【Materials for Investor Briefing】

FY2020 1st Half Results
and Annual Forecasts

November 24, 2020

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-1-

住友電設株式会社

Agenda1. FY2020 1st Half Results and Annual Forecasts
2. Main Initiatives for FY2020 by Works Type
3. Policy on the Distribution of Profits toShareholdersⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-2-

住友電設株式会社

1. FY2020 1st Half Results and Annual ForecastsⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-3-

住友電設株式会社

1-1. Summary of FY2020 1st Half Results◇Explanation of Business Results[Orders received and Sales amount] Orders received and sales amount both declined year onyear (YoY).
• Sales activities were restricted due to the impact of COVID-19, the number of short-term projects decreased,
and progress was delayed in some works, resulting in a YoY decline.
• Overseas, though we saw positive results of our strengthened efforts to receive orders from non-Japanesecompanies, postponed orders from Japanese companies due to the impact of the COVID-19 disaster, among
other factors, caused a YoY decline.

[Operating profit and Ordinary income] Achieved the forecasts, with a YoY decline.
• Profit and income declined YoY primarily due to the decline in sales amount, but profit and income (and theirmargins) exceeded the forecasts owing to profitability improvement in works on hand, decreases in activity
expenses attributable to the impact of the COVID-19 disaster, etc.

◇FY2020 1st Half Results(¥bn)

FY2019 1H
Actual ①
Orders Receiv ed
Sales AmountOperating Profit
MarginOrdinary I ncome
MarginNet I ncome
Margin

84.2
76.6
6.40
8.4%
6.73
8.8%
4.43
5.8%

Growth③-①

FY2020 1H
Plan ②

78.0
71.0
4.30
6.1%
4.60
6.5%
2.80
3.9%

Actual ③

78.2
70.8
5.33
7.5%
5.66
8.0%
3.72
5.3%

Difference③-②

Percentage

0.2
(0.2)
1.03
1.4%
1.06
1.5%
0.92
1.4%

(6.0)
(5.8)
(1.07)(0.9)%(1.07)(0.8)%(0.71)(0.5)%(7.0)%(7.6)%(16.6)%(15.8)%(16.1)%-◇Interim Dividends for FY2020• ¥35 per share (up ¥5 YoY), as the forecast.
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-4-住友電設株式会社

1-2. Sales Amount for FY2020 1st Half Results by Works TypePower Transmission Works: Declined YoY due to a significant decrease in the number of FIT-related projects
despite an increase in the number of projects for electricity companies.
General Electrical Works: In Japan, declined YoY due to delay in progress of works on hand, a decrease in
the number of short-term projects, etc.
Overseas, declined YoY attributable to delay in progress of works caused by theimpact of the COVID-19 disaster, among other factors.
Information & Communications Works: Increased YoY due to solid performances primarily from mobile works.
Facility & HVAC Works: Declined YoY mainly due to a decrease in the number of short-term projects as aresult of the impact of the COVID-19 disaster.
Others*: Declined YoY chiefly due to a decrease in product sales owing to the impact of the COVID-19
disaster.

Sales amount*Others
Insurance agency
business, HVAC
equipment, solar powersystems sales, equipment
manufacturing andrepairs, and manufactureand sales of hot watersupply systems.

(¥bn)

FY19→20Grow th(%)

FY2020Composition

FY2018 1H

FY2019 1H

FY2020 1H

9.49.89.4(3)%

13%

Non-consolidated + Japanese Subsidiaries

33.2

35.0

31.3

(10)%

44%

Ov erseas Subsidiaries

11.0

10.6

9.8(8)%

14%

General Electrical Works

44.2

45.6

41.1

(10)%

58%

Information & Communications Works

9.2

11.0

11.4

4%

16%

Facility & HVAC Works

5.3

5.9

4.7(20)%7%

Others*4.3

4.4

4.1(7)%

6%

72.4

76.6

70.8

(8)%

100%

Works TypePower Transmission WorksTOTALⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-5-住友電設株式会社

1-3. Outlook for FY2020◇ Business Environment and Key Initiatives
Due to the impact of the COVID-19 disaster in addition to the fact that it is an offpeak year for sales caused by the timing of completion of large-scale works, anextremely challenging situation is expected to continue.
Under such circumstances, we will return to our starting point and strive to achieve
the forecast results through high-quality business management with the motto of
Sumitomo Densetsu as one.
Furthermore, we will steadily work on various key measures with the goal of“Sustainable development through a new growth strategy and comprehensivestrength!,” which is the theme of VISION 24, the new Medium-term Management Planannounced this July.

◇ Consolidated Forecast for FY2020

Sales amount:
Operating profit:¥155.0 bn¥9.4 bn

Ordinary income (%):

¥10.0 bn（6.5%）

Net income:¥6.2 bn◇ Dividend Forecast for FY2020•An annual dividend of ¥70 per share (interim ¥35) is forecast, unchanged fromFY2019.

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-6-

住友電設株式会社

1-4. FY2020 Forecast
Despite the challenging situation caused by the impact of the COVID19 disaster, we will focus on quality with the motto of Sumitomo
Densetsu as one and strive to achieve the forecast results.
(¥bn)

FY2018FY2019FY2020GrowthFY2024

ActualActualForecast(%)

V 24

Orders Received

160.2

167.3

160.0

Sales Amount

157.0

172.9

155.0 (10.4)%

Operating Profit

10.95

13.58

9.40 (30.9)%

Margin

7.0%

7.9%

6.1%

Ordinary Income

11.56

14.20

10.00 (29.6)%

Margin

7.4%

8.2%

6.5%

Net Income

5.29

9.77

6.20 (36.7)%

Margin

3.4%

5.7%

4.0%

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-7-(4.4)%
200.0-15.00
7.5%

住友電設株式会社

1-5. Sales Amount for FY2020 by Works TypeSales amount(¥bn)

Works TypePower Transmission Works
Non-consolidated + Japanese Subsidiaries
Ov erseas Subsidiaries

General Electrical Works
Information & Communications Works
Facility & HVAC Works
Others*Total

FY2018FY2019FY2020
Forecast

Growth

19.8
75.1
21.9
97.0
20.7
11.0
8.5
157.0

22.0
80.5
23.1
103.6
26.4
12.1
8.9
172.9

20.0
72.5
18.0
90.5
26.5
10.0
8.0
155.0

(2.0)
(8.0)
(5.1)
(13.1)
0.1
(2.1)
(0.9)
(17.9)*Others
Insurance agency business, HVAC equipment,
solar power systems sales, equipment
manufacturing and repairs, and manufactureand sales of hot water supply systems.

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-8-住友電設株式会社

1-6. Proportion of Sales Amount from Overseas
Overseas, a challenging situation continues with postponement of orders from Japanese manufacturing companies,
delay in progress of works at work sites, etc. due to the impact of the COVID-19 disaster. We will focus on receiving
orders from non-Japanese customers as well to reach sales targets.

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

-9-

住友電設株式会社

1-7. Historical Data Since FY2000

Made a loss in FY05
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Shift in focus from quantity to quality- 10 -

住友電設株式会社

1-8. VISION 24 Initiatives[Ideals of the Sumitomo Densetsu Group]

Aim to become a comprehensive engineering enterprise that truly meetsthe needs of society through the growth of people and technology[Theme of V24]
Sustainable development through a new growth strategy andcomprehensive strength!
Sumitomo Densetsu as one, enhancement of SEM brand power (safety and security,high quality, reliability, and enterprise value)[Four key measures]
Pursuing improved customer satisfaction(proposal-based sales capabilities,capacity, and technical capabilities)

Safety, quality, andcompliance
Securing and developing humanresources and implementing
work style reforms

Enhancing enterprise value inanticipation of the future

Corporate Philosophy of the Sumitomo Densetsu GroupThe Sumitomo SpiritⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 11 -

住友電設株式会社

1-9. Medium-term Management Plan VISION 24- Numerical Targets [Consolidated orders received, sales amount, ordinary income, and ordinary income margin]

VISION 24
FY2024 target
Orders received¥200.0 bn

Sales amount¥200.0 bn

Ordinary income¥15.0 bn

Ordinary incomemargin

7.5%- Growth investment
FY2020 to FY2024 (five years) total ¥20.0 bn- Capital efficiency benchmark
ROE (return on equity): Target 10%- Financial soundness benchmark
Equity ratio: Maintain 50% level- Shareholder returns policy
Dividend payout ratio: Target 40% (FY2024)Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 12 -

住友電設株式会社

2. Main Initiatives for FY2020 by Works TypeⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 13 -

住友電設株式会社

2-1. Power Transmission Works【Orders Received】【Sales Amount】

25.0

25.0
¥bn¥bn

20.0

20.0

15.0

15.0

10.0

10.0

5.0

5.0

0.0
Ordersreceived

FY2018FY2019FY2020(forecast)

20.0

22.1

19.0

0.0
Salesamount

FY2018FY2019FY2020(forecast)

19.8

22.0

20.0

【Outlook for FY2020】• Though there are a certain
number of orders for renewal
works for electricity companies,
sales of ¥20.0 bn are forecast, adecline year-on-year partly due
to a downturn in sales
attributable to the last fiscal
year’s completion of largescale FIT-related projects.
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

I nterconnectedtransmission lines

Special highv oltage transformers- 14 -

I nterconnected intermediary

I ntermediary
substation

PCS

Solar panels

住友電設株式会社

2-2. General Electrical Works【Orders Received】
120.0
¥bn

120.0

億円

98.3

95.3

95.0

100.0

80.0

¥bn億円

97.0

103.6

90.5

100.0

991
Overseas,949 992
Overseas,950 Overseas,
22.6
23.3
920
900 20.060.040.0【Sales Amount】

80.0

Overseas,949
21.9920

Overseas,992991
23.1 950

Overseas,900 18.0

60.0Japan,
75.7Japan,
71.9

Japan,
75.0

20.0

40.0

Japan,
80.5

Japan,
75.1

Japan,
72.5

20.0

0.00.0FY2018FY2019FY2020(forecast)

FY2018FY2019FY2020(forecast)【Outlook for FY2020】• Japan:The situation is challenging with regard to orders related to maintenanceprojects for the manufacturing sector due to the COVID-19 disaster, but wewill focus on orders related to redevelopment in the Tokyo metropolitan
area / Kansai area, logistics warehouses, data centers, etc.
While we had many large-scale projects nearing final completion last fiscalyear, we have only a few this fiscal year. Sales is thus expected to decline.
• Overseas: In countries such as Indonesia and the Philippines, which have been
greatly affected by the COVID-19 disaster, the impact of postponement orcancellation of capital investment by Japanese companies and delay incompletion caused by delay in works is significant. We will focus on orders
from non-Japanese companies as well and forecast sales of ¥18.0 bn.
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 15 -

住友電設株式会社

2-3. Information & Communications Works【Orders Received】【Sales Amount】

30.0

30.0

¥bn¥bn

25.0

25.0

20.0

20.0

15.0

15.0

10.0

10.0

5.0

5.0

0.0
Ordersreceived

FY2018FY2019FY2020(forecast)

21.4

29.4

27.0

0.0
Salesamount

FY2018FY2019FY2020(forecast)

20.7

26.4

26.5

【Outlook for FY2020】• We expect an increase in the volume of works for indoor
networks for GIGA schools, distance learning at educational
facilities, etc. In addition, demand for mobile base station
works, including those for 5G, remains robust. Sales of ¥26.5 bn
is forecast, the same level as the previous year.
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 16 -住友電設株式会社

2-4. Facility and HVAC Works【Orders Received】
¥bn

15.0

【Sales Amount】
¥bn

15.0

10.0

10.0

5.0

5.0

0.0
Ordersreceived

FY2018FY2019FY2020(forecast)

12.1

11.7

11.0

0.0
Salesamount

FY2018FY2019FY2020(forecast)

11.0

12.1

10.0

【Outlook for FY2020】• Maintenance and renewal works for the manufacturingsector will decrease due to the impact of the COVID-19
disaster. We will maintain the existing relationship with theSumitomo Electric Group and secure the amount of works byfocusing on medium-sized projects, primarily for other officebuildings and warehouses. Sales of ¥10.0 bn is forecast.
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 17 -

住友電設株式会社

3. Policy on the Distribution of Profits toShareholdersⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 18 -

住友電設株式会社

3-1. Policy on the Distribution of Profits to Shareholders
Policy on the Distribution of Profits to Shareholders
・Distribute stable dividends well balanced with internal reserves
taking into consideration business results and future businessdevelopment.
Trend in Net Income and Div idends

(¥bn)

FY20

FY15

FY16

FY17

FY18

FY19Net income

5.08

5.52

6.84

5.29

9.77

6.20

Income margin

3.5%

4.0%

4.7%

3.4%

5.7%

4.0%

38

42

50

60

70

70

1420

2225

30

35

Year-end div idend

24

2228

35

40

35

(Increase)
Profit per share(yen)
Div idend payout
ratio

(10)

(2)

(6)

(10)

(10)

-142.85

155.18192.34148.73274.67174.26

26.6%

27.1%

26.0%

40.3%

25.5%

40.2%

Div idends pershare (yen)Interim div idendⒸ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 19 -Forecast

住友電設株式会社

3-2. Profit and Dividends per Share, and Dividend Payout Ratio• Dividends have increased for 9 consecutive fiscal years since FY2011.

Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 20 -

住友電設株式会社

Notes on Perspective Information
This presentation material is based on currently
available information. Actual results may differ
from forecasts due to a variety of factors.

Inquiries
Corporate Planning Department,
Sumitomo Densetsu Co., Ltd.
Phone: +81-3-3454-7423Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

- 21 -

住友電設株式会社