The 1st Quarter FY2017
Summary of Financial Results
August 10, 2017

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
03
The 1st Quarter FY2017 Results (Consolidated)04
Orders Received by Segment (Consolidated)
05
Net Sales by Segment (Consolidated)
06
Ordinary Income and Loss by Segment (Consolidated)
07
Quarterly Results (Consolidated)
08
Operating Results over the Last 5 Years (Consolidated)09<Orders Received/Net Sales>
Operating Results over the Last 5 Years (Consolidated)
10<Profit>
Orders Received by Industry (Consolidated)
11
Orders Received by Type12Major Projects Received and Major Completed Construction Projects
13
Major Projects over 1 Billion Yen (by Industry)
14
Profit Improvement Factors and Measures (Consolidated)
15
Balance Sheet (Consolidated)
16
Statement of Cash Flows (Consolidated)
17
FY2017 Forecast (Consolidated)
18
FY2017 Forecast of Orders Received and Net Sales by Segment (Consolidated) 19
2

Key Points of Financial Results<Orders received>
Due to the effect of having received large-scale projects during
the same period of the preceding year, there was a decrease inorders received by HVAC and Plumbing for Buildings, Industrial
HVAC, and Environmental Systems, but Machinery Systems saw anincrease thanks to the receipt of a large-scale project during thisperiod. Overall, we have seen a decrease compared with the same
period of the previous year, which was at an extremely high level.

<Net Sales & Profit>
Although net sales were slightly lower than those of the same
period of the preceding year, the balance carried forward to thefollowing period was higher than that of the last year. We havecontinued our initiatives for thorough cost management andimprovement of work efficiency, etc., and have secured a constantlevel of profit margin.
3

【Overall Results】
The 1st Quarter FY 2017 Results (Consolidated)••

Although orders received fell compared with the same period of the previous year, net sales have declined only slightly, and we have seena further increase in balance carried forward to the following period.
We have continued our initiatives for thorough cost management and improvement of work efficiency, etc., and despite gross profit
margin declining compared with the same period of the previous year, we have secured a strong margin in the double digits, at 10.6%.

(Millions of yen)
June
2015

June
2016

June
2017

Year onYear

Rate ofchange (%)

Orders received

46,38555,33838,209(17,129)(31.0)

Balance carried forward

113,910

127,860

129,032

1,171

0.9

Net sales

34,49533,86632,933

(933)

(2.8)

34,08933,43832,447

(991)

(3.0)

406

427

485

57

13.5

3,291

3,905

3,482

(423)

(10.8)

3,190

3,786

3,298(488)(12.9)

100

118

183

64

54.2

9.5

11.5

10.6(0.9)pt.

―

Selling, general and administrative expenses

3,921

4,1714,442

271

6.5

Operating income (loss)

(630)

(265)

(960)

(694)

―

Non-operating income488

400

446

46

11.6

Non-operating expenses

112

106

79(27)(25.5)

Ordinary income (loss)(254)

27(593)(621)―

Profit attributable to owners of parent (loss)

(266)

(2)

(604)

(601)

―

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)••

HVAC and Plumbing for Buildings, Industrial HVAC, and Environmental Systems in particular have seen a decline
due to the effect of having received orders of large-scale projects during the same period of the previous year.
(Millions of yen)
Machinery Systems saw an increase due to the receipt of a large-scale project during this period.

June
2015

Segment

June
2016

June
2017

Year onyear

Rate ofchange (%)

HVAC and Plumbing for
Buildings

13,674

19,835

13,346(6,489)(32.7)

Industrial HVAC

13,896

17,756

11,552(6,204)(34.9)

Electrical Systems

5,126

5,068

3,259

(1,809)(35.7)

Facility Systems

3,9793,210

2,410(799)(24.9)

36,67745,871

30,568(15,302)(33.4)

Machinery Systems

4,477

2,030

3,720

1,690

83.2

Environmental Systems

4,842

7,459

3,520

(3,938)(52.8)

Total of Plant & Machinery
Systems Business

9,320

9,489

7,240

(2,248)(23.7)

45,99755,36037,809(17,550)(31.7)

Real Estate Business

381

388

419

318.0

Others

142

142

178

36

25.3

(135)

(552)

(198)

354

―

46,38555,33838,209(17,129)(31.0)

Total of Facilities Construction
Business

Sub-total

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

5

【Net Sales】
Net Sales by Segment (Consolidated)•Net sales in HVAC and Plumbing for Buildings, having the abundant large-scale projects balance carried forward at the beginningof this period, increased compared with the same period of the previous year. Those in other facilities and plant construction
segments decreased, resulting in a slight decrease overall.
(Millions of yen)

June
2015

Segment

June
2016

June
2017

Year onyear

Rate ofchange (%)

HVAC and Plumbing forBuildings

13,572

12,161

13,134973

8.0

Industrial HVAC

9,923

10,351

9,437(914)(8.8)

Electrical Systems

4,759

4,410

3,983(426)(9.7)

Facility Systems

1,957

1,729

1,355(373)(21.6)

Total of Facilities
Construction Business

30,21328,653

27,912(741)(2.6)

Machinery Systems

1,587

2,434

2,230(204)(8.4)

Environmental Systems

2,331

2,576

2,487(88)(3.4)

Total of Plant & Machinery
Systems Business

3,919

5,010

4,718(292)(5.8)

34,132

33,66332,630(1,033)(3.1)

Real Estate Business

381

388

419

31

8.0

Others

125

126

159

33

26.2(144)

(312)

(276)

35

―

34,49533,86632,933

(933)

(2.8)

Sub-total

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

6

【Profit】
Ordinary Income and Loss by Segment (Consolidated)(Millions of yen)

June
2015

Segment

June
2016

June
2017

Year onYear

Rate ofchange(%)

Segment Profit Loss

Facilities Construction

121

46

(610)

(656)

―

Machinery Systems

(171)

121

28

(93)

(76.4)

Environmental Systems

(689)

(546)

(565)

(18)

―(739)(378)(1,146)(768)―Sub-total（Real Estate Business66621013963.1）

Others10143924

172.4

Adjustments *407

329

411

82

25.1(254)

27(593)(621)―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 2015

FY2017FY 2016

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Orders received

46,38552,82048,31135,75355,33835,57347,25047,71638,209Net sales

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

53,94932,933Gross profit

3,291

4,812

6,043

8,783

3,905

4,238

5,566

8,827

3,482

9.5

11.7

12.9

15.6

11.5

11.6

12.6

16.4

10.6

Selling, general and administrative
expenses

3,921

4,005

3,783

4,709

4,171

3,915

3,798

4,640

4,442

Operating income (loss)

(630)

807

2,259

4,073

(265)

323

1,767

4,187(960)

Operating profit margin (%)

(1.8)

2.0

4.8

7.2

(0.8)

0.9

4.0

7.8

(2.9)

Ordinary income (loss)

(254)

778

2,554

5,055

27

341

2,085

4,425

(593)Extraordinary income (loss)(55)3096(371)

―(32)

(43)

200(327)

Profit attributable to owners ofparent (loss)

(266)

521

1,790

3,282(2)

232

1,349

3,119(604)Gross profit margin (%)

8【Operating Results】
Operating Results over the Last 5 Years(Consolidated)<Orders Received/Net Sales>（単位：百万円）(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

02013

2014

2015

2016

2017

(Forecast)9【Operating Results】
Operating Results over the Last 5 Years (Consolidated)<Profit>（％）（％）
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
10,000
4.0
5,000

2.0
00.0
2013

2014

2015

2016

2017

10

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

12,00010,000

Medical Services
Wholesale and Retail
Trade
Miscellaneous
business services
Education

Real Estate

Finance and Insurance

Food

ChemicalMachineryPharmaceuticalIndustry
Automobile

Electrical Machinery

0June2015
June2016
June2017
8,000

6,000

4,0002,00011【Orders Received】
Orders Received by Type(Millions of yen)
FY 2014

FY 2015

FY 2016

June2016
A

143,708

145,069

139,997

44,24528,864(15,380)

Orders received from general contractors (Nonconsolidated : Facilities ConstructionBusiness)

68,96372,751

61,493

16,054

12,436(3,617)

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

48.0

50.1

43.9

36.3

43.1

6.8

Orders received (Non-consolidated : Facilities
Construction Business)

Orders received (Consolidated)

June2017
BYear onYear
B-A

pt.

173,398

183,270

185,880

55,33838,209(17,129)

2,931

2,343

1,612

468

270

(197)

1.7

1.3

0.9

0.8

0.7(0.1)

Orders received for renewal construction(Consolidated)

93,33999,920101,114

23,72422,446(1,277)

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

53.8

54.5

54.4

42.9

58.7

15.8

96,46896,32593,602

20,525

17,113(3,412)

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

pt.

pt.

12

【Orders Received & Net Sales】
Major Projects Received and Major Completed Construction Projects○Major Projects Received
・Pharmaceutical Yokohama Research Institute(HVAC and Plumbing for Buildings) <New construction work>
Other 1 project (Machinery Systems)○Major Completed Construction Projects
・Nakanoshima Festival Tower West
(Office HVAC) <New construction work>
・NKC Nagai Green Power,
Wood Biomass Gasification Power Generation Facility(Facilities Construction and Plant Systems)<New construction work>*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)
June 2015

June 2016

June 2017

Office11―

Factory

22―

Research
institute1

Railway, Airport―

Water andsewage treatment
facility

5 Projects―（6,678 million yen）―

Power station,Substation―

Waste processing
facility

15 Projects（13,806 million yen）―
＊ Orders received from
customers ：1 Project＊ Orders received fromgeneral contractors：4 Projects

11―

12 Projects（4,110 million yen）

1
＊ Orders received from
customers ：4 Projects＊ Orders received fromgeneral contractors：1 Project――＊ Orders received from
customers ：1 Project＊ Orders received fromgeneral contractors：1 Project―
14

【Profit】
Profit Improvement Factors and Measures (Consolidated)○Improvement of the external environment○Thorough cost management○Developing site support systems
・Improved support for purchasing operations by theProcurement Division (established in 2015)
・Expanded target of documentation support by
the Site-Documentation Support Center (established in 2015)
・Expanded support for design work by the Design andEngineering Support Center (established in 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 System15

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

End ofFY 2016

June2017

Rate ofchange (%)

Diff.

June2016

Current assets

114,906

98,291(16,615)(14.5)

98,761

Noncurrent assets

51,70554,4902,784

5.4

50,567

Current liabilities

68,77655,231(13,544)(19.7)

57,367

Noncurrent liabilities

11,875

12,388512

4.3

11,023

Total net assets

85,961

85,161

(799)

(0.9)

80,938

Total assets

166,612

152,781(13,830)(8.3)

149,329

Book-value per share (yen)1,350.08

1,337.52(12.56)(0.9)

1,271.88

51.5

55.7

4.2

―

54.1

(15.2)

5,138

Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

5,654

4,797(856)

16

【CF】
Statement of Cash Flows (Consolidated)••••

The balance of cash and cash equivalents increased compared with both at the end of the same period in the preceding year and at the endof the preceding fiscal year.
The increase in cash flows from operating activities was mainly due to the collection of receivables.
The decrease in cash flows from investing activities was mainly due to savings in time deposits.
The decrease in cash flows from financing activities was mainly due to the repayment of short-term loans and the payment of dividends.

(Millions of yen)June2016

June
2017

FY 2013

FY 2014

FY 2015

FY 2016

Cash flows from operating activities(9,403)

(139)

5,220

10,845

3,375

4,390

Cash flows from investing activities(3,506)

3,440

5,520

(1,644)(573)(1,733)

Cash flows from financing activities(4,152)(2,901)(1,826)(2,458)(2,224)(2,167)

Cash and cash equivalents at end of FY

23,51023,66732,501

39,18733,047

39,66017

【Overall Forecast】
FY2017 Forecast (Consolidated)
Higher revenue and profit are forecast in association with the increase in balance carried forward for construction
contracts (no change from the initial forecast at the beginning of this period).
(Millions of yen)

FY 2017 Forecast(as of August 10)

FY 2016 ResultsFirst
half ofyear

Secondhalf ofyear

Orders received

90,912

Net salesYear on year

Total

First
half ofyear

Secondhalf ofyearFirsthalf ofyear

Secondhalf ofyear

Total

94,967

185,880

93,00093,000186,000

2,088(1,967)

120

70,341

98,171

168,51275,000105,000

180,000

4,659

6,829

11,488Gross profit

8,144

14,394

22,5388,800

15,20024,000

656

806

1,462

Operatingincome(loss)

57

5,955

6,012

300

6,700

7,000

243

745988

Ordinary
income(loss)

368

6,511

6,880

600

6,900

7,500

232

389620

Profit attributableto owners ofparent (loss)

229

4,468

4,698

300

4,700

5,000

71

232

302

Total18【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

Segment

FY 2017
Net sales Forecast

HVAC and Plumbing for Buildings

71,70069,700Industrial HVAC

49,00046,000Electrical Systems

22,00023,000

Facility Systems

9,5009,500

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

Total of Facilities Construction Business

Sub-total
Real Estate Business

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

19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 August 10,2017.
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.

20