Tokyo Stock Exchange (Prime Market)
Securities Code : 7438

FY2024 Q2

Financial
Results
November 10, 2023

Notes on forward-looking statements
This document contains forward-looking statements and business plans. Thesestatements were made based on economic environment and business policies at thetime of the release. Actual results may differ materially from these forward-looking
statements due to various factors and changes.

Contents
1. Highlights of Q2 FY2024 Financial Results

P. 4

2. Company Overview

P. 7

3. Main Products and Merchandise

P. 18

4. Q2 FY2024 Financial Results and Analysis

P. 24

5. Q2 FY2024 Financial Results and Analysis by Segment

P. 30

6. Response to ESG Issues

P. 40

7. Growth Strategies

P. 48

8. Shareholder Return

P. 56

9. Highlights of Results

P. 59

1. Highlights of Q2 FY2024 Financial Results

Summary of Q2 FY2024 Consolidated Financial Results
 Net sales increased due to a demand recovery in private-sector capital investment and price passthrough in response to higher manufacturing and procurement costs.
 Operating results increased due to the sales growth and improvement in GPM, thereby absorbing
an increase in SG&A expenses including freight costs and personnel expenses.

Net sales

37,864 million yen

YoY

+4.5%

Operatingincome2,234 million yen

YoY+15.3%

Ordinary
income2,330 million yen

YoY+14.3%

Profitattributable toowner of parent

1,545 million yen

YoY+19.9%E B I T D A

3,135 million yen

YoY+12.3%※Note: EBITDA= Income before income taxes + Interest expenses + Depreciation + Amortization of goodwill

4Topics in Q2 FY2024
New DOE target
 Factoring in medium-to long-term performance and capital efficiency in future, Kondotec has decided toincrease the DOE target to 4.0% from 2.5% in FY2024 to further enhance shareholder returns due to an
overall increase in dividends in the market.
DOE is the ratio of the dividend paid to shareholders to net assets. It measures a company's

DOEability to pay out dividends sustainably despite short term impacts on profits.

 ROE and net assets
ROE (%)
10.8

10.9

 DOE and dividends

Net assets (million yen)
11.4

10.7

10.7

Dividend per share (yen)DOE (%)

Medium to long-term target
4.0% or more

DOE
target

10.4

ROE target: 10% or more

7.7

7.9
2.8

2.9

2.8

2.7

2.7

2.8

2.8

2.8

2.8

29

31

32

34

20/3

21/3

22/3

23/3

5.4
40

32,066 33,285 33,570

22,71920,231 21,102

15/3

16/3

17/3

28,387
24,745 26,756

18/3

19/3

20/3

29,022

21/3

22/3

23/3

24/3
(Q1)

 We have set ROE of 10% or more as a capitalefficiency target.
 We book higher profit than dividend payment
every year, and the resulting increase in net
assets means we have developed a stable financialbase and increased dividend resource.

23

24

26

20

22

15/3

16/3

17/3

18/3

19/3

24/3
forecast

 FY2024 will be the 13th consecutive fiscal yearof higher dividends.
 We target DOE of 4.0% or more as one of its
medium-term goals and look to pay shareholders
ongoing increases in dividends.

5

2. Company Overview

Performance Trends
Since establishment in 1953, we have not incurred an ordinary loss as a result of efforts to supply products
and merchandise to various industries in response to changes of the times and customer needs.
（trillion yen）

80,00090

Established Nippon Scaffolding Holdings Co., Ltd.
And acquired shares of KURIYAMA ALUMINUM
Acquired sharesof FUKOKU

70,000Acquired sharesof TOKAI STEP

60

Net sales (million yen)

50,000

The Great East
Japan Earthquake
0

Acquired sharesof Sanwa Denzai

5,000

Opened Shiga Factory

Opened Sapporo Factory

Construction investment (nominal)

4,000〈 Sales 〉
Industrial Materials
Structural Steel Materials

30,0006,000

Acquired shares of KONDOTEC
INTERNATIONAL and CHUOH GIKEN

30

40,0007,000

Opened Kanto Factory

Aneha’s The Fabrication of
Quake-Resistance Incident

The Burst Bubble

The Great HanshinAwaji Earthquake

Electrical Equipment

3,000

Ordinary income (million yen)

Acquired sharesof TECBUILD

60,0008,000

Scaffolding Construction
Ordinary income

20,0002,000

EBITDA
10,000The Oil Shocks
1,000

Opened Kyushu Factory

0

0

1953

1958

1963

1968

1973

Established and Gaining ground in Tokyo, ”shiftingfrom sea to land”, Kyushu Factory Opened

1978

1983

1988

From the expansion acrossJapan and completion of
the head office building to
the next stage

1993

1998

2003

Reborn KONDOTEC
developed the base of leap
toward a stock listing

2008

2013

2018

Business Expansion, Enteringa new stage by M&A

7

Company Overview
Company name

KONDOTEC INC.

Group companies

Sanwa Denzai Co., Ltd. KONDOTEC INTERNATIONAL (THAILAND) CO., LTD.
CHUOH GIKEN Co., Ltd. Nippon Scaffolding Holdings Co., Ltd. TECBUILD CO., LTD.
TOKAI STEP CO., LTD. FUKOKU, Ltd. KURIYAMA ALUMINUM Co., Ltd. (as of September 30, 2023)

Established

January 1953

President andRepresentative
Director

Katsuhiko Kondo

2-2-90 Sakaigawa, Nishi-ku, Osaka 550-0024 Japan
Head office
Tokyo Headquarters : 1-9-3 Minami Suna, Koto-ku, Tokyo
Number of
employees

Consolidated:1,278

Capital stock

2,666 million yen

Listed stock market

Tokyo Stock Exchange (Prime Market) (Securities Code :7438)

Business areas

 Manufacturing, procurement and sales of industrial materials primarily in the retail hardware business.
 Manufacturing, procurement, and sale of structural steel materials mainly for steel fabricators.
 Procurement and sales of electrical equipment for electrical construction contractors and electronics retailers.
 Procurement, sale and rentals of temporary scaffolding materials and providing scaffolding construction
services for building contractors and medium-sized general contractors.

Major items
handled Products
Turn buckles, braces, scaffolding chains, screws, anchor bolts, closed-die forged products, construction
materials, machinery, equipment, and aluminum extrusions etc.
 Merchandise
Hardware, chains, wire ropes, screws, construction materials, lighting equipment, panel board, air-conditioning
equipment, and eco items etc.

Parent:754 (as of March 31, 2023)

8

Company History and Business Areas
Company history
January 1953

Established Kondo Shoten Co., Ltd.

January 1989

Changed the company name to KONDOTEC INC.

April 1995

Listed on the Second Section of the Osaka
Stock Exchange

July 1999

Listed on the Second Section of the Tokyo
Stock Exchange

April 2010

Acquired shares of Sanwa Denzai Co., Ltd.

April 2011

Designated as the First Section stock by the
Tokyo Stock Exchange and the Osaka Stock
Exchange

May 2011

Established a representative office (Bangkok,
Thailand)November 2012

August 2014

Established KONDOTEC INTERNATIONAL(THAILAND) CO., LTD.(Joint venture)
Turned KONDOTEC INTERNATIONAL(THAILAND) CO., LTD. into a consolidated
subsidiary and acquired shares of CHUOH
GIKEN Co., Ltd.

February 2019

Acquired shares of TECBUILD CO., LTD.

February 2020

Acquired shares of TOKAI STEP CO., LTD.

January 2021

Acquired shares of FUKOKU, Ltd.

April 2021

Established Nippon Scaffolding Holdings Co., Ltd.

October 2021

Acquired shares of KURIYAMA ALUMINUM Co., Ltd.

April 2022

Shifted to the Prime Market from the First
Section under the previous Tokyo Stock
Exchange structure.

Business areas
Construction industry wholesale
Field

Other thanconstruction

Categorization of merchandise

KONDOTEC INC.
Shipbuilding
Construction
materials
wholesale

Wooden
Plastic
construction construction
materials
materials

Metal
construction
materials

Other
construction
materials

Transport
Land and sea
Cargo handling
Manufacturing &Production facilities

Sanwa Denzai Co., Ltd.
Electric
equipment
wholesaleLighting andhot water
supplyequipment

Fishery
Cultivation

Air-conditioning
equipment

Energy-saving
equipment

Agriculture, etc.
CHUOH GIKEN Co., Ltd.

Nippon Scaffolding Holdings
Co., Ltd.
TECBUILD CO., LTD.
TOKAI STEP CO., LTD.
FUKOKU, Ltd.
KURIYAMA ALUMINUM Co., Ltd.

Pipingequipmentmaterials
wholesale

Wet areaequipment

Hot water
supplyequipment

Security
devices

Demand for
products andmerchandise

21%•

Public•Private 79%(as of September 2023)

9

Sales by Segment(as of end March 2023)

Industrial Materials

Structural Steel Materials

Net sales

Sales weighting

37,610 million yen
Customers

Net sales

50 %19,963 million yen

Hardware stores, Wholesalers, Home improvement centers

Products/
Merchandise

Customers

26 %Steel structure fabricators

Products/
MerchandiseandTurn buckles Shackles Scaffolding chains Screws more

Electrical Equipment

Turnbuckle braces

Anchor bolts

Self-supporting
Kon-pieces

and
more

Scaffolding Construction

Net sales

Sales weighting

9,502 million yen
Customers

Sales weighting

Net sales

13 %Sales weighting

8,371 million yen

Electrical construction contractors, Electronics appliance stores

Products/
Merchandise

Customers

11 %building contractors, medium-sized general contractors

Business
description
Air-conditioning
equipment

Lighting
equipment

Solar power
generation

and
more

Low-riseproperties

Medium-riseproperties

Bridges

and
more

10

Distribution Channels
 By offering in-house products with added value and sourcing products and merchandise from various suppliers, wehave adopted a structure that allows it to meet the diversifying needs of customers.
Manufacturer function(in-house production and OEM production)
Approx. 30 %◆ Suppliers

Construction and civil engineering-related(manufacturers, etc.)

Approx.40 %Overseasprocurement

In-housefactories

Approx.20 %Approx.15 %Electrical equipment
manufactures

Approx.15 %Scaffolding manufactures/
Partner companies

Approx.10 %◆ Segments (sales by business segment in FY2022)
Industrial Materials
50 %Structural SteelMaterials

26 %Electrical
Equipment

13 %Scaffolding
Construction

11 %◆ Customers
Tradingcompanies

Hardware stores/
Wholesalers

Overseas

Home improvement
centers, etc.

Electricalappliance
storesEnd-users
Construction and civil engineering
Industry, etc.

Steel fabricators

Electricalconstruction
contractors

Building
contractors
Medium-sized
general contractors

11

Segment Overview : Industrial Materials
Businessareas

The Industrial Materials Segment manufactures, procures, and sells civil engineering andconstruction materials (primarily metal fittings through retail).

Strengths

By selling products and merchandise to a wide range of industries, the segment has built up adiverse customer base that is not skewed toward any particular industry, it is able to generate
stable earnings that do not hinge on any particular customer.

Ratio of segment sales FY2023
Number ofoperating sites

35

Number ofcustomers

Approx.

16,000

Number of new customers ※1,581

Number of
employees

345

Procurement
source(consolidated)
In-house18%※ As of end March 2023

Domesticallysourced

1,129 million yen※ Note: Figures show sum of this year and previous year’s results.

56%

Customers by industry(parent)
Construction 5%

Service 5%

Manufacturing

Imported

26%

12%

Others 2%

Retail45%

Wholesale

31%

Results in the past 5 years
Net sales

35,459(million yen)Segment profit or loss
37,61037,28239,29333,861

2,111

2,208

FY2020

FY2021

1,995

FY20222,352

FY20232,597

FY2024
forecast※ Figures for sales and segment profit or loss are calculated based on new
segments since FY2022.

Initiatives
 Cultivate new customers, expand sales channels
and expand product lineup Capture the demands for renewable energy andlarge-scale projects (including the construction work
related to the Linear Shinkansen and the OsakaKansai Japan Expo 2025).
 Develop new aluminum products in response to theneed for lightweight materials.
 Enhance the e-commerce website.

12Segment Overview : Structural Steel Materials
Businessareas

The Structural Steel Materials Segment manufactures, procures, and sells construction-relatedmaterials to nationwide steel structure fabricators.

Strengths

High-margin business maintained through supply of high market share products with a highpercentage of in-house production.

Ratio of segment sales FY2023
Number ofoperating sites

Number ofcustomers

18

Approx.

Number of
employees

5,000

Procurement source

131

Customers by industry
Others 6%

Manufacturing

5%

Number of new customers ※657

Inhouse※ As of end March 2023

Domesticallysourced

811 million yen※ Note: Figures show sum of this year and previous year’s results.

60%(million yen)Segment profit or loss

19,963
16,4291,718

944

FY202020,87316,09814,035

FY2021

1,712

1,589

FY2023

FY2024
forecast

1,304

FY20228%31%Construction
Imported

9%

Results in the past 5 years
Net sales

Wholesale81%

Initiatives
 Cultivate new customers and expand productlineup Plan to open new operating sites seeking to capture
the demands in unexplored areas.
 Expand anchor bolt installation business.

13Segment Overview : Electrical Equipment
Businessareas

The Electrical Equipment Segment procures and sells electrical equipment to consumer electricalappliance stores and electrical construction contractors.

Strengths

The segment generates steady earnings through providing a wide range of merchandise fromelectrical materials to building materials to various industries.

Ratio of segment sales FY2023
Number ofoperating sites

Number ofcustomers

14

Approx.

5,000

Number of new customers ※303

Number of
employees

Procurement source

124
Lighting fixtures
Others※ As of end March 2023

662 million yen

Domesticallysourced※ Note: Figures show sum of this year and previous year’s results.

100%

Segment profit or loss

8,710
8,243

(million yen)
9,502

9,684

313

279

8,610

281

253

233

FY2020

FY2021

FY2022

28%
Piping equipment
8%
Circuit breakers/
wiring devices
8%

Results in the past 5 years
Net sales

Merchandise category

FY2023

FY2024
forecast

20%

Electrical wires

19%

Air-conditioners/
ventilation fans17%

Initiatives
 Cultivate new customers and expand merchandise
lineup Expand the electrical work-related construction
business and capture demands from end
users(such as electrical construction contractors).
 Enter into new fields such as factory automationand equipment engineering.
 Expand sales of Eco-friendly and environmentrelated merchandise.

14Segment Overview : Scaffolding Construction
Businessareas
Strengths

The Scaffolding Construction Segment provides scaffolding construction services and procures,
sells and rents out temporary scaffolding materials to building contractors and medium-sized
general contractors
The segment provides a wide range of construction services from residential buildings andmedium-rise properties to civil engineering structures (such as bridges)

Ratio of segment sales FY2023

Number ofoperating sites

Number of employees38323 (construction workers: 126)

Capex forscaffolding materials

Book value ofscaffolding materials

205 million yen

584 million yen

Service type6%

2%

Material sales

14%
Construction sales※ As of end March 2023
※ The amount of investment in the last year

Bridges/
civil engineering

Rental sales

80%

Detached houses/renovations

43%

Large properties(non-residential)
55%

Results in the past 5 years
Net sales

Segment profit or loss

(million yen)
8,371

Initiatives

8,147

7,568
91
54

 Step up orders with higher unit prices for mediumrise properties and civil engineering structures.
 Expand sales of scaffolding materials and sales ofscaffolding rental.
 Expand customer base through developing newcustomers.

△3
FY2020

FY2021

FY2022

FY2023

FY2024
forecast※ Figures for sales and segment profit or loss are calculated based on new
segments since FY2022.

15

Market Size for Main Products and MerchandiseMarket size for main products, merchandise(FY2023)and corresponding market shares Estimated volume ofsteel frame demand

JIS certification

About 11 billion yen
They are seismic bracing
products used in steel
constructions
Segment Market overview
The demand is gradually
recovering after the COVID
pandemic.

(1000 tons)

Turnbuckle braces
Markets size

Market overview and initiatives

5,000

Others

The robust demand for large lowrise properties such as logistics
facilities, data centers andfactories is expected to continue.

4,000
3,000

37.8%

Structural Steel Materials

2,000 initiatives to maintain andexpand the market share

1,000

•
•

Industrial Materials

JIS certification

Anchor bolts
Markets size

About 3 billion yen

Others

They are importantmaterials used to connect
a building structure to a
concrete foundation.
Segment

2013

34.7%

Structural Steel Materials

Scaffolding suspension chains
Markets size

Industrial Materials

2022

Others70.6%•※Source: The website of Ministry of Land,
Infrastructure, Transport and Tourism

 Demand for maintenance and repair ofdeteriorating social infrastructure

Road bridges

 Market overview
The number of 50-plus-year-old
infrastructure is expected toincrease exponentially in the next
decade.

Water control structures initiatives to maintain andexpand the market share

60%

About 1 billion yen

Segment

2019

Percentage of 50+ year old
infrastructure

Industrial Materials

They are scaffolding
materials to provide a safe
working platform for work atheight in bridge andexpressway construction.

2016

Strengthen upstream sales
Expand anchor bolt
installation work
Plan to open new operating
sites

40%

•

Develop new products (such as
lightweight chains)

20%•

Expand sales of products andmerchandise throughcooperation between Industrial
Materials and Scaffolding
16
Construction segments.

0%

18/3

23/3

33/3

※Source: The website of Ministry of Land,
Infrastructure, Transport and Tourism

3. Main Products and Merchandise

Sales Fields
We supply roughly 50,000 products and merchandise to various industries
in response to changes of the times and customer needs.
Wind power generation

Agriculture and horticulture

Agriculture and forestry

Railroad and railroad bridge

Prefabricatedconstruction

Woodenconstruction

Slopeprotection work

Construction
Park playgroundequipment

Road

Detached housing
and condominiums
Greening
materials

Electrical equipment

Solar power

Factory/Plant
Cargo handling

Logistics

Working atheightSea freight
VesselSteel frame construction

Port

Fishery andaquaculture

Civil engineering work

Disaster emergency
supplies

Coastal protection work
Railroads

Construction
The construction field is one of thebiggest sales field. Materials for Steelframe structures such as turnbuckle
braces and round separators forreinforced concrete buildings are main
products manufactured in-house. We
obtained Z-mark certification and Xmark certification in wooden
construction field. We offer various
temporary scaffolding materials used ina wide range of constructions.








Lifting equipment
Turnbuckle braces
Steel frame materials
Foundation materials
Formwork materials
Architectural hardware

When railroad construction has
specific requirements that differ fromother constructions, we offer specificproducts to Japan Railways Group andother railway companies.

Civil engineeringScrewsLifting equipment
Materials for river
improvement andslope protection

There are various fields with growthprospects in civil engineering including
infrastructure-related projects (such as
road construction and port engineering),
slope protection and river engineering.
Demand for materials for urgent postdisaster reconstruction is growing alongwith the increasing frequency of natural
disasters in recent years. We keep
inventory at all of our operating sites tofacilitate quick delivery in the event of adisaster.









Street materials andgreening materials
Materials for river
improvement andslope protection
Lifting equipment
Worksite equipment
Nets and sheets
Port materials

18Turnbuckle Braces Turnbuckle braces are connected cornerwise to prevent the collapse of buildings exposed to lateral pressure.
 Turnbuckle braces are used as seismic bracing products in prefabricated steel-frame houses and steel
constructions such as shopping centers, factories and warehouses. They can also be seen in everyday locations,
including on ceilings of railway station platforms.

19

Anchor Bolts
 Anchor bolts are important materials used to connect a building structure to a concrete foundation. Their main
purpose is to prevent the building connected to the concrete foundation from tilting and falling over.

Afterconstruction
work

Anchor bolts

Anchor frame (Kon-base Eco)

20

Container Bags
 Container bags are used in a wide range of settings such as 1) transportation and storage of feedstuff, fertilizer,
plastic pellets, and industrial waste; 2) rubble disposal and decontamination work; and 3) post-disasterreconstruction work (used as large sandbags).

21

Scaffolding Installation
 Our subsidiaries, TECBULID, TOKAI STEP, and FUKOKU handle assembly and disassembly of scaffolding is used forconstruction and repair of warehouses, detached homes and condominiums.

Overpass repair

Condominium construction22

4. Q2 FY2024 Financial Results and Analysis

Q2 FY2024 Consolidated Financial Results(million yen)

Q2

Q2

YoY

FY2023

FY2024

Amount%Net sales

36,22937,864+1,634+4.5%

Gross profit

7,784

8,368

+583

+7.5%

SG&A expenses

5,846

6,133

+287

+4.9%

Operating income

1,938

2,234

+296

+15.3%

Ordinary income

2,038

2,330

+291

+14.3%

Profit attributabletoowner of parent

1,289

1,545

+256

+19.9%ＥBＩＴＤＡ

2,791

3,135

+343

+12.3%※ Note: EBITDA= Income before income taxes + Interest expenses + Depreciation + Amortization of goodwill

24

Operating Income Analysis (Consolidated)
Operating income analysis(million yen)

Quarterly GPM
Consolidated

232

Parent

△287

351

23.1%

22.9%

2,234

22.7%

1,938
21.9%
21.6%

22.2%
21.2%
Q2 FY2023

Gross Profit
MarginNet Sales

Gross Profit

SG&A

MarginExpenses

Q2 FY2024

21.8%

22.0%

22.2%

21.3%
20.9%

21.5% → 22.1%
Salaries +75 million yen

SG&A
Expenses

Freight and packing costs +57 million yen
Commission expenses +35 million yen
Depreciation +15 million yen

Q1 FY2023 Q2 FY2023 Q3 FY2023 Q4 FY2023 Q1 FY2024 Q2 FY2024

25

Q2 FY2024 Consolidated Financial Results

Progress for FY2024 Forecast
Progress for FY2024 forecast(million yen)

Net sales and operating income■ Q2 FY2024 ■ Full-year forecast
Net sales
37,864Gross profit

Net sales
Operating income

Full-year
forecast

Progress

78,00048.5%

Full-year
forecast

Progress

8,368

17,45048.0%

Operating income

Full-year
forecast

Progress

4,500

49.7%

2,234

19,193

20,137

17,036

2,330

Profit attributable toowner of parent
1,545

Full-year
forecast

Progress

4,700

49.6%

1,052

885

Progress

2,900

53.3%

19,102

18,762

1,253
1,008

981

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

Quarterly percentage breakdown (5-year average)
Q1 - Q2 46.8%

Q4

Q1

Q4

Q1

25.1%

23.2%

22.5%

20.4%

Net
sales

Full-year
forecast

19,0801,408

Q1 - Q2 48.5%

Ordinary income(million yen)

Operatingincome

Q3

Q2

Q3

Q2

26.4%

25.3%

30.7%

26.4%
26

Consolidated Balance Sheet [Assets](million yen)

FY2023Q2 FY2024

ChangeCurrent assets
Non-current assets

Cash and deposits

10,733

10,816+83

Notes and receivable-trade,and contract assets

14,181

14,131△50

Electronically recordedmonetary claims operating

3,695

4,431

+736

Inventories

8,132

7,688

△444

658

589

△69

Total current assets

37,40237,658+256

Property, plant and equipment

15,403

16,206+803

Intangible assets

4,286

4,139

△146

Investments and other assets

1,070

1,095

+24

Total non-current-assets

20,761

21,442+681

58,163

59,100

+937

Other

Total assets

27

Consolidated Balance Sheet [Liabilities and Net Assets](million yen)

FY2023Q2 FY2024

Change

5,015

4,647

Electronically recorded
obligations-operations

9,738

9,405

Electronically recorded obligations–operations

11,43911,042△396

Repayment before maturity△1,701△1,636+64

Short-term loans payable

3,610

3,610

－

946

918

△28

Other

3,319

3,416

+97

Total current liabilities

22,63021,998△632

Non-current liabilities

2,247

2,604

+356

Total liabilities

24,87824,602△275

Shareholder’s equity

32,67933,835+1,155

Accumulated other comprehensive
income△1,395△1,343+51

Non-controlling interests

2,000

2,006

+5

Total net assets

33,28534,498+1,213

Total liabilities and net assets

58,163

59,100+937

Current liabilities

Notes and accounts payable-trade

Breakdown

Income taxes payable

△368
△332

Net assets28

5. Q2 FY2024 Financial Results and Analysis by Segment

Q2 FY2024 Financial Results by Segment(million yen)

Q2 FY2023

Q2 FY2024

Change(%)

Full-year
forecast

Progress

Industrial
Materials
Structural
Steel
Materials
Electrical
Equipment
Scaffolding
Construction

Net sales

18,246

18,221△0.1%

39,29346.4%

Segment
profit or loss

1,113

1,248

+12.1%

2,597

48.1%

EBITDA

1,249

1,384

+10.8%－－Net sales

9,719

10,472+7.7%

20,87350.2%

Segment
profit or loss

847

831

△1.8%

1,589

52.3%

EBITDA

866

851

△1.8%

－

－

Net sales

4,594

4,879

+6.2%

9,684

50.4%

Segment
profit or loss

142

131

△7.4%

279

47.2%

EBITDA

159

157

△1.4%

－

－

Net sales

3,669

4,291

+16.9%

8,147

52.7%

Segment
profit or loss

△157

31

－

54

58.4%

EBITDA

194

372+91.7%－－※ Note: Segment profit or loss has been adjusted with operating income on the quarterly consolidated financial statements.
※ Note: EBITDA= Segment profit or loss + Depreciation + Amortization of goodwill

30

Industrial Materials
Net sales and segment profit or loss

(million yen) Quarterly YoY
Net sales
Segment profit or loss

18,221

18,246

1,248

1,113

9,655

YoY

9,288

9,256

8,591

△ 0.1%

698

YoY

538

+ 12.1%Q2 FY2023

10,075Q2 FY2024

574

8,965
672

539

576

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

Factors affecting net sales
Net sales decreased by about 25 million yen YoY.
Despite passing on costs to its sales prices in response to soaring manufacturing and procurement costs, sales decreased asa result of a slowdown in orders due to the difference in demand trends between various fields.

Increased/decreased amount in net sales (million yen)
Products(approx.)△175

Aluminum extrusions△202

Orders declined due to a drop in demand

Merchandise(approx.)+150

Temporary scaffolding materials+150

On the customer side, there seems to be growing less reluctant
about purchasing merchandise. Therefore, sales increased dueto this environment as well as a rise in large orders

31

Industrial Materials
Segment profit or loss analysis(million yen)

Quarterly GPM
33.1%

△75
△53

426
1,248

1,113

Gross Profit
Margin

SG&A
Expenses

Factors
Related to
Subsidiaries

Q2 FY2024※ Note: The following figures do not include subsidiaries.
Sales Volume

Products △99 million yen Merchandise △293 million yen

Sales Price

Products +98 million yen Merchandise +327 million yen

Margin

SG&A
Expenses

Products 28.2% → 28.5%
Merchandise 20.8% → 22.3% (including imported

merchandise and domestically sourced merchandise)
Freight and packing costs +32 million yen
Salaries +17 million yen
Rent expenses +7 million yen

24.4%

27.0%

19.4%

25.5%

24.6%

25.2%

26.3%

20.0%

19.9%

27.5%

19.9%

28.4%

20.3%

19.1%
18.3%

23.1%

Total
products andmerchandise

Gross Profit

Domesticallysourcedmerchandise

Q2 FY2023 Sales Volume Sales Price

Importedmerchandise△393

Products
manufactured
in-house

230

30.1%
24.0%

23.1%
20.7%

21.4%

23.4%

21.6%

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY202432

Structural Steel Materials
Net sales and segment profit or loss

(million yen) Quarterly YoY
Net sales
Segment profit or loss

10,472

9,719

5,244

YoY

4,847

+7.7%

847

831

5,019

4,475

YoY

471

507

376

△1.8%

Q2 FY2023

5,453

5,396

Q2 FY2024

356

380

450

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

Factors affecting net sales
Net sales increased by about 750 million yen YoY.
Demand for large properties has recovered, while demand for small and medium-sized properties has remained flat. Despite
volatile environment surrounding the Structural Steel Materials segment, sales increased due to efforts to capture recovering
demand and price pass-through in response to higher manufacturing and procurement costs.

Increased/decreased amount in net sales (million yen)
Products(approx.)+40

Steel frame materials+25

Orders increased due to a rise in the number of large property projects
amid a recovery in steel frame demand.

Merchandise(approx.)+710

Screws+248

Sales increased due to robust sales of bolts for H-grade fabricators andsteel companies against the backdrop of higher demand for large-scale
projects.

33

Structural Steel Materials
Segment profit or loss analysis(million yen)

Products
manufactured
in-house

△14

162

△157

△5

831

SG&A
Expenses

Q2 FY2024

Sales Volume

Products △46 million yen Merchandise +40 million yen

Sales Price

Products +58 million yen Merchandise +103 million yen

MarginProducts 28.8% → 27.0%
Merchandise 20.3% → 20.8% (including imported
merchandise and domestically sourced merchandise)

Salaries +36 million yen
SG&A

Freight and packing costs +26 million yen

Expenses

Retirement benefit expenses +15 million yen
Legal welfare expenses +9 million yen

30.8%

31.9%

18.6%

27.2%

28.1%

32.4%

23.8%

33.8%

27.7%

34.6%

26.3%

35.7%

30.3%

18.9%

19.2%

19.0%

19.2%
17.9%

23.6%

Total
products andmerchandise

Gross Profit

Domesticallysourcedmerchandise

Gross Profit
MarginImportedmerchandise

847

Q2 FY2023 Sales Volume Sales Price

Quarterly GPM

23.4%

23.2%
22.6%

22.1%

21.8%

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY202434

Electrical Equipment
Net sales and segment profit or loss

(million yen) Quarterly YoY
Net sales
Segment profit or loss

4,594

YoY

4,879

+6.2%

2,370

2,467

2,441

2,401

50

53

2,478

2,223
121

142

YoY

131

△7.4%

Q2 FY2023

Q2 FY2024

85

78

57

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

Factors affecting net sales
Net sales increased by about 280 million yen YoY.
On the back of an increase in raw materials and distribution costs, sales increased as a result of setting prices in response to
manufacturer’s requests for purchase price hikes and marketing carbon-neutral solutions such as LED lighting for stores.

Increased/decreased amount in net sales (million yen)
Piping equipment+110

Orders increased due to a rise in the number of large-scale projects.

Electrical panels+87

Sales increased due to a rise in large orders such as commercial electrical panels.

35

Electrical Equipment
Segment profit or loss analysis(million yen)

Quarterly GPM and the number of projects

17.6%

Gross Profit Margin

47

△8

△49

142

16.7%

16.9%
16.4%

16.6%

16.7%

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

131
26

Net Sales

Gross Profit
Margin

16.8% → 16.7%

SG&A
Expenses

Gross Profit
Margin

SG&A Expenses

Commission expenses +20 million yen
Depreciation +8 million yen

Salaries +7 million yen

Q2 FY2024

The number of projects※

Q2 FY2023

22
19
14

14

13

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024※Note: Orders worth over 5 million yen from Electrical construction contractors.

36

Scaffolding Construction
Net sales and segment profit or loss

(million yen) Quarterly YoY
Net sales
Segment profit or loss

3,669

4,291

2,504

YoY
+16.9%

2,198
1,746

2,085

1,923

86

67

2,205

52

31
△20

△157
Q2 FY2023△81

Q2 FY2024

Factors affecting net sales

△75

Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY2024

Net sales increased by about 620 million yen YoY.
Against the backdrop of a recovery in private-sector capital investment, sales increased due to favorable construction sales
with a focus on large properties (non-residential) and rental sales, while large orders for scaffolding materials contributed to
the rise in sales.

Increased/decreased amount in net sales (million yen)
Construction sales+414

Sales increased due to a rise in large-scale renovation projects for existing
condominiums and non-residential constructions such as factories.

Material sales+114

Sales increased due to some large orders.

37Scaffolding Construction
Segment profit or loss analysis(million yen)

Sales fluctuations by service type (million yen)
Q2 FY2024

Q2 FY2023

Construction sales

35

△1

1,929

31
1,399

△ 157

1,340

1,549

30

155
Detached

Large properties

houses/renovations (non-residential)

UnfilledordersQ2 FY2023

Gross Profit
Margin
SG&A
Expenses

Net Sales

Gross Profit
Margin

SG&A Expenses

Q2 FY2024

25.0% → 25.9%

215

123

Bridges/474

309

Rental sales

588

Material sales

civil engineering

As of end September 2022

As of end September 2023

2,368 million yen

2,799 million yen

Quarterly GPM

26.1%

Salaries +10 million yen
Depreciation +8 million yen

28.0%
25.6%

24.1%

27.0%

24.7%

Amortization of goodwill △23 million yen
Q1

Q2

Q3

Q4

Q1

Q2

FY2023

FY2023

FY2023

FY2023

FY2024FY202438

6. Response to ESG Issues

ESG Basic Policy In engaging in corporate activities, we recognize that management promoting response to ESG (environment,social, and governance) issues will lead to sustainable growth.
Materiality
 Provision of optimal products
and merchandise forenvironment measures

Environment Business activities paying
attention to the environment

Relevant SDGs

Expansion of the handling of environment-related
products and merchandise
Initiatives for environmental protection andenergy-saving
Management of emissions (material balance) Product liability and quality
assurance

SocialStance for security and safety

 Procurement and provision ofhigh-value-added products,
merchandise and services

Provision of better products, merchandise forcustomers Communication withshareholders and investors

Engagement with shareholders

 Appropriate information
disclosure and security
 Co-existence with local
communities Safety measures and workstyle reform

Governance

Quality control of products and merchandise

Stance for information disclosure
Information security measures
Operating site opening plan
Response to disasters and contributions to local
communities
Risk control for disasters and others
Employee health, safety, and hygiene Human resource development
and diversity

Policy on human resource development
Diversity
Employee benefits Strengthening of corporate
governanceCorporate governance Thorough compliance

Compliance Basic Policy

40Initiatives
 We have established our ESG basic policy and link it to sustainable corporate growth by incorporating it in the
management strategy.
 SDGs Promotion Department established to explore, research and design initiatives to facilitate achieving the SDGs
targets.

Current Specific Initiatives
Cost Reduction and Risk Management
 Implementation of energy-saving measures

Environment(LED installations, achieving 10% cut in power usage) Acquisition of ISO14001

Enhancement of Corporate Value
 Sales of environment-related merchandise Installation of solar power generation
 Introduction of internal training and “Lifting equipment advisor”

 Compliance with ISO/JIS and other industry standards

Social Introduction of the risk control manualsystem (as an internally certified qualification)
 Maternity leave/childcare leave/support for returning towork/Recruitment of foreign students studying in Japan Holding of Safety and Health Committee

 Introduction of a restricted stock compensation plan and employee
shareholders association system

 Prevention of the manifestation of potential costs by theGovernance Evaluation of the effectiveness of the Board of Directors

development governance system

 Establishment of a Nomination and Compensation Committee and Formulation of a compliance manualtransition to a Company with an Audit & Supervisory Committee

Improve Productivity and Profitability

Sales Growth and Business Expansion

Sustainable Growth41

Initiatives: Environment
Environment
Provision of optimal products and merchandisefor environment measures

Business activities paying attention
to the environment

 Oil hunter Initiatives for environmental protection and energy-saving

This is an eco-mark certified oil absorption
mat using recycled materials. It is used forthe disposing of oil at the time of marine
pollution caused by oil spills andat factories which use oil.

 Merchandise using renewable plastics
KONDOTEC also offers recycled PP strapping
merchandise made from plastic collected fromconsumers and construction deck plates madefrom biomass plastics, both of which an Eco
Mark certified.

 Mash-up cover
Joints in building materials intentionally create
rust to fix building materials to each otherthrough friction bonding. For this reason,masking tape or other means that was used on
surfaces as covering to prevent paint fromcoating the joints. Our development of the
mash-up cover makes this covering possible
without generating tape waste.
(SAKUMIGUMI Co., Ltd.’s co-developed product with KONDOTEC)

 Initiatives for environmental protection
As part of efforts to reduce CO2 emissions, KONDOTEC has
begun plans to replace Company cars with EVs, and to switch
to renewable energy sources to power Company facilities.

 Acquisition of ISO14001
We obtained ISO14001 certification for all parent factories. We
will continue to work on business activities with fullconsideration for environmental preservation.

 Reuse of wooden pallets
As one of our initiatives to reduce waste, from this year we are
running a trial program to circulate wooden pallets used inhouse among our locations.

42

Initiatives: Social
SocialThe 2024 problem in the logistics industry

Response to the 2024 problem in the logistics industry

 Logistics function is as an important element to maintain our
rapid-delivery system, one of the KONDOTEC’s strengths.

 In response to the 2024 problem in the logistics industry, weplan to expand inventory at all of our nationwide locations tofacilitate rapid delivery of products and merchandise against
potential risks such as shipping delays.

 Regulations on truckers‘ overtime will come into effect in2024.The regulations are expected to cause problems in thelogistics industry, including truck driver shortages.

Suppliers・
distribution bases(thousand)
1200

Estimated to fall by 30%
from 2015 to 2030

1000
800
600
400
200

644

726

838

980

973

881

784

767

662

578

519

KONDOTEC’s
distribution channels

 Number of drivers in the road haulage industry

45%

Approx.

55%

Approx.

Completion ofdelivery

Increasing inventory atnationwide locations

Est.

Act.

Source: “Logistics Concepts 2030” (Japan Institute of Logistics Systems, February 2020)

 Introduction of regulations to limit overtime for drivers
in the logistics industry

Concerns

Shipping directly from suppliers/
distribution bases

Direct delivery from operatingsites located near customers

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

After April 1, 2024

Long working hours
have been entrenched

Customers

Risk of shipping delays0

Current situation

KONDOTEC’s
operating sites

Drivers' overtime will be limited to960 hours a year

• Unable to secure long-distancetransportation services• Take a long time for transportationand more■ Our initiatives• We will expand inventory of longproducts that are considered moredifficult than previously to transport.
• Also, we will expand existing
warehouses and storage spaces oflong-products.

▲Example of long product: Alpaca(collaborative product with KURIYAMA ALUMINUM Co., Ltd.)▲ Inventory space forlong objects

43

Initiatives: Social
SocialHuman resource development and diversity
 We aim to create a working environment in which employees with diverse backgrounds fully demonstrate their respective
abilities and are motivated to work.

 Male-female ratio of new employees with main career track

Diversity indicators and targets

(※ as of end March 2023)
Year ofemployment

April-2023
April-2022
April-2021
April-2020
April-2019



Male

Female

Total

13

6

19

persons

persons

persons8

513

persons

persons

persons

10

10

20

persons

persons

persons11

7

18

persons

persons

persons19

4

23

persons

persons

persons

Nationality ofinternational
student

Number ofturnover (※)

China

0 person0 person1 personIndicator
Rate of mid-career
individuals inmanagement positions
Rate of womenwith job titles

Brazil1 person

Benefit program Number of employees taking childcare leave
Those who tookchildcare leave
during the period

Return to work rate
after childcare leave
during the period

Rate of those who are
currently on childcare leave
during the period

2022.4.1~2023.3.31

13 persons

53.8%

46.2%

2021.4.1~2022.3.31

6 persons100%－

2020.4.1~2021.3.31

7 persons

100%－

Target31.3%

20% ～ 40%

March 2025

8.9%

15% or more

March 2030

(excluding management
positions)

6 persons

TargetAs of end
March 2023

completion date

Support for athletes
We have been supporting our employees in competitive
sports.
◀Javelin Throw◀Discus Throw

Kiho Kuze

Mika
Yamamoto◀Pole Vault◀Hammer Throw

Yuki Noshi

Sara
Fujimoto(as of end March 2023)

44

Initiatives: Social
SocialImproving employee motivation
 We have introduced an employee restricted stock program. By issuing shares as an incentive to employees, we encourage
employees to boost their motivation and morale toward enhancing performance.
 We target DOE of at least 4.0% and looks to pay continuously raise dividends. We have not lowered dividend since listing,and increased dividend for the twelfth consecutive year. This target serves as a benchmark aimed at improving employee
incentives, which improves employee awareness of stock price.

■ Shareholding status (excluding the founding family)■ Percentage of participation in
employees shareholding association

Participation rate

66%

Participation rate38%

※ As of end March 2023

Average ratio
for the wholesale trade
Participation rate

50%

Shareholding
ratio

Average ratio
for listed companies

Higher percentage ofparticipation

 The shareholding ratios of executive members, employees
and former employees exceeded the average ratios for listedcompanies and the wholesale trade.
 KONDOTEC has not lowered its dividend since its listing, andplans to increase its dividend for the twelfth consecutive year.
Dividends can serve the same function as pensions for former
employees.
Executive
members

Employees

Excluding thefounding family

Including the employees
shareholding association

1.2%

Average ratio forlisted companies
Average ratio for
the wholesale trade

KONDOTEC

Formeremployees

Total

8.4%

11.7%

21.3%

－

1.1%

－

1.1%

－

1.2%

－

1.2%

※ As of end March 2023
※ Shareholding ratio is calculated based on all outstanding shares (treasury stock is
not included).
※ For details on average ratio/participation rate for listed companies and thewholesale trade, refer to “Summary of 2020 Employee Stock Ownership Plan,”published by Japan Exchange Group, Inc., June 2022.

45

Initiatives: Governance
GovernanceCorporate governance KONDOTEC recognizes that strengthening and enhancing corporate governance through increasing soundness, transparency
and efficiency of management and maximizing corporate value is one of the most important management objectives.

Determination of compensation for
executive members

KONDOTEC has introduced a restricted stock compensation plan to promote its shared values
with its shareholders and increase the contribution of its Directors (excluding Outside Directors
and Directors who are Audit & Supervisory Committee Members) and Executive Officers to
performance and enhancement of corporate value.

Establishment of Audit &Supervisory Committee

KONDOTEC works to enhance corporate governance and corporate value by increasing
soundness and transparency of management. Furthermore, we grant voting rights for the Boardof Directors to Directors who are Audit & Supervisory Committee members with the aim ofstrengthening supervisory functions.

Formulation and announcement ofmanagement strategy andmanagement plan

KONDOTEC accurately tracks its cost of capital (Weighted Average Cost of Capital[WACC]),
formulates a medium-term management plan, and publishes a management resources
allocation plan that includes growth investments (personnel, capital, capex, and strategic
investment) aimed at achieving targets for net sales, operating income, ROE, and DOE on its
website and other platforms. In addition, we explain concrete measures for achieving ourtargets at financial results briefings. We review our medium-term plan each year in light ofearnings and anticipated social and economic trends. In cases when we revise plans, we explain
the changes and the reasons for them at financial results briefings or shareholder meetings.

46

7. Growth Strategies

Towards Achieving 100 Billion Yen Sales Target
 We target consolidated sales of 100 billion yen in the 2020s by strengthening the earnings capability of existing core businesses
and expanding into fields with growth prospects.

100 billion yen

M&A strategies

1,000

Accelerate growth with current KONDOTEC (organic) and future
KONDOTEC (periphery-strengthening)
Strengthen businesses other thanexisting ones

Strategies for existing businesses

Organic growth strategies

Periphery-strengthening
growth strategies•••

Increasing presence in foreign
markets
Entering into neighborhood
Expanding online businesses, etc.

750

FY201650.2 billion yen
500

FY200525.9 billion yen
250

Net sales (100 million yen)

① Four growth strategies
 Cultivation of new customers
 Offer of new products andmerchandise Adoption of flexible sales methods
 Cultivation of distribution routes② Expansion of operating sites③ Response to natural disasters, etc.

Medium-term management
plan (FY2024–FY2026)

0
1953

1963

1973

1983

1993

2003

2013

2023

48

Organic Growth① Four Growth Strategies～ Cultivation of New Customers and Offer of New Products and Merchandise ～Cultivation of new customers

Offer of new products and merchandise We achieve a monthly average of one new customer per
sales representative. In addition, we exploit a yearly
average of 10 dormant customers per sales representative.
These activities from the source for 20,000 sales customers.

 For the purpose of developing new merchandise, joint New
Products and Merchandise Committee meeting are held
between the sales division and the manufacturing divisionperiodically to discuss requests from customers andproposals for improvement. We will continue to develop
and cultivate products and merchandise with even higher
added value in order to offer such products andmerchandise.

Cultivation of new customers
Net sales (million yen)

New customers

2,604
1,386

Net sales (million yen)

Q2 FY2023

Q2 FY2024

1,111
2,541

FY2023

1,658

1,819

Q2 FY2023

Q2 FY2024

Cultivation of dormant customers

KONDO furring bolts

173

200

Square shaped hookbolts for railroad tie

75

78

High strength brace“HI TEN CONBRACE”－

0

Heavy duty chain

2

14

Net sales (million yen)
1,810

844

FY2023Q2 FY2023

807

Q2 FY2024

49

Organic Growth① Four Growth Strategies～ Adoption of Flexible Sales Methods and Cultivation of Distribution Routes ～Adoption of flexible sales methods

Cultivation of distribution routes

 Differentiation strategies

 We are working to expand our business into new sectors,
such as Home improvement centers and railroad
companies, in addition to the existing sales routes.
 We established the “E-commerce Group” in July 2017 to
explore sales through the Internet.

 Launch of website, “Tsurikata” for lifting
equipment inspection
We operate the “Tsurikata” inspection site for lifting
equipment to simplify the individual management andinspection of merchandise centered on cargo handlingequipment. We will continue to not only sell products
and merchandise but to also provide high-value-added
services.

Net sales (million yen)
910

Home improvement centers

Railroads

450

466

351

FY2023

 Engaging in anchor bolt installation work

By engaging in anchor bolt installation work and thus
gaining early-stage access to construction sites, we are able
to rapidly collect information on required construction
materials and leverage it in sales.
Net sales from anchor construction work (million yen)
1,445

683

FY2023Q2 FY2023

188

195

Q2 FY2023

Q2 FY2024

 We have in place a sales force dedicated to the Tokyo metropolitan
area to accommodate bulk purchasing from large trading
companies and headquarters of general construction companies
from which orders have been increasing in recent years.
Tokyo metropolitan sales (million yen)
1,054

855

Q2 FY2024

FY2023456

499

Q2 FY2023

Q2 FY2024

50

Organic Growth② Expansion of Operating Sites
 We strive for expansion of operating sites which maintained a local-community-oriented sales structures in order to respondquickly to customer needs. Recently we opened the Gunma office in April 2022. We will continue to execute quick deliveries
in an effort to realize customer-focused management.

Expanding sales network:
103 operating sites (as of end September 2023)
Industrial Materials

35

Structural Steel Materials

18

Electrical Equipment

12

Scaffolding Construction

38＜Operating sites＞
Industrial Materials
Structural Steel Materials
Industrial and Structural Steel Materials
Electrical Equipment
Scaffolding Construction
Factory
New operating site

History of operating site network expansion

2006

Akita Office, Fukushima Office

2012

Tohoku Office2015

Morioka Office2016

Nagano Office, Kumamoto Office2017＜Relocation＞
Shizuoka Office, Tokai Office2017

Sanwa Denzai Co., Ltd.
Aihoku Office

2018

Okayama Office2019

CHUOH GIKEN Co., Ltd.
Kusatsu Office2021＜Relocation＞
Chukyo Branch

2022

Gunma Office2023

Sanwa Denzai Co., Ltd.
Nagoya-Higashi Branch

51

Organic Growth③ Response to Natural Disasters
Response to “New stage” published by
Ministry of Land, Infrastructure, Transport and Tourism

Response to natural disasters
 We have established a structure that allows it to rapidly
respond to demand for products and merchandise that are
generally urgently required for reconstruction work in thewake of natural disasters that affect various regions
throughout Japan, such as earthquakes or abnormal
weather conditions, including extremely heavy rainfall.

 Net sales of disaster-related products and merchandise(million yen)

4,620
3,577

4,857

5,141

5,132 5,112

5,461

5,289

4,941 4,854

4,662

 The Ministry of Land, Infrastructure, Transport and Tourism has
acknowledged that rainfall patterns are clearly changing and istherefore calling on companies to remain alert and prepare for a“new stage” of disaster prevention/mitigation measures.
 To respond to the “New Stage”, we will also focus on advance
preparation to minimize damage.
Extraordinary climate in recent years
Heavy rains with hourly rainfall exceeding 50mm have increased
across Japan, raining locally, intensively and severely→ Recognized as a “New Stage”
Examples of weather conditions bringing disasters

3,877

August 2014 heavy rain

Heavy rainfall in a wide range of areas from west toeastern Japan(Landslide disaster occurred in Hiroshima
prefecture)

July 2018 heavy rain

Record-breaking heavy rainfall in a wide range ofareas across Japan centered on western Japan

October 2019 Typhoon
No.19

Rain storm centered on eastern Japan

July 2020 heavy rain

Heavy rainfall in a wide range of areas centered on
northern Kyushu

2,723

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

24/3
Q2

Related merchandise
Flexible container bags Tarpaulins, Sandbags etc.

Net, Sheet etc.

To respond to the “New Stage”, we need mitigate damage toinfrastructures as much as possible and make advance preparations
for early recovery.
Source: The website of Ministry of Land, Infrastructure, Transport and Tourism

52

Periphery-Strengthening Growth

Increasing Presence in Foreign Markets
 Based on our view that increasing presence in foreign markets where growth is expected will contribute to enhancing our earning
capability, we established a subsidiary in Thailand in November 2012. We executed a capital increase in August 2014, acquired allshares from the two joint venture companies and subsidiary.
 Currently, we are moving ahead with activities to expand our business in ASEAN countries with Thailand as our base location.
 We will further strengthen our sales & marketing capabilities by widening our sales network and reinforcing manpower with a view toincreasing the ratio of net sales from our overseas business.

Subsidiary in Thailand
Company name

KONDOTEC INTERNATIONAL (THAILAND) CO.,LTD.

Location

Bangkok, Thailand

Business areas

Import, export, and local sales of industrials, structuralsteel materials and electrical equipment, etc. in Thailand

Paid-in capital

Date establishedNet sales of overseas business (Q2 FY2024)
FY2024
forecast

Q2 FY2023

Q2 FY2024

International
Sales Division

25

25

106

102 million baht (approximately 316 million yen)

Local Subsidiaryin Thailand

138

108

310

November 1, 2012

Total

164

134

416

(million yen)

※Note: Amounts of inter-company transaction are not included.

Percentage of sales by country (Q2 FY2024)

Expand business areasin the ASEAN region

ASEAN

81%

East
Asia/China

15%

Near andMiddle East

4%

Other
countries

0%

Thailand24%

Indonesia

23%

Singapore

23%

Vietnam

10%

Malaysia

1%53

Toward Accelerating Organic Growth Strategies and Periphery-Strengthening Growth Strategies

M&A Strategy (Corporate Acquisitions and Capital/Business Tie-Ups ) We view that pursuing corporate acquisitions and capital/business tie-ups is an important strategy to strengthen our business platform.

Four perspective in pursuing M&A
Neighboring industry

Deepening of business

Shipbuilding, transport, land and sea cargohandling, manufacturing & production facilities,
fishery, cultivation, agriculture, etc.

Reinforcement of materials that
support buildings and structures
Improving productivity

M&A strategies
Expansion of business area
Full-scale deployment
in ASEAN countries(e.g. Thailand, Indonesia)

1. Neighboring industry
Pursue M&A with companies
associated with industries otherthan the construction industry
and promote businessexpansion.
Actual case：
Sanwa Deazai Co., Ltd.
KURIYAMA ALUMINUM Co., Ltd.

2. Deepening of business
Pursue M&A with material
manufactures, etc.
Actual case：
CHUOH GIKEN Co., Ltd.
TECBUILD CO., LTD.
TOKAI STEP CO., LTD.
FUKOKU, Ltd.

Amplifying sales patterns
Expansion of distribution channels
Entry into the online business

3. Expansion of business area

4. Amplifying sales patterns

Pursue M&A with companies
that maintain overseas sites topromote business area
expansion.

Pursue M&A with companies
that operates different sales
patterns from those of
KONDOTEC, such as retail,catalog-based selling, andonline sales.

54

8. Shareholder Return

Dividends and Shareholder Incentive Plan We target ROE of 10% or more and DOE of 4.0% or more with the aim of continuing to increase dividends.

Transition in dividends

Shareholder incentive plan

Since initial listing: No decrease in dividends
Plan to increase dividends
for the 13th consecutive period

40yen(forecast)

34yen
32yen
31yen

Ordinary dividend

29yen

Increase in ordinary dividend
Commemorative dividend

26yen

Performance indicators for dividend

24yen
23yen
22yen

※ Closing price on October 31 : 1,132yen

Dividendyield

Dividend yield including
shareholder incentive plan

3.5%

4.1%～
13yen

1995

1999

15.5yen
14yen
13.5yen

6yen

2003

2007

Amass

Redeem points

pointsfor gifts

20yen

11yen
10yen

5yen 5.5yen

 Shareholders can redeem reward points for over
4,000 choices (including food, appliances,electronics, travel, activities and much more)through the Premium Special Club PORTAL.

2011

2015

2019

2023

Note: Dividend per share have been retroactively adjusted to reflect the impact of thestock split effective January 1, 2012.

Number of shares held

Reward points

500 to less than 600

3,000 points

600 to less than 700

4,000 points

700 to less than 800

5,000 points

800 to less than 900

6,000 points

900 to less than 1,000

7,000 points

1,000 or more

10,000 points※Note: 1 point is worth 1 yen.

56

Transition of Stock Price
Ranking among listed companies

Transition of stock price
Nikkei average stock price

1,318

1,250

30,0001,000

24,000750

18,000500

12,000

250

6,000

0

0
10/4 11/4 12/4 13/4 14/4 15/4 16/4 17/4 18/4 19/4 20/4 21/4 22/4 23/4

Trading volume (thousand shares)

Nikkei average stock price (yen)

KONDOTEC stock price (yen)Stock price (after stock split)

4,000

Trading volume
2,000

0

Among 3,999 listed companies …
ROE

1,585thProfitattributable toowner of parent

1,343rdOrdinary income

1,192nd

Net assets

1,439thMarketcapitalization

1,537thPBR

2,332ndPER

2,688th

10/4 11/4 12/4 13/4 14/4 15/4 16/4 17/4 18/4 19/4 20/4 21/4 22/4 23/4

Note: The closing prices and trading volumes have been retroactively adjusted
to reflect the impact of the stock split effective January 1, 2012.
Note: In December 2012, KONDOTEC issued new shares through a public
offering and third-party allotment.

Closing price on October 31

1,132 yen
PER： 10.0 PBR：0.9

Source: Mizuho Securities Co., Ltd. (as of September 29, 2023)

EPS： 113.69 yen (FY2024 forecast)
BPS： 1,227.81 yen (as of end March 2023)

57

9. Highlights of Results

Highlights of Consolidated Financial Results
Net sales(million yen)

37,864Progressmillion yen

48.5%

Operating income(million yen)

2,234

50,21150,410

15/3

16/3

17/3

3,907

60,599 59,562
3,271

52,811

Ordinary income(million yen)

18/3

19/3

20/3

21/3

2,330

22/3

23/3

3,303

3,441

3,516

3,594

3,537

3,354

3,368

3,408

3,544

3,614

2,234

24/3

24/3

(Q2)

forecast

Progressmillion yen 49.6%

14/3

15/3

16/3

18/3

19/3

20/3

Profit attributable toowner of parent

2,748
2,497

3,810
3,455
1,992

2,098

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

22/3

23/3

24/3

(Q2)

forecast

14/3

15/3

million yen

2,523
2,284

17/3

18/3

19/3

forecast

53.3%
2,900

2,239

16/3

24/3

(Q2)

Progress

2,414

1,561

24/3

24/3

2,875

2,330

14/3

21/3

1,545

(million yen)

4,177

3,655

17/3

4,700

4,563
4,023

4,500

4,085

37,864

14/3

49.7%

4,355

66,13947,991 49,168

million yen

78,00075,447

57,828Progress

20/3

21/3

1,545

22/3

23/3

24/3

24/3

(Q2)

forecast

59

Highlights of Consolidated Financial Results

34,498

Net assets (million yen)

32,066
26,75628,387

million yen

33,285

ROE (%)

Target10% or more

34,49829,022

11.1

10.8

10.9

11.4
10.7

10.7

10.4

10% or more

24,74518,783

20,231

21,102

22,719
7.7

7.9

22/3

23/3

5.4

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

24/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

40.00

Dividend per share (yen)DOE (%)

yen

24/3
forecast(Q2)

Medium to long-term target

4.0

40.00

% or more

Medium to long-term target
4.0% or more

29.00

20.00

22.00

23.00

24.00

31.00

32.00

34.00

26.00

2.8

2.9

2.8

2.7

2.7

2.8

2.8

2.8

2.8

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

2.4

15.50

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

24/3
forecast

14/3

60

Highlights of Consolidated Financial Results
14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

24/3 Q2 24/3 (forecast)

Net sales

47,991

49,16850,21150,41052,811

57,82860,59959,562

66,13975,44737,86478,000Operating profit

3,271

3,303

3,441

3,516

3,537

3,907

4,085

3,354

3,594

4,355

2,234

4,500

Ordinary income

3,368

3,408

3,544

3,614

3,655

4,023

4,177

3,455

3,810

4,563

2,330

4,700

Profit attributable to owner of parent

1,992

2,098

2,239

2,497

2,523

2,748

2,875

1,561

2,284

2,414

1,545

2,900

EBITDA

3,846

3,948

3,910

4,052

4,079

4,425

4,916

3,783

5,095

5,482

3,135

-

Capital investment

679

403

842

695

423

981

917

1,097

1,694

1,453

-

-

Depreciation

418

449

405

438

423

404

697

897

1,091

1,134

-

-

Total assets

34,48135,186

34,64536,52439,313

43,82046,33549,42656,00958,163

59,100-Net assets

18,783

20,231

21,102

22,71924,74526,75628,38729,022

32,06633,28534,498

-

806

636

508

501

500

853

1,106

3,875

5,315

4,513

-

-

Cash flows from operating activities

1,887

1,818

1,945

2,737

2,429

2,699

4,385

4,196

1,227

3,961

1,426

-

Cash flows from investing activities

△ 660

828

△ 829

△ 646

△ 506 △ 1,551△ 5,205△ 2,264△ 2,373△ 1,389△ 971-

Cash flows from financing activities△ 389△ 699 △ 1,092 △ 1,032

△ 703

△ 915

△ 992

1,060

△ 22

△ 2,025△ 392-

Cash and cash equivalents, end of year

5,636

7,626

7,594

8,660

9,893

10,1338,305

11,317

10,164

10,733

10,816-

Profit attributable to owners of parent
per share

72.13

75.91

81.01

93.29

94.25

102.65107.46

59.60

87.26

94.75

60.61

113.69Net assets per share

679.27730.49774.18846.59922.62996.99

1,071.09

1,110.01

1,170.84

1,227.81--

Dividend per share

15.50

20.00

22.00

23.00

24.00

26.00

29.00

31.00

32.00

34.00

-

40.00

Operating profit margin (%)

6.8

6.7

6.9

7.0

6.7

6.8

6.7

5.6

5.4

5.8

5.9

5.8

ROE (%)

11.1

10.8

10.9

11.4

10.7

10.7

10.4

5.4

7.7

7.9

-

10% or more

Equity ratio (%)

54.4

57.4

60.8

62.1

62.8

61.0

61.2

58.7

53.7

53.8

55.0

-

DOE (%)

2.4

2.8

2.9

2.8

2.7

2.7

2.8

2.8

2.8

2.8

-

4.0% or more

Result of Operations (million yen)

Financial Position (million yen)Interest-bearing debt
Cash Flows (million yen)

Per Share Information (yen)Financial Indicators

Stock Price Index
Stock closing price (yen)

718

786

834

933

939

1,006

929

1,069

1,017

1,002

1,179

-

Price earnings ratio (times)

10.0

10.4

10.3

10.0

10.0

9.8

8.6

17.9

11.7

10.6

-

-

61

Quarterly Highlights
Consolidated
Net sales (million yen)

17,862
16,053
14,313Q1

15,585Q2

Q314,647

14,112Q4

Q114,83915,117

15,492

14,978

Q2

Q3

Q4

Q1

20/3

16,326

Q2

21/3

Q3

19,193
16,971

17,036Q4

Q120,137

Q2

22/3

Q3

19,08018,762

19,102

Q4

Q1

Q2

23/3

Q3

Q4

Q3

Q4

24/3

Operating income (million yen)
1,408
1,147

1,253

1,203

875

858

988

970

915

Q2

Q3

20/3

Q4

1,052
911

885

Q4

Q1

808
660

Q1

1,064

Q1

1,008

981

Q4

Q1

629

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q2

Q3

23/3

Q2

24/3

62

Quarterly Highlights
Industrial Materials
Net sales (million yen)

9,175

9,227

8,371

Q1

Q2

Q3

8,685

Q4

8,758

Q1

9,025

9,536

Q2

20/3

Q3

9,961
9,237

Q4

7,826

8,104

Q1

Q2

21/3

Q3

9,655
8,692

8,591

Q4

Q1

10,075

Q2

22/3

Q3

9,288

9,256

Q4

Q1

8,965

Q2

23/3

Q3

Q4

Q3

Q4

24/3

Segment profit or loss (million yen)
672

698

669
593

553

544
472
421

Q1

Q3
20/3

Q4

Q1

Q2

Q3
21/3

Q4

Q1

538

531

574

539

576

459

430

393

Q2

573

672

Q2

Q3
22/3

Q4

Q1

Q2

Q3
23/3

※ Figures for sales and segment profit or loss are calculated based on new segments since FY2022.

Q4

Q1

Q2
24/3

63

Quarterly Highlights
Structural Steel Materials
Net sales (million yen)
5,244

5,453

5,396
4,847

4,412

4,322
3,859

3,835

3,467

Q1

Q2

Q3

Q4

Q1

3,658

3,616

Q2

20/3

Q3

3,293

Q4

4,299

4,328

Q2

Q3

5,019

4,475

3,954

3,516

Q1

21/3

Q4

Q1

Q2

22/3

Q3

Q4

Q1

Q2

23/3

Q3

Q4

Q3

Q4

24/3

Segment profit or loss (million yen)
497

507

482

471

338

450

431

404

399

376

356

380

311
260

240

252

217
132

Q1

Q2

Q3

20/3

Q4

Q1

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q4

Q1

Q2

Q3

23/3

Q4

Q1

Q2

24/3

64

Quarterly Highlights
Electrical Equipment
Net sales (million yen)
2,465
2,107

Q1

2,035

2,101

Q3

Q4

Q2

2,237

2,155
1,963

1,886

Q1

Q2

20/3

Q3

2,126

2,226

2,323

2,223

2,370

2,467

2,441

2,401

Q3

Q4

Q1

2,478

1,933

Q4

Q1

Q2

21/3

Q3

Q4

Q1

Q2

22/3

Q2

23/3

Q3

Q4

Q3

Q4

24/3

Segment profit or loss (million yen)

121

112

106

96
85
63
52

69

66

59
44

Q2

Q3

20/3

Q4

Q1

57

42

50

53

Q4

Q1

28

26

Q1

78

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q4

Q1

Q2

Q3

23/3

Q2

24/3

65

Quarterly Highlights
Scaffolding Construction
Net sales (million yen)
2,504
2,070
1,702

Q1

Q2

Q3

Q4

Q1

Q2

20/3

Q3

Q4

Q1

2,198
2,001

1,795

Q2

21/3

2,085

1,923

2,205

1,746

Q3

Q4

Q1

Q2

22/3

Q3

Q4

Q1

Q2

23/3

Segment profit or loss (million yen)

Q3

Q4

3Q

4Q

24/3

107
86
67
52

50

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q
△ 33

2Q

3Q

4Q

1Q

21/3

3Q

△ 33

22/3

4Q

1Q

2Q

△ 20

△ 81

20/3

2Q

△ 75

23/3

※ Figures for sales and segment profit or loss are calculated based on new segments since FY2022.

24/3

66

Official SNS accounts
KONDTEC opened official Instagram and Facebook accounts. Please follow us
to get to know us better and for information and updates on our products
and merchandise.

Instagram
URL：https://www.instagram.com/kondotec_official/

Facebook
URL：https://www.facebook.com/kondotec.official/

2-2-90 Sakaigawa, Nishi-ku, Osaka
550-0024 Japan
Telephone: +81-6-6582-8441
Website: https://www.kondotec.co.jp
E-mail：kikaku@kondotec.co.jp