| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥1001.3B | ¥965.2B | +3.7% |
| Operating Income | ¥93.6B | ¥92.9B | +0.7% |
| Ordinary Income | ¥98.2B | ¥96.9B | +1.3% |
| Net Income | ¥72.7B | ¥69.8B | +4.2% |
| ROE | 7.9% | 8.7% | - |
For FY2026 Q3 cumulative results, S&B Foods reported Revenue of ¥1001.3B (YoY +¥36.1B, +3.7%), Operating Income of ¥93.6B (YoY +¥0.7B, +0.7%), Ordinary Income of ¥98.2B (YoY +¥1.3B, +1.3%), and Net Income of ¥72.7B (YoY +¥2.9B, +4.2%). While Revenue showed steady growth, Operating Income increased only marginally. The conversion from Ordinary Income to Net Income was 74.0%, with an effective tax rate of 28.9%, deemed appropriate. The Gross Profit Margin stood at 28.6%, maintaining the earnings base, but SG&A expenses increased to ¥192.9B from the prior year, restraining Operating Income growth. Overall, the Company maintained a trend of higher revenue and profit, while leaving room for profitability improvement.
[Profitability] ROE 7.9% (above the sector median of 4.2%, good within the sector but with room to reach the Company’s target), Operating Margin 9.3% (exceeding the sector median of 4.9% by +4.4pt, sustaining high profitability), Net Margin 7.3% (about 2x the sector median of 3.5%, a high level), EBIT margin 9.3%. By DuPont decomposition, Net Margin 7.3% × Total Asset Turnover 0.631 × Financial Leverage 1.72; improving asset efficiency is key to enhancing profitability. [Cash Quality] Cash and Deposits of ¥210.3B cover Short-term Borrowings of ¥127.1B at 1.65x; cash coverage of short-term liabilities is 0.49x. Interest Coverage is 29.24x, indicating ample debt service capacity. [Investment Efficiency] Total Asset Turnover 0.631x; Inventories decreased to ¥95.7B from the prior year, indicating improving inventory efficiency. Investment Securities increased to ¥194.5B, up +¥38.7B YoY, with valuation gains lifting equity. [Financial Soundness] Equity Ratio 58.1% (exceeding the sector median of 48.7% by +9.4pt), Current Ratio 229.4% (well above the sector median of 1.51x), Quick Ratio 207.3%, Debt-to-Equity Ratio 0.72x, Debt-to-Capital Ratio 20.9%, reflecting a conservative capital structure. However, Short-term Borrowings increased +55.5% to ¥127.1B from ¥81.7B last year, lifting the Short-term Liabilities Ratio to 52.2%, warranting monitoring of refinancing risk.
Cash and Deposits increased by +¥36.5B YoY to ¥210.3B, likely supported by operating funds generated from higher revenue and profit. On working capital, Inventories decreased by -¥8.8B from ¥104.5B to ¥95.7B, showing progress in inventory efficiency, while Short-term Borrowings increased by +¥45.4B from ¥81.7B to ¥127.1B, potentially to address working capital needs or to strengthen funding via refinancing. Cash coverage of short-term liabilities is 0.49x, and coverage of Short-term Borrowings alone is 1.65x, indicating maintained liquidity. Investment Securities increased from ¥155.9B to ¥194.5B (+¥38.7B), suggesting recognition of valuation gains or additional investments. Dividends paid were ¥37 in Q2, with ¥43 planned at year-end, and the annual total of ¥80 is well covered by cash reserves.
Against Ordinary Income of ¥98.2B, Operating Income was ¥93.6B, implying a net non-operating gain of approximately ¥4.6B, mainly positive contributions from non-operating income. Non-operating income is presumed to include dividend income and gains on sales of Investment Securities; as a percentage of Revenue of ¥1001.3B, the contribution is small, and core operations remain the main profit driver. The conversion from Operating Income to Ordinary Income is 104.9%, indicating a limited positive contribution from non-operating items. The conversion from Profit Before Tax of ¥102.3B to Net Income of ¥72.7B is 71.1%, and the effective tax rate of 28.9% aligns with the statutory level. Gross Profit Margin 28.6%, Operating Margin 9.3%, and Net Margin 7.3% remain healthy at each stage, indicating high-quality earnings structure. SG&A expenses account for 19.3% of Revenue but remain under control, and the profitability of the core operating business is stable.
[Positioning within the sector] (Reference information, in-house research) S&B Foods’ profitability stands at a favorable position within the Food & Beverage sector. The Operating Margin of 9.3% exceeds the sector median of 4.9% by +4.4pt, and the Net Margin of 7.3% is about 2x the sector median of 3.5%, placing the Company among high-profit peers. ROE 7.9% is well above the sector median of 4.2%, though it has not reached the top quartile (11.8%), leaving room to improve capital efficiency. In soundness, the Equity Ratio of 58.1% exceeds the sector median of 48.7% by +9.4pt, and the Current Ratio of 229.4% is also well above the sector median of 1.51x, indicating high financial safety. The Net Debt to EBITDA multiple, versus the sector median of -1.96, is estimated to be at a healthy level near net cash for the Company as well. In efficiency, the Revenue growth rate of +3.7% is slightly below the sector median of 4.8%, representing a sector-average growth pace. Return on Assets is estimated at 4.6% (Net Income ¥72.7B ÷ Total Assets ¥1587.9B × 12/9 months) versus the sector median of 2.3%, placing the Company in the sector’s upper ranks. Overall, the Company is superior within the sector in profitability and soundness, shows sector-average growth, and the next focus is improving asset efficiency. (Sector: Food & Beverage (n=8 companies), comparison: 2025 Q3, source: in-house aggregation)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Sector benchmarks are reference information aggregated by our firm based on publicly available financial statements. Investment decisions are your responsibility; please consult a professional as needed before making any decisions.