| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥6309.1B | ¥5610.0B | +12.5% |
| Operating Income | ¥167.4B | ¥141.7B | +18.1% |
| Equity-method Investment Gain | ¥0.4B | ¥0.4B | +5.6% |
| Ordinary Income | ¥137.6B | ¥95.6B | +44.0% |
| Net Profit | ¥61.7B | ¥189.3B | -67.4% |
| ROE | 5.6% | 18.9% | - |
For the fiscal year ended March 2026, Revenue reached ¥6309.1B (YoY +¥699.0B +12.5%), Operating Income was ¥167.4B (YoY +¥25.6B +18.1%), Ordinary Income was ¥137.6B (YoY +¥42.0B +44.0%), and Net Income attributable to owners of the parent was ¥76.9B (YoY +¥2.2B +2.9%), closing with higher revenue and profit. Operating margin improved to 2.7% (up +0.2pt from 2.5% prior year), gross margin remained flat at 8.5%, and SG&A ratio improved to 5.8% (from 6.0% prior year, -0.1pt), indicating improved cost efficiency. At the ordinary income stage, non-operating expenses decreased due to reduced foreign exchange losses and reductions in losses on assignment of receivables, resulting in a higher profit increase than at the operating level. Although a large reduction in extraordinary losses (¥9.9B vs ¥46.3B prior year) was a tailwind for final profit, the increase was limited by higher corporate tax burden and deductions for non-controlling interests.
[Revenue] Revenue was ¥6309.1B (YoY +12.5%), achieving double-digit growth. By segment, the core Device BU (Revenue ¥5563.8B, 88.2% of total) drove results; within that, Device Products amounted to ¥5343.2B (YoY +14.4%), supported by expanding semiconductor/electronic components demand and customer expansion. The EMS business contracted to ¥220.6B (YoY -23.4%), but Device Products growth more than offset this. The System BU (Revenue ¥492.4B, 7.8% of total) declined YoY -7.0%; System Solutions were ¥318.2B (YoY -1.6%) and Eco Solutions ¥174.3B (YoY -15.6%) affected by fewer projects. Conversely, the IT & SIer BU (Revenue ¥268.3B, 4.3% of total) doubled YoY +102.0% due to new consolidation and project expansion. Regional and qualitative disclosures are limited, but overseas revenue and a foreign currency translation adjustment increase of ¥30.8B suggest contributions from international operations.
[Profitability] Operating Income was ¥167.4B (YoY +18.1%), outpacing revenue growth. Gross margin was 8.5% (Gross Profit ¥536.1B) flat YoY, indicating no structural change in product mix. SG&A was ¥368.7B (SG&A ratio 5.8%), up ¥33.5B YoY; however, SG&A growth (+10.0%) was below revenue growth (+12.5%), evidencing economies of scale. Goodwill amortization was ¥8.3B (prior year ¥6.6B), reflecting gradual M&A effects. By segment, Device Products posted Operating Income ¥141.7B (margin 2.7%, YoY +35.1%) with significant profit increase; IT & SIer posted ¥12.4B (margin 4.6%, YoY +166.0%) showing improved profitability. EMS was ¥5.0B (YoY -31.3%), Eco Solutions ¥19.4B (YoY -44.2%) with margin challenges. Ordinary Income was ¥137.6B (YoY +44.0%), markedly higher than the operating-level increase. Non-operating income was ¥12.1B (prior year ¥10.8B) slightly higher, and non-operating expenses decreased substantially to ¥41.9B (prior year ¥57.0B), mainly due to reduced foreign exchange losses (¥5.1B vs ¥9.6B prior) and reduced losses on assignment of receivables (¥2.7B vs ¥11.9B prior). However, interest expense increased to ¥29.2B (prior year ¥25.8B) as borrowings rose. Extraordinary gains were ¥2.0B (including gain on sale of investment securities ¥1.4B, gain on negative goodwill ¥1.5B, etc.), and extraordinary losses were ¥9.9B (impairment loss ¥5.7B, valuation loss on investment securities ¥1.0B), greatly reduced from prior year extraordinary losses of ¥46.3B. Profit before tax jumped to ¥129.8B (prior year ¥52.9B, +145.2%), but income taxes were ¥40.7B (effective tax rate 31.4%, prior year tax burden negative) normalized, and after deduction of non-controlling interests ¥12.1B, Net Income attributable to owners of the parent landed at ¥76.9B (YoY +2.9%). In conclusion, while revenue and operating profit increased, the growth in final profit was limited by tax normalization and non-controlling interests despite lower extraordinary losses.
The Device BU contributed the majority of corporate profits with Operating Income ¥146.7B (margin 2.6%, YoY +30.8%). Within that, Device Products generated ¥141.7B (margin 2.7%, YoY +35.1%) driven by expanding demand for semiconductors/electronic components for overseas customers and SG&A control. The EMS business struggled with ¥5.0B (margin 2.2%, YoY -31.3%), suggesting deteriorating project profitability. The System BU posted Operating Income ¥31.6B (margin 6.4%, YoY -24.6%) lower YoY but with margin above the corporate average. System Solutions improved markedly to ¥12.2B (margin 3.8%, YoY +70.7%) as project profitability improved. Eco Solutions maintained high margin at ¥19.4B (margin 11.1%, YoY -44.2%) but saw profit decline with falling sales. The IT & SIer BU rapidly expanded Operating Income to ¥12.4B (margin 4.6%, YoY +166.0%) driven by the integration of Lester Embedded Solutions and new project wins. Corporate expenses increased to -¥23.4B (prior year -¥17.0B) due to strengthened management functions and higher headquarter costs; segment profit total of ¥190.8B less corporate expenses yields Operating Income ¥167.4B.
[Profitability] Operating margin 2.7% (up +0.2pt from 2.5%), Net margin 1.2% (down -0.1pt from 1.3%), both below industry medians (Operating margin 3.4%, Net margin 2.3%). Gross margin remained 8.5% (prior year 8.5%), with structurally low gross margins persisting in wholesale/device distribution. SG&A ratio improved to 5.8% (prior year 6.0%, -0.2pt), reflecting some economies of scale. In non-operating results, interest expense rose to ¥29.2B (prior year ¥25.8B, +13.2%), increasing interest burden and inhibiting net margin improvement. ROE declined to 5.6% (prior year 8.8%, 3-year average estimated 7–8%), explained by total asset turnover 1.81x (prior 1.81x), equity multiplier 3.19x (prior 3.10x), and net margin 1.2%. ROA fell to 1.8% (prior 3.2%), affected by both margin deterioration and higher leverage.
[Cash Quality] Operating Cash Flow/Net Profit is -0.53x (Operating CF -¥32.8B vs Net Profit ¥61.7B), indicating a significant deterioration in cash realization of profits. Main drivers were increases in trade receivables (-¥204.1B) and inventories (-¥94.2B), where working capital buildup to support sales absorbed cash. Increase in trade payables (+¥155.6B) partially offset this, but net working capital pressure remained. Operating CF/EBITDA (Operating Income ¥167.4B + D&A ¥35.0B = ¥202.4B) is -0.16x, showing cash conversion significantly lagging EBITDA generation. Accruals are high and earnings quality has temporarily deteriorated.
[Investment Efficiency] Capital expenditures ¥49.1B vs depreciation ¥35.0B gives Capex/Depreciation 1.40x, indicating continued growth investment. Depreciation/Operating CF -1.07x shows Operating CF cannot fully fund investment, and Free Cash Flow was -¥88.4B (prior +¥20.1B), a sharp swing into negative. Total asset turnover 1.81x is roughly flat YoY, with no major change in asset efficiency.
[Financial Health] Equity Ratio 31.3% (prior 32.3%, -1.0pt) slightly declined, and D/E ratio rose to 2.19x (prior 2.10x), increasing debt dependence. Net Debt (total interest-bearing debt - cash) is ¥1035.9B, with Net Debt/EBITDA 5.11x, indicating sustained high leverage. Current ratio 155.0% (prior 165.7%), quick ratio 119.6% (prior 128.8%) slightly declined but short-term liquidity remains at reasonable levels. However, short-term borrowings are ¥685.2B (prior ¥525.4B, +30.4%), increasing short-term funding reliance and refinancing risk. Interest coverage ratio (Operating Income / Interest Expense) is 5.73x, providing a minimal buffer that could be pressured in a rising rate environment.
Operating CF turned to -¥32.8B (prior +¥201.9B, -116.3%). Profit before tax ¥129.8B plus depreciation ¥35.0B, goodwill amortization ¥8.3B, impairment loss ¥5.7B and other non-cash items produce an estimated operating cash subtotal (before working capital) of ¥299B, but large working capital increases absorbed cash. Trade receivables increased -¥204.1B (accounts receivable +¥305.4B, YoY +26.9%), inventories increased -¥94.2B (inventory +¥104.2B, YoY +19.4%), reflecting credit extension and inventory build to support sales. Trade payables increased +¥155.6B (accounts payable +¥186.1B, YoY +25.9%), partially offsetting these, but net working capital absorbed about -¥142.7B. Corporate tax payments ¥25.2B and interest payments ¥31.1B were also cash outflows. Investing CF was -¥55.6B, mainly capex -¥49.1B, acquisitions of subsidiary shares -¥6.6B, business acquisitions -¥6.3B and other M&A-related outflows; proceeds from sale of investment securities ¥8.4B provided some cash. Free Cash Flow was Operating CF -¥32.8B + Investing CF -¥55.6B = -¥88.4B, a large negative; together with dividend payments ¥34.9B, funding needs were met by Financing CF. Financing CF was +¥76.2B, raising funds via long-term borrowings ¥375.2B, bond issuance ¥99.5B, increase in short-term borrowings ¥156.7B, while repaying long-term borrowings -¥38.3B, paying dividends -¥34.9B, and lease liability repayments -¥13.8B. Cash and deposits were ¥449.3B (prior ¥444.2B, +1.0%), nearly flat, indicating borrowings funded working capital increases and investments. If sales growth slows and working capital is unwound, Operating CF should normalize; current poor cash conversion highlights structural credit management and inventory efficiency issues.
Ordinary Income ¥137.6B vs Operating Income ¥167.4B means non-operating net expense was -¥29.8B. Major non-operating expenses were interest expense ¥29.2B and foreign exchange losses ¥5.1B, making interest burden from increased borrowings a persistent profit headwind. Foreign exchange losses and losses on assignment of receivables narrowed YoY, contributing temporarily to improved ordinary income. Extraordinary items were net -¥7.9B, consisting of impairment loss ¥5.7B and valuation loss on investment securities ¥1.0B versus gain on negative goodwill ¥1.5B and gain on sale of investment securities ¥1.4B. The magnitude of extraordinary items is small and does not materially distort core operating profitability. Comprehensive income was ¥123.6B, with Net Income ¥61.7B plus foreign currency translation adjustments +¥30.8B, valuation difference on available-for-sale securities +¥4.6B, deferred hedge gains/losses +¥0.1B, and retirement benefit adjustments -¥1.0B, where FX valuation gains boosted comprehensive income. Operating CF/Net Profit -0.53x and OCF/EBITDA -0.16x indicate high accruals, interpreted as a temporary quality deterioration due to working capital increases. However, days sales outstanding (DSO) at 83.4 days (Accounts receivable ¥1442.5B / Daily sales ¥6309.1B × 365) is high, and stricter credit control remains a priority. Core earnings power should be assessed on an operating income basis, while non-operating fluctuations depend on interest and FX environments.
The company plans Revenue ¥7000.0B (YoY +11.0%), Operating Income ¥180.0B (YoY +7.5%), Ordinary Income ¥145.0B (YoY +5.4%), and Net Income attributable to owners of the parent ¥100.0B (prior ¥76.9B, +30.0%). Operating margin is projected at 2.57% (current 2.65% to -0.08pt) slightly lower, but final profit is expected to rise substantially due to normalization of extraordinary items. Progress to full-year targets: Revenue 90.1% (¥6309.1B/¥7000.0B), Operating Income 93.0% (¥167.4B/¥180.0B), Ordinary Income 94.9% (¥137.6B/¥145.0B), indicating healthy progress. The second half assumes Revenue ¥690.9B (Full year minus cumulative) and Operating Income ¥12.6B, and considering seasonality the targets appear achievable. However, whether the improvement in non-operating expenses seen in the first half continues in the second half is uncertain, limiting upside for Ordinary and Net Income. If working capital normalizes and Operating CF improves, cash-based achievement of plans is supported. Dividend forecast is annual ¥65 per share (DPS) with payout ratio 18.3% (based on projected EPS ¥355.64), a conservative level ensuring dividend policy sustainability.
Annual dividend was ¥128 (interim ¥60 + year-end ¥68), a slight increase from prior interim-equivalent annual ¥120. Payout ratio is 46.8% (dividend ¥128 vs EPS ¥273.56), a moderate level maintaining a stable dividend policy. Total return ratio is 46.8% as only dividends were paid and no share buybacks were executed. Dividend/Free Cash Flow is -1.45x (total dividends ¥34.9B vs FCF -¥88.4B), indicating dividends were not covered by internally generated cash and relied on borrowings. Dividend/Net Profit is 0.57x (dividends ¥34.9B / Net Profit ¥61.7B), sustainable on an earnings basis but raises short-term cash sustainability concerns. Cash and deposits ¥449.3B equate to approximately 12.9 years of dividends, so liquidity buffer is ample. Medium-term, improvement in Operating CF (via working capital unwind) should improve dividend cash coverage; dividend policy sustainability is assessed as neutral to cautiously positive. The company projects a dividend of ¥65 (payout ratio 18.3% based on projected EPS ¥355.64), indicating a policy of prioritizing financial discipline by restraining payout even under an earnings-up scenario.
Working capital expansion risk: Trade receivables ¥1442.5B (YoY +26.9%), inventories ¥640.7B (YoY +19.4%) have grown faster than sales, and DSO at 83.4 days is high. If sales growth decelerates, excess inventory and bad debt risk could materialize, expanding negative Operating CF. Tightening credit management and improving inventory turnover (currently 9.85 turns per year, mid-range for wholesale) are urgent.
Short-term debt refinancing risk: Short-term borrowings ¥685.2B (YoY +30.4%), current portion of long-term borrowings ¥59.9B indicate high short-term debt dependence; with current liabilities ¥1810.5B vs cash ¥449.3B, cash/short-term liabilities ratio is 0.25x. In a rising rate environment refinancing costs could increase and interest coverage of 5.73x could deteriorate further. Net Debt/EBITDA 5.11x is high, constraining financial flexibility.
Segment concentration risk: Device BU accounts for 88.2% of Revenue and 76.9% of Operating Income, indicating high portfolio concentration. Supply-demand volatility or price declines in semiconductor/electronic components could materially impair the core business. IT & SIer and Eco segments have high margins but small scale, so near-term diversification benefits are limited.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.7% | 3.4% (1.4%–5.0%) | -0.7pt |
| Net Margin | 1.0% | 2.3% (1.0%–4.6%) | -1.3pt |
The company’s operating and net margins are below industry medians, indicating inferior profitability within the sector.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 12.5% | 5.9% (0.4%–10.7%) | +6.7pt |
Revenue growth outpaces the industry median substantially, placing the company among the industry leaders in top-line expansion.
※Source: Company aggregation
Revenue growth of +12.5% YoY significantly outperformed the industry median (+5.9%) driven by Device BU revenue and rapid IT & SIer expansion. Operating margin improved to 2.7% (+0.2pt YoY) but remains -0.7pt below the industry median 3.4%, constrained by a low-margin wholesale/device distribution model with gross margin 8.5%. By segment, IT & SIer showed high growth and profitability (margin 4.6%, YoY +166%), while Eco Solutions had the highest margin at 11.1% but fell into decline due to lower sales. Going forward, attention will focus on whether expansion of IT & SIer and Eco can rebalance a portfolio currently highly dependent on Device (88.2% of sales).
Operating CF swung to -¥32.8B and Free Cash Flow to -¥88.4B. Main causes were increases in trade receivables +¥204B and inventories +¥94B, resulting in approximately -¥143B working capital absorption. DSO at 83.4 days and inventory turnover 9.85x remain areas for improvement. Operating CF/Net Profit -0.53x and OCF/EBITDA -0.16x show temporary deterioration in earnings quality tied to working capital growth. Dividends of ¥128 annual (payout ratio 46.8%) were maintained, but dividend/FCF -1.45x indicates reliance on increased borrowings; short-term borrowings +30.4% and Net Debt/EBITDA 5.11x sustain high leverage and interest burden (¥29.2B, +13.2% YoY) that compresses net margin. Monitoring refinancing risk and rate sensitivity is critical.
Full-year guidance targets Revenue ¥7000B (+11.0%), Operating Income ¥180B (+7.5%), Net Income ¥100B (+30.0%), with operating margin slightly down at 2.57% and meaningful increase in Net Income assumed via normalization of extraordinary items. Progress rates are strong (Operating Income 93.0%, Ordinary Income 94.9%), making achievement likely. However, upside for Ordinary and Net Income depends on non-operating items (FX / interest) and extraordinary item trends, and continued improvement in non-operating expenses in H2 is an assumption. Dividend forecast ¥65 (payout 18.3%) is conservative, showing a willingness to prioritize financial discipline even under profit growth. Medium term, improvements in working capital efficiency and Operating CF normalization, plus growth in high-margin segments (IT & SIer, Eco), should enhance profitability and cash generation.
This report is an earnings analysis document automatically generated by AI from XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.