| Indicator | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3788.2B | ¥3735.7B | +1.4% |
| Operating Income / Operating Profit | ¥280.4B | ¥286.5B | -2.1% |
| Ordinary Income | ¥357.8B | ¥273.8B | +30.7% |
| Net Income / Net Profit (attributable to owners of parent) | ¥187.9B | ¥143.1B | +31.3% |
| ROE | 7.6% | 6.4% | - |
For the fiscal year ended March 2026, Revenue was ¥3788.2B (YoY +¥52.5B +1.4%), Operating Income was ¥280.4B (YoY -¥6.1B -2.1%), Ordinary Income was ¥357.8B (YoY +¥84.0B +30.7%), and Net Income attributable to owners of parent was ¥187.9B (YoY +¥44.8B +31.3%). The performance structure was unusual: slight top-line growth with an operating-stage decline, while ordinary and final profits increased substantially. Operating margin was 7.4% (down -0.3pt from 7.7% prior year), driven by deterioration in both gross margin 12.6% (from 12.7%, -0.1pt) and SG&A ratio 5.2% (from 5.0%, +0.2pt). The large increase in Ordinary Income was mainly due to foreign exchange gains of ¥57.6B (prior year foreign exchange losses ¥23.1B), shifting non-operating profit/loss to a ¥83.3B surplus (prior year -¥1.3B). In extraordinary items, impairment losses of ¥67.1B were included within special losses of ¥71.1B, partially offset by special gains of ¥10.8B including investment securities sales gains of ¥8.9B, resulting in Profit Before Tax of ¥297.5B and an effective tax rate of 36.8%, yielding Net Income up +31.3% YoY. By segment, the Temperature-Controlled Logistics related business achieved Revenue ¥658.8B (+12.8%) and Operating Income ¥97.7B (+24.2%, margin 14.8%) maintaining high growth and high profitability, while the core Press-related products recorded Revenue ¥2974.9B (-0.8%) and Operating Income ¥166.9B (-12.7%, margin 5.6%), showing decline in sales and profits and notable margin deterioration. Operating Cash Flow was ¥351.6B, a healthy 1.9x of Net Income, but cash conversion slowed with OCF/EBITDA at 0.68x (driven by working capital deterioration: inventory increase -¥47.8B and accounts payable decrease -¥86.7B). Free Cash Flow was secured at ¥185.6B, preserving capacity to fund dividends of ¥100.0B and share buybacks of ¥22.2B. Financials are very robust with current ratio 188.6%, D/E 0.57x, Debt/EBITDA 0.40x. ROE was 7.6%, driven by improvement in Net Profit Margin (+1.1pt), while total asset turnover and leverage declined. The company plan for FY Mar-2027 targets Revenue ¥3920.0B (+3.5%) and Operating Income ¥230.0B (-18.0%), a conservative stance with Operating Margin 5.9% (-1.5pt), factoring in normalization of forex contribution and cost increases. Temperature-Controlled Logistics’ high-margin growth underpins the company, while recovery of core Press profitability and improvement in working capital management are focal points.
[Revenue] Revenue was ¥3788.2B (+1.4%), a slight increase. By segment, Press-related products were ¥2974.9B (-0.8%, composition 78.5%) decreasing, Temperature-Controlled Logistics related was ¥658.8B (+12.8%, composition 17.4%) achieving double-digit growth, and Others were ¥169.2B (+1.3%, composition 4.5%) largely flat. High growth in Temperature-Controlled Logistics supported the overall top line, but weakness in demand for the core Press segment constrained overall growth. Gross margin edged down to 12.6% (from 12.7%, -0.1pt), suggesting headwinds in selling prices and cost mix.
[Profitability] Operating Income was ¥280.4B (-2.1%). Deterioration came from both gross margin (-0.1pt) and SG&A ratio (+0.2pt) (SG&A was ¥195.6B, +4.6% exceeding revenue growth). By segment, Temperature-Controlled Logistics maintained a high margin of 14.8% and delivered a large profit increase of +24.2%, while Press-related suffered margin deterioration to 5.6% (from 6.4%, -0.8pt) and Operating Income fell -12.7%. Ordinary Income rose to ¥357.8B (+30.7%), far outpacing operating-stage performance. The primary driver was an ¥80.7B improvement in forex (foreign exchange gains ¥57.6B vs prior year FX losses ¥23.1B), expanding non-operating income to ¥83.3B (from ¥24.1B) while non-operating expense shrank to ¥6.0B (from ¥36.8B), turning non-operating profit/loss into a ¥83.3B surplus (prior year -¥12.7B). Extraordinary items included special losses of ¥71.1B (including impairment losses of ¥67.1B: Miike Industry ¥30.7B, Topre Foshan ¥28.6B, Guangzhou Miike ¥7.8B) partially offset by special gains ¥10.8B including investment securities sales gains ¥8.9B. Pre-tax profit was ¥297.5B, corporate taxes ¥109.6B (effective tax rate 36.8%), non-controlling interests ¥2.3B, resulting in Net Income ¥187.9B (+31.3%). Net profit margin improved to 5.0% (from 3.8%, +1.2pt), but this improvement was supported by non-operating forex contributions and temporary special gains.
The Press-related products business reported Revenue ¥2974.9B (-0.8%), Operating Income ¥166.9B (-12.7%), margin 5.6% (from 6.4%, -0.8pt), reflecting declines in sales and profits. Weakening demand for automotive parts and rising costs drove notable margin deterioration. Temperature-Controlled Logistics related business achieved Revenue ¥658.8B (+12.8%), Operating Income ¥97.7B (+24.2%), margin 14.8% (from 13.5%, +1.3pt), with expansion of comprehensive temperature-controlled logistics solutions and accumulation of high-margin projects contributing, functioning as a growth driver that lifts overall profit quality. Other segments recorded Revenue ¥169.2B (+1.3%), Operating Income ¥15.8B (-3.5%), margin 9.3% (from 9.8%, -0.5pt), a slight decline. Of total Operating Income ¥280.4B, Temperature-Controlled Logistics accounted for 34.8%, Press 59.5%, and Others 5.6%, indicating the rising weight of Temperature-Controlled Logistics in stabilizing future profits. In the Press domain, impairments totaling ¥67.1B were recorded at Chinese and domestic subsidiaries, suggesting an ongoing review and efficiency improvement of the business portfolio.
[Profitability] Operating margin 7.4% (from 7.7%, -0.3pt), Net Profit Margin 5.0% (from 3.8%, +1.2pt). ROE was 7.6%; DuPont decomposition aligns as Net Profit Margin 5.0% × Total Asset Turnover 0.97 × Financial Leverage 1.57. YoY, Net Profit Margin improved +1.2pt, while Total Asset Turnover fell 1.01→0.97 and leverage fell 1.66→1.57, so ROE improvement (prior year 6.5%) was mainly driven by higher net profit margin. However, the net profit margin improvement largely reflects forex gains (non-operating); operating-stage profitability worsened with gross margin -0.1pt and SG&A ratio +0.2pt. Gross margin at 12.6% is slightly lower compared with historical levels, driven by delayed price pass-through and rising costs in the Press area. Temperature-Controlled Logistics’ margin of 14.8% improved from prior year 13.5%, indicating positive trend.
[Cash Quality] Operating Cash Flow ¥351.6B / Net Income ¥187.9B = 1.87x, indicating good cash backing for profits. Conversely, OCF/EBITDA (Operating CF ÷ (Operating Income + Depreciation)) is ¥351.6B ÷ (¥280.4B + ¥238.9B) = 0.68x, indicating deterioration (prior year 0.97x). Working capital outflows driven by inventory increase -¥47.8B (finished goods +¥10.0B, raw materials +¥11.5B, work-in-progress +¥48.1B) and accounts payable decrease -¥86.7B were main factors. Work-in-progress at ¥257.5B accounts for 65.8% of total inventories ¥391.5B, suggesting production process backlog and changeover inefficiencies. Accrual (Net Income - Operating CF) was -¥163.7B, indicating cash exceeded accounting profit and a healthy structure, though improvement from prior year -¥379.4B narrowed.
[Investment Efficiency] Total asset turnover 0.97x (from 1.01x) declined mainly due to total assets increasing +4.9% vs. slight revenue growth +1.4%. CapEx ¥297.7B / Depreciation ¥238.9B = 1.25x, reflecting an active investment stance. CapEx/Sales ratio was 7.9%, reflecting both growth and maintenance investments. ROA (on Ordinary Income basis) improved to 9.4% (from 7.4%, +2.0pt) but was materially influenced by forex contribution.
[Financial Soundness] Equity Ratio 63.5% (from 59.2%, +4.3pt), Current Ratio 188.6% (from 160.4%, +28.2pt), Quick Ratio 184.7% indicating very good short-term payment capacity. D/E ratio 0.57x (interest-bearing debt ¥221.5B / equity ¥2434.6B), Debt/EBITDA 0.40x, Debt/Capital 7.8%—leverage is low. Interest Coverage (Operating Income ÷ Interest Expense) is ¥280.4B ÷ ¥2.3B = 121x indicating minimal interest burden. Cash and deposits ¥628.5B + short-term securities ¥59.9B = ¥688.4B held, providing buffers for working capital and investments.
Operating CF was ¥351.6B (from ¥522.5B prior year, -32.7%), which is 1.87x Net Income ¥187.9B, so cash backing of profits remains good despite a large YoY decline. The decrease was due to working capital deterioration: inventory increase -¥47.8B (including WIP +¥48.1B), accounts payable decrease -¥86.7B, and accounts receivable decrease +¥29.6B, totaling a -¥104.9B outflow. Non-cash charges such as depreciation ¥238.9B and impairment ¥67.1B supported Operating CF but were offset by working capital headwinds. Investing CF was -¥166.0B (improved from -¥445.5B), driven mainly by capital expenditures -¥297.7B (prior year -¥328.0B), partially offset by net recoveries from short-term securities and time deposits +¥11.7B. Free Cash Flow was ¥185.6B (Operating CF ¥351.6B + Investing CF -¥166.0B), up substantially from prior year ¥77.0B. Financing CF was -¥120.7B (prior year -¥44.1B), with dividends -¥45.2B, share buybacks -¥22.2B, net repayment of borrowings -¥5.6B, bond issuance +¥54.7B and redemptions -¥100.0B yielding net bond repayments -¥45.3B. Cash and cash equivalents rose to ¥622.0B (from ¥540.0B, +¥82.0B), with forex impact +¥17.3B contributing to net increase ¥82.2B. CapEx/Depreciation 1.25x reflects both maintenance and growth investments; while this pressures short-term Operating CF, it supports medium-term profitability improvement. Working capital shows significant WIP concentration (65.8% of inventories), indicating material room for DIO improvement.
Operating Income ¥280.4B versus Ordinary Income ¥357.8B reflects an uplift of ¥77.4B, primarily due to non-operating income ¥83.3B (of which foreign exchange gains ¥57.6B were dominant, interest income received ¥7.9B, dividend income received ¥6.3B, equity-method income ¥1.8B). Foreign exchange gains ¥57.6B represented an ¥80.7B swing from prior year foreign exchange losses ¥23.1B, driven by yen depreciation affecting foreign-currency transactions and translations. Non-operating expenses were minor at ¥6.0B (interest expense ¥2.3B, other ¥1.7B), sharply down from prior year ¥36.8B (including FX losses ¥23.1B). Non-operating profit/loss turned into a ¥83.3B surplus (prior year -¥12.7B), and forex largely explains the ¥84.0B increase at the Ordinary Income stage. Extraordinary items netted -¥60.3B (special losses ¥71.1B including impairments ¥67.1B and disposal losses of fixed assets ¥1.3B; special gains ¥10.8B including investment securities sales gains ¥8.9B and fixed asset sales gains ¥1.8B). The impairments ¥67.1B related to equipment at Chinese/domestic subsidiaries Miike Industry, Topre Foshan, and Guangzhou Miike, reflecting deteriorating profitability in the Press business. Comprehensive income was ¥304.1B, ¥116.2B higher than Net Income ¥187.9B. Other comprehensive income components were foreign currency translation adjustments ¥85.3B, valuation difference on available-for-sale securities ¥19.0B, retirement benefit adjustments ¥11.0B, and OCI attributable to equity-method associates ¥0.8B, with yen depreciation boosting comprehensive income. The gap between Operating CF and Net Income (Operating CF ¥351.6B - Net Income ¥187.9B = +¥163.7B) is mainly due to non-cash items such as depreciation ¥238.9B and impairment ¥67.1B, indicating healthy earnings quality. However, the transitory nature of forex gains and volatility in Ordinary Income suggest variability; operating-stage profitability (Operating Margin 7.4%) will determine medium- to long-term earnings quality.
The company plan for the fiscal year ending March 2027 projects Revenue ¥3920.0B (+3.5%), Operating Income ¥230.0B (-18.0%), Ordinary Income ¥240.0B (-32.9%), Net Income ¥150.0B (-20.1%), EPS ¥302.64 (this period ¥374.49, -19.2%), indicating an earnings decline. The company assumes a conservative operating margin decline 7.4%→5.9% (-1.5pt), apparently incorporating normalization of forex contribution, cost increases, higher personnel expenses, and higher depreciation. The larger decline in Ordinary Income (-32.9%) relative to Operating Income (-18.0%) assumes erosion of non-operating income (forex gains). Operating Income falling -18.0% despite Revenue +3.5% suggests significant operating leverage deterioration; maintaining Temperature-Controlled Logistics growth and recovering Press-area profitability are key to meeting targets. First-half progress is undisclosed, but full-year achievement likely requires second-half recovery. Dividend guidance is annual ¥50.0 (year-end only; this period included ¥60.0 year-end + ¥40.0 interim = ¥100.0 including a commemorative dividend ¥10.0), with payout ratio 33.0% on company plan, a sustainable level.
Annual dividend this period was ¥100.0 (interim ¥40.0, year-end ¥60.0 including commemorative ¥10.0), which implies a payout ratio of 26.7% against EPS ¥374.49 (company disclosed 30.6% with rounding differences). Total dividends were approximately ¥49.6B (year-end ≈¥29.7B + interim ≈¥19.8B), coverage by FCF ¥185.6B is 3.74x, ample. Excluding the commemorative ¥10.0, ordinary dividend base is ¥90.0 implying payout ratio 24.0%, indicating high sustainability. Share buybacks of ¥22.2B were executed, bringing total returns (dividends + buybacks) to approx. ¥71.8B, which equals 38.7% of FCF ¥185.6B, and Total Return Ratio 19.2% (Total Return ¥71.8B ÷ Net Income ¥187.9B × 100). DOE (dividend on equity) is roughly 2.0%, showing attention to capital efficiency. For FY Mar-2027, dividend forecast is annual ¥50.0 (year-end only), reflecting removal of the commemorative dividend. On company plan Net Income ¥150.0B, payout ratio would be 33.0% (¥50.0 ÷ EPS forecast ¥302.64 × 100), indicating a modest increase in payout stance. With cash and deposits ¥628.5B + short-term securities ¥59.9B = ¥688.4B and strong financial position (D/E 0.57x), there is substantial scope for stable dividends and flexible total returns.
Dependency on Press-related products and margin deterioration risk: Press-related products account for 78.5% of sales and are sensitive to automotive production cycles, model changes, and electrification shifts. This period showed notable margin deterioration to 5.6% (from 6.4%, -0.8pt) and impairments of ¥67.1B at Chinese/domestic subsidiaries. Continued downside pressure on order prices, raw material cost inflation, and rising labor costs with delayed price pass-through would further compress operating margins. Temperature-Controlled Logistics provides some offset through high margins, but delayed recovery in Press profitability would weigh on overall company profits.
Working capital management deterioration and cash conversion efficiency decline: Inventory increase -¥47.8B (including WIP +¥48.1B) and accounts payable decrease -¥86.7B pressured operating cash flow by -¥104.9B. WIP ¥257.5B represents 65.8% of inventories, indicating production bottlenecks, inter-process inventory accumulation, and changeover inefficiencies. OCF/EBITDA 0.68x (from 0.97x) has deteriorated; absent production efficiency improvements, cash generation may remain muted. Risks also include inventory valuation losses and obsolescence; improvements in DIO and CCC are urgent.
Volatility of non-operating profit/loss from forex and resulting earnings quality variability: Of Ordinary Income ¥357.8B, foreign exchange gains ¥57.6B (prior year FX losses ¥23.1B) contributed an ¥80.7B uplift, increasing dependence on non-operating income. Movements in the yen and emerging market currencies can cause large swings in non-operating profit/loss, reducing predictability of Ordinary and Net Income. The company plan for FY Mar-2027 assumes Ordinary Income down -32.9%, implying forex contribution normalization. Given that operating-stage profitability (Operating Margin 7.4%) defines medium-term earnings quality, high forex sensitivity is a risk to earnings stability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.4% | 7.8% (4.6%–12.3%) | -0.3pt |
| Net Profit Margin | 5.0% | 5.2% (2.3%–8.2%) | -0.2pt |
Profitability slightly lags industry median. Operating margin is evaluated excluding forex and special loss impacts, and margin deterioration in the Press domain pulls the aggregate down. Temperature-Controlled Logistics margin 14.8% is high, but substantial room for improvement exists in the core Press business.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 1.4% | 3.7% (-0.4%–9.3%) | -2.3pt |
Revenue growth is -2.3pt below industry median, and below average manufacturing growth. Core Press -0.8% declines suppressed overall growth, offset partially by double-digit Temperature-Controlled Logistics growth. The company’s growth position within the industry is lower-ranked, but financial resilience and cash generation are strong, providing capacity to accelerate growth via investment.
※ Source: Company compilation
Temperature-Controlled Logistics’ high-margin growth is lifting overall profit quality, while recovery of core Press profitability is the top priority. Temperature-Controlled Logistics continues revenue and profit growth with segment margin 14.8% (up +1.3pt year-on-year), accounting for 34.8% of consolidated Operating Income and acting as a growth driver. In contrast, the Press domain shows margin deterioration to 5.6% (down -0.8pt) and impairments ¥67.1B at Chinese/domestic subsidiaries, indicating portfolio review and efficiency improvements underway. The company’s FY Mar-2027 plan assumes a conservative operating margin 5.9% (-1.5pt), factoring in normalization of forex contributions and cost increases. If price pass-through, cost improvements, and productivity gains in the Press business progress, upside to company guidance on Operating Income is possible.
Improvement in working capital management and restoration of cash conversion efficiency would be a positive catalyst. OCF/EBITDA 0.68x (from 0.97x) deteriorated due to inventory increase -¥47.8B and accounts payable decrease -¥86.7B, with WIP ¥257.5B (65.8% of inventories) suggesting production bottlenecks and inter-process accumulation. If DIO and CCC improvements proceed, Operating CF could recover to >2x Net Income, enabling stable FCF expansion and greater return capacity. CapEx ¥297.7B (CapEx/Depreciation 1.25x) supports medium-term productivity and capacity expansion; if utilization and yield improvements materialize, inventories and margins could improve simultaneously.
Strong financial headroom supports both investment and shareholder returns. D/E 0.57x, Debt/EBITDA 0.40x, Current Ratio 188.6%, and cash & short-term investments ¥688.4B indicate very solid financial resilience. FCF ¥185.6B funds dividends and share buybacks totaling ¥71.8B, and Total Return Ratio 19.2% is conservative—leaving room for dividend increases or buyback expansion. FY Mar-2027 dividend guidance ¥50.0 (payout ratio 33.0%) is the post-commemorative baseline; with earnings recovery, dividend increases are feasible. The balance between growth CapEx (CapEx/Sales 7.9%) and shareholder returns appears sustainable and provides a foundation for mid-term value creation.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult professionals as needed.