Kondotec Inc. · TSE:7438
Kondotec — Q1 FY2024 Earnings Presentation
68 slides from Kondotec's earnings presentation, Aug 10, 2023
Slide 1: FY2024 Q1 Financial Results
Tokyo Stock Exchange (Prime Market) Securities Code : 7438 FY2024 Q1 Financial Results August 10, 2023
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 FY2024 Financial Results P. 4 2. Company Overview P. 7 3. Main Products and Merchandise P. 18 4. Q1 FY2024 Financial Results and Analysis P. 24 5. Q1 FY2024 Financial Results and Analysis by Segment P. 30 6. Response to ESG Issues P. 40 7. Growth Strategies P. 48 8. Shar
Slide 4: 1. Highlights of Q1 FY2024 Financial Results
1. Highlights of Q1 FY2024 Financial Results
Slide 5: Summary of Q1 FY2024 Consolidated Financial Results
Summary of Q1 FY2024 Consolidated Financial Results Net sales increased due to a demand recovery in private-sector capital investment and price pass-through in response to higher manufacturing and procurement costs. Operating results increased thanks to the sales growth offsetting a dip in gross
Slide 6: Topics in Q1 FY2024: New DOE target
Topics in Q1 FY2024 New DOE target Factoring in medium-to long-term performance and capital efficiency in future, Kondotec has decided to increase the DOE target to 4.0% from 2.5% in FY2024 to further enhance shareholder returns due to an overall increase in dividends in the market. DOE is the rat
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. （trillion yen） 80,000 90 8,000 Established Nippon Scaffolding Holdings Co., Lt
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, 2023) 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 2023) Industrial Materials Structural Steel Materials Net sales Sales weighting Net sales Sales weighting 37,610 million yen 50 % 19,963 million yen 26 % 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 (in-house production and OEM production) ◆ Suppliers 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 (FY2022) Market overview and initiatives Estimated volume of steel frame demand Market overview JIS certification (1000 tons) The demand is gradually Turnbuckle braces 5,000 r
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 FY2024 Financial Results and Analysis
4. Q1 FY2024 Financial Results and Analysis
Slide 25: Q1 FY2024 Consolidated Financial Results
Q1 FY2024 Consolidated Financial Results (million yen) Q1 Q1 YoY FY2023 FY2024 Amount % Net sales 17,036 18,762 +1,726 +10.1% Gross profit 3,777 4,122 +345 +9.1% SG&A expenses 2,892 3,141 +249 +8.6% Operating income 885 981 +95 +10.8% Ordinary income 940 1,032 +92 +9.8% Profit attributable to 590 67
Slide 26: Operating Income Analysis (Consolidated)
Operating Income Analysis (Consolidated) Operating income analysis (million yen) Quarterly GPM Consolidated Parent △37 382 △249 23.1% 22.9% 981 885 21.9% 22.2% 21.6% 22.0% 21.2% 21.8% Q1 FY2023 Net Sales Gross Profit SG&A Q1 FY2024 21.3% Margin Expenses 20.9% Gross Profit Margin 22.2% → 22.0% Bonuse
Slide 27: Progress for FY2024 Forecast
Q1 FY2024 Consolidated Financial Results Progress for FY2024 Forecast Progress for FY2024 forecast (million yen) Net sales and operating income (million yen) ■ Q1 FY2024 ■ Full-year forecast Net sales Operating income Net sales Full-year 20,137 forecast Progress 19,193 19,080 18,762 18,762 56,367 78
Slide 28: Consolidated Balance Sheet [Assets]
Consolidated Balance Sheet [Assets] (million yen) FY2023 Q1 FY2024 Change Cash and deposits 10,733 9,997 △736 Notes and receivable-trade, 14,181 13,444 △737 and contract assets Current assets Electronically recorded 3,695 4,085 +390 monetary claims operating Inventories 8,132 8,293 +160 Other 658 71
Slide 29: Consolidated Balance Sheet [Liabilities and Net Assets]
Consolidated Balance Sheet [Liabilities and Net Assets] (million yen) FY2023 Q1 FY2024 Change Notes and accounts payable-trade 5,015 4,766 △249 Electronically recorded obligations-operations △272 9,738 9,465 Current liabilities Breakdown Electronically recorded obligations–operations 11,439 11,144 △
Slide 30: 5. Q1 FY2024 Financial Results and Analysis by Segment
5. Q1 FY2024 Financial Results and Analysis by Segment
Slide 31: Q1 FY2024 Financial Results by Segment
Q1 FY2024 Financial Results by Segment (million yen) Change Full-year Q1 FY2023 Q1 FY2024 Progress (%) forecast Net sales 8,591 9,256 +7.7% 39,293 23.6% Industrial Materials Segment 538 576 +6.9% 2,597 22.2% profit or loss EBITDA 605 643 +6.2% － － Net sales 4,475 5,019 +12.2% 20,873 24.0% Structural
Slide 32: Industrial Materials
Industrial Materials Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 10,075 9,655 YoY 9,288 9,256 9,256 8,591 8,591 + 7.7% 698 576 YoY 574 576 538 538 539 + 6.9% Q1 FY2023 Q1 FY2024 Q1 Q2 Q3 Q4 Q1 FY2023 FY2023 FY2023 FY2023 FY2024 Factors affect
Slide 33: Industrial Materials: Segment Profit Analysis
Industrial Materials Segment profit or loss analysis (million yen) Quarterly GPM 33.1% 30.1% 24.0% 24.4% manufactured 19.4% in-house Products △15 △95 299 △15 △134 27.5% merchandise 26.3% 25.5% Imported 25.2% 24.6% 576 538 19.9% 20.0% 19.9% 19.1% merchandise Domestically Q1 FY2023 Sales Volume Sales
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 5,396 5,244 YoY 5,019 5,019 4,847 4,475 +12.2% 4,475 YoY 471 507 376 380 376 356 380 +1.2% Q1 Q2 Q3 Q4 Q1 Q1 FY2023 Q1 FY2024 FY2023 FY2023 FY2023 FY2023 FY2024 Factors af
Slide 35: Structural Steel Materials: Segment Profit Analysis
Structural Steel Materials Segment profit or loss analysis (million yen) Quarterly GPM 30.8% manufactured 27.2% 28.1% 27.7% △0 in-house Products 23.8% 120 △117 2 33.8% 34.6% 32.4% merchandise 31.9% Imported 30.3% 376 380 19.2% 19.2% merchandise Domestically 19.0% 18.9% sourced Q1 FY2023 Sales Volume
Slide 36: Electrical Equipment
Electrical Equipment Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,467 YoY 2,441 2,401 2,401 2,370 2,223 2,223 +8.0% 121 57 YoY 85 53 △6.7% 57 50 53 Q1 Q2 Q3 Q4 Q1 Q1 FY2023 Q1 FY2024 FY2023 FY2023 FY2023 FY2023 FY2024 Factors affecting net s
Slide 37: Electrical Equipment: Segment Profit Analysis
Electrical Equipment Segment profit or loss analysis (million yen) Quarterly GPM and the number of projects 17.6% △0 Gross Profit Margin 16.9% 27 △30 16.7% 16.6% 16.4% Q1 Q2 Q3 Q4 Q1 FY2023 FY2023 FY2023 FY2023 FY2024 57 53 26 The number of projects※ 22 19 14 13 Q1 FY2023 Net Sales Gross Profit SG&A
Slide 38: Scaffolding Construction
Scaffolding Construction Net sales and segment profit or loss (million yen) YoY Quarterly Net sales Segment profit or loss 2,504 YoY 2,198 2,085 2,085 1,746 +19.5% 1,923 1,746 86 67 △20 △20 △81 △81 △75 Q1 FY2023 Q1 FY2024 Q1 Q2 Q3 Q4 Q1 FY2023 FY2023 FY2023 FY2023 FY2024 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 (million yen) Q1 FY2023 Q1 FY2024 Construction sales 870 738 673 704 △29 △20 1 329 151 179 102 88 21 61 △ 81 Detached Large properties Bridges/ Rental sales Material sales houses/renovations (no
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 mat using recycle
Slide 44: Initiatives: Social (Logistics 2024 problem)
Initiatives: Social Social The 2024 problem in the logistics industry Response to the 2024 problem in the logistics industry Logistics function is as an important element to maintain our In response to the 2024 problem in the logistics industry, we rapid-delivery system, one of the KONDOTEC’s st
Slide 45: 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 Diversity ind
Slide 46: 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 4.0% and looks to
Slide 47: Initiatives: Governance
Initiatives: Governance Governance Corporate governance KONDOTEC recognizes 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
Slide 48: 7. Growth Strategies
7. Growth Strategies
Slide 49: 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 50: 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 For the purpose of developing new merchandise, joint New sale
Slide 51: 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, Launch of website, “Tsu
Slide 52: 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 53: 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 54: 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 55: 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 56: 8. Shareholder Return
8. Shareholder Return
Slide 57: Dividends and Shareholder Incentive Plan
Dividends and Shareholder Incentive Plan We target ROE of 10% or more and DOE of 4.0% or more with the aim of continuing to increase dividends. Transition in dividends Shareholder incentive plan Since initial listing: No decrease in dividends 40yen Shareholders can redeem reward points for over
Slide 58: 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 Among 3,986 listed companies … KONDOTEC stock price (yen) Nikkei average stock price (yen) 1,318 1,250 30,000 ROE 1,517th 1,000 24,000 Profit 750 18,000 attri
Slide 59: 9. Highlights of Results
9. Highlights of Results
Slide 60: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 18,762 981 Progress Progress Net sales Operating income (million yen) million yen 24.1% (million yen) million yen 21.8% 78,000 75,447 4,500 4,355 4,085 66,139 3,907 60,599 59,562 3,594 3,441 3,516 3,537 57,828 3,303 3,354 3,271 52,811 50,211 50,410 47,991
Slide 61: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 33,570 Net assets (million yen) million yen ROE (%) Target 10 % or more 33,285 33,570 32,066 29,022 11.4 28,387 11.1 10.9 10.8 10.7 10.7 26,756 10.4 10% or more 24,745 22,719 21,102 7.9 20,231 7.7 18,783 5.4 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23
Slide 62: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results 14/3 15/3 16/3 17/3 18/3 19/3 20/3 21/3 22/3 23/3 24/3 Q1 24/3 (forecast) Result of Operations (million yen) Net sales 47,991 49,168 50,211 50,410 52,811 57,828 60,599 59,562 66,139 75,447 18,762 78,000 Operating profit 3,271 3,303 3,441 3,516 3,537 3,907
Slide 63: Quarterly Highlights
Quarterly Highlights Consolidated Net sales (million yen) 20,137 19,193 19,080 18,762 17,862 16,971 17,036 16,053 16,326 15,585 15,117 15,492 14,647 14,839 14,978 14,313 14,112 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Operating income (million yen) 1,408 1
Slide 64: Quarterly Highlights: Industrial Materials
Quarterly Highlights Industrial Materials Net sales (million yen) 9,961 10,075 9,536 9,655 9,175 9,227 9,025 9,237 9,288 9,256 8,685 8,758 8,692 8,591 8,371 8,104 7,826 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen) 698 672 6
Slide 65: Quarterly Highlights: Structural Steel Materials
Quarterly Highlights Structural Steel Materials Net sales (million yen) 5,396 5,244 5,019 4,847 4,412 4,328 4,475 4,322 4,299 3,835 3,859 3,954 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 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen) 497
Slide 66: Quarterly Highlights: Electrical Equipment
Quarterly Highlights Electrical Equipment Net sales (million yen) 2,465 2,467 2,441 2,401 2,323 2,370 2,237 2,226 2,223 2,107 2,101 2,155 2,126 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 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen) 121 112 10
Slide 67: Quarterly Highlights: Scaffolding Construction
Quarterly Highlights Scaffolding Construction Net sales (million yen) 2,504 2,198 2,070 2,085 2,001 1,923 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 20/3 21/3 22/3 23/3 24/3 Segment profit or loss (million yen) 107 86 67 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 68: Official SNS accounts and contact
Official SNS accounts KONDTEC opened 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 Teleph