Kondotec Inc. · TSE:7438
Kondotec — Q3 FY2022 Earnings Presentation
60 slides from Kondotec's earnings presentation, Feb 9, 2022
Slide 1: Financial Results Q3 FY2022
Financial Results Q3 FY2022 February 9,2022 Securities Code : 7438
Slide 2: Contents
Contents 1. Highlights of Q3 FY2022 Financial Results P.3 2. Company Overview P.6 3. Main Products and Merchandise P.14 4. Q3 FY2022 Financial Results and Analysis P.20 5. Q3 FY2022 Financial Results and Analysis by Segment P.26 6. Response to ESG Issues P.34 7. Growth Strategies P.40 8. Shareholder
Slide 3: 1. Highlights of Q3 FY2022 Financial Results
1. Highlights of Q3 FY2022 Financial Results
Slide 4: Summary of Q3 FY2022 Consolidated Financial Results
Summary of Q3 FY2022 Consolidated Financial Results Net sales increased due to demand recovery in construction and sales contributions from Fukoku (which became a subsidiary in January 2021) and KURIYAMA ALUMINUM (which became a subsidiary in October 2021). Operating income and ordinary income i
Slide 5: Topics in Q3 FY2022
Topics in Q3 FY2022 Change of the shareholder incentive plan and introduction of new shareholder incentive plan In December 2021, KONDOTEC has changed the existing shareholder incentive plan and has introduced new shareholder incentive plan called, “KONDOTEC Premium Special Club” to enhance the at
Slide 6: 2. Company Overview
2. Company Overview
Slide 7: Performance Trends
Performance Trends Since establishment in 1953, we have not incurred an ordinary loss as a result of efforts to supply products and merchandise to various industries in response to changes of the times and customer needs. Acquired shares Acquired shares of TOKAI STEP of FUKOKU 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. Nippon Scaffolding Holdings Co., Ltd. TECBUILD CO., LTD. TOKAI STEP CO., LTD. FUKOKU, Ltd. KURIYAMA ALUMINUM Co., Ltd. (As of December 31, 2021) Establ
Slide 9: Company History and Business Areas
Company History and Business Areas Company history Business areas January 1953 Established Kondo Shoten Co., Ltd. Construction industry wholesale Changed the company name to January 1989 KONDOTEC INC. Other than Field Categorization of merchandise construction Listed on the Second Section of the Apr
Slide 10: Net Sales by Segment
Net Sales by Segment Segment Main customers Main products & merchandise Net sales by segment (FY2021) Turn buckles Shackles Hardware stores Scaffolding chains Wholesalers Industrial Hooks and clips Materials Home Screws Electrical improvement Container bags Equipment center Tarpa
Slide 11: Distribution Channels
Distribution Channels Suppliers Construction and civil engineering-related Overseas Electrical equipment In-house (manufacturers, etc.) factory procurement manufactures 50% 15% 20% 15% ※ Manufacturer function (In-house manufactured products and OEM products) Approximately 40% Sales contribution rati
Slide 12: Segment Overview
Segment Overview (As of end March 2021) Industrial Structural Electrical Consolidated Materials Steel Materials Equipment 59,562 million yen 37,282 million yen 14,035 million yen 8,243 million yen In- In- house In- 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 2021) 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: 3. 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 construction 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
Scaffolding Installation Our subsidiaries, TECBULID, TOKAI STEP and FUKOKU, handle assembly and disassembly of scaffolding is used for construction and repair of warehouses, detached homes and condominiums. Overpass repair Condominium construction 18
Slide 20: 4. Q3 FY2022 Financial Results and Analysis
4. Q3 FY2022 Financial Results and Analysis
Slide 21: Q3 FY2022 Consolidated Financial Results
Q3 FY2022 Consolidated Financial Results (million yen) Q3 Q3 YoY FY2021 FY2022 Amount % Net sales 44,069 49,167 +5,098 +11.6% Gross profit 10,181 11,056 +874 +8.6% SG&A expenses 7,635 8,373 +738 +9.7% Operating income 2,546 2,682 +135 +5.3% Ordinary income 2,626 2,815 +189 +7.2% Profit attributable
Slide 22: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent △203 754 △273 △140 23.7% 23.3% The impacts of making 23.0% 23.6% 22.9% Nippon Scaffolding 2,682 22.7% 2,546 Holdings, FUKOKU and KURIYAMA ALUMINUM 22.4% 22.8% 22.8% subsidiaries 22.1% 2
Slide 23: Progress for FY2022 Forecast
Q3 FY2022 Consolidated Financial Results Progress for FY2022 Forecast Progress for FY2022 forecast (million yen) Net sales and operating income (million yen) ■ Q3 FY2022 ■ Full-year forecast Net sales Operating income 17,862 Net sales Full-year forecast Progress 16,326 49,167 15,492 15,117 14,978 63
Slide 24: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2021 Q3 FY2022 Change Cash and deposits 11,317 14,659 +3,342 Notes and receivable –trade, 12,372 13,603 +1,231 and contract assets Current assets Electronically recorded 1,984 3,103 +1,119 monetary claims operating Inventories 4,932 6,697 +1,764 Ot
Slide 25: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2021 Q3 FY2022 Change Notes and accounts payable – trade 3,978 4,241 +263 Electronically recorded 8,029 9,085 +1,055 obligations – operations Current liabilities Electronically recorded obligations–operations 9,202 10,823 +1,620
Slide 26: 5. Q3 FY2022 Financial Results and Analysis by Segment
5. Q3 FY2022 Financial Results and Analysis by Segment
Slide 27: Q3 FY2022 Financial Results by Segment
Q3 FY2022 Financial Results by Segment (million yen) Change Full-year Q3 FY2021 Q3 FY2022 Progress (%) forecast Net sales 27,320 30,736 +12.5% 40,452 76.0% Industrial Materials Segment 1,615 1,520 △5.9% 2,265 67.1% profit or loss EBITDA 2,125 2,157 +1.5% － － Net sales 10,742 12,144 +13.0% 14,687 82.
Slide 28: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 11,308 YoY 30,736 9,961 9,900 +12.5% 9,536 9,528 27,320 9,025 8,758 YoY 669 1,615 1,520 593 582 553 540 △5.9% 393 397 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2021 Q3 FY2022 FY2021 FY2021 FY20
Slide 29: Industrial Materials Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM manufactured 29.1% 28.8% 170 27.3% 27.2% in-house Products 26.3% △227 23.1% 24.8% 150 △169 △18 Major increase/decrease factors related to subsidiaries 29.8% 30.7% 30.6% Goodwill amortization 29.2% 28.8% merchandise △156 million yen 27.6% Im
Slide 30: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 4,299 4,328 Segment profit or loss 12,144 3,658 3,616 YoY 3,467 3,516 10,742 3,293 +13.0% 1,052 404 431 812 311 YoY 260 240 217 +29.5% 132 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2021 Q3 FY2022 FY2021 FY2021
Slide 31: Structural Steel Materials Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM 32.2% manufactured 30.7% 30.7% 31.1% 31.8% 29.3% 26.7% in-house Products △1 △85 164 161 merchandise 36.9% 36.7% Imported 35.5% 35.8% 34.2% 34.0% 1,052 32.3% 812 19.3% 19.2% 18.8% merchandise Domestically 18.3% sourced 18.0% Q3 FY2021 Sales
Slide 32: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,237 2,226 2,155 2,126 6,286 YoY 1,886 1,963 1,933 6,006 +4.7% 112 YoY 140 137 69 66 △2.1% 44 42 26 28 Q3 FY2021 Q3 FY2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2021 FY2021 FY2021 FY2021 FY20
Slide 33: Electrical Equipment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM and the number of projects 17.4% Gross Profit Margin 16.8% 16.8% 16.8% 16.6% △35 16.4% 58 16.0% △26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2021 FY2021 FY2021 FY2021 FY2022 FY2022 FY2022 140 137 17 The number of projects※ 14 11 10 Q3 FY2021 Net Sales Gross
Slide 34: 6. 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 m
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. Quality Assurance Department changed the name to SDGs Promotion Department to work actively towards achieving the SDGs targets. In addition to auditing
Slide 37: Initiatives: Environment
Initiatives: Environment Environment Provision of optimal products and merchandise Business activities paying attention for environment measures to the environment Oil hunter Initiatives for environmental protection and energy-saving This is an eco-mark certified oil absorption Initiatives for
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 Year of Nationa
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. KONDOTEC has i
Slide 40: 7. Growth Strategies
7. Growth Strategies
Slide 41: Towards Achieving Billion Yen Sales Target
Towards 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 Accelerate growth with current KONDOTEC (
Slide 42: ① 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: ① Four Growth Strategies: Sales Methods 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: ② 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 opened the Okayama office in April 2018. We will continue to execute quick deliveries in
Slide 45: ③ 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 has resp
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: M&A Strategy Recent Case
M&A Strategy Recent Case Acquisition of KURIYAMA ALUMINUM Co., Ltd. in October 2021 KONDOTEC resolved to acquire shares in KURIYAMA ALUMINUM Co., Ltd. which develops and manufactures aluminum extrusion products and made it a subsidiary with the aim of achieving sustainable growth and improving the
Slide 49: 8. Shareholder Return
8. Shareholder Return
Slide 50: 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. Transition in dividends Shareholder incentive plan Shareholders can redeem reward points for over Since initial listing: No decrease in dividends 2,000
Slide 51: 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) Nikkei average stock price (yen) Among 3,870 listed companies … 1,318 1,250 30,000 1,000 24,000 ROE 1,614th 750 18,000 Profit 500 1
Slide 52: 9. Highlights of Results
9. Highlights of Results
Slide 53: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 49,167 2,682 Progress Progress Net sales Operating income (million yen) million yen 77.2% (million yen) million yen 79.6% 63,700 60,599 59,562 57,828 4,085 3,907 52,811 50,211 50,410 49,167 3,516 3,537 3,441 3,354 3,370 47,991 49,168 3,271 3,303 41,153 2,
Slide 54: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net assets (million yen) 31,987 million yen ROE (%) Target 10 % or higher 31,987 11.1 11.4 10.8 10.9 10.7 10.7 29,022 10.4 28,387 10.0 10% or higher 26,756 24,745 22,719 21,102 20,231 7.1 18,783 16,990 5.8 15,097 5.4 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/
Slide 55: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 Q3 22/3 (forecast) Result of Operations (million yen) Net sales 38,745 41,153 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 49,167 63,700 Operating profit 1,926 2,664 3,271 3,303 3,441 3,516
Slide 56: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 17,862 16,053 16,326 15,665 15,585 15,492 14,647 14,839 15,117 14,978 14,050 14,350 14,199 14,313 14,112 13,220 13,613 13,108 12,433 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 18/3 19/3 20/3 21/3 22/3 Operating income (millio
Slide 57: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 11,308 9,961 9,900 9,536 9,528 9,175 9,227 9,025 8,919 8,685 8,758 8,371 8,052 7,968 7,907 7,607 7,664 7,228 7,373 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (million ye
Slide 58: Quarterly Highlights: Structural Steel Materials
Quarterly Highlights Structural Steel Materials Net sales (million yen) 4,597 4,412 4,322 4,299 4,328 4,225 3,991 3,913 4,019 3,720 3,835 3,859 3,658 3,616 3,516 3,420 3,467 3,277 3,293 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (milli
Slide 59: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,237 2,226 2,125 2,156 2,148 2,107 2,101 2,155 2,126 2,080 2,035 2,035 2,005 1,963 1,927 1,886 1,933 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (million yen
Slide 60: Notes on forward-looking statements
Notes on forward-looking statements This document contains forward-looking statements and business plans. These statements were made based on economic environment and business policies at the time of the release. Actual results may differ materially from these forward-looking statements due to vario