FY2017 Summary of
Financial Results
May 11, 2018

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
FY2017 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 most recent 5 years(Consolidated) <Orders Received/Net Sales>
Operating Results over the most recent 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)
Dividends and Others
FY2018 Forecast (Consolidated)
FY2018 Forecast of Orders Received and Net Sales by Segment (Consolidated)
2Key Points of Financial Results<Orders received>
Although orders received declined for HVAC and Plumbing for Buildings, orders
received increased for Facilities Construction Business overall, due to a dramaticincrease in factors such as orders received for large-scale projects, particularly inIndustrial HVAC. The overall value of consolidated orders exceeded the previous
fiscal year, including the increase in orders received for large-scale projects in
Machinery Systems, and the balance carried forward increased even further.
<Net Sales & Profit>
Net sales increased overall, due to the increase in HVAC and Plumbing for
Buildings and Plant & Machinery Systems Business. In terms of profit, gross profit
margin further improved year-on-year as a result of continued pursuit of initiatives,
including the enhancement of our site support systems. As a result, gross profit,
operating income, and ordinary income increased.
However, profit attributable to owners of parent declined due to recording
extraordinary income and extraordinary loss.

<Dividends>
An extra dividend, which has been paid for three consecutive fiscal years, of 15 yen
has been paid in addition to the regular dividend of 20 yen, resulting in a total
annual dividend of 35 yen, which is an increase of 5 yen from the previous fiscal year.
3【Overall Results】
FY2017 Results (Consolidated)• Orders received increased, due to factors such as receipt of large-scale projects for Industrial HVAC and Machinery Systems, and the Balance carried forward also rose significantly.
Net sales exceeded the previous fiscal year due to an increase in net sales for HVAC and Plumbing for Buildings and Plant & Machinery Systems Business.
• Gross profit margin further improved to 14.7% due to higher construction profitability, and there were increases in gross profit, operating income, and ordinary income.
• Profit attributable to owners of parent declined due to recording loss on retirement of noncurrent assets arising from the Yamato Site Redevelopment Plan andprovision of allowance for doubtful accounts for billed receivables for which the risk posed by concern about recovery has increased, as extraordinary losses,
despite gain on sales of investment securities being recorded as extraordinary income because of the revision of the shareholding policy.
(Millions of yen)

FY 2015

FY 2016

FY 2017

Year onyear

Rate ofchange (%)

Orders received

183,270

185,880

191,113

5,233

2.8

Balance carried forward

106,388

123,756

144,712

20,956

16.9

Net sales

178,901

168,512170,157

1,644

1.0

177,262

166,817

168,266

1,449

0.9

1,638

1,694

1,890

195

11.5

22,92922,53825,060

2,521

11.2

22,55622,184

24,403

2,218

10.0

373

353

656

303

85.6

12.8

13.4

14.7

1.3

－

Selling, general and administrative expenses

16,41916,526

18,466

1,940

11.7

Operating income

6,509

6,012

6,593

580

9.7

Non-operating income

1,625

867

841

(26)

(3.1)

Ordinary income (loss)

8,135

6,880

7,434

554

8.1

Net extraordinary income (loss)

(300)

124

(979)

(1,103)－

Profit attributable to owners of parent (loss)

5,327

4,698

3,906

(791)

(16.9)

Completed construction contracts
Real Estate and Others
Gross profit

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

pt.

4

【Orders Received】
Orders Received by Segment (Consolidated)• In Facilities Construction Business, although orders declined for HVAC and Plumbing for Buildings, orders increased year on year for Facilities Construction
Business overall, due to a large increase in orders for large-scale projects, particularly in Industrial HVAC and the firming of Electrical Systems.
• With regard to Plant & Machinery Systems Business , Machinery Systems increased, receiving some large-scale projects in this period.
Although Environmental Systems decreased due to orders received for large-scale DBO projects in the previous fisical year,
orders received remain high.
(Millions of yen)Segment

FY 2015

FY 2016

FY 2017

Year onyear

Rate ofchange(%)

HVAC and Plumbing for Buildings

66,172

65,76362,274(3,488)(5.3)

Industrial HVAC

52,522

49,82358,907

9,084

18.2

Electrical Systems

22,667

21,576

22,6751,099

5.1

Facility Systems

11,070

9,450

9,585

135

1.4

152,432

146,612

153,443

6,830

4.7

Machinery Systems

10,3098,130

12,100

3,969

48.8

Environmental Systems

19,61030,62624,247(6,378)(20.8)

29,91938,75636,347(2,409)(6.2)

182,352

185,369

189,791

4,421

2.4

1,532

1,592

1,755

163

10.3

524

491

587

95

19.5

(1,139)(1,573)(1,020)552―

183,270

185,880

191,113

5,233

2.8

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems Business
Sub-total
Real Estate Business
OthersAdjustments *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 in the HVAC and Plumbing for Buildings
segment which had a high carried forward balance at the start of the fiscal year, including large-scale projects, sales fell in other segments.
(Conversely, the balance carried forward in Facilities Construction Business overall increased greatly over the previous fiscal year.)• With regard to Plant & Machinery Systems Business, there was an increase for both Machinery Systems and Environmental Systems.
As a result there was a year-on-year increase in consolidated net sales for the company as a whole.
(Millions of yen)Segment

FY 2015

FY 2016

FY 2017

Year onyear

Rate of change(%)

HVAC and Plumbing for Buildings

64,49260,37663,782

3,405

5.6

Industrial HVAC

52,08449,44046,556(2,883)(5.8)

Electrical Systems

22,95821,542

20,653

(888)

(4.1)

Facility Systems

10,416

10,208

8,695(1,512)(14.8)

149,952

141,567

139,688(1,878)(1.3)

Machinery Systems

9,217

8,192

9,254

1,062

13.0

Environmental Systems

18,734

18,271

19,9091,637

9.0

27,951

26,464

29,164

2,699

10.2

177,904

168,032

168,853

821

0.5

1,532

1,592

1,755

163

10.3

542

499

578

79

15.9

(1,077)(1,611)(1,030)580―

178,901

168,512170,157

1,644

1.0

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems Business
Sub-total
Real Estate Business
OthersAdjustments *Total＊ Adjustments eliminate inter segment transactions included in each segment.

6

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

FY 2015

Facilities
Construction

Segment Profit Loss（）

FY 2016

FY 2017

Year onyear

Rate ofchange (%)

7,698

6,404

6,010

(394)

(6.2)

Machinery Systems

275

(138)

(40)

97

―

Environmental
Systems

(315)

671

575

(96)

(14.3)

7,658

6,938

6,545

(393)

(5.7)

Real Estate Business

233

189

476

287

151.7

Others

52

22

49

27

121.7

Adjustments *

191

(270)

362

632

―

8,135

6,880

7,434

554

8.1

Sub-total

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

FY 2016

FY 2017

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Orders received

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

51,456

Net sales

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

53,94932,93339,573

43,10254,548Gross profit

3,291

4,812

6,043

8,783

3,905

4,238

5,566

8,827

3,482

5,837

5,995

9,744

Gross profit margin (%)

9.5

11.7

12.9

15.6

11.5

11.6

12.6

16.4

10.6

14.8

13.9

17.9

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

5,443

Operating income (loss)

(630)

807

2,259

4,073

(265)

323

1,767

4,187

(960)

1,450

1,802

4,300

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

7.9

Ordinary income (loss)

(254)

778

2,554

5,055

27

341

2,085

4,425

(593)

1,546

2,093

4,388

Net extraordinary
income (loss)

(55)

30

96

(371)

―

(32)

(43)

200

(327)

(806)

(381)

536

Profit attributable toowners of parent (loss)

(266)

521

1,790

3,282

(2)

232

1,349

3,119

(604)

508

1,119

2,882

8

【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Orders Received/Net Sales>(Millions of yen)Orders received
200,000

Net sales

180,000
160,000

Balance carriedforward140,000

120,000
100,000

80,00060,00040,00020,000
0
2014

2015

2016

2017

2018

(Forecast)9【Operating Results】
Operating Results over the most recent 5 years(Consolidated) <Profit>(Millions of yen)（％）

30,00016.0

14.0
25,00012.0
20,00010.0

15,000

8.0

Gross profit (left axis)
Operating income (leftaxis)
Ordinary income (leftaxis)
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

0

0.0
2014

2015

2016

2017

2018

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

35,000Governmnet Offices
Miscellaneous businessservices
Wholesale and Retail
Trade
Education
Medical Services
Real Estate
Finance and Insurance
ChemicalMachinery
Food
PharmaceuticalIndustry
Automobile
Electrical Machinery0

FY 2015
FY 2016
FY 201740,00030,00025,00020,00015,00010,0005,000

11【Orders Received】
Orders Received by Type(Millions of yen)
FY 2014

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 2015

FY 2016Ａ

FY 2017
Ｂ

Diff.
Ｂ－Ａ

143,708

145,069

139,997

147,013

7,015

68,96372,751

61,49367,345

5,852

48.0

50.1

43.9

45.8

1.9
pt.

173,398

183,270

185,880

191,113

5,233

2,931

2,343

1,612

1,246

(366)

1.7

1.3

0.9

0.7

(0.2)

Orders received for renewal construction(Consolidated)

93,33999,920101,114

101,597

483

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

53.8

54.5

54.4

53.2

(1.2)

96,46896,32593,602

94,601

999

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.

【Orders Received】
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 Plan
(Electrical systems) <New construction work>• Niseko Hanazono Hotel(HVAC systems) <New construction work>• Chiba University (Hospital) Central Clinical Building(HVAC and Plumbing for Buildings) <New construction work>• Nihon Shokken Holdings Co., Ltd. Schönbrunn Palace Factory(HVAC systems) <New construction work>• Toshiba Memory Yokkaichi Plant Building 260, Stage 3(HVAC systems) <New construction work>• Micron Memory Japan Hiroshima Plant B2 Building and CUP Building(HVAC and Plumbing for Buildings) <New construction work>• Micron Memory Japan Hiroshima Plant B2 Building Processing Facility Construction(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 Renovation work to basic facility(Waste treatment facilities) <Renovation>• Waste Treatment Facilities with Energy Recovery Type in the Tenzan area
(Waste treatment facilities) <New construction, operation, and maintenance>
Eight 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) <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>• New PCTM Building at the Takeda Pharmaceutical Company Hikari Plant(HVAC systems) <New construction work>• NKC Nagai Green Power, Wood Biomass Gasification Power Generation Facility(HVAC and Plant Systems) <New construction work>• Tokyo Midtown Hibiya(Plumbing systems) <New construction work>• Hibiya Heat Supply Center(HVAC, Plumbing, and Electrical systems) <New construction work>• Nippon Life Hospital(HVAC, Plumbing and Electrical systems) <New construction work>• Toshiba Memory Yokkaichi Plant Building 260, Stage 1(HVAC 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)
2015年度

2016年度

2017年度

Office

３件

４件

２件

Complex building

１件

―

―

Commercial facility

１件

１件

―

Hotel

―

―

１件

Factory

５件

４件

６件

Multiple – dwelling complex

―

―

２件

School

１件――

Hospital

２件

Research institute

１件

Gymnasium―

Others

１件

Railway, Airport―

Power station,Substation―

Waste processing facility

３件

１件

２件

Water and sewage treatment
facility

１件

２件

―

19 Projects（31,476 millionyen）＊ Orders received from
customers ：6 Projects＊ Orders received fromgeneral contractors：13 Projects

１件
１件
―
―
―
１件

15 Projects（40,057 million yen）
＊ Orders received from
customers ：9 Projects＊ Orders received fromgeneral contractors：6 Projects

１件
１件
１件
３件
１件
―

20 Projects（40,822 million yen）
＊ Orders received from
customers ：9 Projects＊ Orders received fromgeneral contractors：11 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 theProcurement Division (established in 2015)• Expanded support for on-site document creation• Expanded support for design work by the Design andEngineering 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 Choice System
16【Financial Conditions】
Balance Sheet (Consolidated)• Increase in current assets such as cash and deposits, and noncurrent liabilities such as long-term loans payable,
due to long-term loans, etc. taken out for the purpose of capital investment, etc.

End of
FY 2016
Current
assetsEnd of
FY 2017(Millions of yen)

Year on year

Rate ofchange (%)

114,906

124,759

9,852

8.6

34,18743,866

9,679

28.3

Noncurrent assets

51,70553,831

2,125

4.1

Current liabilities

68,776

73,834

5,058

7.4

Noncurrent liabilities

11,875

18,565

6,690

56.3

－

6,610

6,610

－

Total net assets

85,961

86,191229

0.3

Total assets

166,612

178,591

11,9787.2

Book-value per share (yen)1,350.08

1,419.77

69.69

5.2

Equity ratio (%)

51.5

48.2

(3.3)

―

Interest-bearing liabilities(consolidated)

5,654

13,504

7,849

138.8

Cash and deposits

Long-term loans payable

pt.

17

【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 was mainly due to the inclusion of income before taxes and other adjustments.
• The decrease in cash flows from investing activities was mainly due to savings in time deposits and theacquisition of tangible fixed assets.
• The increase in cash flows from financing activities was due to the increase in funds from long-term loans, etc. taken out for the
purpose of capital investment, etc. despite funds declining mainly due to the purchase of treasury stock and the payment of dividends.

FY 2013

FY 2014

FY 2015

FY 2016(Millions of yen)
FY 2017

Cash flows from operating
activities(9,403)

(139)

5,220

10,845

6,306

Cash flows from investing
activities(3,506)

3,440

5,520

(1,644)(2,510)Cash flows from financing
activities(4,152)(2,901)(1,826)(2,458)

1,814

Cash and cash equivalents at
end of FY

23,51023,66732,501

39,18744,866

Capital investment(including intangible assets)

545

395

855

1,015

3,772

Depreciation and amortization

740

723

723

718

818

18

【Shareholder Returns】
Dividends and Others• An extra dividend, which has been paid for three consecutive fiscal years, of 15 yen has been paid in addition to the regular dividend of 20 yen,resulting in an annual dividend of 35 yen (increase of 5 yen year on year).

FY 2013

FY 2014

FY 2015

FY 2016

September2017

FY 2017

26.46

38.30

83.84

73.91

(1.51)

63.02

Cash dividends per share:
regular dividends (yen)

15

15

18

20

10

20

Cash dividends per share:commemorative dividends (yen)

―

5

―

―

―

―

Cash dividends per share:
extra dividends (yen)

―

―

12

10

5

15

Cash dividends per share (yen)

15

20

30

30

15

35

Payout ratio (consolidated) (%)

56.7

52.2

35.8

40.6

Number of shareholders at end of FY

3,598

3,375

3,397

3,157

2,909

3,243

Stock price at end of FY (yen)

654

930

901

958

1,262

1,188

Acquisition of treasury stock(thousand shares)

4,000

2,000

―

―

1,955

3,000

Retirement of treasury stock(thousand shares)

4,800

3,000

―

―

3,000

3,000

ROE (Return on Equity) (%)

2.3

3.0

6.3

5.5

4.5

ROA (Return on Assets) (%)

1.9

2.2

4.7

4.1

4.3

Earnings per share (yen)

55.5

19

【Overall Forecast】
FY2018 Forecast (Consolidated)(Millions of yen)

FY 2014

FY 2015

FY 2016

FY 2017Ａ

FY 2017
Forecast
Ｂ

Orders received

173,398

183,270

185,880

191,113

175,000(16,113)(8.4)

Balance carried forward

102,019

106,388

123,756

144,712

132,712(12,000)(8.3)

Net sales

179,598

178,901

168,512170,157

187,000

16,8439.9

Gross profit

17,96622,92922,53825,06026,800

1,740

6.9

10.0

12.8

13.4

14.7

14.3

(0.4)

―

Operating income (loss)

2,951

6,509

6,012

6,593

7,500

907

13.8

Ordinary income (loss)

3,809

8,135

6,880

7,434

8,000

566

7.6

Profit attributable toowners of parent (loss)

2,461

5,327

4,698

3,906

5,500

1,594

40.8

Gross profit margin (%)

Increase/decrease
Ｂ－Ａ

Rate ofchange(%)

20

【Forecast of Orders Received and Net Sales】
FY2018 Forecast of Orders Received andNet Sales by Segment (Consolidated)(Millions of yen)
FY 2018
Orders received Forecast

セグメント

FY 2018
Net sales Forecast

HVAC and Plumbing for Buildings

54,40063,300Industrial HVAC

55,00058,000Electrical Systems

21,00020,000

Facility Systems

9,800

9,900

140,200

151,200

Machinery Systems

12,00012,000

Environmental Systems

21,00022,000Total of Plant & Machinery Systems Business

33,00034,000Sub-total

173,200

185,200

1,800

1,800

200

200

(200)

(200)

175,000

187,000

Total of Facilities Construction Business

Real Estate Business
OthersAdjustments

*

Total

＊ Adjustments eliminate inter segment transactions included in each segment.

21

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 May 11,2018.
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.

22