2025/3 Q1 Summary
|
2025/3 Q1 |
YoY |
Net sales |
128,638 |
6.6%Down |
Operating income |
5,550 |
20.6%Down |
Ordinary income |
6,045 |
12.5%Down |
Profit attributable to owners of parent |
4,127 |
28.4%Down |
During the first quarter of the consolidated fiscal period under review, net sales decreased by 6.6% year on year to 128,638 million yen, due to such factors in the electronic components business as the impact of inventory adjustments at key customers which emerged from the second half of the fiscal year ended March 2024, as well as diminution of transactions with a certain major customer of an overseas subsidiary.
Gross profit was generally at the same level year as the same period of the previous fiscal year despite a net sales decrease notably in the electronic components business, down 3.3% year on year to 16,980 million yen, with gross profit margin improving by 0.5 percentage points year on year, reflecting improved sales mix resulting from a reduction in sale of lower-margin products. Operating income decreased by 20.6% year on year to 5,550 million yen. In addition to a gross profit decline, the decrease was also attributable to an increase in selling, general and administrative expenses resulting primarily from wage increases implemented in April 2024 for the Group’s employees in Japan. Ordinary income decreased by 12.5% year on year to 6,045 million yen, due partly to the impact of foreign exchange gains and losses.
Profit attributable to owners of parent decreased by 28.4% year on year to 4,127 million yen, partly reflecting the absence of the 1,065 million yen gain on sale of investment securities recorded in the same period of the previous fiscal year.
In the earnings assumption for the fiscal year ending March 2025, the impact of inventory adjustments at key customers is carefully factored into our assumption of a decrease in both net sales and incomes in the first half, and an increase in net sales and incomes in the second half reflecting recovery from such adjustment phase. In line with this scenario, performance got off to a good start in the first quarter under review.
2025/3 Q1 Segment summary
|
Electronic components |
Information equipment |
Software |
Others |
Net Sales |
111,320 |
10,606 |
631 |
6,079 |
Operating Income |
4,331 |
639 |
35 |
461 |
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS*1), and other activities)
In this business, the components sales business enjoyed robust sales of SoC*2 products by Kaga FEI Co., Ltd., but overall, business was slow due largely to the impact of inventory adjustments at key customers which emerged from the second half of the fiscal year ended March 2024, and diminution of transactions with a certain major customer of an overseas subsidiary of Excel Co., Ltd.
In the EMS business, although sales in applications related to air-conditioning equipment were affected by inventory adjustments at key customers, net sales turned upward on the back of solid sales in the automotive sector as well as sales recovery in applications related to industrial equipment.
As a result, net sales decreased by 7.2% year on year to 111,320 million yen, and segment income decreased by 26.9% year on year to 4,331 million yen.
Note: 1. Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis.
2. Abbreviation for System on a Chip. A design technique of integrating all the functions necessary for operation of a device or system on a single semiconductor chip.
(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products)
In this business, the PC sales business saw continued strong sales of PCs for educational institutions amid the season of high demand for newly enrolled students, in contrast to sluggish sales of PCs for mass retailers due to a reduction in product lines by a major PC supplier. Additionally, the LED installation business faced a decrease in net sales given completion of the large-scale project that the Group had been pushing forward on a full sale since the fiscal year ended March 2023.
As a result, net sales decreased by 12.0% year on year to 10,606 million yen, and segment income decreased by 14.4% year on year to 639 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In this business, orders for computer graphics production remained generally steady. Net sales increased by 9.4% year on year to 631 million yen, and segment income of 35 million yen was recorded (4 million yen of segment loss in the same period of the previous fiscal year).
(d) Others (Repair and support for electronics equipment, and sales of amusement equipment and sports goods, and others)
In this business, PC product and peripheral recycling business remained strong, as did sales of amusement equipment in both domestic and overseas markets. Net sales increased by 20.4% year on year to 6,079 million yen, and segment income increased by 58.3% year on year to 461 million yen.
2024/3 Summary
|
2024/3 |
YoY |
Net sales |
542,697 |
10.8%Down |
Operating income |
25,845 |
19.9%Down |
Ordinary income |
25,976 |
20.7%Down |
Profit attributable to owners of parent |
20,345 |
11.8%Down |
In the electronics industry to which the Group belongs, the automotive market continued to enjoy demand growth along with easing of supply shortages of semiconductors and electronic components, on the back of vehicle electrification and other trends, but demand in the industrial equipment and other markets remained in an adjustment phase.
Under such circumstances, during the consolidated fiscal year under review, the electronic components business was affected by such factors as disappearance of spot demand given easing of supply shortages of semiconductors and electronic components, diminution of transactions with a certain client of an overseas subsidiary of Excel Co., Ltd., and inventory adjustment taking place on a full-scale from the third quarter of the consolidated fiscal year under review. As a result, net sales decreased by 10.8% year on year to 542,697 million yen.
Operating income decreased by 19.9% year on year to 25,845 million yen, with efforts made to reduce selling, general and administrative expenses in the face of a decline in gross profit due to lower net sales, while ordinary income decreased by 20.7% year on year to 25,976 million yen.
Profit attributable to owners of parent decreased by 11.8% year on year to 20,345 million yen, reflecting in part posting of extraordinary income that included 1,420 million yen in gain on sale of investment securities and 481 million yen in gain on bargain purchase associated with a corporate acquisition.
2024/3 Segment summary
|
Electronic components |
Information equipment |
Software |
Others |
Net Sales |
472,583 |
44,305 |
2,567 |
23,241 |
Operating Income |
20,887 |
2,924 |
370 |
1,555 |
(a) Electronic components (Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS*), and other activities)
In this business, the components sales business enjoyed robust sales of SoC*2 products by Kaga FEI Co., Ltd., but sales of semiconductors and electronic components in general were sluggish, affected by disappearance of spot demand given easing of supply shortages of semiconductors and electronic components that had continued for two consecutive years until the previous fiscal year, diminution of transactions with a certain client of an overseas subsidiary of Excel Co., Ltd., and inventory adjustment taking place on a full-scale from the third quarter.
In the EMS business, sales in the automotive sector increased due to improved supply and demand balance of semiconductors and electronic components, whereas sales in applications related to medical and industrial equipment decreased due partly to investment adjustment at key customers.
As a result, net sales decreased 12.4% year on year to 472,583 million yen and segment income decreased 26.2% year on year to 20,887 million yen.
Note: 1. Electronics Manufacturing Service: Provision of product development and manufacturing services on an outsourcing basis.
2. Abbreviation for System on a Chip. A design technique of integrating all the functions necessary for operation of a device or system on a single semiconductor chip.
(b) Information equipment (Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products)
In this business, net sales remained robust with continued strong sales of PCs for educational institutions and security software, although sales of PCs for mass retailers struggled due to weak demand. In the LED installation business, sales of a large-scale project that the Group started pushing forward on a full scale in the previous fiscal year contributed.
As a result, net sales increased 1.4% year on year to 44,305 million yen and segment income increased 19.4% year on year to 2,924 million yen.
(c) Software (Production of computer graphics, planning and development of amusement products, and other activities)
In this business, orders for computer graphics production remained generally steady. Net sales decreased by 14.4% year on year to 2,567 million yen while segment income increased by 29.0% year on year to 370 million yen, attributable partly to the effect of containing cost of sales through operational efficiency improvement and other efforts.
(d) Others (Repair and supports for electronics equipment, manufacture and sales of amusement equipment, and sales of sports goods, and other activities)
In this business, the PC and PC peripheral recycling business remained strong, and so did sales of amusement equipment and sporting goods. Net sales increased by 5.4% year on year to 23,241 million yen, and segment income increased by 41.2% year on year to 1,555 million yen.
2023/3 Summary
(million Yen)
|
2023/3 |
YoY |
Net sales
|
608,064 |
22.6%Up |
Operating income
|
32,249 |
54.2%Up |
Ordinary income |
32,739 |
52.6%Up |
Profit attributable to owners of parent |
23,070 |
49.8%Up |
In the electronic components business, which is the Group’s core business, primarily in automotive and medical equipment applications, sales in both the component sales business and the EMS business grew significantly.
In the information equipment business, the Company saw growth in sales of high-end PC products and security software, as well as in the LED installation business.
In the software business, orders for smartphone game development and computer graphics production recovered.
In other businesses, the recycling business for PC products and other products remained solid.
As a result, sales increased in all business segments, and the Group’s net sales in the fiscal year under review totaled 608,064 million yen, up 22.6% year on year.
Operating income increased by 54.2% year on year to 32,249 million yen due to a significant increase in gross profit resulting from higher net sales and improved gross profit margin. Ordinary income increased by 52.6% year on year to 32,739 million yen and profit attributable to owners of parent increased by 49.8% to 23,070 million yen. The Company achieved record highs in net sales for the second consecutive year, operating income and ordinary income for the fourth consecutive year, and profit attributable to owners of parent for the third consecutive year.
2022/3 Summary
(million yen)
|
Electronic components |
Information equipment |
Software |
Others |
Net Sales |
539,342 |
43,680 |
2,998 |
22,044 |
Operating Income |
28,314 |
2,449 |
286 |
1,101 |
(a) Electronic components
(Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS*), and other activities)
In this business, the component sales business attracted a high level of sales in a broad range of industries, in part due to the improved supply/demand conditions for semiconductors and electronic components from the second half of the fiscal year, which remained tight. Some products for automotive-related applications are facing supply shortages, but the Company mobilized its abilities and secured sales volume by using its strength in procurement capabilities as an independent trading company as well as proposing alternative products.
In the EMS business, sales in the automotive sector grew significantly and sales to key customers in applications related to medical and office equipment remained strong. The yen has been weak since the start of the fiscal year, and this pushed up revenue on a yen basis.
As a result, net sales increased 24.3% year on year to 539,342 million yen and segment income increased 56.4% year on year to 28,314 million yen.
(b) Information equipment
(Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products)
In this business, sales of PCs for corporations and educational institutions were sluggish on a unit basis due to the prolonged replacement cycle but performed well on a value basis thanks to sales of high-end products. Sales of PC peripheral products such as security software also remained solid. In the LED installation business, the installation of large-scale nationwide projects, which had been delayed due to material shortages, made steady progress and contributed significantly to operating revenue.
As a result, net sales increased 10.3% year on year to 43,680 million yen and segment income increased 17.4% year on year to 2,449 million yen.
(c) Software
(Production of computer graphics, planning and development of amusement products, and other activities)
In this business, orders for large-scale and new projects in smartphone games development and computer graphics production recovered, and the profitability of the business improved as a result of progress in cost reductions.
As a result, net sales increased 8.3% year on year to 2,998 million yen and segment income was 286 million yen (segment loss was 26 million yen in the same period of the previous year).
(d) Others
(Repair and supports for electronics equipment, manufacture and sales of amusement equipment, and sales of sports goods, and other activities)
In this business, the PC and PC peripheral recycling business was strong. In addition, sales of game equipment for the amusement industry in Japan and overseas as well as golf products were robust, in part due to the relaxation of restrictions on movement during the pandemic.
As a result, net sales increased 12.5% year on year to 22,044 million yen and segment income increased 76.0% year on year to 111 million yen.
2023/3 Segment summary
(Million Yen)
|
2022/3 |
YoY |
Net sales |
495,827 |
17.4%Up |
Operating income |
20,915 |
82.4%Up |
Ordinary income |
21,456 |
90.9%Up |
Profit attributable to owners of parent |
15,401 |
35.1%Up |
The electronic components business, which is the Group’s core business, addressed customer requests from various industries in advance, pursued sales activities that leveraged its strengths as an independent trading company, and gave the highest priority to securing sales volume. As a result, the Group’s net sales in the fiscal year under review totaled 495,827 million yen, up 17.4% year on year.
In terms of income, the Company’s continued efforts to facilitate telework and take other workstyle reform measures in the midst of the COVID-19 pandemic while also controlling operating costs, combined with an increase in gross profit due to higher net sales and an improved gross profit margin, led to an 82.4% year-on-year increase in operating income, to 20,915 million yen, and a 90.9% increase in ordinary income, to 21,456 million yen. Despite the absence of the 7,963 million yen “gain on bargain purchase” posted as extraordinary income following a corporate acquisition in the previous fiscal year, profit attributable to owners of parent increased 35.1% year on year, to 15,401 million yen, due to a significant increase in ordinary income.
Net sales reached the highest level in two fiscal years, since the fiscal year ended in March 2020, operating income and ordinary income reached record levels for the third straight year, and profit attributable to owners of parent did so for the second straight year
2022/3 Segment summary
(Million Yen)
2022/3 |
Electronic components |
Information equipment |
Software |
Others |
Net Sales |
433,852 |
39,616 |
2,767 |
19,590 |
Operating Income |
18,107 |
2,085 |
-26 |
626 |
(a) Electronic components
(Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS*), and other activities)
In this business, despite prolonged constraints on the supply of semiconductors and electronic parts, strong sales continued in the component sales business throughout the period as a result of previously capturing demand from customers in a wide range of industries. Furthermore, the Company leveraged the strength of its procurement capabilities and knowledge as an independent trading company to enable it to maintain widespread sales quantities, which also boosted revenue in this business. In addition, steady progress in PMI at acquired companies such as KAGA FEI Co., Ltd., and EXCEL Co., Ltd., contributed to profit growth in this business.
In the EMS business, the automotive, industrial equipment, and medical sectors in particular continued to see strong performance. Although lockdowns to combat the spread of COVID-19 and production line stoppages due to a shortage of electronic parts occurred at some plants, the Company endeavored to mitigate their impact by implementing thorough process control through close cooperation with customers’ plants and other measures.
As a result, net sales rose 22.7% year on year to 433,852 million yen and segment income increased 122.1% year on year to 18,107 million yen.
(b) Information equipment
(Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products)
In this business, sales of PCs for educational institutions and PC peripherals such as security software remained strong, but sales of PCs to corporations were sluggish due to the winding down of demand associated with the shift to remote work and the impact of product supply difficulties attributable to a shortage of electronic parts. In addition, the impact of difficulties in procuring equipment, products, and materials and delays to construction work resulting from late deliveries were also felt in the equipment installation business for LED lighting, network devices, and other, which led to disappointing results.
As a result, net sales decreased 18.1% year on year to 39,616 million yen and segment income decreased 16.0% year on year to 2,085 million yen.
(c) Software
(Production of computer graphics, planning and development of amusement products, and other activities)
In this business, demand for computer graphics production for smartphone games was solid on the back of stay-at-home demand during the pandemic, but profitability worsened due to an increase in development costs and other resulting from efforts to meet delivery deadlines.
As a result, net sales decreased 5.6% year on year to 2,767 million yen and segment loss was 26 million yen (segment income was 263 million yen in the same period of the previous year).
(d) Others
(Repair and supports for electronics equipment, manufacture and sales of amusement equipment, and sales of sports goods, and other activities)
In this business, the PC and PC peripheral recycling business was strong, as demand for reused and recycled products increased amid continuing supply difficulties for PC products due to the shortage in electronic parts.
As a result, net sales increased 11.4% year on year to 19,590 million yen and segment income increased 32.0% year on year to 626 million yen.
2021/3 Summary
(Million Yen)
|
2021/3 |
YoY |
Net sales |
422,365 |
-4.8% |
Operating income |
11,467 |
14.5%
|
Ordinary income |
11,241 |
10.9%
|
Profit attributable to owners of parent |
11,399 |
94.8% |
Net sales in the consolidated fiscal year ended March 31, 2021 decreased by 4.8% year on year to 422,365 million yen. Although the Group attracted demand for computers and others spurred by telework and responded to the recovery in demand in the manufacturing industry, and new Group subsidiary EXCEL boosted sales, the termination of Kaga FEI’s sales agency agreements with large firms continued to affect sales.
11,467 million yen and ordinary income rose 10.9% year on year to 11,241 million yen. This was due to an increase in gross profit supported by solid sales in key businesses, in addition to efforts to curtail and reduce selling, general, and administrative expenses, such as travel and transportation costs and business dining costs, as well as to promote teleworking, online meetings, and other initiatives to improve operational efficiency.
Profit attributable to owners of parent rose 94.8% over the previous year, to 11,399 million yen, well over the previous year’s level. This was because the Group posted a 7,963 million yen “gain on bargain purchase” as extraordinary income following a corporation acquisition, despite pricing in one-off losses resulting from the prolonged COVID-19 pandemic, such as the posting of 1,893 million yen in impairment losses including those for the newly built EMS manufacturing bases overseas as an extraordinary loss and 1,750 million yen in provision for allowance for doubtful accounts for a major supplier.
Both operating income and ordinary income reached record highs for the second straight fiscal year, and profit attributable to owners of parent reached a historical high for the first time in two fiscal years, since the fiscal year ended in March 2019.
2021/3 Segment summary
(Million Yen)
2021/3 |
Electronic components |
Information equipment |
Software |
Others |
Net Sales |
353,454 |
48,389 |
2,932 |
17,589 |
Operating Income |
8,151 |
2,482 |
263 |
474 |
(a) Electronic components
(Development, manufacture and sale of semiconductors, general electronic components and other products, the electronics manufacturing service (EMS), and other activities)
In this business, the components sales business saw the effect of higher sales generated by EXCEL’s consolidation from April 2020, and the business also responded adroitly to demand as it recovered sharply in a wide range of industries from the second half of the fiscal year. However, the termination of Kaga FEI’s sales agency agreements with large firms continued to affect sales, and as a result, net sales undercut the previous year’s levels in this fiscal year.
The EMS business was affected by the suspension of manufacturing at overseas manufacturing plants of both the Company and its customers due to countries imposing lockdowns as COVID-19 infections increased early in the fiscal year, among other factors. However, demand picked up markedly from the second half of the fiscal year, particularly in the automotive and industrial equipment sectors. This in turn can be attributed to a recovery in spending, particularly on automobiles, which had fallen sharply at one point. As a result, net sales in the fiscal year under review exceeded levels in the previous year.
As a result, net sales decreased by 6.4% year on year to 353,454 million yen, and segment income increased by 8.6% year on year to 8,151 million yen.
(b) Information equipment
(Sales of PCs, PC peripherals, home electric appliances, photograph and imaging products, original brand products, and other products)
In this business, sales of PCs, PC peripherals, and security software grew as companies and schools respectively expanded teleworking and online classes. In addition, sales of thermography equipment for temperature checks and sterilizing deodorizers with antiviral functions for companies were also solid as products aimed at countering COVID-19.
As a result, net sales increased by 11.3% year on year to 48,389 million yen, and segment income increased by 45.3% year on year to 2,482 million yen.
(c) Software
(Production of computer graphics, planning and development of amusement products, and other activities)
In this business, areas such as computer graphics animation and the development of game software performed well due to an increase in orders and front-loaded orders from customers sparked by a rise in at-home activities, among other factors.
As a result, net sales increased by 5.5% year on year to 2,932 million yen, and segment income increased by 11.4% year on year to 263 million yen.
(d) Others
(Repair and supports for electronics equipment, manufacture and sales of amusement equipment, and sales of sports goods, and other activities)
In this business, the PC and PC peripheral recycling business was solid, but sales of game equipment for the amusement industry and golf products were low due to the impact of requests from administrative authorities around the country that large commercial facilities curtail their operating hours to prevent the spread of COVID-19.
As a result, net sales decreased by 11.1% year on year to 17,589 million yen, and segment income increased by 4.9% year on year to 474 million yen.