FUJIFILM Holdings Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.57T
• Operating Income: ¥158.49B
• Net Income: ¥120.23B

Income Statement

Balance Sheet

Profitability Ratios

Share Information

Dividend Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Verdict: FY2026 Q2 was solid on absolute profit generation with conservative leverage, but capital efficiency remains subdued and cash flow visibility is limited due to unreported items. Revenue came in at 15,723.63 (100M JPY) and operating income at 1,584.86, implying a current operating margin of about 10.1%. Profit before tax was 1,619.14, indicating modest net non-operating gains of roughly 34.28. Net income totaled 1,202.32, translating to a net margin of 7.7%. ROE is calculated at 3.4% based on a DuPont decomposition of 7.7% net margin, 0.284x asset turnover, and 1.58x financial leverage. ROIC is reported at 3.2%, below the 5% warning threshold and well under the 7–8% management KPI benchmark common among Japanese corporates. Balance sheet strength is evident with total assets of 55,337.92 and equity of 34,947.16, yielding an equity ratio of 63.1% and conservative leverage (assets/equity ~1.58x). Margin comparison versus prior periods is not possible due to missing YoY/QoQ figures, but the net margin trails the operating margin by roughly 240 bps, suggesting tax and other below-the-line items reduced profitability from operating to net level. Earnings quality cannot be validated as operating cash flow and free cash flow are unreported; OCF/NI and FCF coverage ratios are thus not calculable. The payout ratio is calculated at 67.2%, slightly above the 60% sustainability benchmark, increasing the importance of cash generation discipline in the second half. The slight positive non-operating contribution (PBT > OI) is supportive but likely not a structural driver. Asset turnover at 0.284x points to a capital-intensive mix and/or mid-cycle utilization, which constrains ROE despite decent margins. With leverage intentionally conservative, future ROE improvements must come from margin expansion and/or better asset efficiency. Data gaps (COGS, gross profit, SG&A, OCF, capex) limit deeper diagnostics on mix, cost control, and cash conversion. Forward-looking, maintaining a ~10% operating margin while lifting ROIC above 5% will be key to value creation; otherwise, the elevated payout ratio could pressure financial flexibility if cash generation lags.

Profitability Analysis

ROE decomposition: ROE (3.4%) = Net Profit Margin (7.7%) × Asset Turnover (0.284x) × Financial Leverage (1.58x). The lowest contributor is asset turnover at 0.284x, which is the principal drag on ROE, while financial leverage is deliberately conservative and margin is the strongest of the three components. Given the absence of YoY/QoQ comparatives, the component change cannot be quantified; however, structurally low turnover suggests capital intensity and inventory/working capital needs are likely the binding constraint on returns versus margin or leverage. Business rationale: Fujifilm’s portfolio includes healthcare, materials, and imaging solutions that require significant fixed assets and R&D, naturally depressing turnover versus light-asset peers; the margin profile (~10% OPM, 7.7% NPM) indicates reasonable pricing and mix. Sustainability: the margin appears sustainable near term absent evidence of unusual items; non-operating gains were modest (+34.28), indicating limited reliance on one-offs. The spread from operating to net margin (~240 bps) likely reflects taxes and ordinary below-the-line items rather than outsized financial costs (interest unreported). Watch-outs: without SG&A disclosure, we cannot confirm operating leverage; if SG&A growth were to exceed revenue growth, margin pressure would emerge, but data is unavailable to verify.

Growth Assessment

Top-line sustainability cannot be assessed for growth trajectory due to missing YoY/QoQ data. Current profitability (10.1% OPM, 7.7% NPM) indicates a healthy margin base from which to defend earnings even if growth slows. The modest positive non-operating contribution suggests earnings are primarily operating-driven, which is favorable for quality. However, ROIC at 3.2% signals that current investment returns are below common cost-of-capital proxies, implying future growth must be higher return or more selective. Without R&D and capex data, the durability of innovation-led growth and the pace of reinvestment are unclear. Outlook hinges on improving asset efficiency (inventory turns, project ramp-ups) to raise ROIC above 5% while holding margins around 10%.

Financial Health

Liquidity: Current ratio and quick ratio are unreported; therefore, near-term liquidity cannot be quantified. Solvency: Equity ratio is 63.1%, indicating a conservative capital structure; assets/equity ~1.58x implies low balance sheet leverage. Debt metrics (interest-bearing debt, D/E) are unreported, preventing calculation of D/E or interest coverage. Maturity mismatch risk cannot be assessed without current assets/liabilities and debt tenor data. No off-balance sheet obligations are disclosed in the provided data. Explicit warnings: None triggered for Current Ratio < 1.0 or D/E > 2.0, but this is due to non-disclosure rather than confirmed strength.

Cash Flow Quality

OCF and FCF are unreported, so OCF/Net Income and FCF coverage cannot be calculated. As a result, earnings quality cannot be validated; the possibility of working capital-driven earnings cannot be ruled in or out. The small positive non-operating line (PBT > OI) does not suggest heavy reliance on non-cash gains this quarter, but the absence of depreciation, working capital, and capex data is a material limitation. No clear signs of working capital manipulation can be assessed with the current information.

Dividend Sustainability

The calculated payout ratio is 67.2%, modestly above the <60% benchmark for sustainability. With FCF unreported, coverage of dividends by free cash flow is unknown, increasing reliance on second-half cash generation. The strong equity base (63.1% equity ratio) offers balance sheet flexibility, but if ROIC remains at 3.2% and cash conversion lags, sustaining a >60% payout could constrain reinvestment or necessitate trade-offs. Dividend policy outlook cannot be inferred from DPS trends as DPS is unreported.

Risk Assessment

Business Risks:

• Low asset turnover (0.284x) constraining ROE and ROIC performance.
• Potential margin pressure if SG&A or input costs rise (gross profit and SG&A unreported).
• Execution risk in capital-intensive segments that require sustained R&D and capex (data unreported).
• Product and end-market cyclicality across healthcare, materials, and imaging solutions.

Financial Risks:

• Dividend payout ratio at 67.2% without FCF disclosure raises coverage risk.
• ROIC at 3.2% below the 5% warning threshold suggests sub-par capital returns.
• Liquidity and leverage metrics (current ratio, D/E, interest coverage) unreported, masking potential risks.

Key Concerns:

• Inability to verify cash flow quality (OCF/NI and FCF not available).
• Limited visibility on cost structure and operating leverage due to unreported COGS/gross profit/SG&A.
• Potential tax and below-the-line impacts compressing net margin by ~240 bps from operating margin.

Investment Implications

Key Takeaways:

• Solid operating performance with 10.1% OPM and 7.7% NPM.
• Positive but small non-operating contribution (PBT > OI by ~34.28).
• Conservative balance sheet (equity ratio 63.1%, leverage ~1.58x).
• Capital efficiency is the weak link: ROE 3.4% and ROIC 3.2%.
• Dividend payout ratio elevated at 67.2% with unknown FCF coverage.

Metrics to Watch:

• Operating cash flow, free cash flow, and OCF/NI ratio (target >1.0).
• Capex and R&D levels to gauge reinvestment and ROIC trajectory.
• Gross margin and SG&A trends to confirm cost discipline.
• Asset turnover (inventory turns, receivables days) to lift ROE/ROIC.
• Effective tax rate and non-operating items that bridge OPM to NPM.

Relative Positioning: Relative to domestic diversified tech/healthcare peers, Fujifilm shows strong balance sheet conservatism and healthy operating margins but lags on capital efficiency (ROIC 3.2%), implying a need for improved asset utilization or mix to close the return gap.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis