The 1st Quarter FY2019
Summary of Financial Results
August 9, 2019

Sanki Engineering Co., Ltd.

1

Contents
Key Points of Financial Results
FY2019 1Q Results (Consolidated)
Orders Received by Segment (Consolidated)
Net Sales by Segment (Consolidated)<Reference> Ordinary 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 and 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)
Dividends and Others
FY2019 Full-Year Forecast (Consolidated)
FY2019 Forecast of Orders Received and Net Sales by Segment (Consolidated)

030405
060708
09101112131415
16171819202

Key Points of Financial Results<Orders Received>
In the Facilities Construction Business, orders received fell below those of theprevious fiscal year due to factors such as orders for large-scale projects inIndustrial HVAC received in the same period of the previous fiscal year. The Plant& Machinery Systems Business saw great improvements, thanks to factors suchas an order for a large-scale project in Environmental Systems. As a result, overallorders received remained at a high level, but declined year on year.
<Net Sales & Profit>
Net sales in the Facilities Construction Business increased year on year for all
businesses. In the Plant & Machinery Systems Business, both Machinery Systemsand Environmental Systems showed great improvements, resulting in increased
net sales overall.
The gross profit margin improved year on year thanks to initiatives such as
ongoing thorough cost management and improved work efficiency. Furthermore,
all profit items increased due to the effects of increased revenue.

3

【Overall Results】
FY2019 1Q Results (Consolidated)(Millions of yen)

June 2017

June 2018

June 2019Year on year

Rate ofchange(%)

Orders received

38,20950,885

46,697(4,187)(8.2)

Balance carried forward

129,032

160,345

155,644(4,701)(2.9)

Net sales

32,93335,25240,882

5,629

16.0

32,447

34,73040,270

5,539

16.0

485

522

612

90

17.2

3,482

4,329

5,305

976

22.5

3,298

4,113

5,028

914

22.2

183

215

277

62

28.8

10.6

12.3

13.0

0.7

―

Selling, general and administrative expenses

4,442

4,571

4,983

411

9.0

Operating income (loss)

(960)

(242)

322

564

―

Non-operating income and loss

366

335

225

(109)

(32.6)

Ordinary income (loss)

(593)

92

547

455

490.7

Extraordinary income (loss)

(327)

(147)

24

171

―

Profit attributable to owners of parent (loss)(604)(66)428494―

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

pt.

* Due to increased importance, SANKI CONSTRUCTION ENGINEERING (SHANGHAI) CO., LTD., was included within thescope of consolidation starting in the first quarter of FY2019.

4

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

June 2017

June 2018

June 2019

Rate ofChange (%)

Year on year

HVAC and Plumbing forBuildings

13,346

14,211

13,018(1,193)(8.4)

Industrial HVAC

11,55221,136

11,052(10,083)(47.7)

Electrical Systems

3,259

6,506

7,469

962

14.8

Facility Systems

2,410

2,842

2,921

78

2.8

Total of Facilities Construction
Business

30,56844,697

34,461(10,236)(22.9)

Machinery Systems

3,720

2,240

2,257

160.7

Environmental Systems

3,520

4,005

9,451

5,446

136.0

Total of Plant & Machinery
Systems Business

7,240

6,246

11,709

5,462

87.5

37,80950,944

46,170(4,773)(9.4)

Real Estate Business

419

452

525

72

16.0

Others

178

184

195

116.1

Adjustments *(198)

(695)

(193)

501―38,209

50,885

46,697(4,187)(8.2)

Sub-totalTotal* “Adjustments” eliminate internal transactions included in each segment.

5

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

June 2017

June 2018

June 2019Year on year

Rate ofChange (%)

HVAC and Plumbing for
Buildings

13,134

13,345

15,253

1,908

14.3

Industrial HVAC

9,437

11,906

13,615

1,709

14.4

Electrical Systems

3,983

3,831

3,958

127

3.3

Facility Systems

1,355

1,392

1,867

475

34.1

Total of Facilities Construction
Business

27,91230,47534,6954,22013.8

Machinery Systems

2,230

2,114

2,601

487

23.0

Environmental Systems

2,487

2,396

3,143

746

31.2

Total of Plant & Machinery
Systems Business

4,718

4,511

5,745

1,233

27.4

32,63034,98640,440

5,453

15.6

Real Estate Business

419

452

525

72

16.0

Others

159

169

233

64

38.0

Adjustments*(276)

(356)

(317)

38

―

32,93335,25240,882

5,629

16.0

Sub-total

Total* “Adjustments” eliminate internal transactions included in each segment.

6

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

Ordinary Gross Profit by Segment (Consolidated)

Segment

June 2017

HVAC and Plumbing for Buildings
Industrial HVACElectrical Systems

June 2018

June 2019Year on year

Rate ofChange (%)

2,702

3,613

4,152

539

14.9

(19)

87

240

153

176.5

2,683

3,700

4,393

692

18.7

Machinery Systems

468

337

541

203

60.3

Environmental Systems

182

203

113

(90)

(44.2)

Total of Plant & Machinery Systems
Business

650

541

654

113

20.9

3,333

4,241

5,048

806

19.0

Real Estate Business

123

153

192

3825.1Others75

71

94

2232.2Adjustments*(50)

(137)

(29)

108－3,482

4,329

5,305

976

22.5

Facilities Systems
Total of Facilities Construction
Business

Sub-total

Total7

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

FY 2017

FY2019FY 2018

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

Orders received

38,20957,56643,881

51,45650,88552,934

51,22862,04846,697

Net sales

32,93339,573

43,10254,54835,25245,47061,32370,26740,882Gross profit

3,482

5,837

5,995

9,744

4,329

6,442

8,654

12,258

5,305

10.6

14.8

13.9

17.9

12.3

14.2

14.1

17.413.0

Selling, general andadministrative expenses

4,442

4,386

4,193

5,443

4,571

5,072

4,965

6,437

4,983

Operating income (loss)

(960)

1,450

1,802

4,300(242)

1,369

3,688

5,821

322

(2.9)

3.7

4.2

7.9

(0.7)

3.0

6.0

8.3

0.8

Ordinary income (loss)

(593)

1,546

2,093

4,388

92

1,447

3,848

5,815

547

Extraordinary income (loss)

(327)

(806)

(381)

536

(147)

(3)

(1,167)

1,439

24

Profit attributable to owners of parent(loss)

(604)

508

1,119

2,882

(66)

8621,743

6,505428

Gross profit margin (%)

Operating profit margin (%)

8【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

50,000

0
2015

2016

2017

2018

2019

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

35,00016.0

14.0

30,000Grossprofit (left axis)
売上総利益（左軸）
Operatingincome (left axis)
営業利益（左軸）
Ordinaryincome (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)

14,00012,000June 2017

June 2018

June 201910,000

8,000

6,000

4,000

2,000

0

Government Offices
Miscellaneous businessservices
Wholesale and Retail
Trade
Education
Medical Services
Real Estate
Finance and Insurance
ChemicalMachinery
Food
PharmaceuticalIndustry
Automobile
Electrical Machinery11【Orders Received】
Orders Received by Type(Millions of yen)

FY 2016

Orders received (Non-consolidated: Facilities
Construction Business)

FY 2017

FY 2018

June 2018
A

June 2019
BDiff.
B–A

139,997

147,013

173,553

42,067

31,782(10,284)

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

61,49367,34578,30415,855

9,161(6,693)Rate of orders received from generalcontractors (Non-consolidated: Facilities
Construction Business) (%)

43.9

45.8

45.1

37.7

28.8(8.9)

Orders received (Consolidated)pt.

185,880

191,113217,096

50,885

46,697(4,187)

1,612

1,246

2,379

640

704

64

0.9

0.7

1.1

1.3

1.5

0.2

Orders received for renewal construction(Consolidated)

101,114

101,597

117,619

32,17729,736(2,440)Rate of orders received for renewal
construction (Consolidated) (%)

54.4

53.2

54.2

63.2

63.7

0.5

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

93,602

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

pt.

pt.

94,601

116,627

18,827

21,1322,305

12

【Orders Received】
Main Large-Scale Projects Received andMain Large-Scale Completed Construction Projects○ 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

Water treatment andsewage systems

RenewalTokyo

Waste treatment systems

RenewalFukushima

Ishikawa Regional Association of Community Facilities: Work toimprove core equipment at waste treatment facility

1 other project○ Large-Scale Completed Construction Projects
Property name
Kintetsu Hakata Building
Sony Semiconductor Manufacturing Corporation
Yamagata Technology Center

Item of construction

Type of construction

Location

HVAC systems

New construction work

Fukuoka

HVAC and Electricalsystems

Renovation

Yamagata* The property name is the name being used by the Company. This may differ from the name used on the construction contract.

13

【Orders Received】
Main Large-Scale Projects Received over 1 Billion Yen (by Industry)

June 2017

June 2018

June 2019

Logistics Center―1―

Factory―31Research
institute

1――

2 Projects(4,110 million yen)

4 Projects

Railway, Airport

1

Other building
interiors―

Water treatment
plants andsewage plants－－

Waste treatment
facility―－*Orders received from
customers: 1 Project*Orders received fromgeneral Contractor: 1 Project――(8,080 million yen)
*Orders received from
customers: 2Projects*Orders received fromgeneral Contractor: 2 Projects

4 Projects―
11(8,884 million yen)
*Orders received from
customers: 3Projects*Orders received fromgeneral Contractor: 1 Project

１14

【Profit】
Profit Improvement Factors and Measures (Consolidated)○ Strong business environment○ Thorough cost management (thorough internal control processes)○ 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)
・Company-wide promotion of BIM* by the BIM Promotion Center (established infiscal 2019)
・ 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* BIM (Building Information Modeling): a process that integrates information from design to construction in order to improve quality andstreamline operations

15

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

End ofFY 2018

June 2019

Rate ofchange (%)

Year on year

June 2018

Current assets

141,342

121,886(19,455)(13.8)

109,516

Noncurrent assets

53,97953,535(444)(0.8)

55,098Current liabilities

91,31773,874(17,442)(19.1)

62,789Noncurrent liabilities

14,232

14,228(3)(0.0)

16,804

Total net assets

89,77287,319(2,453)(2.7)

85,020Total assets

195,321

175,422(19,899)(10.2)

164,614Book-value per share

1,502.53

1,461.37(41.16)(2.7)

1,400.34

45.8

49.6

3.8

―

51.5

(9.3)

12,366Equity ratio (%)

pt.

Interest-bearing liabilities(consolidated)

12,094

10,975(1,119)16

【CF】
Statement of Cash Flows (Consolidated)
・ The balance of cash and cash equivalents increased from both the end of the same period in the previous fiscal year and the end of
the previous fiscal year.
・ 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 of property, plant and equipment.
・ The decrease in cash flows from financing activities is mainly due to the repayment of short-term/long-term loans payable and thepayment of dividends.
(Millions of yen)

FY 2015

FY 2016

FY 2017

FY 2018

June 2018

June 2019

Cash flows from operating activities

5,220

10,845

6,306

6,786

5,349

7,999

Cash flows from investing activities

5,520(1,644)(2,510)(3,775)(1,435)(840)

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

1,814(5,215)(2,389)(3,557)

Cash and cash equivalents at end ofperiod

32,501

39,18744,866

42,612

46,36446,89617

【Shareholder Returns】
Dividends and Others
・ Dividends remain unchanged from the initial forecast (midterm dividend of 30 yen and term-end dividendof 30 yen, for a total forecasted annual dividend of 60 yen).
・ Acquisition of 2 million shares of treasury stock is planned by the end of FY 2019.
・ Retirement of 2 million shares of treasury stock is scheduled for August 19, 2019.
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019（Forecast）

Cash dividends per share:
regular dividends (yen)15182020

4060

Cash dividends per share:commemorative dividends (yen)

5――

―

－－

Cash dividends per share:extra dividends (yen)―12101520－

Cash dividends per share (yen)

2030

30

3560

60

Acquisition of treasury stock(thousand shares)

2,000

―

―

3,000

1,000

2,000

Retirement of treasury stock(thousand shares)

3,000

―

―

3,000

1,000

2,00018

【Overall Forecast】
FY2019 Full-Year Forecast (Consolidated)
・No changes from initial forecast(Millions of yen)

FY 2019 forecast(Interim forecast fromAugust 9)

FY 2018 results

Year on year

1H

2H

Total

1H

2H

Total

1H2H

Total

Orders received

103,819

113,276

217,096

93,00097,000190,000(10,819)(16,276)(27,096)

Net sales

80,723

131,591

212,31490,000110,000

200,000

9,277(21,591)(12,314)Gross profit

10,771

20,912

31,684

12,50017,50030,0001,729(3,412)(1,684)

Operatingincome

1,126

9,510

10,637

2,200

6,600

8,800

1,074

(2,910)(1,837)

Ordinary income

1,540

9,664

11,204

2,400

6,600

9,000

860

(3,064)(2,204)

Profit attributableto owners ofparent

796

8,249

9,046

1,600

4,600

6,200

804

(3,649)(2,846)19

【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

62,00066,000Industrial HVAC

59,00063,000Electrical Systems

23,00024,000

Facility Systems

11,00010,000Total of Facilities Construction Business

155,000

163,000

Machinery Systems

12,00012,000

Environmental Systems

21,00023,000Total of Plant & Machinery Systems Business

33,00035,000Sub Total

188,000

198,000

2,000

2,000

Others600600Adjustments*(600)(600)

190,000

200,000

Real Estate Business

Total* Adjustments eliminate inter-segment 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 August 9, 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● Fluctuations in private capital investment

21