FY2019 Summary of Financial Results
May 15, 2020

FY2019 Financial Summary (1)☆Key Points of Financial Results<Orders received> 194.0 billion yen (217.0 in the previous fiscal year)● Orders received by the Facilities Construction Business fell short of the previous fiscal year, mainly due to the effect of orders forlarge-scale projects received for Industrial HVAC in the previous fiscal year
Orders received by the Plant & Machinery Systems Business increased, mainly due to orders for large-scale projects received forEnvironmental Systems<Net sales> 207.6 billion yen (212.3 billion yen in the previous fiscal year)● In the Facilities Construction Business, net sales for HVAC and Plumbing for Buildings, Electrical Systems, and Facility Systems
firmed over the previous fiscal year
Net sales for Industrial HVAC declined due to the impact of a favorable previous fiscal year
The Plant & Machinery Systems Business generated increased net sales, mainly due to net sales for large-scale projects received in
Environmental Systems<Gross profit> Gross profit margin of 15.5% (14.9% in the previous fiscal year)● The gross profit margin improved over the previous fiscal year, due to initiatives such as ongoing thorough cost management andimproved work efficiency
Irrespective of a decline in revenue, gross profit, operating income, and ordinary income increased, and profit attributable to owners ofparent remained at a high level● All profit items exceeded the mid-term forecasts released on February 7, 2020, in spite of a slight decline in net sales<Medium-term management plan “Century 2025” Phase 2 targets>● Targets for fiscal 2019, which is the first fiscal year of the plan, were all achieved (nets sales: 200.0 billion yen, gross profit: 30.0 billion
yen, gross profit margin:15.0%, ordinary income: 9.0 billion yen, ordinary profit margin: 4.5%)*The impact of the novel coronavirus pandemic was minimal in fiscal 2019
<FY2020 results forecasts>● Maintain “Century 2025” Phase 2 targets

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FY2019 Financial Summary (2)☆Stakeholder Returns<Shareholders>●Conducted shareholder returns according to medium-term management plan “Century 2025” Phase 2
financial and capital policies●Annual dividends of 95 yen (regular dividends: 70 yen, extra dividends: 25 yen), which is an increase of
35 yen over the previous fiscal year
●Acquisition of 1,958,000 shares of treasury stock and retirement of 2,000,000 shares of treasury stock●Payout ratio: 73.9%, total return ratio: 111.4%<Partner companies>●Review of payment terms
Review of payment terms for partner companies with a capital of 40.00 million yen (payments madeentirely in cash)<Response to social circumstances>●Commitment line agreements
Plan to conclude commitment line agreements for the purpose of securing funds to support partnercompanies and preparing to short-term demand for operating capital

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Contents

1

2

3

4

5

FY2019Results

FY2019Balance Sheetand Statementof Cash Flows

Shareholder
Returns

FY2020
Forecast

Supplementary
Materials

P5-11

P12-14

P15-17

P18-20

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FY2019 RESULT

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【Overall Results】
FY2019 Results (Consolidated)(Millions of yen)

FY2017FY2018FY2019Year on year

Rate ofchange(%)

Orders received

191,113217,096

194,018(23,077)(10.6)

Balance carried forward

144,712

149,495

136,163(13,332)(8.9)

Net sales

170,157

212,314207,684(4,629)(2.2)

168,266

210,245

205,247(4,997)

(2.4)

1,890

2,069

2,437

368

17.8

25,06031,684

32,110426

1.3

24,40330,99031,224

233

0.8

656

694

886

192

27.7

14.7

14.9

15.5

0.6pt.

－

Selling, general and administrative expenses

18,466

21,046

21,436389

1.9

Operating income

6,593

10,637

10,674

36

0.3

841

566

550

(16)

(2.9)

Ordinary income

7,434

11,204

11,22420

0.2

Extraordinary income (loss)

(979)

122

(110)

(232)

－

Profit attributable to owners of parent (loss)

3,906

9,046

7,576

(1,469)(16.2)

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

Non-operating income and loss

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【Overall Results】
Quarterly Results (Consolidated)
FY 2017(Millions of yen)

FY 2018

FY 2019

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Orders received

38,20957,56643,881

51,45650,88552,934

51,22862,04846,69754,20450,031

43,085Net sales

32,93339,573

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

51,83364,006Gross profit

3,482

5,837

5,995

9,744

4,329

6,442

8,654

12,258

5,305

7,862

7,460

11,482Gross profit margin (%)

10.6

14.8

13.9

17.9

12.3

14.2

14.1

17.4

13.0

15.4

14.4

17.9

Selling, general andadministrative expenses

4,442

4,386

4,193

5,443

4,571

5,072

4,965

6,437

4,983

4,992

5,063

6,396

Operating income (loss)

(960)

1,450

1,802

4,300

(242)

1,369

3,688

5,821

322

2,869

2,396

5,085

Operating profit margin (%)

(2.9)

3.7

4.2

7.9

(0.7)

3.0

6.0

8.3

0.8

5.6

4.6

7.9

Ordinary income (loss)

(593)

1,546

2,093

4,388

92

1,447

3,848

5,815

547

2,955

2,644

5,076

Extraordinary income (loss)

(327)

(806)

(381)

536

(147)

(3)

(1,167
)

1,439

24

84

49

(269)

Profit attributable toowners of parent (loss)

(604)

508

1,119

2,882

(66)

862

1,743

6,505

428

2,057

1,815

3,276

7
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【Orders Received】
Orders Received by Segment (Consolidated)(Millions of yen)Segment

FY 2017

FY 2018

FY 2019

Year on year

Rate of
Change (%)

HVAC and Plumbing for Buildings

62,27465,63962,095(3,543)(5.4)

Industrial HVAC

58,90782,72958,391(24,338)(29.4)

Electrical Systems

22,67523,34225,0001,658

7.1

Facility Systems

9,585

10,821

12,171

1,349

12.5

153,443

182,533

157,659(24,874)(13.6)

Machinery Systems

12,10012,04910,351(1,698)(14.1)

Environmental Systems

24,247

21,70524,247

2,542

11.7

Total of Plant & Machinery Systems Business

36,34733,75534,599843

2.5

Sub-total

189,791

216,288

192,258(24,030)(11.1)

1,755

1,926

2,210

284

14.7

587

960

917

(42)

(4.4)

(1,020)(2,078)(1,367)710―

191,113217,096

194,018(23,077)(10.6)

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments *Total* “Adjustments” eliminate internal transactions included in each segment.

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

FY 2017

FY 2018

FY 2019

Year on year

Rate of
Change (%)

HVAC and Plumbing for Buildings

63,782

71,55870,756

(802)

(1.1)

Industrial HVAC

46,55673,49367,736(5,756)(7.8)

Electrical Systems

20,653

23,214

21,889(1,325)(5.7)

Facility Systems

8,695

11,033

11,11985

0.8

139,688

179,300

171,501(7,798)(4.3)

Machinery Systems

9,254

11,791

11,169

(621)

(5.3)

Environmental Systems

19,90920,471

23,261

2,789

13.6

Total of Plant & Machinery Systems Business

29,16432,26334,431

2,167

6.7

Sub-total

168,853

211,563

205,932(5,630)

(2.7)

1,755

1,926

2,210

284

14.7

578

718

931

213

29.7

(1,030)(1,893)(1,389)503―

170,157

212,314207,684(4,629)(2.2)

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments*
Total* “Adjustments” eliminate internal transactions included in each segment.

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

Year on year

Rate of
Change (%)

23,610

(102)

(0.4)

1,877

2,170

293

15.6

19,122

25,59025,781190

0.7

Machinery Systems

1,749

2,136

2,316

180

8.4

Environmental Systems

3,666

3,622

3,314

(308)

(8.5)

Total of Plant & Machinery
Systems Business

5,416

5,759

5,631

(128)

(2.2)

Sub-total

24,53831,34931,41262

0.2

Real Estate Business

543

567

673

106

18.8

Others

192

178

200

22

12.4

Adjustments

(213)

(411)

(176)

234

－

25,06031,684

32,110426

1.3

Gross Profit by segment

Segment

FY 2017

FY 2018

FY 2019

HVAC and Plumbing for
Buildings/Industrial HVAC
/Electrical Systems

17,65623,712

Facility Systems

1,465

Total of Facilities
Construction Business

Total

10

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【Profit】
Profit Improvement Factors and Measures● Strong business environment(The impact of the novel coronavirus pandemic was minimal in fiscal 2019)● 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
・Conducting the Liaison Meeting for subcontractor groups
・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)

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FY2019
BALANCE SHEET AND
STATEMENT OF CASH FLOWS

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【Financial Conditions】
Balance Sheet (Consolidated)
End of
FY 2018
Current
assets(Millions of yen)

End of
FY 2019

Year on year

Rate ofchange (%)

141,342

130,765(10,576)(7.5)

85,24371,739(13,503)(15.8)

53,97950,040(3,939)(7.3)

27,87924,017(3,862)(13.9)

91,31779,705(11,612)(12.7)

68,28652,489(15,796)(23.1)

Noncurrent liabilities

14,232

13,735

(496)

(3.5)

Total net assets

89,77287,364(2,407)(2.7)(3,700)(4,187)(487)―

Total assets

195,321

180,805(14,516)(7.4)

Book-value per share

1,502.53

1,510.59

8.06

0.5

45.8

48.2

2.4

―

12,094

10,719(1,375)(11.4)

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

Treasury stock

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

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【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 inclusion of income before taxes and otheradjustments.
• The decrease in cash flows from investment activities is mainly due to the acquisition of property, plant and equipment• The decrease in cash flows from financing activities is mainly due to the repayment of long-term loans payable, expenditurefrom the purchase of treasury stock, and the payment of dividends(Millions of yen)

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

Cash flows from operating
activities

5,220

10,845

6,306

6,786

11,940Cash flows from investing
activities

5,520(1,644)(2,510)(3,775)(303)

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

1,814(5,215)(8,955)

Cash and cash equivalents at
end of period

32,501

39,18744,866

42,61245,946

Capital investment(including intangible assets)

855

1,015

3,772

6,110

2,197

Depreciation and amortization

723

718

818

1,340

1,643

14
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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.
・ An extra dividends of 25 yen has been paid in addition to the regular dividends of 70 yen, resulting in a total annual dividends of 95 yen, which isan increase of 35 yen from the previous fiscal year.
・ Acquired 1,958,000 shares of treasury stock in fiscal 2019. Retirement of 2,000,000 shares of treasury stock conducted on August 19, 2019.

FY 2015

FY 2016

FY 2017

FY 2018

September2019

FY 2019

83.84

73.91

63.02

150.0241.71

128.51

Cash dividends per share:
regular dividends (yen)

18

20

20

40

35

70

Cash dividends per share:
extra dividends (yen)

12

10

15

20

―

25

Cash dividends per share (yen)

30

30

35

60

35

95

Payout ratio (consolidated) (%)

35.8

40.6

55.5

40.0

73.9

35.8

40.6

148.9

52.9

111.4

3,397

3,157

3,243

3,381

3,357

4,216

Stock price at end of FY (yen)

901

958

1,188

1,210

1,280

1,211

Acquisition of treasury stock(thousand shares)

―

―

3,000

1,000

―

1,958

Retirement of treasury stock(thousand shares)

―

―

3,000

1,000

2,000

2,000

ROE (Return on Equity) (%)

6.3

5.5

4.5

10.3

8.6

ROA (Return on Assets) (%)

4.7

4.1

4.3

6.0

6.0

Earnings per share (yen)Total return ratio (%)
Number of shareholders at end of FY

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【Shareholder Returns】
Total Return Ratio
・ Achieved at least 70% shareholder returns according to medium-term management plan “Century 2025” Phase 2
financial and capital policies.
(Millions of yen)Phase 1

Phase 2（％）

10,000160.0%
1 4 8 .9%

Value of treasury stock acquired
自己株式取得額（左軸）(left axis)
140.0%

配当金支払額（左軸）Amount of dividends (left axis)

8,000
1 1 1 .4%

6,000

2 , 8 99

120.0%

Total return ratio (right axis)
総還元性向（右軸）100.0%

80.0%
1 ,1 91
4,000←70% Total return ratio

3 ,6 79

60.0%
5 2 .9%5 , 5 43

3 5 .8%4 0 .6%

2,000

40.0%

3 , 5 95
1 , 9 06

1 , 9 06

2 ,1 36

2015

2016

2017

20.0%

0

0.0%
2018

2019

17
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FY2020 FORECAST

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

FY 2016

FY 2017

FY 2018

FY 2019
A

Initialforecast
for FY 2020
B

Increase/
Decrease
B–A

Rate ofchange(%)

Orders received

185,880

191,113217,096

194,018

190,000(4,018)(2.1)

Balance carried forward

123,756

144,712

149,495

136,163

126,163(10,000)(7.3)

Net sales

168,512170,157

212,314207,684

200,000(7,684)(3.7)

Gross profit

22,53825,06031,684

32,11031,000(1,110)

(3.5)

13.4

14.7

14.9

15.5

15.5

―

―

Operating income

6,012

6,593

10,637

10,6749,000(1,674)(15.7)

Ordinary income (loss)

6,880

7,434

11,204

11,2249,500(1,724)(15.4)

Profit attributable to owners ofparent

4,698

3,906

9,046

7,576

6,500

(1,076)(14.2)

Regular dividends per share (yen)

20

20

40

70

70

－

－

Extra dividends per share (yen)

10

15

20

25

－

(25)

－

30

35

60

95

70

(25)

－

Gross profit margin (%)

Dividends per share (yen)* Although results have been incorporated, which take into account the impact of novel coronavirus pandemic on business of our group, business results may befurther impacted due to future spread of the impact of novel coronavirus pandemic.

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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 Forecast

Segment(Millions of yen)

FY 2020
Net sales Forecast

HVAC and Plumbing for Buildings

65,00060,000Industrial HVAC

57,00066,000Electrical Systems

22,00025,000

Facility Systems

11,00011,000155,000

162,000

Machinery Systems

12,00011,000

Environmental Systems

21,00025,000Total of Plant & Machinery Systems Business

33,00036,000Sub Total

188,000

198,000

2,000

2,000

500

500

(500)

(500)

190,000

200,000

Total of Facilities Construction Business

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)

FY 2016

Orders received (Non-consolidated: Facilities
Construction Business)

FY 2017

FY 2018AFY 2019
B

Diff.
B–A

139,997

147,013

173,553

147,191(26,361)

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

61,49367,34578,304

48,238(30,066)

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

43.9

45.8

45.1

32.8

(12.3)

185,880

191,113217,096

194,018(23,077)

1,612

1,246

2,379

3,143

763

0.9

0.7

1.1

1.6

0.5

Orders received for renewal construction(Consolidated)

101,114

101,597

117,619

112,909(4,709)Rate of orders received for renewal
construction (Consolidated) (%)

54.4

53.2

54.2

58.2

4.0

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

93,602

94,601

116,627

114,208(2,418)Orders received (Consolidated)
Orders received from overseas projects(Consolidated)*
Rate of orders received from overseas
projects (Consolidated) (%)

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

50,00045,000FY201740,000FY201835,000FY201930,00025,00020,00015,00010,0005,000
Government Offices

Miscellaneous business services

Wholesale and Retail Trade

Education

Medical Services

Real Estate

Finance and Insurance

ChemicalMachinery

Food

Pharmaceutical Industry

Automobile

Electrical Machinery

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【Orders Received】
Main 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 to
improve core equipment at waste treatment facility

Construction of waste
treatment system

RenewalFukushima

Bank of Japan Head Office Fuchu Branch Machinery Building

HVAC and Plumbing
systems

Expansion

Tokyo

Reconstruction of Toyota Motor Technical Department

HVAC, Plumbing andElectrical systems

New construction work

Aichi

Toyota Technical Center Shimoyama

HVAC, Plumbing andElectrical systems

New construction workAichi

7 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
Property nameItem of construction

Type of construction

Location

HVAC systems

New construction work

Fukuoka

Sony Semiconductor Manufacturing Corporation
Yamagata Technology Center

HVAC and Electrical systems

Renovation

Yamagata

NISSAY Logistics Center YOKOHAMA-MACHIDA

HVAC, Plumbing and Electricalsystems

New construction work

Kanagawa

Nihon Shokken Holdings Co., Ltd. Schönbrunn Palace Factory

HVAC systems

New construction work

Ehime

Daimaru Shinsaibashi: Main Building reconstruction project

HVAC systems

New construction work

Osaka

Takashimaya Osaka: Eastern annex renovation project

HVAC and Plumbing for Buildings

Renovation

Osaka

Ajinomoto Tokai Plant: Construction of new factory

HVAC and Plumbing for Buildings

New construction work

Mie

Park Hyatt Niseko HANAZONOHVAC systems

New construction work

Hokkaido

Toranomon Hills Business Tower new construction project

HVAC systems

New construction work

Tokyo

Yoyogi National Gymnasium 1st Gymnasium

HVAC, Plumbing and Electricalsystems

RenovationTokyo

Otemachi One Tower new construction project

HVAC systems

New construction work

Tokyo

Works to enhance facilities for a next-generation ultra-high-speed computer
system in fiscal 2018

HVAC systems

Renovation

Hyogo

Tenzan area energy recovery waste treatment facilities

Construction of waste treatment
systemNew construction work

Saga

Tsushima Clean Center renovation project

Construction of waste treatment
systemRenovation

NagasakiSendai Clean Center renovation projectCore equipment renovation project

Renovation

Kagoshima

Kintetsu Hakata Building

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.

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【Orders Received】
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)
FY2017FY2018FY2019

Office２２１Complex building

―

１

―

Hotel

１

１

―

Factory６

１０

３

Logistics Center

―

１

―

Multiple – dwelling complex

２

１

―

Hospital and Clinics

１

Research institute１

20
Projects（40,822
million yen）

１
１

23
Projects（55,118
million yen）

１
２

13
Projects（31,945
million yen）

General governmentbuildings－

Gymnasium

１* Orders received from
customers: 9 Projects

１* Orders received from
customers: 10 Projects―* Orders received from
customers: 9 Projects

Other building interiors

３１* Orders received fromgeneral Contractors: 13 Projects

２* Orders received fromgeneral Contractors: 4 Projects

Railway, Airport

１* Orders received fromgeneral Contractors: 11 Projects

Power station, Substation

―

―

１

Waste processing facility

２

１

１

Water treatment plants andsewage plants

―

―

１

１

１

１

―

26
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【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Orders Received/Net Sales>
Phase 1

Phase 2

(Millions of yen)Orders received

200,000

Net sales
Balance carriedforward150,000

100,000

50,000

0
2016

2017

2018

2019

2020
(Forecast)

27©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
10,000
4.0
5,000
2.0

0

0.0
2016

2017

2018

2019

2020

(Forecast)

28©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.

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 May 15, 2020.
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 Communications
Department● Risk of legal regulation.
● Outbreak to the natural disasters.

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

29©2020 SANKI ENGINEERING CO., LTD. All Rights Reserved.