Performance trends for NSW <9739>.

2024 FY Performance Overview Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024. Changes in the ratio of revenues - while the revenue composition ratio increased by 0.8 points from the previous year, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main factors affecting selling, general and administrative expenses were a drop of 600 million yen in energy costs due to subsidies from rising electricity rates and an increase of 1 billion yen in labor costs due to increases in treatment and education expenses for employees. Depreciation expenses also rose by just under 600 million yen due to increased costs of construction materials and opening new stores. The EBITDA (earnings before interest, taxes, depreciation, and amortization) margin rose 0.1 points from the previous year. Lastly, the reason for the increase in the net income of the parent company's shareholders attributable to the current period was due to the elimination of the 500 million yen for executive retirement bonuses paid in the previous period, the reduction of impairment losses by 455 million yen, and the realization of gains on investment securities of 127 million yen in FY3/2024.

In the March 2024 period, the Japanese economy showed a moderate recovery trend against the backdrop of improvements in personal income and employment environment, as well as stable corporate earnings. In addition, there were concerns that the economy would be pushed down due to various factors, such as the historical depreciation of the yen caused by continued global financial tightening, the stagnation of the Chinese economy, the opaque situation in the Ukraine and Middle East regions, the slump in consumer sentiments due to rising prices, the impact of financial policies such as the abolition of negative interest rates, and more. In the information services industry, investments in AI and digital-related technologies to enhance business process efficiency, labor-saving, competitiveness, and next-generation business creation, which are keywords for robots and automation, have been going strong. Under these circumstances, the company group has been eagerly working on the second year of its mid-term management plan. As a result, the consolidated results for the March 2024 period were sales of 50,299 million yen (an increase of 8.9% over the previous year), operating profit of 5,862 million yen (an increase of 8.8% over the previous year), ordinary profit of 5,940 million yen (an increase of 9.2% over the previous year), and net income attributable to parent company shareholders of 4,287 million yen (an increase of 4.8% over the previous year). This was a great financial result, achieving the sales target of 50,000 million yen, which is important for the company as a benchmark for large companies, and was the 12th consecutive year of increased revenue and profit, breaking its record for highest performance. Furthermore, sales were 3.7% higher than initial plans, operating profit was 4.7% higher, ordinary profit was 5.1% higher, and net income attributable to parent company shareholders was 8.5% higher. Although there were some unprofitable cases, the operating margin was 11.7% (no change from the previous year). However, in actual performance basis after adjusting for one-time bonuses paid to employees for achieving sales targets, the operating margin was 12.1% (an increase of 0.4 points). In addition, the reason why net income attributable to parent company shareholders had a high growth rate compared to initial plans was due to the recording of gains on sale of land and securities as special profits. The order backlog, which will lead to future sales growth, supported by stable demand across the overall IT industry, was robust at 50,784 million yen (an increase of 4.1%).It can be said that the company group continues to maintain stable growth, despite having a wide range of trading partners and changes in the business environment.

Please use your Futubull account to access the feature.

(Written by FISCO guest analyst Nozomi Kokushige).