FUJIMI INCORPORATED FY2027 Q1 Earnings Report

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Executive Summary

Both revenue and profit posted double-digit growth, resulting in an earnings report featuring higher revenue and higher profit, with growth in Operating Income and below exceeding revenue growth. Revenue was ¥19.52B (¥16.39B in the same period of the previous year, YoY +19.1%), Operating Income was ¥4.61B (up +41.5%), Ordinary Income was ¥4.83B (up +75.7%), and Net Income (consolidated Net Income) was ¥3.39B (up +80.4%). Revenue growth was driven by expansion in Japan and Asia, while profit growth reflected fixed-cost absorption as the increases in cost of sales and SG&A expenses remained below revenue growth, together with improved non-operating income and expenses, including foreign exchange gains and dividend income.

Factors Affecting Earnings

【Revenue】Revenue was ¥19.52B, representing a year-on-year increase of +19.1%. By segment (including intersegment transactions), Japan grew significantly to ¥14.81B (YoY +23.1%) and Asia to ¥6.17B (up +36.7%), driving company-wide revenue growth. Meanwhile, North America was ¥2.39B (up +3.7%), remaining nearly flat, while Europe declined to ¥0.59B (down -20.5%).

【Profit and Loss】Operating Income was ¥4.61B (up +41.5%), and the Operating Income margin improved to 23.6% from 19.9% in the previous year, an improvement of +3.7pt. The primary factor was operating leverage resulting from the increases in cost of sales and SG&A expenses remaining below revenue growth (+19.1%). Ordinary Income was ¥4.83B (up +75.7%), boosted by improved non-operating income and expenses, including a ¥0.10B foreign exchange gain and ¥0.12B dividend income. Consolidated Net Income was ¥3.39B (up +80.4%), while the effective corporate tax burden was approximately 29.8%, showing no major change from the previous year. The company reported higher revenue and higher profit.

Segment Analysis

The Japan segment recorded revenue of ¥14.81B (YoY +23.1%), Operating Income of ¥3.84B (up +40.9%), and a profit margin of 25.9%, continuing to account for the core of company-wide profit. The Asia segment recorded revenue of ¥6.17B (up +36.7%) and Operating Income of ¥1.67B (up +43.9%), and continued to deliver strong growth while maintaining the highest profit margin among the segments at 27.1%. The North America segment was nearly flat, with revenue of ¥2.39B (up +3.7%), but profitability improved, with Operating Income increasing to ¥0.12B (up +45.0%); its profit margin remained limited at 4.9%. The Europe segment recorded lower revenue and lower profit, with revenue of ¥0.59B (down -20.5%) and Operating Income of ¥0.05B (down -28.8%). Its profit margin of 8.8% exceeded that of North America but remained low compared with other regions. Company-wide profit growth is supported by growth and improved profitability in Japan and Asia.

Key Financial Indicators

【Profitability】The Operating Income margin was 23.6%, improving by +3.7pt from 19.9% in the previous year, while the Net Income margin (based on consolidated Net Income) was 17.4%, improving by +5.9pt from 11.5% in the previous year. The gross profit margin remained at a high level of 47.4%. 【Cash Flow Quality】Comprehensive Income was ¥4.17B, exceeding Net Income of ¥3.39B by ¥0.78B. Foreign currency translation adjustments (+¥0.46B) and valuation difference on available-for-sale securities (+¥0.35B) made positive contributions. Cash and deposits were ¥27.07B, a decrease of ¥4.28B year on year. 【Investment Efficiency】ROE was 3.9% (based on Net Income attributable to owners of the parent, before annualization of quarterly results), EPS increased to ¥45.45 (up +81.1%), and BPS increased to ¥1,147.55. Total asset turnover remained limited at 0.16x on a quarterly basis, indicating that the improvement in asset efficiency was limited relative to the improvement in profitability. 【Financial Soundness】The Equity Ratio was 70.4%, improving from 69.1% in the previous year, while the current ratio remained strong at approximately 368%. Long-term borrowings were ¥15.89B, a decrease of ¥0.27B from the previous year, indicating conservative financial leverage.

Cash Flow Analysis

Cash and deposits were ¥27.07B, down ¥4.28B from ¥31.35B in the same period of the previous year (-13.6%). While revenue increased +19.1%, accounts receivable and notes receivable were ¥15.55B, an increase of ¥1.86B year on year, and are considered to have absorbed part of the funds. Inventories (the combined total of finished goods, raw materials, and work in process) were ¥15.19B, representing only a slight increase of ¥0.26B year on year. Inventory growth was restrained relative to sales growth, suggesting that working capital turnover efficiency may have improved from the previous year. Property, plant and equipment was ¥52.16B, an increase of ¥0.97B year on year, while construction in progress was ¥8.26B, a decrease of ¥0.61B year on year, indicating progress in transferring some investment projects to fixed assets. Long-term borrowings were ¥15.89B, down ¥0.27B year on year, reflecting modest repayment progress. The decrease in cash is considered to reflect funding needs related to the increase in accounts receivable, capital expenditures, and repayment of borrowings.

Quality of Earnings

Non-operating income was ¥0.32B, comprising dividend income of ¥0.12B, a foreign exchange gain of ¥0.10B, and other items, and remained approximately 1.6% of revenue. The majority of profit therefore consisted of recurring earnings at the operating level. Whereas non-operating expenses exceeded ¥0.07B in the same period of the previous year, the shift to a foreign exchange gain in the current period supported Ordinary Income growth of +75.7%. It should be noted that this reversal effect may fluctuate depending on market conditions. Loss on disposal of fixed assets was ¥0.003B and immaterial, so the impact of extraordinary gains and losses on Net Income was limited. Corporate income taxes of ¥1.44B against Profit Before Tax of ¥4.83B resulted in an effective tax burden of approximately 29.8%, broadly in line with the previous year. The divergence between Ordinary Income and Net Income was attributable to the tax burden and did not represent a significant distortion. Comprehensive Income of ¥4.17B exceeded Net Income of ¥3.39B by ¥0.78B, with valuation-related items such as foreign currency translation adjustments and valuation difference on securities making positive contributions.

Earnings Forecast and Guidance

Progress against the full-year company forecast was 26.1% for revenue (¥19.52B/¥74.80B), 31.8% for Operating Income (¥4.61B/¥14.50B), 33.3% for Ordinary Income (¥4.83B/¥14.50B), and 32.4% for Net Income (attributable to owners of the parent) (¥3.37B/¥10.40B). Profit items exceeded the 25% benchmark for simple progress, indicating that profit growth as of Q1 was proceeding at a relatively faster pace than revenue growth. No revisions were made to the earnings forecast or dividend forecast during the quarter.

Shareholder Returns

The company’s full-year dividend forecast is ¥77.00, resulting in a Payout Ratio of approximately 54.9% against forecast EPS of ¥140.19. Given the financial foundation of cash and deposits of ¥27.07B and an Equity Ratio of 70.4%, the company appears to have secured sufficient resources to pay dividends. No revision was made to the dividend forecast during the quarter.

Risk Factors

1. Concentration of regional earnings composition: Japan accounts for the core of revenue and profit on a segment-total basis and drives the company-wide Operating Income margin at 25.9%. However, this structure is susceptible to domestic demand trends and foreign exchange fluctuations.

2. Absolute level of working capital: Accounts receivable were ¥15.55B (YoY +¥1.86B), while inventories were ¥15.19B (YoY +¥0.26B). Although the pace of increase relative to revenue growth was restrained compared with the previous year, the absolute levels remain substantial, requiring monitoring of progress in converting these assets into cash.

3. Risk of reversal in non-operating income and expenses: In the current period, a foreign exchange gain of ¥0.10B and dividend income of ¥0.12B boosted Ordinary Income. However, a foreign exchange loss was recorded in the same period of the previous year, and non-operating income and expenses may reverse depending on foreign exchange movements.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

Both the Operating Income margin and Net Income margin were significantly above the industry median, placing the company’s profitability in the upper tier of the industry.

Growth and Capital Efficiency

The revenue growth rate exceeded both the industry median and the upper quartile (14.6%), indicating a high growth pace within the industry.

※Source: Company compilation

Key Earnings Highlights

1. The Operating Income margin improved to 23.6% (19.9% in the previous year), and the increase in Operating Income (+41.5%) exceeded revenue growth (+19.1%), indicating that fixed-cost absorption is progressing.

2. Growth in Ordinary Income and Net Income (+75.7%, +80.4%) exceeded Operating Income growth (+41.5%). The shift from non-operating expenses recorded in the previous year to improved non-operating income and expenses in the current period boosted growth at the final profit stages.

3. Progress against the full-year plan was 31.8% for Operating Income and 33.3% for Ordinary Income, exceeding the 26.1% progress rate for revenue, indicating that profitability improvements are also evident relative to the plan.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade). It does not constitute a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥1,238–¥1,308 at ±1% in the cost of equity, and ¥1,270–¥1,277 at ±0.1 in ω.

Note:

• Net assets as of the quarter-end were used (there is a timing difference relative to the full-year forecast).

(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This figure does not forecast or guarantee future share prices)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting professionals as necessary.

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