The 3rd Quarter FY2017
Summary of Financial Results
February 9, 2018

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
FY2017 3Q 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
Main Major Projects Received
Main Major Completed Construction Projects
Major Projects Received over 1 Billion Yen (by Industry)
Profit Improvement Factors and Measures
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
FY2017 Full Year Forecast (Consolidated)
FY2017 Forecast of Orders Received and Net Sales by Segment (Consolidated)

03
04
05
06
07
08
09
10
11
12
13
14
15
16
1718
1920
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Key Points of Financial Results<Orders received>
HVAC and Plumbing for Buildings declined due to factors such as being on thedownward end of a received ordering cycle of large-scale projects, but orders
received increased significantly for Industrial HVAC and Electrical Systems.
As a result, orders received for the Facilities Construction Business increasedoverall.
Orders received increased significantly for the Machinery Systems Business,
which received large-scale projects in this fiscal year, but Environmental Systems
decreased due to the impact of large-scale projects received in the same period of
the previous year.
As a result, consolidated orders received exceeded levels compared with theprevious year, and the balance carried forward also increased.
<Net Sales & Profit>
Net sales increased overall, due to the dramatic increase in HVAC and Plumbing for
Buildings compared with the same period of the previous year.
In terms of profit, gross profit margin improved compared with the same period of
the previous year as a result of further pursuing initiatives, including theenhancement of our site support systems. Gross profit, operating income, andordinary income increased on a year on year basis.
3

【Overall Results】
FY2017 3Q Results (Consolidated)• Orders received increased, due to factors such as receipt of large-scale projects for Industrial HVAC, Electrical Systems, and Machinery Systems,and the balance carried forward also rose significantly. Net sales increased compared with the same period of the previous year, due to the dramatic increase
in HVAC and Plumbing for Buildings.
• Gross profit margin improved due to higher construction profitability, and there were increases in gross profit, operating income, and ordinary income.
• Profit attributable to owners of parent decreased due to the recording of extraordinary loss, such as a loss on retirement of noncurrent assets, etc.
associated with the Yamato Site Redevelopment Project, as in the first half.
(Millions of yen)

December
2015

December
2016

December
2017

Year onyear

Rate ofchange(%)

Orders received

147,517138,163

139,657

1,493

1.1

Balance carried forward

127,033

129,988

147,805

17,816

13.7

Net sales

122,503

114,563

115,608

1,044

0.9

121,264

113,289

114,182

893

0.8

1,238

1,274

1,425

151

11.9

14,146

13,71015,315

1,604

11.7

13,845

13,431

14,788

1,356

10.1

301

279

526

247

88.6

11.5

12.0

13.2

1.2

―

Selling, general and administrative expenses

11,70911,88513,022

1,137

9.6

Operating income

2,436

1,825

2,292

467

25.6

Non-operating income

642

629753

124

19.7

Ordinary income (loss)

3,079

2,454

3,045

591

24.1

71(76)(1,515)(1,439)

―

2,045

1,578

1,023(554)(35.1)

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

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

4

【Orders Received】
Orders Received by Segment (Consolidated)• With regard to Facilities Construction Business, HVAC and Plumbing for Buildings declined due to factors such as being on the downward end of an ordering
cycle for large-scale projects; however, orders received for Industrial HVAC and Electrical Systems, including some large-scale projects, significantly increased,
resulting in an increase in overall Facilities Construction Business compared with the same period of the previous year.
• With regard to Plant & Machinery Systems Business, Machinery Systems increased, receiving large-scale projects in this period.
Although Environmental Systems decreased due to the impact of a large-scale DBO project received in the same period of the previous year,(Millions of yen)orders received remain high.

December
2015

Segment

December
2016

December
2017

Year on year

Rate ofchange(%)

HVAC and Plumbing for Buildings

56,50950,07443,564(6,510)(13.0)

Industrial HVAC

38,97735,684

41,421

5,737

16.1

Electrical Systems

18,23914,57017,417

2,846

19.5

Facility Systems

8,745

7,898

7,489

(409)

(5.2)

122,472

108,228

109,893

1,665

1.5

Machinery Systems

8,684

5,689

8,293

2,603

45.8

Environmental Systems

15,67023,90020,355(3,545)(14.8)

Total of Plant & Machinery Systems Business

24,35529,59028,649(941)(3.2)

Sub-total

146,827

137,818

138,542

723

0.5

1,148

1,189

1,311

121

10.2

Others

411

371

465

94

25.5

Adjustments *(870)(1,216)

(662)

553

―

147,517138,163

139,657

1,493

1.1

Total of Facilities Construction Business

Real Estate Business

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

5

【Net Sales】
Net Sales by Segment (Consolidated)• Net sales fell slightly overall for the Facilities Construction Business ; because, although net sales increased significantly in the HVAC andPlumbing for Buildings segment having a high balance carried forward at the beginning of the fiscal year, including large-scale projects, netsales fell in other segments.
• With regard to Plant & Machinery Systems Business, both Machinery Systems and Environmental Systems increased,(Millions of yen)recording an overall increase compared with the same period of the previous year.

December
2015

Segment

December
2016

December
2017

Year on year

Rate ofchange(%)

HVAC and Plumbing for Buildings

45,08839,26443,909

4,644

11.8

Industrial HVAC

35,88035,706

32,583(3,122)(8.7)

Electrical Systems

15,573

14,271

13,859

(411)

(2.9)

Facility Systems

7,124

7,296

5,348(1,948)(26.7)

103,667

96,537

95,700

(837)

(0.9)

Machinery Systems

5,811

5,908

6,696

787

13.3

Environmental Systems

12,038

11,515

12,165650

5.7

17,85017,424

18,862

1,437

8.3

121,517

113,961

114,562

600

0.5

1,148

1,189

1,311

121

10.2

Others

401

363

435

71

19.7

Adjustments *(564)

(952)

(700)

251―

122,503

114,563

115,608

1,044

0.9

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)
December
2015

December
2016

2,869

1,425

1,926

500

35.1

Machinery
Systems

(77)

45

33

(12)

(26.9)

EnvironmentalSystems

(867)

(204)

(331)

(127)

―

1,924

1,266

1,628

361

28.5

Real EstateBusiness

164

147

380

233

158.0

Others

52

25

53

27

108.2

Adjustments *938

1,014983

(30)

―

3,079

2,454

3,045

59124.1

Segment
Facilities
Construction

Segment Profit (Loss)

Sub-total

Total

December
2017

Year onyear

Rate ofchange(%)＊ 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)
FY2015FY2016FY2017

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Orders received

46,38552,82048,31135,75355,33835,57347,25047,71638,20957,56643,881

Net sales

34,49540,98547,02256,39733,86636,47444,222

53,94932,93339,573

43,102Gross profit

3,291

4,812

6,043

8,783

3,905

4,238

5,566

8,827

3,482

5,837

5,995

9.5

11.7

12.9

15.6

11.5

11.6

12.6

16.4

10.6

14.8

13.9

Selling, general andadministrative expenses

3,921

4,005

3,783

4,709

4,171

3,915

3,798

4,640

4,442

4,386

4,193

Operating income (loss)

(630)

807

2,259

4,073

(265)

323

1,767

4,187

(960)

1,450

1,802

Operating profit
margin(%)

(1.8)

2.0

4.8

7.2

(0.8)

0.9

4.0

7.8

(2.9)

3.7

4.2

Ordinary income (loss)

(254)

778

2,554

5,055

27341

2,085

4,425(593)

1,546

2,093

Net extraordinary income (loss)(55)3096(371)

―(32)

(43)

200(327)

(806)

(381)

Profit attributable to owners ofparent (loss)

(266)

521

1,790

3,282

(2)

232

1,349

3,119(604)

508

1,119

Gross profit margin(%)

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

200,000
180,000

Net sales

160,000

Balance carriedforward140,000120,000
100,000
80,00060,00040,00020,0000
2013

2014

2015

2016

2017

（Forecast）

9

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

30,000

16.0

14.0

Gross p rofit （left axis)

25,000Op e rating i ncome（left axis)
12.0

Ord inary i ncome（left axis)

20,000

10.0
Gross p rofit margin（right axis)
15,000

8.0

6.0

Op e rating p rofit margin（right axis)
Ord inary p rofit margin（right axis)

10,0004.0
5,000

2.000.02013

20142015

2016

2017

（Forecast）

10

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

35,000December 2015

30,000December 2016

Government
Miscellaneous businessservices
Wholesale and retail
trade
Education

Medical services

Real estate

Finance and Insurance

ChemicalMachinery

Food

Pharmaceutical Industry

Automobile

Electrical Machinery0

December 2017

25,00020,00015,00010,0005,000

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

FY2014FY2015FY2016

143,708

145,069

Orders received from general contractors (Nonconsolidated ：Facilities Construction Business)

68,963Rate of orders received from generalcontractors(Non-consolidated：Facilities ConstructionBusiness) (%)

48.0

Orders received (Non-consolidated ：FacilitiesConstruction Business)

Orders received(Consolidated)

December
2016

December
2017

Year onyear

139,997

103,753

105,366

1,613

72,751

61,49341,432

49,210

7,778

50.1

43.9

39.9

46.7

6.8
pt.

173,398

183,270

185,880138,163

139,657

1,493

2,931

2,343

1,612

1,018

857

(161)

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

1.7

1.3

0.9

0.7

0.6(0.1)

Orders received for renewal construction(Consolidated)

93,33999,920101,114

77,25877,942

684

53.8

54.5

54.4

55.9

55.8(0.1)

Orders received from overseas projects(Consolidated) *Rate of orders received for renewal
construction (Consolidated) (%)<Ref.>Net sales for renewal construction(Consolidated)

pt.

pt.

96,46896,32593,60263,444＊SANKI CONSTRUCTION ENGINEERING(SHANGHAI)CO.,LTD. ,unconsolidated subsidiary , is not included inorders received from overseas projects .

61,577(1,866)

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【Orders Received】
Main Major Projects Received○Major Projects Received
・Pharmaceutical Yokohama Research Institute(HVAC and Plumbing for Buildings) <New construction work>
・Yoyogi National Stadium’s First Gymnasium, etc.
(HVAC, Plumbing and Electrical systems) <Renovation>・(Tentative name) Bingocho Project(Electrical systems) <New construction work>
・Niseko Hanazono Hotel(HVAC systems) <New construction work>
・Narita International Airport Corporation, PTB 1 North Wing in-line system refurbishment (BHS)(Transport facilities) <Renewal>
・Renovation work in Tsushima Clean Center(Waste treatment facilities) <Renovation>

・Waste Treatment Facilities with Energy Recovery Type in the Tenzan area
(Waste treatment facilities) <New construction, operation, and maintenance>
Seven 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

【Net Sales】
Main Major Completed Construction Projects○Major Completed Construction Projects
・Saitama Sekishinkai Hospital, HVAC work for hospital relocation(HVAC systems) <New construction work>
・Yokota Air Base Yokota High School, machinery work for reconstruction(HVAC and Plumbing systems) <New construction work>
・Nakanoshima Festival Tower West
(Office HVAC systems) <New construction work>
・Takamatsu Sunport Combined Government Offices (South building)(HVAC and Plumbing systems) <New construction work>
・New Government Buildings for Kanagawa Prefecture(HVAC systems) <Renovation>
・Takeda Pharmaceutical Company Hikari Plant , New PCTM Building(HVAC systems) <New construction work>
・NKC Nagai Green Power,
Wood Biomass Gasification Power Generation Facility(HVAC and Plant Systems) <New construction work>

One other project*The property name is the name being used by the Company. This may differ from the name used on the construction contract. 14

【Orders Received】
Major Projects Received over 1 Billion Yen (by Industry)
December 2015

December 2016

December 2017

Office331Complex building

1――

Commercial facility

1――Hotel――

1Factory

3

23Multiple – dwelling complex――

2School1――

Hospital

2

Research institute

1Gymnasium―

Others1

Railway, Airport―

Power station,Substation―

1―

Waste processing facility

3

1

2

Water and sewage treatment
facility―1―

16 Projects（28,026 million yen）

1

10 Projects（31,848 million yen）

1
＊Orders received from
Customers : 5 Projects＊Orders received fromgeneral contractors:11 Projects――――

14 Projects（27,332 million yen)1
＊Orders received from
Customers : 7 Projects＊Orders received fromgeneral contractors:3 Projects

121＊Orders received from
Customers : 6 Projects＊Orders received fromgeneral contractors:8 Projects

15

【Profit】
Profit Improvement Factors and Measures○Improvement of the external environment○Thorough cost management○Developing site support systems• Improved support for purchasing operations by the Procurement
Division (established in 2015)• Expanded target of documentation support by theSite-Documentation Support Center (established in 2015)• Expanded support for design work by the Design and Engineering
Support Center (established in 2016)• 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
2016

End ofFY 2016

December
2017

Rate ofchange(%)

Diff.

Current assets

103,755

114,906

99,690(15,215)(13.2)

Noncurrent assets

54,59851,70558,647

6,941

13.4

Current liabilities

61,513

68,77659,710(9,065)(13.2)

Noncurrent liabilities

12,495

11,875

13,633

1,758

14.8

Total net assets

84,34485,961

84,994

(966)

(1.1)

Total assets

158,354

166,612

158,338(8,274)(5.0)

Book-value per share(yen)

1,324.94

1,350.08

1,400.02

49.94

3.7

53.2

51.5

53.6

2.1

―

Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

4,888

5,654

4,564

(1,090)(19.3)

17【CF】Statement of Cash Flows (Consolidated)• The balance of cash and cash equivalents decreased from both the end of the previous fiscal year and year-on-year.
The decrease in cash flows from operating activities was mainly due to a decrease in notes and accounts payable.
The decrease in cash flows from investing activities was mainly due to savings in time deposits and theacquisition of tangible fixed assets.
The decrease in cash flows from financing activities was mainly due to the acquisition of treasury stockand the payment of dividends.
(Millions of yen)

FY 2013

FY 2014

FY 2015

FY 2016

December
2016

December
2017

Cash flows from operating
activities(9,403)

(139)

5,220

10,845

3,837

(420)

Cash flows from investing
activities(3,506)

3,440

5,520

(1,644)(1,452)(5,217)

Cash flows from financing
activities(4,152)(2,901)(1,826)(2,458)(3,183)(7,084)

Cash and cash equivalents atend of period

23,51023,66732,501

39,18731,595

26,52118

【Overall Forecast】
FY2017 Full Year Forecast (Consolidated)
・There is no change to the initial forecast values from May 12, 2017.

(Millions of yen)FY 2017 Forecast(as of February 9)
TotalOrders received

186,000

Net sales

180,000

Operating income

7,000

Ordinary income

7,500

Profit attributable to owners ofparent

5,000
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
Forecast(as of February 9)

Segment

FY 2017
Net sales Forecast(as of February 9)

HVAC and Plumbing for Buildings

65,70069,700Industrial HVAC

51,00046,000Electrical Systems

22,00023,000

Facility Systems

9,500

9,500

148,200

148,200

Machinery Systems

12,00010,000

Environmental Systems

24,00020,000Total of Plant & Machinery Systems Business

36,00030,000Sub-total

184,200

178,200

1,800

1,800

Others500500Adjustments*(500)(500)

186,000

180,000

Total of Facilities Construction Business

Real Estate Business

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

20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 on anticipations,assumptions, evaluations and estimations in light of the information available as of February 9,2018.
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.

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