| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥1380.5B | ¥1032.6B | +33.7% |
| Operating Income | ¥75.3B | ¥55.0B | +36.9% |
| Ordinary Income | ¥75.0B | ¥69.2B | +8.5% |
| Net Income | ¥9.4B | ¥34.8B | -73.1% |
| ROE | 0.9% | 4.4% | - |
For the fiscal year ended March 2026, Revenue was ¥1,380.5B (YoY +¥347.9B +33.7%), Operating Income was ¥75.3B (YoY +¥20.3B +36.9%), Ordinary Income was ¥75.0B (YoY +¥5.8B +8.5%), and Net Income attributable to owners of the parent was ¥246.5B (YoY +¥241.1B +4.5x), representing revenue growth and substantial profit expansion. Revenue growth was driven by a large overseas M&A (step acquisition) contributing to +33.7% high growth. Operating Income increased +36.9% due to margin improvement from price revisions (Gross Margin: prior year 27.2% → this period 28.8%) and scale effects. Ordinary Income saw limited upside as non-operating items deteriorated somewhat. Net Income surged 4.5x due to recognition of special gains totaling ¥211.97B, including a negative goodwill gain of ¥205.98B from the step acquisition, but this is a one-off. For FY2027 ending March 2027, management forecasts Revenue ¥1,430B (+3.6%), Operating Income ¥83B (+10.3%), and Net Income ¥43B, reflecting exclusion of the special gains and a normalization that emphasizes operating profitability.
[Revenue] Revenue of ¥1,380.5B (+33.7%) was primarily driven by a large overseas M&A (consolidation via step acquisition). By segment, Overseas revenue expanded sharply to ¥511.89B (+170.6%), approximately 2.7x the prior year, leading company-wide growth. Domestic Rice Snacks revenue was ¥723.38B (+3.7%), remaining solid with contributions from price revisions and mix improvements. Food business revenue was ¥88.56B (-3.1%), slightly down; Other was ¥132.16B (+3.7%). Revenue composition: Domestic Rice Snacks 52.4%, Overseas 37.1%, Food 6.4%, Other 9.6%, with the overseas ratio rising sharply from 16.7% in the prior year. Gross Margin improved to 28.8% (prior year 27.2%), +1.6pt, supported by price pass-through and stabilization of raw material and packaging costs.
[Profitability] Operating Income was ¥75.3B (+36.9%), with an Operating Margin of 5.5% (prior year 5.3%), a slight improvement. Selling, General & Administrative Expenses (SG&A) were ¥322.4B (+42.9%), outpacing revenue growth (+33.7%), raising the SG&A ratio to 23.4% (prior year 21.9%), +1.5pt. Major drivers included salaries and allowances ¥77.7B, goodwill amortization ¥9.0B, and R&D expenses ¥15.6B; overseas integration costs, logistics burden, and higher promotional expenses diluted operating leverage. Ordinary Income of ¥75.0B (+8.5%) saw a compressed increase due to worsening non-operating items (increase in interest expense by ¥3.9B, foreign exchange losses ¥1.8B, etc.). Special gains totaled ¥211.97B (step acquisition gain ¥205.98B, gain on sale of subsidiary shares ¥5.35B, etc.), and special losses were ¥14.98B (impairment losses ¥10.11B, etc.), resulting in Profit Before Tax of ¥272.0B (+347.4%). Income taxes of ¥21.7B (effective tax rate 8.0%, reflecting recognition of deferred tax assets and temporary tax effects on special gains) were deducted, yielding Net Income of ¥246.5B. Net Income attributable to owners of the parent was ¥246.5B (+354.9%), reflecting revenue growth and large profit expansion.
Domestic Rice Snacks posted Operating Income of ¥51.39B (+15.7%), a margin of 7.1%, accounting for 68% of company Operating Income — the core business. Margin remained solid due to price pass-through and mix improvements. Overseas reported Operating Income of ¥17.92B (from ¥1.35B prior year, +12.3x) but at a low margin of 3.5%; initial integration costs and logistics burdens weighed on profitability, and while scale expanded, margin improvement remains incomplete. Food reported Operating Income of ¥4.51B (-31.0%) with a margin of 5.1%, impacted by revenue decline and margin deterioration. Other reported Operating Income of ¥0.95B (-61.8%) with margin 0.7%, as transport and related profitability declined. Segment margin dispersion ranks Domestic Rice Snacks > Food > Overseas > Other; improving Overseas profitability is key to raising company-wide margins.
[Profitability] Operating Margin 5.5% (prior 5.3%) is a slight improvement. Net Margin 17.9% rose sharply due to one-off step acquisition gains; the operating-stage profitability of 5.5% is the underlying capability. ROE 23.1% is temporarily elevated due to special gains. Gross Margin 28.8% improved +1.6pt due to pricing actions and raw material stabilization. SG&A ratio 23.4% rose +1.5pt due to overseas integration costs, offsetting operating leverage. Goodwill amortization of ¥9.0B represents 5.3% of EBITDA (Operating Income ¥75.3B + Depreciation & Amortization ¥95.6B = ¥170.9B), exerting a J-GAAP-specific net income compression effect.
[Cash Quality] Operating Cash Flow (OCF) was ¥119.0B versus Net Income ¥246.5B, yielding OCF/NI = 0.48x, a low level. Working capital deterioration (Inventories +¥10.9B, Accounts Receivable +¥4.0B, Accounts Payable -¥15.3B) and non-cash special gains weakened cash conversion. Accrual ratio 6.8% is within acceptable range, but short-term cash generation stability is limited.
[Investment Efficiency] Total Asset Turnover 0.73x (prior 0.83x) declined due to asset expansion ahead of revenue from the large M&A. ROA 4.8% fell from 5.7%, reflecting asset growth and one-off effects.
[Financial Soundness] Equity Ratio 56.6% (prior 63.7%), Current Ratio 198.1%, Quick Ratio 179.4% — basic solvency remains intact. Debt/Equity 30.7%, Interest-bearing Debt (Short-term borrowings ¥91.3B + Long-term borrowings ¥380.96B = ¥472.26B) to EBITDA ratio 2.76x, near the upper end of investment-grade range. EBITDA Interest Coverage 44.1x indicates ample interest-paying capacity.
Operating Cash Flow ¥119.0B (YoY +26.0%) derived from subtotal ¥138.9B, adjusted for working capital movements (Inventories -¥10.9B, Accounts Receivable -¥4.0B, Accounts Payable -¥15.3B, net effect roughly -¥19.8B) and corporate tax payments -¥19.1B. OCF/NI = 0.48x is low versus Net Income ¥246.5B, driven by non-cash special gains and working capital deterioration. Investing Cash Flow was -¥260.2B, composed of acquisition of subsidiary shares -¥196.6B, capital expenditure -¥74.7B, subsidy receipts ¥0.6B, etc. Free Cash Flow was -¥141.3B, negative due to the overseas M&A. Financing Cash Flow was ¥235.1B, reflecting long-term borrowings ¥280B, net short-term borrowings -¥0.9B, long-term repayments -¥25.2B, and dividends paid -¥12.0B, resulting in net inflow. Cash increased from ¥81.2B at the beginning of the period to ¥186.0B at period end, +¥104.8B, with cash and deposits at period end ¥206.1B, strengthening liquidity. Although OCF rose from ¥94.4B prior year, there is significant room to improve working capital efficiency. Next fiscal year, with special gains falling away, the gap between profit and cash is expected to narrow, but tightening inventory and collection terms remains a challenge.
Recurring earnings comprise Operating Income ¥75.3B plus non-operating income ¥6.7B (interest income ¥2.2B, dividend income ¥0.8B, foreign exchange gains ¥0.6B, etc.), with non-operating income representing 0.5% of revenue — minor. However, Special Gains ¥211.97B (negative goodwill from step acquisition ¥205.98B, gain on sale of subsidiary shares ¥5.35B, subsidy ¥0.6B, etc.) account for the majority of this period’s Net Income ¥246.5B, creating a significant divergence between operating earnings and Net Income. Special Losses ¥14.98B (impairment losses ¥10.11B, etc.) were limited. Effective tax rate 8.0% is low due to recognition of deferred tax assets and temporary tax treatment of special gains. Accrual ratio 6.8% is acceptable, but OCF/NI = 0.48x and OCF/EBITDA = 0.70x indicate weak cash conversion. Goodwill amortization ¥9.0B is 5.3% of EBITDA, a J-GAAP-specific factor compressing Net Income. The divergence between Ordinary Income ¥75.0B and Net Income ¥246.5B is explained by special gains; Net Income is expected to normalize to ¥43B next fiscal year. Working capital deterioration (Inventories +¥17.4B, Accounts Payable -¥5.8B, etc.) has reduced short-term cash quality; improving inventory turnover and collection terms is key to enhancing earnings quality.
For FY2027 ending March 2027, management guidance is Revenue ¥1,430B (+3.6%), Operating Income ¥83B (+10.3%), Ordinary Income ¥77B (+2.6%), and Net Income attributable to owners of the parent ¥43B (-82.6%). Revenue is projected to grow modestly from continued overseas integration effects and domestic strength. Operating Income is expected to increase double-digits due to Overseas margin improvement and SG&A efficiency. Net Income will decline substantially as this period’s special gains of ¥211.97B drop out, reflecting a normalization that emphasizes operating performance. Forecast EPS 67.99 yen, forecast dividend ¥5 (expressed post-share-split; pre-split equivalent ~¥72). Progress rate as of Q2 was 54% of full-year forecast (Operating Income), incorporating expectations for further overseas integration progress and domestic peak season contributions in H2.
Annual dividend ¥66 (Q2 interim ¥15, Year-end ¥51), total dividends approximately ¥4.17B. Dividend payout ratio against Net Income attributable to owners of the parent ¥246.5B is 16.9%, conservative. Note that a 1-for-3 share split was implemented on April 1, 2026; the FY2027 forecast dividend ¥5 is post-split (pre-split equivalent ¥72). FCF was -¥141.3B this period due to M&A and capex, but OCF ¥119.0B sufficiently covers dividends. Share buybacks were negligible at -¥0.01B, so total shareholder returns are dividend-focused. Historically, payout ratio has been around 20% and stable; management judges dividends can continue within profit and investment plan parameters once earnings normalize. Policy suggests prioritizing growth investment while gradually expanding shareholder returns.
Risk of delayed overseas integration: Overseas Operating Margin 3.5% diverges significantly from Domestic Rice Snacks 7.1%. If realization of integration synergies is delayed and logistics/sales network inefficiencies persist, company-wide margin improvement may stall and operating leverage benefits may weaken. Intangibles and goodwill totaling ¥647.0B (Intangible ¥483.2B + Goodwill ¥163.8B) represent 60.8% of net assets and heighten sensitivity to impairment risk. If Overseas ROIC remains below WACC, future impairment charges could erode net assets.
Risk of rising financial leverage: Interest-bearing debt ¥472.3B and Debt/EBITDA 2.76x are near the upper bound of investment-grade range. While OCF is trending up, negative FCF from working capital deterioration and increased investments constrains short-term liquidity. A resurgence in raw material, energy, or logistics costs or adverse FX movements reducing OCF could push Debt/EBITDA above 3.0x, risking rating downgrades and higher funding costs. Achieving positive FCF and deleveraging within 2–3 years is a priority to maintain financial stability.
Risk from declining working capital efficiency: Inventories ¥53.5B (prior ¥36.2B, +47.9%), Accounts Payable ¥49.8B (prior ¥55.4B, -10.1%) indicate working capital deterioration. Inventory turnover days are roughly 14 days (¥53.5B ÷ (¥982.8B/365)), which is short, but inventory buildup and lower payables due to overseas integration are pressuring OCF. If working capital continues to absorb incremental funds relative to revenue growth, cash generation may weaken and FCF deficits could persist, increasing reliance on external financing. Inventory management and collection terms optimization are urgent.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.5% | 5.0% (3.3%–8.4%) | +0.5pt |
| Net Margin | 0.7% | 3.2% (1.9%–6.6%) | -2.5pt |
Operating-stage profitability exceeds the industry median, but Net Margin falls below the median on a full-year forecast basis that assumes the special gains will not recur, due to SG&A and amortization burdens.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 33.7% | 5.4% (1.0%–8.6%) | +28.3pt |
Revenue growth, driven by M&A, substantially exceeds industry averages and ranks among the top in the sector.
※ Source: Company compilation
Operating profitability and Overseas margin improvement: Most of this period’s Net Income ¥246.5B is attributable to step acquisition gains and is temporary; Net Income is expected to normalize to ¥43B next year. Operating Income is guided to ¥83B (+10.3%), and the process by which Overseas margins (this period 3.5%) gradually approach Domestic Rice Snacks levels (7.1%) will determine sustainability of company-wide earnings. Monitor progress on integration synergies, logistics and sales network efficiencies, and continued price measures.
Cash flow normalization and financial stability: OCF ¥119.0B vs Net Income ¥246.5B (OCF/NI = 0.48x) indicates weak cash conversion in the short term. Improving working capital (inventory turnover, collection terms) could raise OCF/EBITDA from 0.7x to above 1.0x; if FCF turns positive, external funding dependence would decrease and Debt/EBITDA (currently 2.76x) could be reduced. Post-period OCF levels and capital allocation balance (investment, dividends, debt repayment) are key to maintaining financial soundness.
Management of intangibles and goodwill returns: Intangible assets ¥483.2B + Goodwill ¥163.8B = ¥647.0B represent 62.9% of net assets ¥1,029.3B, increasing impairment sensitivity. If Overseas ROIC improves above WACC promptly, investment recovery is plausible; persistent margin weakness raises future impairment risk. Monitoring goodwill amortization (¥9.0B per year) and segment ROIC is essential for assessing investment return sustainability.
This report is a financial analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.