Tenox Corporation · TSE:1905
Tenox — H1 FY2024 Earnings Presentation
49 slides from Tenox's earnings presentation, Nov 28, 2023
Slide 1: Second Quarter Financial Results Briefing for the Fiscal Year Ended March 31, 2024
Second Quarter Financial Results Briefing for the Fiscal Year Ended March 31, 2024 November 28, 2023 TENOX CORPORATION Securities Code: 1905
Slide 2: Today's Topics
Today’s Topics TENOX CORPORATION 1. Results for the Six Months Ended September 30, 2023 2. Earnings Forecast for the Fiscal Year Ending March 31, 2024 3. Progress of Medium-term Management Plan (from FY 2021 to FY 2023) 4. Aiming to Be a Sustainable Company (Contribute to a Sustainable Society) 5. R
Slide 3: Results for the Six Months Ended September 30, 2023
1．Results for the Six Months Ended September 30, 2023 3 Copyright © 2023 TENOX CORPORATION All rights reserved.
Slide 4: Key points for the financial results
Key points for the financial results TENOX CORPORATION Net sales increased by 1,217 million yen (up 14%) year on year to 9,729 million yen For civil engineering piling work, continuing from the previous fiscal year, the increase was due to large-scale projects such as the extension project for the
Slide 5: Outline of financial results
Outline of financial results TENOX CORPORATION Revenue increased due to the contributions from civil engineering piling work such as for the extension project for the Hokkaido Shinkansen and projects related to infrastructure in Kansai, as well as the contributions from the ground improvement work
Slide 6: Business segments
Business segments TENOX CORPORATION Construction business In Japan, the Company, Tenox Giken Co., Ltd. and Hiroshimagumi Co., Ltd. and Ohmishima Bussan Co., Ltd. are engaged in construction projects specializing in foundation work. TENOX ASIA COMPANY LIMITED is engaged in overseas business. General
Slide 7: By segment
By segment TENOX CORPORATION In the construction business, revenue increased mainly due to piling work for expressways, railway viaducts, etc., and to ground improvement work for factories and logistics facilities. Profit increased due to increased revenue, and due to significant profit improvemen
Slide 8: Factors affecting changes in net sales
Factors affecting changes in net sales TENOX CORPORATION For civil engineering piling work, continuing from the previous fiscal year, the increase was due to large-scale projects such as the extension project for the Hokkaido Shinkansen and projects related to infrastructure in Kansai. For ground
Slide 9: Factors affecting changes in operating profit
Factors affecting changes in operating TENOX CORPORATION profit Although profit from civil engineering piling work, construction piling work, and other work fell, multiple construction machines were placed on-site in large-scale projects for ground improvement work, improving construction efficien
Slide 10: Factors affecting changes in cash flows
Factors affecting changes in cash flows TENOX CORPORATION Operating C/F resulted in a decrease in cash due to an increase in trade receivables, etc., despite an increase in cash mainly due to profit before income taxes and depreciation. Investment C/F decreased due mainly to a purchase of proper
Slide 11: Earnings Forecast for the Fiscal Year Ending March 31, 2024
2．Earnings Forecast for the Fiscal Ye a r E n d i n g M a r c h 3 1 , 2 0 2 4 11 Copyright © 2023 TENOX CORPORATION All rights reserved.
Slide 12: Earnings forecast
Earnings forecast TENOX CORPORATION We expect net sales to increase by 15.7% due to continued healthy demand for projects related to Kansai infrastructure and the start of main work for the extension project for the Hokkaido Shinkansen in the civil engineering business, and to continued constructi
Slide 13: Progress of Medium-term Management Plan (FY2021 to FY2023)
3．Progress of Medium-term Management Plan (from FY 2021 to FY 2023) 13 Copyright © 2023 TENOX CORPORATION All rights reserved.
Slide 14: Long-term vision and Medium-term Management Plan
Long-term vision and TENOX CORPORATION Medium-term Management Plan Long-term vision (our future goals) Create new value and markets by aggressively implementing technological innovation to address variable social needs Be a provider of “peace of mind” and “safety” through engaging in Long-term found
Slide 15: Position and slogans of the Medium-term Management Plan
Position and slogans of TENOX CORPORATION the Medium-term Management Plan Flexibly respond to changes in construction demand and VUCA(*), in pursuit of high added value to build a foundation for the next 50 years Phase1 Phase2 Phase3 From FY 2018 to FY 2020 From FY 2021 to FY 2023 From FY 2024 Sloga
Slide 16: Three basic strategies
Three basic strategies TENOX CORPORATION Provide solutions based on three basic strategies to challenges, changes in the management environment, and needs that were inherited from the previous Medium-term Management Plan Intensified Decreasing disasters demand Developmental Sales and strategy Labor
Slide 17: Three basic strategies (1)
Three basic strategies (1) TENOX CORPORATION Developmental strategy Important points ・・・ In progress Results Materiality Action plan Progress Efforts introduced on Increase strength of improved ground, establish construction Currently under verification method Currently developing the industry’s fir
Slide 18: Three basic strategies (2)
Three basic strategies (2) TENOX CORPORATION Sales and construction strategy Important points ・・・ In progress Results Materiality Action plan Progress Efforts introduced on Sale of one project completed; orders received for four projects in FY 2023, Extension of Hokkaido Shinkansen P.41 construction
Slide 19: Three basic strategies (3)
Three basic strategies (3) TENOX CORPORATION ESG strategy Important points ・・・ In progress Results Materiality Action plan Progress Efforts introduced on Began development of the industry’s first small motorized pile driver P.24 Reduce CO2 emissions Currently using GTL fuel for pile drivers for firs
Slide 20: Numerical management targets (FY2021 to FY2023)
Numerical management targets TENOX CORPORATION (from FY 2021 to FY 2023) ROE(%) Ordinary profit ratio (%) 6.6 5.7 3.5(Plan 3.9) 4.0(Plan 6.0) 4.6(Forecast) (Plan 8.0) 6.3 2.1 4.9 3.8(Plan 5.0) 4.0(Forecast) (Plan 6.8) 3.0 (Plan 4.0) 25,000 1.5 2,500 (millions of yen) (millions of yen) Planned net sa
Slide 21: Progress of investment plan
Progress of investment plan TENOX CORPORATION Investment plan: 3,500 million yen (3 years) Equipment will be purchased mainly to increase construction capacity and improve construction quality control. Development will mainly be conducted in the form of joint research with railway research insti
Slide 22: Progress of shareholder return policy
Progress of shareholder return policy TENOX CORPORATION Taking into account the medium-term outlook, we aim to achieve a stable dividend payout ratio of around 30% on a consolidated basis. Implement flexible purchase of treasury shares 450 Total amount of treasury shares purchased 140% (millions
Slide 23: Aiming to Be a Sustainable Company
4．Aiming to Be a Sustainable Company (Contribute to a Sustainable Society) (1) Response to climate (2) Personnel capital (3) Efforts to improve corporate value 23 Copyright © 2023 TENOX CORPORATION All rights reserved.
Slide 24: Response to climate
Response to climate TENOX CORPORATION Began development of foundation construction industry’s first motorized small pile driver In April 2023, the Company entered into a joint development agreement with NIPPON SHARYO, LTD. for motorization of a small pile driver and began development. By changin
Slide 25: Personnel capital
Personnel capital TENOX CORPORATION In addition to the chronic labor shortage and aging of engineers, in order to respond to the construction industry’s upper limit on overtime work that will be implemented in April 2024, we must increase the number of employees, with a focus on young employees in t
Slide 26: Efforts to improve corporate value
Efforts to improve corporate value TENOX CORPORATION Stock price trend (from April 2013 to November 2023) 1,400 November 10, 2017 40,000 (Yen) 1,322 (Yen) 35,000 1,200 TENOX (left scale) Nikkei Stock Average (right scale) 30,000 1,000 25,000 800 20,000 1,052 yen as of November 22 600 (Reference valu
Slide 27: Efforts to improve corporate value
Efforts to improve corporate value TENOX CORPORATION Current status 0.62 0.58 0.55 0.51 0.52 0.45 0.48 0.44 PBR 0.41 0.41 13.2% 10.0% 8.5% 6.6% 6.6% 5.7% ROE 4.8% 4.0% 3.0% 1.5% 1,850.63yen 1,781.85yen 1,742.11yen 1,748.57yen BPS 1,668.33yen 1,591.14yen 1,548.68yen 1,457.74yen 1,301.71yen 1,194.30ye
Slide 28: Efforts to improve corporate value
Efforts to improve corporate value TENOX CORPORATION Increase in corporate value = Increase in PBR = Expansion of equity spread (ROE - equity cost) Increasing ROE is an essential prerequisite for increasing PBR ROE target for the current Medium-term ⇒ Forecasted ROE for FY 2023 results Management Pl
Slide 29: Reference Material
TENOX CORPORATION TENOX CORPORATION 4．Reference Material 29 Copyright © 2023 TENOX CORPORATION All rights reserved.
Slide 30: Company profile
Company profile TENOX CORPORATION We provide “safety” and “peace of mind” by engaging in foundation work to all people who use various structures around us, including houses, commercial facilities, hospitals, warehouses, factories, railways, and roads. Power plant Airport Factory Harbor Office and W
Slide 31: Company profile
Company profile TENOX CORPORATION Company name TENOX CORPORATION Location of head 5-25-11 Shiba, Minato-ku, Tokyo Example of construction work office Foundation July 8, 1970 Paid-in capital 1,710,900,000 yen 50th Anniversary Commemorative Logo Masayuki Sato, President and Representative Representati
Slide 32: Business segment: Construction business
Business segment TENOX CORPORATION : Construction business Ground improvement Piling method method Method used when the support layer is more than 10 meters Method used when the support layer is at a depth of roughly one underground to ten meters by mixing soil conditioner material with the existing
Slide 33: Introduction of major technology
Business segment: Construction business TENOX CORPORATION - Introduction of major technology - Gantetsu Pile Method (Piling) Tenocolumn Method (Ground Improvement) A construction method jointly developed with NIPPON STEEL CORPORATION and Patented in 1984. A pioneering foundation construction method
Slide 34: Business model and characteristics
Business model and characteristics TENOX CORPORATION Realized a high-quality through a consistent system from design to construction TENOX Group (Design consultant and (1) Inquiry Integrated Geotechnology Design companies Institute Limited design offices Technology Orderer (customer) (2) Design Head
Slide 35: Earnings trend
Earnings trend TENOX CORPORATION (net sales, ordinary profit, ordinary profit ratio, and ROE) Included Tenox Kyushu Corporation, a former consolidated subsidiary company, as an equity method affiliate company in the fiscal year ended March 2016. Excluded the company from equity method affiliates i
Slide 36: Breakdown of net sales
Breakdown of net sales TENOX CORPORATION (reference on page 8) For civil engineering piling work in the six months ended September 30, 2023, the increase was due to large-scale projects such as the extension project for the Hokkaido Shinkansen and projects related to infrastructure in Kansai. For
Slide 37: Trends in dividends and dividend payout ratio
Trends in dividends and dividend payout TENOX CORPORATION ratio The dividend payout ratio has been set at 30% as a guide since the previous Medium-term Management Plan that started in the fiscal year ended March 2019. The dividend for the fiscal year ended March 2021 includes a commemorative div
Slide 38: Trends in investments
Trends in investments TENOX CORPORATION Made strategic investments for future growth by leveraging cash on hand and treasury shares, and issuing corporate bonds and borrowing funds when necessary 900 (millions of yen) M&A, etc. 800 R&D and education 150 Capital investment (mainly for improving con
Slide 39: Medium-term Plan progress: Expansion of sales area
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (1) Expansion of sales area ➡ Towards realization of a one-stop service Shallow-mixing processing method, “TENO Q-be” • Sales started from May 2020. To date, 11 projects have been ordered, and construction is being carri
Slide 40: Medium-term Plan progress: National resilience projects
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (2) Contribute to enhancing national resilience and redundancy(*) projects Completed “Ichinowatari Viaduct, etc., of Hokkaido Shinkansen” the first Kutchan Station Viaduct phase construction for the elevated section of t
Slide 41: Medium-term Plan progress: GTL fuel at construction sites
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (3) First case in the foundation construction industry Start introducing GTL fuel at construction sites NETIS New Technology Information System (Ministry of Land, Infrastructure, Transport and Tourism) GTL (Gas to Liquid
Slide 42: Medium-term Plan progress: Technology for pulled-up pile sites
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (4) Possible application of construction technology to a site where existing piles are pulled up When demolishing an existing building, inappropriate backfilling treatment of pile holes after pulling up existing Insuffic
Slide 43: Medium-term Plan progress: Large-scale project overseas (Vietnam)
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (5) Order received for a large-scale project overseas (Vietnam) In addition to orders from Japanese general contractors, we have also received our first order for a large-scale project(*) from a non-Japanese client by le
Slide 44: Medium-term Plan progress: Diversity & Inclusion
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (6) Diversity & Inclusion On June 29, 2022, the Company appointed its first female Outside Director Ratio of female officers 12.5% (one out of eight) Ratio of female officers across 3,795 listed companies in FY2021 was 9
Slide 45: Medium-term Plan progress: Healthcare-oriented management
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (7) Enhance healthcare-oriented management Wellbeing management Implemented measures to support each employee both mentally and physically • Implemented measures to prevent heatstroke of site workers (supplied air-cond
Slide 46: Medium-term Plan progress: Work environment with high job satisfaction
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (8) Establish work environment with high job satisfaction Renovated the offices of the Tokyo Equipment Center and Tenox Giken Co., Ltd. (completed in October 2021) for the purpose of promoting communication and improving
Slide 47: Medium-term Plan progress: Risk Management Committee
Initiatives and progress of the Medium-term TENOX CORPORATION Management Plan (9) Establishment of the Risk Management Committee On September 20, 2022, we established the Risk Management Committee, chaired by the President and Representative Director The Risk Management Committee ascertains vari
Slide 48: Contact for inquiries
Contact for inquiries TENOX CORPORATION IR Inquiries IR Contact Budget and IR Group,Corporate Planning Department E-mail ir@tenox.co.jp URL https://www.tenox.co.jp/contact/contact_ir/ Corporate website https://www.tenox.co.jp/ The forward-looking statements including earnings forecasts provi
Slide 49: Thank you for reading the material
Thank you for reading the material. 49 Copyright © 2023 TENOX CORPORATION All rights reserved.