■Future Outlook of Sanuki Services <6044>

1. Financial forecast for the year ending May 2025

For the consolidated performance forecast for the fiscal year ending May 2025, the company plans to achieve revenue of 21,450 million yen (an increase of 10.4% compared to the previous year), operating profit of 1,034 million yen (an increase of 40.4%), ordinary profit of 1,037 million yen (an increase of 36.7%), and net income attributable to parent company shareholders of 633 million yen (an increase of 35.3%). The fiscal year ending May 2025 marks the final year of the current medium-term management plan, and the company aims to achieve the planned performance based on the medium-term management plan and continue promoting the key initiatives defined in the plan. Against the backdrop of rising energy costs, increased interest in carbon neutrality, and labor shortages among customers, the demand for energy-saving construction in the environmental solutions services and total maintenance services is expected to continue to increase. The company plans to capture demand by actively proposing nationwide maintenance services and proposal activities related to equipment, store renovations, and energy-saving, aiming to increase sales.

The purpose of acquiring Nagasuna Heating and Air Conditioning as a subsidiary in December 2023 was to leverage Nagasuna's expertise, technical capabilities, and customer base in air conditioning, ventilation, plumbing, and sanitary equipment installations, as well as to secure talent in the Niigata area. Various qualifications are essential for various tasks, including plumbing and electrical construction management technicians, and acquiring these qualifications was a challenge when expanding into the region, which was resolved through the subsidiary. This move serves as a foothold for building a presence in the Hokuriku and Tohoku areas in the future, significantly advancing performance. By further utilizing each company's expertise, technical capabilities, and personnel, they aim to extend performance. On the profit side, they will continue to persistently pursue price adjustments to deal with rising labor costs. In terms of maintenance services, due to the nature of contracts, reflecting the revenue after price negotiations into the next year's budget is common. By seizing the opportunity to negotiate effectively, they aim to secure contracts. In terms of costs, they will continue initiatives such as promoting in-house multi-skilling of employees and cost reduction through operational efficiency in various tasks and operations.

The total maintenance services of the company, given their nature, lead construction projects to regular maintenance and repair projects, ultimately shaping the revenue structure into a stock-based business model in the long run. By consolidating sales organizations that were previously separate for business segments such as environmental solution services, air conditioning maintenance services, and total maintenance services, the company strengthens its organizational structure by sharing customer information across segments and proposing multiple services. The strategy is to improve repeat business rates throughout the business cycle, starting from equipment and design to construction, installation, regular inspections, and maintenance, leveraging the synergies of each business. The subsidiary acquisitions of Hyogo Kiko and Nagasuna Heating and Air Conditioning are believed to complement and strengthen area-based business foundation enhancement measures.

(Writer: FISCO analyst Tomoichi Murase)