SWCC groups
Supplementary Materialfor the Third Quarter of the Fiscal YearEnding March 2021

Creating for the Future
SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)
February 3, 2021

https://www.swcc.co.jp

FY3/2021 3Q Overview of Financial Results
Results: The recovery trend in 3Q continued after 2Q.
・ In the Energy and Infrastructure operations ：Demand for energy infrastructure was in line with initial expectations. The
recovery trend of demand for construction-related products continued after 2Q, but it did not reach the level of the same periodof the previous year.
・ In the Communication and Industrial devices operations ：Demand for communication infrastructure picked up gradually
due to 5G demand. Industrial devices showed signs of recovery, mainly in China.
・ In the Electrical equipment and Components operations ：Although the net sales decreased since the demand forgeneral-purpose magnet wires for heavy electric continued to be sluggish, the net income increased due to the recovery ofdemand for high performance products for automobile.

3Q Progress Rate (Net Sales/Operating Income/Ordinary Income/Net Income)※percentagechanges fromthe initial plan

71％

Net Sales Plan
162 billion yen

OperatingincomePlan
6 billion yen

85％

Ordinary
income Plan
5.5 billion yen

96％

Net incomePlan
4 billion yen

87％2

FY3/2021 Revision to Full-year Business Forecast and Dividend Forecast• Since the impact of COVID-19 was limited and less than the estimated, the consolidated earnings anddividend forecast were revised on February 3.
• The extraordinary losses due to the structural reforms on reorganization of domestic bases including
communication cable operations etc., were estimated in the net income.
(Unit:100 million yen)

FY2019ResultComposition%

FY2020
PlanComposition%

FY2020
Revised plan

Compositio
nRevised
amount%Change%Net sales

1,711－

1,620－

1,620－－－

Operatingincome

86

5.0%

60

3.7%

70

4.3%

+10+16.7%

Ordinary
income

79

4.6%

55

3.4%

70

4.3%

+15+27.3%

Net income
attributable toowners of parent

55

3.2%

40

2.5%

42

2.6%

+2+5.0%

Dividend/Dividend
Payout Ratio

15 yenper share

8.2%

15 yenper share

11.2%

20 yenper share

14.2%+5yen－
3Macroeconomic Environment• Due in part to the economic recovery in China, the average price of domestic copper prices (on a yenbasis) for 3Q cumulative period rose by 3.6%.
• Domestic copper wire shipments fell sharply, mainly in construction and electric power sales. (-11.9%YoY)(Thousand yen/ton)(Monthly Average) Domestic Copper Price Trends

Copper Cable Shipment Volume (tons)

200,000

900.0

172
Thousandton

800.0
700.0

163
Thousand ton
Est.

150,000

600.0
500.0

100,000

400.0

Rise by 3.6% YoY on 3Q cumulative average

300.0

50,000200.0
100.000.0AprMayJunJulAugSepPrevious yearOctNovDecJan

Current year

Source from Japan Electric Wire Manufacturers AssociationFebMar2018
Apr-JunCommunication

Jul-Sep
Electric power

Oct-Dec

2019
Jan-MarApr-JunElectrical machinery

Jul-Sep

Automotive

Oct-Dec

2020
Jan-MarApr-JunElectrical construction and sales

Jul-Sep

Oct-Dec
Plan

Other domestic demand

Source from Japan Electric Wire Manufacturers Association

4

3Q Consolidated Statements of Income• Net sales decreased by 11.0% YoY and operating income decreased by 25.1% YoY. The recovery trend in 2H
continued.
• Profits for 3Q cumulative period exceeded that of FY2018, partly due to the structural reforms on changes ofbusiness portfolio etc..

FY20183Ｑ Actual

FY20193Ｑ Actual

FY2020
3Ｑ Actual

Composition%

Net sales

1,318

1,293

1,152－△11.0%

Gross profit

158

179

15513.4%△13.8%

Operatingincome456851

4.4%△25.1%

Ordinary
income396353

4.6%△16.5%Net income
attributable toowners of parent

28

4635

3.0%

△24.2%(Unit:100 million yen)

YoY%

5

Quarterly Performance Trends(Net sales: Comparison with past 3 years)
Changes in quarterly net sales(Unit:100 million yen)

FY2018FY2019FY2020600400424430

430

430

338

384

464

434

430

454

418

468 Est.

20001Q

2Q

3Q

Changes in cumulative net sales(Unit:100 million yen)
2,000

854

1,0000FY2018FY2019

1,772

1,500

500

4Q

424

430

1Q

860

338
2Q

FY20201,711

1,620 Est.

1,318 1,293 1,152
722

3Q

4Q

6

Changes in Quarterly Business Results(Operating income: Comparison with past 3 years)
Changes in quarterly operating income(Unit:100 million yen)
30

26

20
1018

17
12
6023

25

FY201827212Q

3Q
FY2018Changes in cumulative operating income

19 Est.

FY2019FY202086806860

1224231770 Est.

66514543400184Q

10020

FY2020101Q(Unit:100 million yen)

FY2019

61Q

2Q

3Q

4Q

7Segment Information• Sales and profits fell sharply in 1Q due to the impact of COVID-19, but recovered in 2Q, and the recovery
continued in 3Q.

(Unit:100 million yen)

FY20183Q Results
Net sales

Energy andInfrastructure

632

Communication andIndustrial devices

249

Electrical equipment
and Components

399

Others(New Business)
Total

FY20193Q Results

Operatingincome(Profit margin %)Net sales

2566717229636237（22）△3（△2）

1,31845（4.0%）（6.7%）（1.6%）（3.4%）FY2020
3Q Results

Operatingincome(Profit margin %)Net sales

Operatingincome(Profit margin %)

48618

20

197

330436（22）△4（△1）

33（23）△4（△0）

1,293

68

1,15251（7.2%）（8.6%）（0.9%）（5.2%）

35（5.7%）15（7.7%）5（1.6%）（4.4%）
8Energy and Infrastructure operations Results & Forecast(Unit:100 million yen)

1,200

Net sales（3Q)
Operating income（3Q）

Net sales
Operating income

1,000100885867868 Est.

80060012080667 61632
434840060618

04025

FY201820FY2019◆Construction

General-purpose electric cables,
Seismic isolation devices,
Anti- seismic / Anti-shock◆Electric power infrastructure
Power cables, construction,
Power device component(SICONEX®)

From 2Q, demand for construction
work projects recovered, but did
not reach the level of the same
period last year.
Progress was in line with theforecast made at the beginning ofthe period.

47 Est.
35

200

3Q Results

FY2020 Est.

0Full-year forecast
Demand for electric power infrastructure moved as expected.
Demand for construction work projects recovered, but did notreach the level of the same period last year.
The planned net sales of 86.8 billion yen and operating incomeof 4.7 billion yen.
Operating margin: 5.4% (6.9% in the previous fiscal year)
9Communication and Industrial devices operations
Results & Forecast(Unit:100 million yen)

500

Net sales（3Q)
Operating income（3Q）

Net sales
Operating income

40030530251817250 Est.

229

◆Communication infrastructure

20197

FY2019FY2020 Est.

Wire harness

Precision devices

Demand was sluggish compared to thesame period of the previous year,
despite demand associated with theexpansion of communication
infrastructure, such as for 5G services.
Supply chain disruptions were resolved
and demand recovered, especially inChina, but demand was sluggish
compared to the same period last year.

Full-year forecast

1510FY2018◆Home and industrial equipment◆Copy machine

20 Est. 20

1000

Metal cables, optical cables
LAN cables, optical cables

300
249

3Q Results◆Construction

40327

200

500Capture demand for domestic telecommunication infrastructure
has been expanded, and the GIGA School Project.
In precision devices, promote structural reform in response tochanges in the supply chain due to COVID-19.
The planned net sales of 25 billion yen and operating incomeof 2 billion yen.
Operating margin: 7.9% (8.2% in the previous fiscal year)
10Electrical equipment and Components operations
Results & Forecast(Unit:100 million yen)600
Net sales
Operating income

30

Net sales（3Q)
Operating income（3Q）

523

500

400

25471

449 Est.
20399

3Q Results◆Automobile

Oxygen free copper MiDIP®,
Copper Alloy,
High performance magnet wire◆Electrical machinery
applications etc.

General-purpose magnet wires

362
300

200866100015304

3FY2018

FY20198 Est.
5FY2020 Est.

1050

Demand for high performance products
for automobile recovered in 2H.
Demand for general-purpose magnet
wires for heavy electric continued to besluggish.

Full-year forecast
Progress is underway to transform business from conventional
general-purpose products to focus on high-value-added products.
The profit was improved due to the automobile market recovery,
production increase of Oxygen free copper MiDIP®, copper
alloys and magnet wire for automobile in 2H.
The planned net sales of 44.9 billion yen and operating incomeof 0.8 billion yen
Operating margin: 1.7% (1.2% in the previous fiscal year)
11Consolidated Balance Sheet(Comparison with the previous fiscal year-end)
・Equity ratio was 34.8% (up 2.5 points from the end of the previous fiscal year)
March 31,2020

December 31,
2020

March 31,2020

Change(Unit:100 million yen)

December 31,
2020

ChangeCash and deposits

4347+4Notes & accounts
payable186

198+12Accounts receivableand other receivables

412

407

△5Short-term borrowings

295

272

△24Inventories

21745

221
51+4＋6Others

Total current liabilities

157638129599△28△40Total current assets

717

726+8Long-term debt

119133+14

Property, plant andequipment399

400+1Others

6870+2Intangible assets

1412△2Total long-term liabilities

187

203+16

Investments and otherassets

94

99+5Total liabilities

825

801

△24508512+4242
57
6238400

24257
92
45436

00+30+6

1,225

1,238+12Others

Total fixed assets

Capital stock
Capital surplus
Retained earnings
OthersTotal net assets

Total assets

1,225

1,238+12Total liabilities and netassets+36

12

Measures against COVID-19

Regulated onMay 25, 2020

Five stages of crisis management by regions in domestic「Guidelines on new working style in the workplaces」•Explicit directions on the five stages of crisis management•

Utilization of contact network of all the Group subsidiaries（i.e. Emergency contact app)

•Web conference system installation which all of the employees can access•

Prohibition of discrimination against infected people, and protection of personal information•

Implementation of education on the guidelines

etc.

Measures for the state of emergency
declaration in January 2021•

Strengthen
measures

Aiming to reduce the attendance rate from 50% to 30% in the specified regions
under the state of emergency declaration(Excluding plant offices, factories, logistics centers, construction business)•

Measures to prevent infection based on the new normal•

Request to refrain from nonessential and non-urgent outings, and Web conference
system is recommended to utilize•

All employees are required to take and record temperature•

Visitors are asked to check temperature•

Any Business dinners, internally or externally, are forbidden

etc.

13

Market Outlook for the Second Half• Recovering trend from 2H continued, but it can’t be prejudged due to the re-spread of infection.
Market Environment
Construction
Energy andInfrastructure

Electric power
infrastructure
Seismic isolation & Others

Communicationand Industrial
devices

Electricalequipment andComponents

Telecommunications cable
Wire harness
Precision devices(for copy machine)High performance products(Automobile etc.)
General-purpose products
IoT Solution

Others(New Business)

Industry(Medical etc.)

Measures・Production system to respond to demand fluctuations
・Strengthening the renewable energy grid interconnection
business model・Promotion of structural reform of vibration control and soundcontrol business・Capturing demand from 5G startup, GIGA School Project, etc.
・Structural reform of new supply chains and local production for
local consumption (China, Southeast Asia)
・Launching a new wiring harness system and strengthening
overseas investment
・Strengthen the production system to respond to structuralchanges in the automobile industry and an increase in theproportion of eco-friendly automobiles
・Reinforcement of telework-compatible system products・Strengthen sales promotions in response to increase demandfor medical materials, systems and services due to theacceleration of telemedicine and smart work14Creating for the Future
SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)

Contact

SWCC SHOWA HOLDINGS CO., LTD.
Corporate Planning Department,
Business Strategy Division
TEL:044-223-0520

Forward-looking statements in this document are based on information available at the time ofpublication and contain potential risks and uncertainties.
Therefore, actual results may differ materially from those projected in the forward-looking
statements as a result of various factors.
Factors that could influence actual results include economic conditions, demand trends, rawmaterial prices, and exchange rate fluctuations, as well as other items not limited to the above.

https://www.swcc.co.jp