%, indicating that the increase in per capita net sales c
Slide 6: Net sales by type
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 3/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Breaking down net sales by type, the increase in construction net sales (CAGR 8.3%), based on stable growth in maintenance net sales (CAGR 2.8%), drove overall net sale
Slide 7: Maintenance service sales by facility type
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 4/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. When maintenance services sales are broken down by facility type, hospitals and research facilities accounted for the largest share of net sales by value. However, grow
Slide 8: Construction work sales by facility type
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 5/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Breaking down construction work sales by facility type, growth driven by manufacturing and other plants was primarily attributable to work environment improvement measu
Slide 9: Sales ratio of facilities with special environments
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 6/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. The period average sales ratio of facilities with special environments was 73.1%, with a CAGR during the period of 5.6%, boosting net sales growth. Office buildings and
Slide 10: Gross profit margins by facility type
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 7/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Gross profit margins for facilities with special environments averaged 17.9% for the period; gross profit margins for office buildings, etc. were 19.5%. A favorable env
Slide 11: Overseas net sales and foreign employees
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 8/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Although overseas net sales and the number of foreign employees (target: 150) increased, the Company struggled in terms of profit and growth, due mainly to the COVID-19
Slide 12: Employee satisfaction levels
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 9/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Employee satisfaction fell short of the 70% target. We received numerous negative responses regarding treatment and compensation. We continued implementing various meas
Slide 13: Technological capabilities index
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 10/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. The technical capabilities index rose steadily, exceeding the target of 20 pts thanks to the active acquisition of qualifications by employees. The index correlates wi
Slide 14: Market capitalization and total shareholder return vs TOPIX
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 11/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. To summarize the results of the 2019 Five-Year Mid-Term Management Plan, the market capitalization growth rate was lower than the TOPIX growth rate. The total sharehol
Slide 15: PBR and ROE versus cost of equity
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 12/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. While PBR is above 1x, it was recently below the Prime market average. On the other hand, ROE in excess of cost of equity created a positive equity spread. ▶Trends in
Slide 16: Summary of review of the 2019 Plan
Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan 13/13 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Comparing the performance of the Company with TOPIX during the period covered by the 2019 Five-Year Mid-Term 1 Management Plan, the Company’s corporate value creation
Slide 17: Contents
Contents © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan Ⅱ．The 2024 Five-Year Mid-Term Management Plan Ⅲ．Shareholder Returns 17
Slide 18: Purpose, Mission, Vision, Value
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 1/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. PURPOSE Contributing to the sustainability of customer businesses and enhancing the value of society as a whole MISSION Bringing together the technological capabilities and human
Slide 19: Contribute to the sustainability of customer businesses
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 2/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. PURPOSE Contributing to the sustainability of customer businesses and enhancing the value of society as a whole ▶We will further enhance the added value creation ability of our c
Slide 20: MISSION
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 3/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. MISSION Bringing together the technological capabilities and human resources to maintain optimal environments and give our clients peace of mind through top quality service Custo
Slide 21: VISION
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 4/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. VISION Customers Employee Shareholder Improving the happiness of all stakeholders in a sustainable manner Improving the Sustainable improvement Appropriate investments for Once e
Slide 22: VALUE: items 01-04
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 5/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. VALUE Sustainable value creation and returns through enhancing the value of human capital 01 Increasing engagement to 02 Improving the Core 03 Focusing on customers 04 Strengthen
Slide 23: VALUE: items 05-08
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 6/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. VALUE Sustainable value creation and returns through enhancing the value of human capital 05 06 07 08 Expanding and Maintaining profit levels to Maintaining capital Implementing
Slide 24: Addressing the four bottlenecks to enhancing human capital value
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 7/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Addressing the four bottlenecks to Develop Discover enhancing human capital value 「Human」 「 Satisfaction」 「Technical 「Education」 capabilities」 Acceleration of hiring Increasing e
Slide 25: Technical Training Center
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 8/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. To accelerate the process of enhancing human capital value, the key to expanding our corporate value, we are currently building a Technical Training Center that will become fully
Slide 26: Provide quality services at a fair price
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 9/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Corporate value = Discounted present value of future cash flows ▼ Provide quality services at a fair price ▼ Working from the basic stance of demonstrating integrity in all that
Slide 27: Value Creation Structure and Human Capital
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 10/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Value Creation Structure Human Capital Simultaneously boosting engagement and Value Creation Structure productivity Developing our capabilities (strengths) Increasing engagement
Slide 28: Governance and Capital Structure
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 11/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Governance Capital Structure Accelerating value creation by Realizing an appropriate capital structure monitoring and clarifying execution based on the assumption free cash flow
Slide 29: Intensifying our focus on increasing competitive advantages of core businesses
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 12/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Intensifying our focus on increasing the competitive advantages of our core businesses ▼ We will focus on accelerating the expansion of human capital capable of providing qualit
Slide 30: SustaiNACS
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 13/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. We will focus on a growth strategy (strengthening competitive advantages) that strengthens corporate value without mistaking Sustainability the means for the ends, and + Nippon
Slide 31: New financial and non-financial KPIs
Ⅱ．The 2024 Five-Year Mid-Term Management Plan 14/14 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. We will strive to expand corporate value by reconsidering financial KPIs to track growth in the core businesses and non-financial KPIs selected for their strong correlation with
Slide 32: Contents
Contents © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Ⅰ．Review of the 2019 Five-Year Mid-Term Management Plan Ⅱ．The 2024 Five-Year Mid-Term Management Plan Ⅲ．Shareholder Returns 32
Slide 33: Shareholder Returns 1/2
Ⅲ．Shareholder Returns 1/2 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Although the Company paid a progressive dividend for 17 consecutive fiscal years from FY03/2005 to FY03/2022, the dividend was reduced in FY03/2023 because the extraordinary profit from the sale of strat
Slide 34: Stable and sustainable returns
Ⅲ．Shareholder Returns 2/2 © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. Profit growth through sustainable growth of core businesses ▼ Stable and sustainable returns ▼ During the period covered by the 2024 Five-Year Mid-term Management Plan, the minimum annual dividend per sh
Slide 35: We will do what we must.
© 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. We will do what we must. Strengthening the competitive advantages of our core businesses 35
Slide 36: Disclaimer
Disclaimer © 2024 Nippon Air Conditioning Services Co., Ltd. All Rights Reserved. These materials were prepared by Nippon Air Conditioning Services Co., Ltd. (the “Company”) for the purpose of understanding the current status of the Company, and do not aim at solicitation for investment in securitie
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