| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3599.5B | ¥3598.1B | +0.0% |
| Operating Income / Operating Profit | ¥101.3B | ¥85.4B | +18.6% |
| Equity-method Investment Income (Loss) | ¥-0.2B | ¥0.2B | -188.0% |
| Ordinary Income | ¥89.3B | ¥71.3B | +25.2% |
| Net Income / Net Profit | ¥58.1B | ¥59.3B | -2.0% |
| ROE | 4.2% | 4.5% | - |
For the fiscal year ended March 2026, Revenue was ¥3599.5B (YoY +¥1.4B +0.0%), Operating Income was ¥101.3B (YoY +¥15.9B +18.6%), Ordinary Income was ¥89.3B (YoY +¥18.0B +25.2%), and Net Income was ¥58.1B (YoY -¥1.2B -2.0%). While Revenue was flat, gross margin improved to 10.4% (prior year 9.7%) up +0.7pt, and SG&A ratio only slightly increased to 7.6% (prior year 7.3%), resulting in Operating Margin improving to 2.8% (prior year 2.4%) up +0.4pt. At the ordinary income level, a reduction in interest expense (¥11.5B, prior year ¥16.9B) contributed to wider profit growth. Conversely, Net Income declined due to a reduction in extraordinary gains (¥27.6B, prior year ¥61.6B), leaving Net Margin unchanged at 1.6% (prior year 1.6%). By segment, the Devices Business posted lower Revenue but higher profit (Revenue -1.9%, Profit +27.9%), and the Solutions Business achieved higher Revenue and profit (Revenue +5.0%, Profit +19.9%), improving profitability in both segments. Regionally, the Japan share rose to 55.1% (prior year 50.2%) while China declined to 24.5% (prior year 31.0%), reflecting a reallocation of demand composition.
【Revenue】Revenue was ¥3599.5B (YoY +0.0%), essentially flat. By segment, Devices Business was ¥2546.8B (-1.9%) and Solutions Business was ¥1052.7B (+5.0%). Revenue mix was Devices 70.8%, Solutions 29.2%, with a slight increase in Solutions share. By region, Japan was ¥1982.6B (+9.7%) with double-digit growth, China was ¥880.4B (-21.2%) with a significant decline, and Asia was ¥608.7B (+5.8%) and remained solid. Expansion in Japan and contraction in China reorganized the regional portfolio, with currency effects and demand shifts driving the change in revenue composition.
【Profitability】Cost of Sales was ¥3223.5B (YoY -0.4%), declining, expanding Gross Profit to ¥376.0B (+7.6%). Gross Margin improved to 10.4% from 9.7% (+0.7pt), aided by improved product mix and an increase in high-margin projects. SG&A was ¥274.7B (+4.1%), growing faster than Revenue, but the expansion in gross profit absorbed this, raising Operating Income to ¥101.3B (+18.6%). Operating Margin improved to 2.8% (prior year 2.4%) up +0.4pt. Non-operating items comprised interest income ¥3.9B and interest expense ¥11.5B (prior year ¥16.9B); the decline in interest expense supported growth in Ordinary Income, which rose to ¥89.3B (+25.2%). Extraordinary items included Extraordinary Gains of ¥27.6B (including ¥23.6B gain on sale of investment securities) versus ¥61.6B in the prior year, a reduction of ¥34.0B YoY. Profit before tax was ¥112.5B (-13.8%); after deducting Income Taxes and Deferred Taxes of ¥38.1B (effective tax rate 33.9%), Net Income was ¥58.1B (-2.0%), resulting in a profile of Revenue stable, Operating and Ordinary Income up, but Net Income down.
The Devices Business reported Revenue of ¥2546.8B (YoY -1.9%), Operating Income ¥57.3B (+27.9%), with a margin of 2.3% (prior year 1.7%). Despite lower Revenue, margin improved by +0.6pt, driven by a shift to higher-margin products and cost efficiency. The Solutions Business posted Revenue of ¥1052.7B (+5.0%), Operating Income ¥43.7B (+19.9%), with a margin of 4.1% (prior year 3.6%), driven by expanding demand for IT products and solutions and higher project unit prices. Both businesses achieved operating profit growth, and the high margin of Solutions (4.1%) pushed up the company average. Sum of segment profits was ¥101.0B, nearly matching consolidated Operating Income of ¥101.3B after corporate adjustments.
【Profitability】Operating Margin was 2.8% (prior year 2.4%) up +0.4pt. Gross Margin improved to 10.4% (prior year 9.7%) up +0.7pt; SG&A ratio remained subdued at 7.6% (prior year 7.3%). ROE was 4.2% (prior year 4.5%) slightly down. Net Margin was 1.6% (prior year 1.6%) unchanged, but Pretax Margin declined to 3.1% (prior year 3.6%) due to reduced extraordinary gains. 【Cash Quality】Operating Cash Flow (OCF) was -¥14.9B (prior year ¥131.8B), a large deterioration. OCF/Net Income was -0.26x, driven primarily by Accounts Receivable increase -¥133.3B and Inventory increase -¥23.7B causing working capital outflow. Accounts Payable increase +¥19.4B partially offset this, but the pre-working-capital OCF subtotal was only ¥24.7B, and tax payments -¥36.5B further pushed OCF negative. Free Cash Flow was ¥23.0B (OCF -¥14.9B + Investing CF ¥37.9B) and positive, but largely due to one-off investment securities sale receipts of ¥54.8B. Capital expenditures were restrained at -¥5.0B, and intangible asset additions -¥7.9B; no large M&A was observed. 【Investment Efficiency】Total Asset Turnover was 1.44x (annualized), roughly flat YoY. Accounts Receivable Days were 112 days, Inventory Days 63 days, and CCC (Cash Conversion Cycle) extended to about 120 days. 【Financial Soundness】Equity Ratio was 54.6% (prior year 57.0%) slightly down but at a healthy level. Current Ratio was 207.2% and Quick Ratio 153.4%, indicating solid liquidity. Interest-bearing debt consisted of Short-term Borrowings ¥226.3B and Long-term Borrowings ¥25.0B, giving a Debt/Equity of 0.83x and Debt/EBITDA of 2.14x, within investment-grade ranges. Interest Coverage was 10.2x (OCF subtotal ¥24.7B ÷ interest expense ¥11.5B annualized), indicating sufficient interest-paying capacity.
OCF was -¥14.9B (prior year ¥131.8B), a marked deterioration. The OCF subtotal (before working capital changes) was ¥24.7B, with Depreciation & Amortization ¥16.3B and Goodwill Amortization ¥3.9B, indicating maintained cash generation capacity before working capital. However, Accounts Receivable increase -¥133.3B and Inventories increase -¥23.7B caused working capital outflow of -¥157.0B; Accounts Payable increase +¥19.4B partially offset but net outflow was large. Tax payments -¥36.5B also contributed to negative OCF. Investing CF was an inflow of ¥37.9B, mainly from one-off investment securities sale proceeds ¥54.8B. CapEx was restrained at -¥5.0B and intangible asset purchases -¥7.9B; no large-scale M&A. Financing CF was an inflow of ¥16.1B, reflecting net decrease in short-term borrowings -¥92.9B, net long-term borrowings +¥48.0B, and dividend payments -¥55.9B. Free Cash Flow was ¥23.0B positive, but absent the one-off sale proceeds the FCF would be negative; sustainable cash generation depends on OCF recovery. Cash and Deposits rose to ¥359.7B (prior year ¥300.4B) up ¥59.3B, preserving liquidity.
Of Ordinary Income ¥89.3B, the composition is Operating Income ¥101.3B plus Non-operating items -¥12.0B, where Non-operating Income was ¥8.0B (including Dividend Income ¥1.5B) and Non-operating Expense was ¥20.0B (including Interest Expense ¥11.5B and Foreign Exchange Losses ¥4.0B). Non-operating income was minor at 0.2% of Revenue, so most of Ordinary Income was generated from operating activities. Extraordinary items comprised Extraordinary Gains ¥27.6B (primarily gain on sale of investment securities ¥23.6B) and Extraordinary Losses ¥4.4B, netting to a ¥23.2B uplift. Extraordinary Gains declined ¥34.0B from ¥61.6B a year earlier, reducing reliance on one-off gains. Of Profit Before Tax ¥112.5B, one-off items (net extraordinary items) accounted for 20.6%. The reduction from Ordinary Income to Net Income was due to Income Taxes of ¥38.1B (effective tax rate 33.9%) and other comprehensive income adjustments; Total Comprehensive Income was ¥109.7B, substantially above Net Income ¥58.1B, primarily due to Foreign Currency Translation Adjustments ¥40.9B. On an accrual basis, OCF/Net Income at -0.26x is low, indicating issues in cash realization of earnings. Increases in Receivables and Inventory have delayed cash collection relative to profit recognition; improving working capital efficiency is key to raising quality of earnings.
Dividends were Interim ¥70 and Year-end forecast ¥70, totaling ¥140 annually. Payout Ratio was 59.7% (against EPS ¥185.59), maintaining the prior-year level. Total dividend payout was ¥56.1B (based on outstanding shares 54.0M - treasury shares 13.90M = 40.10M shares), equivalent to 75.4% of Net Income ¥74.4B. No share buybacks were conducted (CF impact -¥0.0B); shareholder returns consisted solely of dividends. The ratio of Dividend Payments ¥56.1B to Free Cash Flow ¥23.0B was 2.44x, indicating dividends are not covered by FCF. Cash and deposits ¥359.7B correspond to approximately 6.4 years of dividend payments, so short-term dividend continuity is not an issue, but sustainable dividends depend on OCF recovery and working capital efficiency improvements.
Working Capital Outflow Risk: Accounts Receivable Days at 112 days and Inventory Days at 63 days show elongation trends and are the main driver of OCF -¥14.9B. Accounts Receivable are ¥1104.1B (44.0% of total assets) and Inventory ¥557.7B (22.2% of total assets), representing high asset concentration; collection delays or inventory impairments would pressure cash and earnings. Regionally, concentration of receivables and inventory stagnation in China remain risks; strengthening receivables management and shortening CCC are urgent priorities.
Short-term Funding Concentration Risk: Short-term Borrowings ¥226.3B, CP ¥199.8B, and Long-term Borrowings maturing within one year ¥12.0B mean 90.1% of interest-bearing debt is current. If short-term funding markets tighten or credit conditions worsen, refinancing costs could rise. Interest Coverage of 10.2x is currently acceptable, but continued negative OCF would reduce short-term funding capacity. Cash/Short-term Debt ratio is 1.59x (¥359.7B ÷ ¥226.3B), providing some buffer, but correcting short-term funding dependence is difficult without working capital improvement.
Dependence on Extraordinary Gains and Earnings Volatility: Extraordinary Gains this period were ¥27.6B (gain on sale of investment securities ¥23.6B), representing 24.5% of Pretax Profit; dependence on one-off gains is still material. Extraordinary Gains decreased ¥34.0B from prior year ¥61.6B, and with investment securities balance reduced to ¥38.7B (prior year ¥79.9B), scope for further sales is limited. Stabilizing Net Income will require growth in Ordinary Income; reliance on one-off gains is no longer a viable path.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.8% | 3.4% (1.4%–5.0%) | -0.5pt |
| Net Margin | 1.6% | 2.3% (1.0%–4.6%) | -0.7pt |
Operating Margin is 0.5pt below the industry median of 3.4%, and Net Margin is 0.7pt below the median of 2.3%. Within the trading company sector, profitability is below median, indicating room for further improvement in gross margin and cost efficiency.
※ Source: Company compilation
Divergence between Operating Income growth and negative OCF: Operating Income increased +18.6% and performed well, but OCF turned negative to -¥14.9B. Working capital outflows — Accounts Receivable +¥133.3B and Inventory +¥23.7B — are the main causes, showing a challenge in converting profits to cash. CCC is about 120 days and lengthening; accelerating receivables collection and improving inventory turns are top priorities for the next fiscal year. Sustained cash generation and dividend continuity depend on OCF recovery through working capital efficiency.
Decline in one-off gains and shift in earnings structure: Extraordinary Gains fell to ¥27.6B (prior year ¥61.6B) down ¥34.0B, reducing dependence on gains from sale of investment securities. With investment securities balance compressed to ¥38.7B (prior year ¥79.9B), future sale potential is limited. Net Income growth must rely on Operating and Ordinary Income expansion; sustainable improvement of core profitability is key. The +0.7pt improvement in Gross Margin is positive, but the company remains below industry median, so continued product mix improvement and higher value-add are necessary for margin expansion.
Regional portfolio rebalancing and short-term funding structure: Japan revenue share rose to 55.1% (prior year 50.2%) and China declined to 24.5% (prior year 31.0%), reshaping regional composition. This reduces geopolitical risk and stabilizes currency impact, but risks in receivables collection and inventory processing in China remain. Short-term Borrowings and CP account for 90.1% of interest-bearing debt, posing refinancing risk, though Cash/Short-term Debt ratio 1.59x provides a buffer. Deleveraging trend (Debt/Equity 0.83x) is positive, and normalization of OCF should enhance funding stability.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.