Improving the SG&A Ratio Through a Review of Indirect Departments and Business Integration
First written in FY2016. 3 of 22 entries say "Advanced", first in FY2017. Latest entry: FY2026.
The whole theme swung hardest in 2022: 1 of 11 companies on the "Worse" side.
0 other companies' latest entry also says "Other".
- FY2026Making improvements in corporate-function productivity an ongoing priorityAnnual report
「The continuing issues identified are advancing DX, improving productivity in corporate functions, and improving the ratio of policy-held shares to consolidated net assets.」
While pursuing greater efficiency through BPR and the use of digital technologies, the company explicitly identified improving productivity in corporate functions as a continuing issue for the next medium-term management plan. - FY2026-H1Operating profit flat despite higher SG&A expensesAnnual report
「Operating profit remained flat as higher gross profit offset the increase in general and administrative expenses resulting from M&A-related expenses and higher retirement benefit expenses associated with the amortization of actuarial differences, among other factors.」
Selling, general and administrative expenses increased to ¥69.854 billion from ¥66.939 billion in the same period of the previous year, but operating profit was ¥21.058 billion, representing a 0.0% year-on-year increase, due to higher gross profit. - FY2025Higher operating profit despite increased SG&A expensesAnnual report
「Operating profit increased as gross profit rose.」
Selling, general and administrative expenses increased from ¥134.1 billion in the previous fiscal year to ¥142.2 billion, while operating profit increased to ¥39 billion due to higher gross profit. Cost-efficiency measures coexisted with higher SG&A expenses. - FY2025-H1Higher SG&A expenses coexist with higher operating profitAnnual report
「Operating profit increased as gross profit rose.」
Selling, general and administrative expenses increased to ¥71.09 billion from ¥64.413 billion in the same period of the previous year, while operating profit increased due to higher gross profit. Against the theme of improving cost efficiency, higher SG&A expenses coexisted with higher operating profit. - FY2024-Q3Operating profit continues to decline due to higher selling, general and administrative expensesAnnual report
「Operating profit declined due to higher selling, general and administrative expenses, despite an increase in gross profit.」
Although gross profit increased, operating profit declined due to higher selling, general and administrative expenses. Against the theme of improving cost efficiency, higher SG&A expenses continue to be a factor behind lower profit. - FY2024-Q2Operating profit continues to decline due to higher selling, general and administrative expensesAnnual report
「Operating profit declined due to higher selling, general and administrative expenses, in addition to lower gross profit.」
Selling, general and administrative expenses for the six months ended the second quarter increased to ¥64.413 billion from ¥59.491 billion in the same period of the previous year, while operating profit fell 27.2% year on year. Although efficiency measures are progressing, higher SG&A expenses continue to reduce profit. - FY2024-Q1Operating profit continues to decline due to higher selling, general and administrative expensesAnnual report
「Operating profit declined due to higher selling, general and administrative expenses, in addition to lower gross profit.」
While measures to improve indirect costs and cost efficiency continued, higher selling, general and administrative expenses were cited as a factor behind the decline in operating profit. - FY2023Efficiency measures continue alongside higher SG&A expensesAnnual report
「To improve the productivity of core operations, we carried out business process reengineering (BPR) at Nagase Business Expert Co., Ltd., the shared services company, and continued to improve operating efficiency. We also pursued measures to improve productivity across the group, including expanding outsourced operations, mainly for domestic group companies.」
While BPR, the expansion of outsourced operations, and the use of BI tools and CRM continued, higher consolidated selling, general and administrative expenses reduced operating profit. - FY2023-Q3Lower profit due to higher selling, general and administrative expensesAnnual report
「Although the yen weakened during the nine months ended the third quarter, operating profit declined due to the lower gross profit margin and higher selling, general and administrative expenses, among other factors.」
Against the theme of improving indirect costs and cost efficiency, the decline in the gross profit margin and higher selling, general and administrative expenses were cited as factors behind the decline in operating profit. - FY2022AdvancedAnnual report
「At Nagase Business Expert Co., Ltd., the shared services company, we carried out business process reengineering (BPR) to improve operating efficiency. In addition, we promoted efficiency improvements in indirect operations and sales and marketing activities by using business intelligence (BI) tools, customer relationship management (CRM) and other tools.」
In addition to reviewing indirect functions, the company pursued greater efficiency in operations and sales activities through BPR, BI tools and CRM. - FY2021RaisedAnnual report
「We aim to improve the ratio of general and administrative expenses to consolidated gross profit by 5 percentage points.」
In place of the previous target of a 0.5% improvement in the consolidated SG&A ratio, a new quantitative target has been set to improve the ratio of general and administrative expenses, excluding R&D expenses and other items, to consolidated gross profit by 5 percentage points compared with the average of the past 5 years. - FY2021-Q3Higher DX expenses coexist with lower expenses due to activity restrictionsAnnual report
「Operating profit was ¥16.06 billion, up 6.7% year on year, as lower expenses resulting from activity restrictions in response to the COVID-19 pandemic and other factors outweighed higher expenses for promoting digital transformation (DX) and other costs related to sustainable growth」
While expenses for promoting DX and other initiatives continued to rise, lower expenses resulting from activity restrictions and other factors contributed to a 6.7% year-on-year increase in operating profit. Both increases and decreases in indirect costs and growth investment-related expenses were cited. - FY2021-Q2RestatedAnnual report
「Meanwhile, operating profit was ¥8.93 billion, down 15.9% year on year, despite a contribution from the Prinova Group, due to higher expenses for promoting digital transformation (DX) and other costs related to sustainable growth」
Higher expenses associated with investments in sustainable growth, including DX promotion, continued to be cited as a factor behind the decline in operating profit, outweighing Prinova’s contribution. - FY2021-Q1Operating profit declines due to higher DX expensesAnnual report
「Operating profit was ¥3.67 billion, down 30.1% year on year, despite a contribution from the Prinova Group, due to lower profit at existing companies and higher expenses for promoting digital transformation (DX), which is positioned as an investment in medium- to long-term growth, among other factors」
While efficiency measures progressed, higher expenses for promoting DX and other factors were cited as reasons for the 30.1% year-on-year decline in operating profit. - FY2020-Q3Operating profit continues to decline due to higher general and administrative expensesAnnual report
「Operating profit was ¥15.05 billion, down 28.1% year on year, due to lower revenue and the impact of higher general and administrative expenses, among other factors. Ordinary profit was ¥15.7 billion, down 29.3%, and profit attributable to owners of the parent was ¥12.04 billion, down 25.2%.」
Higher general and administrative expenses and other factors were cited as reasons for the 28.1% year-on-year decline in operating profit, indicating continued cost pressures following FY2020-Q1 and Q2. - FY2020-Q2Operating profit continues to decline due to higher general and administrative expensesAnnual report
「Operating profit was ¥10.62 billion, down 20.9% year on year, due to lower revenue and the impact of higher general and administrative expenses, among other factors. Ordinary profit was ¥10.58 billion, down 23.9%, and profit attributable to owners of the parent was ¥7.42 billion, down 28.1%.」
While measures to improve the efficiency of indirect functions continued, higher general and administrative expenses and other factors caused operating profit to decline 20.9% year on year in the six months ended the second quarter. - FY2020-Q1Lower Operating Profit Due to Higher General and Administrative ExpensesAnnual report
「Operating profit was ¥5.25 billion, down 24.2% year on year, due to lower revenue and the impact of higher general and administrative expenses, among other factors.」
While measures to improve the efficiency of indirect functions and costs continued, higher general and administrative expenses and other factors reduced operating profit in the first quarter under review. - FY2019Measures continue, but KPI improvements are delayedAnnual report
「Under “pursuing efficiency,” the pace of group-wide revenue growth has fallen below the assumptions made when the medium-term management plan was formulated, and improvement in the KPI “consolidated SG&A expenses as a percentage of revenue” is taking longer than expected. Meanwhile, the gross profit margin has improved as the profitability of the group’s manufacturing companies has improved, resulting in better cost efficiency relative to revenue.」
While measures such as reviewing indirect functions and using RPA continued, management recognizes that the improvement in the SG&A ratio is slower than assumed when the plan was formulated. - FY2019-Q1AdvancedAnnual report
「During the first quarter of the current consolidated fiscal year, ナガセ総合サービス株式会社, formerly a consolidated subsidiary, ceased to exist as a result of an absorption-type merger, with 長瀬ビジネスエキスパート株式会社, a consolidated subsidiary, as the surviving company (merger date: 1 April 2018), and was therefore excluded from the scope of consolidation.」
Nagase Business Expert Co., Ltd., the shared services center, was the surviving company in the absorption-type merger of Nagase General Services Co., Ltd. Organizational restructuring aimed at consolidating and standardizing operations is taking shape. - FY2018Implementation of efficiency measures and limited KPI contributionAnnual report
「During the current fiscal year, as part of the “Pursuit of Efficiency,” we reviewed the functions and organisation of indirect operations, launched 長瀬ビジネスエキスパート株式会社 as a shared services centre, and advanced the consolidation and standardisation of operations. We also introduced RPA (Robotic Process Automation) for some operations.」
Although the shared services centre was launched and operations were consolidated and standardised, the company stated that the KPI contribution to the consolidated SG&A ratio was not “particularly significant.” - FY2017AdvancedAnnual report
「As part of the “Pursuit of Efficiency” initiative, we established the “Indirect Functions Sophistication and Efficiency Project,” conducted an inventory of operations and reviewed functions, and integrated some indirect-function organisations. We established the Business Transformation Promotion Department as the project’s successor organisation and will continue to improve the efficiency of indirect functions.」
Progress was made through an inventory of indirect-function operations, function reviews, the integration of some organisations, and the establishment of the successor organisation, the Business Transformation Promotion Department. - FY2016First statedAnnual report
「We will review indirect functions across the group, redefine and redesign organisational sizes, and integrate companies and businesses where synergies are expected, aiming to improve the consolidated SG&A ratio by 0.5%.」
The target is to improve the SG&A ratio by 0.5% through reviewing organisational structures and indirect functions and integrating companies and businesses.