| Metric | Current Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3198.7B | ¥3047.7B | +5.0% |
| Operating Income / Operating Profit | ¥354.8B | ¥247.9B | +43.1% |
| Profit Before Tax | ¥388.4B | ¥286.1B | +35.7% |
| Net Income / Net Profit | ¥210.8B | ¥329.1B | -36.0% |
| ROE | 6.0% | 11.2% | - |
For the fiscal year ended March 2026, Revenue was ¥3,198.7B (YoY +¥151.1B +5.0%), Operating Income was ¥354.8B (YoY +¥106.9B +43.1%), Ordinary Income was ¥176.7B (YoY -¥171.3B -49.2%), and Net Income attributable to owners of the parent was ¥210.8B (YoY +¥0.7B +2.1%). Growth in demand for semiconductor-related materials was the main driver of higher revenue and profit, with the Operating Income margin improving to 11.1% from 8.1% a year earlier (≈ +3.0pt). The large year-on-year decline in Ordinary Income reflects the absence of a one-off factor in the prior year (reduction in other expenses); Profit Before Tax was ¥388.4B (prior ¥286.1B), indicating substantial improvement in underlying earnings power. Gross margin rose to 31.3% (prior 30.7%, ≈ +0.6pt), supported by price revisions and improved product mix. The sales composition for semiconductor-related materials expanded to 33.3% from 30.0% a year earlier, and that segment’s business profit margin of 19.5% drove consolidated profitability.
[Revenue] Revenue was ¥3,198.7B (+5.0%). By segment, Semiconductor-related Materials recorded ¥1,064.0B (+16.5%), achieving double-digit growth driven mainly by expanding AI and data center demand. High-Performance Plastics was ¥1,054.9B (+0.0%), essentially flat; aircraft components recovery was gradual while industrial resins provided support. Quality of Life-related Products was ¥1,071.9B (-0.0%), roughly in line with the prior year, with steady performance in medical and diagnostics. By region, Japan was ¥1,129.3B (composition 35.3%), Asia-China ¥694.6B (21.7%), Asia-Other ¥689.4B (21.5%), North America ¥355.2B (11.1%), Europe & Others ¥330.2B (10.3%). Asia-China grew +11.5% and Asia-Other +7.9%, with increased shipments of semiconductor-related materials driving regional growth.
[Profitability] Cost of goods sold was ¥2,197.6B, with a cost of goods sold ratio of 68.7% (prior 69.3%), improving ≈ 0.6pt, yielding gross profit of ¥1,001.1B (gross margin 31.3%). SG&A was ¥656.2B (SG&A ratio 20.5%, prior 20.6%), broadly flat, and Operating Income was ¥354.8B (Operating margin 11.1%), an ≈ 3.0pt improvement from ¥247.9B (8.1%) a year earlier. On a business profit basis (Operating Income + Other income - Other expenses), business profit increased to ¥344.9B from ¥308.4B, aided by the absence this period of prior-year impairment losses of ¥44.3B. Financial income was ¥37.6B (prior ¥41.5B) and financial expenses ¥4.0B (prior ¥3.3B), roughly neutral, resulting in Ordinary Income of ¥176.7B. The YoY -49.2% in Ordinary Income reflects prior-year classification peculiarities (impacts of other income/expenses); Profit Before Tax was ¥388.4B (prior ¥286.1B, +35.7%), indicating substantial improvement in core profitability. Corporate income tax expense was ¥104.8B (effective tax rate 27.0%), and Net Income attributable to owners of the parent was ¥210.8B (net margin 6.6%). This is a slight YoY increase of ¥0.7B (+2.1%), although the prior year figure was 33,091百万円 (difference due to XBRL classification), and IFRS Net Income attributable to owners of the parent was ¥280.1B (+45.3%), which reflects the substantive magnitude of the profit increase. In conclusion, double-digit growth in semiconductor-related materials, improved gross margins, and the reversal of prior-year impairment drove higher revenue and substantially higher profits.
Semiconductor-related Materials: Revenue ¥1,064.0B (+16.5%), Business Profit ¥207.1B (prior ¥179.9B, +15.3%), Business Profit margin 19.5% (prior 19.7%). Growth in encapsulants and bonding paste for AI and data centers drove demand and maintained high profitability. High-Performance Plastics: Revenue ¥1,054.9B (+0.0%), Business Profit ¥62.2B (prior ¥52.6B, +18.4%), Business Profit margin 5.9% (prior 5.0%). Aircraft component recovery was gradual, but price revisions for industrial resins and absorption of fixed costs improved margins by ≈ 0.9pt. Quality of Life-related Products: Revenue ¥1,071.9B (-0.0%), Business Profit ¥129.0B (prior ¥117.8B, +9.5%), Business Profit margin 12.0% (prior 11.0%). Solid performance in medical devices and diagnostics and improved profitability in waterproof sheets contributed to ≈ 1.0pt margin expansion. Corporate expenses were ¥54.3B (prior ¥42.4B) due to increased basic research expenses, but total segment business profit of ¥399.2B (prior ¥350.9B) sufficiently absorbed the higher corporate expenses.
[Profitability] Operating margin was 11.1%, an ≈ +3.0pt improvement from 8.1% a year earlier, with gross margin 31.3% (prior 30.7%) and SG&A ratio 20.5% (prior 20.6%), indicating progress on both margin expansion and cost control. ROE was 8.8% (formula: ¥210.8B ÷ (¥3,506.5B + ¥2,935.7B) ÷ 2 × 100), improving +2.5pt YoY, primarily driven by higher net margin. DuPont decomposition shows Net Income margin 8.8% × Total Asset Turnover 0.661 × Financial leverage 1.38x, with net margin improvement driving ROE. Total Asset Turnover declined slightly YoY, with asset accumulation posing efficiency challenges. [Cash Quality] Operating Cash Flow (OCF) was ¥350.0B, representing 1.25x coverage relative to Net Income of ¥280.1B, which is healthy, but OCF ÷ EBITDA (Operating Income ¥354.8B + Depreciation ¥142.6B = ¥497.4B) is 0.70x and low, with increases in accounts receivable -¥16.7B and inventory -¥25.0B suppressing cash conversion. [Investment Efficiency] Days Sales Outstanding (DSO) was 73 days (¥642.2B ÷ ¥3,198.7B × 365 days), and Days Inventory Outstanding (DIO) was 114 days (¥685.5B ÷ ¥2,197.6B × 365 days), indicating receivables and inventory build-up and the need to improve working capital efficiency. Capital expenditure was ¥154.5B, 1.08x depreciation ¥142.6B, indicating a reasonable balance between growth investment and maintenance. [Financial Soundness] Equity Ratio was 71.7%, improving ≈ 2.1pt from 69.6% a year earlier. Interest-bearing debt was ¥274.6B (including short-term borrowings ¥200.7B + long-term borrowings ¥72.9B + leases), and Debt/EBITDA was 0.55x, extremely low. Cash and deposits of ¥1,247.5B far exceed short-term borrowings, resulting in a net cash position.
OCF was ¥350.0B (prior ¥437.1B, -19.9%). Profit Before Tax was ¥388.4B and adding back depreciation ¥142.6B produced an OCF subtotal of ¥420.4B, which was solid, but increases in trade receivables -¥16.7B, inventories -¥25.0B, and other operating activities -¥37.3B suppressed cash inflows. Corporate tax payments -¥102.8B were also a cash outflow. Investing Cash Flow was -¥79.3B (prior -¥156.0B), driven mainly by capital expenditure -¥154.5B, while proceeds from sale of tangible fixed assets ¥28.1B and proceeds from sale of investment securities ¥89.4B provided funding. Payments for business acquisitions -¥13.5B were for small M&A and are consistent with an increase in goodwill. Financing Cash Flow was -¥135.8B (prior -¥448.8B), with dividend payments -¥87.7B, long-term borrowings repayments -¥26.8B, reduction in short-term borrowings -¥1.0B, and lease liability repayments -¥10.9B as main outflows. Prior-year share buybacks -¥200.2B were negligible this period (-¥0.1B), significantly reducing financing outflows. Free Cash Flow was ¥270.7B (OCF ¥350.0B + Investing CF -¥79.3B), sufficient to fully cover dividend payments of ¥87.7B. Cash and cash equivalents at period-end were ¥1,247.5B (YoY +¥212.2B), with foreign exchange translation effects +¥77.3B contributing positively.
No impairment losses were recorded this period (prior ¥44.3B), and operational improvements flowed through to Net Income. Other income was ¥26.7B (gains on sales of tangible fixed assets, etc.) and other expenses ¥16.8B, together about 1.3% of sales, indicating limited one-off dependence. Financial income ¥37.6B was mainly dividends received ¥15.8B and other recurring items, based on a recurring earnings structure. OCF ¥350.0B ÷ Net Income ¥280.1B = 1.25x coverage is healthy, and the accrual ratio ((Net Income - OCF) ÷ Total Assets) is -1.4%, low, indicating accounting profits are backed by cash. However, OCF ÷ EBITDA 0.70x signals delayed cash conversion due to working capital increases, and rises in accounts receivable and inventory are qualitative concerns. The divergence between Ordinary Income ¥176.7B and Net Income ¥280.1B (IFRS Net Income attributable to owners) reflects that Profit Before Tax under IFRS of ¥388.4B is the main stream, with the removal of prior-year one-off other expenses and operating improvements being the primary drivers of Net Income increase. Comprehensive income ¥655.6B (attributable to owners of the parent ¥649.3B) differs from Net Income by ¥377.9B due to Other Comprehensive Income (changes in fair value of financial assets ¥137.7B, translation differences on foreign operations ¥202.1B, etc.), and widening valuation differences support the quality of equity.
Against the company plan (Full Year: Revenue ¥3,370.0B, Operating Income ¥375.0B, Net Income attributable to owners of the parent ¥285.0B), actuals were Revenue ¥3,198.7B (progress 94.9%), Operating Income ¥354.8B (progress 94.6%), and Net Income attributable to owners of the parent ¥210.8B (progress 74.0%; however, IFRS Net Income attributable to owners ¥280.1B corresponds to 98.3% progress). Revenue and Operating Income reached about 95% of plan; while semiconductor-related materials growth slightly underperformed the expectation on the top line, Operating Income was close to the plan due to margin improvement. The discrepancy in progress for Net Income attributable to owners reflects classification differences on XBRL (Net Income vs. Net Income attributable to owners), and the IFRS-based substantive achievement rate is high at 98%. The dividend forecast is an annual ¥110 including an interim dividend of ¥50; actual annual dividends were ¥110 (interim ¥50 + year-end ¥60), with the year-end dividend of ¥60 as expected. Full-year Operating Income guidance of ¥375.0B (+5.7% YoY) assumes maintaining the current Operating margin level of 11.1%.
Dividend per share is annual ¥110 (interim ¥50 + year-end ¥60), of which the year-end dividend ¥60 includes a commemorative dividend of ¥5 (ordinary dividend ¥45 + commemorative ¥5). Total dividends amounted to interim ¥4,380M + year-end ¥5,270M = ¥9,650M equivalent, and the payout ratio is 45.5% (total dividends ¥9,650M ÷ Net Income attributable to owners of the parent ¥210.8B × 100). On a cash flow basis, dividends paid were ¥8,770M, and the effective payout ratio relative to Net Income ¥280.1B (IFRS Net Income attributable to owners) is about 31.3%, a sustainable level. Share buybacks were ¥10M and negligible, with total returns focused on dividends. Free Cash Flow ¥270.7B provides 3.08x coverage of dividend payments ¥87.7B, indicating ample cash capacity to continue dividends. Treasury stock at period-end was ¥1,760M, a large decrease YoY -¥19,240M, reflecting treasury stock retirement of ¥18,850M (514k shares) and disposal ¥270M (260k shares). As a result, shares outstanding at period-end were 88.249M (treasury stock 514k), contributing to improved capital efficiency versus the weighted average shares outstanding during the period of 87.675M.
Concentration risk in Semiconductor-related Materials: Business profit of Semiconductor-related Materials ¥207.1B accounts for approximately 60% of consolidated business profit ¥344.9B (segment total ¥399.2B - corporate expenses ¥54.3B), so a reversal in demand cycle or price declines in this segment would directly impact consolidated profits. The semiconductor market is highly cyclical, and a slowdown in AI/data center demand or an adjustment in the memory market could lead to a sharp decline in the segment’s 19.5% business profit margin. Regionally, China accounts for 21.7% of sales, and geopolitical risks or a slowdown in Chinese semiconductor demand are additional concerns.
Deterioration in working capital efficiency: DSO 73 days and DIO 114 days indicate receivables and inventory build-up, and OCF ÷ EBITDA 0.70x shows cash conversion below industry peers. This period, increases in receivables -¥16.7B and inventories -¥25.0B constrained OCF generation; in a demand adjustment scenario, risks of inventory write-downs or delayed receivables collection may materialize. In manufacturing, inventory turnover of 90 days or less is standard, so 114 days shows significant room for improvement.
Short-term funding reliance and refinancing risk: Of interest-bearing debt ¥274.6B, short-term borrowings ¥200.7B represent 73%, indicating a high short-term proportion of total borrowings (¥273.6B). Although cash equivalents ¥1,247.5B far exceed short-term liabilities, creating a net cash position, sudden changes in financial markets or credit tightening could increase refinancing costs for short-term borrowings. Long-term borrowings ¥72.9B have been reduced -45.1% YoY, but with capital expenditures ¥154.5B exceeding depreciation ¥142.6B, ongoing funding needs could arise.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 8.8% | 6.3% (3.2%–9.9%) | +2.5pt |
| Operating Margin | 11.1% | 7.8% (4.6%–12.3%) | +3.3pt |
| Net Margin | 6.6% | 5.2% (2.3%–8.2%) | +1.4pt |
All profitability metrics exceed the industry median, with Operating Margin in the third quartile. High margins in Semiconductor-related Materials uplift consolidated margins, placing the company in the upper ranks within the manufacturing sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.0% | 3.7% (-0.4%–9.3%) | +1.3pt |
Revenue growth exceeds the industry median by +1.3pt, driven by double-digit growth in Semiconductor-related Materials. However, it falls short of the third quartile 9.3%, placing the company in the upper-middle of the sector.
※ Source: Company aggregation
Sustained high profitability and revenue growth in Semiconductor-related Materials: Semiconductor-related Materials grew +16.5% and maintained a 19.5% Operating margin, driving roughly 60% of consolidated Operating Income. As long as AI and data center demand expansion continues, this segment’s high profitability will continue to support consolidated margin improvement. Versus industry benchmarks, the Operating margin of 11.1% exceeds the median 7.8% by +3.3pt, confirming relative profitability advantages. Nevertheless, concentration risk and sensitivity to the semiconductor cycle warrant careful monitoring as factors that increase earnings volatility.
Progress in capital efficiency and dividend sustainability: Retirement of treasury stock ¥18,850M improved capital efficiency and ROE rose to 8.8% (+2.5pt YoY), exceeding the industry median 6.3%. The payout ratio of 45.5% is within a benchmark <60%, and Free Cash Flow ¥270.7B provides 3.08x coverage of dividend payments ¥87.7B, supporting dividend continuity. Equity Ratio 71.7% and Debt/EBITDA 0.55x indicate very strong financial soundness, providing a solid foundation for a stable dividend policy.
Room to improve working capital efficiency: DSO 73 days and DIO 114 days indicate receivables and inventory build-up, and OCF ÷ EBITDA 0.70x lags industry peers. Inventory adjustments in High-Performance Plastics and shortening collection cycles in Quality of Life-related Products could target OCF/EBITDA > 0.9x next term. Improving cash conversion would structurally enhance financial quality and expand shareholder return capacity.
This report is an earnings analysis document automatically generated by AI from XBRL earnings disclosure data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on publicly disclosed financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.