Nippon Air Conditioning Services Co., Ltd. · TSE:4658
Nippon Air Conditioning Services — FY2023 Earnings Presentation
48 slides from Nippon Air Conditioning Services's earnings presentation, June 2023
Slide 1: Reference Materials of Financial Results for the Fiscal Year Ended March 31, 2023
We are the doctor of your invisible air. Reference Materials of Financial Results for the Fiscal Year Ended March 31, 2023 June 2023 TSE Prime Market, NSE Premier Market : 4658 1
Slide 2: Disclaimer
Disclaimer These materials were prepared by Nippon Air Conditioning Services Co., Ltd. (the “Company”) for the purpose of understanding the current status of the Company, and do not aim at solicitation for investment in securities issued by the Company. The information in these materials is based on
Slide 3: Contents
Contents Ⅰ. Overview and strength p.03-p.24 Ⅱ. Financial highlights p.25-p.37 Ⅲ. Toward the achievement of long-term vision p.38-p.47 3
Slide 4: Overview and strength
Overview and strength Building facilities maintenance Number of technology-related employees: 2,520 Bases: 47 prefectures and 6 overseas countries * Number of Technology-related employees and Base information are as of the end of March 2023. 4
Slide 5: Company overview
Company overview Company overview Head office 239-2 Terugaoka, Meito-ku Apr. 1964 The company is established in Nagoya-shi, Aichi Japan Higashijukucho, Nakamura-ku Nagoya-shi, Aichi. Capital stock ¥1,139 million Business General building facility description maintenance service Number of Consolidate
Slide 6: Number of employees
Number of employees Technology-related employees ■Number of employees (persons) ■ Regular employees ■ Average temporarily employed workers ( ) Technology-related employees account for more than 80% 4,000 Technology-oriented company 3,500 3,065 3,095 3,132 3,121 2,993 (2,523) (2,520) ▼ (2,502) (2,515
Slide 7: Stock-related information
Stock-related information Stock-related information ■Total shareholder return (%) ● The Company (including dividends) ● TOPIX including dividends Stock price ¥739 Total market capitalization ¥26.4 billion 140.0 131.8 Dividends ¥30 per share 120.0 Dividend payout ratio 51.4% 116.6 100.0 Dividend yiel
Slide 8: Management philosophy
Management philosophy To make all our stakeholders happier ▼ Creation of social value Management philosophy Bringing together the technological capabilities and human resources to maintain optimal environments and give our clients peace of mind through top quality service. ▼ Creation of economic val
Slide 9: Maintenance and management cycle of building facilities
Maintenance and management cycle of building facilities In-house technicians can respond in any phase ▼ Technological capabilities Business Solution capabilities Model Total support capabilities ▲ What sets us apart from the competition 9
Slide 10: Business division
Business division Net sales Business division Overview composition PM ■ Inspection, maintenance, repair, Preventive Maintenance replacement, etc. of overall equipment / systems of buildings. (mainly air conditioning) 37 ％ FM ■ Integrated management that optimally combines maintenance services with d
Slide 11: Business contents (Examples of Hospital Operations)
Business contents（Examples of Hospital Operations） Central surveillance service Solution proposals “Is it possible to create such and such environment?” or “How can we improve the situation?” ▼ Daily measurement service Environmental diagnosis service ＋ Boosting added value by identifying needs base
Slide 12: History since foundation
History since foundation ■ Net sales (left axis) ■Net sales and operating income changes since foundation (billion yen) ● Operating income (right axis) 60 Apr. 1964 Establishment 6.0 2019 Five-Year Mid-Term Management Plan Start of TECS (Total Environmental Consulting System) Jun. 1985 2016 Three-Ye
Slide 13: Goals since foundation and goals in the future
Goals since foundation and goals in the future Three goals since foundation To make all our stakeholders happier (1) Overseas expansion (Jan. 1999) (1) [Customers] Provision of high-added value services (2) IPO in TSE and NSE (Sep. 2006) (2) [Employees] Improvement of satisfaction level and (3) Expa
Slide 14: Domestic market size
Domestic market size Construction and maintenance Companies approx. ¥2.2 trillion ▼ Approx. 70% of the air conditioning and heat source system market is for existing buildings ▼ we project a target for the Company of approx. ¥1.5 trillion * Prepared by the Company with reference to “Actual State of
Slide 15: Comparison with other companies in the same business
Comparison with other companies in the same business The Company Company Company Company A B C Characteristics of the Company compared to other Total market ¥26.4 ¥151.8 ¥108.8 ¥8.1 companies in the same sector capitalization billion billion billion billion PER 12.66x 13.98x 16.47x 4.71x (1) Scope o
Slide 16: Our strength lies in our ability to service products from any manufacturer
Our strength lies in our ability to service products from any manufacturer There is air-conditioning equipment from various makers inside buildings. Company A- Company B- Company C- manufacture manufacture manufacture (1) As an independent company, we are not subject to restrictions imposed by manuf
Slide 17: Strength in the stability
Strength in the stability ■ Annual contract sales ■Ratio of annual contracts to net sales (%) ■ Manufacturing plant, etc. sales excluding annual contracts ■ Other sales 100.0 (1) Maintaining stable annual contracts, mainly with hospitals (2) Growth by expanding manufacturing plants 75.0 ▼ Transactio
Slide 18: Strength in excellent technological capabilities
Strength in excellent technological capabilities ■Ratio of sales of facilities with special environment (%) ■ Ratio of sales of facilities with special environment ■ Other sales 100.0 Hospitals and manufacturing plants must meet strict environmental demands, thus maintenance at these 75.0 facilities
Slide 19: Reasons for inclination to facilities with special environments
Reasons for inclination to facilities with special environments Office building Hospitals Manufacturing plants Air conditioning equipment in Air conditioning equipment in operating Air conditioning equipment in conference room breaks down room breaks down manufacturing plant breaks down ▼ ▼ ▼ Operat
Slide 20: Wide range of high-quality services
Wide range of high-quality services Examples of the technological capabilities required are shown below. * Picture: Environmental performance measurement / diagnosis, Clean equipment maintenance, Environmental hygiene management, High efficiency filter maintenance, Work environment measurement, Safe
Slide 21: Technological capabilities index
Technological capabilities index ■Technological capabilities index (pt) 25.0 Number of technological type official 21.6 22.2 20.8 qualification acquisition 19.9 20.0 20.0 10,017 (Increase of 144 from previous fiscal year) 15.0 Target 20pt or higher ▼ 10.0 While technological capabilities cannot be m
Slide 22: Share in large-scale domestic hospitals
Share in large-scale domestic hospitals ■ Percentage of acceptance of outsourcing for domestic hospitals that have 600 beds or more (beds) Our strengths include facilities maintenance at large ■ Our company ■ Others hospitals, founded on our many years of experience 19,937 beds at facilities with sp
Slide 23: Hospital energy savings (example)
Hospital energy savings (example) ■Energy transition graph（t-CO2） 2010年度エネルギー Energy in FY2010 2021年度エネルギー Midsized Tokyo hospital Energy in FY2021 800 Total floor area approx. 48,000 sqm DOWN 600 Succeeded in saving a significant amount of energy 400 by maintaining a thorough site understanding and
Slide 24: Mid-to Long-Term Growth Strategy
Mid-to Long-Term Growth Strategy ■ Solar power generation and consumption business Train capable engineers [Target] Manufacturing plants with high voltage/high power electricity requirements. while striving to achieve [Goal] Expand outsourcing from manufacturing plants. full-scale operations as [Sta
Slide 25: Financial highlights
Contents Ⅰ. Overview and strength p.03-p.24 Ⅱ. Financial highlights p.25-p.37 Ⅲ. Toward the achievement of long-term vision p.38-p.47 25
Slide 26: Financial highlights
Financial highlights Net sales：¥52.8 billion [+6.0％] Operating income：¥2.8 billion [+8.8%] Profit attributable Final income：¥1.9 billion [-31.2％] to owners of parent * For net sales, operating income, profit attributable to owners of parent, the number in the fiscal year ended March 31, 2023 is used
Slide 27: Results for the fiscal year ended March 31, 2023 1/8
Results for the fiscal year ended March 31, 2023 1/8 (billion yen, %) FY03/2021 FY03/2022 FY03/2023 Consolidated Year-on- Year-on- Year-on- (cumulative period) Ratio to Ratio to Ratio to Amount year growth Amount year growth Amount year growth sales sales sales ratio ratio ratio Net sales 49.1 100.0
Slide 28: Results for the fiscal year ended March 31, 2023 2/8
Results for the fiscal year ended March 31, 2023 2/8 While 4Q performance stalled in the previous year for various reasons, including COVID-19 and supply issues, Renovation work construction work volume in the 4Q increased sharply, due in large part to the responses implemented since then, including
Slide 29: Results for the fiscal year ended March 31, 2023 3/8
Results for the fiscal year ended March 31, 2023 3/8 Net sales reached record highs for the second year in succession. The main business of maintenance services set a new record high for the 12th year in a row, thanks mainly to growth in spot maintenance for manufacturing plants and other facilities
Slide 30: Results for the fiscal year ended March 31, 2023 4/8
Results for the fiscal year ended March 31, 2023 4/8 Profit remained largely unchanged from last year, despite rising costs of procurement of materials and supplies and rising labor costs. However, results were lower than prior to COVID-19 due to factors including pressure exerted on the completion
Slide 31: Results for the fiscal year ended March 31, 2023 5/8
Results for the fiscal year ended March 31, 2023 5/8 SGA rose due to the lifting of COVID-19 restrictions and other factors, but growth in net sales outpaced this increase, resulting in a higher YoY operating profit both by amount and as a percentage of sales. ■Selling, general and administrative ex
Slide 32: Results for the fiscal year ended March 31, 2023 6/8
Results for the fiscal year ended March 31, 2023 6/8 ■Net sales by facilities of which services are entrusted ①Hospitals and research facilities ■ Hospitals and research facilities ■ Manufacturing plants, etc. (billion yen) ・Both maintenance services and construction work increased. ■ Other special
Slide 33: Results for the fiscal year ended March 31, 2023 7/8
Results for the fiscal year ended March 31, 2023 7/8 ■Annual contract sales (billion yen) ■ Maintenance services net sales (billion yen) ■ Renovation work construction work volume (billion yen) ■ Hospitals and research facilities ■ Manufacturing plants, etc. ■ Other special facilities ■ Office build
Slide 34: Results for the fiscal year ended March 31, 2023 8/8
Results for the fiscal year ended March 31, 2023 8/8 ■Overseas net sales by region (million yen) ■ China ■ Singapore ■ Other regions Net sales in six countries outside Japan: ¥ 1.5 billion 1,200 Operating income to sales overseas :－1.2％ 1,017 1,000 Despite higher sales and profit due to an improved
Slide 35: Status of cash flows
Status of cash flows FY03/2022 FY03/2023 Cash flows from operating activities Consolidated (cumulative period) decreased Year-on-year Year-on-year ▼ Amount Amount change change (billion yen) (billion yen) (billion yen) (billion yen) Cash flows from operating 1.7 -0.9 0.9 -0.8 Accounts receivable inc
Slide 36: Financial position
Financial position FY03/2022 FY03/2023 Consolidated (as of the end of period) Year-on-year Year-on-year Amount Amount growth ratio growth ratio (billion yen) (billion yen) (％) (％) Total assets: Current assets 21.6 +7.4 23.4 +8.3 Up from 35.1 to 37.5 billion yen Fixed assets 13.4 -8.6 14.1 +4.7 ▼ Tot
Slide 37: Forecast for the fiscal year ending March 31, 2024
Forecast for the fiscal year ending March 31, 2024 Despite progress in striking a balance between measures to stop the spread of COVID-19 and steps to resume economic and social activity, international instability, inflation, and supply limitations are expected to persist. We will seek to expand sal
Slide 38: Toward the achievement of long-term vision
Contents Ⅰ. Overview and strength p.03-p.24 Ⅱ. Financial highlights p.25-p.37 Ⅲ. Toward the achievement of long-term vision p.38-p.47 38
Slide 39: Toward the achievement of long-term vision
Toward the achievement of long-term vision Improvement of happiness of all stakeholders ▲ Creation of sustainable shareholder value ▲ Capital productivity improvement ▲ Enhanced human resources value 39
Slide 40: Enhancing human resources value
Enhancing human resources value Promote four projects aiming at enhancing human resources value Plans are underway to build a new Training Center. The facility will strengthen employee skills overall and help new and young employees make rapid contributions. 「Human」 「Technological capabilities」 「Sat
Slide 41: Employee satisfaction levels
Employee satisfaction levels ■Employee satisfaction levels (％) Employee satisfaction levels： 67.4％ 100.0 Positive responses concerning rewarding work / teamwork / work-life balance 90.0 We will strive to deliver improvements is trending higher 80.0 through initiatives with each project (raise 65.9 6
Slide 42: Improving the capital productivity
Improving the capital productivity Most important factor for improving the capital productivity 「enhancement of human resources value」 Linked to ESG(Social) Number of employees Special environment × Net income Net sales ＋ Technological capabilities Overseas development × Satisfaction level ROE Barri
Slide 43: Shareholder return policy
Shareholder return policy Maintain dividend payout ratio of 50% by enhancing capital productivity ▼ Implementation of shareholder return with awareness of dividend on equity ratio ■ROE (%) ■Payout ratio (%) ■Dividend on equity ratio (%) 15.0 14.1 60.0 8.0 7.2 50.2 51.0 49.4 × ＝ 10.5 6.0 5.2 9.4 4.6
Slide 44: Dividends
Dividends ■Dividends per share (yen) ■(year-end dividend ■(interim dividend 45.00 41.50 Returning 50% of extraordinary gains from cross- 40.00 shareholdings sales as a special dividend 35.00 14.00 30.00 Dividend per share 13.50 yen 30.00 28.00 28.50 28.00 26.00 25.00 15.00 20.00 15.50 16.00 14.00 Th
Slide 45: Sustainable shareholder value creation
Sustainable shareholder value creation ■PBR (x) ■(PBR＞1 ■(PBR＝1 2.00 PBR＞1 1.80 1.60 Evaluation of non-financial capital 1.40 ▼ 1.20 “Creation of sustainable shareholder value” 1.00 Linked to ESG (Governance) 0.80 0.60 ▼ 0.40 Medium- to long-term expansion of corporate value 0.20 Improvement of happ
Slide 46: Financial Key Performance Indicator
Financial Key Performance Indicator Net sales：¥55 billion (Ratio of sales of facilities with special environment 75％) Operating income：¥3 billion (Operating income to sales overseas 5％) Profit attributable to owners of parent：¥1.9 billion EPS：¥54 (Payout ratio：50％) ROE： Maintain 10％ * For net sales,
Slide 47: Aim to improvement of happiness of all stakeholders
Aim to improvement of happiness of all stakeholders Improvement of happiness of all stakeholders Creation of sustainable Shareholder Value shareholder value Purposeful dialogue with stakeholders 10％ ROE Payout ratio50％ Financial Key Performance Indicator Operating income ¥ 3 billion ¥ 55 billion Net
Slide 48: www.nikku.co.jp/en
www.nikku.co.jp/en In charge of IR: Corporate Planning Division E-mail：ir4658@nikku.co.jp 48
Nippon Air Conditioning Services — FY2023 Earnings Presentation on 6ix