Supply Shortages and Excess Inventory Due to Short Product Life Cycles
First written in FY2016. 8 of 16 entries say "Worsened", first in FY2022-Q3. Latest entry: FY2026.
Sega Sammy Holdings moved to the "Worse" side of this theme in 2021, 1 year before the typical company in this theme (2022).
The whole theme swung hardest in 2022: 14 of 40 companies on the "Worse" side.
12 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「The Company recorded a loss before income taxes and other adjustments of ¥3,783 million, while inventories and trade receivables increased by ¥18,312 million and ¥11,672 million, respectively. In addition, it recorded impairment losses of ¥54,627 million and depreciation of ¥16,171 million, among other items,」
Inventories increased by ¥18,312 million, and inventory valuation losses also increased from ¥7,303 million in the previous fiscal year to ¥8,403 million. Inventory and funding pressures, as well as valuation risk, continue. - FY2026-H1WorsenedAnnual report
「The Company recorded interim profit before income taxes and other adjustments of ¥6,449 million and depreciation of ¥7,113 million, while inventories increased by ¥25,450 million and it paid ¥4,795 million in corporate taxes and other taxes. As a result, cash flows from operating activities for the current interim consolidated accounting period amounted to an outflow of ¥11,859 million, compared with income of ¥10,770 million in the same period of the previous year.」
Inventories increased by ¥25,450 million, and cash flows from operating activities swung from income in the same period of the previous year to an outflow of ¥11,859 million. Inventory and funding requirements increased. - FY2025Inventory increase alongside a reduction in valuation lossesAnnual report
「The Company paid ¥19,153 million in corporate taxes and other taxes, while inventories increased by ¥12,793 million. In addition, it recorded profit before income taxes and other adjustments of ¥54,803 million and depreciation of ¥13,046 million, and received a refund of ¥16,180 million in corporate taxes and other taxes. As a result, cash flows from operating activities for the current consolidated fiscal year amounted to income of ¥20,856 million.」
Inventories increased by ¥12,793 million, while operating cash flow decreased from ¥66,862 million in the previous fiscal year to ¥20,856 million. Inventory valuation losses also decreased from the previous fiscal year. - FY2025-H1WorsenedAnnual report
「The Company paid ¥11,602 million in corporate taxes and other taxes, while inventories increased by ¥10,417 million. In addition, it recorded interim profit before income taxes and other adjustments of ¥35,313 million and received a refund of ¥13,924 million in corporate taxes and other taxes. As a result, cash flows from operating activities for the current interim consolidated accounting period amounted to income of ¥10,770 million, compared with income of ¥27,809 million in the same period of the previous year.」
Inventories increased by ¥10,417 million during the interim period, while operating cash flow decreased from ¥27,809 million in the same period of the previous year to ¥10,770 million. The impact of inventory and funding requirements is quantified. - FY2024WorsenedAnnual report
「The ending inventory balance is stated after write-downs due to lower profitability, and the following inventory valuation loss is included in cost of sales.」
Inventory valuation losses increased from ¥9,871 million in the previous fiscal year to ¥19,697 million, indicating a further deterioration in inventory profitability. - FY2024-Q1Increase in InventoriesAnnual report
「Current assets decreased by ¥9,091 million from the end of the previous consolidated fiscal year. This was mainly due to decreases in trade receivables and cash and deposits, despite an increase in inventories.」
Inventories increased in the current quarter, indicating a new development in the inventory-related theme associated with short product life cycles. - FY2023MaterialisedAnnual report
「The ending inventory balance is stated after write-downs due to lower profitability, and the following inventory valuation loss is included in cost of sales.」
Inventory valuation losses increased from ¥6,636 million in the previous fiscal year to ¥9,871 million, indicating that the decline in inventory profitability continues to materialize. - FY2023-Q3WorsenedAnnual report
「The prize category has remained strong and is driving the overall amusement equipment market, but the effects of supply chain disruptions and soaring raw material costs resulting from the weaker yen have recently become apparent.」
In addition to the existing supply chain disruptions and soaring raw material costs, the weaker yen is explicitly identified as a factor behind higher raw material costs, making the supply and cost risks more concrete. - FY2023-Q2Pressure on operating cash flow from higher inventoriesAnnual report
「Although profit before income taxes of ¥12,019 million and depreciation and amortization of ¥5,565 million were recorded, cash flow from operating activities for the six-month period ended the second quarter of the current fiscal year was an outflow of ¥6,455 million, compared with an inflow of ¥3,226 million in the same period of the previous year, mainly due to a ¥22,458 million increase in inventories.」
Inventories increased by ¥22,458 million, and cash flow from operating activities turned from an inflow in the same period of the previous year into an outflow of ¥6,455 million. The figures indicate the inventory and funding burden associated with short product life cycles. - FY2023-Q1WorsenedAnnual report
「The effects of supply chain disruptions and soaring raw material costs have recently become apparent.」
In addition to the existing semiconductor shortage and logistics disruptions, the effects of supply chain disruptions and soaring raw material costs have become apparent, indicating that component supply and cost risks continue. - FY2022WorsenedAnnual report
「Meanwhile, concerns have arisen over higher raw material prices due to the global semiconductor shortage, logistics disruptions and soaring crude oil prices.」
In addition to the existing component procurement risk, logistics disruptions and higher crude oil prices have led to higher raw material prices, broadening the supply and cost risk factors. - FY2022-Q3WorsenedAnnual report
「Meanwhile, the global semiconductor shortage and logistics disruptions have made the component supply system unstable, and continued monitoring is required.」
In addition to the semiconductor shortage that had already become apparent, logistics disruptions are identified as another factor undermining component supply, broadening the scope of supply risk. - FY2022-Q2MaterialisedAnnual report
「Meanwhile, the global semiconductor shortage has made the supply system unstable, and the risk of procuring components has become apparent.」
The company explicitly states that the global semiconductor shortage has made the risk of procuring components for gaming machines apparent. - FY2021MaterialisedAnnual report
「The following are the write-downs of the carrying amount due to reduced profitability of inventories held for ordinary sales purposes: Cost of sales ¥10,622 million.」
The decline in inventory profitability due to weaker sales prospects and other factors materialized as a ¥10,622 million write-down of carrying amounts. - FY2018RestatedAnnual report
「Although measures have been taken to standardize components, shorten component procurement lead times and strengthen inventory management, it may not be possible to procure sufficient raw materials to produce large volumes of initial orders.」
The company continues to address the risks of component shortages and excess inventory associated with short product life cycles. - FY2016First statedAnnual report
「Although measures have been taken to standardize components, shorten component procurement lead times and strengthen inventory management, it may not be possible to procure sufficient raw materials to produce large volumes of initial orders.」
The company discloses inventory risks arising from concentrated initial orders for gaming machines, insufficient component procurement, excess components and seasonal sales campaigns.