RYOBI LIMITED FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥227.79B
• Operating Income: ¥8.04B
• Net Income: ¥5.67B
• EPS: ¥178.72

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

Ryobi Co., Ltd. reported solid FY2025 Q3 year-to-date performance with revenue of ¥227.8bn, up 5.8% YoY, evidencing steady topline momentum. Operating income rose 32.8% YoY to ¥8.0bn, indicating strong operating leverage as cost structures scaled favorably against growth. Gross profit of ¥24.0bn implies a gross margin of 10.5%, while operating margin improved to approximately 3.5%, reflecting better mix, pricing, or cost control. Ordinary income of ¥8.26bn sits modestly above operating income, suggesting limited but positive net non-operating contribution. Net income increased 5.0% YoY to ¥5.78bn, with EPS of ¥178.72, although share count data were not disclosed. DuPont analysis shows ROE of 3.26%, driven by a 2.54% net margin, 0.688x asset turnover, and 1.86x financial leverage, pointing to ROE constrained primarily by thin margins. Cash generation was strong with operating cash flow (OCF) of ¥15.94bn and an OCF/Net Income ratio of 2.76x, indicating high earnings quality and robust cash conversion. Liquidity is sound with a current ratio of 140% and quick ratio of 118%, supported by ¥46.0bn of working capital. Leverage appears moderate with total liabilities to equity of 0.88x and interest coverage of about 7.6x, providing comfortable debt service capacity. Depreciation and amortization of ¥14.87bn underscores a capital-intensive base; however, investing cash flows and capital expenditure details were not disclosed, limiting free cash flow assessment. The tax charge of ¥1.97bn implies an effective rate near the mid‑20% range based on available pre-tax proxies, despite the “0.0%” effective tax in the calculated metrics table. Inventory of ¥24.87bn appears reasonable relative to the sales base, though full turnover analysis requires average balances. Equity ratio and cash balances were not disclosed (zeros indicate not reported), which constrains capital structure benchmarking. Dividend figures were also not provided, so payout assessment must rely on earnings and cash metrics rather than declared distributions. Overall, Ryobi exhibits improved profitability on modest revenue growth, solid cash conversion, and a stable balance sheet, though ROE remains subdued due to low margins and capital intensity.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.54%
• asset_turnover: 0.688
• financial_leverage: 1.86
• calculated_ROE: 3.26%
• commentary: ROE is mainly constrained by a low net margin; asset turnover is moderate and leverage is not excessive. Incremental ROE improvement will likely require sustained margin expansion and/or better asset utilization. margin_quality:
• gross_margin: 10.5%
• operating_margin: 3.5%
• ordinary_margin: 3.6%
• net_margin: 2.54%
• drivers: ['YoY operating income growth (+32.8%) materially outpaced revenue growth (+5.8%), evidencing positive operating leverage.', 'Operating margin uplift suggests improved cost control and/or favorable mix and price-cost spread.', 'Non-operating items modestly boosted ordinary income over operating income, with limited reliance on non-core gains.'] operating_leverage:
• evidence: Revenue +5.8% YoY vs Operating Income +32.8% YoY
• interpretation: High incremental margins this period; fixed cost base leveraged effectively.
• sustainability_considerations: ['Persistence depends on demand stability, pricing power, and input cost normalization.', 'Capital intensity (D&A ¥14.87bn) suggests ongoing fixed cost burden that can aid or hurt leverage depending on volumes.']

Growth Assessment

revenue_sustainability: Topline growth of 5.8% YoY indicates steady demand; sustainability will hinge on end-market conditions and order backlog (not disclosed). profit_quality: Operating profit growth far outpaced revenue, pointing to mix/efficiency gains; ordinary profit closely tracks operating profit, indicating low reliance on non-operating items. outlook: If current operating leverage persists and cost inflation remains contained, margins could remain above prior-year levels; however, thin absolute margins leave limited buffer against volume or price pressure.

Financial Health

liquidity:

• current_ratio: 140.0%
• quick_ratio: 118.4%
• working_capital: ¥46,012m
• commentary: Adequate near-term liquidity with a healthy quick ratio and positive working capital; cash and equivalents were not disclosed, so absolute liquidity headroom cannot be quantified. solvency:
• debt_to_equity: 0.88x
• interest_coverage: 7.6x (EBIT/Interest)
• equity_base: ¥177,545m
• commentary: Moderate leverage and solid coverage suggest manageable solvency risk within a capital‑intensive business model. capital_structure:
• assets: ¥331,055m
• liabilities: ¥156,209m
• equity: ¥177,545m
• equity_ratio_reported: Not disclosed (0 indicates unreported)
• interpretation: Balance sheet is reasonably capitalized; lack of equity ratio disclosure does not impede basic leverage assessment given available assets and equity.

Cash Flow Quality

earnings_quality:

• OCF: ¥15,938m
• net_income: ¥5,784m
• OCF_to_net_income: 2.76
• assessment: Strong cash conversion (>2x) supports the quality of earnings and indicates working capital tailwinds or non-cash charges aiding OCF. FCF_analysis:
• investing_CF: Not disclosed (0 indicates unreported)
• capex_proxy: Unavailable; D&A = ¥14,868m suggests meaningful ongoing reinvestment needs.
• free_cash_flow: Unavailable (computed 0 reflects missing investing CF, not true FCF).
• assessment: While OCF is solid, true FCF cannot be determined without investing cash flows or capex detail. working_capital:
• inventories: ¥24,874m
• commentary: Inventory appears proportionate to sales scale; fuller analysis (turnover, DIO) would require average balances and COGS cadence.

Dividend Sustainability

payout_ratio_assessment: Declared dividend per share and payout ratio were not disclosed; EPS is ¥178.72, but without DPS we cannot infer payout. FCF_coverage: Unknown due to missing investing cash flows; OCF is healthy, but reinvestment needs are likely significant given D&A. policy_outlook: No guidance on dividend policy was provided; with low ROE and capital intensity, management may prioritize reinvestment and balance sheet stability over high distributions, but confirmation requires disclosure.

Risk Assessment

Business Risks:

• Margin sensitivity to raw material and energy costs given low gross margin base (10.5%).
• Volume risk in key end-markets; operating leverage can work in reverse if demand slows.
• Pricing pressure in competitive manufacturing niches could cap margin expansion.
• Supply chain and logistics volatility affecting input costs and delivery schedules.

Financial Risks:

• Capital intensity requiring ongoing capex; unknown investing cash flows limit FCF visibility.
• Interest rate risk on borrowing costs despite current coverage of ~7.6x.
• FX exposure potential (not disclosed) given typical industry export/import profiles.

Key Concerns:

• Thin operating margin (~3.5%) leaves limited shock absorption.
• ROE at 3.26% remains below cost of equity proxies, dependent on margin improvement for uplift.
• Lack of disclosure on investing cash flows, cash balances, and dividend policy constrains full assessment of FCF and distributions.

Investment Implications

Key Takeaways:

• Topline growth of 5.8% YoY with strong operating leverage drove 32.8% YoY operating profit growth.
• ROE of 3.26% is held back by low net margin; leverage is moderate and not the primary driver.
• OCF of ¥15.94bn and 2.76x OCF/NI demonstrate high earnings quality.
• Liquidity is sound (current ratio 140%, quick ratio 118%) and debt service capacity is comfortable (interest coverage ~7.6x).
• True FCF and dividend capacity cannot be confirmed due to missing investing CF and DPS disclosure.

Metrics to Watch:

• Operating margin trajectory and price-cost spread.
• Capital expenditure and investing cash flows to gauge FCF.
• Working capital movements (inventory and receivables) sustaining OCF.
• Interest expense trend and coverage in a changing rate environment.
• ROE progression via margin and asset turnover improvements.

Relative Positioning: Profile consistent with a capital‑intensive manufacturer exhibiting modest margins, moderate leverage, and improving operating leverage; ROE remains subdued versus typical equity return hurdles, placing emphasis on execution to lift margins and cash generation.

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