Improving Earnings Power by Shifting the Product Mix

「Despite the positive effects of fixed-cost reductions and refining operations following the reorganization of downstream production, soaring benchmark metal prices and lower sales in the Chinese market resulted in a consolidated operating loss of ¥4,728 million, compared with a consolidated operating loss of ¥3,788 million in the previous consolidated fiscal year,」

「In terms of profit and loss, against downward pressures such as lower sales and soaring material prices, the results of reducing fixed costs and refining operations following the reorganization of downstream production brought the consolidated operating loss to ¥916 million, compared with a consolidated operating loss of ¥5,658 million in the same period of the previous year,」

「The next 3 years are positioned as a phase for achieving full-scale growth. During the 24 Medium-Term Management Plan, Sanken Core has identified profitability improvement as the issue to be addressed with the highest priority and intends to achieve it by continuing to increase the ratio of new-product sales, securing appropriate selling-price terms for existing products and pursuing thorough cost improvements.」

「To achieve a recovery at an early stage and full-scale profitability improvement from the fiscal year ending March 2026 onward, the company is working to increase the proportion of new products, secure appropriate selling-price terms for existing products and reduce costs.」

「The ratio of new-product sales, a KPI for achieving improved profitability at Sanken Core, the company's highest-priority issue, reached the target of 15% through a focus on research and development centered on the SPP concept and the launch of new products using production lines built to improve productivity through smart-factory initiatives.」

「The company worked to increase the new-product sales ratio by launching new power module products based on the SPP concept, the core of its growth strategy, while launching production lines incorporating new smart-factory technologies and improving profitability.」

「The company also accelerated development reform centered on the Monozukuri Development Center, which began operations in May, and focused on development activities aimed at increasing the proportion of new products at Sanken Core.」

「In the Power Systems business, sales of power products for communications base stations increased in preparation for the full-scale adoption of 5G standards, but sales of unit products for non-strategic markets continued to be withdrawn steadily. As a result, consolidated net sales decreased by ¥2,673 million, or 12.0%, from the previous consolidated fiscal year to ¥19,561 million. In terms of profit and loss, however, consolidated operating profit increased by ¥334 million, or 60.9%, to ¥882 million, driven by higher sales of power products for communications base stations.」

「The company also continued to address unprofitable products and work to improve productivity, including through the automation of production lines.」

「The company also continued to work to expand sales in these growth fields, launch new product production lines and improve productivity, while continuing to address unprofitable products.」

「However, in terms of profit and loss, structural reforms improved the product mix, resulting in consolidated operating profit of ¥549 million, an increase of ¥74 million, or 15.8%, from the previous consolidated fiscal year.」

「In the Power Systems business, consolidated net sales decreased by ¥2,948 million, or 13.2%, year on year to ¥19,430 million as the company proceeded with the withdrawal of unprofitable products for the AV and OA markets. In terms of profit and loss, the improvement in the product mix resulted in consolidated operating profit of ¥105 million, compared with a consolidated operating loss of ¥26 million in the same quarter of the previous year.」

「In the Power Systems business, sales of products for the communications market continued to recover, but the company was proceeding with the withdrawal of unprofitable products for the AV and OA markets. As a result, consolidated net sales in this business decreased by ¥1,244 million, or 8.7%, year on year to ¥13,049 million. On the other hand, in terms of profit and loss, the improvement in the sales product mix resulted in consolidated operating profit of ¥89 million, compared with a consolidated operating loss of ¥60 million in the same quarter of the previous year, bringing the business into the black.」

「In the Power Systems business, sales of products for the communications market continued to recover, but sales of unprofitable products for the AV and OA markets were curbed. As a result, consolidated net sales in this business decreased by ¥64 million, or 1.0%, year on year to ¥6,194 million. In terms of profit and loss, the improvement in the sales product mix resulted in a consolidated operating loss of ¥107 million, compared with an operating loss of ¥305 million in the same quarter of the previous year.」

「In particular, the company has sought to capture growth opportunities through new product launches, including the growing adoption of energy-efficient white goods overseas, the increasing use of electronic systems in the automotive market and advances in autonomous driving, while expanding sales. It has also implemented structural reforms, including the withdrawal from the PM business, which had been an ongoing management issue, the discontinuation of unprofitable products in the semiconductor device business and reductions in fixed costs at headquarters.」

「while implementing structural reforms, including the withdrawal from the PM business, a shift in the business structure of the semiconductor device business and a special early-retirement program」

「Against this backdrop, the Company has identified two basic policies for achieving growth, “Focus on growth markets” and “Strengthen the financial position,” and has worked to expand sales of new products in the priority strategic markets of eco-friendly and energy-saving products and green energy, while reducing fixed costs.」

「while working to improve profitability by shifting the product mix in line with market trends」

「while working to improve profitability by shifting the product mix」

「while working to improve profitability by shifting the product mix」