SWCC groups

Financial Results for the Fiscal Year
Ended March 2021
Creating for the Future
SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)
May 13, 2021

https://www.swcc.co.jp

Overview of Financial Results for FY2020
Results: Achieved the profit targets, despite the impact of COVID-19
・Energy and Infrastructure operations: Demand for energy infrastructure was in line with initialexpectations. Demand for construction-related products also recovered gradually.
・ Communication and Industrial devices operations: Demand for communication cable related to 5G, etc.
picked up. Industrial devices recovered mainly in China.
・ Electronic equipment and components operations: Sales declined as demand for heavy electricremained sluggish, but profits rose as demand for automobiles recovered.
Plan VS Actual (Net sales/Operating income/Ordinary income/Net income)(Unit:100 million yen)
2,000

Net sales
1,620

1,617

1,500

10080

Operating income
7076

10080*Vs. the plan announced on February 3, 2021

Net income

Ordinary income
80

70

78
60

60

60

40

40500

2020200000

1,000

40PlanActualPlan

ActualPlan

Actual

5042Plan

Actual2Domestic Copper Prices/Copper Wire Shipments• The average price of domestic copper prices (on a yen basis) remained on an uptrend,
partly due to the economic recovery in China, and the annual average rose by 12.9% YoY.
• Domestic copper wire shipments declined significantly, mainly in construction and electric
power sales (-9.8% YoY).
(Thousand yen/ton)Copper Cable Shipment Volume (tons)(Monthly Average) Domestic Copper Prices
200,000

1,200.0

158
thousand tons
Est.

164 thousand tons

1,000.0

150,000
800.0

100,000

600.0
400.0

Average annual increase of 12.9% YoY50,000

200.000.0
AprMayJunJulAug

Previous year

Sep

OctNovDec

Jan

Current year

Source: Japan Electric Wire Manufacturers AssociationFebMar

18/4-6

通信

7-9

10-12

電力

19/1-3

電気機械

4-6

7-9

自動車

10-12

20/1-3

建設・電販

4-6

7-9

Oct-Dec
10-12

その他内需

2021

21/1-3予
Jan-Mar
Plan

Source: Japan Electric Wire Manufacturers Association3

FY2020: Consolidated Statements of Income• Net sales decreased by 5.5% YoY and the gross margin decreased by 11.8%. The performance fell in 1Q due
to the impact of COVID-19 but began to recover since 2Q.
• Maintain a profit level above FY2018 for the full fiscal year, partly due to the effects of structural reforms.

(Unit:100 million yen)

FY2018Actual

FY2019ActualFY2020
ActualComposition%

YoY%

Net sales

1,772

1,711

1,617－△5.5％

Gross profit

217

237

218

13.5％

△8.3％

Operatingincome

66

8676

4.7％

△11.8％

Ordinary income

56

79

78

4.8％

△1.3％

4655

50

3.1％

△9.1％

7 yen

15 yen20 yen＋5 yen

5%

8%

12%

Net income
attributable toowners of parent

Dividend/
Payout ratio－4Quarterly Performance Trends (Last 3 years)(Unit:100 million yen)

Changes in quarterly net sales

600400424 430430 430338

464384FY2018FY2019454

434 430

418

FY2020465

2,000

Changes in cumulative
net sales
1,772

1,711

1,617

1,500

1,000

200

500

001Q

(Unit:100 million yen)

2Q

3Q

4Q

Changes in quarterly operating income
FY20183026

20Year-end cumulative

2325

1227
21

1817

FY2019

18

10025

80

867666

60

40

1010

FY2020Changes in cumulative
operating income

20600

1Q

2Q

3Q

4Q

Year-end cumulative5

Results by Segment• The recovery trend began in 2Q, and the profit level exceeded that of FY2018.
FY2018Actual(Unit:100 million yen)

Net sales

FY2019ActualOperatingincome(Profit margin %)Net sales

43885

18305

8（1.6％）

471

55（36）

△3（1）

1,772

66

Energy andInfrastructure

867

Communication andIndustrial devices

327

Electrical equipment
and components

523

Others(New Business)
Total（5.0％）（5.5％）（3.8％）FY2020
ActualOperatingincome(Profit margin %)Net sales

Operatingincome(Profit margin %)

61865

25270

6（1.2％）

431（1.7％）50（35）△6（0）52（38）

△4（1）

1,711

86

1,617

76（6.9％）（8.2％）（5.0％）

54（6.3％）18（6.9％）7（4.7％）

6

Energy and Infrastructure Operations(Unit:100 million yen)

1000

Product category

Net sales

Operating income

885

867

100
865

800

600
61400

◆ Construction
General-purpose electric cables

80◆ Seismic isolation/Others
Seismic isolation devices, Antiseismic / Anti-shock60◆ Electric power infrastructure
Power cables, construction, Powerdevice component (SICONEX®)

54

Demand for construction work projects
recovered from 2Q but did not reach the levelof FY2019.

Progressed in line with the forecast made at
the beginning of the year.

Composition of sales

43409%
2002000FY2018

Results

FY201927%

64%

FY2020 results
Net sales: ¥86.5 bn
Operating income:¥5.4 bn◼ Operating income margin: 6.3%
◼ ROIC: 7.2％
◼ Capital expenditure: 1.4 billion yen*ROIC by segment is a reference value for internalmanagement purposes.

FY2020Construction
Electric power infrastructure
Seismic isolation/Others

7Communications and Industrial Devices Operations(Unit:100 million yen)

400

Product category

Net sales

Operating income

40◆ Communication cable (Construction)
Metal cables, optical cables◆ Communication cable

327(Communication infrastructure)

305

300

30(Home and industrial equipment, etc.)

25200◆ Precision devices
181820(Copy machine, etc.)

100
FY2018FY201945%

Overseas sales compositionin this segment (FY2020)

32.7%
39%

0

Although the supply chain turmoil wassubsided and demand was recovered,especially in China, the total demand did notreach the level of the previous year's.

Composition of sales
16%

100

Although there was a demand forcommunication infrastructures, such as 5Gservices, the total demand did not reach thelevel of the previous year’s.

LAN cables, optical cables◆ Wire harness

270Results

FY2020 results
Net sales: ¥27.0 bn
Operating income:¥1.8 bn◼ Operating income margin: 6.9%
◼ ROIC: 6.1%
◼ Capital expenditure: 9 billion yen*ROIC by segment is a reference value for internalmanagement purposes.

FY2020Communication cable
Precision devices

Wire harness

8Electrical equipment and components Operations(Unit:100 million yen)

600

Product category

Net sales

Operating income

2018523
500

471

16431
14400

12300

Results◆ High-performance products(Automobile, electrical equipment, etc.)Oxygen free copper MiDIP®, Copper
Alloy, High performance magnet wire

Demand for high-performance
products for automobiles increased
from 3Q.

◆ General-purpose products(Electrical machinery applications etc.)

General-purpose magnet wires

Demand for general-purpose magnet
wires for heavy electronics continued
to be sluggish.

10Composition of sales
200

7886660%

4100

2040%

FY2020 results
Net sales: ¥43.1 bn
Operating income:¥0.7 bn*ROIC by segment is a reference value for internalmanagement purposes.

0FY2018

FY2019◼ Operating income margin: 1.7%
◼ ROIC: 4.9%
◼ Capital expenditure: 1.0 billion yen

FY2020High-performance products
General-purpose products

9FY2020：Consolidated Balance Sheet/Other KPIs
March 31, 2019

(Unit:100 million yen)March 31, 2020

March 31, 2021

Current assets

741

717

753

Fixed assets

500

508

542

Current liabilities

698

638

629

Fixed liabilities

188

187

184

Capital stock

242

242

242

Capital surplus

55

57

57

Retained earnings

1062

106

1,242

1,225

1,295

Interest-bearing liabilities

467

423

377

DE ratio

134%

107%

79%

Equity Ratio

28.1%

32.3%

36.7%

Total assets

FY2018FY2019FY2020

ROIC

5.6%

7.3%

6.3%

ROE

13.5%

14.7%

11.4%

*The DE ratio is calculated using equity capital.

10Medium-term Management Plan Numerical Targets (KPIs)
FY2021 Plan

FY2021 Plan

FY2022 Mid-term Plan

VISION2026(Before adoption of Revenue
Recognition Standard)(After adoption of Revenue
Recognition Standard)(Before adoption of Revenue
Recognition Standard)(Before adoption of Revenue
Recognition Standard)

1,617

2,000

1,800

2,000

2,100

Operating income

768686100

150

Ordinary income

78838395150

Net income attributable toowners of parent50

686866100

Operating income
margin

4.7%

4.3%

4.8%

Over 5%

Over 7%

Dividend/Payout Ratio

20 yen40 yen40 yenOver 50 yen

(12%)

(18%)

(18%)

（About 20％）

Over 120 yen（About 35%）

Interest-bearing liabilities

377

390

390

Under 380

Under 300

DE ratio

79%

73%

73%

Under 70％

Under 40％

Net assets

482

543

543

Over 550

Over 800

Equity Ratio

36.7%

38.4%

38.4%

Over 38％

Over 50％

ROE

11.4%

13.5%

13.5%

Over 10％

Over 10％

ROIC

6.3%

6.7%

6.7%

Over 7％

Over 9%(Unit: 100 million yen)

Net sales

FY2020Actual*As a result of the application of the "Accounting Standard for Revenue Recognition," the Group's consolidated business forecasts for the fiscal year ending
March 2022 after the application of the said standard is presented as "FY2021 Plan (after the application of Revenue Recognition Standard).
*Debt-to-equity ratio is calculated based on shareholders' equity.

11

FY2021：Forecast• While there are concerns that the impact of COVID-19 will continue, the Company plans to increase
sales and profit in FY2021 by capturing demand for environment-conscious products.
(Unit:100 million yen)FY2020
ActualComposition%

FY2021
PlanComposition%

ChangeChange%Net sales

1,617－

1,800－+183+11.3%

Gross profit

218

13.5％

－－－－

Operating income

76

4.7％

86

4.8％

+10+13.3%

Ordinary income

78

4.8％

83

4.6％

+5+6.9%

50

3.1％

68

3.8％

+18+36.9%

20 yen12%

40 yen18%+20 yen－

Net income
attributable to ownersof parent

Dividend/
Payout ratio

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

Contact
SWCC SHOWA HOLDINGS CO., LTD.
STRATEGY SECTION,
BUSINESS STRATEGY PLANNING DEPT.
TEL:044-223-0520
Forward-looking statements in this document are based on information available at the timeof publication 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