First Half Year FY2018 Business Results [PDF:2.0 MB]

October 31, 2018

Presentation Materials

First Half Year FY2018 Business Results (The 84th Period)

www.sanwa-hldgs.co.jp

Contents

■ Introduction

• 1. Progress of Second Three Year Plan ････････････ 3 / Trend of Consolidated Results

• 2. Business Environment ･････････････････････････ 4

■ 1st Half FY2018 Consolidated Results

3. Business Results Highlight ･････････････････････ 6

4. Net Sales (by Sector) ･･････････････････････････ 7

5. Operating income (by Sector) ･･････････････････ 8

■ FY2018 Consolidated Forecast

6. FY2018 Forecast Highlight ････････････････････ 10

7. Net Sales (by Sector) ･････････････････････････ 11

8. Operating income (by Sector) ･････････････････ 12

Foot-note on Forecast

Any contents in this brochure are based on various assumptions, and neither promise nor guarantee the indicated results of forecast or realization of any management issue.

■ Progress of Second Three Year Plan

9. Progress of Second Three Year Plan ･････････ 14

• 10. Strengthen Asian Business Base ･････････････

• 11. Realize competitive advantage

17

through our global undertaking ･･････････････ 18

■ Financial Information Highlight

12. Financial Information Highlight ･･････････････ 20

◆ Appendix

1. Outline of Consolidated Results by Sector ･･････････ 23

• 2. Sales Trend of Main Products

  (Japan, U.S., Europe) ････････ 24

• 3. Japan : Order Intake & Net Sales by Products

(Sanwa Shutter) ･････････････ 25

4. U.S. : Net Sales by products (ODC) ･････････････ 26

5. Europe : Net Sales by products (NF) ･･･････････････ 27

6. Key Figures & Ratios ･･･････････････････････････････ 28

7. Capital Expenditure & Depreciation ･････････････････ 29

8. Topics ･････････････････････････････････････････････ 30

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１．Key points: Second Three Year Plan / Trend of Consolidated Results

Progress of the second three year plan(2016-2018)

■ 1H FY2018 net sales and profits exceeded the forecast.

The full year forecast remains the same as the original.

・Japan ：1H profit fell, but a recovery is expected for the full year by the progress of large-scale projects and expansion of the maintenance and service business.

・U.S. ：Both residential and non-residential markets were firm, and the sharp rise in material costs was absorbed by price increases.

・Europe：Group's growth engine this year, owing in part to M&A.

・Asia ：Organization split into the China Business and the Asia Business to accelerate growth.

Yen

Target of the second three year plan	Revised Forecast (FY2018)
Net Sales	¥410.0Bln	¥407.0Bln
Operating Income	¥37.0Bln	¥31.5Bln
Operating Income ratio	9.0%	7.7%
ROE *1	15.0%	13.3%
SVA *2	¥12.8Bln	¥10.4Bln
Shareholders' Equity Ratio	42.0%	46.2%
Debt-Equity Ratio	0.40	0.40

*1 Shareholder's equity cost assumed

to be around 8%

*2 Calculated the weighted average cost of capital 6% and corporate tax rate 40%

*3 Forex rate: Second three year: 1USD=110yen, 1EUR=125yen

Revised Forecast: 1USD=105 yen, 1EUR=130yen

Forex Rate* USDEUR

• 2014 106.46 140.35

• 2015 121.03 133.69

• 2016 109.44 120.63

• 2017 112.04 127.22

2018(F) 105.00 130.00

*Applying yearly average exchange rates for our consolidated figures.

2. Business Environment (Japan, U.S., Europe)

■ Business Environment

2014		2015		2016		2017		2018				2019
Revised Forecast		Original Forecast		Forecast
Japan	Housing Starts	k units	880	-10.8%	921	4.6%	974	5.8%	946	-2.8%	964	1.8%	965	2.0%	929	-3.5%
	Non-res construction areas	k㎡	45,013	-5.9%	44,098	-2.0%	45,299	2.7%	47,293	4.4%	48,100	1.7%	47,198	-0.2%	48,100	0.0%
	Private-sector capital investmen	tJPY bn	79,781	3.3%	81,623	2.3%	82,627	1.2%	85,223	3.1%	89,654	5.2%	87,950	3.2%	90,910	1.4%
USA	Housing starts	k units	1,003	8.4%	1,112	10.8%	1,174	5.6%	1,203	2.5%	1,280	6.4%	1,290	7.2%	1,320	3.1%
	Existing Home Sales	k units	4,940	-2.9%	5,250	6.3%	5,450	3.8%	5,510	1.1%	5,420	-1.6%	5,500	-0.2%	5,530	2.0%
	Capital investment	USD bn	2,357	6.9%	2,400	1.8%	2,411	0.5%	2,538	4.5%	2,721	7.2%	2,670	5.2%	2,862	5.2%
EU	Housing completions(4 countrie	sk) units	373,593	0.4%	377,164	1.0%	392,649	4.1%	407,082	3.7%	413,823	1.7%	416,445	2.3%	415,739	0.5%
	Non-res investment(4 countries	)EUR m	214,954	0.3%	214,463	-1.6%	217,066	1.2%	220,979	1.8%	225,802	2.2%	224,515	1.6%	228,729	1.3%
Germany	Housing completions	k units	171,586	4.4%	174,346	1.6%	180,901	3.8%	185,732	2.7%	188,007	1.2%	187,032	0.7%	188,741	0.4%
	Non-res investment	EUR m	85,127	4.0%	83,763	-1.6%	84,198	0.5%	85,019	1.0%	85,780	0.9%	84,849	-0.2%	85,097	-0.8%

※EU(4 countries) include Germany, France, Italy and the Netherlands.

※Ref:(JPN) MLIT Apr 2018, R.I.C.E. Oct 2018, (US) Blue Chip Economic Indicators Oct 2018, National Association of Realtors Oct 2018, Construct Connect Oct 2018, (EU)Euroconstruct Oct 2018.

Capital investment in JPN/US from NLI Research Institute.

※FY basis in JPN(Apr-March), US/EU on CY basis(Jan-Dec)

■ Change in Business Environment (2014=100)

Japan

Residential market is bearish.

Capital investment recovery accelerated.

U.S.

Europe

Residential market is strong. Non-residential market in Germany seems bearish.

Housing starts recovery continues. Capital investment recovery accelerated.

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