Risk of Delayed Monetization and Failure to Achieve Business Expansion in Overseas and New Businesses
First written in FY2019. 1 of 3 entries say "Worsened", first in FY2025. Latest entry: FY2026.
and ST HD moved to the "Worse" side of this theme in 2025, 3 years after the typical company in this theme (2022).
The whole theme swung hardest in 2018: 3 of 6 companies on the "Worse" side.
5 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「With respect to goodwill, because the earnings initially anticipated in the business plan considered at the time of acquisition were no longer expected to be generated, the carrying amount of the relevant goodwill was reduced to its recoverable amount, and the decrease was recognized as an impairment loss and recorded as an extraordinary loss.」
The earnings initially projected for the investee were no longer expected to be generated, and an impairment loss on goodwill was actually recognized. The total impairment loss was ¥3,639 million. - FY2025WorsenedAnnual report
「To achieve long-term growth, the Group invests in external companies and acquires businesses to expand overseas, acquire new brands and customers, and obtain related technologies. It also makes capital and systems investments necessary for business growth, including digitalization and the enhancement of logistics functions. If the companies in which it invests or which it acquires fail to generate the expected earnings or synergies, or if the facilities or systems fail to perform as expected, recovering the investments may take longer than anticipated or may not be possible.」
The risk associated with monetizing overseas and new businesses has been expanded to include the risk that large investments, including M&A, digitalization, and logistics and systems investments, cannot be recovered or fail to generate synergies. - FY2019First statedAnnual report
「The Group has positioned overseas expansion and initiatives in new businesses as part of its strategy. However, because these businesses require a certain amount of time and funding before they generate stable earnings, there is a possibility that business expansion and business earnings may not materialize as initially projected.」
For overseas and new businesses, the Company describes as an independent risk the time and funding required to generate stable earnings, as well as the possibility of failing to achieve business earnings as initially projected.