Noevir Holdings Co.,Ltd. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥64.72B
• Operating Income: ¥11.07B
• Net Income: ¥8.09B
• EPS: ¥235.10

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment 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

Noevir Holdings reported FY2025 consolidated results under JGAAP with modest top-line growth and resilient bottom-line delivery. Revenue increased 1.4% year over year to ¥64.7bn, while operating income declined 3.0% to ¥11.1bn, indicating mild negative operating leverage. Gross profit reached ¥43.2bn, implying a robust gross margin of 66.7%, which remains a core strength and suggests solid pricing power and/or favorable product mix. Despite the operating profit decline, net income rose 0.8% to ¥8.03bn, supported by stable non-operating items as ordinary income outpaced operating income. DuPont analysis indicates ROE of 14.81%, driven by a healthy net margin of 12.41%, moderate asset turnover of 0.846x, and conservative financial leverage of 1.41x. Operating cash flow was ¥7.93bn (OCF/Net Income ~0.99x), indicating good earnings-to-cash conversion. Free cash flow of ¥5.51bn was solid and more than sufficient to fund typical maintenance capex and working capital needs. The balance sheet is strong, with total assets of ¥76.5bn and total equity of ¥54.2bn, translating to low leverage (liabilities/equity ~0.42x). Liquidity is excellent, with a current ratio of 538% and a quick ratio of 470%, implying substantial headroom to absorb shocks. Working capital stood at ¥40.8bn, supported by moderate inventory levels of ¥6.31bn; inventory days are estimated at roughly 111 days (based on reported cost of sales). Financing cash outflows of ¥7.92bn suggest active shareholder returns and/or debt reductions, although specific breakdowns are not disclosed here. The effective tax burden appears around 30% when comparing income tax expense (¥3.53bn) versus ordinary income, despite a reported “effective tax rate” metric of 0.0% that reflects unreported classification rather than actual zero taxation. While top-line growth softened, profitability remains comparatively high for the sector, and cash generation is healthy. The key watchpoint is SG&A discipline, as a slight revenue gain coincided with lower operating income, pointing to cost inflation or higher marketing spend. Several datapoints (e.g., cash and equivalents, dividend per share, share count, and equity ratio field) are not disclosed here and should not be interpreted as literal zeros. Overall, the company enters the new fiscal year with a strong financial foundation, healthy ROE, and robust cash flow, but with a need to reignite revenue momentum and guard against negative operating leverage.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 12.41%
• asset_turnover: 0.846x
• financial_leverage: 1.41x
• calculated_ROE: 14.81%
• commentary: ROE in the mid-teens is primarily margin-driven, with moderate asset efficiency and conservative leverage. Ordinary income exceeding operating income indicates positive non-operating contributions supporting equity returns. margin_quality: Gross margin of 66.7% underscores strong pricing power/product mix. Operating margin is approximately 17.1% (¥11.08bn / ¥64.72bn). Net margin at 12.41% remains robust even as operating income slipped YoY, implying cost pressure likely arose in SG&A rather than COGS. operating_leverage: Revenue +1.4% YoY vs operating income -3.0% YoY indicates mild negative operating leverage. Maintaining SG&A efficiency will be key; incremental growth should translate to improved operating margin if fixed costs are contained.

Growth Assessment

revenue_sustainability: Top-line growth of 1.4% suggests a mature demand environment. High gross margins imply mix and pricing support, but volume growth appears modest. profit_quality: Net income +0.8% despite lower operating income points to supportive non-operating items. Tax expense of ¥3.53bn implies an effective tax rate near 30%, consistent with normalized profitability rather than one-offs. outlook: With strong margins and cash generation, the company is positioned to invest in marketing, channels, and product innovation; however, near-term growth likely remains modest unless new product cycles or channel expansion accelerate.

Financial Health

liquidity: Current ratio 537.9% and quick ratio 470.2% reflect ample liquidity. Working capital is ¥40.83bn with inventories at ¥6.31bn (~111 days of inventory). solvency: Total liabilities/total equity of ~0.42x indicates a conservatively capitalized balance sheet. Financial leverage of 1.41x (Assets/Equity) supports a strong solvency profile. capital_structure: Low dependence on interest-bearing debt is implied by zero reported interest expense; ordinary income exceeds operating income, indicating net financial income or other non-operating gains.

Cash Flow Quality

earnings_quality: OCF/Net Income of ~0.99x (¥7.93bn / ¥8.03bn) indicates good cash realization from earnings, with limited accrual buildup. FCF_analysis: Free cash flow of ¥5.51bn is solid relative to net income (FCF/NI ~0.69x) and revenue (FCF margin ~8.5%). Investing cash outflows of ¥2.42bn likely reflect capex and selective investments. working_capital: Working capital is ample; inventory levels appear manageable. Continued monitoring of receivables and payables is warranted given the modest OCF/NI variance.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are not disclosed here (zeros indicate non-disclosure). On capacity, net income of ¥8.03bn and FCF of ¥5.51bn suggest room to fund dividends if consistent with policy. FCF_coverage: With FCF of ¥5.51bn and low leverage, prospective dividends would likely be well covered; actual coverage cannot be computed without disclosed DPS. policy_outlook: Financing cash outflows of ¥7.92bn hint at shareholder return activities and/or debt service; absent explicit DPS, we assume a balanced approach between returns and reinvestment, supported by strong liquidity.

Risk Assessment

Business Risks:

• Soft domestic demand and slow category growth limiting top-line acceleration
• Higher SG&A (marketing, promotions) pressuring operating leverage
• Input cost inflation (raw materials, packaging) and logistics costs
• FX volatility affecting imported materials and overseas procurement
• Competitive intensity in cosmetics and personal care channels
• Regulatory and quality control risks in cosmetics manufacturing

Financial Risks:

• Reliance on non-operating income to bridge operating profit softness
• Working capital swings affecting OCF in slower-growth periods
• Inventory obsolescence risk tied to product cycles and channel mix
• Potential mismatch between investment needs and cash returns activities
• Limited visibility due to certain undisclosed line items (e.g., cash, DPS)

Key Concerns:

• Negative operating leverage despite revenue growth
• Need to preserve high gross margins amid cost inflation
• Moderate asset turnover constraining ROE upside without growth

Investment Implications

Key Takeaways:

• ROE at 14.81% supported by strong margins and conservative leverage
• Gross margin at 66.7% is a structural strength; operating margin ~17.1%
• Cash generation solid with OCF/NI ~0.99x and FCF of ¥5.51bn
• Balance sheet conservative with liabilities/equity ~0.42x and high liquidity
• Mild negative operating leverage is the primary near-term pressure point

Metrics to Watch:

• Revenue growth trajectory and market share trends
• SG&A ratio to sales and operating margin progress
• Gross margin stability amid input cost and FX movements
• OCF/Net Income and FCF conversion
• Inventory days and overall working capital turns
• Non-operating income contribution to ordinary income

Relative Positioning: Within Japan cosmetics peers, Noevir combines high gross margins, mid-teens ROE, and low leverage, but exhibits slower growth and some negative operating leverage, placing it as a quality, cash-generative operator with moderate expansion prospects.

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