financial results briefing for fiscal year ended march ... · so airlines will be informed of the...

Copyright © AGP Corp. All Rights Reserved. 1

2019.5.28

Code number：9377

Financial Results Briefing for Fiscal Year Ended March 2019

&Review Summary and Progress Report

of Medium-Term Management Plan


FY2018 Results

FY2019 Forecasts

(Reference)●Company Profile ●Review Summary and Progress Report of

Medium-Term Management Plan(FY15~19)

●Dividend achievements and prospectsetc.

P 3

p12

p21

Contents


FY2018 Results


Executive SummaryIn FY18 performance, income have increased over the previous year, but profits decreased.

ROE reached 10%, but the operating profit margin could not be achieved. ( Capital adequacy ratio has exceeded 60% )

A fundamental review of less profitable businesses, e.g. our new businesses, is underway, and productivity is increasing as a result of enhancing and increasing the operational efficiency of our core businesses.

The issues of further improving supply rates in the power business and stabilizing income and expenditures in non-airport business remain, but We are increasing sales and securing almost 10% profit.

Taking everything into consideration including underfoot achievements and financial structure, we plan for interim dividends of 5 yen in FY18 and 9 yen by the end of the period. (However, this presumes the stockholders‘ approval at the 54nd annual meeting of stockholders)

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●

●

●

●


FY2017 FY2018 y-o-y

Total assets 13,625 13,675 +49Interest-bearing debt 949 558 ▲391

Equity capital 8,471 9,123 +651

Equity ratio (%) 62.2% 66.7% +4.5pt

ROE (%) 11.3% 10.0% ▲1.3pt

FY2017 FY2018 y -o-y

Operating cash flow 1,954 1,378 ▲575

Investing cash flow ▲642 ▲1,153 ▲510

Free cash flow 1,311 224 ▲1,086

Financial cash flow ▲573 ▲473 +100

EBITDA 2,195 2,116 ▲79

FY2017 FY2018 y-o-y

Operating revenues 13,196 13,818 +621

Operating costs 11,792 12,462 +669

Operating income 1,403 1,356 ▲47

Operating margin (%) 10.6% 9.8% ▲0.8pt

Ordinary income 1,389 1,352 ▲37

Quarter income 914 877 ▲37

Beginning cash on

hand

Operating CF

Investmert CF

Financial CF(existing)

New procurem

ent

Year-end cash on

hand

3,673 3,424+100

Equity ratio > 50%, ROE achieved 10%.

2018 Financial Results

Consolidated income statement (unit： million yen) Consolidated cash flows statement (unit： million yen)

Consolidated Balance sheet (unit：million yen)

Cash reserves increase or decrease(unit：million yen)


ＸｘｘｘｘｘｘｘｘｘFY2017 FY2018 y-o-y Remarks

Power supply business 5,370 5,475 +104 Demand+3.8%、Supply rate 62%

Unit revenue ▲0.9％Maintenance business 3,742 3,925 +182 Airport renewal construction , Typhoon

recovery workFacilities business 1,848 2,240 +392 Other large construction work , Typhoon

recovery workSecurity business 440 608 +168 Equipment installation work , Machine sales

Food system solutionbusiness

605 453 ▲152 Decrease in large projects etc.

New business 643 558 ▲85 Decreased sales of plant vegetable production

and salesGSE and other sales 544 556 +11 Ground handling machine sales

Total 13,196 13,818 +621

With bullish aviation demand, increased sales from airline companies and airport companies. Sales of our installation and facilities maintenance services have increased as a result of typhoon recovery work, but food cart sales have slumped. Revenue from 2 businesses - retail sale of electricity (a new business) and business jet support, has increased, but revenue from commercial vegetable growing and sales has decreased due to liquidation of "Dr. Vegetable."

Operating revenue breakdown(unit：million yen)


FY2017 FY2018 y-o-y Items of Note

Labor cost 4,542 4,656 +114 Staffs FY17 699→FY18 721

Depreciation and amortization

792 752 ▲39

electric expense 813 885 +72 Unit price increase due to increase in

electricity price and increase in crude oil price

Other 5,645 6,169 +524 Material costs and outsourcing costs increase +313million yen

Total 11,792 12,462 +669

Increase in labor costs to support business expansion. In capital investment, airport reorganization construction is

behind originally expected schedule, suppressing FY18.Decrease in depreciation costs over previous year

The increase in electricity consumption and the rise in oil prices have caused an increase in electricity costs over the previous year.

Efforts to reduce costs are ongoing.

Operating Expenses breakdown(unit：million yen)


FY2018Initial plan

FY2017Act. y-o-y Remarks

Operating revenues 14,300 13,818 ▲481

Power Supply operations▲109 Maintenance Servicing operations+227, Facilities Servicing operations+282,food carts▲267, New business▲513, GSE▲253

Operating costs 12,900 12,462 ▲437 Labor cost▲100, Electricity charges+28, Material cost▲346, Maintenance cost▲33


Operating margin (%) 9.8% 9.8% ▲0pt


Net income 850 877 +27

Revenue from our installation and facilities maintenance business has increased as a result of typhoon recovery work, but revenue from our power supply business and non-airport business will greatly miss projections; sales have decreased over 400 million yen. Projections will be met by cutting labor costs, reducing raw materials costs, and improving the profitability of our existing businesses. As a result, operating profit and the operating margin will be generally in line with projections.

【 Performance Summary 】・ Record high sales > FY18 13,818・ Record high operating profits > FY17 1,403・ Record high ordinary profits > FY17 1,389・ Record high current term profits FY17 914・ROE 10% achieved (3nd straight)・ Record high operating profit> FY17 10.6%

2018 performance summary(plan comparison)Consolidated income statement (unit： million yen)


0%

20%

40%

60%

80%

0

20,000

40,000

60,000

80,000

FY14 FY15 FY16 FY17 FY18

FLTSupply Rate

（million yen）

Opportunities to supply powerhave increased as a result ofgrowth of our power supplybusiness at Chubu Intl Airportsince Oct. 2018 and increaseddemand for air travel. As a result,revenue from power andelectricity is +2.3% from last yearThe percentage supplied: 62.4%,▲0.5%(▲0.3P).As usage has decreased, the unitprice per flight has ▲0.9%

4,487

4,592+3.8%

－0.5%-0.9%

＜ Status for 787 and 350 ＞

＜Status for LCC＞

● Movement equipment:Deployed to 6 locations(total of 28 units deployed)

● Fixed equipment ：NRT（36 units）, HND（38 units）ITM（3 units）, KIX（7 units）FUK（6 units）, OKA（2units）Installation completed

(As of the end of 2018)

（times） FLT＆Supply Rate

0%

20%

40%

60%

020,00040,00060,00080,000

100,000120,000140,000


FLTSupply Rate

（times） FLT＆Supply Rate

（million yen）

0

500

1000


Arrangement of 180kVA

●The number of flights (mainly intl) has increased; airlines using these units and those not using these units are clearly differentiable, so airlines will be informed of the cost benefits and benefits of reduced CO2 emission, and sales will proceed individually.

0

100

200

300


Expansion of LCC-geared business policies

（Of that 3.1％ is from Chubu Airport）

Reduced use of American , Singapore and Scoot.

Sales analysis in power operations●Factor Analysis on Power Electric Sales

Demand Supply rate Unit Revenue

Electric Power Sales

(million yen)Electric Power Sales


0

50

100

150

200

250

300

FY17 FY18 FY19Plan

OtherEHIH

FY18/FY19Plan(82%)

(Number of units)New orders of reheating carts (IH and EH carts) have decreased from last year, but there are large repeat orders. The number of food carts sold has remained roughly the same from last year. There will be few new large orders in 2019, but in response to renewed demand, sales to assisted living facilities & small nursing homes for contracted food service or in collaboration with ingredient suppliers are being considered, and new markets are being explored.

FY17/FY18(99%)

(Number of cases/units)

FY17 FY18 Fluctuation Remarks

Hospital(Breakdown repeat)

11cases/234units(6cases/73units)

8cases/150units(8sases/150units)

▲3cases/▲84units(+2cases/+77units)

125 repeat projects updated

Outside the hospital(Breakdown repeat)

17cases/48units( 13cases/35units)

18cases/130units( 7cases/99units)

+1cases/+82units( ▲6sases/+64units)

Total(Breakdown repeat)

28cases/282units( 19cases/108units

)

26cases/280units( 15cases/249units

)

▲2cases/▲2units( ▲4cases/+141units

)

State of food cart sales


0100200300400500600700

FY15 FY16 FY17 FY18

Retal electricitysales

Business jetsupport

Factory Vagetableproduction salesbusiness

As part of a fundamental review of our businesses, our commercial growth and sales of low-potassium lettuce will continue, but we intend to turn a profit soon by shifting to commercial growth and sales of long-life lettuce for use in sandwiches and by increasing the heft of individual heads. Business has been kept in the black, with an increased number of contracts with jets in the business jet support operation and the startup of the cleaning service, etc. We will improve the profitability of our retail sale of electricity by increasing the number of contracts.

New business sales(million yen)


FY19 Forecasts


Executive SummaryRevenue has continued to increase in 2019 from last year, but a temporary decline in profit is projected to steadily enhance personnel and increase capital investment needed for future growth. We intend to maintain an operating margin of 10% via the following efforts.We will carefully manage operations with "selection and concentration" as our motto in order to strengthen the basis for our core businesses and to create businesses with more added value. We are improving operational efficiency by enhancing the system of group management and by reviewing operations. Strengthen proactive investment (facilities investment and business investments) and risk management systems. Focus on asset efficiency and strive for investment profit ratio exceeding 10%.

Fully and comprehensively taking into consideration returns to investors to fit our profit growth as well as internal reserves for the future, results, states of financial affairs, dividend payout ratio, etc.., and continue mid-term dividends and term-end dividends twice annually. Dividends in the next term are expected to reduce to 2 yen temporarily, but due to income improvements during the term we plan to fulfill returns to stockholders.

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各事業の基本⽅針と重点施策

power operation

s

Servicing

operations

Retail electricit

y business

SecurityOperatio

ns

Businessjet

support operation

s

Retail electricity business

Foreignoperatio

n

Food system

SolutionsOperatio

ns

Factory vegetable

production sales

GSE and other sales

Basic Policy

• More consistent business as a result of a stronger foundation and comprehensive responses to changing airport data

• Business growth through formulation of a business investment strategy for growth areas

• Priority allocation of management resources to areas like personnel

• Fostering potentially profitable business with an eye to the future

• Selection and concentration of fields of operations

• Prompt and consistent earnings exceeding expenses

• Expanding the horizons of the sale of goods business

Primary

• Carefulimplementation of measures to increase the percent of power supplied

• Definite efforts to create “smart airports” and respond to airport improvement projects

ti id

• Expansion of non-airport and overseas transactions

• Promoting strategic partnerships and enhanced sales to produce a synergistic effect

• top line expansion and profitability improvement through peripheral business efforts

• Enhancing collaboration with Thailand's Civil Aviation Training Center (CATC) via AGP Thailand and t i i d

• Improving earnings by reviewing business models & sales strategies

• Drastic review of cost structure

• Product diversification

• Conclusion of distributor contracts with overseas manufacturers

Further top line expansion and improved profit ratios with thorough maximization of sales and minimization of costsSecuring and reinforced training of human resources who can support unstable business strategies and growth strategies


FY2018 FY2019 y-o-y

Total assets 13,675 15,158 +1,483

Interest-bearing debt 558 735 +177

Equity capital 9,123 9,518 +395

Equity ratio (%) 66.7% 62.8% ▲3.9pt

ROE (%)2 10.0% 8.3% ▲1.7pt

FY2018 FY2019 y-o-y

Operating cash flow 1,378 1,789 +411

Investing cash flow ▲1,153 ▲3,000 ▲1,847

Free cash flow 224 ▲1,210 ▲1,434

Financial cash flow ▲473 ▲30 +443

ROIC3 9.8％ 9.5％ ▲0.3pt

EBITDA4 2,116 2,052 ▲64

FY2018 FY2019 y-o-y

Operating revenues 13,818 14,800 +981

Operating costs 12,462 13,500 +1,038


Operating margin (%) 9.8% 8.8% ▲1.0pt


Quarter income 877 770 ▲107

Beginning cash on

hand

Operating CF

Investment CF

Financial

CF(existing)

New procurem

ent

Year-end cash on

hand

(unit：million yen)3,424 2,183+400

Strive for 10% or higher operating profit ratio through improved income and expenditures during the term

FY19 income and expenditures/financial planConsolidated income statement (unit： million yen)

Consolidated Balance sheet (unit：million yen)

Consolidated cash flows statement (unit： million yen)

Cash reserves increase or decrease


Increased revenue from our power supply business (our core business) and increased sales outside of airports

FY2018 FY2019 y-o-y Remarks

Power supply business 5,475 5,670 +195 Supply rate 62.4%→64%

Maintenance business 3,925 3,920 ▲5 Addition of other construction projects.

Rebound of the special demand in FY18.Facilities business 2,240 2,140 ▲100 Rebound of the special demand in FY18.

Security business 608 570 ▲38 Change in the sector for sales of walkthrough metal

detectorsFood system business 453 500 +47 Efforts to secure repeat orders and obtain

new ordersNew business 558 750 +192 Expanded sales of retail electricity

GSE 556 1,250 +694 sales of GSE and PBR, Obtaining orders from the ODA

Total 13,818 14,800 +981

While working to increase revenue in existing business in airports which are a favorable business environment, expand non-airport operations such as new business, and aim for sales of 14.8 billion yen

Operating revenue breakdown

(unit： million yen)


61.6%

25.3%

13.1%

Airlines

Airport companies

Other(Except airlines and airport companise

63.4%

26.8%

9.8%

AirlinesAirport companiesOther(Except airlines and airport companise

Sales13.8 ¥ billion

Sales14.8 ¥ billion

＜FY19売上割合＞

Expanding the business with such as food cart or new business other than existing customers such as airlines, airport companies

Sales ratio of outside airport

＜FY18 Sales ratio＞＜FY18 Sales ratio＞


Increased capital investment (upgrading to 180kVA units) at individual airports and upgrading of air conditioners is steadily underway, and plans are to strengthen the basis of our operations (capital investment of 2 billion yen). A delay in the revamping of Fukuoka Airport has had an effect. Investment will primarily occur in FY19. In addition, a business investment limit of 1 billion to foster growth will be set separately.

0

500

1,000

1,500

2,000

FY15 FY16 FY17 FY18 FY19Plan

CAPEX

Depreciation and amortization

Business investment frames 2 billion yen(FY19)＋

The FY18 training and practice cost results were 44 million yen. In addition to safety device certification and certification of facility engineers, we will invest in training for manufacturers of self-bag-drop systems in order to further enhance technical training in FY19. Plans are for 65 million yen.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

100

200

300

400

500

FY15 FY16 FY17 FY18 FY19Plan

Direct Expenses Times

Participants

Investments<CAPEX> <Education and Training>

(unit: million yen)

Investment leading to continued growth

(unit: imes,participants)(times, people)


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0123456789

10111213141516 Net profit(100 million \) Dividends(\)

dividend payout ratio(%)

(100 million yen,Yen)

(FY)

We plan for interim dividends of 5 yen in FY18 and 9 yen by the end of the period. (14 yen expected at the first of the term)We plan for 12 yen dividends to fit with the mid-term and end-of-term dividends.

Dividend achievements and prospects


16.0

13.0

0

5

10

15

20

Operating profit

FY19Mid-term FY19Plan

40.0 40.0

20.0

25.0

30.0

35.0

40.0

45.0

Reduction of CO2

FY19Mid-term FY19Plan

20.0%

13.1%

5.0%

10.0%

15.0%

20.0%

25.0%

Sales rario outside airport

FY19Mid-termFY19Plan

10.0%

8.8%

5.0%

7.5%

10.0%

12.5%

15.0%

Operating margin


160

148

120

130

140

150

160

170

180

Sales


10.0%

8.3%

5.0%

7.5%

10.0%

12.5%

ROE


Comparison with Mid-term plan at FY19x 0.1 ¥billion x 0.1 ¥billion

x 10 thousand ton


Company Profile


Profile Company Name ＡＧＰＣＯＲＰＯＲＡＴＩＯＮ

ＡＧＰ（Airport Ground Power*）*Changed company name from Japan Airport Ground

Power Co., Ltd. (September 1, 2000) Date founded December 1965 Head office Airport Facilities Sogo Building No.2, 1-7-1

Haneda Airport, Ota-ku, Tokyo Capital 2,038,750,000yen Major shareholders Japan Airlines Co., Ltd. (33.3%)

Mitsubishi Corporation (26.8%)ANA Holdings Co., Ltd. (20.0%)

Number of shareholders 1,121 (Consolidated as of March 31, 2019） ← FY16 2,093 Number of employees 721 (Consolidated as of March 31, 2019) ← FY16 654 Airport offices 3 branch offices, 5 branches, 1 factory,2 sub-branches

Narita Airport, Haneda Airport, Kansai, New Chitose Airport,Chubu Airport, Osaka Airport, Fukuoka Airport, Naha Airport, Kobe Airport, Hiroshima Airport, yokoshibahikari Factory


(注) GPU：Ground Power Unit

Corporate philosophy and long-term vision outline

Corporate philosophyAGP group is enhancing the technical capabilities, and contributing to the

environmental and social.- Contributing to environmentally friendly, safe and prosperous society- Honestly providing technology and services of choice, and enhancing the

enterprise value- Growing along with the employees with glowing ambitions

Long-term vision 2025 (outline)AGP group will become a trusted company that is responsible for airport infrastructure function by enhancing technology and contributing to environmental and social, and deliver the technology developed for protecting the airport safety to all over Japan and overseas. To achieve the vision, over the next 10 years- Became a company stably achieve 20 billion yen sales, and 10% or more operating income ratio- Aim at 30% or more sales ratio outside the airport- Contribute to prevent the increase of global warming with 135,000 tons of CO2-reduction in major airport, by promoting use of GPU* through the realization of the Eco-Airport.


FY15 FY16 FY17 FY18 FY19 FY20

Tokyo Olympics

The environment surrounding our company

Financial environment

World economy at a standstill/declining interest rates

Continuous development of the Asian economy/ gentle incline in interest rates

Crude oil price slump Risk of rising oil prices

Airport data

Haneda 447,000 times

Haneda 300,000 times

Tokyo area airport slot expansion

Chitose airport terminal renovationsInternational air routes expand

Fukuoka airport terminal renovationsItami airport terminal renovations

Haneda 486,000 times（+39,000 times）

Haneda 340,000 times（+40,000 times）

★Okinawa 2nd runway opened for use

Development of Eco Airport policies/Reduction in C02 emission volumes

Business environment

Development of domestic airport concessions

Increase in international routes, domestic LCC/overseas LCC business scale expanding, local airport networks expanding

Social environment

Expansion of aging population/reduction in workforce★Paris Agreement goes into effect★ ICAO’s Carbon Offsetting and Reduction Scheme

★Rugby world cup★Consumption tax 10%

Visit to Japan19.73 million

people


people


people

Increase in foreigners visiting Japan

Visit to Japan40 million

people

Airport Maintenance Plan Advances

Deregulation of foreign workers


The Strategy of 2018 fiscal year

Expansion of profitability Strengthen aviationevent risk tolerance

Contribution to environmental and social

SalesOperating profit margin

Sales ratio of outside airportCapital adequacy ratio CO2 emissions

FY18Plan

FY18Act.

FY19Plan

Sales(¥billion) 14,300 13,818 14,800

Operating profit 9.8% 9.8% 8.8%

FY18Act.

FY19Plan

Sales rario outside airport

9.8% 13.1%

Capital adequacy rario 66.7％ 62.8％

FY18Plan

FY18Act.

FY19Plan

CO2 amount reduced

（10000 tons）

32.5 31.7 32.9

Aggressive challenges and prompt actions for growth

① Promote growth strategy to increase sales / review the ways of working to improve productivity② Conduct balanced business management / build an appropriate business portfolio③ Redistribute profits properly to employees, company, shareholders, and society

Consistent increase in both sales and profits / achieve a 10% operating margin

Aggressive investment for growing domains / improve profitability in low-profit businesses by making use of A Relief, etc.

Deployment of smart project Promote overseas expansion and oversea

transactions

Expand new businesses to increase the sales ratio outside the airport / aggressive investment / improve cost-effectiveness

Capital adequacy ratio of 50% or greater

Contribution to Eco Airport→ Reduce CO2 emissions by improving GPU supply rateTransmit information about our

environmental activities inside and outside the company Advance update to EV


ESG Major issues Key effort details

Environment

contributing to the

environmental and social

●Reduction in C02 emission volumes in the aviation field Our goal: 107thousand ton reduction compared to FY14 by the end of FY19

●Business expansion with consideration for the environment・Progressing with the adoption of battery vehicle EVs and fuel cell vehicle

FCVs・Progressing with the adoption of energy-saving machines, renewable

energy, etc.

Social

Cultivation of diverse human resources to

respond to the aging society(Diver city)

●Participation by airport technicians in education and training projects●Promotion of hiring older workers [Expand the number of workers 60 and

older]（FY14 year end：22 workers⇒FY16 year end：18 workers⇒FY19 year

end：25 workers）●Promoting women's activities [Expansion of female employees]（FY14 year end：13 workers⇒FY16 year end：20 workers ⇒FY19 year

end ：30workers）●Training and utilization of foreign technicians

Governance

Corporate governance

●Stronger governance of group companies●Stronger management transparency and IR activities to increase fairness●Decision to execute investments with regulations

Riskmanagement

●Responses to new risks inherent in overseas business expansion●Responses to new risks inherent in new business expansion (food-related,

etc..)

Promotion of ESG management which takes care of the environment and humans


Strive to reduce C02 emission volumes in the aviation field by 10.7 by 2019 compared with 2014 (of which 46 thousand tons will be reduced by promoting the use of GUPs in major airports).

実績

0

100,000

200,000

300,000

400,000

500,000

FY14 FY16 FY17 FY18 FY19 FY25

ton

Efforts and goals to the environment

Our reduction target for the civil aviation sector CO2 emissions

Civil aviationemissions 1019thousand-ton

Eight majorairports emissions

786thousand-ton(*)

Our reductiontarget

FY19：400thousand-tonFY25：428thousand-ton

(＊)Approximate value multiplied by the arrival and departure times ratio in aviation emissions

＜Commitment to the environment in all business areas＞

Power supplybusiness

Maintenance, facilities and security business

Food system solution

New business

As a further environmental impact reduction measures at airports and airports around●Introduce electric vehicles (EV) and research on fuel cell vehicles (FCV)●Promote energy-saving equipment and introduce new technologies such as renewable energy

● Proposal and the introduction of energy-saving operation and energy-saving components, such as reduction of parts replacement number of times

● Participation in the maintenance business of photovoltaic power generation to reduce CO2

● Sale of energy-saving and space-saving AGP food cart

●Production of Vegetables pesticide-free, low viable bacteria, wash-free, and long-lastingin a fully closed factory


資格名称保有者電気主任技術者 47電気⼯事⼠ 432電気⼯事施⼯管理技⼠ 71管⼯事施⼯管理技⼠ 29エネルギー管理⼠ 22ボイラー技⼠ 142⾼圧ガス製造保安責任者（冷凍保安責任者） 267

危険物取扱者 363Ｘ線作業主任者 116消防設備⼠ 79建築物環境衛⽣管理技術者 24

昇降機検査資格者 15衛⽣管理者 32

Qualification name HoldersOxygen deficiency Operations Chief

292

Organic solvent work chief 102Specific chemical substances such as operations chief

36

Small mobile craneDriving skills

142

Forklift driving skills 375Aerial driving skills 368Slinging skills 299Scaffolding assembly work chief 91

Gas welding skills 312Arc welding special education 392Grinding wheel special education

409

Large automobile driver's license

388

Towing car driver's license 55

資格名称保有者

X-RAY SmithsHeiman 16

X-ray baggage inspection equipment

IHI 20

Manufacturers license Astrophysics 24

EDS*Manufacturers license

L3 8Morpho

Detection 6NUCTECH 2

Metal detectorManufacturers license CEIA 32

危険物検知ゲート Evolv Edge 11

ETD

SmithsHeiman 7

MorphoDetection 49

ImplantSciences 9

Smart lane SmithsHeiman 3

Body scanner(AIT)L3 4Rohde＆

Schwarz 13

＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿* 2019年3⽉末現在

Qualification name HoldersElectrical chief engineer 47Electrical worker 432Electrical work construction management engineer

71

Tube constructionmanagement engineer

29

Energy management officer 22Boiler engineer 142High pressure gas Production Safety Officer(Refrigeration Safety Officer)

267

Hazardous materials handlers

363

X-ray Operations Chief 116Fire protection engineer 79Building environmental sanitation managementEngineer

24

Elevator inspection qualified 15Health administrator 32

● National qualification (Excerpt)

● Manual labor safety training engineer qualifications. ， Special training lectures ，Special driverʻs license ， Maker license（ Some excerpt）

Individual average number of qualifications: 9 qualifications / person

Many of the employees have a wide range of basic knowledge and skills of the mechanical, electrical and control system, and also hold professional qualifications.

Our technical capabilities


Factory vegetable production/sales operations(Factory administration, manufacture and sales

utilizing our unique equipment maintenance know-how

①Establishment of A Relief, airporttechnicians dispatching firm

②Participation in training and practice operations in Thailand

We plan to make use of the high technologies that we have developed to expand our business outside of airports.

Airport techniciansTraining/dispatch operations

Strategy matrix

New

Market

Existing

Existing Projects, products and technologies

Maintenance and Facility business & Security business(Development of the market

that take advantage of existing technology)

Power Supply business

(Improvement of utilization rate tailored to the Eco-Airport Promotion)

(Optimization of investments by such as improvements of facilities)

Food system solution business

(Sales of Food carts and product developments)

(Business jets support,Retail Electricity Business,

etc.)

New


100 102

90

95

100

105

110

Labor profitability per hour

FY18 Plan FY18

62.762.4

60.0

61.0

62.0

63.0

64.0

65.0

Supply Rate

FY17 FY18

億円億円

10.4%

9.8%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

ROIC

FY17 FY18

Indices of production efficiency have been sluggish compared to the same period last year. We intend to provide highly profitable, robust management through thorough efforts to efficiently use management resources through "selection and concentration" and to continually "maximize sales and minimize costs." Labor profitability per hour has improved compared to projections.

(%)

Major production efficiency goals over the previous year

Operating ratio of power supply facilities

Profit ratio compared to invested assets Labor profitability per hour


● We have deployed our company's power facilities in 10 domestic airports (Narita, Haneda,

Kansai, New-Chitose,Chubu,Osaka, Fukuoka, Naha, Kobe, Hiroshima)

● Development support for power-supply vehicles/air-conditioner vehicles for airplanes

●Operation/maintenance management of power supply facilities/equipment

航空機が必要とする電⼒・冷暖房・圧搾空気の供給および、動⼒供給設備の設計・施⼯、運⽤管理等

Power Supply operationsPercent of FY18 sales: 39.6%

Provision of electric power/air conditioning/compressed air which are required by aircraft,

and design, execution, operation, management, etc. of power supply facilities

329 fixed power equipment units, 192 fixed air conditioning equipment units, 111 power-supply vehicles, 34 air-conditioner vehicles, 12 engine starters (as of the end of 2018) with very unique business model in Japan.


旅客搭乗橋、⼿荷物搬送設備、物流倉庫搬送設備など、空港内外の特殊設備の整備および保守管理

Maintenance Servicing operationsPercent of FY18 sales: 28.4%

Servicing and maintenance management of special equipment inside and outside the airport such as

passenger boarding bridges, baggage handling systems, distribution warehouse transport equipment, etc.

●Planning, design, operation, and maintenance management for long-term service of passenger boarding bridges (PBB) and baggage handling systems (BHS)

Airports with large-scale automatic sorting equipment installed: Narita, Kansai, Chubu, and Haneda Airports

●Training for maintenance management and operation of PBB

85 in Narita Airport, 54 in Kansai Airport, 30 in Chubu Airport

●Installation construction management for BHS/PBB, determining of maintenance specifications, instruction manuals, etc. for BHS/PBB●Maintenance checks and repair work for distribution center transport systems


航空機格納庫、貨物上屋、機内⾷⼯場、排⽔処理施設、冷熱源供給設備、特⾼変電所、ホテルなど空港内外の諸施設の整備および保守管理

Facilities Servicing operationsPercent of FY18 sales: 16.2%

Servicing and maintenance of aircraft hangars, cargo sheds, in-flight meal factories, waste water processing equipment,

cold and heat supply equipment, high-voltage transformer substations, and various facilities inside and outside airports such as hotels

●Planning/design of long-term renovation/maintenance plans for facilities/equipment

Facilities management of airline company buildings, aircraft hangars, equipment/engine servicing factories, cargo buildings, in-flight meal factories mainly inside airports, distribution centers outside airports, etc.

●Maintenance management of high voltage substation equipment, uninterruptible power supplies, large-scale boilers/refrigerators, air-conditioning equipment, sanitation equipment, etc.

●Renovation/repair, servicing construction for electrical equipment and machines


Maintenance management for security equipment inside and outside the airport

● Installing and maintaining walkthrough metal detectors

X-ray inspection equipment

Metal detectors Explosives detection

equipment

Liquids inspection

Body scanner

FY17 288 units 150 units 237 units 25units 8unitsFY18 303 units 175 units 264units 31units 27units

Security Servicing OperationsPercent of FY18 sales: 4.4%

Maintenance of important security equipment supporting airport safety

Maintenance management of inspection equipment which automatically conduct inspections of baggage kept on the aircraft on the luggage transport conveyer belts (inline screening systems)

Technology to support the world's inspection machines


No. 1 domestic share with sales of approximately 5,000 units (total at the end of March 2019)

Efforts toward vigorous repeat demands (82% repeat rate) and Expandedsales to new customers to alleviate "a shortage of personnel"

￥

（当社調べ）

￥

￥￥￥

￥

Solutions for Food Systems operationsPercent of FY18 sales: 3.3%

Eco/energy-savingConsume just the electricity of the

heated tableware１．Main dish2．Side

dish

3．Soup bowl

Heating time/heat strength (IH) can be adjusted depending on the menu. Providing a natural layout on the dish, with the warm food warm and the cold food cold.

AGP'sfood cart

Tableware only

PinpointHeating

Hot-air type cart

Heat the entireinsidewith hot air

AGP'sfood cart

Electricity cost per 1 unit per year

Less than 1/5

Hot-air type cart

Space reductionUtilizing in-flight meal technology

forSpace reduction

Increased maneuverability and safety so that even women can handle them easily. Featuring space reduction with kitchen carts which occupy little space.

AGP'sfood cart

Cart spaceLess

than 1/2

Hot-air type cart


A cart system that enables heat cooking by "simply placing the raw ingredients on it"

About the new in-cart cooking meal system

ＩＨ Heating part

Main dish

Soup bowl

Side dish

IH：Induction Heater

It is a meal system which utilizes the heat maintenance of an IH heating cart to automatically cook the food placed on the trays using different temperatures and times for each dish. Maintaining a cooking temperature of 85℃ or higher within the food container for 90 seconds allows safe and secure provision of food.

Staplefood

Cold

【Foodstuff】【Foodstuff】【Cooked rice】【Cooked rice】

■What is the in-cart cooking system?

[Specialized Heated Food Containers ICS Specs]

[IH28 Food Heating Cart ICS Specs]


・Starts a parking space providing service and aircraft power supply service from February 1, 2015・Starts a towing service from August 20, total of 10aircraft, execution of 46 towings・Starts a cleaning service from September 20, total of 6aircraft, executed cleaning of 13 aircraft・Starts a crew pickup service and aircraft tire nitrogen (N2)refill service from February 1・ Started office service of mechanic from October.・保税倉庫の供⽤開始・FY18 Activity record Towing service ：117 times

Cleaning service ：16 timesNitrogen (N2) refilling service ：9 timesFY17 FY18

No. of regular tarmac contracts 5（Septemberonwards）

5（Septemberonwards）

No. of temporary (SPOT)aircraft

38 71

Number of cleaners 17/44 times 16/35 times

Number of towing 48/268 times 117/432 times

Business airvraft support operationsOpened hangar for business jets at Narita in February 2015

Expansion of business jet support servicesBusiness contents

●Provision of parking space (size: 7,655㎡)※ Ensuring of privacy

●Handling work on the ground, machine provision・Aircraft power supply service・Cleaning service (inside and outside aircraft)・Towing service (towing of aircraft)・Crew pickup service・Nitrogen (N2) refilling service・ Water supply and drainage service・ Bonded warehousing・ O2 filling service Should start in FY19

Photo: Towing service Photo: Cleaning service (Brightwork)

【Changes in the number of regular tarmac contracts】

FY14 February 〜1 FY17 September 〜5FY15 December 〜2FY16 May 〜3

September〜4


Forbusiness 63,626kg（347kg/day）

Forretailers 102,819bag（508bag/day）

Vegetable factory production and sales business operations

Change the common sense of greengrocery by

supplying LL lettuce throughout the yearThrough a radical review of our business, we will place importance not only on low-

potassium lettuce, but also on business-use long life lettuce, making good use of fully closed factory vegetable production, aiming for expanding the business.

Characteristics of

LL lettuceCultivation without

The use of agricultural chemicals

Stable supply Low viable Bacteria count

Outdoor-cultivated lettuce are easily affected by climate change, and their market price fluctuates a lot. It also has a high risk of contamination by foreign objects, and the processed food industry has to spend a lot for manpower and washing, etc. LL lettuce can solve these problems with outdoor-cultivated lettuce, and is highly received as a sandwich material for convenience stores.

Challenge for new things

We have succeeded in the cultivation of red

lettuce which is said to be difficult to cultivate

at plant factories.

We have already completed test cultivation for

mass production, and are having sales

activities to obtain new clients.

Number of lettuce


Although new power producers account for about 14% of all electricity sold nationwide (total for low- & high-voltage consumers as of Sept. 2018), the switch to new power producers is still limited when looking at the market as a whole. In light of this situation, we are taking steps to compete with the prices of other companies. These steps include① implementing measures to promote the sale of low-voltage electricity by every employee of the AGP Group② expanding the pricing plans for low-voltage electricity③increasing high-voltage electricity providers and ④ expanding our network of agents.

＊Application status(Up to the end year2019

Classification

Contractagreements Number of

cases

Estimate completions Number of

cases

Estimaterequests

Number of cases

Highvoltage 71 550 706Lowvoltage 1065 1950 2469

＊TOPICS● Electric distibutors 42 companies.

（Up to the end year 2019）●Start selling Internet lines “AGP hikari”.● Increased sales of retail electricity and

energy-saving devices as a package

Retail electricity operations

“AGP Denki”For estimates and inquiries please contact

us as below

Phone：０３－３７４７－００７１email ： [email protected]

Scheme illustration (Note)

Balancing groupGeneral electricity operator backup power sourceJapan Electric Power Exchange(JEPX)

Marubeni Shindenryoku・F-Power

Supply and demand management

Electrical power provision

(Note) This is a scheme to reduce risk as much as possible by not possessing a power plant at AGP and entering a balancing group of major new power companies for supply and demand management as well.

ElectricityElectricity

Customers


ＧＳＥ sales operations

[Walkthrough metal detector systems]

We are facilitating sales of counterterrorism security devices for common areas in airport terminals.

【GPU 180kVA】

We will begin adding technical support (one of our strengths) to import and sale of new foreign-made airport equipment in light of trends towards motorization and automation.

Cool brakes in the short period of time from when aircraft land until they depart. Total sales in Japan of 692 units achieved.

【Step car】

[Brake Cooling Cart] 【Passenger boarding roof(PBR)】Expansion / exit passage for customers to walk safely, safely, comfortably without stress from the terminal to the aircraft.[Scheduled to be commercialized in July 2018]

[Self-propelled power-supplyvehicles for aircraft]

A vehicle which provides electricity to parked aircraft.

[Self-propelled air-conditioner vehicles for aircraft]

A vehicle which provides electricity and conditioned air to parked aircraft. [Overseas GSE Import Sales]

[Catering vehicles] [Aircraft towing tractor] [Belt loader]


Review Summary and Progress Report of Medium-Term

Management Plan


Review points

Future

Fields of operations

Business management

Securing of human resources

Training of human resources

Stockholder returns

Business expansion through proactive investment including business investments

Portfolio management with unevennessIncreased productivity through the start of smart projects

Utilization of affiliated companies that handle human resource training and dispatchParticipation in training and practice operations

Stable dividends + stockholder returns

By establishing a business foundation through proactive investment and also accelerating our growth strategy, revise sales goal for the last year of the medium-term (FY19) from 15 billion to 16 billion yen. Other management goal values remain the same as now.

Management goal values Goal values as of FY19 Goal values as of FY25Consolidated sales 16 billion yen 20 billion yen

Consolidated operating profit ratio More than 10%Capital adequacy ratio More than 50%

ROE More than 10%

Existing

Strengthening of airport operations foundation, cultivation of fields of operation, taking part in concessions, promotion of strategic collaborations

Efforts to maximize sales and minimize costs (increase profits) and contribute to the environment

Proactive adoption including carrier adoption, promotion of increased employee technical and other abilities

Stable dividends


FY14 FY15 FY16 FY17 FY18 FY19CO2 amount reduced 29.3 31.8 36.2 37.9 39.1 40.0

＊Medium-Term Management Plan Initial goal values

＊Results/plans (FY14-17 are results, FY18-19 plans）

(Unit：10000 tons)

・Strive to reduce C02 emission volumes by107 thousand tons by 2019 compared to 2014 by promoting the adoption of GPU at major airports.

Reduction measures FY14 FY15 FY16 FY17 FY18 FY19

GPU adoption promotion 28.9 29.7 30.4 31.2 31.7 32.9

Other －－－－ ― 7.1

CO2 amount reduced Total 28.9 29.7 30.4 31.2 31.7 40.0

(Unit：10000 tons)

Amount reduced Implement review of breakdown

・Strive to reduce C02 emission volumes in the aviation field by 10.7 by 2019 compared with 2014(of which 46 thousand tons will be reduced by promoting the useof GUPs in major airports).

Review of CO2 emission volume reduction goals


778 740 887 900

1,115

1,3801,404

1,400

1,3561,600

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

(million yen)■Operating Profit

10,67111,400

11,582 12,08012,291 13,352

13,196

14,30013,818

16,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

FY14

Act.

FY15

Mid-

term

FY16

Act.

FY17

Mid-

term

FY18

Act.

FY19

Mid-

term

Power supply Maintenance Facility SecurityFood system New GSE

FY14Act.

FY15Mid-term

FY15Act.

FY16Mid-term

FY16Act.

FY19Mid-term

FY17Mid-term

FY17Act.

FY14Act.

FY15Mid-term

FY15Act.

FY16Mid-term

FY16Act.

FY19Mid-term

FY17Mid-term

FY17Act.

7.3%7.7%

9.1%

10.6%9.8% 10.0%

4.0%

6.5%

9.0%

11.5%

14.0%Operating margin

Progress of Mid-term plan

(million yen)

＜Sales＞＜Profit＞

Sales, operating profit, and ordinary profit posted record highs for 2 consecutive periods in the previous year. Sales posted a record high in 2018, but profits decreased. Moreover, the operating margin with respect to the target for the final year of the current medium-term management plan will not meet projections. However, profitability will be achieved as a result of improvements during the term, and we intend to further accelerate our growth strategy.

FY18Mid-term

FY18Act.

FY18Mid-term

FY18Act.


Fulfill returns to investors to fit our profit growth

(Unit: yen)

0

5

10

mid-term end-of-term

＋α Added returns

In the medium term up to F19, as a general rule current net income belonging to the parent company is:≦ 700 million yen：Stable dividends of 10 yen annually (mid-term and end-of-term 5 yen)＞700 million yen：Implement additional return to stockholders aiming for 30% of the excess by the end of the term

Dividends*Current net income＝amount

exceeding 700 million yen

*Current net income＝up to 700 million yen

Stable dividends*Current net income＝Current net income

belonging to parent company

[Dividend Policy]Recognizing stable return on investment to our stockholders as one of our most important issues, we generally work to fulfill returns on investments twice annually in the form of mid-term and end-of-term dividends after making judgments comprehensively taking into account the internal reserves required for future business expansion, the financial and performance conditions, dividend payout ratios, etc..


We mention the name of businesses as described below, in the consolidated financial statements or separate financial statements of our company, giving consideration to the property of the current business and the quantitative importance etc., though the names are different from this document.Maintenance business and facilities business are put together into "maintenance business", and security business, food cart business, new business, and GSE sales business are put together into "incidental business".

In this document, we describe the outlooks based on current plans, estimates, strategies, and beliefs of our company. Those are based on our judgment and hypothesis obtained from currently available information.

Our operating results in the future, that may changes by trends in technology, demand, prices and economic environment, may differ significantly from the forecasts described in this document.Therefore, the goal that we have set, does not guarantee that it is all achieved.

Corporate Planning Department, AGP CorporationTEL: 81-3-3747-1638FAX: 81-3-3747-0707

URL: http: //www.agpgroup.co.jp/.en/(Please see our introduction video)

Contact Information

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