| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥7881.3B | ¥7765.9B | +1.5% |
| Operating Income | ¥623.3B | ¥743.7B | -16.2% |
| Profit Before Tax | ¥650.8B | ¥768.0B | -15.3% |
| Net Income | ¥678.1B | ¥145.6B | +365.7% |
| ROE | 12.1% | 2.8% | - |
For the fiscal year ended March 2026, Revenue was ¥7,881.3B (YoY +¥115.4B +1.5%), Operating Income was ¥623.3B (YoY -¥120.4B -16.2%), Ordinary Income was ¥651.3B (YoY +¥501.7B +335.3%), and Net Income attributable to owners of the parent was ¥453.8B (YoY -¥96.4B -17.5%). The company recorded revenue growth with profit decline: solid domestic demand and recovery in China partially offset weakness in the Americas, but increases in SG&A and cost overruns reduced the operating margin to 7.9% (prior year 9.6%, -1.7pt). Ordinary Income rose substantially due to equity-method investment gains of ¥129.5B and financial income of ¥52.9B, but Net Income fell double-digits driven by lower Operating Income. Gross margin slightly declined to 34.1% (prior year 35.1%, -1.0pt), SG&A ratio rose to 27.7% (prior year 27.0%, +0.7pt), reversing operating leverage. By major segment, Nissin Foods (Japan) delivered Operating Income of ¥321.5B (margin 13.3%) and remained stable; China improved significantly with Operating Income of ¥89.6B (+51.7%, margin 12.0%); the Americas saw Operating Income of ¥105.7B (-33.8%, margin 6.5%) with profitability deterioration from rising logistics and manufacturing costs. Total assets expanded to ¥9,812.0B (+15.6%) as substantial capital expenditure (tangible fixed assets +¥747.1B) strengthened the medium-term growth base, but short-term depreciation burden and front-loaded CAPEX limited FCF to ¥77.7B, below total returns of ¥408.0B.
[Revenue] Revenue was ¥7,881.3B (+1.5%), a slight increase. Domestic revenue remained firm at ¥4,874B (61.9% of total): Nissin Foods ¥2,419B (+1.3%), Myojo Foods ¥483B (+6.5%), chilled & beverages ¥1,042B (+2.8%), confectionery ¥959B (+3.8%), all solid. Domestic segments maintained volumes through brand strength and continuous product renewals while phased price increases took effect. Overseas, China recovered to ¥749B (+2.0%) and Other (including Europe, Asia, and new businesses) expanded to ¥591B (+4.4%), while the Americas declined to ¥1,637B (-2.9%). In the Americas, volumes struggled despite price sensitivity measures and increased promotions; FX effects were a partial headwind. By region: Japan ¥4,874B (+1.1%), Americas ¥1,638B (-2.8%), Other ¥1,369B (+8.6%), with Other region growth partially offsetting the Americas decline. Instant noodles and related businesses were ¥6,150B (+0.4%), slightly up; Other businesses (confectionery & beverages, etc.) grew faster at ¥1,731B (+5.4%).
[Profitability] Operating Income was ¥623.3B (-16.2%), with margin down to 7.9% (prior year 9.6%, -1.7pt). Cost of sales was ¥5,190.6B, resulting in gross profit of ¥2,690.7B (gross margin 34.1%, prior year 35.1%, -1.0pt), a contraction at the gross-profit level. Primary drivers were that price pass-through lagged rising raw material and energy costs and higher manufacturing/logistics costs in the Americas. SG&A was ¥2,183.0B (+4.3%), lifting the SG&A ratio to 27.7% (prior year 27.0%, +0.7pt). Increased advertising/promotional spend and higher personnel costs outpaced sales growth of +1.5%, reversing operating leverage. Segment results: Nissin Foods ¥321.5B (-5.9%) maintaining margin 13.3%; Myojo Foods ¥34.4B (+9.9%, margin 7.1%); Chilled & Beverages ¥77.2B (-10.2%, margin 7.4%); Confectionery ¥52.8B (-2.1%, margin 5.5%); Americas ¥105.7B (-33.8%, margin 6.5%); China ¥89.6B (+51.7%, margin 12.0%). The Americas profit decline of -¥54.2B was the main contributor to the companywide Operating Income decline of -¥120.4B. Equity-method investment gains were ¥129.5B (prior year ¥132.2B, -2.0%) and stable; other income ¥14.9B, other expenses ¥28.8B produced a slight negative on non-operating items. Financial income was ¥52.9B (mainly interest/dividend income), financial expenses ¥25.4B (including interest expense ¥30.3B), yielding net financial income of +¥27.5B. As a result, Ordinary Income was ¥651.3B (+335.3%). Note the prior year Ordinary Income of ¥149.6B reflected a ¥28.4B impairment loss in the Americas, so the large increase largely reflects that reversal. Profit Before Tax was ¥650.8B (prior year ¥767.98B, -15.3%), and after deducting income taxes of ¥157.8B (effective tax rate 24.2%), Net Income attributable to owners of the parent was ¥453.8B (-17.5%). Net income including non-controlling interests was ¥493.0B (non-controlling interests ¥39.2B). Special items included impairment losses of ¥2.6B (prior year ¥28.4B), greatly reducing one-off negative items year-over-year. In conclusion, domestic resilience and China recovery partially offset Americas weakness, but overall the company delivered revenue growth with profit decline; recovery of Americas profitability is key going forward.
Nissin Foods (Japan) Revenue ¥2,419B (+1.3%), Operating Income ¥321.5B (-5.9%), margin 13.3%. Price increases for core cup and bag noodles and improved product mix contributed, but higher promotional and advertising spend reduced profits. Myojo Foods Revenue ¥483B (+6.5%), Operating Income ¥34.4B (+9.9%), margin 7.1%; new product launches and channel expansion drove revenue and profit. Chilled & Beverages Revenue ¥1,042B (+2.8%), Operating Income ¥77.2B (-10.2%), margin 7.4%; frozen/chilled demand was firm but higher logistics costs and delayed manufacturing efficiency improvements reduced profits. Confectionery Revenue ¥959B (+3.8%), Operating Income ¥52.8B (-2.1%), margin 5.5%; promotions increased sales but margin slightly declined. Americas Revenue ¥1,637B (-2.9%), Operating Income ¥105.7B (-33.8%), margin 6.5%; rising local logistics and labor costs plus increased promotional investment significantly weakened profitability and pressured company margins. China Revenue ¥749B (+2.0%), Operating Income ¥89.6B (+51.7%), margin 12.0%; rebound from prior-year impairment, demand recovery, and production efficiency improvements drove significant profit growth. Other (Domestic Other, Europe, Asia, new businesses) Revenue ¥591B (+4.4%), Operating Income ¥75.7B (-37.3%), margin 12.8%; sales grew but profits declined due to new investments and start-up costs. After inter-segment adjustments, companywide Operating Income was ¥623.3B, with Americas margin deterioration partially covered by growth in China and Other regions.
[Profitability] Operating margin 7.9% (prior year 9.6%, -1.7pt) declined due to rising SG&A ratio and cost increases; Net margin 5.8% (prior year 7.1%, -1.3pt) also reflects the profit decline. ROE was 9.1% (prior year 11.4%, -2.3pt), deteriorating due to lower net margin and slower total asset turnover (0.803x, prior year 0.915x). ROA on an Ordinary Income basis improved to 7.1% (prior year 1.8%, +5.3pt) due to higher Ordinary Income, but Operating-Income-based ROA fell to ~6.4% (prior year 8.8%). [Cash Quality] Operating Cash Flow (OCF) was ¥804.3B (prior year ¥570.6B, +41.0%), up significantly from improved working capital management and optimized corporate tax payments; OCF/Net Income was 1.77x indicating high quality. Free Cash Flow (FCF) was limited to ¥77.7B (OCF ¥804.3B - Investing CF ¥726.6B), reflecting front-loaded CAPEX of ¥833.4B (2.32x depreciation ¥359.0B). [Investment Efficiency] Total asset turnover 0.803x (prior year 0.915x) declined due to significant asset increase; tangible fixed asset turnover was 1.85x (Revenue ¥7,881B ÷ tangible fixed assets ¥4,265B). Estimated ROIC = after-tax operating profit approx. ¥476B (Operating Income ¥623B × (1 - effective tax rate 24.2%)) ÷ invested capital approx. ¥6,280B (tangible fixed assets ¥4,265B + working capital ¥2,015B) ≈ 7.6%, slightly above WACC. [Financial Soundness] Equity Ratio 52.7% (prior year 56.0%, -3.3pt) slightly down but remains healthy; Debt/Equity approx. 31.6% (interest-bearing debt ¥1,531B ÷ equity ¥5,172B) is low and stable. Current ratio 123% (current assets ¥3,244B ÷ current liabilities ¥2,637B), interest coverage approx. 25.5x (EBIT ¥647.0B ÷ financial expense ¥25.4B), indicating strong coverage.
OCF was ¥804.3B (prior year ¥570.6B, +41.0%). Adjusting Profit Before Tax ¥650.8B for depreciation ¥359.0B, impairment ¥2.6B, equity-method gains △¥129.5B, etc., produced a subtotal of ¥861.7B. Working capital contributed positively with trade receivables decrease +¥41.6B and trade payables increase +¥15.2B; inventory increase -¥3.9B was a small negative; other working capital -¥53.8B left overall working capital slightly lower. After corporate tax payments -¥130.7B, interest payments -¥30.3B, lease payments -¥43.1B, OCF was ¥804.3B, and OCF/Net Income was 1.77x, showing high quality. Investing CF was -¥726.6B, primarily CAPEX -¥833.4B. Adjustments included proceeds from tangible fixed assets +¥1.8B, intangible asset acquisitions -¥12.5B, investment acquisitions -¥14.3B, proceeds from investments +¥98.0B, M&A-related -¥14.2B, net increase in time deposits +¥48.0B, etc. FCF was ¥77.7B (OCF ¥804.3B - Investing CF ¥726.6B), a large improvement from prior-year FCF -¥196.5B, but still far below total returns ¥408.0B (dividends ¥203.3B + share buybacks ¥204.7B); the shortfall was covered by financing CF. Financing CF was +¥110.4B: short-term borrowings +¥60.2B, CP issuance +¥220.0B, long-term borrowings procured +¥442.9B, long-term repayments -¥146.7B, lease repayments -¥43.1B, dividends -¥203.3B, share buybacks -¥204.7B, distributions to non-controlling interests -¥13.3B, etc. Including FX effects +¥64.8B, cash increased from ¥730.4B at the beginning of the period to ¥983.3B at year-end, a +¥252.9B increase. CAPEX/Depreciation 2.32x reflects aggressive investment, limiting short-term FCF, but high-quality OCF and borrowing capacity support liquidity.
Earnings quality shows Operating Income ¥623.3B and Ordinary Income ¥651.3B, a positive non-operating contribution of +¥28.0B. Breakdown: net financial income +¥27.5B (financial income ¥52.9B - financial expense ¥25.4B), equity-method gains ¥129.5B, other income ¥14.9B less other expenses ¥28.8B producing other net -¥13.9B. Equity-method gains reflect stable contributions from associates and are highly recurring; financial income is mainly interest/dividend income and stable. One-off items included impairment losses ¥2.6B (recorded in other expenses; prior year ¥28.4B), substantially reducing one-off negatives year-over-year. Comparing OCF ¥804.3B with the operating subtotal ¥861.7B yields an accrual ratio of approximately -3.6% ((operating subtotal - OCF) / operating subtotal), i.e., cash generation exceeded reported profits, indicating high cash backing. Comprehensive income was ¥880.3B (Net Income ¥493.0B + Other Comprehensive Income ¥387.3B); major OCI items were foreign currency translation adjustments on overseas operations +¥251.4B, fair value revaluations +¥130.3B, and OCI from equity-accounted companies +¥6.4B. Gains from FX translation and asset valuation caused comprehensive income to significantly exceed Net Income, but the decline in Net Income driven by lower Operating Income remains consistent. Dividend and share buyback funding is derived from recurring OCF, with limited reliance on temporary gains.
The full-year forecast targeted Revenue ¥860.0B versus actual ¥788.1B, implying progress of approx. 91.6% and underperformance. Primary causes were Americas revenue and profit declines and slower-than-expected domestic price pass-through. Dividend guidance was DPS ¥35 (forecast), with actual DPS ¥70 (interim ¥35 + year-end ¥35) achieved. Going forward, focus areas include Americas margin restoration (SKU optimization, price actions, productivity improvements), expanding domestic premium product lines, efficiency improvements in chilled & beverages, and sustaining China demand recovery. The effects of large CAPEX are expected to materialize from next fiscal year onward, allowing depreciation burdens to normalize and further cost reduction through higher utilization and SG&A ratio improvements. No revised guidance has been disclosed; recovery pace in the second half’s revenue and profit trends will determine the recovery of the full-year operating margin.
Annual dividend DPS ¥70 (interim ¥35 + year-end ¥35), unchanged from prior year; total dividends amounted to ¥203.3B. Payout ratio versus Net Income attributable to owners of the parent (¥453.8B) is approx. 44.8%, a sustainable level. Share buybacks totaled ¥204.7B, bringing total returns to ¥408.0B. Total Return Ratio is approx. 89.9% (Total Returns ¥408.0B ÷ Net Income attributable to owners of the parent ¥453.8B), a high level. With FCF ¥77.7B versus Total Returns ¥408.0B, the excess was funded by borrowings and CP issuance. Year-end treasury shares stood at 105.3 hundred million shares, with a weighted average shares outstanding during the period of 2,884 million shares; outstanding shares decreased slightly year-over-year due to buybacks. The dividend policy targets stable dividends with a payout ratio range of 40–50%; this year maintained the dividend while expanding total returns via buybacks. Sustainability going forward depends on Americas profitability recovery and FCF improvement once CAPEX stabilizes. Share buybacks will be flexibly adjusted based on performance and cash flow, while dividend stability is underpinned by high-quality OCF and financial capacity.
Americas segment profitability deterioration risk: Operating Income ¥105.7B (-33.8%), margin 6.5%, a significant decline. Rising logistics and labor costs, higher manufacturing costs, and expanded promotional investment have simultaneously pressured gross and SG&A ratios. Negative FX (USD/JPY, BRL/JPY) also contributed. Success of price increases and SKU optimization will be key to restoring company margins; if improvement lags, margins could be further compressed. The Americas account for approx. 21% of revenue, so prolonged deterioration in its profit contribution would continue to weigh on company ROE.
CAPEX front-loading and FCF strain risk: CAPEX ¥833.4B (2.32x depreciation) left FCF at ¥77.7B, far below total returns ¥408.0B. Short-term borrowings +¥127.4B and new CP issuance ¥220.0B increased short-term funding dependence. Deterioration in rollover conditions or rising interest rates would raise funding costs and liquidity risk. If investment recovery lags expectations, FCF improvement may be delayed, constraining the balance of returns and growth investments.
Raw material & energy cost volatility and price pass-through lag risk: Increases in wheat flour, palm oil, packaging materials, and energy reduced gross margin to 34.1% (prior year 35.1%, -1.0pt). Although phased price increases are being implemented, private-label competition and consumer price sensitivity may limit effective pass-through. If additional raw material spikes occur and further price increases are difficult, gross and operating margins could be further squeezed. FX volatility (imported input costs) adds uncertainty.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 9.1% | 6.0% (2.6%–11.7%) | +3.1pt |
| Operating Margin | 7.9% | 5.0% (3.3%–8.4%) | +2.9pt |
| Net Margin | 8.6% | 3.2% (1.9%–6.6%) | +5.4pt |
Profitability ranks in the upper half of the industry, with ROE, operating margin, and net margin all above industry medians. Net margin is substantially higher by +5.4pt, reflecting strong contributions from equity-method gains and financial items relative to peers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 1.5% | 5.4% (1.0%–8.6%) | -3.9pt |
Revenue growth lags the industry median, with domestic strength offset by Americas slowdown. Recovery in the Americas and accelerated overseas expansion are key to restoring growth momentum.
※ Source: Company tabulation
Americas profitability recovery is the single most important theme for a turnaround. To reverse a 33.8% decline in Operating Income (margin 6.5%), SKU optimization, precise pricing measures, and productivity improvements are essential; the pace of recovery will determine next-year and beyond company margin and ROE improvement. If logistics and labor cost containment and utilization improvements advance, upside to operating margins is significant.
Large CAPEX (¥833.4B, 2.32x depreciation) strengthens medium-term supply capacity and is positive, but in the short term FCF at ¥77.7B is thin while Total Returns (¥408.0B) exceed FCF. If investment recovery progresses, utilization improvements and depreciation normalization are realized, OCF and FCF should rise, enabling sustained returns and growth investment. Early manifestation of start-up benefits is critical.
Dividend DPS ¥70 (payout ratio ~44.8%) and Total Return Ratio ~89.9% reflect an active shareholder return policy, but sustainability depends on Americas recovery and CAPEX completion improving FCF. OCF is ¥804.3B and Equity Ratio 52.7%, Debt/Equity 31.6%, indicating ample financial capacity and limited short-term liquidity risk. Flexibly adjusting share buybacks according to performance and cash flow while maintaining dividend stability is an appropriate policy given the high-quality OCF and financial headroom.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.