Slide 1: Financial Results Presentation for the Second Quarter of FY2024
TSE Prime Market 1961 Financial Results Presentation for the Second Quarter of FY2024 November 11, 2024
Slide 2: Contents
Contents Summary 01 Business Description P. 4 02 Summary of Q2 FY2024 Results P. 5 03 Performance by Segment P. 14 04 Earnings Forecast P. 18 05 Shareholder Returns and Capital Policy P. 21 Status of Business Progress in the Medium-Term Management Plan 06 Status of Business Progress in the Medium-Te
Slide 3: Q2 FY2024 Summary of Financial Results
Q2 FY2024 Summary of Financial Results ©2024 SANKI ENGINEERING CO., LTD. 3
Slide 4: Business Description
01− Business Description Facilities Construction Sales composition ratio Business (Q2 FY2024) The business includes HVAC and The Group aims to be the Plumbing for Buildings, Industrial HVAC centered on air-conditioning systems for factories, Electrical Systems, and Facility Systems 83% Machinery Sys
Slide 5: Financial Summary (Consolidated)
02− Summary of Q2 FY2024 Results Financial Summary (Consolidated) Performance remained strong, supported by steady project progress, in addition to robust capital investment in the private sector. ■ Net sales, profit, and orders received all reaching record highs* on a H1 standalone basis. (Millions
Slide 6: Consolidated Results (P/L, Orders Received)
02− Summary of Q2 FY2024 Results Consolidated Results (P/L, Orders Received) ⚫ Net sales increased due to progress in projects carried forward, with contribution particularly from large-scale projects in Facilities Construction ⚫ Profit increased significantly due to higher net sales and continued i
Slide 7: Quarterly Changes in Net Sales and Ordinary Profit
02− Summary of Q2 FY2024 Results Quarterly Changes in Net Sales and Ordinary Profit ⚫ Normally, there is a seasonality in net sales and profit whereby progress in the first and second quarters tends to be low against full-year performance. However, in the period under review, net sales and profit bo
Slide 8: Completed construction contracts as a percentage of net sales, and gross profit
02− Summary of Q2 FY2024 Results Reference: Completed construction contracts delivered as a percentage of net sales, and gross profit (non-consolidated: Facilities Construction) Net sales of uncompleted construction contracts Gross profit Net sales of completed construction contracts delivered (Mill
Slide 9: Balance Sheets (B/S)
02− Summary of Q2 FY2024 Results Balance Sheets (B/S) (Millions of yen) FY2024 March 31, 2024 Change Q2 Current assets 131,564 117,539 (14,024) Trade receivable Cash and deposits / Securities 24,500 34,249 9,748 Decrease due to seasonal fluctuations Trade receivable* 97,549 72,202 (25,346) Non-curre
Slide 10: Financial Condition (consolidated)
02− Summary of Q2 FY2024 Results Financial Condition (consolidated) (Millions of yen) Liabilities and Assets net assets 202,161 202,161 Liabilities and Cash and Cash and deposits / Securities Assets deposits / Accounts payable for net assets 24,500 179,664 Securities construction contracts 179,664 I
Slide 11: Cash Flows
02− Summary of Q2 FY2024 Results Cash Flows ⚫ Balance of cash and cash equivalents increased from March 31, 2024 (Millions of yen) Due to posting of profit before Due to repayment of Due to acquisition of income taxes and progress in long-term borrowings securities collection of trade receivables an
Slide 12: Main Large-Scale Projects Received
02− Summary of Q2 FY2024 Results Main Large-Scale Projects Received ⚫ Large-Scale Contracts Awarded Property name Item of construction Type of construction Location Daiichi Sankyo Biotech Co., Ltd. / Emergency Power Generator Electrical and HVAC systems Renewal Saitama Installation Project Takara Bi
Slide 13: Main Large-Scale Completed Construction Projects
02− Summary of Q2 FY2024 Results Main Large-Scale Completed Construction Projects ⚫ Large-Scale Completed Construction Projects Type of Property name Item of construction Location construction New Urbannet Midosuji Building HVAC systems construction Osaka work New Panasonic Corporation Suehirocho Bu
Slide 14: Orders Received by Segment (Consolidated)
03− Performance by Segment Orders Received by Segment (Consolidated) Facilities Increased significantly reflecting large-scale contracts awarded in such projects as urban redevelopment and EV Construction battery plant. Business Decreased as a result of order intake activities that took into conside
Slide 15: Net Sales by Segment (Consolidated)
03− Performance by Segment Net Sales by Segment (Consolidated) Facilities Construction Increased due to progress in large-scale projects carried forward in all of HVAC and Plumbing for Buildings, and Business Industrial HVAC and Electrical Systems businesses Plant & Machinery Increased due to progre
Slide 16: Gross Profit by Segment (Consolidated)
03− Performance by Segment Gross Profit by Segment (Consolidated) Facilities Increased due to improvement in profit margin at the time of order intake and of works in progress, in addition to Construction higher net sales. In particular, completion of EV battery plant contributed to the increase. Bu
Slide 17: Ordinary Profit by Segment (Consolidated)
03− Performance by Segment Ordinary Profit by Segment (Consolidated) (Millions of yen) Q2 FY2023 Q2 FY2024 YoY Ordinary profit Ordinary profit Change % change Facilities Construction 1,236 5,784 4,548 368.0 Business Machinery Systems (518) (449) 69 ― Environmental Systems (203) (104) 98 ― Real Estat
Slide 18: FY2024 Forecast (Consolidated)
04− Earnings Forecast FY2024 Forecast (Consolidated) Forecast has been revised upward because, in addition to projection for better-than-expected progress in large-scale Net sales / projects carried forward against initial forecast, improvement in profit margin is anticipated as a result of order Pr
Slide 19: Contracts carried forward and completion schedule
04− Earnings Forecast Reference Contracts carried forward and completion schedule (non-consolidated, Real Estate business excluded) (Millions of yen) Q2 FY2023 Q2 FY2024 217,130 199,625 107,205 95,271 94,913 79,438 79,748 78,298 24,605 31,627 Net sales Contracts Of which, Of which, Of which, Net sal
Slide 20: Forecast of Orders Received and Net Sales by Segment
04− Earnings Forecast Forecast of Orders Received and Net Sales by Segment (Consolidated) ⚫ Forecast of orders received and net sales was amended for some segments following revision to earnings forecast (Millions of yen) Revised forecast Revised forecast Revised forecast Revised forecast announced
Slide 21: Status of Shareholder Returns
05− Shareholder Returns and Capital Policy Status of Shareholder Returns ⚫ Provided stable returns to shareholders in line with the shareholder return policy set forth in the medium-term management plan “Century 2025” Phase 3 ⚫ Following revision to earnings forecast, dividend forecast for the fisca
Slide 22: Financial and Capital Policies
05− Shareholder Returns and Capital Policy Financial and Capital Policies Reduction of strategic shareholdings ⚫ With a target of reducing strategic shareholdings as a percentage of consolidated net assets to below 20% by March 31, 2028, seek to bring down the ratio by 50% or more from the status as
Slide 23: Status of Business Progress in the Medium-Term Management Plan
Status of Business Progress in the Medium-Term Management Plan ©2024 SANKI ENGINEERING CO., LTD. 23
Slide 24: Phase 3 Basic Policies "Century 2025"
06− Status of Business Progress in the Medium-Term Management Plan Phase 3 Basic Policies The Phase 3 medium-term management plan will put the finishing touches on our Century 2025 long-term vision. During this phase we will realize our ambition of becoming the company of choice through the maturati
Slide 25: Phase 3 Performance Targets and Results
06− Status of Business Progress in the Medium-Term Management Plan Phase 3 (FY2022 – FY2025) Performance Targets and Results Phase3 FY2024 forecast FY2024 forecast FY2022 FY2023 final fiscal year 2025 announced on announced on actual actual targets August 9 November 11 Net sales ¥220.0 billion ¥190.
Slide 26: Progress in Strategic Measures: Strengthen core businesses
06− Status of Business Progress in the Medium-Term Management Plan Progress in Strategic Measures Maturity and evolution of measures to Ongoing initiatives from Phase 1 enhance Quality Measure 1 Strengthen core businesses Orders received for large-scale projects related to semiconductors and EV batt
Slide 27: Progress in Strategic Measures: Promote Growth Strategies
06− Status of Business Progress in the Medium-Term Management Plan Progress in Strategic Measures Maturity and evolution of measures to Ongoing initiatives from Phase 1 enhance Quality Measure 2 Promote Growth Strategies ⚫ Promoted the Earth MIRAI Project* Proceeded with refining the projects select
Slide 28: Progress in Strategic Measures: Financial and Capital Policies, Information Dissemination
06− Status of Business Progress in the Medium-Term Management Plan Progress in Strategic Measures Maturity and evolution of measures to Ongoing initiatives from Phase 2 enhance Quality Measure 1 Disclose Financial and Capital Policies ⚫ Disclosed policy to reduce strategic shareholdings * Please ref
Slide 29: Progress in Strategic Measures: Sustainability and Work-Style Reform
06− Status of Business Progress in the Medium-Term Management Plan Progress in Strategic Measures New initiatives implemented from Enhance the Company’s Quality and Phase 3 Reliability Coral Project Measure 1 Contribute to the Sustainability of Society An initiative aimed at preservation of coral re
Slide 30: Progress in Strategic Measures: Invest toward the Next Era
06− Status of Business Progress in the Medium-Term Management Plan Progress in Strategic Measures New initiatives implemented from Enhance the Company’s Quality and Phase 3 Reliability Measure 3 Invest toward the Next Era ⚫ Accelerated digital transformation of construction work in Facilities Constr
Slide 31: Supplementary Materials
Supplementary Materials ©2024 SANKI ENGINEERING CO., LTD. 31
Slide 32: "Century 2025" Long-Term Vision Business Results
Supplementary Materials “Century 2025” Long-Term Vision Business Results (in ¥100 million) Consolidated Orders Received (in ¥100 million) Consolidated Net sales 2,500 2,300 3,000 Q2 Full year Q2 Full year 2,450 2,000 1,858 2,500 1,509 2,000 1,685 1,500 1,500 1,000 909 1,059 1,000 703 500 500 0 0 201
Slide 33: Trends of Orders Received by Building Usage
Supplementary Materials Trends of Orders Received by Building Usage (Consolidated: Facilities Construction Business) (Millions of yen) Factory Laboratories Office Store Hospitals Sports facilities Others 4.5% 4.3% Q2 Orders 45.9% 6.4% 17.3% 3.8% 17.8% FY2024 received 129,704 3.5% Q2 Orders 49.2% 5.7
Slide 34: Trends of Orders Received by Main Customer Industry
Supplementary Materials Trends of Orders Received by Main Customer Industry (Consolidated: Facilities Construction Business) (Millions of yen) Electrical Machinery Automobile Machinery Pharmaceutical Real Estate Finance and Insurance Miscellaneous Business Services Government Offices Others 2.3% 3.9
Slide 35: Financial Indicators
Supplementary Materials Financial Indicators FY2024 FY2022 FY2023 Sep. 2024 (Full-year forecast) Earnings per share (EPS) (yen) 85.80 165.58 83.78 218.47 Return on equity (ROE) (%) 5.1 9.2 ― 11.1 Return on assets (ROA) (%) 3.5 6.8 ― 8.8 Book-value per share (BPS) (yen) 1,666.36 1,967.03 1,902.33 1,9
Slide 36: Other data
Supplementary Materials Other data (Millions of yen) FY2022 FY2023 Sep. 2023 Sep. 2024 Overseas orders 3,021 3,245 1,552 1,968 Overseas sales 3,488 3,675 1,794 1,837 Percentage of orders received directly (non-consolidated: Facilities 51.8 50.3 54.0 44.1 Construction)(%) Percentage of orders receive
Slide 37: Other data
Supplementary Materials Other data (Millions of yen) FY2024 FY2022 FY2023 Sep. 2024 (Full-year forecast) Capital investment 1,039 1,431 303 2,100 Capital investment (including intangible assets, etc.) 2,279 1,694 452 2,400 Depreciation of property, plant and equipment 1,343 1,355 657 1,500 Depreciat
Slide 38: Disclaimer
Disclaimer Forward-looking statements, including forecast of financial results, contained in this document reflect the management’s judgment based on the information available as of November 11, 2024. Actual results may differ from the figures contained herein due to a number of factors. For IR inqu