Sumitomo Densetsu : FY2023 Results and Annual Forecasts FY2024

【Materials for Investor Briefing 】

FY2023 Results

and Annual Forecasts FY2024

MAY 24, 2024

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

CORPORATE PHILOSOPHY

SEM VALUE

Recognizing its social mission and responsibility, the Sumitomo Densetsu Group:

-Aims to develop a favorable environment to support a prosperous and secure society.

-Values its technical prowess and the customer's confidence in it and provides high quality engineering service that gives a high level of customer satisfaction.

-Practices fair and transparent management based on compliance in keeping with a high standard of corporate ethics.

-Seeks to create a vibrant and pleasant business environment while fostering employees rich in creativity.

SEM VALUE

Sincerity

Meet the needs of society in a cordial attitude.

Meet the needs of customer and society, place yourself in the other person's position, and perform tasks properly and actively with sincerity and passion.

Teamwork

Recognize diversity and show a team effort.

Show our integrated strengths and recognize diversity and values, thereby strengthening unity and enabling further growth.

Creation
Create a sustainable future with advanced
technologies.
Develop our established technologies and continue to challenge creation of a sustainable
society.	2
Ⓒ SUMITOMO DENSETSU CO.,LTD. All Rights Reserved.

Agenda

SEM VALUE

１．FY2023 Results

２．FY2024 Forecast

３. FY2024 Forecast by Works Type

４．Medium term Management Plan VISION 24(FY2020－FY2024)

５．Policy on the Distribution of Profits to Shareholders

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

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1.FY2023 Results

• Explanation of Business Results

SEM VALUE

Orders received, Net sales, ordinary profit, and Backlog of Orders reached a record high.

［Orders Received・Net Sales］increase year on year (YoY).

Steady growth in large-scale projects such as Power Transmission works for private sector and electricity companies as well as General Electrical works for data centers.

［Operating profit・Ordinary profit］decrease year on year (YoY).

There were individual unprofitable projects and an increase in expenses associated with investments in human resources and technologies, such as work style reforms and IT investment.

■ FY2023

		FY2022	FY2023			Growth
	（¥bn）	Actual① Plan ②	Actual ③	Difference	Growth	Percentage
					③-②	③－①
	Orders Received	188.8	190.0	225.9	35.9	37.1	19.6%
	Net Sales	175.1	185.0	185.5	0.5	10.4	5.9%
	Operating profit	13.46	13.50	12.55	△0.95	△0.91	△6.8%
	Margin	7.7%	7.3%	6.8%	△0.5%	△0.9%
	Ordinary profit	14.39	14.50	13.50	△1.00	△0.89	△6.2%
	Margin	8.2%	7.8%	7.3%	△0.5%	△0.9%
	Profit attributable to	9.38	9.50	10.06	0.56	0.68	7.2%
	owners of parent
	5.4%	5.1%	5.4%	0.3%	0.1%
	Margin
	Backlog of Orders	122.4		162.8		40.3	33.0%
■ Year-end dividend for FY2023 was ¥59 per share

(up ¥12 per share from the forecast at the start of the fiscal year), annual dividend of ¥106 per share

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

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2.FY2024 Forecast

SEM VALUE

• Business EnvironmentOverall steady growth

Expected demand：Growth areas such as data centers, redevelopment projects in the metropolitan areas, carbon-neutral investments including renewable energy, information &communication-related investments for the creation of ICT environment, investments related to Expo 2025 Osaka, Kansai.

Potential risks：Increased costs due to progression of the weak yen, high prices of materials, equipment, and cables, soaring labor costs, and rush construction due to delays in the progress of our construction work associated with delays in general contractor's processes.

• Consolidated Forecast for FY2024:

Our forecast for FY2024 is in line with the numerical targets set forth in VISION 24

			VISION24
(¥bn)	2020	2021	2022		2023	FY2024	Growth(%)
	Forecast
Orders Received	162.1	179.0	188.8		225.9	220.0	△2.6%
Net Sales	154.1	167.6	175.1		185.5	200.0	7.8%
Operating profit	11.32	13.01	13.46		12.55	14.50	15.6%
Margin	7.3%	7.8%	7.7%		6.8%	7.3%
Ordinary profit	11.94	13.90	14.39		13.50	15.00	11.1%
Margin	7.7%	8.3%	8.2%		7.3%	7.5%
Profit attributable
to owners of	8.05	9.14	9.38		10.06	10.00	△0.6%
parent
Margin	5.2%	5.5%	5.4%		5.4%	5.0%

• Dividends Forecast for FY2024

An annual dividend of ¥114 per share (interim ¥57) is planned, up¥8 per share from FY2023.

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

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3.Net Sales for FY2024 by WorksSEMTypeVALUE

• Net Sales for FY2023 Results by Works Type

（Our forecast for FY2024 are explained on the following pages by Works Type）

Power Transmission	Significant increase YoY due to progress on large-scale Backlog of Orders in
	projects for electricity companies, electric furnace projects for private sector, and
	renewable energy projects.

General Electrical

Info & Comms

Facility & HVAC

J a p a n :Increased YoY due to progress of large-scale projects such as data centers and redevelopment projects in the metropolitan areas

Overseas :Decreased YoY due to a decline in projects for Japanese companies mainly following the rapid depreciation of the yen.

Communication System: Secured the same level as FY2022 mainly due to projects of digital radio communication system for fire and ambulance service offsetting the decrease of mobile base station projects

Information & Telecommunication: Increased YoY due to plant, medical, and educational facility-relatedprojects.

Increased YoY due to a progress of Backlog of Orders in HVAC division.

Net Sales for by Works	2020	2021	2022	2023	FY22→23		2024	FY23→24
Type(¥bn)	Growth		Forecast	Growth
Power Transmission	20.9	20.3	19.1	24.5	5.4		30.0	5.5
General Electrical	87.1	100.7	106.0	111.1	5.2		116.0	4.9
Non-consolidated +	68.1	76.8	76.6	83.2	6.6		85.0	1.8
Japanese Subsidiaries
Overseas Subsidiaries	19.0	23.8	29.3	27.9	△ 1.4		31.0	3.1
Info & Comms	27.7	27.5	28.5	29.6	1.1		32.0	2.4
Facility & HVAC	10.1	10.6	12.1	12.4	0.4		14.0	1.6
Others	8.3	8.6	9.5	7.8	△ 1.6		8.0	0.2
TOTAL	154.1	167.6	175.1	185.5	10.4		200.0	14.5

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3-1.Power Transmission Works SEM VALUE

Energy

Provide high-quality, reliable electric transmission technologies to meet the needs of customers

Electricity is vital to modern society. Sumitomo Densetsu has a range of experience in the

construction of the facilities required for the transmission of "electricity," including overhead

and underground transmission, electrical substations, and electrical power distribution systems. We are also engaged in the construction of interconnected systems to supply electricity from new energy facilities, including photovoltaic power stations, wind power

Ⓒ stations and hydroelectric power stations.	For more details, please refer to the link below	7
https://www.sem.co.jp/english/business/

3-1.Power Transmission FY2024 ForecastSEM VALUE

• Summary of the FY2024

Both Orders received and Net sales are planned to increase YoY

Orders received・Net Sales（bn）	Orders received
	Net Sales

60.0

50.0

40.0

30.0

20.0

10.0

0.0

50.0

		34.2
				30.0
18.6 20.9	24.2	24.5
19.8 20.3	19.1

FY2020	FY2021	FY2022	FY2023	FY2024
				Forecast

We will make it our highest priority to acquire large-scale private transmission line projects related to renewable energy. We will also continue to focus on acquiring projects for electricity companies and projects for private sector such as those for steel manufacturers.

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

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For more details, please refer to the link belowhttps://www.sem.co.jp/english/business/

3-2.General Electrical Works

SEM VALUE

Environment

Electric

Overseas

Electric ： Provide speedy and high-qualityservices for electrical systems that are becoming increasingly important.

Overseas ： 50 years of experience in Southeast Asia. Contributing to the development of customers and regions.

Environment：Contribute to the use of energy for a new age, such as solar, storage cell and biomass systems.

Engineering : Offer highly satisfactory engineering expertise in control/management systems such as FMS and BM

Sumitomo Densetsu has been implementing speedy and high-quality planning, design, construction and maintenance, making use of our high technological capabilities for various electrical systems (high-voltage,low-voltage, disaster preventive and security). We will meet any kind of needs based on substantial experience both inside and outside Japan.

Ⓒ

3-2.General Electrical Works FY2023SEMForecastVALUE

• Summary of the FY2024

Orders received are planned to decrease YoY, Net sales are planned to increase YoY

										Orders received・Net Sales（bn）			Orders received
																														Net Sales
160
																								138.4
140																												112.0
																112.2
									108.8
																									116.0
120																			111.1
																			106.0
												100.7
100		93.4
		87.1
80
60
40
																										34.7
20																															31.0		31.0				over
		20.6				19.0				26.7			23.8				28.2				29.3						27.9								seas
0
		FY2020			FY2021			FY2022			FY2023			FY2024
																																Forecast

Japan : In addition to growth areas such as data centers, we will focus on acquiring projects expecting continued orders into the future such as plants.

Overseas: We will focus on semiconductor-related and data center projects for Japanese companies. It is vital that we expand projects for non-Japanese companies.

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