The 1st Quarter FY2020
Summary of Financial Results
August 7, 2020

The 1st Quarter FY2020 Financial Summary<Orders received> 47,660 million yen (46,697 million yen in the same period of the previous fiscal year)● Orders in the Facilities Construction Business increased year on year due to great increases, particularly in large-scale
Industrial HVAC projects. Orders received by the Plant & Machinery Systems Business fell short of the same period of theprevious fiscal year, mainly due to orders for large-scale waste processing facility projects received by Environmental Systems.
< Net sales> 38,253 million yen (40,882 million yen in the same period of the previous fiscal year)● Net sales in the Facilities Construction Business declined mainly due to the effect of a decline in construction carried forwardfrom the previous fiscal year, even though industrial HVAC and electrical firmed since the previous fiscal year.
<Gross profit> Gross profit margin of 13.4% (13.0% in the same period of the previous fiscal year)● Gross profit margin improved over the same period of the previous fiscal year, particularly for large-scale projects, due toinitiatives such as ongoing thorough cost management and improved work efficiency. Gross profit decreased due to a decline ingross profit margin.
* The effect of the spread of the novel coronavirus (COVID-19) on first-quarter performance was minimal.
<FY2020 consolidated results forecasts>● No change from initial forecast.
* Although results have been incorporated, which take into account the impact of the spread of the novel coronavirus (COVID19) on business, business results may be further impacted due to altered circumstances in the future.
<Shareholder returns>● Forecast interim dividend: 35 yen, year-end dividend: 35 yen, annual dividend: 70 yen (no change from initial forecast)● 1,000,000 shares of treasury stock to be acquired by the end of fiscal 2020.
Cancellation of 1,000,000 shares of treasury stock to be conducted on August 17, 2020.
● Forecast payout ratio: 62.1%, forecast total return ratio: 84.2%

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Contents

1

The 1stQuarter
FY2020Results2
The 1st Quarter
FY2020
Balance Sheetand Statementof Cash Flows

P4-10P11-13345

ShareholderReturns

FY2020
Forecast

SupplementaryMaterials

P14-15

P16-18

P19-253©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

FY2020 1Q RESULTS

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【Overall Results】
FY2020 1Q Results (Consolidated)(Millions of yen)June
FY2018June
FY2019June
FY2020Year on year

Rate ofchange(%)

Orders received

50,885

46,69747,660962

2.1

Balance carried forward

160,345

155,644

145,569(10,074)(6.5)

Net sales

35,25240,882

38,253(2,628)(6.4)

34,73040,27037,654(2,615)

(6.5)

522

612

599

(12)

(2.1)

4,329

5,305

5,120

(185)

(3.5)

4,113

5,028

4,875

(152)

(3.0)

215

277

244

(32)

(11.9)

12.3

13.0

13.4

0.4

―

Selling, general and administrative expenses

4,571

4,983

5,274

291

5.8

Operating income (loss)

(242)

322

(154)

(476)

―

Non-operating income and loss

335

225

221

(4)

(2.0)

Ordinary income

92

547

66

(481)

(87.9)

Extraordinary income (loss)(147)

24(82)(107)―

Profit attributable to owners of parent (loss)

(66)

428

11(416)(97.2)

Completed construction contracts
Real estate and others
Gross profit
Completed construction contracts
Real estate and others
Gross profit margin (%)

pt.

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

FY 2018

FY2020

FY 2019

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Orders received

50,88552,934

51,22862,04846,69754,20450,031

43,08547,660Net sales

35,25245,47061,32370,26740,88250,962

51,83364,00638,253Gross profit

4,329

6,442

8,65412,258

5,305

7,862

7,460

11,4825,120

Gross profit margin (%)

12.3

14.2

14.1

17.4

13.0

15.4

14.4

17.9

13.4

Selling, general andadministrative expenses

4,571

5,072

4,965

6,437

4,983

4,992

5,063

6,396

5,274

Operating income (loss)

(242)

1,369

3,688

5,821

322

2,869

2,396

5,085

(154)

(0.7)

3.0

6.0

8.3

0.8

5.6

4.6

7.9

(0.4)

92

1,447

3,848

5,815

547

2,955

2,644

5,076

66

Extraordinary income (loss)

(147)

(3)

(1,167)

1,439

24

84

49(269)(82)

Profit attributable toowners of parent (loss)

(66)

862

1,743

6,505

428

2,057

1,815

3,276

11

Operating profit margin (%)
Ordinary income

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【Orders Received】

Orders Received by Segment (Consolidated)(Millions of yen)Segment

June FY 2019

June FY 2020

HVAC and Plumbing for
Buildings

14,211

13,018

14,235

1,217

9.4

Industrial HVAC

21,136

11,052

18,054

7,002

63.4

Electrical Systems

6,506

7,469

3,125(4,343)(58.2)

Facility Systems

2,842

2,921

2,645(275)(9.4)

44,697

34,46138,062

3,600

10.4

Machinery Systems

2,240

2,257

2,016(241)(10.7)

Environmental Systems

4,005

9,451

7,066

(2,385)(25.2)

Total of Plant & Machinery
Systems Business

6,246

11,7099,082(2,626)(22.4)

50,944

46,17047,144973

2.1

Real Estate Business

452

525

582

57

11.0

Others

184

195

133

(61)

(31.6)

Adjustments *(695)

(193)

(200)

(6)

―

50,885

46,69747,660962

2.1

Total of Facilities Construction
Business

Sub-total

Total

Year on year

Rate ofChange (%)

June FY 2018

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

7©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

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

June FY 2019

June FY 2020

HVAC and Plumbing for
Buildings

13,345

15,253

10,847(4,406)(28.9)

Industrial HVAC

11,906

13,615

14,288672

4.9

Electrical Systems

3,831

3,958

5,068

1,109

28.0

Facility Systems

1,392

1,867

2,016

148

8.0

30,47534,69532,220(2,475)(7.1)

Machinery Systems

2,114

2,601

2,262(338)(13.0)

Environmental Systems

2,396

3,143

3,298

154

4.9

Total of Plant & Machinery
Systems Business

4,511

5,745

5,560

(184)

(3.2)

34,98640,44037,781(2,659)(6.6)

Real Estate Business

452

525

582

57

11.0

Others

169

233

170

(62)

(26.9)

Adjustments*(356)

(317)

(280)

36―

35,25240,882

38,253(2,628)(6.4)

Total of Facilities Construction
Business

Sub-total

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

Year on year

Rate ofChange (%)

June FY 20188©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

【Profit】
Gross Profit by Segment (Consolidated)(Millions of yen)June
FY 2018

Segment
HVAC and Plumbing for
Buildings/Industrial
HVAC/Electrical Systems

June
FY 2020

Year on year

Rate ofChange (%)

3,613

4,152

4,103

(48)

(1.2)

87

240

183

(57)

(24.0)

3,700

4,393

4,286(106)(2.4)

Machinery Systems

337

541

427

(113)

(21.1)

Environmental Systems

203

113

248

134

118.5

541

654

675

20

3.2

4,241

5,048

4,962

(85)

(1.7)

Real Estate Business

153

192

232

39

20.7

Others

71

94

4(89)

(95.1)

(137)

(29)

(78)(49)―4,3295,305

5,120(185)(3.5)

Facility Systems

Ordinary Gross Profit by segment

June
FY 2019

Total of Facilities Construction
Business

Total of Plant & Machinery Systems
Business
Sub-total

Adjustments
Total9©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

【Profit】
Profit Improvement Factors and Measures● Improvement in profitability of large-scale projects over the same period of the previous fiscalyear● Thorough cost management (thorough internal control processes)● Developing site support systems
・Improved support for purchasing operations by the Procurement Division(web-based 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
・Implementing the Sanki Super Meister System
・Implementing the Sanki Best Partners System
・Reviewing payment terms for partner companies with a capital of 40.00 million yen(payments made entirely in cash)
・Conclusion of commitment line agreements for the purpose of catering to short-term
demand for financing and operating capital in order to support the stable operation ofpartner companies
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FY2020 1Q
BALANCE SHEET AND
STATEMENT OF CASH FLOWS

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【Financial Conditions】
Balance Sheet (Consolidated)
End of
FY 2019
Currentassets(Millions of yen)June
FY 2020

Rate ofchange (%)

Year on year

June
FY 2019

130,765

99,983(30,782)(23.5)

121,886

71,73948,530(23,208)(32.4)

58,19650,04051,7101,670

3.3

53,53524,017

25,7701,753

7.3

26,61979,70555,363(24,341)(30.5)

73,87452,48934,807(17,682)(33.7)

53,609Noncurrent liabilities

13,735

11,095(2,640)(19.2)

14,228

Total net assets

87,36485,235(2,129)(2.4)

87,319(4,187)(4,071)116―(3,700)Total assets

180,805

151,693(29,111)(16.1)

175,422

Book-value per share (yen)1,510.59

1,472.82(37.77)(2.5)

1,461.37

48.2

56.0

7.8

―49.6

10,7199,600(1,118)(10.4)

10,975

Notes and accounts receivable
on completed construction
contracts and otherNoncurrent assets
Investment securities
Current liabilities
Notes and accounts payable
on construction contracts andother

Treasury stock

Equity ratio (%)
Interest-bearing liabilities (consolidated)

pt.

12

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【CF】
Statement of Cash Flows (Consolidated)○ The balance of cash and cash equivalents decreased year on year
• The decrease in cash flows from operating activities is due to contribution to retirement benefit funds and payment of bonuses andcorporation tax, etc., in spite of recovery of receivables exceeding payment of accounts payable• The decrease in cash flows from investment activities is mainly due to the acquisition of investment securities and property, plantand equipment• The decrease in cash flows from financing activities is mainly due to the repayment of short-term /long-term loans payable,
expenditure from the purchase of treasury stock, and the payment of dividends(Millions of yen)

FY 2016

FY 2017

FY 2018

JuneFY 2019

FY 2019June
FY 2020Cash flows fromoperating activities

10,845

6,306

6,786

11,9407,999(3,694)

Cash flows from investing
activities(1,644)(2,510)(3,775)

(303)

(840)

(1,579)Cash flows from financing
activities(2,458)

1,814(5,215)(8,955)(3,557)(4,629)Cash and cash
equivalents at end of
period39,18744,866

42,61245,946

46,89636,00913©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

SHAREHOLDER
RETURNS

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【Shareholder Returns】
Dividends and Others・Conducted shareholder returns according to medium-term management plan “Century 2025” Phase 2 financial and capital policies
・Forecast interim dividend: 35 yen, year-end dividend: 35 yen, annual dividend: 70 yen (no change from initial forecast)・Acquisition of 1 million shares of treasury stock is planned by the end of FY 2020.
・Retirement of 1 million shares of treasury stock is scheduled for August 17, 2020.
・Forecast payout ratio: 62.1%, forecast total return ratio: 84.2%

FY 2016

FY 2017

FY 2018

FY 2019

FY 2019(Forecast)

73.91

63.02

150.02128.51

112.65

Cash dividends per share:
regular dividends (yen)

2020

4070

70

Cash dividends per share:
extra dividends (yen)

1015

2025

―

Cash dividends per share (yen)3035609570

Payout ratio (%)

40.6

55.5

40.0

73.9

62.1

Total return ratio (%)

40.6

148.9

52.9

111.4

84.2

Acquisition of treasury stock(thousand shares)

―

3,000

1,0001,958

1,000Retirement of treasury stock(thousand shares)―

3,0001,000

2,000

1,000

Earnings per share (yen)15©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

FY2020 FORECAST

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【Overall Forecast】
FY2020 Full-Year Forecast (Consolidated)(Millions of yen)

FY 2019 results

FY 2020 forecast(Initial forecast)A

FY 2020 forecast(Interim forecast
from August 7)
B

Difference
B－A

Orders received

194,018

190,000

190,000―

Balance carried forward

136,163

126,163

126,163―

Net sales

207,684

200,000

200,000―

Gross profit

32,11031,00031,000

―

15.5

15.5

15.5

―

Operating income

10,6749,000

9,000―

Ordinary income

11,2249,500

9,500―

Profit attributable to owners ofparent

7,576

6,500

6,500

―

Gross profit margin (%)* Although results have been incorporated, which take into account the impact of the spread of the novel coronavirus (COVID-19) on business, businessresults may be further impacted due to altered circumstances in the future.

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【Forecast of Orders Received and Net Sales】
FY2020 Forecast of Orders Received andNet Sales by Segment (Consolidated)
FY 2020
Orders Received ForecastSegment(Millions of yen)

FY 2020
Net sales Forecast

HVAC and Plumbing for Buildings

59,00060,000Industrial HVAC

63,00066,000Electrical Systems

22,00025,000

Facility Systems

11,00011,000155,000

162,000

Machinery Systems

12,00011,000

Environmental Systems

21,00025,00033,00036,000188,000

198,000

2,000

2,000

500500

(500)

(500)

190,000

200,000

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems
Business
Sub Total
Real Estate Business
OthersAdjustments*Total* Adjustments eliminate inter-segment transactions included in each segment.

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SUPPLEMENTARY
MATERIALS

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【Orders Received】
Orders Received by Type(Millions of yen)June
FY 2019AJune
FY 2020BFY 2017
Full-year

FY 2018
Full-year

FY 2019
Full-year

147,013

173,553

147,191

31,78236,356

4,574

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

67,34578,304

48,2389,161

13,9004,739

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

45.8

45.1

32.8

28.8

38.2

9.4

Orders received (Non-consolidated: Facilities
Construction Business)

Diff.
B–A

pt.

191,113217,096

194,018

46,69747,660

962

1,246

2,379

3,143

704

736

31

0.7

1.1

1.6

1.5

1.5

―

Orders received for renewal construction(Consolidated)

101,597

117,619

112,909

29,736

26,223(3,512)Rate of orders received for renewal
construction (Consolidated) (%)

53.2

54.2

58.2

63.7

55.0(8.7)<Ref.> Net sales for renewal construction(Consolidated)

94,601

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

pt.

116,627

114,208

21,132

18,814(2,317)

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【Orders Received】

Orders Received by Industry (Consolidated)(Millions of yen)

14,00012,000June FY2018
10,000June FY2019

June FY2020
8,000

6,000

4,000

2,000

0

Government Offices

Miscellaneous business services

Wholesale and Retail Trade

Education

Medical Services

Real Estate

Finance and Insurance

ChemicalMachinery

Food

Pharmaceutical Industry

Automobile

Electrical Machinery©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

21

【Orders Received / Net Sales 】
Main Large-Scale Projects Received and Large-Scale
Completed Construction Projects〇Main Large-Scale Projects Received
Property nameItem of construction

Type of construction

Location

Kurita Water Industries Ltd. New Research and Development
Facility Construction Project (provisional name)

HVAC systems

New construction
work

Tokyo

HVAC and Plumbingsystems

New construction
work

Tochigi

Kanae Tochigi Factory No. 3 Building

2 other projects〇Main Large-Scale Completed Construction Projects
Property nameItem of construction

Type of construction

Location

Nissay Training Center

HVAC systems

Renovation

ChibaDENSO Corporation Headquarters PT Development Center

HVAC systems

New construction
workAichi
1 other project* 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)
June FY2018

June FY2019

June FY2020

Office――

1Factory

3

1

1

Logistics Center1――

Research institute―

Other building interiors―* Orders received from
customers: 2 Projects

1* Orders received fromcustomers: 3 Projects―* Orders received fromcustomers: 2 Projects

Waste processing facility―* Orders received fromgeneral Contractors: 2 Projects

1* Orders received fromgeneral Contractors: 1 Project1* Orders received fromgeneral Contractors: 2 Projects

Water treatment plants andsewage plants―4 Projects（8,080 million yen）―

14 Projects（8,884 million yen）

14 Projects（7,917 million yen）―

23
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【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Orders Received/Net Sales>
Phase 1Phase 2(Millions of yen)
200,000Orders
received
受注高
Net
sales
売上高
Balance carried forward

期末繰越高150,000

100,000

50,000

0

2016

2017

2018

2019

2020(Forecast)24©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Profit>
Phase 2Phase 1（％）

(Millions of yen)
35,00018.0

16.0
30,000

売上総利益（左軸）
Grossprofit (left axis)

Operatingincome (left axis)
営業利益（左軸）
14.0

Ordinary
income (left axis)
経常利益（左軸）
売上総利益率（右軸）Grossprofit margin (right axis)

25,00012.0

営業利益率（右軸）
Operatingprofit margin (right axis)
経常利益率（右軸）
Ordinary
profit margin (right axis)

20,00010.0

8.0

15,000

6.0
10,0004.0
5,000
2.000.0
2016

2017

2018

2019

2020

(Forecast)

25©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

Statements about the future, such as results forecasts included in thesematerials, are based on judgements made according to the information
available to the Company as of August 7. Actual results may differ from thefigures contained herein due to a number of factors.
For inquiries, please contact:
Sanki Engineering Co., Ltd.
Corporate Communications Department

TEL: +81-3-6367-7041
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