The 2nd Quarter FY2019
Summary of Financial Results
November 8, 2019

Sanki Engineering Co., Ltd.

1

Contents
Key Points of Financial Results
FY2019 2Q Results – Cumulative Results (Consolidated)
Orders Received by Segment (Consolidated)
Net Sales by Segment (Consolidated)<Reference> Gross Profit by Segment (Consolidated)
Quarterly Results (Consolidated)
Operating Results over the most recent 5 Years (Consolidated) <Orders Received/Net Sales>
Operating Results over the most recent 5 Years (Consolidated) <Profit>
Orders Received by Industry (Consolidated)
Orders Received by Type
Main Large-Scale Projects Received and Main Large-Scale Completed Construction Projects
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)
Profit Improvement Factors and Measures (Consolidated)
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
Dividends and Others
FY2019 Full-Year Forecast (Consolidated)
FY2019 Forecast of Orders Received and Net Sales by Segment (Consolidated)

030405
060708
0910111213141516171819202

Key Points of Financial Results<Orders Received>
In the Facilities Construction Business, orders received fell below those of the previous fiscal year due to factors suchas orders for large-scale projects in Industrial HVAC received in the same period of the previous fiscal year. The Plant &Machinery Systems Business saw great improvements, thanks to factors such as an order for a large-scale project inEnvironmental Systems. As a result, orders received declined year on year, but remained at a high level.
<Net Sales & Profit>
Net sales in the Facilities Construction Business increased year on year for all businesses due to progress being
steady for the large amount of construction carried forward, particularly large-scale construction.
In the Plant & Machinery Systems Business, both Machinery Systems and Environmental Systems showed great
increase in net sales.
The gross profit margin improved year on year thanks to initiatives such as ongoing thorough cost management andimproved work efficiency. Furthermore, all profit items increased due to the effects of increased revenue.
<Results Forecast>
In the first half of fiscal 2019, orders received, sales, and profit all exceeded the August 9, 2019 forecast due to strong
results, resulting in upward revisions to full-year forecasts for orders received, sales, and profit.
<Shareholder Returns>○The annual dividend forecast is now for 70 yen due to a 10 yen increase in regular dividends (+10 yen year on year).
(Forecast interim dividend: 35 yen, year-end dividend: 35 yen, annual dividend: 70 yen)
○2,000,000 shares of treasury stock to be acquired by the end of fiscal 2019.
2,000,000 shares of treasury stock retired on August 19, 2019.

3

【Overall Results】
FY2019 2Q Results – Cumulative Results (Consolidated)(Millions of yen)
September
2017

September
2018

September
2019

Year on year

Rate ofchange(%)

Orders received

95,775

103,819

100,901(2,918)(2.8)

Balance carried forward

147,026

167,809

158,885(8,924)(5.3)

Net sales

72,50680,723

91,845

11,122

13.8

71,561

79,71090,685

10,975

13.8

944

1,012

1,159

146

14.5

9,319

10,771

13,168

2,396

22.3

8,972

10,407

12,744

2,336

22.5

346

363

424

60

16.6

12.9

13.3

14.3

1.0

―

8,829

9,644

9,976

331

3.4

Operating income (loss)

489

1,126

3,191

2,065

183.3

Non-operating income and loss (expenses)

462413311(101)(24.5)

Ordinary income (loss)

952

1,540

3,503

1,963

127.5

(1,134)

(150)

109

259―

(95)

796

2,485

1,688

212.0

Completed construction contracts
Real estate and others
Gross profit
Completed construction contracts
Real estate and others

Gross profit margin (%)
Selling, general and administrative expenses

Extraordinary income (loss)
Profit attributable to owners of parent (loss)pt.

* Due to increased importance, SANKI CONSTRUCTION ENGINEERING (SHANGHAI) CO., LTD., was included within thescope of consolidation starting in the beginning of FY2019.

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

Rate ofChange (%)

September 2017

September 2018

September 2019

HVAC and Plumbing for
Buildings

28,86032,38532,810425

1.3

Industrial HVAC

27,06038,49528,741(9,753)(25.3)

Electrical Systems

10,39412,013

12,198185

1.5

Facility Systems

5,487

5,350

5,905

555

10.4

Total of Facilities Construction
Business

71,80388,24479,656(8,587)(9.7)

Machinery Systems

6,506

6,536

5,479

(1,057)(16.2)

Environmental Systems

16,634

8,776

14,933

6,156

70.1

Total of Plant & Machinery
Systems Business

23,141

15,313

20,413

5,099

33.3

94,945103,557

100,070(3,487)(3.4)

Real Estate Business

860

923

1,050

126

13.7

Others

305

320

324

4

1.3(335)

(982)

(543)

438

―

95,775

103,819

100,901(2,918)(2.8)

Sub-total

Adjustments *Total* “Adjustments” eliminate internal transactions included in each segment.

Year on year5

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

Rate ofChange (%)

September 2017

September 2018

September 2019Year on yearHVAC and Plumbing for
Buildings

27,802

27,111

32,580

5,468

20.2

Industrial HVAC

20,89829,77430,8491,075

3.6

Electrical Systems

8,785

8,647

9,845

1,197

13.9

Facility Systems

3,687

4,460

4,962

502

11.3

Total of Facilities Construction
Business

61,17369,99378,237

8,244

11.8

Machinery Systems

4,522

4,377

5,294

916

20.9

Environmental Systems

6,139

6,132

7,413

1,281

20.9

Total of Plant & Machinery
Systems Business

10,662

10,50912,707

2,198

20.9

71,83580,502

90,945

10,442

13.0

Real Estate Business

860923

1,050

126

13.7

Others

291

295

443

147

50.1

(482)

(998)

(593)

404

―

72,50680,723

91,845

11,12213.8

Sub-total

Adjustments*Total* “Adjustments” eliminate internal transactions included in each segment.

6

【Profit】<Reference> Ordinary Gross Profit by Segment (Consolidated)(Millions of yen)
September
2017

Ordinary Gross Profit by Segment (Consolidated)

Segment
HVAC and Plumbing for Buildings
Industrial HVACElectrical Systems

September
2018

September
2019

Year on year

Rate ofChange (%)

6,931

8,529

10,565

2,035

23.9

487

641

824

182

28.5

7,4199,171

11,390

2,218

24.2

Machinery Systems

885

798

998

200

25.0

Environmental Systems

707713386(327)(45.9)

1,592

1,512

1,384(127)

(8.4)

9,011

10,683

12,774

2,091

19.6

Real Estate Business

272

287

318

31

10.9

Others

114

96

124

27

28.3

Adjustments

(79)

(296)

(49)

247

－

9,319

10,771

13,168

2,396

22.3

Facilities Construction
Total of Facilities Construction
Business

Total of Plant & Machinery Systems
Business

Sub-total

Total

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【Overall Results】
Quarterly Results (Consolidated)(Millions of yen)

FY 2017

FY 2018

FY 2019

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

Orders received

38,20957,56643,881

51,45650,88552,934

51,22862,04846,69754,204

Net sales

32,93339,573

43,10254,54835,25245,47061,32370,26740,88250,962Gross profit

3,482

5,837

5,995

9,744

4,329

6,442

8,654

12,258

5,305

7,862

10.6

14.8

13.9

17.9

12.3

14.2

14.1

17.4

13.0

15.4

Selling, general andadministrative expenses

4,442

4,386

4,193

5,443

4,571

5,072

4,965

6,437

4,983

4,992

Operating income (loss)

(960)

1,450

1,802

4,300(242)

1,369

3,688

5,821

322

2,869(2.9)

3.7

4.2

7.9(0.7)

3.0

6.0

8.3

0.8

5.6

Ordinary income (loss)

(593)

1,546

2,093

4,388

92

1,447

3,848

5,815

547

2,955

Extraordinary income (loss)

(327)

(806)

(381)

536

(147)

(3)

(1,167)

1,439

2484

Profit attributable to owners of parent(loss)

(604)

508

1,119

2,882(66)

862

1,743

6,505

428

2,057

Gross profit margin (%)

Operating profit margin (%)

8【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Orders Received/Net Sales>(Millions of yen)

200,000

Ordersreceived
受注高
Net
sales
売上高
Balancecarried forward
期末繰越高150,000

100,000

50,000

02015

2016

2017

2018

2019

(Forecast)9【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Profit>(Millions of yen)（％）

35,00016.0

14.0

30,000Gross
profit (left axis)
売上総利益（左軸）
Operatingincome (left axis)
営業利益（左軸）
Ordinary
income (left axis)
経常利益（左軸）

12.0
25,000Gross
profit margin (right axis)
売上総利益率（右軸）Operatingprofit margin (right axis)
営業利益率（右軸）

10.0

Ordinary
profit margin (right axis)
経常利益率（右軸）20,0008.0
15,000
6.0
10,0004.0

5,000

2.000.0
2015

2016

2017

2018

2019

(Forecast)10【Orders Received】
Orders Received by Industry (Consolidated)(Millions of yen)

30,000

September 2017
25,000

September 2018
20,000

September 201915,00010,0005,000

0Government Offices
Medical Services
Wholesale and Retail Trade
Miscellaneous business services
Education
Real Estate
Finance and Insurance
Food
ChemicalMachinery
Pharmaceutical Industry
Automobile
Electrical Machinery11【Orders Received】
Orders Received by Type(Millions of yen)

FY 2016

Orders received (Non-consolidated: Facilities
Construction Business)

FY 2017

FY 2018

September
2018
A

September
2019
BDiff.
B–A

139,997

147,013

173,553

83,94274,498(9,444)

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

61,49367,34578,30436,415

19,141(17,274)

Rate of orders received from generalcontractors (Non-consolidated: Facilities
Construction Business) (%)

43.9

45.8

45.1

43.4

25.7

(17.7)

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

pt.

185,880

191,113217,096

103,819

100,901

(2.8)

1,612

1,246

2,379

1,588

1,352(235)

0.9

0.7

1.1

1.5

1.3(0.2)
pt.

Orders received for renewal construction(Consolidated)

101,114

101,597

117,619

62,11960,808(1,310)

Rate of orders received for renewal
construction (Consolidated) (%)

54.4

53.2

54.2

59.8

60.3

0.5

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

93,602pt.

94,601

116,62743,488

48,3434,85412

【Orders Received】
Main Large-Scale Projects Received andMain Large-Scale Completed Construction Projects○ Large-Scale Projects Received
Property nameItem of construction

Type of construction

Location

DENSO Corporation Headquarters PT Development Center

HVAC systems

New construction work

Aichi

Kasai Water Reclamation Center: Construction of sludge
dewatering equipment

Construction of watersupply and sewer system

RenewalTokyo

Ishikawa Regional Association of Community Facilities: Work toimprove core equipment at waste treatment facility

Construction of wastetreatment system

RenewalFukushima

Bank of Japan Head Office Fuchu Branch Machinery Building

HVAC and Plumbing
SystemsExpansionTokyo

３ other projects○ Large-Scale Completed Construction Projects
Property nameKintetsu Hakata Building
Sony Semiconductor Manufacturing Corporation
Yamagata Technology Center

Item of construction

Type of construction

Location

HVAC systems

New construction work

Fukuoka

HVAC and Electricalsystems

Renovation

Yamagata

３ other projects* The property name is the name being used by the Company. This may differ from the name used on the construction contract.

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【Orders Received】
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)
September 2017September 2018

September 2019

Offices

11－

Hotels and inns―

1－

Factory

252

Research andinstitute1――

Logistics Center―

Hospitals andclinics―

Other building
interiors

1

Railway andAirport

1

Waste processing
facility

2―

1

Water treatment
plants and sewage
plants――18 Projects（19,052 million yen）
* Orders received from
customers: 6 Project* Orders received fromgeneral Contractor: 2 Project11――

9 Projects（15,873 million yen）
* Orders received from
customers: 4Projects* Orders received fromgeneral Contractor: 5 Projects－
12―7 Projects（18,952 million yen)
* Orders received fromcustomers: 6Projects* Orders received fromgeneral Contractor: 1 Project14

【Profit】
Profit Improvement Factors and Measures (Consolidated)○ Strong business environment○ Thorough cost management (thorough internal control processes)○ Establishment of a company-wide HR system○ Developing site support systems
・ Improved support for purchasing operations by the Procurement Division (webbased procurement system)
・ Expanded support for on-site document creation at each branch office・ Expanded support for design work by the Design and Engineering Support Center・ Support and guidance for on-site operations by the Technology Support Center(established in fiscal 2018)
・ ICT support at work sites (introduction of tablet devices to all sites)・ Quality audits by technical experts○ Strengthening relationships with business partners
・ Conducting the Liaison Meeting for subcontractor groups
・ Implementing the Sanki Super Meister System
・ Implementing the Sanki Best Partners System15

【Financial Conditions】
Balance Sheet (Consolidated)(Millions of yen)

End of
FY 2018

September
2019

Rate ofchange (%)

Year on year

September
2018

Current assets

141,342

115,368(25,973)(18.4)

111,664Noncurrent assets

53,97953,235

(744)

(1.4)

58,446

Current liabilities

91,31764,503(26,814)(29.4)

65,731

Noncurrent liabilities

14,232

13,951

(280)

(2.0)

17,414

Total net assets

89,772

90,149377

0.4

86,965

Total assets

195,321

168,603(26,717)(13.7)

170,110Book-value per share

1,502.53

1,507.67

5.14

0.3

1,431.40

45.8

53.3

7.5

―

51.0

(5.7)

12,790Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

12,094

11,400

(694)

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【CF】
Statement of Cash Flows (Consolidated)
・ The balance of cash and cash equivalents increased from the end of the previous fiscal year (also a year-on-year increase).
・ The increase in cash flows for operating activities is mainly due to the fact that accounts receivable turnover progressed beyond
the decrease in accounts payable.
・ The decrease in cash flows from investing activities is mainly due to the acquisition and sales of property, plant and equipment.
・ The decrease in cash flows from financing activities is mainly due to the repayment of long-term loans payable and the paymentof dividends.
(Millions of yen)

FY 2015

FY 2016

FY 2017

FY 2018

September2019

September
2018

Cash flows from operating
activities

5,220

10,845

6,306

6,786

5,369

1,434

Cash flows from investing
activities

5,520(1,644)(2,510)(3,775)(584)(2,051)

Cash flows from financing
activities(1,826)(2,458)

1,814(5,215)(3,184)(2,007)

Cash and cash equivalents
at end of period

32,501

39,18744,866

42,612

44,86542,195

Capital investment

855

1,015

3,772

6,110

1,449

4,842

Depreciation

723

718

818

1,340814531

17

【Shareholder Returns】
Dividends and Others
・ The annual dividend forecast is now for 70 yen due to a 10 yen increase in regular dividends (+10 yen year on year).
・ Acquisition of 2 million shares of treasury stock is planned by the end of FY 2019.
・ Retirement of 2 million shares of treasury stock is scheduled for August 19, 2019.

FY 2017

FY 2018

September2019

FY 2019(Full-yearforecast)

FY 2015

FY 2016

Net income per share (yen)

83.84

73.91

63.02

150.0241.71

117.46

Cash dividends per share:
regular dividends (yen)182020403570

Cash dividends per share:commemorative dividends (yen)

―

―

―

―

―

―

Cash dividends per share:
extra dividends (yen)12101520――

Cash dividends per share (yen)

30

30

3560

3570

Payout ratio (%)

35.8

40.6

55.5

40.0

Number of shareholders at end ofperiod (people)

3,397

3,157

3,243

3,381

3,357

Share price at end of period (yen)

901

958

1,188

1,210

1,280

Acquisition of treasury stock(thousand shares)

―

―

3,000

1,000―

2,000

Retirement of treasury stock(thousand shares)

――

3,000

1,000

2,0002,000

ROE (return on equity) (%)

6.3

5.5

4.5

10.3

7.7

ROA (return on assets) (%)

4.7

4.1

4.3

6.0

5.5

59.6

＜Reference＞

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【Overall Forecast】
FY2019 Full-Year Forecast (Consolidated)
・The FY2019 full-year forecast has been upwardly revised for all items, including orders received, due to exceeding values
stated in the initial forecast.
(Millions of yen)August 9, 2019 mid-term forecast(same as May 14, 2019 initialforecast)

November 8, 2019 mid-termforecast(current revision)

Full-year1H(Cumulativeresults)

2H(Forecast)

Full-year(Forecast)

97,000190,000

100,901

99,099152,829

139,829

139,829

158,885

Net sales

90,000110,000

200,000

Gross profit

12,50017,500Gross profit margin
(%)

13.9

Operating income

1H

2H

Orders received

93,000

Balance carried forward

Difference

1H

2H

Full-year

200,000

7,901

2,099

10,000139,829

139,829

6,056－－

91,845

118,155

210,000

1,845

8,155

10,00030,00013,16818,83232,000

668

1,332

2,000

15.9

15.0

14.3

15.9

15.2

0.4

－0.2

2,200

6,600

8,800

3,191

6,609

9,800

991

91,000Ordinary income

2,400

6,600

9,000

3,503

6,497

10,0001,103(103)1,000

Profit attributable toowners of parent

1,600

4,600

6,200

2,485

4,515

7,000885(85)800

19【Forecast of Orders Received and Net Sales】
FY2019 Forecast of Orders Received andNet Sales by Segment (Consolidated)(Millions of yen)

FY 2019
Orders Received ForecastSegment

FY 2019
Net sales Forecast

HVAC and Plumbing for Buildings

67,00071,000Industrial HVAC

61,00065,000Electrical Systems

23,00024,000

Facility Systems

12,00011,000Total of Facilities Construction Business

163,000

171,000

Machinery Systems

12,00012,000

Environmental Systems

23,00025,000Total of Plant & Machinery Systems Business

35,00037,000Sub Total

198,000

208,000

2,000

2,000

Others600600Adjustments*(600)(600)

200,000

210,000

Real Estate Business

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

20Remarks on Business Forecast
The descriptions contained in these materials, 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 November 8,2019.
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 exposures of client companies.
● Sudden changes in material and equipment cost and labor cost.
● Stock Market fluctuations.
● Increase in retirement benefits or debts.
● Country risk.
● Accident or disaster in facilities construction and other.
● Outbreak of the unprofitable project.
● Risk in the Real Estate Business.

For inquiries, please contact:● Risk of legal action.

Corporate CommunicationsDepartment● Risk of legal regulation.

● Outbreak to the natural disasters.

TEL: +81-3-6367-7041● Fluctuations in private capital investment

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