Kondotec Inc. · TSE:7438
Kondotec — Q1 FY2022 Earnings Presentation
62 slides from Kondotec's earnings presentation, Aug 6, 2021
Slide 1: Financial Results Q1 FY2022
Financial Results Q1 FY2022 August 6,2021 Securities Code : 7438
Slide 2: Contents
Contents 1. Highlights of Q1 FY2022 Financial Results P.3 2. Company Overview P.6 3. Main Products and Merchandise P.14 4. Q1 FY2022 Financial Results and Analysis P.20 5. Q1 FY2022 Financial Results and Analysis by Segment P.26 6. Response to ESG Issues P.34 7. Growth Strategies P.40 8. Shareholder
Slide 3: 1. Highlights of Q1 FY2022 Financial Results
1. Highlights of Q1 FY2022 Financial Results
Slide 4: Summary of Q1 FY2022 Consolidated Financial Results
Summary of Q1 FY2022 Consolidated Financial Results Net sales increased due to demand recovery in construction and a sale contribution from Fukoku, which was made a subsidiary in January 2021. Operating results decreased due to higher SG&A expenses following the acquisition of two subsidiaries a
Slide 5: Topics in Q1 FY2022
Topics in Q1 FY2022 Compliance with the continued listing criteria for the new market segment (Prime Market) of Tokyo Stock Exchange In July 2021,we have received the result of the initial assessment of compliance with the continued listing criteria in the new market segment from Tokyo Stock Excha
Slide 6: 2. Company Overview
2. Company Overview
Slide 7: 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 Acquired shares of TOKAI STEP of FUKOKU （trillion yen） Acquire
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. Nippon Scaffolding Holdings Co., Ltd. TECBUILD CO., LTD. TOKAI STEP CO., LTD. FUKOKU, Ltd. (As of June 30, 2021) Established January 1953 President and
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 January 1989 Other than KONDOTEC INC. Field Categorization of merchandise construction Listed on the Second Section of the Apr
Slide 10: Net Sales by Segment
Net Sales by Segment Segment Main customers Main products & merchandise Net sales by segment (FY2021) 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 2021) Industrial Structural Electrical Consolidated Materials Steel Materials Equipment 59,562 million yen 37,282 million yen 14,035 million yen 8,243 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 (which became a subsidiary 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. Overpa
Slide 20: 4. Q1 FY2022 Financial Results and Analysis
4. Q1 FY2022 Financial Results and Analysis
Slide 21: Q1 FY2022 Consolidated Financial Results
Q1 FY2022 Consolidated Financial Results (million yen) Q1 Q1 YoY FY20201 FY2022 Amount % Net sales 14,112 14,978 +865 +6.1% Gross profit 3,218 3,373 +155 +4.8% SG&A expenses 2,557 2,743 +186 +7.3% Operating income 660 629 △30 △4.6% Ordinary income 678 676 △2 △0.3% Profit attributable to owner of par
Slide 22: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent △47 98 △94 13 23.7% 23.3% 660 23.6% The impacts of making 629 23.0% Nippon Scaffolding 22.7% Holdings and FUKOKU subsidiaries 22.8% 22.8% 22.1% 22.5% Q1 FY2021 Net Sales Gross Profit SG
Slide 23: Progress for FY2022 Forecast
Q1 FY2022 Consolidated Financial Results Progress for FY2022 Forecast Progress for FY2022 forecast (million yen) Net sales and operating income (million yen) ■ Q1 FY2022 ■ Full-year forecast Net sales Operating income 15,492 Net sales Full-year 14,839 15,117 14,978 forecast Progress 14,112 14,978 63
Slide 24: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2021 Q1 FY2022 Change Cash and deposits 11,317 10,513 △804 Notes and receivable –trade, 12,372 12,071 △301 and contract assets Current assets Electronically recorded 1,984 2,046 +62 monetary claims operating Inventories 4,932 5,555 +622 Other 962 1
Slide 25: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2021 Q1 FY2022 Change Notes and accounts payable – trade 3,978 3,935 △42 Electronically recorded obligations – operations 8,029 8,517 +487 Current liabilities Breakdown Electronically recorded obligations–operations 9,202 9,648
Slide 26: 5. Q1 FY2022 Financial Results and Analysis by Segment
5. Q1 FY2022 Financial Results and Analysis by Segment
Slide 27: Q1 FY2022 Financial Results by Segment
Q1 FY2022 Financial Results by Segment (million yen) Change Full-year Q1 FY2021 Q1 FY2022 Progress (%) forecast Net sales 8,758 9,528 +8.8% 40,452 23.6% Industrial Materials Segment 393 397 +0.9% 2,265 17.5% profit or loss EBITDA 560 588 +5.1% － － Net sales 3,467 3,516 +1.4% 14,687 23.9% Structural
Slide 28: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 9,961 9,528 YoY 9,536 9,528 8,758 9,025 8,758 +8.8% 669 393 397 YoY 593 553 +0.9% 393 397 Q1 Q2 Q3 Q4 Q1 Q1 FY2021 Q1 FY2022 FY2021 FY2021 FY2021 FY2021 FY2022 Factors affecting
Slide 29: Industrial Materials Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM 16 manufactured 27.3% 29.1% 28.8% 27.2% in-house Products 23.1% △13 63 △73 10 Major increase/decrease 29.8% 30.7% 30.6% factors related to 29.2% 28.8% merchandise subsidiaries Imported Goodwill amortization +0 million yen 393 397 Goodwill a
Slide 30: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 3,658 3,616 Segment profit or loss 3,467 3,516 3,516 3,293 3,467 YoY +1.4% 240 217 311 YoY 260 240 217 △9.5% 132 Q1 Q2 Q3 Q4 Q1 Q1 FY2021 Q1 FY2022 FY2021 FY2021 FY2021 FY2021 FY2022 Factors aff
Slide 31: Structural Steel Materials Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM manufactured 30.7% 30.7% 31.1% in-house Products 29.3% 26.7% △20 25 △7 △20 36.9% 36.7% merchandise 35.8% Imported 35.5% 240 217 34.2% 19.3% 18.8% merchandise Domestically 18.3% Sourced Q1 FY2021 Sales Volume Sales Price Gross Profit SG&A Q1
Slide 32: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,237 2,155 1,933 YoY 1,963 1,933 1,886 1,886 +2.5% 112 26 28 YoY 69 +6.6% 44 26 28 Q1 FY2021 Q1 FY2022 Q1 Q2 Q3 Q4 Q1 FY2021 FY2021 FY2021 FY2021 FY2022 Factors affecting net s
Slide 33: Electrical Equipment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM and the number of projects 17.4% Gross Profit Margin 16.8% 16.8% 16.6% △11 16.4% 19 △6 Q1 Q2 Q3 Q4 Q1 FY2021 FY2021 FY2021 FY2021 FY2022 26 28 14 The number of projects※ 11 8 7 Q1 FY2021 Net Sales Gross Profit SG&A Expenses Q1 FY2022 6 Marg
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. Quality Assurance Department changed the name to SDGs Promotion Department to work actively towards achieving the SDGs targets. In addition to auditing
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 Introduction of
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: 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 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 Strategy
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 Dividend yield Closing price on July 30: 997 yen 32yen 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 3,858 listed companies … 1,318 1,250 30,000 1,000 24,000 ROE 1,274th 750 18,000 Profit 500 1
Slide 51: 9. Highlights of Results
9. Highlights of Results
Slide 52: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 14,978 629 Progress Progress Net sales Operating income (million yen) million yen 23.5% (million yen) million yen 18.7% 63,700 60,599 59,562 4,085 57,828 3,907 52,811 3,516 3,537 50,211 50,410 3,441 3,354 3,370 3,271 3,303 47,991 49,168 41,153 2,664 38,74
Slide 53: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net assets (million yen) 28,940 million yen ROE (%) Target 10 % or higher 29,022 28,940 11.1 11.4 28,387 10.9 10.8 10.7 10.7 26,756 10.4 10.0 10% or higher 24,745 22,719 21,102 20,231 18,783 7.1 16,990 15,097 5.8 5.4 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/
Slide 54: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 Q1 22/3 (forecast) Result of Operations (million yen) Net sales 38,745 41,153 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 14,978 63,700 Operating profit 1,926 2,664 3,271 3,303 3,441 3,516
Slide 55: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 15,665 16,053 15,585 15,117 15,492 14,647 14,839 14,978 14,050 14,350 14,199 14,313 14,112 13,220 13,613 13,108 12,433 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18/3 19/3 20/3 21/3 22/3 Operating income (million yen) 1,268 1
Slide 56: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,961 9,536 9,528 9,175 9,227 9,025 8,919 8,685 8,758 8,371 8,052 7,968 7,907 7,607 7,664 7,228 7,373 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (million yen) 672 669 64
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 3,516 3,420 3,467 3,277 3,293 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (million yen) 552
Slide 58: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,237 2,125 2,156 2,148 2,107 2,101 2,155 2,080 2,035 2,035 2,005 1,963 1,927 1,886 1,933 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18/3 19/3 20/3 21/3 22/3 Segment profit or loss (million yen) 112 106 97
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 the release. Actual results may differ materially from these forward-looking statements due to vario
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Slide 62: 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