SWCC groups

Financial Results for the Fiscal Year
Ended March 2020
SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)
May 15, 2020

https://www.swcc.co.jp

Overview of Financial Results for FY3/20 (FY2019)
Results: Showed strong performance. Operating income increased by 29.7% YoY.
・In the Energy and Infrastructure operations, sales and profits increased due to strong demand for constructi​on-related​
applications reflecting redevelopment demands in the metropolitan area, measures against the resilience of power
infrastructure, and demand for renewable energy.
・In the Communication and Industrial devices operations, sales decreased and operating income increased due to firm sales ofcommunication cable for construction and data centers in Japan, despite sluggish sales of optical fiber in overseas markets.
・In the Electronic equipment and Components operations, sales of high-grade wire materials for electronic components werefirm. Sales and profits decreased due to the continued slump in demand for magnet wires used in electrical machinery andother applications.
Strategy:
・ Aim to optimize prices for construction and electronics sales.

Net Sales/Operating Income(Comparison with Previous Fiscal Year and Forecast)(Unit:100 million yen)
1,800

1,771

・ Power System operations are promoting a new business model.
・ Promote measures to ensure a stable supply of products forautomobiles.
・ Cost reductions by improving operational efficiency.

Net sales

1,711

Operating income

100

1,600
80
1,400

・ Continue to improve profitability (increase operating income margin)
・ Plan to pay dividend of 15 yen per share. (7 yen in the previous
fiscal year)
・ Medium-Term Management Plan 「Change SWCC2022」 Rolling Plan120
1,7008680
6066

40
1,20020
1,0000FY3/2019

FY3/2020 PlanFY3/2020

2

Macroeconomic Environment• Domestic copper prices (on a yen basis) recovered in 3Q due to the expectation of easing trade friction
between the United States and China, but shifted to a downward trend in 4Q due to the impact of the newcoronavirus (COVID-19).
• Domestic copper wire shipments were firm until 3Q, but demand declined in 4Q.
(Monthly Average) Domestic Copper Prices(Thousand yen/ton)Copper Cable Shipment Volume (tons)

900.0

200,000

800.0
700.0
150,000
600.0
500.0
100,000
400.0
300.0

Down 8.7％ YoY50,000

200.0
100.0
0.0
Apr.

May.

Jun.

Jul.

Aug.

Sep.

FY2018

Oct.

Nov.

Dec.

FY2019Source: Japan Electric Wire Manufacturers AssociationJan.

Feb.

Mar.

017/4-6

7-9

10-12

通信

18/1-3

電力

4-6

電気機械

7-9

自動車

10-12

19/1-3

建設・電販

4-6

7-9

その他内需

10-12

2020 Jan20/1-3予
Mar Est.

Source: Japan Electric Wire Manufacturers Association3FY3/20: Consolidated statements of income (YoY)• Net sales decreased by 3.4% YoY and the gross margin increased by 9.3%.
Operating income increased by 29.7% YoY.
(Unit:100 million yen)

FY2018ActualComposition%

FY2019ActualComposition%

YoY%

Net sales

1,771－

1,711－△3.4%

Gross profit

217

12.3%

237

13.9%

+9.3%

Operatingincome

66

3.8%

86

5.0%

+29.7%

Ordinary
income

56

3.2%

78

4.6%

+40.3%Net income
attributable toowners of parent

45

2.6%

54

3.2%

＋19.6%
4

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.

(Unit:100 million yen)

FY2018Results
Net sales

Energy andInfrastructure

867

Communication andIndustrial Devices

327

Electrical equipment
and Components

522

Others(New business)

55(36)
1,771

Total

FY2019Results

Operating income(Profit margin %)43

Net sales

885(5.0%)18305(3.8%)

61

Net sales

Operatingincome＋18＋1825△22＋7△51△2△5△3△60＋20(8.2%)

471(1.6%)△3(1)66Operating income(Profit margin %)(6.9%)(5.5%)

8

Change6(1.2%)50(35)
1,711△6(0)86(5.0%)5Quarterly Performance Trends(Net sales: Comparison with past 3 years)
Changes in quarterly net sales(Unit:100 million yen)

FY2017FY2018FY2019

600
400

389

423

430

409

430

429456464

434427

454

418

200
0
1Q

2Q

(Unit:100 million yen)

3Q

4Q

Changes in Cumulative Net sales

2,000
1,681
1,500

1,254 1,317
853

1,000
500

1,771

1,711

1,293

859

798
389

423

430

01Q

2Q

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

FY201726212016111223

FY2018FY2019252119151510100
1Q(Unit:100 million yen)

2Q

3Q

4Q

Changes in cumulative operating income

100868067604240
2011121626476266

45

220
1Q

2Q

3Q

4Q

7

Energy and Infrastructure Operations Results(Unit:100 million yen)

1,000

100Net sales

Operating income
885

867
806
800

80

61600

40

31200

2000
FY2017••FY2018① Power cables connecting from power stations tohouses② SICONEX®, our proprietary power device
component③ Electric wires and seismic isolation components
used in buildings■ In the electric power infrastructure use, demand for

4340060■ Characteristics: Our Core Businesses

FY2019measures to strengthen national land resilience andrenewable energy was firm.
In 3Q, demand for construction-related services, such as
the redevelopment of the metropolitan area, peaked, andbegan to decreasing in 4Q.

Net sales:
88.5 billion yen（YoY ＋2.1％）
Operating income: 6.1 billion yen（YoY ＋42.4％）

Figures for FY2017 are based on simple calculations by our company.
The Company has partially recategorized its segments from FY3/2019 3Q.

Operating margin ：6.9％（ 5.0% in the previous fiscal year ）8Communications and Industrial Devices Operations
Results(Unit:100 million yen)

400

40Net sales

Operating income
327318305

300■Characteristics: Provide communication
cables, industrial devices, and officeequipment components in global markets

30■Sales of communication cable for construction and data
25

200

20
22

18

100

1000FY2017••FY2018

FY2019Figures for FY2017 are based on simple calculations by our company.
The Company has partially recategorized its segments from FY3/2019 3Q.

centers in Japan remained strong.
Improved profitability by shifting production to domesticproducts.
Sales of optical fiber cables for overseas remained sluggish.
In wire harnesses, we are promoting structural reforms todissolve DAIJI and reinforce overseas operations.
In precision devices, we began working to reorganize bases inJapan and overseas.

Net sales:
30.5 billion yen ( -6.8% YoY)
Operating income:2.5 billion yen (+38.7% YoY)
Operating margin: 8.2% (5.5% in the previous fiscal year)
9Electrical equipment and Components Operations
Results(Unit:100 million yen)

600

30
Net sales

522506500

Operating income

25471

400

■Characteristics: Strategic products of Oxygen
free copper MiDIP® and copper-silver alloys
manufactured by the one and only dip forming
systems available in Japan.

20■ Demand for Oxygen-free copper MiDIP ® was strong due
300

1513200

1086100

500
FY2017•FY2018

FY2019Figures for FY2017 are based on simple calculations by our company.

to firm demand for environmentally friendly automobiles
and other applications.
Demand for magnet wires for electrical machinery andothers largely decreased.
In magnet wire operations, profitability improved by
implementing business structural reforms.

Net sales:47.1 billion yen ( -9.8% YoY)
Operating income: 0.6 billion yen (-30.9% YoY)
Operating margin: 1.2% (1.6% in the previous fiscal year)10Consolidated Balance Sheet(Comparison with the previous fiscal year-end)
・ Equity ratio was 32.3% (up 4.2 points from the end of the previous fiscal year)
March 31,2019

March 31,
2020

186

△26

Short-term borrowings

335295△40Others

Total current liabilities

150697

157
638＋7△59

Long-term debt

121119△26768+1Total long-term liabilities

188

187

△1△2Total liabilities

885825△60＋8

Capital stock

24255
1049356242
576238400

0＋2＋52△11＋44

1,241

1,225

△1643

△6Accounts receivableand other receivables

434

412

△22213
45

217
45＋4

Total current assets

741

717

0
△24Property, plant andequipment

392

399＋7

Intangible assets

1214＋2Investments and otherassets

96

94

500

508

Total fixed assets

OthersCapital surplus
Retained earnings
OthersTotal net assets
Total assets

1,241

1,225

Change212

49

OthersMarch 31,2020Notes & accounts
payableCash and deposits

Inventories

March 31,2019

Change(Unit:100 million yen)

△16

Total liabilities and net
assets11

FY2019 KPI(Unit:100 million yen)

FY2017
ResultFY2019
ForecastFY2018
Result(Announced on Feb.3,2020)

FY2019Result

1,681

1,771

1,700

1,711

Operating income

6266

80

86

Ordinary income

48567378

Net income attributable toowners of parent

3745

4854

Operating income

3.7%

3.8%

4.7%

5.0%

Dividend/Dividend Payout
Ratio

5 yen

7 yen

15 yen15 yen

(4.0%)(4.6%)(9.3%)(8.2%)

Interest-bearing liabilities

490

466

430

423

DE ratio ※

149%

134%

108%

107%

Net assets

334356404

400

Equity Ratio

26.5%

28.1%

32.5%

32.3%

ROE

12.3%

13.5%

12.8%

14.7%

ROIC

5.4%

5.6%

6.8%

7.3%

Net sales※ Debt-to-equity ratio is calculated based on shareholders' equity.

12FY3/21

Full-year Forecast

・In FY2020, our performance bottomed out in 1Q due to the outbreak of COVID-19, and although it will gradually recoverfrom 2Q, it is estimated that the impact will remain until 4Q.
Sales and profits are expected to decrease due to a decline in demand.
(Unit:100 million yen)

FY2019ResultComposition%

FY2020
PlanComposition%

Net sales

1,711－

1,620－

Gross profit

237

13.9%

－－

Operating income

86

5.0%

60

3.7%

Ordinary income

78

4.6%

55

3.4%

54

3.2%

40

2.5%

Net income
attributable toowners of parent

13

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 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