| Metric | Current Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥504.7B | ¥494.6B | +2.0% |
| Operating Income / Operating Profit | ¥22.7B | ¥25.9B | -12.2% |
| Ordinary Income | ¥24.4B | ¥26.8B | -8.9% |
| Net Income | ¥16.2B | ¥16.2B | -0.4% |
| ROE | 3.7% | 3.8% | - |
For the fiscal year ended March 2026, Revenue was ¥504.7B (prior ¥494.6B, +¥10.1B, +2.0%) achieving top-line growth, while Operating Income was ¥22.7B (prior ¥25.9B, -¥3.2B, -12.2%), Ordinary Income was ¥24.4B (prior ¥26.8B, -¥2.4B, -8.9%), and Net Income attributable to owners of parent was ¥16.2B (prior ¥16.2B, -¥0.1B, -0.4%), resulting in declines at the operating and ordinary stages. Gross margin fell to 29.8% (prior 30.1%, -0.3pt), SG&A ratio rose to 25.3% (prior 24.9%, +0.4pt), and Operating Margin contracted to 4.5% (prior 5.2%, -0.7pt). The Medical Business maintained high profitability (Operating Margin 25.3%), but the low-margin Tape Business (Operating Margin 3.2%) and heavy corporate expenses of ¥48.8B weighed on consolidated profitability. Special losses of ¥3.2B, including ¥1.3B in head office relocation-related expenses, lowered pre-tax income and left the bottom line roughly flat with the prior year. Operating Cash Flow (OCF) was ¥25.4B (prior ¥36.9B, -31.2%), hit by a large decrease in accounts payable and higher tax payments, leaving Free Cash Flow at ¥3.0B. Financial soundness remains high with an Equity Ratio of 65.9% and Debt/EBITDA of 0.39x.
[Revenue] Revenue of ¥504.7B (+2.0%) reflected increases in both the Medical Business at ¥250.3B (+1.4%) and the Tape Business at ¥256.1B (+2.7%). In Medical, Domestic Healthcare Field was ¥153.1B (+0.4%) and Medical Supplies Field was ¥56.8B (-1.1%), largely flat, while Global Field expanded to ¥28.0B (+13.4%) driven by overseas markets. Tape was led by the Industrial Products Field at ¥138.6B (+5.1%), with EC Field ¥42.0B (+2.1%) and Stationery Field ¥48.4B (+0.0%) remaining resilient. By region, Domestic was ¥454.5B (+2.0%) and Overseas was ¥50.0B (+4.4%), with Domestic accounting for 90% of sales and Overseas remaining around 10%. Sales to major customer PIP were ¥84.2B (prior ¥81.0B, +4.0%), representing about 34% of Medical sales. Revenue composition was nearly balanced: Tape 50.7%, Medical 49.3%.
[Profitability] Cost of goods sold was ¥354.4B (+2.6%), outpacing Revenue growth (+2.0%), causing Gross Margin to decline to 29.8% (prior 30.1%, -0.3pt). Limited pass-through of higher raw material and logistics costs and limited mix improvement were contributing factors. SG&A was ¥127.5B (+3.6%), rising faster than sales and lifting the SG&A ratio to 25.3% (prior 24.9%, +0.4pt). The SG&A increase was mainly due to higher corporate expenses of ¥47.2B (prior ¥45.8B, +3.1%), which included one-off head office relocation costs. Operating Income was ¥22.7B (-12.2%), with Operating Margin at 4.5% (-0.7pt). Non-operating items contributed positively: interest and dividend income ¥0.7B and equity-method investment gains ¥1.1B, offset by interest expenses ¥0.4B and other non-operating expenses ¥0.4B, resulting in net non-operating income of +¥1.7B and Ordinary Income of ¥24.4B (-8.9%). Special losses of ¥3.2B (impairment losses ¥0.5B, loss on disposal of fixed assets ¥0.4B, head office relocation-related expenses ¥1.3B, etc.) reduced pre-tax income to ¥21.2B (-19.2%). After corporate taxes of ¥4.7B (effective tax rate 22.2%), Net Income attributable to owners of parent was ¥16.2B (-0.4%). Comprehensive income was ¥21.9B, with Other Comprehensive Income of ¥5.4B (foreign currency translation adjustments ¥0.1B, valuation difference on available-for-sale securities ¥1.6B, remeasurement of defined benefit plans ¥3.2B, share of OCI of affiliates ¥0.5B) exceeding Net Income and resulting in a capital enhancement effect from revaluation. In conclusion, despite revenue growth, cost increases and higher SG&A led to revenue-up/profit-down dynamics.
The Medical Business reported Revenue ¥250.3B (+1.4%), Operating Income ¥63.3B (-4.4%), and Operating Margin 25.3% (prior 26.9%, -1.6pt), maintaining high profitability though margins contracted. Domestic Healthcare Field was ¥153.1B (+0.4%) slightly up, Medical Supplies Field ¥56.8B (-1.1%) slightly down, indicating a maturing domestic market. Global Field grew strongly to ¥28.0B (+13.4%), making overseas expansion a key growth driver. The Tape Business posted Revenue ¥256.1B (+2.7%), Operating Income ¥8.3B (+17.3%), and Operating Margin 3.2% (prior 2.8%, +0.4pt); despite revenue and profit growth, profitability remains low. Industrial Products Field led at ¥138.6B (+5.1%), and the EC Field ¥42.0B (+2.1%) was steady. Stationery Field ¥48.4B (flat) shows signs of market saturation. Segment total Operating Income was ¥71.5B, offset by corporate expense adjustments of -¥48.8B, resulting in consolidated Operating Income of ¥22.7B. Medical generated about 88% of segment profits; Tape is large in scale but contributes limited profit. The heavy corporate expense burden clearly pressures overall profitability, making Tape margin improvement and corporate cost optimization key issues.
[Profitability] Operating Margin 4.5% (prior 5.2%, -0.7pt), Ordinary Income Margin 4.8% (prior 5.4%, -0.6pt), Net Income Margin 3.2% (prior 3.3%, -0.1pt) — margins decreased at all stages. Declining Gross Margin 29.8% (prior 30.1%, -0.3pt) and rising SG&A ratio 25.3% (prior 24.9%, +0.4pt) were drivers. ROE 3.7% (prior 4.6%, -0.9pt) fell due to lower profitability and Net Income margin. [Cash Quality] OCF/Net Income ratio is 1.54x, indicating good cash backing of accounting profits, but OCF/EBITDA is 0.50x showing weak cash conversion efficiency. A decrease in accounts payable of ¥19.4B and tax payments of ¥10.1B pressured OCF. Working capital turnover days show room for improvement: DSO 65 days (Accounts receivable ¥89.8B ÷ daily sales ¥1.38B), DIO 96 days (Inventory ¥54.5B ÷ daily COGS ¥0.97B). [Investment Efficiency] Total Asset Turnover 0.75x (prior 0.73x, +0.02x) slightly improved. Capital expenditures ¥19.0B were below depreciation ¥28.4B, with CapEx/Depreciation at 0.67x, indicating renewal-level investment. Tangible Fixed Asset Turnover 2.38x (Revenue ¥504.7B ÷ Tangible fixed assets ¥211.7B) indicates high asset efficiency. [Financial Soundness] Equity Ratio 65.9% (prior 63.9%, +2.0pt), Current Ratio 227.8% (prior 233.3%, -5.5pt), Quick Ratio 196.1% (prior 199.7%, -3.6pt) — very healthy. Interest-bearing debt consists only of long-term borrowings ¥20.0B, Debt/EBITDA 0.39x, Interest Coverage 116x (OCF ¥25.4B ÷ interest paid ¥0.4B), indicating ample financial capacity. Cash and deposits ¥137.3B far exceed short-term interest-bearing debt ¥20.0B, minimizing liquidity risk.
OCF was ¥25.4B (prior ¥36.9B, -31.2%). Starting from pre-tax income ¥21.2B plus depreciation ¥28.4B, OCF subtotal was ¥36.1B, from which working capital changes of -¥10.7B (inventory changes +¥1.6B, accounts receivable changes -¥0.1B, accounts payable changes -¥19.4B, accrued expenses changes +¥3.2B, income taxes payable changes -¥3.2B, etc.) and corporate tax payments ¥10.1B were deducted. The large decrease in accounts payable of ¥19.4B was the main factor reducing OCF year-on-year. Investing Cash Flow was -¥22.4B (prior -¥16.9B), driven by Capital Expenditure ¥19.0B (prior ¥12.9B), intangible asset purchases ¥1.7B (prior ¥0.4B), and payments for disposal of fixed assets ¥1.4B (prior ¥0.5B). Increased CapEx related to head office relocation worsened investing CF. Free Cash Flow was ¥3.0B (prior ¥20.0B, -85.0%), insufficient to cover shareholder returns of dividends ¥7.1B and share buybacks ¥3.4B (total ¥10.5B). Financing Cash Flow was -¥11.1B (prior -¥7.6B) with dividend payments ¥7.1B, share buybacks ¥3.4B, and lease liability repayments ¥0.6B as outflows, and proceeds from treasury stock disposals ¥0.0B as inflow. Beginning cash balance ¥143.1B plus Free Cash Flow ¥3.0B, Financing CF -¥11.1B, and foreign exchange effects ¥0.2B resulted in ending cash balance ¥135.1B (down ¥8.0B, -5.6%). The gap between OCF subtotal ¥36.1B and reported OCF ¥25.4B was driven by weak working capital management and heavy tax outflows; improving accounts payable management and DIO/DSO are urgent.
Operating Income ¥22.7B derives from recurring business activities. Non-operating income ¥3.4B (interest and dividends ¥0.7B, equity-method investment gains ¥1.1B, other ¥1.0B) is modest at roughly 15% of Operating Income. Equity-method gains ¥1.1B reflect contributions from affiliates and, while slightly down from ¥1.3B prior, remain a stable income source. Non-operating expenses ¥1.7B (interest paid ¥0.4B, fees paid ¥0.1B, other ¥0.4B) are limited, so Ordinary Income ¥24.4B appropriately reflects operating strength. Special losses ¥3.2B (impairment ¥0.5B, loss on disposal of fixed assets ¥0.4B, head office relocation-related expenses ¥1.3B, etc.) are one-off; the head office relocation expense ¥1.3B is a one-time charge this fiscal year. The impairment ¥0.5B was recorded in the Medical segment and suggests disposal or write-down of idle assets or assets with reduced future cash flow prospects. The divergence between Ordinary Income ¥24.4B and Net Income ¥16.2B is due to special losses and taxes; from a recurring earnings perspective, Ordinary Income is a more appropriate indicator. Comprehensive Income ¥21.9B exceeded Net Income by ¥5.7B, with Other Comprehensive Income ¥5.4B (remeasurement of defined benefit plans ¥3.2B, valuation difference on securities ¥1.6B, etc.) contributing to capital strengthening. Although OCF exceeds Net Income, OCF/EBITDA of 0.50x indicates delayed accrual cash conversion; the impact of accounts payable reduction and tax payments is strong, necessitating improvements in working capital management and cash conversion efficiency.
Full-year guidance projects Revenue ¥520.0B (YoY +3.0%), Operating Income ¥36.0B (YoY +58.5%), Ordinary Income ¥37.0B (YoY +51.5%), and Net Income attributable to owners of parent ¥23.0B (YoY +41.9%). Compared with actuals, Operating Income is planned to rise significantly from ¥22.7B to ¥36.0B (+¥13.3B), with Operating Margin improving from 4.5% to 6.9% (+2.4pt). Progress rates stand at Revenue 97.1%, Operating Income 63.1%, Ordinary Income 66.0%. The plan assumes one-off head office relocation costs will drop out, corporate expense optimization, stabilization of raw material costs and progress in price pass-through, and margin improvement in the Tape Business, driving recovery in profitability. Realization hinges on controlling SG&A (reducing corporate expenses), recovering Gross Margin (price/mix improvement), and improving working capital efficiency to boost OCF. Dividend guidance indicates only a year-end dividend (interim ¥0), with annual dividend undecided; based on past practice (annual ¥40), continuation of dividends is possible. PER forecast cannot be calculated due to lack of share price data, but EPS forecast 113.06円 (from actual 81.22円, +39.2%) embeds substantial earnings growth; market assessment will depend on realization probability.
A year-end dividend of ¥40 (interim dividend ¥0) was declared, maintaining the annual dividend at ¥40, unchanged from prior year. Total dividends amounted to ¥7.1B (prior ¥7.1B) and Payout Ratio was 49.3% (DPS ¥40 ÷ EPS 81.22円), maintaining an appropriate level. Cash-based payout ratio is approximately 43.1% (dividend total ¥7.1B ÷ Net Income attributable to owners of parent ¥16.5B), within a sustainable range. Share buybacks totaled ¥3.4B (prior ¥0.0B), equivalent to approximately 56k shares acquired (increase in treasury stock book value ¥3.4B), demonstrating an active capital policy. Combined dividends and buybacks totaled ¥10.5B, with Total Return Ratio about 64.7% (Total return ¥10.5B ÷ Net Income attributable to owners of parent ¥16.2B), signaling a strong shareholder-return stance. However, Free Cash Flow ¥3.0B was insufficient to cover total returns ¥10.5B, so internal funds did not fully cover returns; FCF coverage was 0.29x (FCF ¥3.0B ÷ total return ¥10.5B), a low level, indicating returns were effectively funded by drawing down cash. Next fiscal year, balancing returns and investment will depend on OCF improvement. Dividend policy is undecided, but based on historical practice, stable dividends are expected to continue.
Low-margin business structure risk: The Tape Business, with Revenue ¥256.1B (50.7% of sales), is large in scale but low-margin with Operating Income ¥8.3B (Operating Margin 3.2%), diluting consolidated profits. Although Industrial Products Field drives growth, Stationery Field is flat with market saturation. If Tape margin improvement lags, consolidated profitability may suffer structurally. Heavy corporate expenses of ¥48.8B (9.7% of sales) further depress Operating Margin, which at 4.5% is well below the industry median of 7.8%. Suppressing SG&A and optimizing Tape SKUs and increasing high-value-added product mix are essential; delays would make achieving next year’s plan (Operating Margin 6.9%) difficult.
Working capital management and cash conversion risk: With OCF ¥25.4B and OCF/EBITDA 0.50x, cash conversion efficiency is weak. A decrease in accounts payable of ¥19.4B was the main reason OCF fell -31.2% yoy. DIO 96 days and DSO 65 days indicate slow working capital turnover; weak inventory and credit management hurt capital efficiency. Free Cash Flow ¥3.0B cannot cover total shareholder returns of ¥10.5B, making it tight to balance shareholder returns and growth investment from internal funds alone. Without working capital improvements, dependence on external funding may rise and financial flexibility may decline.
Customer concentration and market volatility risk: Sales to major customer PIP ¥84.2B account for about 16.7% of revenue; changes in trading terms or demand could directly impact results. The Medical Business is highly dependent on PIP (approximately 33.7% of Medical sales), creating risk if contract terms deteriorate or competition intensifies. Continued rises in raw materials (resins, paper, adhesives) and logistics costs, and delays in passing these costs to prices have pressured Gross Margin (29.8%, -0.3pt yoy), and continued cost increases would further squeeze profitability. Strengthening environmental regulation and asset retirement obligations ¥7.6B (3.3% of liabilities) could also increase medium- to long-term cash outflows.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.5% | 7.8% (4.6%–12.3%) | -3.3pt |
| Net Income Margin | 3.2% | 5.2% (2.3%–8.2%) | -2.0pt |
Operating Margin 4.5% is 3.3pt below the industry median 7.8%, placing the company in the lower tier among peers. While the high-margin Medical Business lifts the company average, the low-margin Tape Business and heavy corporate expenses depress profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 2.0% | 3.7% (-0.4%–9.3%) | -1.7pt |
Revenue growth of 2.0% trails the industry median 3.7% by 1.7pt. A mature domestic market and Tape Business saturation constrain growth; accelerating global expansion is key to faster growth.
※ Source: Company compilation
The Medical Business’s high profitability (Operating Margin 25.3%) underpins a strong earnings base, supported by competitive advantage in medical supplies and healthcare fields and stable relationships with major customers such as PIP. The Global Field grew +13.4%, indicating overseas expansion as the next growth driver for Medical. Conversely, the Tape Business, despite large sales scale, is low-margin (Operating Margin 3.2%) and structurally dilutes consolidated profits. Achieving next year’s plan (Operating Income +58.5%, Margin 6.9%) requires Tape margin improvement (SKU rationalization, higher share of high value-added products, price pass-through) and corporate expense reduction; execution certainty is critical.
Financial soundness is very high: Equity Ratio 65.9%, Debt/EBITDA 0.39x, Interest Coverage 116x, Cash and deposits ¥137.3B (short-term interest-bearing debt ¥20.0B) provide strong downside resilience. However, OCF ¥25.4B and Free Cash Flow ¥3.0B fell sharply yoy, with accounts payable reduction ¥19.4B and slow working capital turnover (DIO 96 days, DSO 65 days) weighing on cash generation. Total returns of dividends ¥7.1B and buybacks ¥3.4B (total ¥10.5B) are not covered by FCF; restoring returns depends on improving working capital and OCF. If DIO/DSO shorten and accounts payable management is optimized, cash generation could materially improve, enabling sustained shareholder returns alongside growth investments.
This report was generated automatically 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 the company based on public financial statements. Investment decisions should be made at your own responsibility and, where appropriate, after consulting a professional advisor.