The 2nd Quarter FY2015
Summary of Financial Results
November 10, 2015

Sanki Engineering Co., Ltd.
1Contents
Key points of Financial Results
The 2nd Quarter FY 2015 Results (Consolidated)
Orders Received by Segment (Consolidated)
Sales by Segment (Consolidated)
Profit and loss by Segment (Consolidated)
Quarterly Results (Consolidated)
Operating Results over the Last 5 Years (Consolidated)
Orders Received by Industry (Consolidated)
Orders Received by Type
Major Projects
Major Projects over 1 billion yen
Increase and Decrease Factor of Ordinary income
Profit improvement factor and measure
Balance Sheet (Consolidated)
Statements of Cash Flows (Consolidated)
Dividends and Payout Ratio
FY2015 Forecast (Consolidated)
FY2015 Orders Received Forecast by Segment（Consolidated）
FY2015 Sales Forecast by Segment（Consolidated）
Management Direction for Fiscal 2015

03
0405
06
07
08
09
10
111213
1415
16
1718
1920
21
222

Key Points of Financial Results〈Order received〉
Orders received at Facilities Construction Business increased becauseof result of industrial HVAC such as Electrical machinery andAutomobile , etc. under the influence of manufactures returning todomestic. Orders received of Plant & Machinery Systems Businessincreased largely because of large-scale project order received
establishment of Machinery Systems and Environmental Systems.
Total of orders received exceed year-on-year basis and initial forecast.

〈Sales ・ Profit〉
Sales changed relatively flat on year-on-year basis , but Gross profit
margin was improved by improvement of the order environment andthorough cost management. Gross profit largely exceeded year-onyear basis , Operating income , Ordinary income and Profit attributableto owners of parent increased and turned a profit.
3

【 Overall Results 】
The 2nd Quarter FY 2015 Results (Consolidated)(Millions of yen)・Orders received exceeded year-on-year basis , Sales changed relatively flat.
・Gross profit , Operating income , Ordinary income and Profit attributable to owners of parent were improved largely.
Yearonyear

September
2014

September
2015

Orders received

81,24899,206

17,957

22.1

Balance carried forward

113,960

125,745

11,784

10.3

Sales

75,50775,480

(27)

(0.0)

74,912

74,668

(243)

(0.3)

595

812

216

36.3

4,925

8,103

3,178

64.5

4,755

7,918

3,162

66.5

169

185

159.16.5

10.7

4.2

64.5

Selling, general and administrative expenses

7,631

7,926

295

3.9

Operating income (loss)(2,705)176

2,882―

Ordinary income (loss)(2,325)524

2,850―

Profit attributable to owners of parent (loss)(1,327)

255

1,582

―

Completed construction contracts
Real Estate and Others

Gross profit

Completed construction contracts
Real Estate and Others

Operating profit margin(%)＊”The net income” of September 2014 changed to “the profit attributable to owners of parent”.

Rate ofchange(%)

4【 Orders Received 】
Orders Received by Segment (Consolidated)
・Orders received of Industrial HVAC and Facility Systems were increased in Facilities construction business.
・Orders received of Machinery systems and Environmental Systems exceeded year-on-year basis because of large(Millions of yen)scale project order received establishment.
September
2014

Segment

September
2015

Year on year

Rate ofchange(%)

HVAC and plumbing for Buildings

31,39634,0232,627

8.4

Industrial HVAC

21,94325,294

3,351

15.3

Electrical Systems

11,807

12,699892

7.6

Facility Systems

4,803

6,623

1,820

37.9

69,95078,642

8,691

12.4Machinery Systems

2,888

6,981

4,093

141.7

Environmental Systems

7,971

13,133

5,161

64.8

Plant & Machinery Systems Business total

10,85920,115

9,255

85.2

Sub-total

80,81098,757

17,947

22.2

Real Estate

550

766

216

39.3

Others

228

272

43

19.0

Adjustments

(340)

(590)

(249)

-81,248

99,206

17,95722.1

Facilities Construction Business total

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

5

【Sales】
Sales by Segment (Consolidated)
・Sales of Electrical Systems and Facility Systems were increased in Facilities construction business.
・Sales of Machinery Systems was decreased because of decrease of order received in last year.
September
2014

Segment

September
2015

Year on year

(Millions of yen)
Rate ofchange(%)

HVAC and plumbing for Buildings

31,051

28,255(2,795)(9.0)

Industrial HVAC

21,272

22,230957

4.5

Electrical Systems

8,480

10,010

1,530

18.1

Facility Systems

3,945

4,884

939

23.8

64,74965,381632

1.0Machinery Systems

4,864

3,307

(1,556)(32.0)

Environmental Systems

5,401

6,134

732

13.6

10,2659,441(823)(8.0)

75,01474,823

(191)

(0.3)

Real Estate

550

766

216

39.3

Others

242

259

17

7.0

Adjustments

(300)

(368)

(68)

-

75,50775,480

(27)

(0.0)

Facilities Construction Business total

Plant & Machinery Systems Business total
Sub-total

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

6

【Profit】
Ordinary income and ross by Segment（ Consolidated）(Millions of yen)Yearonyear

September
2014

September
2015(2,011)

866

2,878

-

Machinery Systems

(54)

(251)

(196)

-

Environmental Systems

(931)

(941)

(10)

-

(2,996)

(325)

2,670

-

Real Estate

11111432.7

Others2217(4)(18.7)

Adjustments

537

718

180

33.6(2,325)

524

2,850

-Segment
Facilities Construction

Segment Profit (loss)

Sub-total

Total

Rate ofchange(%)＊ Adjustment of profit and loss by Segment to all company profit and loss that amount distribute into each segment.

7

【Overall Result】
Quarterly Results (Consolidated)
・Gross profit , Operating income , Ordinary income and Profit attributable to owner of parent turned a profit(Millions of yen)because of improvement of order environment and thorough cost management.
FY 2014

FY 2015

1Q

2Q

3Q

4Q1Q

2Q

Orders received

42,48938,75855,92336,226

46,38552,820Sales

32,82542,682

47,14556,94534,49540,985Gross profit

1,700

3,224

4,753

8,287

3,291

4,812

5.2

7.6

10.1

14.6

9.5

11.7

Selling, general and administrative expenses

3,786

3,845

3,552

3,831

3,921

4,005

Operating income (loss)(2,085)

(620)

1,201

4,456

(630)

807

(6.4)

(1.5)

2.5

7.8

(1.8)

2.0

(1,846)

(478)

1,612

4,522(254)

778

-

18116

312

55

(30)

(1,215)

(111)

1,119

2,669(266)521

Provision for loss on construction contracts (balance at theend of period)

724

1,236

989

1,314

1,045

777

Provision (or reversal of provision) for loss (gain) on
construction contracts

157

511

(246)

324

(269)

(267)

7,329

8,131

5,376

4,388

2,451

1,661

Gross profit margin

Operating profit margin

Ordinary income (loss)
Extraordinary income (gain)
Profit attributable to owners of parent (loss)

Balance carried forward (at the end of period) subjected toprovision for loss on construction contracts＊”The net income” of September 2014 changed to “the profit attributable to owners of parent”.

8【 Operating Results】
Operating Results over the Last 5 Years (Consolidated)(Millions of yen)Orders receivedand SalesProfit

200,000

Ordinary income (right axis)
150,000
5,000
Net income (right axis)

100,000

Orders received (left axis)

0

Sales (left axis)
50,0000-5,000
1112131415

FY（Forecast）＊the net income of FY2011~ FY2014 changed to the profit attributable to owners of parent .

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

16,00014,00014,996

September 2014
September 2015

12,967

12,00010,081

10,000
8,351

8,000

8,718

8,045
6,417

6,000

6,161
5,477

5,401

4,000

5,098

4,351

4,133
2,991
2,544

2,000

2,195
1,121

2,700

2,559

1,640

1,531

Medicalservices

Wholesale andretail trade

Miscellaneous
business
services

Education

Real estate

Finance andInsurance

ChemicalMachinery

PharmaceuticalIndustry

Automobile

Electrical
Machinery

Food

0

3,198

4,493
3,694

10

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

＊FY2012FY2013

FY2014September2014

September2015

Construction orders received fromGeneral contractor(Non-consolidated)

49.3

53.7

48.0

51.3

52.6

1.3

Construction orders received fromoverseas project (Consolidated)

1,347

3,055

2,931

1,549

1,280(269)Rate of Construction orders
received from overseas project(Consolidated)

0.8

1.8

1.7

1.9

1.3

(0.6)

Renewal construction(Consolidated)

56.9

52.6

53.8

53.8

54.6

0.8

Diff.

<Ref.>

Orders received for renewal
construction (Consolidated)

94,402

88,473

93,33943,692

54,202

10,510<Ref.>

Sales for renewal construction(Consolidated)

87,533

98,02496,46835,116

37,372

2,256＊The ratios and amounts are those in Facilities construction business unit.

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【Orders Received】
Major Project・Asahi Nakanoshima Western Division tower new construction（Air Conditioning (HVAC) works)〈 new construction work 〉
・The second factory of the IKEDA MOHANDO CO.,LTD.
（Air Conditioning (HVAC) works)〈 new construction work 〉
・Nihonbashi Muromachi 3chome area The 1srt urban Redevelopment
BusinessA new construction work
（Plumbing works）〈 new construction work 〉
・Research institute X（ Air Conditioning (HVAC) works and electrical works 〈renovation works 〉
・Hospital X（ Air Conditioning (HVAC) works・Plumbing works・electrical works ）〈new construction work 〉
・Factory X（conveyance systems）〈 new construction work 〉
・Syuutou Environmental hygiene association cleaning center（Waste treatment works）〈overall renovation work〉
・Nomi bika Center（waste treatment works）＜renovation work＞
・Minamisouma City Clean Haramachi Center（ waste treatment works ）＜ renovation work ＞
12

【Orders Received】
Major Project over 1 billion yen(By industry)
September 2014

September 2015Office―2

Hospital2

1

Research institute

14Projects1（5,430million yen）

Factory―

Waste processingfacility―

Water and sewage
treatment facility

1＊Construction orders received from
Costumer ：1 Project＊Construction orders received from
General contractor：3 Projects

9Projects（16,683million yen）

2
3

＊Construction orders received from
Costumer ：3 Project＊Construction orders received from
General contractor：6 Projects―
13

【Profit】
Increase and Decrease Factor of Ordinary Income (Consolidated)(Millions of yen)

September 2014

(2,325)

Improvement of Gross profit margin

1,971

Decrease Provision for loss on construction contracts

1,206

Increase Selling , General and Administrative expenses(295)

Decrease Non-operating income(32)

Total Ordinary Income
September 2015

2,850524
14

【 Profit 】
Profit improvement factor and measure○Improvement of order environment.
○Thorough cost management.
○Maintenance of the site support system.
・Purchasing operations support by the Procurement Division.
・Documentation support by the Site-Documentation SupportCenter.
・Quality management activities by technical experts.
○Strengthening of relations with business partners.
・Enforcement of the liaison Meeting for Subcontractor Groups.
・Establishment of the Sanki Super Meister System.

15【Financial condition】
Balance Sheet (Consolidated)
・Improvement of the capital adequacy ratio by decreasing Current liabilities and Non-current liabilities.
(Millions of yen)
End of 2014

September
2015

Current assets

116,224

93,720(22,503)(19.4)

100,365

Non-current assets

60,15756,405(3,752)(6.2)

53,77739,70436,223(3,480)(8.8)

33,805

72,10654,146(17,960)(24.9)

61,247

1,314

777

(537)

(40.9)

1,236

Non-current liabilities

19,406

13,841(5,564)(28.7)

16,566

Net assets

84,86982,137(2,731)(3.2)

76,32915,332

13,031(2,301)(15.0)

10,804

Total net assets

176,382

150,126(26,256)(14.9)

154,143

Book-value per share (yen)1,334.65

1,290.56(44.09)(3.3)

1,200.45

Capital adequacy ratio (%)

48.1

54.6

6.5

-49.5

Interest-bearing liabilities(consolidated)

6,332

6,164

(168)

(2.7)

6,464

Investment securities
Current liabilities
Provision for loss on
construction contracts

Unrealized gains on availablefor-sale securities

Rate ofchange(%)

Diff.

September
201416【CF】
Statements of Cash Flows (Consolidated)
・Decrease in operating activities cash flows by additional contribution to retirement benefit trust fund and to corporate
income taxes paid.
・Increase in investment activities cash flows by refund of time deposits.
(Millions of yen)・Decrease in financing activities by cash dividends paid.

YearonYear

FY 2011

FY 2012FY 2013

FY 2014

September
2014

September
2015

Cash flows from operating
activities(2,697)

9,729(9,403)

(139)

1,535

(1,330)(2,866)

Cash flows from investing
activities(1,046)(9,481)(3,506)3,440

27

5,5995,572

Cash flows from financing
activities(280)(1,028)(4,152)(2,901)(2,247)(1,010)1,236

Cash and cash equivalentat end of year

41,09740,36723,51023,66722,732

26,877

4,145

Capital investment

815

645

545

395

125

218

93

Depreciation andamortization

1,339

1,207

740

723

355

343

(12)

17

Dividends and Payout Ratio
・Plan to pay a larger dividend on stocks to 18yen from 15yen a year in a regular dividend.

(Millions of yen)

FY 2011

FY 2012FY 2013

FY 2014

September2015

2.46(71.04)

26.46

38.30

4.01

15

1515

159-

-

-

5-

Cash dividend per share (yen)15151520

9

Payout ratio (consolidated) (%)

609.8

-

56.7

52.2

224.4

Number of shareholders at year end

4,015

4,169

3,598

3,375

3,302

447

492

654

930

900

Acquisition of treasury stock (thousand shares)

-

1,988

4,000

2,000-

Retirement of treasury stock (thousand shares)

-

-

4,800

3,000-ROE (Return on Equity)

0.2％(6.4)％

2.3％

3.0％

-

ROA (Return on Assets)

1.4％

1.6％

1.9％

2.2％

-

Earnings per share (yen)Cash dividend per shareregular dividend(yen)Cash dividend per sharecommemorative dividend (yen)Stock price at year end (yen)<Reference>18

【Overall forecast】
FY 2015 Forecast (Consolidated)(Millions of yen)
Forecast
August 7,2015
The1stQuarter～
The2stQuarter

The 3stQuarter～
The 4stQuarter

Order received

91,000

Sales

Forecast
November 10,2015

FullYear

The1stQuarter～
The2stQuarter

The 3stQuarter～
The 4stQuarter

94,000185,000

99,20676,000104,000

180,000

Operating income(loss)(1,900)5,400

Ordinary income(loss)(1,700)

Profit attributable toowners of parent(loss)(1,200)Diff.

FullYear

The1stQuarter～
The2stQuarter

The 3stQuarter～
The 4stQuarter

85,794

185,000

8,260(8,206)－

75,480104,520

180,000(520)

520

－

3,500

176

5,824

6,000

2,076

424

2,500

5,700

4,000

524

5,976

6,500

2,224

276

2,500

3,800

2,600

255

4,145

4,400

1,455

345

1,800

＊Forecast August 7 ,2015 didn’t changed from initial forecast May 13,2015.

FullYear19【Order Received forecast】
FY2015 Orders Received Forecast by Segment（Consolidated）(Millions of yen)
Forecast
August 7,2015

Segment

Forecast
November 10,2015

Diff.

HVAC and plumbing for Buildings

73,20072,700(500)

Industrial HVAC

54,00052,000(2,000)

Electrical Systems

19,00020,0001,000

Facility Systems

9,500

11,0001,500

155,700

155,700－

Machinery Systems

8,000

8,000

－

Environmental Systems

20,00020,000－28,00028,000－183,700

183,700

－

1,200

1,200

－

Others

600

600

－

Adjustments

(500)

(500)

－

185,000

185,000－

Facilities Construction Business total

Plant & Machinery Systems Business total
Sub-total

Real Estate

Total＊ Adjustments eliminate inter segment transactions included in each segment.
＊Forecast August 7 ,2015 didn’t changed from initial forecast May 13,2015.

20

【Sale forecast】
FY2015 Sales Forecast by Segment（Consolidated）(Millions of yen)
Forecast
August 7,2015

Segment

Forecast
November 10,2015

Diff.

HVAC and plumbing for Buildings

69,20066,700(2,500)Industrial HVAC

54,00052,000(2,000)Electrical Systems

21,00021,000－

Facility Systems

9,500

11,0001,500

153,700

150,700(3,000)Machinery Systems

8,000

9,000

1,000

Environmental Systems

17,00019,0002,000

25,00028,0003,000

178,700

178,700－

1,200

1,200－

Others600

600－

Adjustments

(500)

(500)

－

180,000

180,000－

Facilities Construction Business total

Plant & Machinery Systems Business total
Sub-total
Real EstateTotal＊Adjustments eliminate inter segment transactions included in each segment.
＊Forecast August 7 ,2015 didn’t changed from initial forecast May 13,2015.

21

Management Direction for Fiscal 2015
Slogan of 90th anniversary「Unity-Thanks to the past 90 years and building a bridge to the 100th year」

Promote total engineering.
Enhance the profit ratio.
Revitalize Communication.
・Strengthen divisional collaboration and promote proposal – based sales.
・Reduce the work burden at worksites by establishment the site – documentation
support center and the procurement division.
・Improve profitability maintaining the quality of works.
・Raster compliance.
・Enhance corporate value by bolstering corporate governance.
22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 November
10,2015.
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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