Glory Results Impaired by Post COVID Supply and Cost Issues

Glory – the Japanese developer of cash handling, management and automation systems for the financial, retail, vending, transportation and gaming sectors – saw sales recover in 2022-23. But profits fell due to supply chain disruption caused by high material prices, the invasion of Ukraine and increased risk of an economic downturn from global monetary tightening. In Japan there were ongoing price increases, procurement difficulties for materials, rising consumer prices and depreciation of the yen.

The company posted net sales of JPN 255.85 billion, a 12.9% increase over the previous year. Operating income however, fell from JPN 10.2 billion to JPN 522 million, a 94.9 % decrease. Ordinary income fell for a second year running, from JPN 10.4 billion to a loss of JPN 2.7 billion and net income attributable to the owners of the parent company fell from a profit of JPN 6.4 billion to a loss of JPN 9.5 billion.

Performance by market

Glory operates in three domestic markets – financial, retail and transportation, and amusement - which together accounted for just over 41% of group sales. Overseas sales accounted for the other 59%.

In the Financial segment, sales increased by 0.5% to JPN 36.2 billion, albeit revenues from maintenance services fell due to the completion of modifications associated with the issue of the new 500 yen coin. Operating income fell by 96.7% to JPN 152 million, mainly due to the impact of high material prices.

Sales of coin and banknote recyclers, the main product in the Retail and Transportation segment, increased but were adversely affected by production delays caused by parts shortages. Sales from deposit machines for CIT companies, medical payment kiosks and from the new 500 yen coin modifications all decreased. The result, in conjunction with high material prices, was a 4.7% decline in overall sales to JPN 45.6 billion, leading to an operating loss of JPN 571 million.

Sales of the Amusement segment’s main products - card systems and new units for smart amusement machines increased by 24.8% to JPN 15.14 billion and an operating loss of JPN 366 million in 2021-22 was turned into an operating income of JPN 1.6 billion.

In the Overseas segment, sales increased by 22% to JPN 156 billion, but income fell by 90% to JPN 436 million, mainly due to global inflation, increased labour costs, high material prices and logistics costs. Sales for the Americas were JPN 69 billion, for Europe 70.7 billion and for Asia 15.8 billion.

Outlook

In FY 2023-2024 the company anticipates a recovery in production and parts procurement. Net sales are forecast to increase by 31% to JPN 335 billion, operating income to recover to JPN 35 billion, ordinary income to JPN 33 billion and net income attributable to owners to JPN 20 billion.

Part of this growth will be driven by the benefits of a spate of recent acquisitions and investments, mostly surrounding digital solutions and fintech, to support what the company terms Cash 4.0.

These include kiosk manufacturer Acrelec and retail cash recycling specialist Revolution Retail Systems, acquired in 2020 and 2021. They also include investments in the virtual ATM company Socash, in the banking hub technology provider OneBanx, and a partnership with the payments platform provider Paysafe following the acquisition of viafinech.

Further digitisation of the cash cycle will come from UBIQULAR™, its cloud-based software-as-a-service for retail and bank cash management which enables enhanced monitoring, optimisation, forecasting, analytics and automation of customers’ cash operations.