Recovery Risk from Acquisitions, Business Alliances and Strategic Investments
First written in FY2021. 1 of 4 entries say "Restated". Latest entry: FY2026.
No.1 moved to the "Worse" side of this theme in 2026, 5 years after the typical company in this theme (2021).
The whole theme swung hardest in 2020: 28 of 84 companies on the "Worse" side.
10 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「To expand its business going forward, the Group may invest in systems, make business investments for the purpose of forming alliances, and conduct M&A transactions. However, system investments may experience substantial development delays or fail altogether because of inadequate requirements definition or insufficient communication with development vendors and user departments. In conducting M&A and other transactions, it may be difficult to accurately forecast the future business conditions of an investee. If the profitability of an investee subsequently deteriorates and its enterprise value is materially impaired or reduced, the Group’s business, operating results and financial position may be affected by impairment losses on goodwill recognized through M&A and other factors.」
Goodwill increased to ¥3,166.678 million through the acquisition of multiple subsidiaries, and the company continues to explicitly identify the risks of deteriorating profitability and impairment associated with M&A and system investments. - FY2025MitigatedAnnual report
「This committee continually reviews the business portfolio, determining which businesses should receive priority allocation of management resources and considering timely and appropriate measures to address deteriorating performance and capital efficiency.」
The company has newly described resource allocation by the Investment Committee, monitoring of performance and capital efficiency, and portfolio reviews in response to recovery risks associated with M&A and strategic investments. - FY2022RestatedAnnual report
「The Group thoroughly evaluates in advance the risks of recovering invested capital and the asset valuation associated with investment projects, verifies synergies for the Group as a whole, and works to maximize investment returns.」
The company has reiterated its response policy for M&A, business alliances and strategic investments, based on preliminary evaluations, asset valuations and synergy assessments. - FY2021First statedAnnual report
「To expand its business going forward, the Group may make capital expenditures, invest in systems, establish subsidiaries, develop joint ventures, make business investments for the purpose of forming alliances, and conduct M&A transactions. …If the performance of an investee deteriorates and the value of the net investment is materially impaired or reduced, the Group’s business, operating results and financial position may be affected by impairment losses on goodwill recognized through M&A and other factors.」
The company has, for the first time, systematically described its policies for conducting M&A, business alliances and strategic investments, as well as the risks of deteriorating investee performance, impairment of investments and goodwill impairment.