| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥744.8B | ¥718.5B | +3.7% |
| Operating Income | ¥249.8B | ¥269.1B | -7.2% |
| Ordinary Income | ¥263.2B | ¥270.3B | -2.6% |
| Net Income | ¥181.9B | ¥165.4B | +10.0% |
| ROE | 12.4% | 12.9% | - |
For the fiscal year ended March 2026, MARUWA reported Revenue of ¥744.8B (YoY +¥26.3B, +3.7%), Operating Income of ¥249.8B (YoY -¥19.3B, -7.2%), Ordinary Income of ¥263.2B (YoY -¥7.1B, -2.6%), and Net Income of ¥181.9B (YoY +¥16.5B, +10.0%), resulting in revenue growth and net income growth on the bottom line. The decline in Operating Income was partly offset by increased non-operating income (interest income ¥6.2B, foreign exchange gains ¥5.6B, etc., totaling ¥14.7B), which limited the decline in Ordinary Income to -2.6%. At the Net Income level, the prior-year extraordinary loss of ¥24.7B (including impairment/write-down losses) did not recur, and this period’s net special items were marginally positive at ¥0.98B, resulting in Net Income growth of +10.0%. Operating margin contracted to 33.5% (prior year 37.5%), down 4.0pt, and gross margin declined to 52.6% (prior year 54.9%), down 2.3pt. The core Ceramic Components Business posted Operating Income down -9.3%, which was the primary driver of the overall decline, while the Lighting Equipment Business showed a substantial improvement with Operating Income +49.0%, raising its margin to 20.0% (prior year 15.3%).
Revenue: Revenue was ¥744.8B (+3.7%), a modest increase. By segment, Ceramic Components Business: ¥638.1B (+2.1%, composition 85.7%), Lighting Equipment Business: ¥106.9B (+13.7%, composition 14.3%), with the non-core Lighting segment delivering double-digit growth. Ceramic components centered on electronic components, ceramic substrates, and semiconductor manufacturing equipment-related products, maintaining slight growth despite market adjustments. Lighting benefited from broader LED adoption and improved product mix, delivering both revenue growth and substantial margin improvement.
Profitability: Operating Income was ¥249.8B (-7.2%), a decline despite higher Revenue. Cost of goods sold increased to ¥353.2B (prior year ¥323.8B, +9.1%), outpacing revenue growth (+3.7%), and gross margin fell to 52.6% (prior year 54.9%), down 2.3pt. SG&A rose to ¥141.8B (prior-year estimate ¥125.6B, +12.9%), increasing the ratio to sales to 19.0% (prior year approx. 17.5%), and Operating Margin declined to 33.5% (prior year 37.5%), down 4.0pt. By segment, Ceramic Components Operating Income was ¥245.7B (-9.3%), margin 38.5% (prior year 43.3%), with margin contraction in the core business weighing on the consolidated result. Conversely, Lighting Equipment Operating Income was ¥21.4B (+49.0%), margin 20.0% (prior year 15.3%), a substantial improvement in profitability. Non-operating income totaled ¥14.7B, comprised of interest income ¥6.2B (prior year ¥3.3B), foreign exchange gains ¥5.6B, rental income ¥1.1B, etc. Non-operating expenses were minor at ¥1.2B. Extraordinary items comprised Extraordinary Gains ¥1.9B (including gains on sale of marketable securities ¥1.5B) and Extraordinary Losses ¥0.9B (loss on retirement/disposal of fixed assets ¥0.4B, write-downs ¥0.4B), netting to ¥0.98B positive. The prior year included Extraordinary Losses ¥24.7B (including write-downs ¥23.6B), so the improvement in special items contributed to the +10.0% Net Income increase. Income taxes were ¥82.5B (effective tax rate 31.2%), resulting in Net Income of ¥181.9B.
Ceramic Components Business: Revenue ¥638.1B (+2.1%), Operating Income ¥245.7B (-9.3%), margin 38.5% (prior year 43.3%). As the core business, it represents 85.7% of revenue and 92.0% of Operating Income (pre-adjustments). The modest revenue increase and 4.8pt margin decline are attributed to a combination of higher raw material costs, product mix shifts, and reduced production efficiency. Lighting Equipment Business: Revenue ¥106.9B (+13.7%), Operating Income ¥21.4B (+49.0%), margin 20.0% (prior year 15.3%). Expansion of LED adoption and product mix improvement drove profit growth that outpaced revenue growth, improving margin by 4.7pt. Consolidated Operating Income after corporate adjustments was ¥249.8B, calculated as segment profit total ¥267.1B less corporate expenses ¥17.4B (prior year ¥16.1B).
Profitability: Operating Margin of 33.5% decreased 4.0pt from 37.5% but remains substantially above the industry median of 7.8% by 25.8pt. Net Margin of 24.4% exceeds the industry median 5.2% by 19.2pt. ROE is 12.4%, decomposed as Net Margin 24.4% × Asset Turnover 0.458 × Financial Leverage 1.10. A five-factor decomposition shows tax burden 68.8%, interest burden 105.8%, EBIT margin 33.5%, asset turnover 0.458, and leverage 1.10. ROA (based on Ordinary Income) is 17.3% (prior year 20.4%), high but down 3.1pt due to margin compression. Gross margin 52.6%, Operating margin 33.5%, Net margin 24.4% each fell YoY by 2.3pt, 4.0pt, and 2.4pt (Net margin compared to prior-year estimate 26.8%). Cash Quality: Operating CF / Net Income is 0.93x, generally healthy, but OCF/EBITDA is 0.56x (Operating CF ¥169.3B ÷ EBITDA ¥302.7B), low. Inventory increase of -¥42.6B and Accounts Receivable increase of -¥10.4B were primary drivers of working capital deterioration, with CCC 191 days, DIO 168 days, DSO 67 days indicating working capital efficiency issues. Accrual ratio is 0.8%, low, indicating high quality of accounting income. Investment Efficiency: Asset Turnover 0.458x is typical for capital-intensive manufacturing, but large CapEx (CapEx ¥224.7B, Depreciation ¥53.3B = 4.21x) has increased Construction in Progress to ¥163.5B, with potential improvement in turnover expected as new assets commence operations. Financial Soundness: Equity Ratio 90.5% (prior year 89.9%), D/E 0.10x, Cash & Deposits ¥671.9B (41.3% of total assets), Current Ratio 694.5%—extremely robust. Interest-bearing debt is minimal and Interest Coverage is effectively infinite (interest expense ¥0.0B).
Operating CF was ¥169.3B (prior year ¥253.5B, -33.2%), 0.93x of Net Income ¥181.9B. Operating CF subtotal (pre-tax profit + non-cash adjustments) was ¥255.4B, but deterioration in working capital (inventory increase -¥42.6B, accounts receivable increase -¥10.4B) and tax payments -¥92.3B reduced cash flow. Accounts payable increased +¥12.6B but was insufficient to offset working capital headwinds. Investing CF was -¥217.6B, comprising capital expenditures -¥224.7B (about 2.3x prior year -¥99.1B), subsidy receipts ¥1.4B, proceeds from sale of marketable securities ¥5.8B, etc. The large CapEx is presumed to expand production capacity related to semiconductor manufacturing equipment, supported by Construction in Progress of ¥163.5B. Free Cash Flow was negative ¥-48.2B (prior year +¥165.7B) but ample liquidity with Cash & Deposits ¥671.9B means no funding concerns. Financing CF was -¥12.2B, including long-term debt repayments -¥4.0B, dividend payments -¥12.1B, treasury stock purchases -¥0.06B, and proceeds from treasury stock disposal ¥0.7B. Ending Cash & Deposits were ¥671.9B (prior year ¥717.9B, -4.6%), remaining at a high level post large investments.
Earnings quality is high. Non-operating income ¥14.7B (2.0% of sales) versus Operating Income ¥249.8B is below the 5% threshold, and is mainly composed of sustainable items such as interest income ¥6.2B and foreign exchange gains ¥5.6B. Extraordinary net items were ¥0.98B (0.5% of Net Income), minimal, including gains on sale of marketable securities ¥1.5B and loss on disposal of fixed assets ¥0.4B. The prior year’s write-downs of ¥23.6B largely did not recur, indicating a return toward recurring earnings. The divergence between Operating CF ¥169.3B and Net Income ¥181.9B (CF/NI 0.93x) is attributable to working capital deterioration (inventory build and valuation). Accrual ratio 0.8% (change in working capital / total assets) is low. OCF/EBITDA 0.56x is weak but driven by temporary inventory and receivables build; improvements are expected as new equipment is operational and inventory is reduced. Comprehensive Income was ¥205.5B (Net Income ¥181.9B + Other Comprehensive Income ¥23.6B), mainly due to positive foreign currency translation adjustment ¥23.7B. The gap between Comprehensive Income and Net Income reflects translation gains from FX movements and does not impair core earnings quality.
Company guidance for the fiscal year ending March 2027: Revenue ¥841.0B (YoY +12.9%), Operating Income ¥297.0B (YoY +18.9%). Operating margin is expected to improve to 35.3% (current period 33.5%), a 1.8pt improvement. Dividend guidance is annual ¥55 (current period ¥102). The guidance assumptions likely include commissioning of the large CapEx undertaken this period (CapEx ¥224.7B, Construction in Progress ¥163.5B) and normalization of inventory and working capital efficiency. The Ceramic Components Business is expected to benefit from improved market conditions and new equipment ramp-up; Lighting Equipment Business is expected to continue high growth. The projected Operating Income increase of +18.9% assumes revenue growth plus margin expansion (Operating Margin +1.8pt) driven by cost reductions, improved utilization, and product mix improvements. No progress rate against full-year guidance is provided, but achieving next year’s margin recovery and managing the investment payback schedule are key success factors.
Annual dividend was ¥102 (interim ¥51, year-end ¥51), with Payout Ratio 6.0% (total dividends ¥12.1B ÷ consolidated Net Income ¥181.9B), very low. Share buybacks were ¥0.06B, also minimal, so Total Return Ratio is approximately 6.0%. Dividend sustainability is high given ample Cash & Deposits ¥671.9B (over 55x the dividend outlay) and low debt. Free Cash Flow this period was -¥48.2B, yielding negative FCF coverage, but liquidity is sufficient to support dividend payments. Next period’s dividend guidance is ¥55 (down ¥47), a significant cut, likely reflecting the reversal of the current period’s one-off driver (the prior-year write-down absence that boosted Net Income), suggesting a conservative policy to maintain a ~6% payout ratio. The dividend policy appears to prioritize internal reserves and allocation to growth investments.
Segment concentration risk: The Ceramic Components Business accounts for 85.7% of revenue and 92.0% of Operating Income (pre-adjustment), so demand swings or price competition in this market materially impact consolidated performance. In the event of adjustments in the semiconductor manufacturing equipment market, there is risk of large swings in revenue and margins.
Working capital efficiency deterioration risk: Inventory ¥163.0B (10.0% of total assets), DIO 168 days, CCC 191 days indicate stagnant working capital. Risks include inventory obsolescence and valuation losses; increased volatility in Operating CF (current OCF/EBITDA 0.56x) can compress capital efficiency. If inventory reduction is delayed after new equipment comes online, CF deterioration could persist.
Large investment recovery risk: CapEx ¥224.7B (4.21x depreciation) and Construction in Progress ¥163.5B indicate an aggressive investment phase. If new equipment start-ups are delayed, yields are below expectations, or fixed cost absorption lags, the next-year guidance (Operating Income +18.9%) may not be met and ROIC could decline. FX volatility could also raise investment costs.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 33.5% | 7.8% (4.6%–12.3%) | +25.8pt |
| Net Margin | 24.4% | 5.2% (2.3%–8.2%) | +19.2pt |
Profitability ranks among the top in manufacturing, with Operating and Net margins roughly 20pt higher than industry medians.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.7% | 3.7% (-0.4%–9.3%) | +0.0pt |
Revenue growth is in line with the industry median and follows broader manufacturing trends.
※ Source: Company compilation
Commissioning of large investments and recovery scenario: The rise in CapEx this period (¥224.7B, 4.21x depreciation) and Construction in Progress ¥163.5B underpin production capacity expansion and future revenue growth. Company guidance anticipates Operating Income +18.9% and margin improvement, premised on new asset contributions and inventory compression improving working capital efficiency. Monitoring investment recovery progress and pace of margin recovery is key.
Scope to improve working capital efficiency and cash conversion: Current DIO 168 days, CCC 191 days, OCF/EBITDA 0.56x indicate working capital inefficiency. Compression of inventory and receivables would materially improve Operating CF, potentially restoring positive Free Cash Flow and improving capital efficiency. Monitoring quarterly trends in CCC, DIO, and DSO is important.
Coexistence of high profitability and financial strength: Operating Margin 33.5%, ROE 12.4%, Equity Ratio 90.5%, Cash & Deposits ¥671.9B demonstrate a high-level balance of profitability and financial safety. Low interest burden and low leverage provide resilience to economic cycles and support investment capacity. Payout Ratio 6% is conservative, suggesting a capital policy prioritizing internal reserves for growth investment.
This report is an earnings analysis document automatically generated 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 publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.