Establishing a revenue-diversification business model to reduce dependence on the biotech industry

「In the investment and consulting business, revenue increased year on year as market conditions in the e-commerce business improved. In the trading business, including wholesale sales, revenue increased following the completion of a large order, while revenue in the manufacturing and other businesses also grew as the company focused on capturing demand and passing on higher prices. In addition, each business worked to manage costs, resulting in substantial year-on-year increases in both revenue and earnings.」

「The Group is developing its businesses in a Hybrid-style model that leverages the characteristics of both businesses, and each group company is pursuing business development in line with this policy while taking its individual characteristics into account.」

「During the interim consolidated accounting period, consumer sentiment declined amid sustained price increases, and retail sales through e-commerce struggled. However, in the trading business, including wholesale sales, the Company focused on expanding revenue by deepening existing relationships and securing profit through price negotiations. As a result, revenue was ¥5,290.204 million, down 4.0% year on year, while operating profit rose significantly by 27.8% year on year to ¥245.102 million.」

「In the Investment and Consulting business, retail sales through e-commerce struggled as consumers’ willingness to purchase declined amid rising prices. However, revenue and profit increased from the previous fiscal year due to sales and profit contributions from 東北新和化学株式会社, which became a consolidated subsidiary in April 2024, as well as the development of new customers and the pass-through of higher costs.」

「During the interim consolidated accounting period, revenue was ¥5,508.798 million, up 2.0% year on year, while operating profit was ¥191.717 million, down 14.1% year on year.」

「As a result, revenue was ¥10,771.933 million, up 17.3% from the previous fiscal year, while operating profit was ¥429.661 million, up 162.4%.」

「During the first nine months of the fiscal year, revenue increased as 株式会社ＴＧＭ completed a large-scale order and other subsidiaries proceeded with passing higher costs on to customers and strengthening their sales capabilities. Segment profit also increased significantly year on year. As a result, revenue was ¥8,112.366 million, up 21.0% year on year, while operating profit was ¥313.347 million, up 75.3% year on year.」

「During the first six months of the fiscal year, revenue increased as 株式会社ＴＧＭ completed a large-scale order and other subsidiaries proceeded with passing higher costs on to customers and strengthening their sales capabilities. Segment profit also increased significantly year on year. As a result, revenue was ¥5,399.031 million, up 26.3% year on year, while operating profit was ¥223.077 million, up 142.3% year on year.」

「In the Investment and Consulting business, revenue at 株式会社ＴＧＭ increased following the completion of a large-scale order, while profit margins at other subsidiaries improved as the Company passed higher costs on to customers. As a result, the business reported higher revenue and profit year on year. Revenue for the first quarter was ¥2,795.080 million, up 42.1% year on year, while operating profit was ¥167.068 million, up 3,505.7% year on year.」

「As a result, revenue for the first nine months of the fiscal year was ¥6,704.812 million, up 17.1% year on year, while operating profit was ¥178.753 million, down 11.8% year on year.」

「During the first six months of the fiscal year, the business reported higher revenue year on year, owing to the sales contribution from 株式会社ホープ, which became a consolidated subsidiary at the end of September 2021. However, growth at group companies operating EC businesses slowed because of the impact of COVID-19 and weak consumer spending amid higher prices. In addition, the rapid depreciation of the yen, against a backdrop of deteriorating global conditions and interest-rate policies in various countries, put pressure on the profit margins of group companies whose operations are based on importing supplies.」

「Beginning with the first quarter of the current fiscal year, the name of the reporting segment was changed from the former “TGBS business” to the “Investment and Consulting business.”」

「In the TGBS business, the Company worked to secure supplies of popular products in the E-commerce business despite weak consumer spending, and also pursued orders in the Other business to restore sales, which had generally declined amid the COVID-19 pandemic. As a result, during the first nine months of the fiscal year, revenue increased by ¥144.639 million, or 2.6%, year on year, while operating profit was ¥202.757 million, down ¥66.847 million, or 24.8%, year on year.」

「In the TGBS business, the Company worked to secure supplies of popular products in the E-commerce business despite weak consumer spending, and also pursued orders in the Other business to restore sales, which had generally declined amid the COVID-19 pandemic. As a result, during the first six months of the fiscal year, revenue increased by ¥158.294 million, or 4.6%, year on year, while operating profit was ¥116.579 million, up ¥1.033 million, or 0.9%, year on year.」

「As a result, during the first quarter of the fiscal year, revenue declined by ¥50.865 million, or 2.9%, year on year, while operating profit was ¥42.392 million, down ¥31.699 million, or 42.8%, year on year.」

「As a result, the Company significantly surpassed its previous record high profit for the fiscal year ended March 2021 and established a solid foundation for its Hybrid-style management, built around the two pillars of its drug discovery support business and TGBS business.」

「As a result, during the cumulative third quarter of the consolidated fiscal year under review, the TGBS business recorded a ¥423.508 million year-on-year decline in net sales, down 7.1%, while operating income was ¥269.605 million, an increase of ¥26.489 million, or 10.9%, year on year.」

「As a result, during the cumulative second quarter of the consolidated fiscal year under review, the TGBS business recorded a ¥559.676 million year-on-year decline in net sales, down 13.9%, while operating income was ¥115.545 million, a decline of ¥52.092 million, or 31.1%, year on year.」

「In the e-commerce business, sales and profit from ギャラックス貿易株式会社, which became a consolidated subsidiary in March 2020, contributed. Sales remained firm amid stay-at-home demand resulting from the spread of COVID-19, and efforts to improve gross profit resulted in net sales increasing by ¥65.010 million, or 5.2%, year on year, and operating income of ¥67.386 million, an increase of ¥60.384 million, or 862.3%, year on year.」

「In March 2020, the Company made ギャラックス貿易株式会社, which imports tableware and conducts retail and wholesale sales through online shopping sites, a consolidated subsidiary, thereby strengthening its earnings base.」

「As a result, the TGBS business's performance during the cumulative third quarter of the consolidated fiscal year under review benefited substantially from increased sales and earnings in the Other business. Net sales increased substantially by 39.8% year on year, while operating income also rose substantially to ¥243.115 million, up 302.5% year on year.」

「Although e-commerce sales remained sluggish during the cumulative second quarter of the consolidated fiscal year under review, sales from 株式会社ＴＧＭ, which joined the consolidated group from the first quarter, made a significant contribution. Net sales therefore increased substantially by 35.4% year on year, while operating income also rose substantially to ¥167.755 million, up 370.7% year on year. At the end of the second quarter of the consolidated fiscal year under review, TGBS had an order backlog of ¥851.711 million, up 2,247.9% year on year.」

「Although e-commerce sales remained sluggish during the cumulative first quarter of the consolidated fiscal year under review, sales from 株式会社ＴＧＭ, which joined the consolidated group from the first quarter of the consolidated fiscal year, contributed, resulting in a 15.5% year-on-year increase in net sales. Operating income also turned positive at ¥49.011 million.」

「株式会社ＴＧＭ is a trading company that imports and sells auxiliary materials for eco-glass (insulating glass), including spacers and sealants, as well as glass-processing equipment, with major domestic glass manufacturers as its main customers. Demand for 株式会社ＴＧＭ's main products, auxiliary materials for insulating glass, is expected to benefit from the energy-saving market. In addition, bringing 株式会社ＴＧＭ into our Group is expected to expand the Group's trading-company capabilities.」

「In the ＴＧＢＳ business, the Company worked to procure popular products in its e-commerce business and focused on expanding sales channels through platforms, meaning major online shopping sites. Outside the e-commerce business, it strengthened its efforts in business succession consulting.」

「In the ＴＧＢＳ business, the Company worked to procure popular products in its e-commerce business and focused on expanding sales channels through platforms, meaning major online shopping sites. Outside the e-commerce business, it strengthened its efforts in business succession consulting.」

「In the ＴＧＢＳ business, the Company worked to procure popular products in its e-commerce business and focused on expanding sales channels through platforms, meaning major online shopping sites. Outside the e-commerce business, it strengthened its efforts in business succession consulting.」

「Based on these considerations, we decided to leverage the expertise we have accumulated in acquiring and revitalizing businesses and, through the newly established TGBS company, develop advisory and support services related to business succession and business revitalization across a broad range of fields, as well as M&A, in order to more flexibly promote revenue diversification by establishing a business model independent of the business environment in the biotech industry.」