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Latest Business Results

2022/3 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.