Deterioration in Profitability Due to Rising Fixed Labor Costs and Outsourcing Unit Prices
First written in FY2016. 5 of 9 entries say "Materialised", first in FY2022-Q3. Latest entry: FY2026.
Digital Information Technologies moved to the "Worse" side of this theme in 2022, 2 years before the typical company in this theme (2024).
0 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「Selling, general and administrative expenses for the consolidated fiscal year under review increased by ¥240.450 million, or 7.7%, to ¥3,372.247 million. This was mainly because, in addition to continued investment in personnel development, the Company made growth investments in promoting the use of generative AI, developing strategic products and expanding the headquarters floor, in line with its initial plan.」
Investments in personnel development, generative AI, strategic products and expansion of the headquarters increased selling, general and administrative expenses by ¥240.45 million, or 7.7%. - FY2025-H1MaterialisedAnnual report
「During the interim consolidated accounting period, costs increased substantially due to improvements in employee compensation, including an average 9% pay raise, amortization of goodwill related to M&A, and higher partner rates.」
Fixed and semi-fixed costs increased substantially as incurred due to an average 9% pay raise, amortization of goodwill related to M&A, and higher partner rates. - FY2024MaterialisedAnnual report
「Meanwhile, costs associated with improving employee compensation, including pay raises, and with expanding the business, including expansion costs at the Kanto, Kansai and Ehime offices, the cost of opening the Hakodate office, and fees related to 2 M&A transactions, increased by more than initially expected, leaving profit within the initial forecast.」
Higher costs for pay raises, office expansion, opening the Hakodate office and M&A were incurred and restrained profit growth. - FY2024-Q3MaterialisedAnnual report
「Costs associated with improving employee compensation, including pay raises, and with expanding the business, including expansion costs at the Kanto, Kansai and Ehime offices, the cost of opening the Hakodate office, and fees related to 2 M&A transactions, increased, leaving profit within the initial forecast.」
Costs for pay raises, office expansion, opening the Hakodate office and M&A increased, creating an actual cost burden that restrained profit growth. - FY2022-Q3MaterialisedAnnual report
「As described above, the business itself has continued to perform well, as in previous fiscal years. However, selling, general and administrative expenses increased by ¥164.501 million year on year, mainly because personnel and recruitment costs rose as the business expanded and the previous year included a refund of taxes and dues in the first quarter, resulting in a restrained rate of profit growth.」
States that selling, general and administrative expenses increased by ¥164.501 million due to higher personnel and recruitment costs accompanying business expansion, restraining profit growth. - FY2020RestatedAnnual report
「Most of the Group's cost of sales consists of personnel costs for engineers and outsourcing expenses. Personnel costs for Group employees are fixed costs. If the Group's order volume declines sharply and its utilization rate falls, personnel costs for engineers will not decrease accordingly, and the Group's profitability could deteriorate.」
Continues to disclose the profitability risk arising from fixed personnel costs, higher outsourcing rates and the difficulty of passing these costs on through sales prices. - FY2019RestatedAnnual report
「Most of the Group's cost of sales consists of personnel costs for engineers and outsourcing expenses. Personnel costs for Group employees are fixed costs. If the Group's order volume declines sharply and its utilization rate falls, personnel costs for engineers will not decrease accordingly, and the Group's profitability could deteriorate.」
Continues to disclose the profitability risk arising from fixed personnel costs, higher outsourcing rates and the difficulty of passing these costs on through sales prices. - FY2018RestatedAnnual report
「Most of the Group's cost of sales consists of personnel costs for engineers and outsourcing expenses. Personnel costs for Group employees are fixed costs. If the Group's order volume declines sharply and its utilization rate falls, personnel costs for engineers will not decrease accordingly, and the Group's profitability could deteriorate.」
Continues to disclose the profitability risk arising from fixed personnel costs and the difficulty of passing on higher outsourcing rates. - FY2016First statedAnnual report
「Personnel costs for Group employees are fixed costs. If the Group's order volume declines sharply and its utilization rate falls, personnel costs for engineers will not decrease accordingly, and the Group's profitability could deteriorate.」
Identifies the burden of fixed costs when order volume declines and the difficulty of passing on higher outsourcing rates as profitability risks.