FY2015
Summary of Financial Results
May 13, 2016

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
03
FY 2015 Full-Year Results (Consolidated)04
Orders Received by Segment (Consolidated)
05
Net Sales by Segment (Consolidated)
06
Ordinary Income and Loss by Segment(Consolidated)
07
Quarterly Results (Consolidated)
08
Operating Results over the Last 5 Years (Consolidated)09
Orders Received by Industry (Consolidated)
10
Orders Received by Type11
Major Projects
12
Major Projects over 1 Billion Yen (by Industry)
13
Profit Improvement Factors and Measures
14
Balance Sheet (Consolidated)
15
Statements of Cash Flows (Consolidated)
16
Dividends and Payout Ratio
17
FY 2016 Forecast (Consolidated)
18
FY 2016 Forecast of Orders Received by Segment (Consolidated)
19
FY 2016 Forecast of Net Sales by Segment (Consolidated)
20
Long-Term Vision “Century 2025”
21
Medium-Term Management Plan “Century 2025” Phase1「Key Initiatives and Strategies」 22
Medium-Term Management Plan “Century 2025” Phase1 「ESG Policy」
23
2Key Points of Financial Results〈Orders received〉
Orders received by Facilities Construction Business increased because of highperformance of industrial HVAC such as electrical machinery and automobile ,etc. under the influence of manufactures returning to domestic.
Orders received by Plant & Machinery Systems Business increased because oflarge-scale project orders received by both Machinery Systems andEnvironmental Systems.

〈Sales , Profit〉
Net sales changed relatively flat year-on-year basis , but gross profit margin
was improved due to improved work efficiency in addition to rigorous costmanagement. Above all , gross profit margin of large-scale projects was greatly
improved.
As a result, all profit categories such as gross profit, operating income, ordinary
income, and profit attributable to owners of parent changed smoothly and weregreatly improved.
3

【 Overall Results 】
FY 2015 Full-Year Results(Consolidated)(Millions of yen)
FY 2014

FY 2015

Year on year

Rate ofchange(%)

Orders received

173,398

183,270

9,871

5.7

Balance carried forward

102,019

106,388

4,368

4.3

Net sales

179,598

178,901

(696)

(0.4)

Completed construction contracts

178,220

177,262

(957)

(0.5)

Real estate business and Others

1,378

1,638

260

18.9

17,96622,929

4,963

27.6

17,64822,556

4,908

27.8

318

373

55

17.3

10.0

12.8

2.8

―

Selling, general and administrative expenses

15,015

16,4191,404

9.4

Operating income (loss)

2,951

6,509

3,558

120.6

Non-operating income

1,607

2,365

758

47.2

Non-operating expenses

749

740

(8)

(1.2)

Ordinary income (loss)

3,809

8,135

4,325

113.6

Profit attributable to owners of parent (loss) *

2,461

5,327

2,866

116.4

Gross profit
Completed construction contracts
Real estate business and Others
Gross profit margin (%)＊With accounting standards about the combine after the revision having been applied from the fiscal year, “profit attributable toowners of parent” in this consolidate account year expresses “net income” in previous consolidated account year.

4【 Orders Received 】
Orders Received by Segment (Consolidated)(Millions of yen)Segment

FY 2014

FY 2015

Year on year

Rate ofchange(%)

HVAC and Plumbing for Buildings

70,77866,172(4,605)(6.5)

Industrial HVAC

46,76552,522

5,756

12.3

Electrical Systems

23,21522,667

(548)

(2.4)

Facility Systems

9,272

11,070

1,797

19.4

150,032

152,432

2,400

1.6

Machinery Systems

5,716

10,309

4,593

80.4

Environmental Systems

16,767

19,610

2,842

17.0

Total of Plant & Machinery Systems Business

22,48329,919

7,436

33.1

Sub-total

172,516

182,352

9,836

5.7

1,285

1,532

247

19.3

Others

481

524

42

8.9

Adjustments *(884)(1,139)(254)―

173,398

183,270

9,871

5.7

Total of Facilities Construction Business

Real Estate Business

Total*Adjustments eliminate inter segment transactions included in each segment.

5

【Net Sales】
Net Sales by Segment (Consolidated)(Millions of yen)Segment

FY 2014

FY 2015

Year on year

Rate ofchange(%)

HVAC and Plumbing for Buildings

72,37164,492(7,878)(10.9)

Industrial HVAC

47,01552,084

5,069

10.8

Electrical Systems

21,884

22,9581,073

4.9

Facility Systems

9,897

10,416518

5.2

151,169

149,952(1,216)(0.8)

Machinery Systems

9,953

9,217

(736)

(7.4)

Environmental Systems

17,48518,7341,248

7.1

Total of Plant & Machinery Systems Business

27,43927,951512

1.9

Sub-total

178,608

177,904

(704)

(0.4)

1,285

1,532

247

19.3

Others

508

542

34

6.7

Adjustments *(803)(1,077)(274)―

179,598

178,901

(696)

(0.4)

Total of Facilities Construction Business

Real Estate Business

Total＊ Adjustments eliminate inter segment transactions included in each segment.

6

【Profit】
Ordinary Income and Loss by Segment (Consolidated)(Millions of yen)Segment

FY 2014

Facilities Construction

FY 2015

Year on year

Rate ofchange(%)

Segment Profit (Loss)

2,943

7,698

4,755

161.6

Machinery Systems

105

275

170

162.3

Environmental Systems

24

(315)

(340)

―

3,073

7,658

4,584

149.2

Real Estate Business

207

233

25

12.1

Others

48

52

3

7.8

Adjustments *

479

191

(287)

(60.1)

3,809

8,135

4,325

113.6

Sub-total

Total＊ Adjustment of profit and loss by Segment to all company profit and loss that amount distribute into each segment.

7

【Overall Result】
Quarterly Results (Consolidated)(Millions of yen)
FY 2014

FY 2015

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Orders received

42,48938,75855,92336,226

46,38552,82048,31135,753

Net sales

32,82542,682

47,14556,94534,49540,98547,02256,397Gross profit

1,700

3,224

4,753

8,287

3,291

4,812

6,043

8,783

5.2

7.6

10.1

14.6

9.5

11.7

12.9

15.6

Selling, general and administrative expenses

3,786

3,845

3,552

3,831

3,921

4,005

3,783

4,709

Operating income (loss)(2,085)

(620)

1,201

4,456

(630)

807

2,259

4,073

(6.4)

(1.5)

2.5

7.8

(1.8)

2.0

4.8

7.2

(1,846)

(478)

1,612

4,522

(254)

778

2,554

5,055

-

(18)

(116)

(312)

(55)

30

96

(371)

(1,215)

(111)

1,119

2,669

(266)

521

1,790

3,282

Gross profit margin (%)

Operating profit margin (%)
Ordinary income (loss)
Extraordinary income (loss)
Profit attributable to owners of parent (loss)＊ With accounting standards about the combine after the revision having been applied from the fiscal year, “profit attributable toowners of parent” in this consolidate account year expresses “net income” of FY 2014 in previous consolidated account year.

8【 Operating Results】
Operating Results over the Last 5 Years (Consolidated)(Millions of yen)Orders received
and Net sales

Profit200,000

10,000Ordinary income (rightaxis)

150,000

5,000

Profit attributable toowners of parent (rightaxis)

Orders received (left axis)

100,000

Net sales (left axis)
050,0000-5,000
12

13

14

15

16

FY

（Forecast）＊ With accounting standards about the combine after the revision having been applied from the fiscal year, “profit attributable toowners of parent” in this consolidate account year expresses “net income” of FY2012~ FY2014.

9【Orders Received】
Orders Received by Industry(Consolidated)(Millions of yen)

35,000FY 2014
FY 2015
30,00025,00020,00015,00010,0005,000

0Medical services
Wholesale and retail
trade
Miscellaneous
business services
Education

Real estate
Finance andInsurance
Food
ChemicalMachinery

PharmaceuticalIndustry
Automobile
Electrical Machinery10【Orders Received】
Orders Received by Type(Millions of yen)
FY2012FY2013

FY2014FY2015Diff.

Orders received (Non-consolidated ：Facilities Construction Business)

130,574

137,027

143,708

145,069

1,361

Orders received from general contractors (Non-consolidated ：Facilities Construction Business)

64,40573,60868,96372,751

3,788

Rate of Orders received from general contractors(Non-consolidated：Facilities Construction Business) (%)

49.3

53.7

48.0

50.1

2.1

165,800

168,295

173,398

183,270

9,871

Orders received from overseas projects (Consolidated) *

1,347

3,055

2,931

2,343

(587)

Rate of Orders received from overseas projects(Consolidated) (%)

0.8

1.8

1.7

1.3

(0.4)

94,402

88,473

93,33999,9206,581

Rate of Orders for renewal construction (Consolidated) (%)

56.9

52.6

53.8

54.5

0.7

<Ref.>Net sales for renewal construction (Consolidated)

87,533

98,02496,46896,325(143)

Orders received(Consolidated)

Orders received for renewal construction (Consolidated)*SANKI CONSTRUCTION ENGINEERING(SHANGHAI)CO.,LTD. of unconsolidated subsidiary is not included inconstruction orders received from overseas project .

11【Orders Received】
Major Projects
・The 1st Urban Redevelopment BusinessA of Nihonbashi-Muromachi 3-chome（Plumbing works）〈 New construction work 〉

・A for 1 period of Mitsukoshi Nihonbashi Main Store Overall CM Project of Facilities（ Air Conditioning (HVAC) works and Plumbing works ） 〈 Renovation work 〉

・Hibiya Heat Supply Center（ Air Conditioning (HVAC) works and electrical works ）〈 New construction work 〉

・(Tentative name) New Nissay Hospital Construction Project（ Air Conditioning (HVAC) works ・ Plumbing works・electrical works ）〈 New construction work 〉

・Asahi Nakanoshima West Tower（Air Conditioning (HVAC) works)〈 New construction work 〉

・The Second Factory of the IKEDAMOHANDO CO.,LTD.
（Air Conditioning (HVAC) works)〈 New construction work 〉

・Clean Center of Syuto Environmental Hygiene Association（Waste treatment works）〈Overall renovation work〉

・Nomi Clean Center（Waste treatment works） 〈 Renovation work 〉

・Haramachi Clean Center in Minami-Souma City
（ Waste treatment works ） 〈 Renovation work 〉

Other 10 projects* The property name is the name which is being used in us and is sometimes different from the name on theconstruction contract.

12【Orders Received】
Major Projects over 1 Billion Yen(by Industry)
FY 2014

FY 2015

Office23Complex building―

1

Commercial facility

11Factory

1

5

School―Hospital

2

Research institute2

Government officebuilding

2

Waste processing
facility―

Water and sewage
treatment facility

1

Others1

12 Projects(20,619 million yen)1
2

19 Projects(31,476 million yen)

1
＊Construction orders
received from
Customers: 4 Projects＊Construction orders
received fromgeneral contractors:8 Projects―

3
1＊Construction orders
received from
Customers: 6 Projects＊Construction orders
received fromgeneral contractors:13 Projects

113

【 Profit 】
Profit Improvement Factors and Measures○Thorough cost management.
○Maintenance of the site support system.
・Purchasing operations support by the Procurement Division.
・Documentation support by the Site-Documentation Support
Center.
・Quality management activities by technical experts.
○Strengthening of relations with business partners.
・Enforcement of the liaison Meeting for Subcontractor
Groups.
・Establishment of the Sanki Super Meister System.

14

【Financial condition】
Balance Sheet (Consolidated)(Millions of yen)
End of
FY 2014

End of
FY 2015

Year on Year

Rate ofchange(%)

Current assets

116,224

115,491

(732)

(0.6)

Noncurrent assets

60,15753,931(6,226)(10.3)

39,70434,789(4,914)(12.4)

72,106

72,863

757

1.1

1,314

1,186

(128)

(9.8)

Noncurrent liabilities

19,406

12,001(7,404)(38.2)

Total net assets

84,86984,557

(311)

(0.4)

15,33213,012(2,319)(15.1)

Total assets

176,382

169,423(6,958)(3.9)

Book-value per share (yen)1,334.65

1,328.60(6.05)(0.5)

Equity ratio (%)

48.1

49.8

1.7

―

Interest-bearing liabilities(consolidated)

6,332

5,992

(340)

(5.4)

Investment securities
Current liabilities
Provision for loss on
construction contracts

Unrealized gains onavailable-for-sale securities

15

【CF】
Statements of Cash Flows (Consolidated)
・ It increases in the balance of cash and cash equivalents more than the previous end of the fiscal year.
Cash flows from operating activities was increased by increase of profit before income taxes.
Cash flows from investing activities was increased by withdrawal of time deposits and sales of investment securities.
Cash flows from financing activities was decreased by Payment of dividends.
(Millions of yen)
Year
on
Year

FY 2011

FY 2012FY 2013

FY 2014

FY 2015

Cash flows from operating activities(2,697)

9,729(9,403)

(139)

5,220

5,360

Cash flows from investing activities(1,046)(9,481)(3,506)

3,440

5,520

2,080

Cash flows from financing activities(280)(1,028)(4,152)(2,901)(1,826)

1,074

41,09740,36723,51023,66732,501

8,833

Capital investment(including intangible assets)

815

645

545

395

855

460

Depreciation and amortization

1,367

1,207

740

723

723

0

Cash and cash equivalents at end of FY

16

Dividends and Payout Ratio
・Plan to pay a larger dividend on stocks to 18yen from 15yen a year in a regular dividendand extra dividend at 12yen was put into effect.
FY
2011

FY
2012

FY
2013

FY
2014

FY
2015

2.46

(71.04)

26.46

38.30

83.84

Cash dividends per share: regular dividends (yen)

15

15

15

15

18

Cash dividends per share: commemorative dividends (yen)

―

―

―

5

―

Cash dividends per share: extra dividends (yen)

―

―

―

―

12

15

15

15

20

30

Payout ratio (consolidated) (%)

609.8

―

56.7

52.2

35.8

Number of shareholders at end of FY

4,015

4,169

3,598

3,375

3,397

447

492

654

930

901

Acquisition of treasury stock (thousand shares)

―

1,988

4,000

2,000

―

Retirement of treasury stock (thousand shares)

―

―

4,800

3,000

―

ROE (Return on Equity) (%)

0.2

△6.4

2.3

3.0

6.3

ROA (Return on Assets) (%)

1.4

1.6

1.9

2.2

4.7

Earnings per share (yen)Cash dividends per share (yen)Stock price at end of FY (yen)<Reference>17

【Overall Forecast】
FY 2016 Forecast (Consolidated)(Millions of yen)
FY 2012FY 2013

FY 2014

FY 2015AFY 2016
Forecast
B

Increase/decrease
B-A

Orders received

165,800

168,295

173,398

183,270

183,000

(270)

(0.1)

Balance carried forward

111,414108,219

102,019

106,388

104,388(2,000)(1.9)

Net sales

154,658

171,496

179,598

178,901

185,000

6,099

3.4

Gross profit

17,59018,423

17,96622,92923,00071

0.3

16,163

18,111

17,64822,55622,650

94

0.4

11.4

10.7

10.0

12.8

12.4

(0.4)

―

10.6

10.6

9.9

12.7

12.4

(0.3)

―

Operating income(loss)

2,391

2,818

2,951

6,509

6,500

(9)

(0.1)

Ordinary income(loss)

2,680

3,146

3,809

8,135

7,000

(1,135)(14.0)

Profit attributable to owners ofparent (loss)*(4,992)

1,763

2,461

5,327

4,900

(427)

(8.0)

Completed construction contracts

Gross profit margin (%)
Completed construction contracts (%)

Rate ofchange(%)＊ With accounting standards about the combine after the revision having been applied from the fiscal year, “profit attributable to18
owners of parent” in this consolidate account year expresses “net income” of FY 2012~FY 2014 in previous consolidated account year.

【Orders Received Forecast】
FY 2016 Forecast of Orders Received by Segment（Consolidated）(Millions of yen)
FY 2015(Result)

Segment

FY 2016(Forecast)

Diff.

HVAC and Plumbing for Buildings

66,172

68,9002,728

Industrial HVAC

52,52250,000(2,522)

Electrical Systems

22,66721,000(1,667)

Facility Systems

11,07010,000(1,070)152,432

149,900(2,532)

Machinery Systems

10,309

9,500

(809)

Environmental Systems

19,61022,0002,390

Total of Plant & Machinery Systems Business

29,91931,5001,581

Sub-total

182,352

181,400

(952)

1,532

1,600

68

524

500

(24)

(1,139)

(500)

639

183,270

183,000(270)

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments*
Total＊ Adjustments eliminate inter segment transactions included in each segment.

19

【Net Sale Forecast】
FY 2016 Forecast of Net Sales by Segment（Consolidated）(Millions of yen)
FY 2015(Result)

Segment

FY 2016(Forecast)

Diff.

HVAC and Plumbing for Buildings

64,492

72,9008,408

Industrial HVAC

52,08450,000(2,084)

Electrical Systems

22,95822,000(958)

Facility Systems

10,416

10,000(416)

149,952

154,900

4,948

Machinery Systems

9,217

9,500

283

Environmental Systems

18,73419,000266

Total of Plant & Machinery Systems Business

27,951

28,500549

Sub-total

177,904

183,400

5,496

1,532

1,600

68

542

500

(42)

(1,077)

(500)

577

178,901

185,000

6,099

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments*
Total＊Adjustments eliminate inter segment transactions included in each segment.

20

Long-Term Vision “Century 2025”
We will strive over the next 10 years to become the company of choice for customers byfurther enhancing the quality and reliability we provide.

2022–2025
Phase 34-year period to become
the company of choice

2019–2021
Phase 23-year period toenhance reliability

2016–2018
Phase 13-year period toenhance quality
FY2016FY2019FY2022

FY2025■ Phase 1 → We will enhance quality by refining our skills and wisdom and developing our humanresources as a foundation for responding to change.
■ Phase 2 → Superior quality generates customer satisfaction, and customer satisfaction andconfidence leads to reliability.
■ Phase 3 → Increased reliability will encourage more customers to choose our company.

21

Medium-Term Management Plan “Century 2025” Phase1

Key Initiatives and Strategies
1. Passing on Technical Skills
We will renovate the Sanki Yamato Building (Yamato City, Kanagawa Prefecture) andreopen it as the “Sanki Techno Center (tentative name)”. This will be a comprehensive
training facility that imparts and develops the technical skills at the backbone of the SankiEngineering Group.
2. Anticipating the Age of Maintaining Building Stock
We will give a boost to the LCE business, as described in our “SANKI VITAL PLAN 90th”.
This will bolster our business foundation, allowing us to maintain sound corporate
management, even if the construction market experiences a slowdown.

3. Developing Next-Generation Technologies
We will establish a new R&D base inside the “Sanki Techno Center”. Here we will develop
technologies for the next generation while keeping up with advances in new technologies
such as robotics, IoT, and artificial intelligence.
22

Medium-Term Management Plan “Century 2025” Phase1

ESG Policy
Organically Integrate Existing Activities and Seek Strategic Deployment
OutlineEnvironment

As evidenced by the Paris Agreement, which created an international framework against global warming, and the
Act on Promotion of Global Warming Countermeasures as well as other legislation passed in Japan in response,
protecting the global environment is becoming even more important. Recognizing that the business of the SankiEngineering Group could have a direct impact on protecting the global environment:
1. In our core Facilities Construction Business, we will contribute to reducing greenhouse gas emissions in theindustrial and operational sectors of society by developing and providing various facilities and systems for air
conditioning, plumbing, electricity, and network systems, as well as related services;
2. In our Plant & Machinery Systems Business, we will develop equipment that offers greater energy savings; and3. We will be mindful of reducing the impact on the global environment in all aspects of our business operations
and pursue activities based on ISO 14000.

Social

1. We will continue our “SANKI YOU Eco Contribution Point”, social contribution activity, in which we extend
donations to environmental conservation organizations according to the level of reduction in greenhouse gas
emissions.
2. We intend to create work environments that are even more worker friendly by implementing measures against
long working hours and expanding opportunities for women and the elderly.

Governance

1. In fiscal 2016, we will launch a full-scale initiative under the “Sanki Engineering Corporate Governance
Guidelines” established in December 2015.
2. Under the leadership of the Board of Directors, we will operate and improve our internal control system andrisk management systems to emphasize effectiveness.
3. We will abide by our rules of conduct, including the “Sanki Engineering Group Compliance Declaration”, “SankiEngineering Group Code of Conduct and Action Guidelines”, and “Sanki Engineering Group Behavioral
Standards and Guidelines”, and strive to maintain and develop our corporate culture of ethical conduct.

23

Thank you for your kind attention.
Remarks on Business Forecast
The descriptions contained in this material, except for those as to past or present facts, are based on
anticipations, assumptions, evaluations and estimations in light of the information available as of May 13,2016.
Therefore, the actual results may differ from those presented herein as a consequence of various factors
including uncertainties and prospective changes in the economic environment.
＜Major factors＞
 Credit exposure of client companies.
 Sudden changes in material and equipment cost and labor cost.
 Stock Market fluctuations.
 Increase in retirement benefits and debts.
 Country risk.
 Accident and disaster in Facilities construction and other.

 Outbreak of the unprofitable project.
 Risk in Real Estate Business.

For inquiries please contact: Risk in Regal action.

Corporate Communications
Department

 Risk in Regal regulation.

TEL：+81-3-6367-7041

 Outbreak of the natural disaster.

24