Passing higher component costs through to selling prices to secure appropriate profitability
First written in FY2022-Q2. 3 of 7 entries say "Worsened", first in FY2023. Latest entry: FY2025.
Japan Display moved to the "Worse" side of this theme in 2023.
The whole theme swung hardest in 2023: 2 of 10 companies on the "Worse" side.
0 other companies' latest entry also says "Worsened".
- FY2025WorsenedAnnual report
「The decline in profit accompanying lower revenue was almost offset by the effects of the fixed-cost reductions and product portfolio improvements described above. However, due to a higher fixed-cost ratio associated with the smaller scale of revenue and increases in materials and processing costs, operating loss was ¥37,068 million, compared with a loss of ¥34,145 million in the previous fiscal year, and losses continued.」
Although the company pursued fixed-cost reductions and portfolio improvements, it was unable to absorb higher material and processing costs and the increase in the fixed-cost ratio, and the effects of passing on costs through prices and securing appropriate profitability were not fully realized. - FY2024WorsenedAnnual report
「We will consider strategies to address persistently high energy, materials and processing costs and will continue working to reflect these cost increases in selling prices to the greatest extent possible.」
The company indicated a policy of continuing to pass through higher prices, but delays in price pass-through became a factor behind the operating loss for the fiscal year, indicating that cost increases had not been sufficiently absorbed. - FY2023WorsenedAnnual report
「Due to delays in passing on higher material, energy and transportation costs」
Although the company continued its policy of passing on higher prices, the transfer of higher costs to customers was delayed during the current fiscal year, leading to a wider loss. - FY2023-Q2RestatedAnnual report
「Although the Group pursued cost reductions and benefited from the weaker yen, it was unable to offset higher materials, energy and transportation costs. EBITDA was negative ¥7,485 million and the operating loss was ¥11,779 million, both worse year on year.」
The company continued to reduce costs and pass on higher prices in response to increases in materials, energy and transportation costs, but was unable to fully offset the cost increases, and no new profit-related achievement milestones were presented. - FY2023-Q1RestatedAnnual report
「In terms of profit, the Company continued to pursue expense reductions and price pass-through and also benefited from the weaker yen. However, it could not fully offset the decline in sales and higher material, energy and transportation costs. EBITDA was negative ¥4,711 million and operating profit was negative ¥6,872 million, both worse than in the same period of the previous year.」
Although cost reductions and price pass-throughs continued, they were insufficient to offset lower sales and soaring materials, energy, and transportation costs, resulting in year-on-year deterioration in EBITDA and operating results. The continuation of price pass-through measures was confirmed, but no new achievement milestone was disclosed. - FY2022AdvancedAnnual report
「In response to soaring materials and energy costs, among other factors, we worked to fulfill our supply obligations to customers to the fullest extent while also passing higher costs through to selling prices.」
The annual results stated that the company had actually proceeded with passing on higher materials and energy costs through prices. - FY2022-Q2First statedAnnual report
「To address tight supply and demand for materials, we worked to secure materials through measures including long-term contracts with major semiconductor suppliers and to maintain appropriate profitability by passing higher material costs through to selling prices, thereby minimizing the impact.」
In response to higher material prices, the Company first explicitly identified as an independent initiative its policy of securing appropriate profitability by passing these increases through to selling prices.