FY2018 Summary of
Financial Results
May 14, 2019

Sanki Engineering Co., Ltd.
1

Contents
Key Points of Financial Results
FY2018 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 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
Balance Sheet (Consolidated)
Statement of Cash Flows (Consolidated)
Dividends and Others
FY2019 Full-Year Forecast (Consolidated)
FY2019 Forecast of Orders Received and Net Sales by Segment (Consolidated)

03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21

2

Key Points of Financial Results<Orders received>○ In the Facilities Construction Business, there were improvements in all business segments year on year. Of these, Industrial
HVAC continued to show great improvements, particularly with regard to large-scale projects.
○ As a result, overall orders received greatly exceeded those of the previous fiscal year, and there was also an increase in thebalance carried forward to the next period.
<Net Sales & Profits>○ Net sales in the Facilities Construction Business increased year on year for all business segments, with factors such as theincreased orders in Industrial HVAC from the previous fiscal year resulting in greatly increased revenue.
○ Furthermore, both Machinery Systems and Environmental Systems saw improvements, resulting in a great increase in net
sales overall in excess of the previous fiscal year’s results and planned values for the final year of the medium-term
management plan, “Century2025”Phase1.
○ The pace of improvement of gross profit margin slowed somewhat, but remained at a high level due to initiatives such as
ongoing thorough cost management and improved work efficiency.
○ Furthermore, all profit items increased greatly due to factors such as increased revenue, particularly for Industrial HVAC, andall profit items exceeded the planned values for the final year of the medium-term management plan, “Century2025”Phase1.
<Shareholder Returns, etc.>○ An extra dividend of 20 yen has been paid in addition to the regular dividend of 40 yen, resulting in a total annual dividend of
60 yen, which is an increase of 25 yen from the previous fiscal year.
(total return ratio of 52.9% due to a payout ratio of 40.0% and an acquisition of treasury stock conducted in the second half ofthe fiscal year)○ Secured ROE of more than 10% due to factors such as a significant increase in net income for the fiscal year.

3【Overall Results】
FY2018 Results (Consolidated)• Orders received increased greatly due to factors such as large-scale orders being received in the Facilities Construction Business, particularly in Industrial HVAC, and balance
carried forward also increased.
• Net sales increased in all businesses, led by a dramatic increase in Industrial HVAC, resulting in a great increase year on year.
• All profit items increased greatly due to improvements in gross profit margin through ongoing initiatives to improve work efficiency in addition to the dramatic increase centeredon Industrial HVAC.

(Millions of yen)

FY2016FY2017FY2018Year on year

Rate ofchange(%)

Orders received

185,880

191,113217,096

25,983

13.6

Balance carried forward

123,756

144,712

149,495

4,782

3.3

Net sales

168,512170,157

212,314

42,15724.8

166,817

168,266

210,245

41,978

24.9

1,694

1,890

2,069

178

9.5

22,53825,06031,684

6,624

26.4

22,184

24,40330,990

6,587

27.0

353

656

694

37

5.6

13.4

14.7

14.9

0.2

－

Selling, general and administrative expenses

16,526

18,466

21,046

2,580

14.0

Operating income

6,012

6,593

10,637

4,044

61.3

867

841

566

(274)

(32.6)

6,880

7,434

11,204

3,769

50.7

124

(979)

122

1,101

－

4,698

3,906

9,046

5,140

131.6

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

Non-operating income and loss
Ordinary income
Extraordinary income (loss)
Profit attributable to owners of parent (loss)pt.

4

【Orders Received】
Orders Received by Segment (Consolidated)• In the Facilities Construction Business, there were improvements in all business segments year on year. Of these, Industrial HVAC continued to show great improvements,
particularly with regard to large-scale projects, exceeding HVAC and Plumbing for Buildings in real terms.
• In the Plant & Machinery Systems Business, Machinery Systems maintained the high level of the previous fiscal year by receiving large-scale projects. However, Environmental
Systems declined year on year due to the impact of a large-scale DBO project received in the previous fiscal year.

(Millions of yen)Segment

FY 2016

FY 2017

FY 2018

Year on year

Rate of
Change (%)

HVAC and Plumbing for Buildings

65,76362,27465,6393,364

5.4

Industrial HVAC

49,82358,90782,72923,821

40.4

Electrical Systems

21,576

22,67523,342667

2.9

Facility Systems

9,450

9,585

10,821

1,236

12.9

146,612

153,443

182,533

29,08919.0

Machinery Systems

8,130

12,10012,049

(50)

(0.4)

Environmental Systems

30,62624,247

21,705(2,541)(10.5)

38,75636,34733,755(2,592)(7.1)

185,369

189,791

216,288

26,497

14.0

1,592

1,755

1,926

170

9.7

491

587

960

372

63.5

(1,573)(1,020)(2,078)(1,057)―

185,880

191,113217,096

25,983

13.6

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

5

【Net Sales】
Net Sales by Segment (Consolidated)• In the Facilities Construction Business, factors such as increased orders in Industrial HVAC in both the previous fiscal year and this fiscal year resulted in greatly increased
revenue. HVAC and Plumbing for Buildings, Electrical Systems, and Facility Systems also firmed, resulting in a year-on-year improvements for all business segments.
• In the Plant & Machinery Systems Business, both Machinery Systems and Environmental Systems improved.
• As a result, there was a great increase in net sales for the company as a whole, which greatly exceeded planned values for the final year of the medium-term managiment plan,(Millions of yen)“Century2025”Phase1, amounting to 210 billion yen.

Segment

FY 2016

FY 2017

FY 2018

Year on year

Rate of
Change (%)

HVAC and Plumbing for Buildings

60,37663,782

71,558

7,776

12.2

Industrial HVAC

49,44046,55673,49326,936

57.9

Electrical Systems

21,542

20,653

23,214

2,561

12.4

Facility Systems

10,208

8,695

11,033

2,337

26.9

141,567

139,688

179,300

39,611

28.4

Machinery Systems

8,192

9,254

11,791

2,536

27.4

Environmental Systems

18,271

19,90920,471562

2.8

26,464

29,16432,263

3,099

10.6

168,032

168,853

211,563

42,710

25.3

1,592

1,755

1,926

170

9.7

499

578

718

139

24.2

(1,611)(1,030)(1,893)(863)―

168,512170,157

212,314

42,157

24.8

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

6

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

FY 2016

FY 2017

FY 2018

Rate of
Change (%)

Year on year

Facilities Construction

6,404

6,010

9,905

3,895

64.8

Machinery Systems

(138)

(40)

238

279

－

Environmental Systems

671

575

312

(263)

(45.8)

6,938

6,545

10,456

3,910

59.8

Real Estate Business

189

476

471

(4)

(1.0)

Others

22

49

52

2

6.0

(270)

362

223

(139)

(38.4)

6,880

7,434

11,204

3,769

50.7

Sub-total

Adjustments*

Total* The adjustments for segment profit (loss) include the adjustments for whole company profit (loss) that are not distributed into individual reporting
segments, reversal of interest liabilities that have been internally allocated into individual reporting segments, and adjustments due to the posting ofextraordinary income (loss) attributable to each segment.

7

【Overall Results】
Quarterly Results (Consolidated)(Millions of yen)
FY 2016

FY 2017

FY 2018

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

Orders received

55,33835,57347,25047,71638,20957,56643,881

51,45650,88552,934

51,22862,048Net sales

33,86636,47444,222

53,94932,93339,573

43,10254,54835,25245,47061,32370,267Gross profit

3,905

4,238

5,566

8,827

3,482

5,837

5,995

9,744

4,329

6,442

8,654

12,258Gross profit margin (%)

11.5

11.6

12.6

16.4

10.6

14.8

13.9

17.9

12.3

14.2

14.1

17.4

Selling, general andadministrative expenses

4,171

3,915

3,798

4,640

4,442

4,386

4,193

5,443

4,571

5,072

4,965

6,437

Operating income (loss)

(265)

323

1,767

4,187

(960)

1,450

1,802

4,300

(242)

1,369

3,688

5,821

Operating profit margin
(%)

(0.8)

0.9

4.0

7.8

(2.9)

3.7

4.2

7.9

(0.7)

3.0

6.0

8.3

Ordinary income (loss)

27

341

2,085

4,425

(593)

1,546

2,093

4,388

92

1,447

3,848

5,815

Extraordinary
income (loss)

―

(32)

(43)

200

(327)

(806)

(381)

536

(147)

(3)

(1,167)

1,439

Profit attributable toowners of parent (loss)

(2)

232

1,349

3,119

(604)

508

1,119

2,882

(66)

862

1,743

6,505

8

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

200,000

Orders received
Net sales
Balance carriedforward150,000

100,000

50,000

0
2015

2016

2017

2018

2019

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

35,000

16.0
Gross profit (left axis)

14.0

30,00012.0
25,000
10.0

Operating income(left axis)
Ordinary income(left axis)
Gross profit margin(right axis)
Operating profit margin(right axis)
Ordinary profit margin(right axis)

20,0008.0
15,000
6.0
10,000
4.0

5,000

2.0

0

0.0
2015

2016

2017

2018

2019

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

45,000FY 2016
40,000FY 2017

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

FY 2018
35,00030,00025,00020,00015,00010,0005,000

11【Orders Received】
Orders Received by Type(Millions of yen)
FY 2015
Orders received (Non-consolidated: Facilities
Construction Business)

FY 2016

FY 2017A

FY 2018
B

Diff.
B–A

145,069

139,997

147,013

173,553

26,539Orders received from general contractors(Non-consolidated: Facilities Construction Business)

72,751

61,49367,34578,304

10,959Rate of orders received from generalcontractors (Non-consolidated: Facilities
Construction Business) (%)

50.1

43.9

45.8

45.1

(0.7)

Orders received (Consolidated)pt.

183,270

185,880

191,113217,096

25,983

2,343

1,612

1,246

2,379

1,133

1.3

0.9

0.7

1.1

0.4

Orders received for renewal construction(Consolidated)

99,920101,114

101,597

117,619

16,021

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

54.5

54.4

53.2

54.2

1.0

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

96,325

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

pt.

pt.

93,602

94,601

116,627

22,025* Orders received by SANKI CONSTRUCTION ENGINEERING (SHANGHAI) CO., LTD. (1,115 millions of yen in FY2018), an unconsolidated subsidiary, are notincluded in orders received from overseas projects.

12【Orders Received】
Main Large-Scale Projects Received
Property nameItem of construction

Type of construction

Location

HVAC, Plumbing and Electrical systems

New construction
work

Kanagawa

NGK Ceramic Device Co., Ltd., Tajimi Plant

HVAC systems

New construction
work

Gifu

Toshiba Memory Corporation, Yokkaichi Plant Building 260, Stage 4

HVAC systems

Expansion

Mie

Sony Semiconductor Manufacturing Corporation, Yamagata Technology Center

HVAC and Electrical systems

Renovation

Yamagata

Tokyo Metropolitan Higashiyamato Medical Center for the Severely Disabled

Plumbing systems

RenovationTokyo

HVAC and Plumbing systems

Renovation

Osaka

Toshiba Memory Iwate Corporation, Iwate Building 510, Stage 1

HVAC systems

New construction
work

Iwate

RIKEN: Works to enhance facilities for a next-generation ultra-high-speed computer
system in fiscal 2018

HVAC systems

Expansion

Hyogo

Toyota Motor Corporation PI Tower Project Phase 2

HVAC and Electrical systems

New construction
Renovation

Aichi

Shiseido: East Saito New Site Construction Project (tentative name)

HVAC and Plumbing systems

New construction
work

Osaka

New HVAC equipment construction such as facilities construction for District B-1 of
the Toranomon/Azabudai Type-1 Urban Area Redevelopment Project (whollyshared construction area, etc.)

HVAC systems

New construction
work

Tokyo

Nissay Training Center

HVAC systems

Renovation

Chiba

Narita International Airport: Works to expand the T1S#53 make-up conveyor andenhance BHS capacity

Transport facilities

Renewal

Chiba

Ochi General Administration Association: Works to construct common garbage
incinerator

Construction of waste treatment facilities

New construction
work

ShimaneNissay Logistics Center, Machida

Takashimaya East Building Hotel Conversion

9 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 Large-Scale Completed Construction Projects
Property nameItem of construction

Type of construction

Location

HVAC and Electrical systems

New construction
work

Aichi

Plumbing and Electrical systems

New construction
work

Tokyo

Toshiba Memory Corporation, Yokkaichi Plant Building 260, Stage 3

HVAC systems

Expansion

Mie

Fukuoka High and District Court/Family Court/Summary Court Office

HVAC, Plumbing systems

New construction
work

Fukuoka

Yokohama Business Park A1 Building

HVAC systems

Renovation

Kanagawa

Toshiba Memory Yokkaichi Plant Building 260, Stage 4

HVAC systems

Expansion

Mie

HVAC, Plumbing and Electrical systems

Renovation

Tokyo

Plumbing systems

New construction
work

Tokyo

Nissay Crea Tower

HVAC systems

New construction
work

Tokyo

NGK Ceramic Device Co., Ltd., Tajimi Plant

HVAC systems

New construction
work

Gifu

HVAC and Electrical systems

New construction
work
and Renovation

Aichi

Toyota Motor Corporation PI Tower Project

Nihonbashi 2-Chome Type-1 Urban Area Redevelopment Project (Districts C & D)

Nihonbashi 2-Chome Type-1 Urban Area Redevelopment Project (District B)
Nihonbashi Muromachi Mitsui Tower

Toyota Motor Corporation PI Tower Project Phase 2

5 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】
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)
FY2016FY2017FY2018

Office422Commercial facility

1

―

―

Complex building

―

―

1

Hotel

―

1

1

Factory

4

6

10

Logistics Center

―

―

1

2

1

Multiple – dwelling complex－

Hospital

1

15 Projects

1

20 Projects

1

23 Projects

Research institute1(40,057 million yen)1

(40,822 million yen)

1

(55,118 million yen)

General governmentbuildings－

Gymnasium－* Orders received from
customers: 9 Projects

1* Orders received from
customers: 9 Projects

1

Other building interiors

―

3

―

* Orders received fromgeneral Contractors: 11 Projects

1

Railway, Airport* Orders received fromgeneral Contractors: 6 Projects

Power station, Substation

1

―

―

Waste processing facility

1

2

1

Water treatment plants andsewage plants

2

―

―

－

1

1

1

* Orders received from
customers: 10 Projects* Orders received fromgeneral Contractors: 13 Projects

15

【Profit】
Profit Improvement Factors and Measures○ Strong business environment○ Thorough cost management (thorough internal control processes)○ Developing site support systems
・ Improved support for purchasing operations by the Procurement
Division (established in fiscal 2015) (web-based 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 (established in fiscal 2016)
・Establishment of Technology Support Center specializing in support
and guidance for on-site operations (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 System
16【Financial Conditions】
Balance Sheet (Consolidated)(Millions of yen)

End of
FY 2017
Current assets

End of
FY 2018

Year on year

Rate ofchange (%)

122,901

141,342

18,44115.0

64,45885,243

20,78432.2

54,112

53,979

(133)

(0.2)

31,927

27,879(4,047)(12.7)

73,78791,317

17,53023.8

49,854

68,286

18,43137.0

Noncurrent liabilities

17,035

14,232(2,803)(16.5)

Total net assets

86,191

89,772

3,581

4.2

Total assets

177,014

195,321

18,307

10.3

Book-value per share

1,419.77

1,502.53

82.76

5.8

48.6

45.8

13,504

12,094

Notes and accounts receivable oncompleted construction contracts andotherNoncurrent assets
Investment securities
Current liabilities
Notes and accounts payable on
construction contracts and other

Equity ratio (%)
Interest-bearing liabilities (consolidated)

(2.8)
pt.

―

(1,409)(10.4)* As we have applied Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. since the 1st quarter of FY2018, the FY2017
balance sheet has been partially rearranged. As a result, the equity ratio has also changed.

17

【CF】
Statement of Cash Flows (Consolidated)○ The balance of cash and cash equivalents decreased year on year
• The increase in cash flows from operating activities is mainly due to the inclusion of income before taxes and otheradjustments, despite the increase in income taxes paid
• The decrease in cash flows from investment activities is mainly due to the acquisition of property, plant and equipment• The decrease in cash flows from financing activities is mainly due to the repayment of long-term loans payable, expenditurefrom the purchase of treasury stock, and the payment of dividends(Millions of yen)

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

Cash flows from operating activities

(139)

5,220

10,845

6,306

6,786

Cash flows from investing activities

3,440

5,520

(1,644)(2,510)(3,775)

Cash flows from financing activities(2,901)(1,826)(2,458)

1,814(5,215)

Cash and cash equivalents at end of period

23,66732,501

39,18744,866

42,612

Capital investment(including intangible assets)

395

855

1,015

3,772

6,110

Depreciation and amortization

723

723

718

818

1,340

18

【Shareholder Returns】
Dividends and Others• In addition to the regular dividend of 40 yen, an extra dividend of 20 yen is paid, resulting in an annual dividend of 60 yen (increase of 25 yenyear on year).
• The payout ratio is 40%. The total return ratio is 52.9% due to an acquisition of 1 million shares of treasury stock conducted in the second halfof fiscal 2018.
• ROE exceeded 10% due to a significant increase in net income for the fiscal year.
FY 2014
Earnings per share (yen)FY 2015

FY 2016

September2018

FY 2017

FY 2018

38.30

83.84

73.91

63.02

13.15

150.02

Cash dividends per share:
regular dividends (yen)

15

18

20

20

20

40

Cash dividends per share:commemorative dividends (yen)

5

―

―

―

－

－

Cash dividends per share:
extra dividends (yen)

―

12

10

15

－

20

Cash dividends per share (yen)

20

30

30

35

20

60

Payout ratio (consolidated) (%)

52.2

35.8

40.6

55.5

Number of shareholders at end of FY

3,375

3,397

3,157

3,243

3,170

3,381

Stock price at end of FY (yen)

930

901

958

1,188

1,220

1,210

Acquisition of treasury stock(thousand shares)

2,000

―

―

3,000

－

1,000

Retirement of treasury stock(thousand shares)

3,000

―

―

3,000

－

1,000

ROE (Return on Equity) (%)

3.0

6.3

5.5

4.5

10.3

ROA (Return on Assets) (%)

2.2

4.7

4.1

4.3

6.0

40.0

19

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

FY 2015

FY 2016

FY 2017

Initialforecast for
FY 2019B

FY 2018
A

Increase/
Decrease
B–A

Rate ofchange(%)

Orders received

183,270

185,880

191,113217,096

190,000(27,096)(12.5)

Balance carried forward

106,388

123,756

144,712

149,495

139,495(10,000)(6.7)

Net sales

178,901

168,512170,157

212,314200,000(12,314)(5.8)

Gross profit

22,92922,53825,06031,68430,000(1,684)

(5.3)

12.8

13.4

14.7

14.9

15.0

0.1

―

Operating income

6,509

6,012

6,593

10,6378,800(1,837)(17.3)

Ordinary income (loss)

8,135

6,880

7,434

11,2049,000(2,204)(19.7)

Profit attributable to owners ofparent

5,327

4,698

3,906

9,046

6,200

(2,846)(31.5)

30

30

35

60

60

－

－

Gross profit margin (%)

Dividends per share (yen)20【Forecast of Orders Received and Net Sales】
FY2019 Forecast of Orders Received andNet Sales by Segment (Consolidated)(Millions of yen)
FY 2019
Orders Received Forecast

Segment

FY 2019
Net sales Forecast

HVAC and Plumbing for Buildings

62,00066,000Industrial HVAC

59,00063,000Electrical Systems

23,00024,000

Facility Systems

11,00010,000155,000

163,000

Machinery Systems

12,00012,000

Environmental Systems

21,00023,00033,00035,000188,000

198,000

2,000

2,000

Others600

600

Adjustments*

(600)

(600)

190,000

200,000

Total of Facilities Construction BusinessTotal of Plant & Machinery Systems Business
Sub Total
Real Estate Business

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

21

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 May 14, 2019.
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

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