Kondotec Inc. · TSE:7438
Kondotec — FY2021 Earnings Presentation
64 slides from Kondotec's earnings presentation, May 13, 2021
Slide 1: Financial Results FY2021
Financial Results FY2021 May 13,2021 Securities Code : 7438
Slide 2: Contents
Contents 1. Highlights of FY2021 Financial Results P.3 2. Company Overview P.6 3. Main Products and Merchandise P.14 4. FY2021 Financial Results and Analysis P.20 5. FY2021 Financial Results and Analysis by Segment P.26 6. FY2022 Financial Forecast P.34 7. Response to ESG Issues P.36 8. Growth Strat
Slide 3: 1. Highlights of FY2021 Financial Results
1. Highlights of FY2021 Financial Results
Slide 4: Summary of FY2021 Consolidated Financial Results
Summary of FY2021 Consolidated Financial Results Net sales decreased due to the sales contributions from TOKAI STEP (which became a subsidiary in FY2020) and FUKOKU (which became a subsidiary in FY2021) were unable to offset the drop in sales caused by the impact of the COVID-19 infection. Opera
Slide 5: Initiatives in FY2021
Initiatives in FY2021 Transition to a Company with an Audit and Supervisory Committee Establishment of SDGs promotion department In June 2020, KONDOTEC transitioned from a Quality Assurance Department changed the name to Company with an Audit and Supervisory Board to a SDGs Promotion Department
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. TECBUILD CO., LTD. TOKAI STEP CO., LTD. FUKOKU, Ltd. (As of March 31, 2021) Established January 1953 President and Representative Katsuhiko Kondo Direc
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. FY2021 Financial Results and Analysis
4. FY2021 Financial Results and Analysis
Slide 21: FY2021 Consolidated Financial Results
FY2021 Consolidated Financial Results Vs. FY2020 (million yen) YoY FY2020 FY2021 Amount % Net sales 60,599 59,562 △1,037 △1.7% Gross profit 13,564 13,604 ＋39 ＋0.3% SG&A expenses 9,479 10,249 ＋769 ＋8.1% Operating income 4,085 3,354 △730 △17.9% Ordinary income 4,177 3,455 △721 △17.3% Profit attributab
Slide 22: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent △942 23 23.7% 5 23.5% 183 23.6% 23.3% 23.3% 23.0% 23.0% 4,085 22.8% The impacts of 22.8% making TOKAI 3,354 22.8% 22.6% STEP and FUKOKU 22.1% 22.5% subsidiaries 22.1% 22.0% 21.9% FY2020
Slide 23: FY2021 Consolidated Financial Results vs. Forecast
FY2021 Consolidated Financial Results Vs. Forecast (million yen) Operating income analysis (million yen) FY2021 FY2021 Change Forecast Actual Amount % Net sales 62,000 59,562 △2,437 △3.9% Gross profit 14,300 13,604 △695 △4.9% △562 SG&A 350 10,600 10,249 △350 △3.3% 3,700 expenses △133 3,354 Operating
Slide 24: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2020 FY2021 Change Cash and deposits 8,305 11,317 ＋3,012 Notes and receivable –trade 13,207 12,372 △835 Current assets Electronically recorded 1,695 1,984 ＋288 monetary claims operating Inventories 5,026 4,932 △93 Other 672 962 ＋289 Total current a
Slide 25: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2020 FY2021 Change Notes and accounts payable – trade 3,333 3,978 ＋644 Electronically recorded obligations – operations 8,400 8,029 △370 Current liabilities Breakdown Electronically recorded obligations–operations 10,006 9,202 △
Slide 26: 5. FY2021 Financial Results and Analysis by Segment
5. FY2021 Financial Results and Analysis by Segment
Slide 27: FY2021 Financial Results by Segment
FY2021 Financial Results by Segment (million yen) Change Full-year FY2020 FY2021 Progress (%) forecast Net sales 35,459 37,282 ＋5.1% 38,900 △4.2% Industrial Materials Segment 2,111 2,208 ＋4.6% 2,068 ＋6.8% profit or loss EBITDA 2,506 2,946 +17.6% － － Net sales 16,429 14,035 △14.6% 14,800 △5.2% Struct
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 YoY 9,536 9,175 9,227 9,025 37,282 +5.1% 8,685 8,758 8,371 35,459 672 669 2,111 2,208 YoY 593 544 553 +4.6% 472 421 393 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2020 FY2021 FY2020 FY2020
Slide 29: Industrial Materials: Segment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM 23 manufactured 78 29.9% 27.0% 28.6% 27.3% 29.1% 28.8% in-house Products 23.4% 23.1% 213 △499 280 Major increase/decrease factors related to subsidiaries 2,208 30.7% 30.6% 2,111 29.2% 29.8% merchandise Goodwill amortization Imported △212 mi
Slide 30: Structural Steel Materials
Structural Steel Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales 4,412 4,322 Segment profit or loss 3,835 3,859 16,429 3,658 3,616 YoY 3,467 14,035 497 3,293 △14.6% 482 399 1,718 338 311 YoY 240 260 944 △45.0% 132 FY2020 FY2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2020
Slide 31: Structural Steel Materials: Segment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM 32.2% 30.9% 32.3% manufactured 30.7% 30.7% 28.6% 29.3% 26.7% in-house Products △438 △155 △227 48 36.9% 36.7% 35.8% 35.4% 35.7% 35.5% merchandise 1,718 Imported 34.2% 33.5% 944 20.8% 20.7% 20.0% 20.1% merchandise Domestically 19.3% 18.8% 18.
Slide 32: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,465 8,710 YoY 8,243 2,237 2,107 2,155 △5.4% 2,035 2,101 1,963 1,886 281 253 112 106 YoY 63 69 △10.0% 52 59 44 26 FY2020 FY2021 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY2020 FY2020 FY2020 FY2
Slide 33: Electrical Equipment: Segment Profit Analysis
Segment profit or loss analysis (million yen) Quarterly GPM and number of projects 17.5% 17.4% Gross Profit Margin 16.8% 16.8% 16.6% 16.6% 16.6% 16.4% △71 55 △12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 281 FY2020 FY2020 FY2020 FY2020 FY2021 FY2021 FY2021 FY2021 253 15 Number of project※ 14 13 11 FY2020 Net Sales Gr
Slide 34: 6. FY2022 Financial Forecast
6. FY2022 Financial Forecast
Slide 35: FY2022 Consolidated Financial Forecast
FY2022 Consolidated Financial Forecast FY2021 FY2022 Change Actual Forecast Amount % Net sales 59,562 63,700 ＋4,137 ＋6.9% Gross profit 13,604 14,750 ＋1,145 ＋8.4% SG&A expenses 10,249 11,380 ＋1,130 ＋11.0% Operating income 3,354 3,370 ＋15 ＋0.5% Ordinary income 3,455 3,500 ＋44 ＋1.3% Profit attributable
Slide 36: 7. Response to ESG Issues
7. Response to ESG Issues
Slide 37: 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 38: Initiatives
Initiatives We have established our ESG basic policy and link it to sustainable corporate growth by incorporating it in the management strategy. NEWS January 2021 Establishment of SDGs promotion department Quality Assurance Department changed the name to SDGs Promotion Department to work actively
Slide 39: 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 40: 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 (※ As of end Ma
Slide 41: 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 42: 8. Growth Strategies
8. Growth Strategies
Slide 43: Toward Achieving Billion Yen Sales Target
Toward 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 (o
Slide 44: ① 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 45: ① 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 46: 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 Okayama office in April 2018. We will continue to execute quick deliveries in
Slide 47: 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 48: 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 49: 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 50: 9. Shareholder Return
9. Shareholder Return
Slide 51: 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 Transition in dividends Closing price on April 30: 1,000 yen 32
Slide 52: 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 53: 10. Highlights of Results
10. Highlights of Results
Slide 54: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net sales (million yen) 59,562 million yen Operating income (million yen) 3,354 million yen 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 38,745 35,548 1,926 1,275 11/3 12
Slide 55: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results Net assets (million yen) 29,022 million yen ROE (%) Target 10 % or higher 29,022 28,387 11.4 26,756 11.1 10.9 10.8 10.7 10.7 10.4 24,745 10.0 10% or higher 22,719 21,102 20,231 18,783 7.1 16,990 15,097 5.8 14,381 5.4 4.7 11/3 12/3 13/3 14/3 15/3 16/3 17/3
Slide 56: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 (forecast) Result of Operations (million yen) Net sales 35,548 38,745 41,153 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 63,700 Operating profit 1,275 1,926 2,664 3,271 3,303 3,441 3,
Slide 57: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 15,665 16,053 15,585 15,117 15,492 14,350 14,647 14,839 14,050 14,199 14,313 14,112 13,220 13,613 12,660 13,058 12,924 13,108 12,433 11,767 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Operating income
Slide 58: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,961 9,536 9,175 9,227 9,025 8,919 8,685 8,758 8,371 8,052 7,968 7,907 7,757 7,694 7,607 7,664 7,297 7,228 7,373 7,083 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss (milli
Slide 59: 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 3,349 3,330 3,420 3,467 3,277 3,293 3,032 2,720 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss
Slide 60: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,272 2,237 2,196 2,156 2,148 2,155 2,125 2,080 2,107 2,101 2,013 1,970 2,005 2,035 2,035 1,963 1,927 1,963 1,886 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 17/3 18/3 19/3 20/3 21/3 Segment profit or loss (milli
Slide 61: 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 release. Actual results may differ materially from these forward-looking statements due to various f
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Slide 64: 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