The 3rd Quarter FY2018
Summary of Financial Results
February 8, 2019

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
FY2018 3Q Results – Cumulative Results (Consolidated)
Orders Received by Segment (Consolidated)
Net Sales by Segment (Consolidated)
Ordinary Income (Loss) by Segment (Consolidated)
Quarterly Results (Consolidated)
Operating Results over the Last 5 Years (Consolidated) <Orders Received/Net Sales>
Operating Results over the Last 5 Years (Consolidated) <Profit>
Orders Received by Industry (Consolidated)
Orders Received by Type
Main Large-Scale Projects Received
Main Large-Scale Completed Construction Projects
Large-Scale Projects over 1 Billion Yen (by Industry)
Profit Improvement Factors and Measures
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
FY2018 Full-Year Forecast
FY2018 Forecast of Orders Received and Net Sales by Segment (Consolidated)

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08
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16171819202

Key Points of Financial Results<Orders Received>
In the Facilities Construction Business, there were increases in all businesses year onyear. Of these, Industrial HVAC continued to show great improvements from the firsthalf, particularly with regard to large-scale projects.
Machinery Systems increased year on year; however, Environmental Systems
decreased due to the effect of receiving large-scale projects in the same period of theprevious year.
As a result, overall orders received exceeded those in the same period of the previousyear, and there was also an increase in the balance carried forward.
<Net Sales & Profit>
Net sales in the Facilities Construction Business increased year on year for all
businesses, with factors such as the increased orders in Industrial HVAC in theprevious fiscal year and this fiscal year resulting in greatly increased revenue.
Furthermore, both Machinery Systems and Environmental Systems saw increases,
resulting in a great increase in net sales overall.
As a result of our continued initiatives for thorough cost management andimprovement of work efficiency, etc. we have seen a year-on-year improvement ingross profit margin. In addition, higher profit, etc. was seen in all profit items due tohigher net sales, particularly in Industrial HVAC.
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【Overall Results】
FY2018 3Q Results - Cumulative Results (Consolidated)
・Orders received increased due to factors such as large-scale orders being received in the Facilities Construction Business, particularly in Industrial HVAC, as well as
in Machinery Systems, and balance carried forward increased.
・Net sales also increased in all businesses, led by a dramatic increase in Industrial HVAC, resulting in a great increase year on year.
・All profit items increased due to improvements in gross profit margin through ongoing initiatives to improve work efficiency in addition to the dramatic increase
centered on Industrial HVAC.

December
2016

December
2017

December2018(Millions of yen)

Year on year

Rate ofchange(%)

Orders received

138,163

139,657

155,048

15,390

11.0

Balance carried forward

129,988

147,805

157,714

9,909

6.7

Net sales

114,563

115,608

142,046

26,43822.9

113,289

114,182

140,521

26,338

23.1

1,274

1,425

1,524

99

7.0

13,71015,315

19,425

4,110

26.8

13,431

14,78818,914

4,126

27.9

279

526

510

(15)

(3.0)

12.0

13.2

13.7

0.5pt.

―

Selling, general and administrative expenses

11,88513,022

14,609

1,586

12.2

Operating income (loss)

1,825

2,2924,815

2,523

110.1

629

753

573(180)(23.9)

2,454

3,045

5,388

2,342

76.9(76)(1,515)(1,317)

197

―

1,578

1,023

2,540

1,516

148.1

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

Net non-operating income and loss （Cost）
Ordinary income (loss)
Net extraordinary income (loss)
Profit attributable to owners of parent (loss)4【Orders Received】
Orders Received by Segment (Consolidated)
・In the Facilities Construction Business, there were increases in all businesses year on year. Of these, Industrial HVAC continued to show
great improvements from the first half, particularly with regard to large-scale projects.
・In the Plant & Machinery Systems Business, Machinery Systems increased due to receiving large-scale projects in this period. Environmental(Millions of yen)
Systems decreased due to the impact of large-scale projects received in the same period of the previous year.

Segment

Rate ofchange(%)

December 2016

December 2017

December 2018Year on year

HVAC and Plumbing forBuildings

50,07443,564

46,3752,8106.5

Industrial HVAC

35,684

41,42160,046

18,62445.0

Electrical Systems

14,57017,417

17,588170

1.0

Facility Systems

7,898

7,489

8,406

916

12.2

108,228

109,893

132,416

22,522

20.5

Machinery Systems

5,689

8,293

9,526

1,232

14.9

Environmental Systems

23,90020,355

12,674(7,680)(37.7)

Total of Plant & Machinery
Systems Business

29,59028,64922,200(6,448)(22.5)

137,818

138,542

154,617

16,074

11.6

1,189

1,311

1,409

98

7.5

371

465

575

109

23.5

(1,216)(662)(1,554)(891)―

138,163139,657

155,048

15,39011.0

Total of Facilities Construction
Business

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

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【Net Sales】
Net Sales by Segment (Consolidated)
・ In the Facilities Construction Business, factors such as increased orders in Industrial HVAC in both the previous fiscal year and this fiscal year resulted in greatly
increased revenue. HVAC and Plumbing for Buildings, Electrical Systems, and Facility Systems also firmed, resulting in a year-on-year increase for all businesses.
・With regard to Plant & Machinery Systems Business, both Machinery Systems and Environmental Systems increased, resulting in a great(Millions of yen)increase in overall net sales.

December
2016

Segment

December
2017

December
2018

Year on year

Rate ofchange(%)

HVAC and Plumbing for
Buildings

39,26443,90946,8472,938

6.7

Industrial HVAC

35,70632,58352,65320,069

61.6

Electrical Systems

14,271

13,85915,1471,287

9.3

Facility Systems

7,296

5,348

6,984

1,636

30.6

Total of Facilities
Construction Business

96,537

95,700121,632

25,932

27.1

Machinery Systems

5,908

6,696

7,089

393

5.9

Environmental Systems

11,515

12,165

12,778612

5.0

Total of Plant & Machinery
Systems Business

17,424

18,862

19,868

1,006

5.3

113,961

114,562

141,500

26,938

23.5

1,189

1,311

1,409

98

7.5

363

435

461

25

5.9

(952)

(700)

(1,325)(624)―

114,563

115,608

142,046

26,43822.9

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

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【Profit】
Ordinary Income (Loss) by Segment (Consolidated)(Millions of yen)Segment
FacilitiesConstruction
Machinery Systems

Segment Profit Loss

EnvironmentalSystems
Sub-total

December
2017

December
2018

Year onyear

Rate ofchange(%)

1,425

1,926

4,873

2,947

153.0

4533(43)(77)―(204)

(331)

(202)

129

―

1,266

1,628

4,627

2,999

184.2

（Real Estate Business

147

380

351

(29)

(7.6)

）

Others25

53

28(24)(46.8)

1,014

983

380(602)(61.3)

2,454

3,045

5,388

2,342

76.9

Adjustments *Total*December
2016

The amount of adjustments of profit (loss) by segment indicates the amount of the Company-level profit and loss not distributed into
each segment. The Company-level profit and loss mainly consists of that of interests and dividends not attributable to each segment,
and the balance of allocations for the Company-level expenses.

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

FY2016FY2017FY2018

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Orders received

55,33835,57347,25047,71638,20957,56643,881

51,45650,88552,934

51,228Net sales

33,86636,47444,222

53,94932,93339,573

43,10254,54835,25245,47061,323Gross profit

3,905

4,238

5,566

8,827

3,482

5,837

5,995

9,744

4,329

6,442

8,654

11.5

11.6

12.6

16.4

10.6

14.8

13.9

17.9

12.3

14.2

14.1

Selling, general andadministrative expenses

4,171

3,915

3,798

4,640

4,442

4,386

4,193

5,443

4,571

5,072

4,965

Operating income (loss)

(265)

323

1,767

4,187(960)

1,450

1,802

4,300

(242)

1,369

3,688

(0.8)

0.9

4.0

7.8

(2.9)

3.7

4.2

7.9

(0.7)

3.0

6.0

Ordinary income (loss)

27

341

2,085

4,425(593)1,546

2,093

4,388

92

1,447

3,848

Extraordinary income (loss)

―(32)

(43)

200(327)

(806)

(381)

536

(147)

(3)

(1,167)

Profit attributable to owners ofparent (loss)

(2)

232

1,349

3,119(604)

508

1,119

2,882

(66)

862

1,743

Gross profit margin(%)

Operating profit margin(%)

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【Operating Results】
Operating Results over the Last 5 Years(Consolidated) <Orders Received/Net Sales>(Millions of yen)

200,000
180,000

Orders received
160,000
140,000

Net sales

120,000

Balance carriedforward100,000

80,00060,00040,00020,00002014201520162017

2018（Forecast）

9

【Operating Results】
Operating Results over the Last 5 Years(Consolidated) <Profit>(Millions of yen)（％）

35,00016.0

14.0

30,000Gross profit （left axis)
Operating income（left axis)

12.0
25,000Ordinary income（left axis)

10.0

Gross profit margin（right axis)

20,0008.0

Operating profit margin（right axis)
Ordinary profit margin（right axis)

15,000
6.0
10,0004.0
5,000

2.000.0
2014

2015

2016

2017

2018

（Forecast）

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

35,00025,00020,000Government

Medical services

Wholesale and retail trade

Miscellaneous business services

Education

Real estate

Finance and Insurance

Food

ChemicalMachinery

Pharmaceutical Industry

Automobile

Electrical Machinery

0December
2016
December
2017
December2018
30,00015,00010,0005,000

11【Orders Received】
Orders Received by Type(Millions of yen)

FY
2015

FY
2016

FY
2017

Orders received (Non-consolidated : Facilities
Construction Business)

145,069

139,997

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

72,751

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

December
2017

December
2018

Year onyear

147,013105,366

125,883

20,516

61,49367,34549,21054,560

5,349

50.1

43.9

45.8

46.7

43.3

(3.4)

183,270

185,880

191,113

139,657

155,048

15,390

2,343

1,612

1,246

857

2,211

1,354

1.3

0.9

0.7

0.6

1.4

0.8
pt.

Orders received for renewal construction(Consolidated)

99,920101,114

101,597

77,94289,58911,646Rate of orders received for renewal
construction (Consolidated) (%)

54.5

54.4

53.2

55.8

57.82.0

96,32593,602

94,601

61,57777,75916,181

Orders received (Consolidated)
Orders received from overseas projects(Consolidated) *Rate of orders received from overseas
projects (Consolidated) (%)<Ref.> Net sales for renewal construction(Consolidated)* Orders received by SANKI CONSTRUCTION ENGINEERING (SHANGHAI) CO., LTD., an unconsolidated subsidiary,
are not included in orders received from overseas projects.

pt.

pt.

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【Orders Received】
Main Large-Scale Projects Received· Nissay Logistics Center, Machida(HVAC, Plumbing, and Electrical Systems) <New construction work>· NGK Ceramic Device Co., LTD., Tajimi Plant(HVAC Systems) <New construction work>· Toshiba Memory Corporation, Yokkaichi Plant Building 260, Stage 4(HVAC Systems) <Expansion>· Sony Semiconductor Manufacturing Corporation, Yamagata Technology Center(HVAC and Electrical Systems) <Renovation work>· Tokyo Metropolitan Higashiyamato Medical Center for the Severely Disabled(Plumbing Systems) <Renovation work>· Takashimaya EAST BUILDING Hotel Conversion(HVAC and Plumbing Systems) <Renovation work>· Toshiba Memory Corporation, Iwate Building 510, Stage 1(HVAC Systems) <New construction work>· RIKEN: Works to expand facilities for a next-generation ultra-high-speed
computer system in fiscal 2018
(HVAC Systems) <Expansion>· Toyota Motor Corporation, PI Tower Phase 2(HVAC and Electrical Systems) < New construction and renovation work>· Narita International Airport: Works to expand the T1S#53 make-up conveyor andenhance BHS capacity (Transport facilities work) <Renewal>
5 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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【Net Sales】
Main Large-Scale Completed Construction Projects·Toyota Motor Corporation, PI Tower(HVAC and Electrical Systems) <New construction work>·Nihonbashi 2-Chome Type-1 Urban Area Redevelopment Project (Districts C & D)
(Plumbing Systems) <New construction work>·Toshiba Memory Corporation, Yokkaichi Plant Building 260, Stage 3(HVAC Systems) <Expansion>·Fukuoka High and District Court/Family Court/Summary Court Office(HVAC and Plumbing Systems) <New construction work>·Yokohama Business Park A1 Building(HVAC Systems) <Renovation work>·Toshiba Memory Corporation, Yokkaichi Plant Building 260, Stage 4(HVAC Systems) <Expansion>* 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】
Large-Scale Projects over 1 Billion Yen (by Industry)
December 2016

December 2017

December 2018

Office311Hotel―11Factory2

3

8

Research institute

1

1

1

Logistics Center――1

Hospital

1―

1Multiple – dwelling complex―

Gymnasium―

Others―Railway, Airport―

Power station,
Substation

1――

Waste processing facility

12―Water and sewage treatment
facility1――

10 Projects（31,848 million yen）
＊Orders received fromCustomers : 7 Projects＊Orders received fromgeneral contractors:3 Projects

212
114 Projects（27,332 million yen）
＊Orders received from
Customers : 6 Projects＊Orders received fromgeneral contractors:8 Projects―1―
115 Projects（31,293 million yen）
＊Orders received from
Customers : 7 Projects＊Orders received fromgeneral contractors:8 Projects

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【Profit】
Profit Improvement Factors and Measures○ Improvement of the external environment○ Thorough cost management (thorough internal control processes)○ Developing site support systems• Improved support for purchasing operations by the Procurement Division(established in 2015) (Webification of the purchasing operations)• Expanded support for on-site documentation creation at each branch office• Expanded support for design work by the Design and Engineering Support Center(established in 2016)• Established the Technical Support Center, specializing in support and guidance forsite operation (established 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 System16【Financial Conditions】
Balance Sheet (Consolidated)(Millions of yen)

December
2017

End ofFY 2017

December
2018

Rate ofchange(%)

Diff.

Current assets

98,425

122,901

121,637(1,263)(1.0)

Noncurrent assets

58,80954,112

54,16452

0.1

Current liabilities

59,67773,78775,457

1,670

2.3

Noncurrent liabilities

12,562

17,035

16,647

(388)

(2.3)

Total net assets

84,99486,191

83,696(2,494)(2.9)

Total assets

157,234

177,014

175,802(1,211)(0.7)

Book-value per share(yen)

1,400.021,419.77

1,395.39(24.38)

(1.7)

53.9

48.6

47.5

(1.1)

―Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

4,564

13,504

11,670(1,834)(13.6)* As we have applied Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. since the 1st quarter of FY2018, the FY2017 balance sheet
has been partially rearranged. As a result, the equity ratio has also changed.

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【CF】
Statement of Cash Flows (Consolidated)
・The balance of cash and cash equivalents decreased from the end of the previous fiscal year (an increase year on year).
-The decrease in cash flow from operating activities is mainly due to the increase in both notes and accounts receivable and income tax that waspaid as a result of the increase in profit, in spite of an increase in notes and accounts payable.
-The decrease in cash flows from investing activities is mainly due to the purchase of property, plant and equipment.
-The decrease in cash flows from financing activities is mainly due to the repayment of long-term loans payable andthe cash dividends paid.
(Millions of yen)

FY 2014

FY 2015

FY 2016

FY 2017

December
2018

December
2018

Cash flows from operating
activities

(139)

5,220

10,845

6,306(420)(74)

Cash flows from investing
activities

3,440

5,520

(1,644)(2,510)(5,217)(3,778)Cash flows from financing
activities(2,901)(1,826)(2,458)1,814(7,084)(5,319)Cash and cash equivalents atend of period

23,66732,501

39,18744,866

26,52135,67818

【Overall Forecast】
FY2018 Full-Year Forecast (Consolidated)
・With regard to the full-year forecast for FY2018, we upwardly revised orders received (balance carried forward) from our interim forecast, which wasannounced on November 9, due to positive trends of orders received. With regard to net sales and the various profit items, we have not changed the interim forecast
announced on November 9, which already included an upward revision, and we plan for increased revenue and profit on a year-on-year basis.

(Millions of yen)

FY 2018
Full-Year
Forecast(as of November 9)

FY 2018
Full-Year
Forecast(as of February 8)<Reference>
Medium-Term Management Plan“Century2025”Phase1（FY2016-2018）
FY2018 Financial Performance
Targets

Diff.

Orders received

185,000

195,000

10,000―

Balance carried forward

130,712140,712

10,000―Net sales

199,000

199,000―

195,000

Gross profit

28,60028,600―24,000Gross profit
margin(%)

14.4

14.4

―

12.3

Operating income

8,200

8,200―

7,500

Ordinary income (loss)

8,900

8,900―

8,000

Profit attributable toowners of parent

5,900

5,900――
19【Forecast of Orders Received and Net Sales】
FY2018 Forecast of Orders Received and Net Sales
by Segment (Consolidated)(Millions of yen)

FY 2018
Orders Received ForecastSegment

FY 2018
Net sales Forecast

HVAC and Plumbing for Buildings

58,40063,300Industrial HVAC

73,00070,000Electrical Systems

21,00020,000

Facility Systems

9,800

9,900

162,200

163,200

Machinery Systems

12,00012,000

Environmental Systems

19,00022,000Total of Plant & Machinery Systems Business

31,00034,000Sub-total

193,200

197,200

1,800

1,800

600

600

△600

△600

195,000

199,000

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments*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 February 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.
● Risk of legal action.
● Risk of legal regulation.
● Outbreak to the natural disasters.

For inquiries, please contact:
Corporate Communications
Department
TEL: +81-3-6367-7041

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