SWCC Group
Supplementary Material
for the Third Quarter of the Fiscal YearEnding March 2020
SWCC SHOWA HOLDINGS CO., LTD.
(TSE1: 5805)
February 3, 2020

https://www.swcc.co.jp

FY3/2020 3Q Overview of Financial Results
Results: Performance was steady. Operating income increased by 50% YoY.
• In the Energy & Infrastructure operations, sales and profits increased due to strong demand for constructi​on-related​ applications reflecting
redevelopment demands in the metropolitan area, measures against the resilience of power infrastructure, and demand for renewable energy.
• In the Communications and Industrial Devices operations, segment sales decreased due to sluggish overseas sales of optical fibers.
• Sales and profits increased due to continued strong sales of communication cables for domestic construction-related applications and for datacenters.
• In the Electronic Devices and Components operations, sales of high-grade wire materials for electronic components were firm. Sales andprofits decreased due to the continued slump in demand for magnet wires used in electrical machinery and other applications.

Strategy:

3Q Progress Rate (Net Sales/Operating Income)(Unit:100 million yen)・ Aim to optimize prices for construction and electronics sales.
・ Power System operations are promoting a new business model.
・ Promote measures to ensure a stable supply of products for automobiles.

・ Cost reductions by improving operational efficiency.
・ Continue to improve profitability (increase operating income margin)
・ Dividend forecast revised upward to 15 yen per share.

November 5
Sales Plan
173 billion yen 74.8%

November 5
Operatingincome Plan
7.3 billion yen 92.9%

Plan to increase year-end dividend from 10 yen to 15 yen2

Macroeconomic Environment• Domestic copper prices (on a yen basis) were on a recovery trend (2% YoY) due to expectations of easing of the U.S.China trade friction, but are currently on a downward trend due to a decline in demand caused by the new type of
infectious diseases.
• Domestic shipments of copper wire remained stable, mainly in construction and electric power sales.
(Monthly Average) Domestic Copper Price Trends-Most Recent 12 Months(Thousandyen/ton)Copper Cable Shipment Volume (tons)
200,000

1,100
1,000

150,000

900
800
100,000

700
600
500

50,000

Annual appreciation 102%4003000200Jun

Feb Mar

AprMayJunJulAug

Sep

Oct

2019

Source from Japan Electric Wire Manufacturers AssociationNovDec2017 Apr- Jul-Sep

Oct-Dec 2018 Jan- Apr-Jun

JunCommunication

Jul-Sep

Mar
Electric power

Electrical machinery

Oct-Dec 2019 Jan- Apr-Jun

Jul-Sep

Oct-Dec

Mar
Automotive

Electrical construction and sales

Est.
Other domestic demand

Source from Japan Electric Wire Manufacturers Association3

3Q Consolidated Statements of Income (YoY)• Net sales decreased by 1.9% YoY and the gross margin improved by +1.9 point to 13.9%.
As a result, operating income increased by 50% YoY.
(Unit:100 millionyen)

FY20183Ｑ Actual

Composition%

FY20193Ｑ Actual

Composition%

YoY%

Net sales

1,317－1,293－△1.9%

Gross profit

158

12.0%

179

13.9%

+13.2%

Operatingincome

45

3.4%

67

5.2%

+50.0%

Ordinary
income

38

2.9%

63

4.9%

+62.7%

272.1%

45

3.5%+65.7%Net income
attributable toowners of parent

4

3Q Segment Information (YoY)• Introduced a new segment structure from this fiscal year. Sales and profits are driven by the Energy and Infrastructure
operations.
Sales in the Communication and Industrial Devices operations declined, but profits increased thanks to the improved profitability.
FY20183Q Results(Unit:100 million yen)
Net sales

FY20193Q Results

Operatingincome

Net sales(Profit margin %)Energy andInfrastructure

632

Communication andIndustrial Devices

249

Electrical equipment
and components

399

25667

Net sales

48

Operatingincome+35+23

△20+2

△38

△3(7.2%)229(6.7%)

6

Operatingincome(Profit margin %)(4.0％)

17

Change19(8.6%)361

3(0.9％)

1.6%

Others(New business)

37（22）△3(△1)

36(22)△3(△1)△1△0Total1,31745

1,29367△24+22（3.4%)(5.2%)* The Company has partially recategorized its segments from FY3/2019 3Q.

5

FY3/2020 Revision to Full-year Business Forecast and Dividend Forecast• Full-year results and dividend forecast revisions in light of the results up to Q3(Unit:100 million yen)

FY2018ResultComposition%

FY2019PlanComposition%

FY2019
Revised plan

Composition%

RevisedamountChange%Net sales

1,771－

1,730－

1,700－△30△1.7%

Operatingincome

66

3.8%

734.2%

80

4.7%+7+9.6%

Ordinaryincome

56

3.2%

66

3.8%734.3%+7+10.6%

Net income
attributable toowners of parent

45

2.6%

482.8%

482.8%－－Dividend

7 yen
per share－

10 yenper share－

15 yenper share－+5yen－6

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

FY2017FY2018FY2019

600
400

389

423

430

409

430

429

456

464

434

427

454

407 Est.

200
0
1Q

2Q

(Unit:100 million yen)

3Q

4Q

Changes in Cumulative Net sales

2,000
1,681

1,500
1,254
1,000500

After revision798389

423853

1,317

1,771 1,700 Est.

1,293859

430

01Q

2Q

3Q

4Q

After revision7

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

Changes in quarterly operating income

30

26
21

20
1610FY2017

111223

FY2018FY2019

25
21

15

15

13 Est.

100
1Q

2Q

(Unit:100 million yen)

3Q

4Q

After revision

Changes in cumulative operating income

10080 Est.

80
67

60
4240
20

11

121626

47

62

66

45

2201Q

2Q

3Q

4Q

After revision

8

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

1,000

100Net sales

Net sales (3Q)

Operating income

879 Est.

867
800

Operating income (3Q)

806

8057 Est.

600

436048400

4031632604667

2523200

2000
FY2017FY2018FY2019E*Figures for FY2017 are based on simple calculations by our company.
Forecast for FY2019 E is the revised figures.
The Company has partially recategorized its segments from FY3/2019 3Q.

■ Characteristics: Our Core Businesses① Power cables connecting from power stations to houses② SICONEX®, our proprietary power device component③ Electric wires and seismic isolation components used inbuildings■ Demand for construction-related applications due to theredevelopment demand in the metropolitan area, measuresagainst the resilience of the power infrastructure, and demand forrenewable energy continued to be strong.
Net sales: 66.7 billion yen (+5.5% YoY)
Operating income: 4.8 billion yen (+90.3% YoY)
■ Full-year forecast: Net sales increased by 1.2 billion yen YoY to87.9 billion yen as demand for construction-related applications
and electric power infrastructure remained strong.
Operating income is expected to increase by 1.4 billion yen to 5.7billion yen.

Operating margin: 6.5% (5.0% in the previous fiscal year)
9Communications and Industrial Devices Operations
Results & Forecast(Unit:100 million yen)

500

50
Net sales

Net sales (3Q)

Operating income

Operating income (3Q)

400

40327

318

301 Est300

3023 Est.

2218200

2019238 16229249 17100

1000
FY2017FY2018FY2019E■ Characteristics: Providing communication cables forvarious markets and industrial devices on a global basis■ Overseas demand for optical fibers continued to deceleratefrom the 2H of the previous fiscal year. Communication cables
for domestic construction-related applications and data centersremained strong.
We are undergoing structural reform for wire harnesses.
Net sales: 22.9 billion yen (-8.2% YoY)
Operating income: 1.9 billion yen (+18.3% YoY)
■ Full-year forecast: Net sales were 30.1 billion yen, a decreaseof 2.6 billion yen YoY, due to sluggish demand caused by trade
frictions between the U.S. and China.
Operating income is expected to increase 500 million yen YoY
to 2.3 billion yen due to strong demand for domesticcommunication cables.
Operating margin: 7.6% (5.5% in the previous fiscal year)*Figures for FY2017 are based on simple calculations by our company.
Forecast for FY2019 E is the revised figures.

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

10Electrical equipment and components Operations
Results & Forecast(Unit:100 million yen)
700
Net sales
Operating income

Net sales (3Q)
Operating income (3Q)

600

50030

■ Sales of high-grade wire materials for electronic components
were firm, but demand for wires for electrical machinery andother applications remained sluggish.

522506467 Est.
40020399361300
13200376108101005 Est.
6300FY2017

FY2018FY2019E*Figures for FY2017 are based on simple calculations by our company.
Forecast for FY2019 E is the revised figures.

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

We aim to improve profitability by accelerating structuralreforms.
Net sales: 36.1 billion yen (-9.4% YoY)
Operating income: 300 million yen (-48.3% YoY)
■ Full-year forecasts: Demand for high-grade wire continues tobe firm, but we cannot expect a rebound in demand for thecurrent fiscal year. As a result, net sales are expected todecrease by 5.5 billion yen YoY to 46.7 billion yen.
Operating income was 500 million yen, a decrease of 300
million yen from the previous fiscal year.

Operating margin: 1.1% (1.6% in the previous fiscal year)
11Consolidated Balance Sheet(Comparison with the previous fiscal year-end)
・ Equity ratio was 31.8% (up 3.7 points from the end of the previous fiscal year)
March 31,2019

December31, 2019

4955+6

Accounts receivableand other receivables

434402△3221345741

233
44734+20△1△7Property, plant andequipment392

396+4Intangible assets

1211△1Investments and otherassets

96

110+14500

517+17

Inventories
OthersTotal current assets

Total fixed assets

March 31,2019

ChangeCash and deposits

198△14Short-term borrowings

335

317

△18Others

150697121143658
126△7△396765△2Total long-term liabilities

188191+3Total liabilities

885

849

△3624255
1049356

242
57
5350
402

0+2+43+1+46

1,241

1,251+10

Total current liabilities
Long-term debtOthers

Capital stock

OthersTotal net assets

1,251+10Change

212

Retained earnings

1,241

December31, 2019

Notes & accounts
payableCapital surplus

Total assets(Unit:100 million yen)

Total liabilities and net
assets+512

SWCC SHOWA HOLDINGS CO., LTD.
(TSE 1: 5805)

Contact
SWCC SHOWA HOLDINGS CO., LTD.
Corporate Planning Department,
Business Strategy Division
TEL:044-223-0520
Forward-looking statements in this document are based on information available at the time of
publication and contain potential risks and uncertainties.
Therefore, actual results may differ materially from those projected in the forward-looking
statements as a result of various factors.
Factors that could influence actual results include economic conditions, demand trends, rawmaterial prices, and exchange rate fluctuations, as well as other items not limited to the above.

https://www.swcc.co.jp