The 3rd Quarter FY2019
Summary of Financial Results
February 7, 2020
Sanki Engineering Co., Ltd.

1

Contents
Key Points of Financial Results
FY2019 3Q Results – Cumulative Results (Consolidated)
Orders Received by Segment (Consolidated)
Net Sales by Segment (Consolidated)<Reference> Gross Profit 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 Large-Scale Projects Received
Main Large-Scale Completed Construction Projects
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)
Profit Improvement Factors and Measures (Consolidated)
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
FY2019 Full-Year Forecast (Consolidated)
FY2019 Forecast of Orders Received and Net Sales by Segment (Consolidated)

03040506
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0910111213141516171819202

Key Points of Financial Results<Orders Received>
In the Facilities Construction Business, orders received fell below those of the previous fiscal year due to factors suchas orders for large-scale projects in Industrial HVAC received in the same period of the previous fiscal year. The Plant &Machinery Systems Business saw great improvements, thanks to factors such as an order for a large-scale project inEnvironmental Systems. As a result, orders received declined year on year, but remained at a high level.
<Net Sales & Profit>
Although net sales in the Facilities Construction Business fell below those of the previous fiscal year due to factors
such as large-scale projects in Industrial HVAC sold in the same period of the previous fiscal year, they remained mostly
level year on year thanks to steady progress in the large amount of construction carried forward, particularly large-scaleconstruction.
In the Plant & Machinery Systems Business, both Machinery Systems and Environmental Systems showed increase in
net sales.
The gross profit margin improved year on year thanks to initiatives such as ongoing thorough cost management andimproved work efficiency. All profit items increased.
<Results Forecast>
No changes from the midterm forecast revised upward from the initial forecast on November 8, 2019
<Shareholder Returns>○The annual dividend forecast is as follows:
Forecast interim dividend: 35 yen, year-end dividend: 35 yen, annual dividend: 70 yen (+10 yen year on year)○2,000,000 shares of treasury stock to be acquired by the end of fiscal 2019.
Retirement 2,000,000 shares of treasury stock conducted on August 19, 2019.
Acquisition of 1,958,000 shares of treasury stock was completed on January 29, 2020
(1,400,000 shares of treasury stock acquired by the end of December 2019).

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【Overall Results】
FY2019 3Q Results – Cumulative Results (Consolidated)(Millions of yen)
December 2017

December 2018

December 2019Year on year

Rate ofchange(%)

Orders received

139,657

155,048

150,933(4,114)(2.7)

Balance carried forward

147,805

157,714

157,084

(630)

(0.4)

Net sales

115,608

142,046

143,678

1,631

1.1

114,182

140,521

141,912

1,390

1.0

1,425

1,524

1,766

241

15.8

15,315

19,425

20,6281,203

6.2

14,78818,91419,998

1,083

5.7

526

510

630

119

23.4

13.2

13.7

14.4

0.7pt.

―

Selling, general and administrative expenses

13,022

14,60915,040430

2.9Operating income2,292

4,815

5,588

772

16.1

753

573

559

(13)

(2.4)

3,045

5,388

6,148

759

14.1

(1,515)(1,317)

158

1,476

―

1,023

2,540

4,300

1,760

69.3

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

Non-operating income and loss (expenses)
Ordinary income
Extraordinary income (loss)
Profit attributable to owners of parent* Due to increased importance, SANKI CONSTRUCTION ENGINEERING (SHANGHAI) CO., LTD., was included within thescope of consolidation starting in the beginning of FY2019.

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

December 2018

December 2019

HVAC and Plumbing for
Buildings

43,564

46,375

48,1701,795

3.9

Industrial HVAC

41,42160,04644,250(15,796)(26.3)

Electrical Systems

17,417

17,58820,363

2,775

15.8

Facility Systems

7,489

8,406

9,325

919

10.9

109,893

132,416

122,110(10,305)(7.8)

Machinery Systems

8,293

9,526

8,245

(1,280)(13.4)

Environmental Systems

20,355

12,67419,197

6,523

51.5

Total of Plant & Machinery
Systems Business

28,64922,20027,443

5,242

23.6

138,542

154,617

149,554(5,063)

(3.3)

1,311

1,409

1,628

218

15.5

465

575

476

(98)

(17.1)(662)(1,554)

(725)

829

―

139,657

155,048

150,933(4,114)(2.7)

Total of Facilities Construction
Business

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

Year on year

Rate ofChange (%)

December 2017

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

December 2018December 2019

HVAC and Plumbing for
Buildings

43,90946,84749,3052,458

5.2

Industrial HVAC

32,58352,65348,298(4,354)(8.3)

Electrical Systems

13,85915,147

15,543396

2.6

Facility Systems

5,348

6,984

7,030

45

0.7

Total of Facilities Construction
Business

95,700121,632

120,178(1,454)(1.2)

Machinery Systems

6,696

7,089

7,882

792

11.2

Environmental Systems

12,165

12,77814,303

1,524

11.9

Total of Plant & Machinery
Systems Business

18,862

19,86822,185

2,317

11.7

114,562

141,500

142,363

863

0.6

1,311

1,409

1,628

218

15.5

435

461

606

145

31.5(700)(1,325)

(920)

405

―

115,608

142,046

143,678

1,631

1.1

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

Year on year

Rate ofChange (%)

December 20176

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

Ordinary Gross Profit by Segment (Consolidated)

Segment

December 2018

December 2019

11,048

14,845

15,889

1,044

7.0

648

1,036

1,152

115

11.2

Total of Facilities Construction
Business11,696

15,882

17,041

1,159

7.3

Machinery Systems

1,352

1,298

1,530

232

17.9

Environmental Systems

1,849

2,089

1,494(595)(28.5)

Total of Plant & Machinery Systems
Business

3,201

3,388

3,024(363)(10.7)

14,89819,27020,066796

4.1

Real Estate Business

427

410

496

86

21.0

Others

157

117

145

2824.2

(167)

(372)

(79)

292－

15,315

19,425

20,6281,203

6.2

HVAC and Plumbing for Buildings
Industrial HVACElectrical Systems
Facility Systems

Sub-total

Adjustments
Total

Year on year

Rate ofChange (%)

December 20177【Overall Results】
Quarterly Results (Consolidated)(Millions of yen)

FY 2017

FY 2018

FY 2019

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

Orders received

38,20957,56643,881

51,45650,88552,934

51,22862,04846,69754,20450,031

Net sales

32,93339,573

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

51,833Gross profit

3,482

5,837

5,995

9,744

4,329

6,442

8,654

12,258

5,305

7,862

7,460

Gross profit margin (%)

10.6

14.8

13.9

17.9

12.3

14.2

14.1

17.4

13.0

15.4

14.4Selling, 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

Operating income (loss)

(960)

1,450

1,802

4,300

(242)

1,369

3,688

5,821

322

2,869

2,396

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

Ordinary income (loss)

(593)

1,546

2,093

4,388

92

1,447

3,848

5,815

547

2,955

2,644

Extraordinary income(loss)

(327)

(806)

(381)

536

(147)

(3)

(1,167)1,439

248449Profit attributable toowners of parent (loss)

(604)

508

1,119

2,882(66)

862

1,743

6,505

428

2,057

1,815

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

200,000

Ordersreceived
受注高
Net
sales
売上高
Balancecarried forward
期末繰越高150,000

100,000

50,00002015

2016

2017

2018

2019

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

35,00016.0

14.0

30,000Gross
profit (left axis)
売上総利益（左軸）
Operatingincome (left axis)
営業利益（左軸）
Ordinary
income (left axis)
経常利益（左軸）

12.0
25,000Gross
profit margin (right axis)
売上総利益率（右軸）Operatingprofit margin (right axis)
営業利益率（右軸）

10.0

Ordinary
profit margin (right axis)
経常利益率（右軸）20,0008.0
15,000
6.0
10,0004.0

5,000

2.000.0
2015

2016

2017

2018

2019

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

40,000December 201930,000Government Offices
Medical Services
Wholesale and Retail Trade
Miscellaneous business services
Education
Real Estate
Finance and Insurance
Food
ChemicalMachinery
Pharmaceutical Industry
Automobile
Electrical Machinery

0December 2017

December 2018

35,00025,00020,00015,00010,0005,000

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

FY 2016

Orders received (Non-consolidated: Facilities
Construction Business)

FY 2017

FY 2018

December2018
A

December
2019
BDiff.
B–A

139,997

147,013

173,553

125,883

114,711(11,171)

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

61,49367,34578,30454,56035,824(18,735)

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

43.9

45.8

45.1

43.3

31.2

(12.1)

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

pt.

185,880

191,113217,096

155,048

150,933(4,114)

1,612

1,246

2,379

2,211

2,006

(204)

0.9

0.7

1.1

1.4

1.3

(0.1)
pt.

Orders received for renewal construction(Consolidated)

101,114

101,597

117,619

89,58988,831(757)

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

54.4

53.2

54.2

57.8

58.9

1.1

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

93,602pt.

94,601

116,627

77,75976,484(1,274)12

【Orders Received】
Main Large-Scale Projects Received○ 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 toimprove core equipment at waste treatment facility

Construction of waste
treatment system

RenewalFukushima

Bank of Japan Head Office Fuchu Branch Machinery Building

HVAC and Plumbingsystems

Expansion

TokyoReconstruction of Toyota Motor Technical Department

HVAC, Plumbing andElectrical systems

New construction work

Aichi

Toyota Technical Center Shimoyama

HVAC, Plumbing andElectrical systems

New construction workAichi

4 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○ 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 Electricalsystems

Renovation

Yamagata

NISSAY Logistics Center YOKOHAMA-MACHIDA

HVAC, Plumbing andElectrical systems

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 workOsaka

Takashimaya Osaka: Eastern annex renovation projectHVAC and Plumbing
systems

Renovation

Osaka

Ajinomoto Tokai Plant: Construction of new factory

HVAC and Plumbing
systems

New construction work

MieHVAC systems

New construction work

Hokkaido

Kintetsu Hakata Building

Park Hyatt Niseko HANAZONO

4 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)
December 2017

December 2018

December 2019

Offices111

Hotels and inns

11―Factory

382

Research institute112Logistics Center―

1―

Hospitals and clinics―

1

1Multiple – dwellingcomplex

2Gymnasium

1

Other building interiors

2

Railway, Airport

1Power station,Substation

―

―

―

Waste processing
facility

2―

1Water treatment plants
and sewage plants

―

―

1

14 projects(27,332 million yen)
*Orders received from
customers: 6 projects*Orders received fromgeneral Contractor: 8 projects―
1―
115 projects(31,293 million yen)
*Orders received from
customers: 7 projects*Orders received fromgeneral Contractor: 8 projects――
2―

10 projects(25,958 million yen)
*Orders received fromcustomers: 7 projects*Orders received fromgeneral Contractor: 3 projects

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【Profit】
Profit Improvement Factors and Measures (Consolidated)○ Strong business environment○ Thorough cost management (thorough internal control processes)○ Establishment of a company-wide HR system○ Developing site support systems
・ Improved support for purchasing operations by the Procurement Division (webbased 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 System16

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

End of
FY 2018

December
2019Year on year

Rate ofchange (%)

December
2018

Current assets

141,342

119,544(21,798)(15.4)

121,637

Noncurrent assets

53,97954,772793

1.5

54,164Current liabilities

91,31770,726(20,590)(22.5)

75,457

Noncurrent liabilities

14,232

14,460228

1.6

16,647

Total net assets

89,772

89,129(642)(0.7)

83,696

Total assets

195,321

174,316(21,004)(10.8)

175,802

Book-value per share

1,502.53

1,526.42

23.89

1.6

1,395.39

45.8

51.0

5.2

―47.5

(14.9)

11,670Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

12,094

10,287(1,806)17【CF】
Statement of Cash Flows (Consolidated)
・ The balance of cash and cash equivalents decreased from the end of the previous fiscal year (a year-on-year increase).
・ The increase in cash flows for operating activities is mainly due to the fact that accounts receivable turnover progressed beyond
the decrease in accounts payable.
・ The decrease in cash flows from investing activities is mainly due to the acquisition and sales of property, plant and equipment.
・ The decrease in cash flows from financing activities is mainly due to the repayment of long-term loans payable, expenditure fromthe purchase of treasury stock, and the payment of dividends(Millions of yen)

FY 2015

FY 2016

FY 2017

FY 2018

December
2019

December
2018

Cash flows from operating activities

5,220

10,845

6,306

6,786

4,583(74)Cash flows from investing activities

5,520(1,644)(2,510)(3,775)(670)(3,778)Cash flows from financing activities(1,826)(2,458)

1,814(5,215)(8,477)(5,319)Cash and cash equivalents at end of
period32,501

39,18744,866

42,61238,65935,67818

【Overall Forecast】
FY2019 Full-Year Forecast (Consolidated)(Millions of yen)

2019 full-year
forecast(Initial forecast)2019 full-year
forecast(November 8, 2019
mid-term forecast)A

2019 full-year
forecast(February 7, 2020
mid-term forecast)
B

Difference
B–A

Orders received

190,000

200,000

200,000—

Balance carriedforward139,829

139,829

139,829－

Net sales

200,000

210,000

210,000—

Gross profit

30,00032,00032,000—

Gross profit
margin (%)

15.0

15.2

15.2

—

Operating income

8,800

9,800

9,800

—

Ordinary income

9,000

10,00010,000—

Profit attributable toowners of parent

6,200

7,000

7,000—

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【Forecast of Orders Received and Net Sales】
FY2019 Forecast of Orders Received andNet Sales by Segment (Consolidated)(Millions of yen)

FY 2019
Orders Received ForecastSegment

FY 2019
Net sales Forecast

HVAC and Plumbing for Buildings

67,00071,000Industrial HVAC

61,00065,000Electrical Systems

23,00024,000

Facility Systems

12,00011,000163,000

171,000

Machinery Systems

12,00012,000

Environmental Systems

23,00025,000Total of Plant & Machinery Systems Business

35,00037,000Sub Total

198,000

208,000

2,000

2,000

Others800800Adjustments*(800)(800)

200,000

210,000

Total of Facilities Construction Business

Real Estate Business

Total* Adjustments eliminate internal transactions included in each segment.

20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 February 7,
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

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