| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4119.7B | ¥4206.5B | -2.1% |
| Operating Income / Operating Profit | ¥363.8B | ¥293.2B | +24.1% |
| Ordinary Income | ¥400.4B | ¥330.5B | +21.1% |
| Net Income / Net Profit | ¥272.9B | ¥199.3B | +37.0% |
| ROE | 7.2% | 5.6% | - |
For the fiscal year ended March 2026, Revenue / Net Sales totaled ¥4119.7B (YoY -¥86.8B -2.1%), a decline, while Operating Income was ¥363.8B (YoY +¥70.6B +24.1%), Ordinary Income ¥400.4B (YoY +¥69.9B +21.1%), and Net Income ¥272.9B (YoY +¥73.7B +37.0%), delivering substantial profit growth. Gross margin improved to 29.4% (prior year 28.1%, +1.3pt) and Operating margin to 8.8% (prior year 7.0%, +1.8pt), demonstrating marked profitability improvement and a favorable result of lower revenue with higher profits. The primary drivers of Operating Income expansion were an improvement in the High-Performance Materials Business operating margin to 18.0% (prior year 14.4%) and compression of SG&A to 20.6% (prior year 21.1%, -0.5pt). Special gains of ¥180.3B (of which gain on sales of investment securities was ¥173.1B) also boosted the bottom line. Operating Cash Flow (OCF) reached ¥764.4B (YoY +267.8%), 2.8x Net Income, with inventory reduction and accounts receivable collection contributing to Free Cash Flow (FCF) of ¥340.0B.
[Revenue] Revenue of ¥4119.7B decreased by -2.1% YoY. By region, Japan ¥146.2B (-4.9%), U.S. ¥392.6B (-6.7%), Europe ¥503.9B (-8.8%) declined, while China ¥787.4B (+12.5%) and Asia ex-China ¥866.3B (-1.5%) provided support led by China. By segment, Elastomer Materials Business was ¥2,236.8B (-5.4%) down due to softer market conditions, whereas High-Performance Materials Business grew to ¥1,242.2B (+2.1%), expanding its sales mix to 30.2% (prior year 28.9%). Growth in High-Performance Materials was driven by price realization in high-performance resins and electronic materials and mix improvement, advancing a shift toward higher-margin product groups despite top-line contraction.
[Profitability] The increase in Operating Income to ¥363.8B (+24.1%) was achieved through a gross margin improvement of +1.3pt and SG&A compression of -0.5pt. The High-Performance Materials Business led with Operating Income of ¥224.2B (+27.7%) and a margin of 18.0% (prior year 14.4%, +3.6pt), while the Elastomer Materials Business improved to ¥116.7B (+6.7%) with a 5.2% margin (prior year 4.6%, +0.6pt). A change to straight-line depreciation methods for this fiscal year temporarily increased segment profit by ¥22.9B. Non-operating items, including foreign exchange gains of ¥20.1B and dividend income ¥29.2B, supported Ordinary Income of ¥400.4B (+21.1%). Extraordinary items resulted in Special Gains of ¥180.3B (mainly gain on sale of investment securities ¥173.1B) and Special Losses totaling ¥87.6B (including impairment losses ¥48.0B and valuation losses on investment securities ¥22.9B), producing a net positive impact of ¥92.7B, leading to Pretax Income of ¥493.1B (+49.8%) and Net Income of ¥272.9B (+37.0%). In conclusion, the company delivered higher profits on lower revenue, driven by a mix shift to High-Performance Materials and disciplined cost control.
The Elastomer Materials Business reported Revenue ¥2,236.8B (-5.4%), Operating Income ¥116.7B (+6.7%), and margin 5.2% (prior year 4.6%, +0.6pt). Revenue declined due to softer markets for synthetic rubber and synthetic latex, but profit increased thanks to lower raw material costs and cost structure improvements. The High-Performance Materials Business posted Revenue ¥1,242.2B (+2.1%), Operating Income ¥224.2B (+27.7%), and margin 18.0% (prior year 14.4%, +3.6pt), with robust demand for high-performance resins, electronic materials, and battery materials; price pass-through and mix improvement significantly expanded margins. Other Businesses achieved Revenue ¥673.6B (-0.4%) and Operating Income ¥42.9B (+11.0%), maintaining stable earnings. Company-wide cost reductions also contributed, and segment total Operating Income after adjustments was ¥383.8B less adjustment -¥20.0B yielding ¥363.8B.
[Profitability] Operating margin 8.8% (prior year 7.0%, +1.8pt) and Net margin 6.6% (prior year 4.7%, +1.9pt) show marked improvement. ROE 7.2% (prior year 5.6%, +1.6pt) improved due to higher Net Income and increased equity. Gross margin 29.4% (prior year 28.1%, +1.3pt) improved from a higher share of High-Performance Materials and lower raw material prices, while SG&A ratio compressed to 20.6% (prior year 21.1%, -0.5pt), supporting Operating margin expansion.
[Cash Quality] OCF ¥764.4B is 2.8x Net Income, and OCF/EBITDA ratio is 1.43x, indicating very high cash conversion quality. Working capital improvements (inventory -¥156.8B, accounts receivable -¥177.9B) boosted cash generation.
[Investment Efficiency] Total asset turnover 0.75x (prior year 0.79x) declined due to asset growth, but active investment in tangible fixed assets (+¥504.1B) continues. Construction in progress ¥703.5B (36.2% of PPE) awaits commissioning to improve turnover. Capital expenditures ¥583.7B are 3.39x depreciation ¥172.3B, indicating a growth investment phase.
[Financial Soundness] Equity Ratio 69.0% (prior year 67.1%, +1.9pt) is very strong, with Liquidity ratios current ratio 178.5% and quick ratio 113.8% indicating solid short-term liquidity. Interest-bearing debt consists of short-term borrowings ¥89.6B and CP ¥70.0B totaling ¥159.6B; after deducting cash and deposits ¥286.8B, net cash is ¥127.2B, effectively debt-free. Interest coverage is 205x (OCF ¥764.4B / interest paid ¥1.8B), showing extremely strong debt-servicing capacity.
OCF ¥764.4B (YoY +267.8%) expanded due to improved operating profit and substantial working capital improvements. Of OCF subtotal ¥810.6B, inventory reduction ¥181.5B and receivables reduction ¥196.4B were major contributors, partially offset by a decrease in trade payables of -¥110.0B. Although inventory days of 156 days (on sales days basis) remain high, year-on-year compression supported cash generation. Investing CF was -¥424.4B, driven mainly by CapEx -¥583.7B, while proceeds from sales of investment securities ¥217.1B supplemented funding. Financing CF was -¥349.2B, driven by dividend payments -¥138.9B and share buybacks -¥100.1B for shareholder returns, and CP repayment -¥100.0B as cash outflows. FCF was ¥340.0B (OCF ¥764.4B + Investing CF -¥424.4B), ample and demonstrating capacity to fund shareholder returns and large investments from internal funds. Cash and cash equivalents at year-end were ¥284.4B (prior year ¥268.4B, +¥16.0B), indicating no liquidity concerns.
The gap between Operating Income ¥363.8B and Ordinary Income ¥400.4B (difference ¥36.6B) was influenced by non-operating gains such as foreign exchange gains ¥20.1B and dividend income ¥29.2B, which are temporary factors; however, recurring earnings quality remains high. Net special items of ¥92.7B (gain on sale of investment securities ¥173.1B - impairment losses ¥48.0B - valuation losses ¥22.9B, etc.) boosted Net Income by roughly 34%. Comprehensive Income ¥434.8B exceeded Net Income ¥272.9B by ¥161.9B, with valuation differences on available-for-sale securities ¥43.0B, foreign currency translation adjustments ¥20.9B, and retirement benefit adjustments ¥5.4B recorded in accumulated OCI, reflecting unrealized gains on market valuations. OCF being 2.8x Net Income underscores the working capital improvement effect, but with inventory days still at 156 days, further normalization of inventory is necessary for sustainable cash generation. Excluding the one-time expense relief from the depreciation method change (~¥22.9B), core Operating Income would be approximately ¥341B (+16.3%), indicating solid underlying improvement.
Full Year guidance was Revenue ¥4,050.0B (YoY -1.7%), Operating Income ¥380.0B (+4.5%), Ordinary Income ¥370.0B (-7.6%), and EPS forecast corresponding to Net Income of ¥185.51. Actuals were Revenue ¥4,119.7B (vs forecast +1.7%), Operating Income ¥363.8B (vs forecast -4.3%), and Ordinary Income ¥400.4B (vs forecast +8.2%), so Revenue and Ordinary Income exceeded guidance while Operating Income slightly missed. Due to sizable special gains, bottom-line results roughly met expectations (Net Income attributable to owners of parent ¥362.3B, EPS equivalent ¥186.7, vs forecast +0.6%). Progress against full-year guidance was Revenue 101.7%, Operating Income 95.7%, Ordinary Income 108.2%, suggesting a conservative stance at the operating level and incorporation of one-off gains into projections. Dividend guidance is an annual ¥39 (actuals interim ¥36 + year-end ¥40 = ¥76) and based on actual payout ratio 54.9%, there remains scope for further returns.
Annual dividend was interim ¥36 + year-end ¥40 totaling ¥76, with Payout Ratio 54.9% (dividend payment equivalent to ¥140B against Net Income attributable to owners of parent ¥362.3B). Total returns including share buybacks of ¥100.1B amounted to approximately ¥240B, implying Total Return Ratio about 66%, a level compatible with continued growth investment. Coverage of dividend plus buybacks against FCF ¥340.0B is 1.42x, sufficient, and the ample OCF supports sustainability of returns. Prior year interim dividend was ¥35 (actual) with year-end not disclosed; current year ¥76 represents a significant year-on-year increase, reflecting stronger earnings and cash generation. Next fiscal year dividend guidance ¥39 assumes a substantial reduction from this year’s ¥76, but given conservative earnings forecasts, upside revision remains possible. A payout ratio in the low-50% range is sustainable and compatible with large investments (CapEx / Depreciation 3.39x), confirming financial capacity to balance investment and returns.
Large investment ramp-up risk: Construction in progress ¥703.5B (36.2% of tangible fixed assets) is at record levels as capacity expansion investments in High-Performance Materials proceed. Delays in commissioning, cost overruns in start-up, or demand forecast divergence could increase depreciation burden and lengthen investment payback, impairing profitability and ROE. The recording of impairment losses ¥48.0B underscores the importance of fixed-asset profitability management.
Elevated inventory risk: Inventory ¥933.6B equals roughly 3.5 months of revenue and inventory days of 156 days (DIO) remain high. In a demand downturn, risks include inventory valuation losses and obsolescence, and deterioration in working capital efficiency could constrain cash generation. Improving CCC of 139 days may require an increase in trade payables, but payables decreased by -¥98.8B YoY, indicating supply chain optimization is a key challenge.
Dependence on special items risk: Approximately ¥92.7B (about 34%) of this fiscal year’s Net Income ¥272.9B derived from net special items, with gain on sale of investment securities ¥173.1B as a major component. Reversal of such gains and volatility in impairment and valuation losses could affect profits in subsequent periods. Evaluations of earnings power should be based on core Operating Income (~¥341B excluding one-time effects), and achieving sustainable profit growth independent of one-offs is essential to meet shareholder expectations.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating margin | 8.8% | 7.8% (4.6%–12.3%) | +1.1pt |
| Net margin | 6.6% | 5.2% (2.3%–8.2%) | +1.4pt |
Profitability exceeds the industry median, contributed by margin improvement from mix shifts toward High-Performance Materials.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | -2.1% | 3.7% (-0.4%–9.3%) | -5.8pt |
Revenue growth lags the industry median, affected by softer elastomer markets and demand declines.
※Source: Company compilation
The High-Performance Materials Business margin of 18.0% (Operating Income ¥224.2B) drove company-wide profitability, and its share expansion to 30.2% improved the revenue structure. The build-up of Construction in progress ¥703.5B represents capacity expansion investments in this area; once commissioned, it should be a medium-term growth driver. However, progress on investment recovery and margin sustainability are key watch points, with demand trends and pricing competition as risk factors.
Strong cash generation with OCF ¥764.4B (2.8x Net Income) and FCF ¥340.0B derives from working capital improvements (inventory -¥156.8B, receivables -¥177.9B), though sustainability requires further compression of inventory days from 156 days. A reduction in payables -¥98.8B was a cash outflow factor; optimizing supply chain financing efficiency will determine next-stage cash generation. Equity Ratio 69.0% and net cash ¥127.2B provide the financial capacity to balance growth investment and shareholder returns.
Net special gains ¥92.7B (≈34% of Net Income) were a one-off boost; evaluating earnings power based on core Operating Income ~¥341B (excluding depreciation method change effect) is important. The next fiscal year Operating Income guidance ¥380.0B appears conservative, but commissioning timing of large investments and progress in inventory normalization are key to potential upward revisions. Payout Ratio 54.9% and Total Return Ratio 66% are sustainable, and FCF coverage 1.42x suggests room to expand returns.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary before making any investment decisions.