SWCC groups
Supplementary Material
for the Second Quarter of the Fiscal YearEnding March 2021

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

November 4, 2020

https://www.swcc.co.jp

FY3/2021 2Q Overview of Financial Results
Results: Sales and profits were down YoY in all businesses affected by the 1Q results,
despite the recovery trend in 2Q.
Results in 1H were almost in line with expectations and on a recovery path in 2H.

・ In the Energy and Infrastructure operations ：Demand for energy infrastructure was in line with expectations. Demand forconstruction-related products has gradually recovered in 2Q, but it did not reach the level of the same period of 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 ：Production adjustments by automakers due to COVID-19 anddemand for general-purpose magnet wires for electrical machinery continued to be sluggish.

2Q Progress Rate (Net Sales/Operating Income/Ordinary Income/Net Income)45％

Net Sales Plan
162 billion yen

OperatingincomePlan
6 billion yen

47％

40％

Ordinary
income Plan
5.5 billion yen

46％

Net incomePlan
4 billion yen

2Macroeconomic Environment• Domestic copper prices (on a yen basis) are on an upward trend due in part to the economic recovery inChina, but the average price for 1H fell by 2.5%.
• Domestic copper wire shipments fell sharply, mainly in construction and electric power sales. (-15% YoY)
(Sep. 24: The Japan Electric Wire Manufacturers Association revised its fiscal 2020 copper wire demand
forecast to -10.8% YoY.)(Thousand yen/ton)Copper Cable Shipment Volume (tons)(Monthly Average) Domestic Copper Price Trends
200,000

900.0

173
Thousandton

800.0
700.0

148
Thousand ton
Est.

150,000

600.0
500.0

100,000

400.0

Decline by 2.5%YoY on 1H average

300.0

50,000
200.0
100.0
00.0
AprMayJunJulAug

Sep

Previous year

OctNovDec

Jan

Current year

Source from Japan Electric Wire Manufacturers AssociationFeb

Mar

2018
Apr-JunCommunication

Jul-Sep

Electric power

Oct-Dec

2019
Jan-MarElectrical machinery

Apr-JunAutomotive

Jul-Sep

Oct-Dec

2020
Jan-MarElectrical construction and sales

Apr-Jun

Jul-SepPlan

Other domestic demand

Source from Japan Electric Wire Manufacturers Association3

2Q Consolidated Statements of Income• Net sales decreased by 16.0% YoY and operating income decreased by 43.5% YoY.
Sales and profits declined due to a sharp drop in demand caused by the impact of COVID-19, but it is expected torecover in 2H.
• Profits for 1H exceeded that of FY2018, partly due to the effects of structural reforms.

FY20182Ｑ Actual

FY20192Ｑ Actual

FY2020
2Ｑ Actual

Composition%Net sales

854860722－△16.0%Gross profit

98

117

9312.9%△20.0%

Operatingincome2343

243.3%△43.5%

Ordinary
income

1940

26

3.6%

△34.4%Net income
attributable toowners of parent1329

182.5%△36.2%(Unit:100 million yen)

YoY%

4

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

FY2018FY2019FY2020

600
400

424

430

430

430

464
384

454

434

418

338

200
0
1Q

2Q

3Q

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

FY2018FY20191,772

FY2020

1,711

1,318

1,500

1,620 Est.

1,293
854

1,000500

4Q

860
722

42443033801Q

2Q

3Q

4Q

5

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

26
2320

FY2018

12FY2020

25211817FY2019181010

60
1Q

2Q

3Q

Changes in cumulative operating income(Unit:100 million yen)

4Q
FY2018FY2019FY20201008680

68

60

20

1224

23

1760 Est.

45434066

601Q

2Q

3Q

4Q

6Segment Information• Sales and profits fell sharply in 1Q due to the impact of COVID-19, but with the exception of Electrical equipment andComponents, sales and profits are expected to recover in 2Q. We expect a recovery in 2H of the fiscal year.

FY20182Q Results(Unit:100 million yen)

Net sales

FY20192Q Results

OperatingincomeNet sales(Profit margin %)Energy andInfrastructure

403

Communication andIndustrial devices

160

Electrical equipmentand Components

265

Others(New Business)
Total435

9153

4248

25（15）△1（△1）

854

23（5.5%）（1.4%）（2.7%）

Operatingincome

Net sales(Profit margin %)11（2.8%）

FY2020
2Q Results
Operatingincome(Profit margin %)31388

111272183

24（14）△2（△1）

23（16）△3（△0）

860

43722

24（7.1%）（7.5%）（0.8%）（5.0%）

18（4.6%）8（6.5%）

1（0.6%）（3.3%）

7Energy and Infrastructure operations Results & Forecast(Unit:100 million yen)

1,200120
Net sales（2Q)
Operating income（2Q）

Net sales
Operating income
1,000◆Construction
100925 Est.

885

867
800

8061600

2Q Results

60

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

4343 Est.

400

435

40

Full-year forecast

388
403

31200

1820

110

Demand for electric power infrastructure was strong. Demand forcapital investment and housing starts fell due to the effects of
COVID-19, but the worst period would come to an end and weexpect a recovery in 2H.

0FY2018

FY2019FY2020 Est.

* The Company has partially recategorized its segments from FY3/2019 3Q.

The planned net sales of 92.5 billion yen and operating incomeof 4.3 billion yen.
Operating margin: 4.6% (6.9% in the previous fiscal year)
8Communication and Industrial devices operations
Results & Forecast(Unit:100 million yen)

500

50
Net sales（2Q)
Operating income（2Q）

Net sales
Operating income

2Q Results◆Construction
Metal cables, optical cables

40040◆Communication infrastructure
LAN cables, optical cables

327
305

300275 Est.

302520100153
1279Wire harness

111080Supply chain disruptions were resolved
and demand recovered, especially inChina, but demand was sluggish
compared to the same period last year.

Precision devices

Full-year forecast

16 Est.
160◆Home and industrial equipment◆Copy machine

18200

Demand was sluggish compared to thesame period of the previous year,
despite demand associated with theexpansion of communication
infrastructure, such as for 5G services.

Capture 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.

0FY2018

FY2019FY2020 Est.

* The Company has partially recategorized its segments from FY3/2019 3Q.

The planned net sales of 27.5 billion yen and operating incomeof 1.6 billion yen.
Operating margin: 5.8% (8.2% in the previous fiscal year)9Electrical equipment and Components operations
Results & Forecast(Unit:100 million yen)600
Net sales
Operating income

30

Net sales（2Q)
Operating income（2Q）

523
500

25471

400

20360 Est.
300

15248265200

10818361005 Est. 542102Q Results◆AutomobileOxygen free copper MiDIP®,
Copper Alloy,
High performance magnet wire

◆Electrical machinery
applications etc.
General-purpose magnet wires

Demand was sluggish caused by theimpact of production adjustments byautomakers due to COVID-19.
Demand for general-purpose magnet
wires for electric machinery such as
those used in capital investment
continued to be sluggish.

Full-year forecast
Progress is underway to transform business from conventional
general-purpose products to focus on high-value-added products.
We expect the market to recover in the 2H of the fiscal
year and an increase in the ratio of eco-friendly vehicles. We aim
to improve profitability by expanding sales of its strategic
products for Oxygen free copper MiDIP® and copper alloys, andby increasing production of magnet wire for automobile.

0FY2018

FY2019FY2020 Est.

The planned net sales of 36 billion yen and operating incomeof 0.5 billion yen
Operating margin: 1.4% (1.2% in the previous fiscal year)10Consolidated Balance Sheet(Comparison with the previous fiscal year-end)
・Equity ratio was 34.3% (up 2.0 points from the end of the previous fiscal year)
March 31,2020September 30,
2020

Cash and deposits

4340△3Accounts receivableand other receivables

412382

△30

217
45212
52

△5＋7Total current assets

717686△31Property, plant andequipment399

401+2Intangible assets

1413△1Investments and otherassets

94

96+2508

510+2

Inventories
OthersTotal fixed assets

March 31,2020

Change182△4Short-term borrowings

295291△4Others

Total current liabilities

157638133607△23△31

Long-term debt

119106△12Others

6868△1Total long-term liabilities

187

174

△13Total liabilities

825781△44242576238400242577640416

00+14+2

1,225

1,196

△29

Capital stock

OthersTotal net assets

1,196△29Change186

Retained earnings

1,225

September 30,2020

Notes & accounts
payableCapital surplus

Total assets(Unit:100 million yen)

Total liabilities and net
assets+1611

Market Outlook for the Second Half• Recovering trend in the automotive market is expected from 2H.
Market Environment (2H)
Construction
Energy andInfrastructure

Electric power
infrastructure
Seismic isolation & Others

Telecommunications cableCommunicationand Industrialdevices

Electricalequipment andComponents

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 forlocal 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 demand
for medical materials, systems and services due to theacceleration of telemedicine and smart work12

FY3/2021

Full-year Forecast

・Full-year business forecasts remain unchanged from the announcement
on May 15.
(Unit:100 million yen)

FY2019ActualComposition%

FY2020
PlanComposition%

Net sales

1,711－

1,620－

Gross profit

237

13.9%

－－

Operating income

86

5.0%

60

3.7%

Ordinary income

79

4.6%

55

3.4%

Net income
attributable toowners of parent

55

3.2%

40

2.5%

Dividend/Dividend
Payout Ratio

15 yen8.2%

15 yen11.2%
13

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