Profit pressure from changes in the product mix of core businesses
First written in FY2019-Q3. 2 of 3 entries say "Worsened", first in FY2019. Latest entry: FY2020.
Fukoku moved to the "Worse" side of this theme in 2019, 4 years before the typical company in this theme (2023).
The whole theme swung hardest in 2023: 5 of 10 companies on the "Worse" side.
5 other companies' latest entry also says "Worsened".
- FY2020WorsenedAnnual report
「As orders slow, the product mix shifts toward a lower proportion of relatively high-margin products, while the company struggles with rising material and labor cost ratios.」
The deterioration in the product mix caused by the lower proportion of high-margin products, together with rising material and labor cost ratios, is weighing on profits. - FY2019WorsenedAnnual report
「Although overall revenue increased, changes in the product mix led to a higher cost ratio. Combined with delays in structural reforms and rationalization at FUKOKU amid efforts to increase production, delays in transfers between sites, higher material and labor costs and other factors, this resulted in operating profit falling 29.7% year on year to ¥1,983 million.」
Changes in the product mix pressured profit through a higher cost ratio and emerged specifically as a factor behind the decline in operating profit. - FY2019-Q3First statedAnnual report
「In terms of profit and loss, a combination of factors, including market and currency market disruptions stemming from US-China trade friction, higher material and labor costs, changes in the product mix of major businesses, and delays in production transfers and rationalization, resulted in operating profit declining 13.1% year on year to ¥1.942 billion and ordinary profit declining 11.9% to ¥2.109 billion.」
The company has for the first time independently identified changes in the product mix of its core businesses as a factor behind declines in operating profit and ordinary profit.