| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4703.9B | ¥4603.2B | +2.2% |
| Operating Income / Operating Profit | ¥505.3B | ¥460.1B | +9.8% |
| Ordinary Income | ¥576.9B | ¥503.2B | +14.6% |
| Net Income / Net Profit | ¥313.2B | ¥226.0B | +38.6% |
| ROE | 6.3% | 4.9% | - |
For the fiscal year ended March 2026, Revenue was ¥4,703.9B (YoY +¥100.7B +2.2%), Operating Income was ¥505.3B (YoY +¥45.2B +9.8%), Ordinary Income was ¥576.9B (YoY +¥73.7B +14.6%), and Net Income attributable to owners of the parent was ¥313.2B (YoY +¥87.2B +38.6%), representing revenue and profit growth. Revenue increases were driven by steady domestic replacement demand and double-digit growth in Australia (+20.3%) which offset a slowdown in China (-11.0%). Gross margin improved by +0.8pt to 34.8% (prior 34.0%). Operating margin expanded by +0.7pt to 10.7% (prior 10.0%) due to pricing corrections and cost efficiency measures. Non-operating items boosted Ordinary Income via interest income of ¥32.9B (prior ¥30.1B) and foreign exchange gains of ¥17.2B. At the Net Income level, Comprehensive Income of ¥616.8B exceeded Net Income (¥313.2B) due to pension asset remeasurement gains of ¥87.2B and valuation differences on securities of ¥35.8B, indicating largely favorable quality including temporary factors. Operating Cash Flow was ¥493.0B (prior ¥575.0B); a decrease in accounts payable of -¥101.5B weighed on cashflow, but Free Cash Flow of ¥183.9B was secured. Dividends of ¥100 (annualized) and share buybacks of ¥100.1B were executed. Total assets were ¥6,495.7B (prior ¥6,065.9B) and total equity was ¥4,941.2B (prior ¥4,617.2B), producing ROE of 6.3% and an equity ratio of 76.1%, indicating very strong financial soundness.
Revenue of ¥4,703.9B (+2.2%) by region: Japan ¥2,533.1B (+2.8%) remained the core at 53.8% of the total, supported by steady domestic replacement demand and reform/remodel markets. Australia ¥441.9B (+20.3%) achieved high growth through volume expansion and channel expansion, and the U.S. ¥721.3B (+8.5%) also posted revenue increases. China ¥635.4B (-11.0%) decelerated due to a weak real estate market and inventory adjustments; Korea ¥349.0B (-1.4%) slightly declined. Segment mix was Japan 53.8%, U.S. 15.3%, China 13.5%, Australia 9.4%, with high-margin Japan and Indonesia contributing to mix improvement. Gross margin improved +0.8pt to 34.8% driven by price realization and favorable product mix. Overseas volume increases and cost rationalization raised gross profit by ¥26.2B, depreciation of ¥150.8B was in line with prior year and manufacturing fixed costs remained stable.
Operating Income ¥505.3B (+9.8%) reflected SG&A of ¥1,131.6B (SG&A ratio 24.1%) which increased only ¥2.15B year-on-year relative to sales growth, indicating controlled expenses. Advertising expense was ¥61.6B (prior ¥63.1B) and warranty provisioning was ¥54.8B (prior ¥79.3B), contributing to improvements. By segment, Japan delivered Operating Income ¥271.1B (+21.5%) as the main contributor; Indonesia ¥38.4B (margin 21.2%) maintained high profitability; Australia ¥21.1B (+88.6%) accelerated growth. China Operating Income ¥94.2B (-6.7%) was impacted by revenue decline but maintained a margin of 14.8%, among industry leaders. Ordinary Income ¥576.9B (+14.6%) benefited from non-operating income of ¥79.3B (interest income ¥32.9B, forex gains ¥17.2B); non-operating expenses were minor at ¥7.8B. Extraordinary items net +¥18.1B (including gain on sale of investment securities ¥10.9B) were limited. Profit before tax was ¥594.9B, income taxes ¥161.8B (effective tax rate 27.2%), and net income attributable to non-controlling interests was ¥71.5B, leaving Net Income attributable to owners of the parent of ¥313.2B. In summary, the company achieved revenue and profit growth, with double-digit increases at the operating and ordinary income stages driven by pricing and cost improvements.
Japan: Revenue ¥2,533.1B (+2.8%), Operating Income ¥271.1B (+21.5%), margin improved to 10.7% (prior 9.0%) (+1.7pt). Domestic replacement demand and a shift to higher-efficiency products supported higher unit prices and gross profit; SG&A efficiency also contributed. U.S.: Revenue ¥721.3B (+8.5%), Operating Income ¥18.6B (-12.9%), margin deteriorated to 2.6% (prior 2.9%) (-0.3pt) as logistics and labor costs rose despite higher sales. Australia: Revenue ¥441.9B (+20.3%), Operating Income ¥21.1B (+88.6%), margin improved to 4.8% (prior 3.1%) (+1.7pt) driven by volume growth and SG&A leverage, with emerging market expansion boosting profits. China: Revenue ¥635.4B (-11.0%), Operating Income ¥94.2B (-6.7%), margin improved to 14.8% (prior 14.1%) (+0.7pt) as fixed cost compression and a focus on high value-added products maintained gross margin despite revenue decline. Korea: Revenue ¥349.0B (-1.4%), Operating Income ¥10.9B (+17.6%), margin improved to 3.1% (prior 2.6%) (+0.5pt) through cost reductions. Indonesia: Revenue ¥181.5B (+2.5%), Operating Income ¥38.4B (flat), margin remained high at 21.2% (prior 21.7%). Other segments: Revenue ¥378.9B (+3.2%), Operating Income ¥51.8B (+3.1%), margin 13.7%. Consolidated Operating Income ¥505.3B reflects elimination of internal transactions of -¥0.8B.
Profitability: Operating margin improved to 10.7% (prior 10.0%) +0.7pt. Gross margin expanded to 34.8% (prior 34.0%) +0.8pt due to price corrections and product mix improvements. SG&A ratio was 24.1% (prior 23.9%) up slightly +0.2pt, with marketing and warranty expense optimization contributing. Net margin rose to 6.7% (prior 4.9%) +1.8pt, aided by non-operating interest and forex gains and a lower effective tax rate. ROE improved to 6.3% (prior 4.9%) +1.4pt on higher Net Income; ROA (on an Ordinary Income basis) improved to 9.2% (prior 8.5%). Cash Quality: Operating Cash Flow ¥493.0B equals 0.98x of Operating Income ¥505.3B, generally sound, though OCF/EBITDA was 0.75x (= Operating CF 493.0 / (Operating Income 505.3 + Depreciation 150.8)) below 1 due to deterioration in working capital. Accrual ratio -2.0% (= (Net Income 313.2 - Operating CF 493.0) / Total Assets 6,495.7) is negative, indicating good cash backing for profits. Investment Efficiency: Total Asset Turnover 0.72x (= Revenue 4,703.9 / Total Assets 6,495.7) was in line with prior year; deterioration in working capital efficiency restrained turnover improvement. DSO 73 days (= Accounts Receivable 946.5 / (Revenue 4,703.9 / 365)), DIO 96 days (= Inventory 443.2 / (COGS 3,067.0 / 365)), CCC 134 days (= 73 + 96 - DPO 35 days) indicate elongation. Financial Soundness: Equity Ratio 76.1% (prior 73.0%), Current Ratio 338.3% (prior 333.7%), Quick Ratio 298.2% (prior 296.3%) — liquidity is very ample. Cash and Deposits ¥1,722.0B are 13.5x short-term borrowings of ¥128.0B, providing ample payment capability. Debt/EBITDA was 0.20x (= short-term borrowings 128.0 / (Operating Income 505.3 + Depreciation 150.8)), indicating light leverage.
Operating CF ¥493.0B (prior ¥575.0B) started from Profit before tax ¥594.9B plus Depreciation ¥150.8B to subtotal ¥586.0B. Working capital movements included a decrease in inventory +¥23.5B and a decrease in trade receivables +¥25.0B which were positive, while a decrease in trade payables of -¥101.5B significantly pressured cash, resulting in net working capital cash outflow of about -¥53B. After corporate tax payments of -¥139.4B, Operating CF was ¥493.0B. Investing CF was -¥309.1B, centered on capital expenditures of -¥148.9B (prior -¥168.4B) and net purchases/placements of investment securities and time deposits. Financing CF was -¥219.3B, driven by dividend payments -¥125.5B (owners of parent -¥68.8B; non-controlling interests -¥76.6B) and share buybacks -¥100.1B. Free Cash Flow was ¥183.9B (= Operating CF 493.0 + Investing CF -309.1), which is below dividends plus buybacks of about ¥226B, but cash balance of ¥1,722.0B is ample and liquidity is solid. Cash and cash equivalents at end of period were ¥1,345.1B (opening ¥1,363.0B), a decrease of -¥17.9B, with foreign exchange impact +¥17.5B providing support. The compression of accounts payable is a short-term CF headwind; strengthening inventory and receivables management to normalize working capital will be key to improving cash generation next fiscal year.
The difference between Ordinary Income ¥576.9B and Operating Income ¥505.3B (+¥71.6B) represents net non-operating items — interest income ¥32.9B (prior ¥30.1B), dividend income ¥7.2B, and foreign exchange gains ¥17.2B — with total non-operating income ¥79.3B less non-operating expenses ¥7.8B. Interest income and forex gains are not purely one-off, but include elements sensitive to exchange rate movements; core operating-stage profitability reflects underlying operational performance. Extraordinary items net +¥18.1B (gain on sale of investment securities ¥10.9B; subsidy income ¥3.7B less loss on retirement of fixed assets ¥1.1B and impairment loss ¥1.0B) amount to 5.8% of Net Income ¥313.2B, so one-off effects are limited. Comprehensive Income ¥616.8B exceeded Net Income by +¥303.6B, comprising currency translation adjustments ¥60.6B, valuation differences on securities ¥35.8B, and remeasurement gains on retirement benefit plans ¥87.2B. The remeasurement gain reflects market valuation increases in pension assets and is a non-cash item; valuation differences likewise are unrealized. The ratio of Operating CF to Net Income was 1.57x (= 493.0 / 313.2), above 1, indicating good cash backing of profits. However, deterioration in working capital (accounts payable decrease -¥101.5B) pressured Operating CF, so sustainable cash generation depends on improvements in working capital management.
Full Year guidance: Revenue ¥5,000.0B (YoY +6.3%), Operating Income ¥505.0B (YoY -0.1%), Ordinary Income ¥541.0B (YoY -6.2%), Net Income attributable to owners of parent ¥363.0B (EPS forecast ¥262.91). Progress rates are Revenue 94.1%, Operating Income 100.1%, Ordinary Income 106.6% — Operating Income has effectively been achieved for the full year and Ordinary Income has exceeded guidance. The company outperformance versus conservative guidance is attributed to unexpectedly strong domestic performance, high growth in Australia, and earlier realization of cost improvements. The second half is expected to see flat Operating Income and lower Ordinary Income. The guidance assumes downside factors such as currency and interest rate reversals and uncertainties in overseas segments (China, Americas), with full-year Operating Income assuming zero growth in the second half relative to first half Operating Income of ¥505.3B. The anticipated decline at the Ordinary Income level is conservatively predicated on a reduction in non-operating income. Dividend guidance of ¥53 (adjusting interim result ¥50 + forecasted year-end ¥50) is broadly consistent with an actual annualized payout of ¥100 (interim ¥50 + year-end ¥50 expected); payout ratio on an actual basis is 38.2% and is maintained. Actual EPS ¥259.96 versus full-year EPS forecast ¥262.91 corresponds to 98.9% progress, with slight upside to Net Income expected in the second half. Company assumptions for guidance assume stable FX rates and raw material prices and no change in regional mix; upside drivers include recovery in China demand and sustained Australian growth; downside risks include renewed rises in raw material/logistics costs and adverse FX movements.
Annual dividend ¥100 (interim ¥50 + year-end ¥50) is a large increase of ¥60 year-on-year, yielding a payout ratio of 38.2% (= dividend ¥100 / EPS ¥259.96). Total dividends to owners of parent of ¥68.8B relative to Net Income attributable to owners of parent ¥313.2B is 4.6x, indicating dividends are well covered by profits and cash. Total shareholder returns including share buybacks of ¥100.1B amount to approximately ¥169B (dividends ¥68.8B + share buybacks ¥100.1B), representing a total return ratio of about 54% relative to Net Income ¥313.2B. Total returns of about ¥169B are broadly covered by FCF of ¥183.9B, though dividends plus capital expenditure (¥148.9B) total about ¥218B, exceeding FCF, suggesting optimization of internal capital allocation during investment phases is a consideration. With cash balance ¥1,722.0B and total equity ¥4,941.2B, the capital base is ample and dividend sustainability is high. Dividend policy assumes a payout ratio range of 30–40%, and this year’s actual payout ratio of 38.2% falls within that range, suggesting stability. Share buybacks are executed flexibly; this year’s buybacks were ¥100.1B (prior ¥100.0B) and will continue. Cancellation of 3,054 thousand shares acquired is undecided, balancing capital efficiency and shareholder returns. Dividends to non-controlling interests of ¥76.6B (prior ¥49.9B) increased reflecting higher earnings at subsidiaries.
China Market Risk: China segment revenue -11.0% and Operating Income -6.7% indicate continued slowdown. Prolonged real estate market weakness and inventory adjustments could further reduce this year’s revenue of ¥635.4B (13.5% of total). While operating margin of 14.8% remains high, if cost coverage limits are reached, margins could decline sharply.
Working Capital Efficiency Risk: CCC 134 days (DSO 73 + DIO 96 - DPO 35) indicates elongation, and decrease in trade payables -¥101.5B has pressured Operating CF. If working capital normalization is delayed, FCF could shrink further, making it difficult to balance investment and returns. OCF/EBITDA at 0.75x is below the target 0.9x, making improvement in cash conversion a priority.
FX & Interest Rate Volatility Risk: Interest income ¥32.9B and forex gains ¥17.2B totaling ¥50.1B account for 8.7% of Ordinary Income ¥576.9B; should interest rates decline or FX move unfavorably, non-operating income could be eroded, pressuring Ordinary Income. Currency translation adjustments of ¥60.6B affect Comprehensive Income and could negatively impact equity valuation in the event of further yen appreciation.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.7% | 7.8% (4.6%–12.3%) | +3.0pt |
| Net Margin | 6.7% | 5.2% (2.3%–8.2%) | +1.5pt |
Operating margin exceeds the median by +3.0pt, placing the company in the top 25% within manufacturing. Improvements in gross margin and SG&A efficiency underpin industry-leading positioning.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 2.2% | 3.7% (-0.4%–9.3%) | -1.5pt |
Revenue growth lags the median by -1.5pt, impacted by the China market slowdown. Domestic strength and strong Australia growth provide limited uplift; recovery in overseas markets is key to returning to industry-average growth.
※ Source: Company aggregation
Progress in working capital management is key to next fiscal year cash generation and ROE improvement. DSO 73 days and DIO 96 days are long relative to industry norms; normalization could restore OCF/EBITDA from 0.75x to above 0.9x, materially expanding FCF. Once the accounts payable compression of -¥101.5B subsides, recovery of Operating CF toward the ¥600B range is conceivable.
By segment, Japan maintains high profitability with a 10.7% margin and Indonesia’s exceptional 21.2% profitability supports group margins. Conversely, China’s -11.0% decline and U.S. margin deterioration (2.6%) are risk areas; resolution of China inventory adjustments and cost rationalization in the Americas are pivotal for improved progress rates. Australia’s high growth (+20.3% and margin +1.7pt) warrants monitoring for sustainability, balancing potential high-base effects and progress on emerging market expansion.
Financial soundness is very robust: Equity Ratio 76.1% and cash/short-term debt 13.5x indicate conservatism. Increases in goodwill and intangibles (goodwill +141% and intangibles +130%) suggest active M&A appetite, but goodwill to equity is minor at 1.4%, limiting impairment risk. Payout ratio 38.2% and total return ratio 54% are within sustainable ranges, and the policy of stable dividends plus flexible buybacks is expected to continue. Full-year guidance is conservative, assuming flat operating profit and lower ordinary profit; given results already achieved, upside remains possible.
This report was auto-generated by AI analyzing XBRL earnings disclosure data to produce financial analysis materials. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.