First Half Year FY2017 Business Results [PDF:1.8 MB]

October 31, 2017

Presentation Materials

First Half Year FY2017 Business Results (The 83th Period)

Convenience

Safety Security

www.sanwa-hldgs.co.jp

Contents

• Introduction

• Progress of Second Three Year Plan････････････3

  / Trend of Consolidated Results

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

• 1st Half FY2017 Consolidated Results

  3. Business Results Highlight ･････････････････････ 6 4. Net Sales (by Sector) ･･････････････････････････ 7

• Operating income (by Sector)･･････････････････ 8

• Progress of Second Three Year Plan

• Progress of Second Three Year Plan ･･････････14

• Strengthen Asian Business Base ･･････････････17

• Realize competitive advantage

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

• Financial Information Highlight

• Financial Information Highlight ･･･・・・･････････20

• FY2017 Consolidated Forecast

6. FY2017 Forecast Highlight ････････････････････ 10

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

25

26

27

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

• Appendix

• Outline of Consolidated Results by Sector ･･････････ 23

• Sales Trend of Main Products

  (Japan, USA, Europe) ････････ 24

• Japan : Order Intake & Net Sales by Products

  (Sanwa Shutter) ･････････････

• USA : Net Sales by products (ODC) ･････････････

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

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

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

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

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.

-2-

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

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

FY2018 Target

■1H 2017 consolidated net sales and operating income posted record high. The Group is now striving to catch up with the second three year plan.

・Japan：Net sales and operating income show good progress.

New legal inspection & report is starting the full-scale implementation.

・USA ：Operating results expand steadily and sales price increase penetrated

the market to cover steel cost increase.

・EU ：All segments established foundations for growth due to aggressive structural reforms.

・Asia ：All companies are establishing steps to secure profitability.

Net Sales ¥410Bln

Operating Income ¥37Bln

Operating Income ratio 9.0%

ROE *1 15.0%

SVA *2 12.8Bln

Shareholders' Equity Ratio 42.0%

Debt-Equity Ratio 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: 1USD=110 yen , 1EUR=125

Net sales Billions of Yen

4,000

Overseas Sales Domestic Sales

Operating Income (Figures indicate OI ratio)

Net Income

Sanwa Global Vision 2020

First Three Year Plan

Appreciate 60th anniversary

Income Billions of Yen

400

3,500

3,000

2,500

2,000

1,500

1,000

500

0

・Great recession

・Business suspension of Sanwa Shutter

・The Great East Japan

Earthquake

1.9%

5.5%

5.3%

6.6%

7.8%

7.3%

7.5%

7.9%

9.0%

350

Forex Rate* USD

2013

2014

2015

2016

EUR

130.56

140.35

133.69

120.63

125.00

300

97.99

106.46

121.03

109.44

250

200

150

2016(F) 110.00

*Applying yearly average exchange rates for our consolidated figures.

100

50

0

-50

Overseas Sales Ratio

Overseas OI

Ratio

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018

43.1% 42.1% 36.9% 38.1% 43.3% 41.0% 39.3% 41.7% 43.9% 44.7% 44.4% 45.0% 44.5%

36.7% 38.1% 26.7% 25.6% 53.9% 48.4% 33.2% 28.8% 29.7% 30.1% 37.9% 37.4% 36.9%

-3-

• Forecast

  2. Business Environment (Japan, USA, Europe)

  • Business Environment

    2013		2014		2015		2016		2017				2018
    								Revised Forecast		Original Forecast		Forecast
    Japan	Housing Starts	k units	987	10.6%	880	-10.8%	921	4.6%	974	5.8%	962	-1.2%	937	-3.8%	962	0.0%
    	Non-res construction areas	k ㎡	47,859	7.4%	45,013	-5.9%	44,098	-2.0%	45,299	2.7%	46,700	3.1%	44,999	-0.7%	46,600	-0.2%
    	Private-sector capital investment	JPY bn	77,176	7.0%	79,043	2.4%	79,532	0.6%	81,510	2.5%	84,444	3.6%	83,873	2.9%	86,808	2.8%
    USA	Housing starts	k units	925	18.5%	1,003	8.4%	1,112	10.8%	1,174	5.6%	1,210	3.1%	1,280	9.0%	1,290	6.6%
    	Existing Home Sales	k units	5,090	9.2%	4,940	-2.9%	5,250	6.3%	5,450	3.8%	5,437	-0.2%	5,573	2.3%	5,810	6.9%
    	Capital investment	USD bn	2,033	3.5%	2,173	6.9%	2,224	2.3%	2,210	-0.6%	2,310	4.5%	2,255	2.0%	2,398	3.8%
    EU	Housing completions(4 countries)	k units	766	-1.3%	763	-0.4%	710	-6.9%	716	0.7%	790	10.4%	786	9.8%	828	4.8%
    	Non-res investment(4 countries)	EUR m	89,745	0.1%	85,109	-5.2%	83,739	-1.6%	85,351	1.9%	88,017	3.1%	86,360	1.2%	89,701	1.9%
    Germany	Housing completions	k units	188	6.7%	216	14.7%	217	0.3%	245	13.1%	270	10.2%	275	12.2%	280	3.7%
    	Non-res investment	EUR m	32,387	5.7%	31,480	-2.8%	31,322	-0.5%	31,730	1.3%	32,364	2.0%	31,669	-0.2%	32,202	-0.5%

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

    ※Ref:(JPN) MLIT Apr 2017, R.I.C.E. july 2017, (US) Blue Chip Economic Indicators Oct 2017, National Association of Realtors Oct 2017, (EU)Euroconstruct June 2017.

    Capital investment in JPN/US from NLI Research Institute Sep 2017.

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

  • Change in Business Environment (2013=100)

Japan USA EU

160

Housing Starts

Non-res construction areas

140

Private-sector capital investment

160

140

Housing starts Existing Home Sales Capital investment

160

140

Housing completions(4 countries) Non-res investment(4 countries) Housing completions

Non-res investment

120 120

120

100 100

100

80 80 80

60

2013 2014 2015 2016 2017(F) 2018(F)

60

2013 2014 2015 2016 2017(F) 2018(F)

60

2013 2014 2015 2016 2017(F) 2018(F)

Non-residential market recovery clearly. Residential market is bearish.

Housing-related growth rate is slightly slow. Capital investment is on a recovering trend.

-4-

non-residential and especially residential markets are in recovery.