Shinwa Co.,Ltd. · TSE:3447

Shinwa Co.,Ltd — FY2020 Earnings Presentation

59 slides from Shinwa Co.,Ltd's earnings presentation, May 26, 2021

Slide 1: FY2020 Presentation Material for Financial Results Briefing
FY 2020 Presentation Material for Financial Results Briefing (May 26, 2021)
Slide 2: Contents
Contents Chapter Chapter 01 Features of Shinwa 07 Financial Overview for FY2020 Chapter Chapter First Pillar: Scaffolding 02 Equipment 08 Business Forecast for FY2021 Chapter Chapter 03 What is System Scaffolding? 09 Shareholder Return Chapter First-class Production Capacity 04 in Japan and Highly C
Slide 3: Features of Shinwa
Chapter 01 Features of Shinwa
Slide 4: Features of Shinwa
Features of Shinwa Leader of scaffolding equipment technology Top share in Japan for system scaffolding products High flexibility and quality owing to first-class production capacity in Japan * System scaffolding is the general term referring to wedge binding type scaffolding and next generation sca
Slide 5: Corporate Outline
Corporate Outline Name Shinwa Co., Ltd. 30-7 Hiratacho Bushigawa, Kaizu-shi, Head Office Gifu 503-0311, Japan President and Representative Hiroshi Yamada Director Founded September 1977 Established August 1979 Capital 153 million yen Employees 175 (*) Securities Code 3447 Number of 14,103,000 shares
Slide 6: Company History
Company History 1977 Began business operations as Shinwa Shoten 1978 Started manufacturing “Jack Base” scaffolding 1988 Entered the system scaffolding market 2003 Established the Logistics Equipment Division Started manufacturing and selling next 2016 generation scaffolding “SPS (Silent Power System
Slide 7: Company Network
Company Network Eleven locations in Japan and two locations overseas Domestic locations Overseas locations Tsuchikura Plant & Tsuchikura Equipment Center Sugito Equipment Center & Satte Office Subcontract Factory Guangdong Nisshin-Chuangfu Kansai Equipment Tokyo Branch in Vietnam Advanced Constructi
Slide 8: Business Activities
Business Activities The Scaffolding Equipment Division that produces and sells the system scaffolding products is our primary revenue earner Scaffolding Equipment Division Logistics Equipment Division Manufacture/sales/rental of scaffolding Manufacture/sales of logistics equipment equipment used in
Slide 10: Categorization of Scaffolding Equipment
Categorization of Scaffolding Equipment Scaffolding equipment is broadly categorized into “lightweight scaffolding equipment” and “heavy-duty scaffolding equipment” Our company manufactures and sells “footholds” amongst lightweight scaffolding equipment Uses for lightweight and heavy-duty scaffoldin
Slide 11: Unique Positioning in the Scaffolding Market
Unique Positioning in the Scaffolding Market The only company that can supply products to various markets, from low- rises to skyscrapers Multi-story scaffolding SPS/NDS Skyscraper market (Next generation scaffolding) (High-rise condominiums, etc.) High-rise market Shinwa Catcher (Large apartments,
Slide 20: System Scaffolding Sales Share
System Scaffolding is Indispensable at Construction Sites System Scaffolding Sales Share Total shipment amount base from internal survey (in 2019) 20 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 21: Business Environment for Scaffolding Equipment Division
Business Environment for Scaffolding Equipment Division Promoting strategic maintenance, repair, and renovation of infrastructure Percentage of social infrastructure Construction Investment: Trends in new built 50 years or more ago construction work and maintenance/repair work Road bridges [about 40
Slide 22: Business Environment for Scaffolding Equipment Division
Business Environment for Scaffolding Equipment Division Expect an increase in renovation demand for houses built 30 years ago or more Number of occupied houses by date of Market size forecast for house renovation construction market Houses built before 1990 represent 39% (Trillion yen) (20.9 million
Slide 23: Work-Related Deaths at Construction Sites
Work-Related Deaths at Construction Sites 40% of all deaths are a result of falls Accidents from falls Number of accidental deaths in construction (People) At time of assembly and disassembly 500 Danger Falls Other Accidental Deaths 400 377 people 327 people 323 people 309 people 294 people 300 228
Slide 24: Measures to Prevent Falls – Pre-install Guard Rails
Measures to Prevent Falls – Pre-install Guard Rails By installing guard rails before construction, prevent accidental falls 1. Install guard rails first, from the bottom 2. After climbing up, there is already a guard rail • A safety harness (fall prevention equipment) can be attached • Strength of t
Slide 25: Measures to Prevent Equipment from Falling
Measures to Prevent Equipment from Falling Installing toe boards protects the walking surface and prevents people and equipment from falling Falling through scaffolding openings Dropping construction equipment Merits to installing toe boards  Prevents workers from falling  Prevents equipment from
Slide 26: Top Production Capacity in Japan and Highly Competitive Manufacturing Cost
Chapter 04 Top Production Capacity in Japan and Highly Competitive Manufacturing Cost 26 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 27: Top Production Capacity in Japan
Top Production Capacity in Japan 10-ton truck Approximately trucks (FY2020) Number of welding robots robots (As of April 27, 2021) Site Area 40,642 m2 Boasts leading production capabilities with production of diverse products and speedy product launch Reduces raw material Able to respond procurement
Slide 28: Highly Competitive Manufacturing Cost
Highly Competitive Manufacturing Cost Ability to respond flexibly to various requests from customers and highly competitive with low manufacturing costs by leveraging plant location Special orders as a percentage manufactured Low-cost structure for manufacturing costs items Achieve the best mix betw
Slide 30: What is Logistics Equipment?
What is Logistics Equipment? Logistics equipment does not come in any specific shape or form. It includes custom-made products that respond to transportation and storage needs of various industries Exclusive designs for specific industries Boasts wide-reaching touch points and needs Transporting aut
Slide 32: [Chemical] Liquid Bulk Containers
[Chemical] Liquid Bulk Containers (For illustrative purposes only) Capable of containing a five-drum bulk in a four-drum area 32 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 33: [Logistics/Warehouse] Storage Racks for E-Commerce Retailers
[Logistics/Warehouse] Storage Racks for E-Commerce Retailers (For illustrative purposes only) 33 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 34: From Site Management to Installation of Logistics Equipment
From Site Management to Installation of Logistics Equipment (For illustrative purposes only) 34 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 36: Overseas Expansion – Initiatives to Date
Overseas Expansion – Initiatives to Date China • Established a joint venture company in November 2019 • Upon completion of a marketing study on China’s domestic market, began manufacturing and selling scaffolding in 2020 that conformed to China’s building standards * Representative office in the Phi
Slide 37: Overseas Expansion – Establish Joint Venture Company
Overseas Expansion – Establish Joint Venture Company Established a joint venture company, Guangdong Nisshin-Chuangfu Advanced Construction Materials Co., Ltd. in November 2019 Guangdong Foshan Guangzhou Shenzhen Hong Kong Macao • A joint venture company was established in Foshan city in Guangdong pr
Slide 38: Summary of the Joint Venture Company in China
Summary of the Joint Venture Company in China Company Guangdong Nisshin-Chuangfu Advanced Registered RMB 25 million Name Construction Materials Co., Ltd. Capital (equivalent to approx. 400 million yen) Kurio Noritake (Executive Vice President Representative and Director, Shinwa Co., Ltd.) Shinwa Co.
Slide 39: Shinwa's "Visions"
Shinwa’s “Visions” Increase the true value of Shinwa with the three “Visions” to achieve continuous growth Deepening Innovation Progress Scaffolding Areas of Logistics Equipment Equipment Division Expansion Division Increase share in Reinforce/expand Conduct transactions system scaffolding overseas
Slide 40: Financial Overview for FY2020
Chapter 07 Financial Overview for FY2020
Slide 41: Financial Highlights for FY2020
Financial Highlights for FY2020 13,885 million yen (year on year -18.7%) Delays to investments in new construction and construction interruptions due to the spread of Covid-19 impacted year on year revenue, which posted a decline of 18.7% 3,621 million yen (year on year -16.3%) Gross profit fell as
Slide 42: Summary of Consolidated P/L Statement
Summary of Consolidated P/L Statement (IFRS-based; million yen) FY2019 FY2020 Increase/ Year on Actuals Actuals Decrease Year Rate Revenue 17,081 13,885 - 3,195 - 18.7% Cost of Sales 12,751 10,263 - 2,488 - 19.5% Gross Profit 4,329 3,621 - 707 - 16.3% Gross Profit Ratio 25.3% 26.1% － + 0.8pt SG&A Ex
Slide 43: Performance by Division: Scaffolding Equipment Division
Performance by Division: Scaffolding Equipment Division Revenue trends FY2020 consolidated cumulative total (million yen)  Impacts were observed in construction 16,000 interruptions and postponements, as well as delays in new construction 14,000 and/or investments due to the spread of Covid-19 12,0
Slide 44: Expansion in Safety Measures Equipment
Expansion in Safety Measures Equipment Sales share of safety measures Pre-installed guard rails equipment  While affected by Covid-19, there continues to be a strong trend towards 30% the importance of safety at construction sites  Rate of adoption for safety measures equipment with regard to syst
Slide 45: Performance by Division: Logistics Equipment Division
Performance by Division: Logistics Equipment Division Revenue trends FY2020 consolidated cumulative total  Despite the impact of stagnating logistics (million yen) globally due to Covid-19, successfully 3,500 won new deals from the automobile and semi-conductor industries which 3,000 recovered busi
Slide 46: EC Market Scale and Construction Order Trends for Warehouse/Logistics Facilities
EC Market Scale and Construction Order Trends for Warehouse/Logistics Facilities With the expansion in EC market scale, construction orders for warehouses and logistics facilities continued to increase Trends in construction order value Trends in EC market scale for warehouses/logistics facilities (
Slide 47: Gross Profit and Operating Profit
Gross Profit and Operating Profit Gross profit and gross profit ratio Operating profit and operating profit ratio Gross profit fell as revenue declined, but demand Thorough cost reduction and expense minimization for high value-added products such as safety efforts including a reduction in fixed cos
Slide 48: Analysis of Increases/Decreases in Operating Profit
Analysis of Increases/Decreases in Operating Profit Sought to secure revenues through cost reductions, etc. but profits fell + + + + - FY2019 Scaffolding Logistics Personnel Expenses Other FY2020 Equipment Equipment Expense Division Division 48 Copyright© Shinwa Co., Ltd. All rights reserved.
Slide 49: Changes on the Balance Sheet
Changes on the Balance Sheet (IFRS-based; million yen) As of Mar As of Mar Factors for Increases/Decreases Change 31, 2020 31, 2021 (million yen) Current assets Current Assets 8,345 9,290 945 ・Cash and cash equivalents +1,617 ・Inventories - 922 Non-Current Assets 13,274 12,945 - 328 Non-current asse
Slide 50: Changes on the Cash Flow Statement
Changes on the Cash Flow Statement (hundred million yen) (million yen) 40 CF from operating activities 2,892 Pretax net profit 1,784 30 Depreciation 655 Changes to inventories 923 Changes to trade and other receivables - 234 20 Changes to trade and other payables 41 Payment of corporate taxes, etc.
Slide 51: Business Forecast for FY2021
Chapter 08 Business Forecast for FY2021
Slide 52: Business Forecast for FY2021
Business Forecast for FY2021 While the future still remains uncertain due to the Covid-19 pandemic, construction is expected to trend favorably. On the other hand, the price of steel, one of the major raw materials for our company’s products, is experiencing a steep increase in price globally and is
Slide 53: Business Forecast: Scaffolding Equipment
Business Forecast: Scaffolding Equipment Demand for high value-added products such as safety measures equipment is expected to continue trending favorably, while demand for other products is also expected to continue to be above a certain level. The impact of steep increases in raw materials prices
Slide 54: Business Forecast: Logistics Equipment Division
Business Forecast: Logistics Equipment Division The trend for bulk containers for transporting liquids and racks for logistics warehouses is expected to remain strong. Additionally, we will make efforts to increase sales through new deals from a wide range of areas. Revenue forecast (million yen) 3,
Slide 55: Trend Forecast for Raw Material Prices
Trend Forecast for Raw Material Prices The price of steel, a major raw material for our company’s products, is currently undergoing a sharp increase globally. Rate of increase of material prices Background of price increase  With strong demand from China in the 25% background, the Asian market saw
Slide 56: Shareholder Return
Chapter 09 Shareholder Return
Slide 57: Shareholder Return
Shareholder Return At Shinwa Group, the return of profits to our shareholders is positioned as one of the most important management issues. Basic Policy Target Dividend Estimated Dividend Payout Ratio for FY2021 Redistribute profit to Based on performance Based on the basic principle, shareholders i
Slide 58: Dividend Payouts to Date
Dividend Payouts to Date For FY2020, the annual dividend paid out was 35 yen per share. For FY2021, annual dividend payout is expected to be 32 yen per share (dividend payout ratio of 40.0%). 46% 42% 41% 40% 40% Policy is to payout dividends in a sustainable and stable manner, in line with performan
Slide 59: Disclaimer
Disclaimer The plans, estimates, strategies, etc. stated in this document are all forecasts based on the information available at the time of this documentation and 30-7 Hiratacho Bushigawa, Kaizu-shi, Gifu hence contain risks and uncertainties inherent to such forecasts. Prefecture Due to such risk

Shinwa — FY2020 Earnings Presentation on 6ix

Shinwa Co.,Ltd — FY2020 Earnings Presentation

Slide 1: FY2020 Presentation Material for Financial Results Briefing

Slide 2: Contents

Slide 3: Features of Shinwa

Slide 4: Features of Shinwa

Slide 5: Corporate Outline

Slide 6: Company History

Slide 7: Company Network

Slide 8: Business Activities

Slide 9: First Pillar: Scaffolding Equipment Division

Slide 10: Categorization of Scaffolding Equipment

Slide 11: Unique Positioning in the Scaffolding Market

Slide 12: What is System Scaffolding?

Slide 13: Housing Construction (Low-Rise)

Slide 14: Logistics Warehouse Construction (Mid-Rise)

Slide 15: Large-Scale Residential Building Repair (High-Rise)

Slide 16: Super High-Rise Residential Building (Skyscraper)

Slide 17: Plant Maintenance

Slide 18: Civil Engineering Work

Slide 19: Road Construction, Maintenance, and Repair

Slide 20: System Scaffolding Sales Share

Slide 21: Business Environment for Scaffolding Equipment Division

Slide 22: Business Environment for Scaffolding Equipment Division

Slide 23: Work-Related Deaths at Construction Sites

Slide 24: Measures to Prevent Falls – Pre-install Guard Rails

Slide 25: Measures to Prevent Equipment from Falling

Slide 26: Top Production Capacity in Japan and Highly Competitive Manufacturing Cost

Slide 27: Top Production Capacity in Japan

Slide 28: Highly Competitive Manufacturing Cost

Slide 29: Second Pillar: Logistics Equipment Division

Slide 30: What is Logistics Equipment?

Slide 31: [Automobile] Engine/Transmission Transport Pallets

Slide 32: [Chemical] Liquid Bulk Containers

Slide 33: [Logistics/Warehouse] Storage Racks for E-Commerce Retailers

Slide 34: From Site Management to Installation of Logistics Equipment

Slide 35: Third Pillar: Overseas Business Expansion

Slide 36: Overseas Expansion – Initiatives to Date

Slide 37: Overseas Expansion – Establish Joint Venture Company

Slide 38: Summary of the Joint Venture Company in China

Slide 39: Shinwa's "Visions"

Slide 40: Financial Overview for FY2020

Slide 41: Financial Highlights for FY2020

Slide 42: Summary of Consolidated P/L Statement

Slide 43: Performance by Division: Scaffolding Equipment Division

Slide 44: Expansion in Safety Measures Equipment

Slide 45: Performance by Division: Logistics Equipment Division

Slide 46: EC Market Scale and Construction Order Trends for Warehouse/Logistics Facilities

Slide 47: Gross Profit and Operating Profit

Slide 48: Analysis of Increases/Decreases in Operating Profit

Slide 49: Changes on the Balance Sheet

Slide 50: Changes on the Cash Flow Statement

Slide 51: Business Forecast for FY2021

Slide 52: Business Forecast for FY2021

Slide 53: Business Forecast: Scaffolding Equipment

Slide 54: Business Forecast: Logistics Equipment Division

Slide 55: Trend Forecast for Raw Material Prices

Slide 56: Shareholder Return

Slide 57: Shareholder Return

Slide 58: Dividend Payouts to Date

Slide 59: Disclaimer