Slide 1: FY2024 Q3 Financial Results
Tokyo Stock Exchange (Prime Market) Securities Code : 7438 FY2024 Q3 Financial Results February 9, 2024
Slide 2: 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
Slide 3: Contents
Contents 1. Highlights of Q3 FY2024 Financial Results P. 4 2. Company Overview P. 7 3. Main Products and Merchandise P. 18 4. Q3 FY2024 Financial Results and Analysis P. 24 5. Q3 FY2024 Financial Results and Analysis by Segment P. 30 6. Response to ESG Issues P. 40 7. Growth Strategies P. 48 8. Shar
Slide 4: 1. Highlights of Q3 FY2024 Financial Results
1. Highlights of Q3 FY2024 Financial Results
Slide 5: Summary of Q3 FY2024 Consolidated Financial Results
Summary of Q3 FY2024 Consolidated Financial Results Net sales increased due to capturing demand such as private-sector capital investment and price pass-through in response to higher manufacturing and procurement costs. Operating results increased due to the sales growth and improvement in GPM,
Slide 6: Topics in Q3 FY2024
Topics in Q3 FY2024 New DOE target Factoring in medium-to long-term performance and capital efficiency in future, Kondotec has decided to increase the DOE target to 4.0% from 2.5% in FY2024 to further enhance shareholder returns due to an overall increase in dividends in the market. DOE is the rat
Slide 7: 2. Company Overview
2. Company Overview
Slide 8: 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. （trillion yen） 80,000 90 8,000 Established Nippon Scaffolding Holdings Co., Lt
Slide 9: 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, 2023) Establ
Slide 10: Company History and Business Areas
Company History and Business Areas Company history Business areas January 1953 Established Kondo Shoten Co., Ltd. January 1989 Changed the company name to KONDOTEC INC. Construction industry wholesale Listed on the Second Section of the Osaka Other than April 1995 Stock Exchange Field Categorization
Slide 11: Sales by Segment
Sales by Segment (as of end March 2023) Industrial Materials Structural Steel Materials Net sales Sales weighting Net sales Sales weighting 37,610 million yen 50 % 19,963 million yen 26 % Customers Hardware stores, Wholesalers, Home improvement centers Customers Steel structure fabricators Products/
Slide 12: Distribution Channels
Distribution Channels By offering in-house products with added value and sourcing products and merchandise from various suppliers, we have adopted a structure that allows it to meet the diversifying needs of customers. Manufacturer function (in-house production and OEM production) ◆ Suppliers Appr
Slide 13: Segment Overview : Industrial Materials
Segment Overview : Industrial Materials Business The Industrial Materials Segment manufactures, procures, and sells civil engineering and areas construction materials (primarily metal fittings through retail). By selling products and merchandise to a wide range of industries, the segment has built u
Slide 14: Segment Overview : Structural Steel Materials
Segment Overview : Structural Steel Materials Business The Structural Steel Materials Segment manufactures, procures, and sells construction-related areas materials to nationwide steel structure fabricators. High-margin business maintained through supply of high market share products with a high Str
Slide 15: Segment Overview : Electrical Equipment
Segment Overview : Electrical Equipment Business The Electrical Equipment Segment procures and sells electrical equipment to consumer electrical areas appliance stores and electrical construction contractors. The segment generates steady earnings through providing a wide range of merchandise from St
Slide 16: Segment Overview : Scaffolding Construction
Segment Overview : Scaffolding Construction Business The Scaffolding Construction Segment provides scaffolding construction services and procures, areas sells and rents out temporary scaffolding materials to building contractors and medium-sized general contractors Strengths The segment provides a w
Slide 17: Market Size for Main Products and Merchandise
Market Size for Main Products and Merchandise Market size for main products, merchandise and corresponding market shares (FY2023) Market overview and initiatives Estimated volume of steel frame demand Market overview JIS certification (1000 tons) The demand is gradually Turnbuckle braces 5,000 r
Slide 18: 3. Main Products and Merchandise
3. Main Products and Merchandise
Slide 19: 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 20: 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 21: 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) 20
Slide 22: 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). 21
Slide 23: 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 22
Slide 24: 4. Q3 FY2024 Financial Results and Analysis
4. Q3 FY2024 Financial Results and Analysis
Slide 25: Q3 FY2024 Consolidated Financial Results
Q3 FY2024 Consolidated Financial Results (million yen) Q3 Q3 YoY FY2023 FY2024 Amount % Net sales 56,367 57,907 +1,540 +2.7% Gross profit 12,182 12,893 +711 +5.8% SG&A expenses 8,835 9,266 +431 +4.9% Operating income 3,346 3,626 +279 +8.4% Ordinary income 3,495 3,772 +277 +7.9% Profit attributable t
Slide 26: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent 378 △431 332 23.1% 3,626 22.9% 22.7% 22.8% 3,346 21.9% 22.6% 22.2% 21.6% 22.2% 21.2% 22.0% 21.8% Q3 FY2023 Net Sales Gross Profit SG&A Q3 FY2024 21.3% Margin Expenses 20.9% Gross Profit
Slide 27: Progress for FY2024 Forecast
Q3 FY2024 Consolidated Financial Results Progress for FY2024 Forecast Progress for FY2024 forecast (million yen) Net sales and operating income (million yen) ■ Q3 FY2024 ■ Full-year forecast Net sales Operating income Net sales Full-year 20,137 Progress 20,042 forecast 19,193 19,080 19,102 18,762 57
Slide 28: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2023 Q3 FY2024 Change Cash and deposits 10,733 11,161 +427 Notes and receivable-trade, 14,181 13,384 △797 and contract assets Current assets Electronically recorded 3,695 5,037 +1,341 monetary claims operating Inventories 8,132 7,846 △286 Other 658
Slide 29: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2023 Q3 FY2024 Change Notes and accounts payable-trade 5,015 4,515 △500 Electronically recorded obligations-operations +140 9,738 9,878 Current liabilities Breakdown Electronically recorded obligations–operations 11,439 11,563 +
Slide 30: 5. Q3 FY2024 Financial Results and Analysis by Segment
5. Q3 FY2024 Financial Results and Analysis by Segment
Slide 31: Q3 FY2024 Financial Results by Segment
Q3 FY2024 Financial Results by Segment (million yen) Change Full-year Q3 FY2023 Q3 FY2024 Progress (%) forecast Net sales 28,321 27,953 △1.3% 39,293 71.1% Industrial Materials Segment 1,812 2,029 +12.0% 2,597 78.2% profit or loss EBITDA 2,018 2,236 +10.8% － － Net sales 15,116 15,990 +5.8% 20,873 76.
Slide 32: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 10,075 9,655 9,732 28,321 YoY 9,288 9,256 27,953 8,965 △ 1.3% 8,591 781 2,029 YoY 698 672 1,812 574 576 + 12.0% 538 539 Q3 FY2023 Q3 FY2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2023 FY2023 FY
Slide 33: Industrial Materials: Profit Analysis
Industrial Materials Segment profit or loss analysis (million yen) Quarterly GPM 33.1% 30.1% manufactured 27.0% 27.7% 24.0% 24.4% in-house Products △145 19.4% 426 △31 △620 588 28.4% 28.6% merchandise 27.5% Imported 2,029 25.5% 26.3% 25.2% 1,812 24.6% merchandise Domestically Q3 FY2023 Sales Volume S
Slide 34: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 5,396 5,453 5,517 Segment profit or loss 5,244 15,990 YoY 5,019 15,116 4,847 +5.8% 4,475 1,355 YoY 471 507 1,241 450 376 380 409 △8.4% 356 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2023 Q3 FY2024 FY2023 FY2023
Slide 35: Structural Steel Materials: Profit Analysis
Structural Steel Materials Segment profit or loss analysis (million yen) Quarterly GPM 30.8% 27.2% 28.1% 27.7% 26.3% 26.8% manufactured 23.8% △69 in-house Products 244 △224 △64 35.7% 34.6% 34.8% 33.8% merchandise 32.4% Imported 31.9% 30.3% 1,355 1,241 19.2% 19.2% 18.9% 19.0% 18.6% merchandise Domest
Slide 36: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,467 2,478 2,512 YoY 2,441 2,401 7,391 2,370 7,061 2,223 +4.7% 121 263 218 YoY 85 86 78 △17.2% 57 50 53 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 FY2023 Q3 FY2024 FY2023 FY2023 FY2023 FY2023 FY2
Slide 37: Electrical Equipment: Profit Analysis
Electrical Equipment Segment profit or loss analysis (million yen) Quarterly GPM and the number of projects 17.6% △23 Gross Profit Margin 50 16.9% 16.8% 16.7% 16.7% △72 16.6% 16.4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 263 FY2023 FY2023 FY2023 FY2023 FY2024 FY2024 FY2024 218 26 The number of projects※ 22 19 14 14 15
Slide 38: Scaffolding Construction
Scaffolding Construction Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,504 6,571 YoY 2,198 2,205 2,280 5,867 2,085 +12.0% 1,923 1,746 122 154 86 67 52 △20 △70 △81 △75 Q3 FY2023 Q3 FY2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY2023 FY2023 FY2023 FY2023 FY2024
Slide 39: Scaffolding Construction: Profit Analysis
Scaffolding Construction Segment profit or loss analysis (million yen) Sales fluctuations by service type (million yen) Q3 FY2023 Q3 FY2024 Construction sales 3,077 △25 66 2,543 2,192 2,085 154 669 691 510 184 206 378 84 Detached Large properties Bridges/ Rental sales Material sales houses/renovatio
Slide 40: 6. Response to ESG Issues
6. Response to ESG Issues
Slide 41: 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
Slide 42: Initiatives
Initiatives We have established our ESG basic policy and link it to sustainable corporate growth by incorporating it in the management strategy. SDGs Promotion Department established to explore, research and design initiatives to facilitate achieving the SDGs targets. Current Specific Initiative
Slide 43: 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 mat using recycle
Slide 44: Initiatives: Social
Initiatives: Social Social The 2024 problem in the logistics industry Response to the 2024 problem in the logistics industry Logistics function is as an important element to maintain our In response to the 2024 problem in the logistics industry, we rapid-delivery system, one of the KONDOTEC’s st
Slide 45: 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 Diversity ind
Slide 46: Initiatives: Social
Initiatives: Social Social Improving employee motivation We have introduced an employee restricted stock program. By issuing shares as an incentive to employees, we encourage employees to boost their motivation and morale toward enhancing performance. We target DOE of at least 4.0% and looks to
Slide 47: Initiatives: Governance
Initiatives: Governance Governance Corporate governance KONDOTEC recognizes 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
Slide 48: 7. Growth Strategies
7. Growth Strategies
Slide 49: 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 50: ① Four Growth Strategies
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 For the purpose of developing new merchandise, joint New sale
Slide 51: ① Four Growth Strategies
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, Launch of website, “Tsu
Slide 52: 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 Gunma office in April 2022. We will continue to execute quick deliveries in an
Slide 53: 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 54: 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 55: 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 56: 8. Shareholder Return
8. Shareholder Return
Slide 57: Dividends and Shareholder Incentive Plan
Dividends and Shareholder Incentive Plan We target ROE of 10% or more and DOE of 4.0% or more with the aim of continuing to increase dividends. Transition in dividends Shareholder incentive plan Since initial listing: No decrease in dividends 40yen Shareholders can redeem reward points for over
Slide 58: 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 Among 4,030 listed companies … KONDOTEC stock price (yen) Nikkei average stock price (yen) 1,500 36,000 1,318 1,250 30,000 ROE 1,626th 1,000 24,000 Profit 750
Slide 59: 9. Highlights of Results
9. Highlights of Results
Slide 60: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 57,907 3,626 Progress Progress Net sales Operating income (million yen) million yen 74.2% (million yen) million yen 80.6% 78,000 75,447 4,500 4,355 4,085 66,139 3,907 60,599 59,562 3,594 3,626 57,907 3,441 3,516 3,537 57,828 3,303 3,354 3,271 52,811 50,21
Slide 61: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 34,498 Net assets (million yen) million yen ROE (%) Target 10 % or more 34,934 33,285 32,066 29,022 11.4 28,387 11.1 10.9 10.8 10.7 10.7 26,756 10.4 10% or more 24,745 22,719 21,102 7.9 20,231 7.7 18,783 5.4 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23
Slide 62: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 24/3 Q3 24/3 (forecast) Result of Operations (million yen) Net sales 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 66,139 75,447 57,907 78,000 Operating profit 3,271 3,303 3,441 3,516 3,537 3,907
Slide 63: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 20,137 20,042 19,193 19,080 18,762 19,102 17,862 16,971 17,036 16,053 16,326 15,585 15,117 15,492 14,647 14,839 14,978 14,313 14,112 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Operating income (millio
Slide 64: Quarterly Highlights
Quarterly Highlights Industrial Materials Net sales (million yen) 9,961 10,075 9,536 9,655 9,732 9,175 9,227 9,025 9,237 9,288 9,256 8,758 8,692 8,965 8,685 8,591 8,371 8,104 7,826 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million ye
Slide 65: Quarterly Highlights
Quarterly Highlights Structural Steel Materials Net sales (million yen) 5,396 5,453 5,517 5,244 5,019 4,847 4,412 4,328 4,475 4,322 4,299 3,835 3,859 3,954 3,658 3,616 3,516 3,467 3,293 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (milli
Slide 66: Quarterly Highlights
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,467 2,478 2,512 2,441 2,401 2,323 2,370 2,237 2,226 2,223 2,107 2,101 2,155 2,126 2,035 1,963 1,933 1,886 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen
Slide 67: Quarterly Highlights
Quarterly Highlights Scaffolding Construction Net sales (million yen) 2,504 2,280 2,198 2,205 2,070 2,085 2,001 1,923 1,795 1,746 1,702 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen) 122 107 86 67 50 52 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 68: Official SNS accounts
Official SNS accounts KONDTEC opened official Instagram and Facebook accounts. Please follow us to get to know us better and for information and updates on our products and merchandise. Instagram 2-2-90 Sakaigawa, Nishi-ku, Osaka URL：https://www.instagram.com/kondotec_official/ 550-0024 Japan Teleph