| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥669.6B | ¥654.0B | +2.4% |
| Operating Income | ¥117.8B | ¥111.2B | +6.0% |
| Ordinary Income | ¥137.6B | ¥120.0B | +14.6% |
| Net Income | ¥72.2B | ¥63.8B | +13.2% |
| ROE | 5.4% | 5.0% | - |
For the fiscal year ended March 2026, the company achieved revenue of ¥669.6B (YoY +¥15.6B +2.4%), Operating Income of ¥117.8B (YoY +¥6.7B +6.0%), Ordinary Income of ¥137.6B (YoY +¥17.6B +14.6%), and Net Income attributable to owners of the parent of ¥94.6B (YoY +¥12.5B +15.3%), recording both higher sales and profits. Non-operating income expanded from ¥10.97B in the prior year to ¥20.8B, with dividend & interest income of ¥9.39B and foreign exchange gains of ¥7.64B boosting the ordinary level. Gross margin improved to 30.7% (up +0.6pt from 30.1% a year earlier) and Operating Margin improved to 17.6% (up +0.6pt from 17.0%), confirming improved profitability driven by price revisions gaining traction and stabilization of raw material costs. EPS increased to ¥296.96 (from ¥257.67, +15.2%).
【Revenue】 Revenue totaled ¥669.6B (+2.4%), marking a second consecutive year of revenue growth. By region, Japan was ¥484.6B (72.4% of sales), Europe ¥84.6B (12.6% of sales, YoY +¥11.6B +15.9%), China ¥62.5B (9.3%), and Asia ¥37.9B (5.7%), with a notable recovery in Europe. Domestic sales showed modest growth from ¥477.6B to +¥7.0B (+1.5%), suggesting limited recovery in foodservice and ready-meal demand. As the company reports a single segment (Natural Seasonings Business), product-level breakdowns are not disclosed; improved utilization at European sites and foreign exchange effects (weaker JPY) supported overseas sales.
【Profitability】 Cost of sales was ¥463.8B (prior year ¥456.8B), keeping the cost-of-sales ratio at 69.3% and improving gross margin by +0.6pt to 30.7%. This is attributed to price revisions taking hold, stabilization of raw material costs (meat, dairy, etc.), and efficiency in logistics and packaging. SG&A was ¥87.9B (prior year ¥86.1B, +2.1%), keeping growth relative to sales contained and maintaining SG&A ratio at 13.1% (flat YoY from 13.2%). Depreciation was ¥22.4B and R&D ¥5.1B (0.8% of sales), both restrained, resulting in Operating Income rising to ¥117.8B (+6.0%). Non-operating income of ¥20.8B, including dividend & interest income of ¥9.39B and FX gains of ¥7.64B, lifted Ordinary Income to ¥137.6B (+14.6%). Extraordinary items were minor, with a loss on disposal of fixed assets of ¥1.0B leading to a net extraordinary loss of -¥0.67B. After deducting income taxes of ¥41.1B (effective tax rate 30.0%), Net Income attributable to owners of the parent was ¥94.6B (+15.3%), concluding the year with higher sales and earnings.
【Profitability】Operating Margin was 17.6% (up +0.6pt from 17.0%), Net Profit Margin 14.1% (up +1.6pt from 12.5%), maintaining high profitability. ROE was 5.4% (prior year 6.7%), declining due to increased equity, reflecting a conservative capital policy backed by a high Equity Ratio. ROA improved to 9.3% (prior year 8.5%), with operating income growth contributing to better asset efficiency. 【Cash Quality】Operating Cash Flow / Net Income was 0.96x, indicating generally good cash conversion, but OCF/EBITDA fell to 0.65x (prior year 0.82x), with increases in working capital suppressing cash conversion. 【Investment Efficiency】Total Asset Turnover was 0.443x (prior year 0.449x), roughly flat; abundant cash & marketable securities and the buildup of inventory and receivables are restraining asset turnover. Inventory days were 101 days (prior year 44 days), Receivable days 74 days (prior year 71 days), and Cash Conversion Cycle (CCC) extended to 141 days, indicating significant room for working-capital efficiency improvements. 【Financial Soundness】Equity Ratio improved to 89.2% (up +2.0pt from 87.2%), Current Ratio 828.7%, Quick Ratio 773.3% — extremely robust — with negligible interest-bearing debt (only ¥0.1B in lease liabilities). Interest coverage is approximately 15,900x, effectively debt-free. Cash and deposits were ¥536.4B and investment securities ¥405.6B, providing a substantial liquidity cushion and no short-term payment concerns.
Operating Cash Flow was ¥90.5B (prior year ¥121.7B, -25.6%), yielding a cash conversion ratio against Net Income of 0.96x, generally healthy but substantially down YoY. Operating CF subtotal (before working capital changes) was stable at ¥117.6B, but working capital deterioration — inventory increase of -¥8.3B, receivables increase of -¥4.8B, and payables decrease of -¥6.0B — caused a ¥27.1B cash outflow. Income taxes paid were ¥36.0B at normal levels. Investing CF was -¥99.6B, mainly due to acquisition of investment securities of -¥75.9B; capital expenditure of -¥23.1B slightly exceeded depreciation of ¥22.4B and was used for capacity maintenance and some expansion. Free Cash Flow was a slight negative at -¥9.1B. Financing CF was -¥54.5B, centered on dividend payments of -¥54.1B, with share buybacks nearly zero. Cash and deposits at year-end were ¥536.4B (prior period ¥589.6B, -9.0%), still ensuring abundant liquidity. The primary reason for cash decline was increased allocation to investment securities; short- to medium-term liquidity risk remains very low.
Of Ordinary Income of ¥137.6B, Operating Income of ¥117.8B accounted for 85.6%, indicating core earnings are business-driven. Major components of non-operating income of ¥20.8B were dividend & interest income of ¥9.39B and FX gains of ¥7.64B, showing surplus asset management and JPY depreciation lifted ordinary level. However, FX gains are market-dependent and temporary, and there is potential for reversal depending on next-period FX moves. Extraordinary items were minor at -¥0.67B (mainly ¥1.0B loss on disposal of fixed assets), so ordinary profit explains most of Net Income. Operating Cash Flow of ¥90.5B broadly supports Net Income of ¥94.6B, but YoY decline was driven by working capital increases (-¥27.1B outflow), with receivables and inventory buildup accumulating as accruals. Comprehensive income was ¥115.5B, ¥20.9B above Net Income of ¥94.6B, primarily due to foreign currency translation adjustments of +¥22.0B from valuation gains on overseas assets with JPY depreciation. Securities valuation difference was -¥0.7B and retirement benefit adjustments -¥1.5B, both minor and not materially affecting earnings quality.
The FY2027 plan projects Revenue of ¥692.3B (+3.4%), Operating Income of ¥112.5B (-4.5%), Ordinary Income of ¥131.6B (-4.4%), and Net Income attributable to owners of the parent of ¥95.5B (+1.0%). This is conservative guidance anticipating revenue growth but declines at the operating and ordinary levels. Operating Margin is planned to fall to 16.3% (down -1.3pt), reflecting risks of raw material and energy cost resurgence, potential increases in SG&A, and anticipated erosion of FX gains. The revenue growth outlook of +3.4% is solid, but demand uncertainty in Europe and domestically and competitive dynamics remain unclear; management maintains a cautious stance. Dividend guidance is annual ¥60 (interim ¥30 + year-end ¥30), a substantial reduction from the current dividend of ¥180 due to elimination of the FY60th anniversary commemorative dividend of ¥120 at year-end; on a normal dividend basis there is no change.
Annual dividend is ¥180 (interim ¥60 + year-end ¥120), with the year-end ¥120 including a ¥120 60th-anniversary commemorative dividend. On a normal dividend basis, annual dividend equates to ¥60, which corresponds to a regular payout ratio of approximately 20.2% against EPS of ¥296.96; including the commemorative dividend, the payout ratio is about 60.6%. Total dividends paid were ¥54.1B (based on weighted average shares outstanding of 31.8 million), implying a payout ratio of 57.2% against Net Income of ¥94.6B, a high level. Share buybacks were virtually zero at ¥0.002B, so shareholder returns are dividend-centric. With Free Cash Flow at -¥9.1B, dividends were funded by drawing down liquidity. Cash and deposits of ¥536.4B and investment securities of ¥405.6B provide abundant liquidity, supporting short- to medium-term dividend sustainability; however, next-period profit decline makes recovery of Operating CF and improvement in working capital efficiency preconditions for maintaining dividends. Next-period dividend guidance of ¥60 represents the normal dividend level after the commemorative dividend lapses, indicating a stable dividend policy.
Working-capital efficiency deterioration risk: Inventory days 101, Receivable days 74, CCC 141 indicate an extended working-capital cycle, which pressured Operating CF by -¥27.1B YoY. Failure to improve inventory management and credit collection efficiency could lead to reduced cash generation and increased liquidity risk.
Investment securities valuation risk: Investment securities expanded to ¥405.6B (up ¥75.7B from ¥330.0B), comprising 26.9% of total assets. While dividend & interest income of ¥9.39B supported Ordinary Income, market volatility could lead to valuation losses or dividend declines. Comprehensive income already recorded a -¥0.7B valuation difference on securities this period, signaling emerging market volatility impact.
Volatility of non-operating income: FX gains of ¥7.64B accounted for 5.6% of Ordinary Income, with JPY depreciation lifting ordinary-level results. Next-period FX moves could reverse into FX losses, and the company’s profit-down guidance likely incorporates the loss of FX tailwinds. Volatility in non-operating income increases Ordinary Income variability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 17.6% | 5.0% (3.3%–8.4%) | +12.6pt |
| Net Profit Margin | 10.8% | 3.2% (1.9%–6.6%) | +7.6pt |
The company significantly outperforms the industry median on profitability, confirming advantages in raw material procurement, manufacturing technology, and price pass-through ability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 2.4% | 5.4% (1.0%–8.6%) | -3.0pt |
Revenue growth lags the industry median by -3.0pt, suggesting delayed recovery in domestic foodservice/ready-meal demand and that overseas site utilization improvements are still in progress.
※Source: Company aggregation
Continued improvement in core profitability: Operating Margin of 17.6% well exceeds the industry median of 5.0%. Improvements of +0.6pt in gross margin and +0.6pt in Operating Margin reflect successful price revisions and cost stabilization. SG&A ratio of 13.1% is restrained, leaving room to leverage operating leverage. Next-period profit-down guidance is conservative; improvements in European site utilization and logistics efficiencies are expected supportive factors.
Working-capital and cash-conversion challenges: While Operating CF / Net Income is 0.96x showing good cash realization, the decline in OCF/EBITDA to 0.65x (from 0.82x) and working-capital outflow of -¥27.1B are structural issues. Shortening DSO 74 days, DIO 101 days, and CCC 141 days is a key execution task for the next period; improving inventory management and receivables collection will be the largest levers for FCF generation and ROIC enhancement.
Expansion of investment securities and dividend sustainability: Allocation to investment securities of ¥405.6B has boosted Ordinary Income but concentrates dividend resource use and exposes the company to market risk. Payout ratio of around 61% (including commemorative dividend) is high, and with FCF at -¥9.1B, dividends have been paid by drawing down liquidity. Liquidity is ample, but under next-period profit decline, recovery in Operating CF and working-capital efficiency is a prerequisite for maintaining dividends.
This report was automatically generated by AI analyzing XBRL financial disclosure data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are aggregated by the firm based on disclosed financial statements and are for reference only. Investment decisions are your responsibility; consult a professional advisor as needed.