SWCC Group
Supplementary Material
for the First Quarter of the Fiscal YearEnding March 2020

Creating for the Future
SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)
July 31, 2019http://www.swcc.co.jp/

FY3/2020 1Q Overview of Financial Results
Results: Performance was steady. Sales increased by 1.6% YoY and profits increased by 35.7% YoY
・ In the Energy & Infrastructure operations, construction-related demand was firm affected by demand from the Tokyo Olympic andParalympic Games. Demand for facility upgrades for electric power infrastructure remained firm.

In the Communications and Industrial Devices operations, segment sales decreased due to sluggish overseas sales of optical fiber.
Rollers for copiers and other products were firm, while communication cables for domestic construction-related applications werestrong.
In the Electronic Devices and Components operations, sales of high-grade wire materials for electronic components were firm. Magnet
Wire demand declined overall.
1Q Rate (Net Sales/Operating Income)Strategy:
・ Aim to optimize prices for construction and electronics sales.
・ Power System operations are promoting a new business model.
・ Promote measures to ensure a stable supply of products forautomobiles.

24.9%(Unit:100 million yen)

25.7%

Sales Plan

Operating income

173 billion yen

6.5 billion yen

・ Cost reductions by improving operational efficiency.
・ Continue to improve profitability (increase operating income margin)2

Macroeconomic environment• Domestic copper prices (yen basis) have been on a slight downward trend since April, due in part to the slowdown in the Chinese
economy. (Down by 9% from the previous year)• Domestic shipments of copper wire remained stable, mainly in construction and electric power sales.
Copper Cable Shipment Volume (tons)(Monthly Average) Domestic Copper Price Trends-Most Recent 12 Months(Thousandyen/ton)

200,000

1,100
1,000

150,000

900
800
100,000

700
600
500

50,000Comparison between July 2018 and June 2019
Annual appreciation 91%

400
3000
2017 Apr-200Jun
2018

JulA ug

Sep

O ct

N ov

D ec

JanFebM ar A pr M ay

2019

Source from Japan Electric Wire Manufacturers AssociationJun

Jul-Sep

Jun
Communication

Oct-Dec

2018 Jan-

Apr-Jun

Jul-Sep

Oct-Dec

2019 Jan- Apr-Jun Est.

MarElectric power

Electrical machinery

MarAutomotive

Electrical construction and sales

Other domestic demand

Source from Japan Electric Wire Manufacturers Association3

1Q Consolidated Statements of Income (YoY)• Net sales increased by 1.6% YoY and the gross margin improved by 0.8 point to 12.5%.
As a result, ordinary income increased by 38.3% YoY to 1.5 billion yen, and both sales and profits
increased.
(Unit:100 millionyen)

FY2018
1Q Actual

Composition%

FY20191Q Actual

Composition%

YoY%

Net sales423-430-+1.6%

Gross profit

4911.7%5312.5%+8.9%

Operatingincome

122.9%

163.9%+35.7%

Ordinaryincome

102.6%

153.5%+38.3%Net income
attributable toowners of parent

81.9%

112.6%+39.0%
4

Quarterly Performance Trends(Net Sales: Comparison with previous Fiscal Years)
Quarterly Net Sales(Unit:100 million yen)

FY2017FY2018FY2019

600
500
400

389

423

430

409

430

456

464

427

454

300
200

10001Q

2Q

3Q

4Q

Changes in Cumulative Net sales(Unit:100 million yen)

FY2017FY2018

2,000
1,681
1,500

1,254

1,000500

798
389

423

FY2019
1,771 1,730 Est.

1,317853

430

01Q

2Q

3Q4Q5Changes in Quarterly Business Results(Operating income: Comparison with previous Fiscal Years)
Changes in quarterly operating income(Unit:100 million yen)252120151611FY2017

FY2018FY201923211515

1210

10
501Q

2Q

(Unit:100 million yen)
70
60
50
40
30
20
1003Q

Changes in cumulative operating income

4Q

FY2017FY20186247

11121Q

1626

FY201966

65 Est.

45

222Q

3Q

4Q

6

1Q Segment Information (YoY)• Introduced a new segment structure from this fiscal year. Sales and profits are driven by the Energy and Infrastructure
operations.
Sales in the Communication and Industrial Devices operations declined, but profits increased thanks to the improved profitability.

FY2018
1Q Results(Unit:100 million yen)
Net sales

FY20191Q Results

Operatingincome

Net sales(Profit margin %)Energy andInfrastructure
Communication andIndustrial Devices

191864204

Others(New business)

12(7)
423

283

12（2.9％）11

Operatingincome+13+4△3+2△2△1△2（△1）△1△1

16+7+4

6
7.0%

132

1.9%

△1（△1）Net sales

5.5%

4.5%

134

Operatingincome(Profit margin %)3.5%

ElectricalComponents

Total

7Change

10.9%

11(6)
430（3.9%）

7

Energy and Infrastructure Operations Results & Forecast(Unit:100 million yen)
1,000
Net sales

Net sales (1Q)

Operating income

807 Est.

778

80

600

60

39400

40 Est. 40

30

20020183 5191 7

204

1100
FY2017FY2018FY2019 E*Figures for FY2017 are based on simple calculations by our company.

■ Characteristics: Our Core Businesses① Power cables connecting from power stations to houses② SICONEX®, our proprietary power device component

Operating income (1Q)
834

800

100

③ Electric wires and seismic isolation components used inbuildings■ In 1Q, we are steadily capturing demand for electricity andconstruction sales. As a result, net sales were 20.4 billion yen(+6.6% YoY) and operating income was 1.1 billion yen (+68.7%YoY). Operating income margin was 5.5% (+2.0Points YoY)
■ Full-year forecasts: Sales of electric wires for domestic electric
power and electric wire for construction and electric powersales were firm. Sales are expected to decrease by 2.7 billion
yen in the previous fiscal year to 80.7 billion yen due to adecrease in seismic separation materials and electricalequipment.
Operating income is expected to increase by 100 million yen to
4 billion yen.
Operating margin: 5.0% (4.7% in the previous fiscal year)

8Communications and Industrial Devices Operations
Results & Forecast(Unit:100 million yen)
500

Net sales

Net sales (1Q)

Operating income

Operating income (1Q)

400
360

34650

■ Characteristics: Providing communication cables forvarious markets and industrial devices on a global basis

40■ In 1Q, although overseas demand for optical fibers has
continued to slow down since the second half of the previous
fiscal year, communication cables for domestic constructionrelated applications are performing well.
Net sales were 8.3 billion yen (-3.0% YoY) and operating
income was 600 million yen (+49.5% YoY). Operating income
margin was 7.0% (+2.5Points YoY)

336 Est.

300

30232220 Est. 20

200

100

1080486 483

600FY2017

FY2018FY2019 E■ Full-year forecasts: Sales of communications cables andindustrial devices for the domestic market were firm. Themarket for optical fiber for overseas markets is expected toremain sluggish, and we are forecasting a decline of 2.4 billion
yen from the previous fiscal year to 33.6 billion yen. Operatingincome is expected to be 2 billion yen.
Operating margin: 5.8% (6.1% in the previous fiscal year)*Figures for FY2017 are based on simple calculations by our company.

9Electrical Components Operations Results & Forecast(Unit:100 million yen)
700
Net sales
600

500

Net sales (1Q)

Operating income

Operating income (1Q)
525 Est.

522

506

400

20300

13200

10030

10 Est. 108115

4134132
210FY2017

FY2018FY2019 E*Figures for FY2017 are based on simple calculations by our company.

0■Characteristics: Strategic products of Oxygen free copper
MiDIP® and copper-silver alloys manufactured by theJapan's only dip forming systems■ In 1Q, demand for high-grade wire for electric appliances wasfirm, but overall demand for wire was sluggish due to the impactof the global economic slowdown, particularly in the Chinese
market.
Sales were 13.2 billion yen (-2.1% YoY) and operating income
was 100 million yen (-51.7% YoY).
Operating margin: 0.9% (-1.0Points YoY)
■ Full-year forecast: Sales are forecast to increase by 300 million
yen to 52.5 billion yen, with recovery expected from the second
half onward. Profitability is expected to improve and operating
profit is forecast to be 1 billion yen due to the expansion ofsales of strategic products such as Oxygen free copper andcopper-silver metals and high-grade magnet wires.
Operating income margin: 1.8% (1.6% in the previous fiscalyear)10Consolidated Balance Sheet(Comparison with the previous fiscal year-end)
・ Equity ratio was 29.3% (up 1.2 points from the end of the previous fiscal year)
March 31,2019

June 30,2019

March 31,2019

Change(Unit:100 million yen)
June 30,
2019

Change4937△12Notes & accounts
payable212

203△9Accounts receivable andother receivables

434

422

△12Short-term borrowings

335

347+12Inventories

213
45741

220
43722

+7△2△19Others

150
697
121137687
114△13△10△7Property, plant andequipment

392

393

+167

66

△1Intangible assets

1211△1Total long-term liabilities

188

180

△8Investments and otherassets

96

108+12Total liabilities

885

867

△18500512+1224255
104935624255
1951367

00+9+2+111,241

1,234△7Cash and deposits

OthersTotal current assets

Total fixed assets

Total current liabilities
Long-term debt
OthersCapital stock
Capital surplus
Retained earnings
OthersTotal net assets

Total assets

1,241

1,234

△7

Total liabilities and net assets

11

FY3/2020 Full-year Forecast
・ FY2019 results are expected to be at the same level as FY2018.
(Unit:100 million yen)

FY2018ResultComposition%

FY2019PlanComposition%

Net sales

1,771-1,730-Gross profit

217

12.3%

--

Operatingincome

66

3.8%

653.8%

Ordinaryincome

563.2%

583.4%Net income
attributable toowners of parent

45

2.6%

452.7%
12

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
E-mail:kouho@hd.swcc.co.jp
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.

http://www.swcc.co.jp/