Kondotec Inc. · TSE:7438
Kondotec — Q1 FY2023 Earnings Presentation
68 slides from Kondotec's earnings presentation, Aug 9, 2022
Slide 1: FY2023 Q1 Financial Results
Tokyo Stock Exchange (Prime Market) Securities Code : 7438 FY2023 Q1 Financial Results August 9, 2022
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 Q1 FY2023 Financial Results P. 4 2. Company Overview P. 6 3. Main Products and Merchandise P. 18 4. Q1 FY2023 Financial Results and Analysis P. 24 5. Q1 FY2023 Financial Results and Analysis by Segment P. 30 6. Response to ESG Issues P. 40 7. Growth Strategies P. 47 8. Shar
Slide 4: 1. Highlights of Q1 FY2023 Financial Results
1. Highlights of Q1 FY2023 Financial Results
Slide 5: Summary of Q1 FY2023 Consolidated Financial Results
Summary of Q1 FY2023 Consolidated Financial Results Net sales increased due to demand recovery in construction, price revisions reflecting surging materials costs and sales contributions from KURIYAMA ALUMINUM (which became a subsidiary in October 2021). Operating results increased thanks to the
Slide 6: Change in Reporting Segments
Change in Reporting Segments As scaffolding construction business, one of important growth strategies in medium-term management plan, has become more of a priority for KONDOTEC, Scaffolding Construction Segment is separated from Industrial Materials Segment with the aim of promoting understanding
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. Acquired shares of KURIYAMA Acquired shares ALUMINUM （trillion yen） of FUKOKU
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 June 30, 2022) Establishe
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 2022) Industrial Materials Structural Steel Materials Net sales Sales weighting Net sales Sales weighting 33,861 million yen 51 % 16,098 million yen 24 % 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 ◆ Suppliers (in-house production and OEM production) 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 (as of end March 2022) We offer an extensive range of products including higher market shares products and merchandise (such as wire ropes, nets, sheets, and screws) and product
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. Q1 FY2023 Financial Results and Analysis
4. Q1 FY2023 Financial Results and Analysis
Slide 25: Q1 FY2023 Consolidated Financial Results
Q1 FY2023 Consolidated Financial Results (million yen) Q1 Q1 YoY FY2022 FY2023 Amount % Net sales 14,978 17,036 +2,057 +13.7% Gross profit 3,373 3,777 +403 +12.0% SG&A expenses 2,743 2,892 +148 +5.4% Operating income 629 885 +255 +40.6% Ordinary income 676 940 +263 +38.9% Profit attributable to 390
Slide 26: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent 4 △91 △3 346 The impact of making KURIYAMA 23.1% ALUMINUM a 22.9% subsidiary 885 22.7% 22.4% 629 22.6% 22.5% 22.3% 21.7% 22.2% 21.4% Q1 FY2022 Net Sales Gross Profit SG&A Other Q1 FY202
Slide 27: Progress for FY2023 Forecast
Q1 FY2023 Consolidated Financial Results Progress for FY2023 Forecast Progress for FY2023 forecast (million yen) Net sales and operating income (million yen) ■ Q1 FY2023 ■ Full-year forecast Net sales Operating income Net sales Full-year 17,862 forecast Progress 16,971 17,036 16,326 17,036 70,000 24
Slide 28: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2022 Q1 FY2023 Change Cash and deposits 10,164 9,005 △1,158 Notes and receivable –trade, 13,200 12,971 △229 and contract assets Current assets Electronically recorded 2,861 2,780 △81 monetary claims operating Inventories 7,183 8,120 +937 Other 1,22
Slide 29: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2022 Q1 FY2023 Change Notes and accounts payable – trade 4,346 4,701 +354 Electronically recorded obligations – operations 9,114 9,034 △79 Current liabilities Breakdown Electronically recorded obligations–operations 10,762 10,63
Slide 30: 5. Q1 FY2023 Financial Results and Analysis by Segment
5. Q1 FY2023 Financial Results and Analysis by Segment
Slide 31: Q1 FY2023 Financial Results by Segment
Q1 FY2023 Financial Results by Segment (million yen) Change Full-year Q1 FY2022 Q1 FY2023 Progress (%) forecast Net sales 7,826 8,591 +9.8% 36,303 23.7% Industrial Materials Segment 430 538 +25.3% 2,473 21.8% profit or loss EBITDA 456 605 +32.7% － － Net sales 3,516 4,475 +27.3% 16,949 26.4% Structur
Slide 32: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 9,237 YoY 8,692 8,591 8,591 8,104 7,826 +9.8% 7,826 538 YoY 573 531 538 430 +25.3% 459 430 Q1 FY2022 Q1 FY2023 Q1 Q2 Q3 Q4 Q1 FY2022 FY2022 FY2022 FY2022 FY2023 Factors affectin
Slide 33: Industrial Materials: Segment Profit Analysis
Industrial Materials Segment profit or loss analysis (million yen) Quarterly GPM 3 33.1% manufactured 27.2% 26.3% 14 24.8% in-house Products 21.0% 44 126 Major increase/decrease △79 factors related to subsidiaries 28.8% 538 merchandise 27.6% Imported Goodwill amortization △33 million yen 25.8% 25.4%
Slide 34: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 4,475 4,299 4,328 4,475 YoY 3,954 +27.3% 3,516 3,516 404 431 376 YoY 376 +73.1% 217 252 217 Q1 FY2022 Q1 FY2023 Q1 Q2 Q3 Q4 Q1 FY2022 FY2022 FY2022 FY2022 FY2023 Factors a
Slide 35: Structural Steel Materials: Segment Profit Analysis
Structural Steel Materials Segment profit or loss analysis (million yen) Quarterly GPM 31.1% 32.2% 31.8% 30.8% manufactured 25.2% in-house Products △1 △64 104 34.2% 34.0% 120 32.3% merchandise 31.9% Imported 30.8% 376 217 19.2% 18.7% merchandise Domestically 18.6% sourced Q1 FY2022 Sales Volume Sale
Slide 36: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 2,323 Segment profit or loss 2,226 2,223 2,223 YoY 2,126 +15.0% 1,933 1,933 96 57 YoY 66 57 28 +99.0% 42 28 Q1 Q2 Q3 Q4 Q1 Q1 FY2022 Q1 FY2023 FY2022 FY2022 FY2022 FY2022 FY2023 Factors affecting net
Slide 37: Electrical Equipment: Segment Profit Analysis
Electrical Equipment Segment profit or loss analysis (million yen) Quarterly GPM and the number of projects 16.8% 16.8% Gross Profit Margin △1 16.7% △18 16.3% 16.0% 48 Q1 Q2 Q3 Q4 Q1 FY2021 FY2021 FY2021 FY2021 FY2022 57 17 28 The number of projects※ 14 13 10 Q1 FY2022 Net Sales Gross Profit SG&A Ex
Slide 38: Scaffolding Construction
Scaffolding Construction Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,070 YoY 2,001 1,702 1,746 1,795 1,746 1,702 +2.6% 107 50 △33 △33 △33 △81 △81 Q1 FY2022 Q1 FY2023 Q1 Q2 Q3 Q4 Q1 FY2022 FY2022 FY2022 FY2022 FY2023 Factors affecting net sa
Slide 39: Scaffolding Construction: Segment Profit Analysis
Scaffolding Construction Segment profit or loss analysis (million yen) Sales fluctuations by service type Q1 FY2022 Q1 FY2023 Construction sales 740 738 691 704 △ 33 148 179 83 102 12 39 21 Detached Large properties Bridges/ Rental sales Material sales △ 38 △81 houses/renovations (non-residential) c
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 Initiatives for
Slide 44: 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 Year of interna
Slide 45: Initiatives: Social - Shareholding
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 2.5% and looks to
Slide 46: 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. KONDOTEC has i
Slide 47: 7. Growth Strategies
7. Growth Strategies
Slide 48: 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 49: 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 50: Four Growth Strategies: Flexible 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, Launch of website, “Tsu
Slide 51: 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 52: 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 53: 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 54: 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 55: 8. Shareholder Return
8. Shareholder Return
Slide 56: 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. Transition in dividends Shareholder incentive plan Shareholders can redeem reward points for over 2,000 choices (including food, appliances, Since initi
Slide 57: 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 3,928 listed companies … 1,318 1,250 30,000 1,000 24,000 ROE 1,700th 750 18,000 Profit 500 1
Slide 58: 9. Highlights of Results
9. Highlights of Results
Slide 59: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 17,036 885 Progress Progress Net sales Operating income (million yen) million yen 24.3% (million yen) million yen 23.2% 70,000 66,139 4,085 60,599 59,562 3,907 3,810 57,828 3,516 3,537 3,594 3,441 3,354 52,811 3,271 3,303 50,211 50,410 47,991 49,168 2,664
Slide 60: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 31,966 Net assets (million yen) million yen ROE (%) Target 10 % or higher 32,066 31,966 11.4 11.1 10.9 10.8 10.7 10.7 29,022 10.4 28,387 10.0 10% or higher 26,756 24,745 22,719 7.7 21,102 20,231 7.1 18,783 16,990 5.4 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/
Slide 61: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 Q1 23/3 (forecast) Result of Operations (million yen) Net sales 41,153 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 66,139 17,036 70,000 Operating profit 2,664 3,271 3,303 3,441 3,516 3,537
Slide 62: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 17,862 16,971 17,036 16,053 16,326 15,665 15,585 15,492 14,647 14,839 15,117 14,978 14,350 14,199 14,313 14,112 13,613 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 19/3 20/3 21/3 22/3 23/3 Operating income (million yen) 1,268 1
Slide 63: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,961 9,536 9,175 9,227 9,025 9,237 8,919 8,685 8,758 8,692 8,371 8,591 7,968 7,907 7,826 8,104 7,664 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 19/3 20/3 21/3 22/3 23/3 Segment profit or loss (million yen) 672 669 64
Slide 64: Quarterly Highlights: Structural Steel Materials
Quarterly Highlights Structural Steel Materials Net sales (million yen) 4,597 4,475 4,412 4,322 4,299 4,328 4,225 3,913 4,019 3,954 3,835 3,859 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 19/3 20/3 21/3 22/3 23/3 Segment profit or loss (million yen) 552
Slide 65: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,323 2,237 2,226 2,223 2,156 2,148 2,107 2,101 2,155 2,126 2,035 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 19/3 20/3 21/3 22/3 23/3 Segment profit or loss (million yen) 112 106 97
Slide 66: Quarterly Highlights: Scaffolding Construction
Quarterly Highlights Scaffolding Construction Net sales (million yen) 2,070 2,001 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 19/3 20/3 21/3 22/3 23/3 Segment profit or loss (million yen) 107 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 △ 33 △ 33 △
Slide 67: GZ KonboTec
GZ KonboTec ~ O 66
Slide 68: Official SNS accounts and contact
Official SNS accounts KONDTEC opened new 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 Te