FY2016
Summary of Financial Results
May 12, 2017

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
FY2016 Full-Year Results (Consolidated)
Orders Received by Segment (Consolidated)
Net Sales by Segment (Consolidated)
Ordinary Income and 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
Major Projects
Major Projects over 1 Billion Yen (by Industry)
Profit Improvement Factors and Measures
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
Dividends and Others
FY2017 Forecast (Consolidated)
FY2017 Forecast of Orders Received and Net Sales by Segment (Consolidated)
Progress of the Medium-Term Management Plan (1) (Priority Measures)
Progress of the Medium-Term Management Plan (2) (ESG)

030405
060708
09101112131415
161718
1920
21222

Key Points of Financial Results<Orders received>
Orders received exceeded the previous fiscal year, which was already favorable,
due to large-scale projects (particularly in HVAC and Plumbing for Buildings) inFacilities Construction Business, as well as large-scale projects in Environmental
Systems during the fiscal year currently under review.
<Net Sales & Profit>
Although net sales fell short of the previous fiscal year, balance carried forward
increased greatly, allowing us to secure a certain level of stock projects.
In particular, our gross profit margin continued to improve as a result of further
pursuing initiatives aimed at rigorous cost management and improving work
efficiency. This allowed us to secure profits on par with last year, in spite of thereduction in income.
<Dividends>
Including the extra dividend of 10 yen, which has been paid for the last 2 years,
we paid a total annual dividend of 30 yen, which is the same as the previous fiscalyear (the regular dividend increased from 18 yen to 20 yen).
3【Overall Results】
FY2016 Full-Year Results (Consolidated)
・Orders received exceeded the last fiscal year, increasing greatly due to large-scale projects in Facilities Construction and Environmental Systems, etc.
・Net sales fell short of the previous fiscal year, particularly due to the fall in the amount of large-scale projects completed, and as a result,the balance carried forward increased greatly.
・Although all profit items fell slightly short of FY2015, in which they were at a high level, they were still significantly greater than FY2014,
so we continued to maintain a high level.
(Millions of yen)
In particular, gross profit margin further improved, hitting the highest level in the last 10 years at 13.4%.

FY 2014

FY 2015

FY 2016

Year onyear

Rate ofchange (%)

Orders received

173,398

183,270

185,880

2,609

1.4Balance carried forward

102,019

106,388

123,756

17,367

16.3

Net sales

179,598

178,901

168,512(10,389)(5.8)

178,220

177,262

166,817(10,445)

(5.9)

1,378

1,638

1,694

55

3.4

17,96622,92922,538

(391

(1.7)

17,64822,55622,184

(371)

(1.6)

318

373

353

(19)

(5.3)

10.0

12.8

13.4

0.6pt.

―

Selling, general and administrative expenses

15,015

16,41916,526106

0.6

Operating income (loss)

2,951

6,509

6,012(497)(7.6)

Non-operating income

1,607

2,365

1,243

(1,122)(47.4)

Non-operating expenses

749740375(365)(49.3)

Ordinary income (loss)

3,809

8,135

6,880(1,254)(15.4)

Profit attributable to owners of parent (loss)

2,461

5,327

4,698(629)(11.8)

Completed construction contracts
Real Estate and Others
Gross profit
Completed construction contracts
Real Estate and Others
Gross profit margin (%)

4【Orders Received】
Orders Received by Segment (Consolidated)
・In the Facilities Construction Business, orders received by HVAC and Plumbing for Buildings remained steady, following on from the last fiscal year, due to orders
received for large-scale projects. Other segments remained roughly on par with FY2014 despite being down year on year due to occurring on the downward end of the cycle.
・Orders received by Plants & Machinery Systems Business were up to a large extent, with a significant increase in Environmental Systems, which received orders forlarge-scale projects during the fiscal year under review. This happened in spite of the decline in Machinery Systems, which received orders for large-scale projects inthe previous fiscal year.
(Millions of yen)Segment

FY 2014

FY 2015

FY 2016

Year onyear

Rate ofchange (%)

HVAC and Plumbing for Buildings

70,77866,172

65,763

(409)

(0.6)

Industrial HVAC

46,76552,522

49,823(2,699)(5.1)

Electrical Systems

23,21522,667

21,576(1,090)(4.8)

Facility Systems

9,272

11,0709,450(1,620)(14.6)

150,032

152,432

146,612(5,820)(3.8)

Machinery Systems

5,716

10,3098,130(2,178)(21.1)

Environmental Systems

16,767

19,61030,626

11,01556.2

22,48329,91938,756

8,837

29.5

172,516

182,352

185,369

3,017

1.7

1,285

1,532

1,592

59

3.9

Others

481

524

491

(33)

(6.3)

Adjustments *(884)(1,139)(1,573)(433)―

173,398

183,270

185,880

2,609

1.4

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems Business
Sub-total
Real Estate Business

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

5

【Net Sales】
Net Sales by Segment (Consolidated)
・Although net sales fell short of the previous fiscal year, particularly in Facilities Construction (HVAC and Plumbing for Buildings), where large-scale projects were
notably down, overall balance carried forward amounted to 123,756 million yen (of which HVAC and Plumbing for Buildings accounts for 60,013 million yen).
・Net sales by Industrial HVAC, Electrical Systems, and Facility Systems all fell short of the previous fiscal year; however, they were equivalent to those in FY2014.

Segment

FY 2014

FY 2015

FY 2016(Millions of yen)

Year onyear

Rate ofchange (%)

HVAC and Plumbing for Buildings

72,37164,49260,376(4,116)(6.4)

Industrial HVAC

47,01552,08449,440(2,644)(5.1)

Electrical Systems

21,884

22,95821,542(1,416)(6.2)

Facility Systems

9,897

10,416

10,208

(208)

(2.0)

151,169

149,952

141,567(8,384)(5.6)

Machinery Systems

9,953

9,217

8,192

(1,024)(11.1)

Environmental Systems

17,48518,734

18,271

(463)

(2.5)

27,43927,951

26,464(1,487)(5.3)

178,608

177,904

168,032(9,872)

(5.5)

1,285

1,532

1,592

59

3.9

Others

508

542

499

(43)

(7.9)

Adjustments *(803)(1,077)(1,611)(533)―

179,598

178,901

168,512(10,389)(5.8)

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems Business
Sub-total
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 onyear

FY 2016

Rate ofchange (%)

Segment Profit Loss

2,943

7,698

6,404

(1,293)(16.8)

Machinery Systems

105275

(138)

(413)

―

Environmental
Systems

24(315)

671

987

―

3,073

7,658

6,938(719)(9.4)

Sub-total（Real Estate Business

207

233189(43)(18.8)）

Others

485222(30)(57.2)

Adjustments *479

191

(270)

(461)

―3,809

8,135

6,880

(1,254)(15.4)

Total＊ The amount of adjustments of profit and loss by segment indicates that of all company’s profit and loss not
distributed into each segment.

7

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

FY 2015

FY 2016

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Orders received

42,48938,75855,92336,226

46,38552,82048,31135,75355,33835,57347,25047,716

Net sales

32,82542,682

47,14556,94534,49540,98547,02256,39733,86636,47444,222

53,949Gross profit

1,700

3,224

4,753

8,287

3,291

4,812

6,043

8,783

3,905

4,238

5,566

8,827

5.2

7.6

10.1

14.6

9.5

11.7

12.9

15.6

11.5

11.6

12.6

16.4

Selling, general andadministrative
expenses

3,786

3,845

3,552

3,831

3,921

4,005

3,783

4,709

4,171

3,915

3,798

4,640

Operating income (loss)(2,085)

(620)

1,201

4,456(630)

807

2,259

4,073

(265)

323

1,767

4,187

Operating profit margin
(%)

(6.4)

(1.5)

2.5

7.8

(1.8)

2.0

4.8

7.2(0.8)

0.9

4.0

7.8

Ordinary income (loss)(1,846)

(478)

1,612

4,522(254)

778

2,554

5,055

27

341

2,085

4,425

Extraordinary income(loss)

―

(18)

(116)

(312)

(55)

30

96(371)

―

(32)

(43)

200(1,215)

(111)

1,119

2,669(266)

521

1,790

3,282

(2)

232

1,349

3,119

Gross profit margin (%)

Profit attributable toowners of parent (loss)

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

200,000
Orders received

180,000
160,000

Net sales

140,000

Balance carriedforward120,000
100,000
80,00060,00040,00020,000
0
2013

2014

2015

2016

2017

FY(Forecast)9【Operating Results】
Operating Results over the Last 5 Years (Consolidated)<Profit>(Millions of yen)（％）

30,00016.0
14.0

25,000Gross profit (left axis)

12.0

20,000Operating income (left axis)
Ordinary income (left axis)

10.0
15,000

8.0

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

6.0
10,0004.05,000

2.000.02013

2014

2015

2016

2017

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

FY 2016
35,000Governmnet Offices
Medical Services
Wholesale and Retail
Trade
Miscellaneous
business services
Education
Real Estate
Finance and Insurance
Food
ChemicalMachinery
PharmaceuticalIndustry
Automobile
Electrical Machinery

0FY 2015
40,00030,00025,00020,00015,00010,0005,00011【Orders Received】
Orders Received by Type(Millions of yen)
FY 2013

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

FY 2014

FY 2015ＡFY 2016
Ｂ

Diff.
Ｂ－Ａ

137,027

143,708

145,069

139,997(5,071)73,60868,96372,751

61,493(11,257)

53.7

48.0

50.1

43.9

(6.2)
pt.

168,295

173,398

183,270

185,880

2,609

3,055

2,931

2,343

1,612

(730)

1.8

1.7

1.3

0.9(0.4)

Orders received for renewal construction(Consolidated)

88,473

93,33999,920101,114

1,194

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

52.6

53.8

54.5

54.4(0.1)

98,02496,46896,32593,602(2,723)

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. (1,100 millions of yen in FY
2016) ,unconsolidated subsidiary , are not included in orders received from overseas projects .

pt.

pt.

12

【Orders Received】
Major Projects
・Building Construction (high rise tower) for Toranomon 1-chome Type 1 City Redevelopment Project(Air Conditioning (HVAC) works) <New construction work>
・Bank of Yokohama, Head Office(Air Conditioning (HVAC) works) <Renovation work>
・NKC Nagai Green Power Generation Facility(Air Conditioning (HVAC) works) <New construction work>
・Daimaru Shinsaibashi Store Rebuilding Plan
(Air Conditioning (HVAC) works) <New construction work>
・Takeda Pharmaceutical Company Limited, HIKARI Plant(Air Conditioning (HVAC) works) <New construction work>
・Toyota Motor Corporation PI Tower Project(Air Conditioning (HVAC) works) <New construction work>
・Minami-Gamo Purification Center No. 4 Sludge Incineration Facility Construction in Sendai City
(Sewage treatment facilities) <Expansion>・Renovation Work of Sendai Clean Center in Satsuma-Sendai City
(General waste treatment facilities) <Renovation work to basic facilities, operation management>
・The North Purification Center in Yamato City
(Sewage treatment facilities) <Maintenance management>

6 other projects*The property name is the name being used by the Company. This may differ from the name used on the construction contract. 13

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

FY 2015

FY 2016

Office23

4Complex building―

1―

Commercialfacility

1

11Factory

154School―

12 Projects

119 Projects―

15 Projects

Hospital

2(20,619 million yen)2

(31,476 million yen)1

(40,057 million yen)

Research institute2

Government
office building

2

Waste processing
facility―

Power station,Substation―

Water and sewage
treatment facility

1

12Others

11―

1＊ Orders received from
customers ：4 Projects＊ Orders received fromgeneral contractors：8 Projects―
3―1＊ Orders received from
customers ：6 Projects＊ Orders received fromgeneral contractors：13 Projects―
11＊ Orders received from
customers ：9 Projects＊ Orders received fromgeneral contractors：6 Projects

14

【Profit】
Profit Improvement Factors and Measures○Improvement of the external environment○Thorough cost management○Developing site support systems
・Purchasing operations support by the Procurement Division
・Documentation support by the Site-Documentation
Support Center・Design work support by the Design and Engineering
Support Center (established in April 2016)
・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 Choice System15

【Financial Conditions】
Balance Sheet (Consolidated)(Millions of yen)
End of
FY 2015

End ofFY 2016

Year on year

Rate ofchange (%)

Current assets

115,491

114,906

(585)

(0.5)

Noncurrent assets

53,931

51,705(2,225)(4.1)

Current liabilities

72,863

68,776(4,087)(5.6)

Noncurrent liabilities

12,001

11,875

(126)

(1.1)

Total net assets

84,55785,961

1,403

1.7

Total assets

169,423

166,612(2,810)(1.7)

Book-value per share (yen)1,328.60

1,350.08

21.48

1.6

49.8

51.5

1.7

―Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

5,992

5,654(337)

(5.6)
16

【CF】
Statement of Cash Flows (Consolidated)
・The balance of cash and cash equivalents increased year on year.
The increase in cash flows from operating activities is mainly due to the continued recovery of receivables and theinclusion of income before taxes and other adjustments.
The decrease in cash flows from investment activities is mainly due to the acquisition of investment securities.
The decrease in cash flows from financing activities is mainly due to the payment of dividends.

(Millions of yen)

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

Cash flows from operating activities

9,729(9,403)

(139)

5,220

10,845

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

3,440

5,520

(1,644)

Cash flows from financing activities(1,028)(4,152)(2,901)(1,826)(2,458)Cash and cash equivalents at end of FY

40,36723,51023,667

32,501

39,187

Capital investment(including intangible assets)

645

545

395

855

1,015

Depreciation and amortization

1,207

740

723

723

718

17

【Shareholder Returns】
Dividends and Others
・Including the extra dividend of 10 yen, we paid a total annual dividend of 30 yen, which is the sameas the previous fiscal year (the regular dividend increased from 18 yen to 20 yen).
FY 2012

Earnings per share (yen)FY 2013

FY 2014

FY 2015

FY 2016(71.04)

26.46

38.30

83.84

73.91

Cash dividends per share:
regular dividends (yen)1515151820

Cash dividends per share:commemorative dividends (yen)

―

―

5―

―

Cash dividends per share:
extra dividends (yen)

―

―

―

1210

Cash dividends per share (yen)

15

15

20

30

30

Payout ratio (consolidated) (%)

―

56.7

52.2

35.8

40.6

4,169

3,598

3,375

3,397

3,157

Stock price at end of FY (yen)

492

654

930

901

958

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) (%)

(6.4)

2.3

3.0

6.3

5.5

ROA (Return on Assets) (%)

1.6

1.9

2.2

4.7

4.1

Number of shareholders at end of FY<Reference>18

【Overall Forecast】
FY2017 Forecast (Consolidated)(Millions of yen)

FY 2013

FY 2014

FY 2015

FY 2016
ＡFY 2017
Forecast
Ｂ

Increase/decrease
Ｂ－Ａ

Rate ofchange(%)

Orders received

168,295

173,398

183,270

185,880

186,000

120

0.1

Balance carried forward

108,219

102,019

106,388

123,756

129,756

6,000

4.8

Net sales

171,496

179,598

178,901

168,512

180,000

11,4886.8Gross profit

18,423

17,96622,92922,53824,000

1,462

6.5

Gross profit margin (%)

10.7

10.0

12.8

13.4

13.3(0.1)―

Operating income (loss)

2,818

2,951

6,509

6,012

7,000988

16.4

Ordinary income (loss)

3,146

3,809

8,135

6,880

7,500

620

9.0

Profit attributable toowners of parent (loss)

1,763

2,461

5,327

4,698

5,000302

6.4

19【Forecast of Orders Received and Net Sales】
FY2017 Forecast of Orders Received andNet Sales by Segment (Consolidated)(Millions of yen)
FY 2017
Orders received ForecastSegment

FY 2017
Net sales Forecast

HVAC and Plumbing for Buildings

71,70069,700Industrial HVAC

49,00046,000Electrical Systems

22,00023,000

Facility Systems

9,500

9,500

Total of Facilities Construction Business

152,200

148,200

Machinery Systems

12,00010,000

Environmental Systems

20,00020,000Total of Plant & Machinery Systems Business

32,00030,000184,200

178,200

1,800

1,800

500

500

(500)

(500)

186,000

180,000

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

20Progress of the Medium-Term
Management Plan (1) (Priority Measures)
Results of the First Fiscal Year of “Century 2025”

Policies for FY2017

Strengthen CoreBusinesses○Facilities Construction
Increase in quantity handled by the Procurement Division
Expansion of site support menu
Operation of the Design & Engineering Support Center○Machinery Systems: Hybrid facilities○Environmental Systems: New dehydrators, biomass
power generation plants, and DBO waste treatment
facilities○Facility Systems: Restructured local banks,
redevelopment projects in Tokyo○Facilities Construction
Expansion of site support activities
through review of work styles foroffice workers○Machinery／Environmental／FacilitySystems
strategy continuationPromote GrowthStrategies○Established the International Business Division○Received orders for large-scale projects which will
become future stock○Developed a “visualization” system for stockprojects○IoT-related development○Building up stock projects○PFI／DBO projects

Enhance theSanki Brand○Established systems that are more conducive towork and provided full welfare services○Meetings to exchange opinions with the president(held 30 times with 240 participants in total)○Sanki Ladies’ Conference○Renewal of Sanki brandawareness○Continuation of strategies toimprove communication21

Progress of the Medium-TermManagement Plan (2) (ESG)
Results of the First Fiscal Year of “Century 2025”

Ｅ○Whole group
SANKI YOU eco contribution points○Facilities Construction
Received Society of Heating, AirConditioning and SanitaryEngineersof Japan Award
Received Institute of Electrical
Installation Engineers of JapanAward○Machinery Systems
Reduced electricity usage by 25%
with lightweight conveyors○Environmental Systems
Reduced electricity usage and CO2
emissions by 50% through3 strategic products○Whole group
SANKI YOU eco contribution points○Machinery Systems
Focus on increasing sales of the S-CON
MINI○Environmental Systems
Increase sales of 3 strategic productsＳ○Work style reform“Smile Project”○Established systems thatare more conducive towork○Tripled foreign workers
compared to 5 years ago(diversity)

Ｇ○Formulated andreleased the Long-Term
Vision and Medium-Term
Management Plan
○Increased the numberof external directors by 1
○Instituted selfevaluation by the Boardof Directors

Policies for FY2017○Continue system reform○Continue initiatives forbetter governance○Assess effectiveness22

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 onanticipations, assumptions, evaluations and estimations in light of the information available as of May 12,2017.
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.

23