Kondotec Inc. · TSE:7438
Kondotec — Q3 FY2021 Earnings Presentation
60 slides from Kondotec's earnings presentation, Feb 9, 2021
Slide 1: Financial Results Q3 FY2021
Financial Results Q3 FY2021 February 9, 2021 Securities Code : 7438
Slide 2: Contents
Contents 1. Highlights of Q3 FY2021 Financial Results and Recent P.3 Initiatives 2. Company Overview P.6 3. Main Products and Merchandise P.14 4. Q3 FY2021 Financial Results and Analysis P.20 5. Q3 FY2021 Financial Results and Analysis by Segment P.26 6. Response to ESG Issues P.34 7. Growth Strateg
Slide 3: 1. Highlights of Q3 FY2021 Financial Results and Recent Initiatives
1. Highlights of Q3 FY2021 Financial Results and Recent Initiatives
Slide 4: Summary of Q3 FY2021 Consolidated Financial Results
Summary of Q3 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 results decreased. Although we worked to cut SG&A expenses and improve efficiency
Slide 5: Recent Initiatives
Recent Initiatives Acquisition of FUKOKU, Ltd. in January 2021 Establishment of intermediate holding company KONDOTEC acquired all shares in FUKOKU, Ltd. with the aim of KONDOTEC has three subsidiaries – TECBUILD CO., LTD., TOKAI achieving sustainable growth and improving the corporate value STE
Slide 6: 2. 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. FUKOKU, Ltd. Established January 1953 President and Representative Katsuhiko Kondo Director 2-2-90 Sakaigawa, N
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 Other than January 1989 Field Categorization of merchandise KONDOTEC INC. construction Listed on the Second Section of the KON
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 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 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- 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 2020) 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
Strengthened Business and Products for Last Year Scaffolding Installation FUKOKU (shares acquired in January 2021) as well as TECBULID and TOKAI STEP handle assembly and disassembly of scaffolding is used for construction and repairs of warehouses, detached homes and condominiums. Overpass repair
Slide 20: 4. Q3 FY2021 Financial Results and Analysis
4. Q3 FY2021 Financial Results and Analysis
Slide 21: Q3 FY2021 Consolidated Financial Results
Q3 FY2021 Consolidated Financial Results (million yen) Q3 Q3 YoY FY2020 FY2021 Amount % Net sales 45,952 44,069 △1,883 △4.1％ Gross profit 10,342 10,181 △160 △1.6％ SG&A expenses 7,115 7,635 ＋519 ＋7.3％ Operating income 3,226 2,546 △680 △21.1％ Ordinary income 3,295 2,626 △668 △20.3％ Profit attributable
Slide 22: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Conslidated Parent 23.7% △885 23 23.5% 45 23.3% 23.3% 23.6% 136 23.0% 23.0% 3,226 22.8% 22.8% The impact of 22.8% 2,546 22.6% making TOKAI 22.5% STEP a subsidiary 22.1% 22.0% Q3 FY2020 Net sales Gross Prof
Slide 23: Progress for FY2021 Forecast
Q3 FY2021 Consolidated Financial Results Progress for FY2021 Forecast Progress for FY2021 forecast (million yen) Net sales and operating income (million yen) ■ Q3 FY2021 ■ Full-year forecast Net sales Operating income Net sales Full-year 16,053 forecast Progress 15,585 15,117 14,647 14,839 44,069 62
Slide 24: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2020 Q3 FY2021 Change Cash and deposits 8,305 8,746 ＋440 Notes and receivable –trade 13,207 12,173 △1,033 Current assets Electronically recorded 1,695 2,337 ＋642 monetary claims operating Inventories 5,026 5,023 △2 Other 672 857 ＋184 Total current
Slide 25: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2020 Q3 FY2021 Change Notes and accounts payable – trade 3,333 3,293 △40 Electronically recorded obligations – operations 8,400 7,416 △984 Current liabilities Breakdown Electronically recorded obligations–operations 10,006 9,471
Slide 26: 5. Q3 FY2021 Financial Results and Analysis by Segment
5. Q3 FY2021 Financial Results and Analysis by Segment
Slide 27: Q3 FY2021 Financial Results by Segment
Q3 FY2021 Financial Results by Segment (million yen) Change Full-year Q3 FY2020 Q3 FY2021 Progress (%) forecast Net sales 26,773 27,320 ＋2.0％ 38,900 70.2% Industrial Materials Segment 1,638 1,615 △1.4％ 2,068 78.1％ profit or loss EBITDA 1,938 2,125 +9.6％ － － Net sales 12,569 10,742 △14.5％ 14,800 72.6
Slide 28: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 9,536 YoY 9,175 9,227 9,025 27,320 8,685 8,758 26,773 +2.0％ 8,371 672 669 1,638 1,615 YoY 544 553 472 △1.4％ 421 393 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2020 Q3 FY2021 FY2020 FY2020 FY2020
Slide 29: Industrial Materials Segment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM manufactured 69 △54 29.9% 28.6% 27.3% 29.1% 28.8% 27.0% in-house Products 23.4% 207 △479 Major increase/decrease factors related to 232 subsidiaries Goodwill △143 million yen amortization： 30.7% 29.8% 1,638 29.2% Goodwill amortization incur
Slide 30: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 4,412 4,322 12,569 3,835 3,859 YoY 3,658 3,616 10,742 3,467 △14.5％ 497 482 1,379 399 YoY 338 311 812 240 260 △41.1％ Q3 FY2020 Q3 FY2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2020 FY2020
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 30.7% 30.7% 29.3% 28.6% △339 △113 34 36.9% △149 35.7% 35.8% 35.5% merchandise 35.4% Imported 1,379 33.5% 34.2% 812 20.8% 20.7% 20.0% 20.1% merchandise Domestically 19.3% Sourced 18.8% Q3 FY20
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 6,609 YoY 6,006 2,107 2,101 2,155 △9.1％ 2,035 1,963 106 1,886 221 YoY 63 69 140 59 52 △36.7％ 44 26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2020 Q3 FY2021 FY2020 FY2020 FY2020 FY2020 FY2
Slide 33: Electrical Equipment Segment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM and number of projects Gross Profit Margin 17.5% 17.4% 16.8% 16.8% 16.6% 16.6% 16.6% △98 21 221 △4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 140 Number of project※ 15 14 13 Q3 FY2020 Net sales Gross Profit SG&A E
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. NEWS January 2021 Establishment of SDGs promotion department Quality Assurance Department changed the name to SDGs Promotion Department to work actively
Slide 37: Initiatives: Environment
Initiatives: Environment Environment Provision of optimal products and merchandise Business activities paying attention for environment measures to the 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: 7. 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 Accelerate growth with current KONDOTEC (o
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: 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: 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: 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: 8. 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. Transition in dividends Transition in dividends Ordinary dividend Increase in ordinary
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) Nikkei average stock price (yen) Among 3,816 listed companies … 1,318 1,250 30,000 1,000 24,000 ROE 806th 750 18,000 Profit 500 12,
Slide 51: 9. Highlights of Results
9. Highlights of Results
Slide 52: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 44,069 2,546 Progress Operating income Progress Net sales (million yen) million yen 71.1％ (million yen) million yen 68.8％ 62,000 60,599 4,085 57,828 3,907 3,700 52,811 3,516 3,537 50,211 50,410 3,441 3,271 3,303 47,991 49,168 44,069 41,153 2,664 38,745 2,
Slide 53: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net assets (million yen) 28,963 million yen ROE (％) Target 10 ％ or higher 28,387 28,963 11.1 10.9 11.4 10.8 10.7 10.7 26,756 10.4 10.0 24,745 22,719 21,102 10％ or higher 20,231 18,783 7.1 16,990 15,097 5.8 14,381 4.7 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/
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 21/3 Q3 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 44,069 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 14,647 14,839 15,117 14,050 14,350 14,199 14,313 14,112 13,220 13,613 12,660 13,058 12,924 13,108 12,433 11,767 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17/3 18/3 19/3 20/3 21/3 Operating income (millio
Slide 56: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,536 9,175 9,227 9,025 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17/3 18/3 19/3 20/3 21/3 Segment profit or loss (million yen
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 3,658 3,616 3,349 3,330 3,420 3,467 3,277 3,032 2,720 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17/3 18/3 19/3 20/3 21/3 Segment profit or loss (milli
Slide 58: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,196 2,156 2,148 2,155 2,125 2,080 2,107 2,101 2,013 1,970 2,005 2,035 2,035 1,963 1,927 1,963 1,886 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17/3 18/3 19/3 20/3 21/3 Segment profit or loss (million yen
Slide 59: 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 release. Actual results may differ materially from these forward-looking statements due to various f
Slide 60: Contact details
2-2-90 Sakaigawa, Nishi-ku, Osaka 550-0024 Japan Telephone: +81-6-6582-8441 Website: https://www.kondotec.co.jp E-mail：kikaku@kondotec.co.jp