Tokyo Stock Exchange (Prime Market)
Securities Code : 7438

FY2023 Q2Financial
Results
November 10, 2022

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 FY2023 Financial Results

P. 4

2. Company Overview

P. 7

3. Main Products and Merchandise

P. 18

4. Q2 FY2023 Financial Results and Analysis

P. 24

5. Q2 FY2023 Financial Results and Analysis by Segment

P. 30

6. Response to ESG Issues

P. 40

7. Growth Strategies

P. 47

8. Shareholder Return

P. 55

9. Highlights of Results

P. 58

1. Highlights of Q2 FY2023 Financial Results

Summary of Q2 FY2023 Consolidated Financial Results
 Net sales increased due to sales contributions from KURIYAMA ALUMINUM (which became asubsidiary in October 2021) as well as a demand recovery in construction and price passthrough in response to higher manufacturing and procurement costs.
 Operating results increased thanks to the sales growth offsetting a dip in gross profit margin,
higher freight costs and personnel expenses, and higher SG&A expenses following theacquisition of the subsidiary.

Net sales

36,229 million yen

YoY+15.7%

Operatingincome1,938 million yen

YoY+19.8%

Ordinary
income2,038 million yen

YoY+19.7%

Profitattributable toowner of parent

1,289 million yen

YoY+21.0%E B I T D A

2,791 million yen

YoY+19.5%※Note: EBITDA= Income before income taxes + Interest expenses + Depreciation + Amortization of goodwill

4Topics in Q2 FY2023
Change in Reporting Segments

Acquisition of ISO14001 at Sapporo Factory As scaffolding construction business, one of important growthstrategies in medium-term management plan, has become
more of a priority for KONDOTEC, Scaffolding Construction
Segment is separated from Industrial Materials Segment withthe aim of promoting understanding of our businesses.

 In July 2022 Sapporo Factory obtained ISO14001 forenvironmental management system.
 We completed to obtain ISO14001 certification for allparent factories. In order to achieve a sustainable
society, we will continue to create environmental value
for the future and foster coexistence between people andnature through our business activities in harmony withnature.

Previous segments(FY2022)

Industrial
Materials

Manufactures,procures, sells andrents out industrial
materials to retailers.

Scaffolding
Construction

Structural
Steel
Materials

Electrical
Equipment

Manufactures,procures, and sells
structural steel
materials to steel
fabricators.
Procures and sells
electrical equipment
to electricalconstruction
contractors andelectronics retailers.

New segments(FY2023)
Industrial
Materials

Manufactures, procuresand sells industrial
materials to retailers.

Completed acquisition of ISO14001
at all parent factories
Shiga Factory

Structural
Steel
Materials

Manufactures, procures,and sells structuralsteel materials to steel
fabricators.

Electrical
Equipment

Procures and sells
electrical equipment toelectrical construction
contractors andelectronics retailers.

Scaffolding
Construction

Provides scaffolding
construction services andprocures, sells and rents out
temporary scaffolding
materials to building
contractors and mediumsized general contractors.

Certified in September 2018

Kyushu Factory

Sapporo Factory
Certified in July 2022

Kanto Factory
Certified in March 2020

Certified in January 2022

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
Acquired sharesand merchandise to various industries in response to changes of the times and customer needs.
of KURIYAMA
Acquired sharesof FUKOKU（trillion yen）

70,000Acquired shares of KONDOTEC
INTERNATIONAL and CHUOH GIKEN

90

ALUMINUM
7,000

Acquired sharesof TOKAI STEP
Acquired sharesof TECBUILD

60,000

6,000

60

5,000

Net sales (million yen)

The Great East Japan Earthquake
30

Opened Shiga Factory
40,0004,000

Opened Sapporo Factory0Aneha’s The Fabrication of
Quake-Resistance Incident

Opened Kanto Factory

Construction investment (nominal)
30,000Acquired shares of
Sanwa Denzai〈 Sales 〉

The Burst Bubble

The Great Hanshin-Awaji
Earthquake

3,000

Industrial Materials

Ordinary income (million yen)

50,000

Structural Steel Materials
20,0002,000

Electrical Equipment
Ordinary income
The Oil Shocks

EBITDA
10,0001,000

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, 2022)

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

Parent:733

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, construction materials, machinery, andequipment etc.
 Merchandise
Hardware, chains, wire ropes, screws, construction materials, lighting equipment, panel board, air-conditioning
equipment ,and eco items etc.

Consolidated:1,215 (as of March 31, 2022)

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 2022)

9

Sales by Segment(as of end March 2022)

Industrial Materials

Structural Steel Materials

Net sales

Sales weighting

33,861 million yen
Customers

Net sales

51 %16,098 million yen

Hardware stores, Wholesalers, Home improvement centers

Products/
Merchandise

Customers

24 %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

8,610 million yen
Customers

Sales weighting

Net sales

13 %Sales weighting

7,568 million yen

Electrical construction contractors, Electronics retailers

Products/
Merchandise

Customers

12 %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
51 %Structural SteelMaterials

24 %Electrical
Equipment

13 %Scaffolding
Construction

12 %◆ Customers
Tradingcompanies

Hardware stores/
Wholesalers

Overseas

Home improvement
centers, etc.

Electronics
retailers

End-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 FY2022
Number ofoperating sites

35

Number ofcustomers

Approx.

16,000

Number of new customers ※1,516

Number of
employees

341

Procurement
source(consolidated)
In-house

16%※ as of end March 2022

Domesticallysourced

1,249 million yen※ Note: Figures show sum of this year and previous year’s results.

58%

Customers by industry(parent)
Construction 5%

Service 5%

Manufacturing

Imported

26%

13%

Others 2%

Retail43%

Wholesale

32%

Results in the past 5 years
Net sales(million yen)Segment profit or loss
35,45937,28233,86132,459

1,954

2,111

2,208

FY2019FY2020

FY2021

Initiatives

36,303

1,995

FY20222,473

FY2023
forecast※ Figures for sales and segment profit or loss are calculated based on new
segments since FY2022.

 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 FY2022
Number ofoperating sites

17

Number ofcustomers

Approx.

Number of
employees

5,000

Procurement source

111

Customers by industry
Others 5%

Manufacturing

6%

Number of new customers ※573

Inhouse※ as of end March 2022

Domesticallysourced

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

59%

16,756(million yen)Segment profit or loss
16,42916,098

1,718
1,304
944

FY2019FY2020

FY2021

Construction
Imported

FY2022

81%

Initiatives

16,94914,035
1,717

8%

32%
9%

Results in the past 5 years
Net sales

Wholesale

1,092

FY2023
forecast

 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 FY2022
Number ofoperating sites

Number ofcustomers

14

Approx.

5,000

Number of new customers ※333

Number of
employees

Procurement source

122
Others※ as of end March 2022

801 million yen

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

100%

8,612

(million yen)Segment profit or loss

8,900

8,710

28%
Circuit breakers/
wiring devices

8%
Piping equipment

8%

Results in the past 5 years
Net sales

Merchandise category

8,610
8,243

262

281

253

233

219

FY2019FY2020

FY2021

FY2022

FY2023
forecast

Air-conditioners/
ventilation fans
19%
Lighting
fixtures
19%
Electrical
wires
18%

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

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)

Strengths

Ratio of segment sales FY2022

Number ofoperating sites

Number of employees37289 (construction workers: 96)

Service type
Rental sales

5%

Capex forscaffolding materials

Book value ofscaffolding materials

469 million yen

630 million yen

Material sales

16%
Construction sales※ As of end March 2022
※ The amount of investment in the last year

79%

Results in the past 5 years
Net sales(million yen)Segment profit or loss

7,846
7,568
91

FY2019FY2020

FY2021

FY2022

69

Initiatives
 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.

FY2023
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 and corresponding market shares (as of end March 2022)
 We offer an extensive range of products including higher market shares products and merchandise (such as wire
ropes, nets, sheets, and screws) and products and merchandise with potential for growth other than the following.

Formwork materials
Market size%

About 120 billion yen

Z-Mark hardware
Markets size%

Market size

About 44 billion yen

Welding wires■ Products■ Merchandise

About 11 billion yen(KONDOTEC estimates)%%

Market size

About 32 billion yen

Braces%Market size

Anchor bolts

High strength bolts%
Market size
About 12 billion yen

About 17billion yen

Other higher shareproducts and merchandise Scaffolding
chains64.8%

 Turnbuckle

30.6%

 Shackles

40.4%
16

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 FY2023 Financial Results and Analysis

Q2 FY2023 Consolidated Financial Results(million yen)

Q2

Q2

YoY

FY2022

FY2023

Amount%Net sales

31,30436,229+4,924+15.7%

Gross profit

7,010

7,784

+773

+11.0%

SG&A expenses

5,392

5,846

+454

+8.4%

Operating income

1,618

1,938

+319

+19.8%

Ordinary income

1,702

2,038

+335

+19.7%

Profit attributabletoowner of parent

1,065

1,289

+223

+21.0%ＥBＩＴＤＡ

2,336

2,791

+454

+19.5%※ 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

Parent

△242
△332

861

33

The impact of

1,938

22.7%
22.4%

making KURIYAMA

1,618

ALUMINUM

22.5%

a subsidiary

23.1%

22.9%

22.6%
22.3%

21.7%

22.2%
21.2%

Q2 FY2022

Net Sales

Gross Profit

SG&A

MarginExpenses

Other

Q2 FY2023

21.4%
20.9%

※ Note: The following figures do not include KURIYAMA ALUMINUM.
Gross Profit
Margin

22.4% → 21.7%

SG&A
Expenses

Bonuses +137 million yen
Salaries +70 million yen
Freight and packing costs +38 million yen

Q1 FY2022 Q2 FY2022 Q3 FY2022 Q4 FY2022 Q1 FY2023 Q2 FY2023

25

Q2 FY2023 Consolidated Financial Results

Progress for FY2023 Forecast
Progress for FY2023 forecast(million yen)

Net sales and operating income■ Q2 FY2023 ■ Full-year forecast
Net sales
36,229(million yen)

Net sales
Operating income

Full-year
forecast

Progress

70,00051.8%

19,193
17,862

16,326

16,971

17,036911

885

14,978Gross profit

Full-year
forecast

Progress

7,784

15,91048.9%

Operating income

Full-year
forecast

Progress

3,810

50.9%

1,938

Ordinary income
2,038

Profit attributable toowner of parent
1,289

1,064

988
629

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY2023

Quarterly percentage breakdown (5-year average)
Q1 – Q2 48.6%

Full-year
forecast

Progress

3,970

51.4%

1,052

Q1 – Q2 47.4%

Q4

Q1

Q4

Q1

25.1%

23.4%

23.0%

20.4%

Net
sales

OperatingincomeFull-year
forecast

Progress

Q3

Q2

Q3

Q2

2,470

52.2%

26.3%

25.2%

29.6%

27.0%
26

Consolidated Balance Sheet [Assets](million yen)

FY2022Q2 FY2023

ChangeCurrent assets
Non-current assets

Cash and deposits

10,164

9,510

△654

Notes and receivable –trade,and contract assets

13,20013,610+410

Electronically recordedmonetary claims operating

2,861

2,963

+101

Inventories

7,183

7,796

+612

Other

1,225

975

△250

Total current assets

34,63634,856+220

Property, plant and equipment

15,011

15,332+321

Intangible assets

5,368

5,132

△235

993

1,064

+70

21,373

21,529+156

56,00956,385+376

Investments and other assets
Total non-current-assets

Total assets

27

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

FY2022Q2 FY2023

Current liabilities

Notes and accounts payable – trade

4,346Electronically recorded
obligations – operations

9,114

Breakdown

Change

4,493

+146

9,348

+234

10,762

11,102+340

Repayment before maturity△1,648△1,754△105

Short-term loans payable

4,610

3,610

△1,000

814

808

△5

Other

3,097

3,168

+70

Total current liabilities

21,983

21,429△553

Non-current liabilities

1,959

2,279

+319

Total liabilities

23,942

23,708△233

Shareholder’s equity

31,342

31,970+627

Accumulated other comprehensive
income△1,255△1,290△34

Non-controlling interests

1,979

1,996

+17

Total net assets

32,06632,677+610

Total liabilities and net assets

56,00956,385+376

Net assets

Electronically recorded obligations–operations

Income taxes payable28

5. Q2 FY2023 Financial Results and Analysis by Segment

Q2 FY2023 Financial Results by Segment(million yen)

Q2 FY2022

Q2 FY2023

Change(%)

Full-year
forecast

Progress

Industrial
Materials
Structural
Steel
Materials
Electrical
Equipment
Scaffolding
Construction

Net sales

15,931

18,246+14.5%

36,30350.3%

Segment
profit or loss

1,003

1,113

+11.0%

2,473

45.0%

EBITDA

1,057

1,249

+18.2%－－Net sales

7,815

9,719

+24.4%

16,94957.3%

Segment
profit or loss

621

847

+36.3%

1,092

77.5%

EBITDA

641

866+35.1%－－Net sales

4,060

4,594

+13.2%

8,900

51.6%

Segment
profit or loss

71

142

+99.7%219

65.0%

EBITDA86

159+84.0%－－Net sales

3,497

3,669

+4.9%

7,846

46.8%

Segment
profit or loss

△66

△157

－

69

－

EBITDA

271

194△28.3%－－※ Note: Figures for FY2022 have been restated under new segment classification.
※ 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

18,246

YoY

8,692+14.5%

15,931
1,113

1,003

7,826

YoY

8,104

573

+11.0%Q2 FY2022

9,655

9,237

531

430

459

8,591

538

574

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY2023Q2 FY2023

Factors affecting net sales
Net sales increased by about 2,310 million yen YoY.
Sales increased due to a demand recovery in construction and price pass-through in response to higher manufacturing andprocurement costs as well as sales contributions from KURIYAMA ALUMINUM (which became a subsidiary in October 2021).

Increased/decreased amount in net sales (million yen)
Products(approx.)+30

Scaffolding suspension chains+35

Orders increased due to a rise in the number of largescale projects.

+471

Sales increased due to some large orders.

Merchandise(approx.)+1,210

Other chains

Other+1,071KURIYAMA ALUMINUM※ Figures for FY2022 have been restated under new segment classification.

Sales increased on the contributions from new
subsidiary.

31Industrial Materials
Segment profit or loss analysis(million yen)

Products
manufactured
in-house

△88
△85

392
△124

17

1,003

1,113

Operating income+82 million yen

Gross Profit
Margin

SG&A
Expenses

Factors
Related to
Subsidiaries

Q2 FY2023※ Note: The following figures do not include subsidiaries.
Sales Volume

Products △30 million yen Merchandise △94 million yen

Sales Price

Products +51 million yen Merchandise +340 million yen

Merchandise 21.6% → 20.8% (including imported
merchandise and domestically sourced merchandise)

SG&A
Expenses

Bonuses +58 million yen Salaries +5 million yen

33.1%
27.2%

28.8%

19.0%

26.3%

24.8%

24.0%

21.0%

27.6%

19.3%

25.8%

25.4%

19.8%

19.6%

25.5%

24.6%

19.9%
18.3%

22.6%

Total
products andmerchandise

Gross Profit
MarginProducts 26.7% → 28.2%

Domesticallysourcedmerchandise

Q2 FY2022 Sales Volume Sales Price

Importedmerchandise

Major increase/decrease
factors related tosubsidiaries
Goodwill amortization△66 million yen

Quarterly GPM

22.4%

23.1%
22.1%

21.3%

20.7%

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY202332

Structural Steel Materials
Net sales and segment profit or loss

(million yen) Quarterly

 YoY

5,244

Net sales
Segment profit or loss

9,719

YoY
+24.4%

7,815
847
621

Q2 FY2022

4,299

3,954
3,516

YoY
+36.3%Q2 FY2023

4,475

4,328

404

471

431

376
252

217

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY2023

Factors affecting net sales
Net sales increased by about 1,900 million yen YoY.
Sales increased due to steady growth in sales of steel frame materials, high strength bolts, and braces, which reflected
recovery in steel frame demand for large properties and price pass-through in response to higher manufacturing andprocurement costs.

Increased/decreased amount in net sales (million yen)
Products(approx.)+580

Merchandise(approx.)+1,320Braces+312

Sales increased due to a rise in sales prices and thenumber of large property projects as well as a recovery
in steel frame demand.

High strength bolts+490

Sales increased due to a last-minute purchasing
demand prior to price hikes and rise in sales prices.

33

Structural Steel Materials
Segment profit or loss analysis

Quarterly GPM
Products
manufactured
in-house

239△38(million yen)

△178

203

31.1%

30.8%

32.3%
30.8%

31.9%
30.3%

19.2%

Sales Price

Gross Profit
Margin

SG&A
Expenses

Q2 FY2023

Sales Volume

Products +95 million yen Merchandise +107 million yen

Sales Price

Products +89 million yen Merchandise +149 million yen

Merchandise 19.5% → 20.3% (including imported
merchandise and domestically sourced merchandise)

SG&A
Expenses

Bonuses +61 million yen
Salaries +17 million yen
Freight and packing costs +58 million yen

18.7%

18.6%

18.9%

18.0%
17.4%

24.6%

Total
products andmerchandise

Gross Profit
MarginProducts 31.7% → 28.8%

Domesticallysourcedmerchandise

Q2 FY2022 Sales Volume

27.2%

34.0%

Importedmerchandise

621

31.8%
25.2%

34.2%

847

32.2%

23.7%

23.6%

23.4%

22.6%

21.9%

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY202334

Electrical Equipment
Net sales and segment profit or loss

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

YoY

4,594

4,060

+13.2%

2,226

2,370

2,223

1,933
96

142

YoY

66

+99.7%

71

Q2 FY2022

2,126

2,323

28

Q2 FY2023

85
57

42

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY2023

Factors affecting net sales
Net sales increased by about 530 million yen YoY.
Sales increased as a result of margin-focused sales efforts despite facing price revision requests from manufacturers due tohigher costs, as well as prolonged construction periods caused by the COVID-19 infections and delays in product supplies
stemming from the semiconductor shortages.

Increased/decreased amount in net sales (million yen)Lighting fixtures+267

The number of LED lighting replacement works increased.

Electrical wires+148

Sales increased due to a rise in the number of orders and higher unit sales
prices reflecting higher copper prices.

35

Electrical Equipment
Segment profit or loss analysis

Quarterly GPM and the number of projects

Gross Profit Margin22(million yen)

△36

84

142

Net Sales

Gross Profit
Margin

SG&A Expenses

Q2 FY2023

16.4% → 16.8%
Bonuses +9 million yen

SG&A
Expenses

Salaries +5 million yen

Legal welfare expenses +4 million yen

The number of projects※

Gross Profit
Margin

16.8%

16.7%

16.9%

16.3%

16.0%

Q1

Q2

Q3

Q4

Q1

Q2

FY2021

FY2021

FY2021

FY2021

FY2022

FY20221771

Q2 FY2022

16.8%

13

14

13

10
6

Q1

Q2

Q3

Q4

Q1

Q2

FY2021

FY2021

FY2021

FY2021

FY2022

FY2022※Note: Orders worth over 5 million yen from Electrical construction contractors.

Retirement benefit expenses +3 million yen

36

Scaffolding Construction
Net sales and segment profit or loss

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

3,497

3,669

2,070

YoY
+4.9%

1,702

2,001

1,795

1,746

1,923

107
50

△66

△33

△33

Q1

Q2

Q3

Q4

Q1

FY2022

FY2022

FY2022

FY2022

FY2023△81△157
Q2 FY2022

Q2 FY2023△75
Q2

FY2023

Factors affecting net sales
Net sales increased by about 170 million yen YoY.
Material sales were boosted by a recovery in construction demand, while rental sales were driven by a reluctance to makepurchases of scaffolding materials due to price hikes.

Increased/decreased amount in net sales (million yen)

Material sales+143

Sales increased due to some large orders.

Rental sales+36

Sales increased due to a reluctance to make purchases of scaffolding materials
amid soaring material prices※ Figures for FY2022 have been restated under new segment classification.

37

Scaffolding Construction
Segment profit or loss analysis(million yen)

Sales fluctuations by service type
Q2 FY2022

Q2 FY2023

Construction sales
1,391 1,399△ 66

1,526 1,549

48

178 215

69 30

△ 110

△157

Detached

Large properties

houses/renovations (non-residential)

331

Bridges/Rental sales

474

Material sales

civil engineering

Unfilled orders(as of end September 2022)

2,368 million yen△ 27

Quarterly GPM
Q2 FY2022

Net Sales

Gross Profit
MarginGross Profit
Margin

28.1% → 25.0%

SG&A
Expenses

Salaries +29 million yen

SG&A Expenses

Q2 FY2023

28.3%

30.1%
27.8%

27.5%

26.1%

24.1%

Q1

Q2

Q3

Q4

Q1

Q2

FY2022

FY2022

FY2022

FY2022

FY2023

FY202238

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”

 Acquisition of ISO9001 and compliance with ISO/JIS andSocialother industry standards

system (as an internally certified qualification)
 Maternity leave/childcare leave/support for returning to Introduction of the risk control manual

work/Recruitment of foreign students studying in Japan
 Introduction of a restricted stock compensation plan and employee

 Holding of Safety and Health Committee

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.

 Initiatives for environmental protection

 Merchandise using renewable plastics

 LED installations

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.

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.

In 2015, we completed installing LED lighting in factories andare currently in the process of installing LED lighting in ouroperating sites. These LED installations are being carried out
in cooperation with Sanwa Denzai Co., Ltd., our subsidiaryand wholesaler of electric equipment.

 Acquisition of ISO14001

 Hardware for CLT construction
Our double end stub bolt set manufactured at
our Shiga Factory is certified as an “x (crossmark) hardware” for meeting the requirements
for metallic hardware used in CLT panel
construction (set by the Japan Housing andWood Technology Center). The metallic
hardware standard for CLT panel construction
is a standard for metallic hardware used inconstruction works using CLT, a nextgeneration lumber material that contributes toreducing CO2 emissions.

We obtained ISO14001 certification for Sapporo Factory in July
2022 (completed to obtain ISO14001 certification for all parent
factories). We will continue to work on business activities withfull consideration for environmental preservation.

42

Initiatives: Social
SocialHuman resource development and diversity
 We aim to create a working environment in which employees with diverse backgrounds fully demonstrate theirrespective abilities and are motivated to work.
 Male-female ratio of new employees with main career track(※ as of end March 2022)
Year ofemployment

April-2022
April-2021
April-2020
April-2019
April-2018

Nationality ofinternational
student(other than Japan)

Male

Female

Total

8

5

13

persons

persons

persons

10

10

20

persons

persons

persons11

7

18

persons

persons

persons19

4

23

persons

persons

persons12

618

persons

persons

persons

Number ofturnover (※)

0 person0 personof athlete employees aspiring
TOPIC Introduction
to participate in the Olympic GamesWe have been supporting our employees in competitive
sports.
◀ Javelin Throw◀ Discus Throw

Kiho Kuze

Mika
Yamamoto◀ Pole Vault◀ Hammer Throw

Yuki Noshi

Sara
Fujimoto

3 personsBrazil0 personKorea

2 persons Benefit program
Number of employees taking childcare leave (as of end March 2022)
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

2021.4.1~2022.3.31

6 persons66.7 %

33.3 %

2020.4.1~2021.3.31

7 persons

100 %

-

2019.4.1~2020.3.31

4 persons

100 %

-

Please check latest updates andTrack & Field Club’s activity reports
on our website.

43

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 2.5% and looks to pay continuously raise dividends. We have not lowered dividend since listing,and increased dividend for the eleventh 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

73%

Participation rate40%

※ (as of end March 2022)

Average ratio
for the wholesale trade
Participation rate

53%

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 eleventh consecutive
year. Dividends can serve the same function as pensions forformer employees.
Executive
members

Employees

Excluding thefounding family

Including the employees
shareholding association

0.9%

Average ratio forlisted companies
Average ratio for
the wholesale trade

KONDOTEC

Formeremployees

Total

8.0%

11.2%

20.1%

－

1.1%

－

1.1%

－

1.2%

－

1.2%

※ As of end March 2022
※ 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.

44

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.

45

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 (FY2023–FY2025)

0
1953

1963

1973

1983

1993

2003

2013

2023

47

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

2,747

Net sales (million yen)
1,087

1,111

1,470

1,658

Q2 FY2022

Q2 FY2023

2,422

FY2022

Cultivation of dormant customers

Q2 FY2022

Q2 FY2023

KONDO furring bolts

115

173

Hook bolts
with square shank85

75

KT suspension balance

3

5

Lightweightscaffolding chains“Carina”

7

4

Net sales (million yen)
1,558
844
679

FY2022Q2 FY2022

Q2 FY2023

48

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)

FY2022

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)

450

416
188

188

Q2 FY2022

Q2 FY2023

 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)
1,031

1,068

546

FY2022

Railroads

812

330

 Engaging in anchor bolt installation work

Home improvement centers

Q2 FY2022

683

Q2 FY2023

FY2022435

456

Q2 FY2022

Q2 FY2023

49

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:
105 operating sites (as of end September 2022)
Industrial Materials

35

Structural Steel Materials

18

Electrical Equipment

14

Scaffolding Construction

38＜Operating sites＞
Industrial Materials
Structural Steel Materials

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 Office

Industrial and Structural Steel Materials
Electrical Equipment
Scaffolding Construction
Factory
New operating site

Opened in April 2022
Gunma Office50

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
4,941 4,854

4,662

3,877

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

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

2,594

12/3

 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.

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

23/3
(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

51

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 FY2023)
FY2023
forecast

Q2 FY2022

Q2 FY2023

International
Sales Division

22

25

55

102 million baht (approximately 316 million yen)

Local Subsidiaryin Thailand

58

138

210

November 1, 2012

Total

81

164

265

(million yen)

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

Percentage of sales by country (Q2 FY2023)

Expand business areasin the ASEAN region

ASEAN

84%

East
Asia/China

12%

Near andMiddle East

4%

Other
countries

0%

Indonesia

38%

Thailand

19%

Vietnam

15%

Singapore

12%52

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.

53

8. Shareholder Return

Dividends and Shareholder Incentive Plan We target ROE of 10% or more and DOE of 2.5% 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 12 th consecutive period

34yen(forecast)
32yen

Ordinary dividend
Increase in ordinary dividend

29yenCommemorative dividend

26yen

Performance indicators for dividend

24yen
23yen
22yen

※ Closing price on October 31: 1,010 yen

Dividendyield

Dividend yield including
shareholder incentive plan

3.4%

4.0%～

20yen

15.5yen

13yen
11yen
10yen

14yen
13.5yen Shareholders can redeem reward points for over
2,000 choices (including food, appliances,electronics, travel, activities and much more)through the Premium Special Club PORTAL.

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(as of March 31)※Note: 1 point is worth 1 yen.

Acquisition of treasury stocks

6yen
5yen 5.5yen

1995

1999

2003

2007

2011

2015

2019

2023

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

Total acquisition
price

899 million yen

Total number ofshares acquired

859,000 shares)

Acquisition
periodJanuary 4, 2022 - July 7, 2022

55

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

Trading volume (thousand shares)

Nikkei average stock price (yen)

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

Among 3,923 listed companies …
ROE

1,775thProfitattributable toowner of parent

1,339thOrdinary income

1,274th

Net assets

1,426thMarketcapitalization

1,530thPBR

2,292ndPER

2,250th4,000

Trading volume
2,000

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

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

1,010 yen
PER： 10.4 PBR：0.9

Source: Mizuho Securities Co., Ltd. (as of September 30, 2022)

EPS： 96.95 yen (FY2023 forecast)
BPS： 1,170.84 yen (as of end March 2022)

56

9. Highlights of Results

Highlights of Consolidated Financial Results
Net sales(million yen)

36,229Progressmillion yen

51.8%

47,991 49,168

50,21150,410(million yen)

1,938

Progressmillion yen

50.9%

70,00066,13957,828Operating income

3,907

60,599 59,562

52,811

3,271

3,303

3,441

3,516

4,085
3,810

3,594

3,537

3,354

2,664

41,15336,229
1,938

13/3

14/3

15/3

16/3

Ordinary income(million yen)

17/3

18/3

19/3

2,038
4,023

3,368

3,408

3,544

20/3

3,614

21/3

22/3

23/3

23/3

(Q2)

forecast

Progressmillion yen 51.4%

4,177

14/3

15/3

16/3

17/3

Profit attributable toowner of parent(million yen)

18/3

19/3

2,748
2,497

3,455
1,992

2,754

2,098

20/3

1,289

3,970

3,810

3,655

13/3

21/3

22/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

forecast

million yen 52.2%

2,875

2,523

2,470
2,284

2,239

1,605

14/3

23/3

(Q2)

Progress

1,561

2,038

13/3

23/3

1,289

23/3

23/3

(Q2)

forecast

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

23/3

(Q2)

forecast

58

Highlights of Consolidated Financial Results

32,677

Net assets (million yen)million yen

ROE (%)
11.1

32,066 32,677
26,75628,387

Target
10.8

10.9

10

11.4
10.7

10.7

10.0

29,022% or higher

10.4

10% or higher

24,74518,783

20,231

21,102

7.7

22,7197.1

16,990

13/3

5.4

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

Dividend per share (yen)

34.00
31.00

DOE (%)

yen
32.00

22/3

23/3
forecast(Q2)

Target2.5% or higher

34.00

29.00
2.8

26.00
22.00

23.00

24.00

2.4

20.00

13.50

14.00

12/3

13/3

2.3

2.9

2.8

2.7

2.7

2.8

2.8

2.4

2.8
2.5% or higher

15.50

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3
forecast

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3
forecast

59

Highlights of Consolidated Financial Results
13/3

14/3

15/3

16/3

17/3

18/3

19/3

20/3

21/3

22/3

23/3 Q2 23/3 (forecast)

Net sales

41,15347,991

49,16850,21150,41052,811

57,82860,59959,562

66,13936,22970,000Operating profit

2,664

3,271

3,303

3,441

3,516

3,537

3,907

4,085

3,354

3,594

1,938

3,810

Ordinary income

2,754

3,368

3,408

3,544

3,614

3,655

4,023

4,177

3,455

3,810

2,038

3,970

Profit attributable to owner of parent

1,605

1,992

2,098

2,239

2,497

2,523

2,748

2,875

1,561

2,284

1,289

2,470

EBITDA

3,178

3,846

3,948

3,910

4,052

4,079

4,425

4,916

3,783

5,095

2,791

-

Capital investment

566

679

403

842

695

423

981

917

1,097

1,694

-

-

Depreciation

390

418

449

405

438

423

404

697

897

1,091

-

-

Total assets

31,192

34,48135,186

34,64536,52439,313

43,82046,33549,42656,00956,385-

Net assets

16,99018,783

20,231

21,102

22,71924,74526,75628,38729,022

32,06632,677

-

808

806

636

508

501

500

853

1,106

3,875

5,315

-

-

Result of Operations (million yen)

Financial Position (million yen)Interest-bearing debt
Cash Flows (million yen)
Cash flows from operating activities

2,077

1,887

1,818

1,945

2,737

2,429

2,699

4,385

4,196

1,227

1,656

-

Cash flows from investing activities

△ 494

△ 660

828

△ 829

△ 646

△ 506 △ 1,551△ 5,205△ 2,264△ 2,373

△ 900

-

426

△ 389

△ 699 △ 1,092 △ 1,032

△ 703

△ 915

△ 992

1,060

△ 22

△ 1,428

-

4,798

5,636

7,626

7,594

8,660

9,893

10,1338,305

11,317

10,164

9,510-

Profit attributable to owners of parent
per share

60.77

72.13

75.91

81.01

93.29

94.25

102.65107.46

59.60

87.26

50.58

96.95

Net assets per share615.12679.27730.49774.18846.59922.62996.99

1,071.09

1,110.01

1,170.84--

Dividend per share

14.00

15.50

20.00

22.00

23.00

24.00

26.00

29.00

31.00

32.00

-

34.00

Gross profit margin (%)

6.5

6.8

6.7

6.9

7.0

6.7

6.8

6.7

5.6

5.4

5.3

5.4

ROE (%)

10.0

11.1

10.8

10.9

11.4

10.7

10.7

10.4

5.4

7.7

-

10% or higher

Equity ratio (%)

54.5

54.4

57.4

60.8

62.1

62.8

61.0

61.2

58.7

53.7

54.4

-

DOE (%)

2.3

2.4

2.8

2.9

2.8

2.7

2.7

2.8

2.8

2.8

-

2.5% or higher

Stock closing price (yen)

606

718

786

834

933

939

1,006

929

1,069

1,017

1,000

-

Price earnings ratio (times)

10.0

10.0

10.4

10.3

10.0

10.0

9.8

8.6

17.9

11.7

-

-

Cash flows from financing activities
Cash and cash equivalents, end of year

Per Share Information (yen)Financial Indicators

Stock Price Index

60

Quarterly Highlights
Consolidated
Net sales (million yen)
19,193
17,862
16,053

15,665
13,613Q1

14,350Q2

Q314,19914,313Q4Q115,585

Q2

19/3

Q3

14,647

Q4

14,112

Q1

14,83915,117

15,492

Q2

Q3

Q4

20/3

16,326

16,971

17,036Q4

Q1

14,978

Q1

Q2

21/3

Q3

Q2

22/3

Q3

Q4

Q3

Q4

23/3

Operating income (million yen)
1,268
1,147

1,203

987
891

875

858
660

Q2

Q3

19/3

Q4

Q1

Q2

Q3

20/3

Q4

1,052
911

885

Q4

Q1

808

760

Q1

1,064

988

970

915

Q1

629

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q2

23/3

61

Quarterly Highlights
Industrial Materials
Net sales (million yen)

9,175

8,919
7,664

Q1

7,968

Q2

7,907

Q3

Q4

9,227

8,371

Q1

Q2

19/3

Q3

8,685

Q4

8,758

Q1

9,025

Q2

20/3

9,536

Q3

9,961
9,237

Q4

7,826

8,104

Q1

Q2

21/3

Q3

9,655
8,692

8,591

Q4

Q1

Q2

22/3

Q3

Q4

Q3

Q4

23/3

Segment profit or loss (million yen)
672

640

474

669

509

593

553

544
472
421

573

574

459

430

393

538

531

329

Q1

Q2

Q3

19/3

Q4

Q1

Q2

Q3

20/3

Q4

Q1

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

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

Q4

Q1

Q2

23/3

62

Quarterly Highlights
Structural Steel Materials
Net sales (million yen)
5,244
4,597
3,913

4,225

4,412
4,019

4,322
3,859

3,835

3,467

Q1

Q2

Q3

Q4

Q1

Q2

19/3

Q3

Q4

Q1

3,658

Q2

20/3

3,616

Q3

3,293

Q4

4,299

4,328

Q2

Q3

4,475

3,954

3,516

Q1

21/3

Q4

Q1

Q2

22/3

Q3

Q4

Q3

Q4

23/3

Segment profit or loss (million yen)
552
497
388

416

482

471
431

404

399
360

338

376

311
260

240

252

217
132

Q1

Q2

Q3

19/3

Q4

Q1

Q2

Q3

20/3

Q4

Q1

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q4

Q1

Q2

23/3

63

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

2,035

Q1

2,156

2,148

Q2

Q3

2,272

Q4

2,107

Q1

2,035

2,101

Q3

Q4

Q2

19/3

2,237

2,155
1,963

1,886

Q1

Q2

20/3

Q3

2,126

2,226

2,323

2,223

2,370

1,933

Q4

Q1

Q2

21/3

Q3

Q4

Q1

Q2

22/3

Q3

Q4

Q3

Q4

23/3

Segment profit or loss (million yen)

112

106

97

96
85

72

66

63
52

69
44

26

Q1

66

59
42
28

26

Q2

Q3

19/3

Q4

Q1

Q2

Q3

20/3

Q4

Q1

57

Q2

Q3

21/3

Q4

Q1

Q2

Q3

22/3

Q4

Q1

Q2

23/3

64

Quarterly Highlights
Scaffolding Construction
Net sales (million yen)

2,070
1,702

Q1

Q2

Q3

Q4

Q1

Q2

19/3

Q3

Q4

Q1

Q2

20/3

Q3

Q4

Q1

2,001

1,795

Q2

21/3

1,923
1,746

Q3

Q4

Q1

Q2

22/3

Q3

Q4

Q3

Q4

23/3

Segment profit or loss (million yen)

107

50

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

△ 33

△ 33

Q4

Q1

△ 81

19/3

20/3

21/3

22/3

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

Q2

△ 75

23/3

65

66

Official SNS accounts
KONDTEC opened new 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