TAKUMA (6013) FY2026 Q3 Earnings Report

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Executive Summary

Revenue and profit increased, driven by higher revenue and earnings in the domestic Environment & Energy Business, although net income included a non-recurring factor. Revenue was ¥1138.1B (+7.0% YoY), Operating Income was ¥95.0B (+9.1%), Ordinary Income was ¥103.5B (+10.9%), and quarterly net income attributable to owners of the parent was ¥82.6B (+14.0%). The gross margin improved to 23.1%, but this was partially offset by higher SG&A expenses, leaving the Operating Income margin at 8.3%, largely unchanged from the previous year. Net income growth was supported by a gain on the sale of investment securities of ¥16.2B; therefore, recurring earnings power should be assessed primarily based on Operating Income and Ordinary Income.

Factors Affecting Performance

【Revenue】Revenue was ¥1138.1B (+7.0% YoY). The core domestic Environment & Energy Business expanded to ¥869.1B (+9.8%), while the Residential Thermal Energy Business also grew to ¥184.7B (+29.4%). In contrast, the overseas Environment & Energy Business contracted to ¥28.3B (-31.9%), and the Facilities & Systems Business declined to ¥56.5B (-36.3%), indicating variation in the timing of revenue recognition for projects. Domestic Environment & Energy accounted for approximately 76% of the revenue mix, reflecting the Company’s high dependence on this business.

【Profit and Loss】Operating Income was ¥95.0B (+9.1%), and Ordinary Income was ¥103.5B (+10.9%). While the gross margin improved from 21.5% to 23.1%, SG&A expenses increased by 19.3% YoY, outpacing revenue growth and limiting expansion of the Operating Income margin. Non-operating income of ¥9.9B, including dividend income of ¥7.0B, contributed to the increase in Ordinary Income. Profit Before Tax of ¥119.8B exceeded Ordinary Income by ¥16.2B, with the entire difference explained by the ¥16.2B gain on the sale of investment securities. Net income of ¥82.6B (+14.0%) included this non-recurring factor. Although the results can be characterized as higher revenue and earnings, it should be noted that the quality of earnings growth reflects stronger growth at the net income level than at the operating level.

Segment Analysis

The domestic Environment & Energy Business generated revenue of ¥869.1B (+9.8%) and segment profit of ¥100.5B (+21.0%), with a profit margin of 11.6% (improved from 10.5% in the previous year). It was the largest source of profit, accounting for 86.4% of the total segment profit of ¥116.4B. The Residential Thermal Energy Business achieved significant revenue growth to ¥184.7B (+29.4%), but profit remained at ¥11.3B (+3.8%), and its profit margin declined from 7.6% to 6.1%, highlighting the challenge of passing higher costs through to prices. The overseas Environment & Energy Business recorded revenue of ¥28.3B (-31.9%) and profit of ¥0.3B (¥8.0B in the previous year), representing a substantial decline in earnings. The Facilities & Systems Business continued to contract, with revenue of ¥56.5B (-36.3%) and profit of ¥4.3B (-15.9%). Profit is highly concentrated in the domestic business, and fluctuations in orders, project schedules, and profitability in that business have a significant impact on overall Company performance.

Key Financial Indicators

【Profitability】The Operating Income margin was 8.3%, the net profit margin was 7.2%, and annualized ROE was 10.2%. The gross margin of 23.1% improved from 21.5% in the previous year, but the SG&A ratio rose to 14.8% (13.3% in the previous year), limiting expansion of the Operating Income margin.【Cash Flow Quality】Profit Before Tax exceeded Ordinary Income by ¥16.2B, and the gain on the sale of investment securities accounted for the entire amount; consequently, net income growth included a non-recurring factor.【Capital Efficiency】The Equity Ratio was 58.7%. Against cash and deposits of ¥485.1B, interest-bearing debt was minimal, indicating that the Company is maintaining both capital efficiency and financial capacity.【Financial Soundness】The current ratio was approximately 201%, calculated as current assets of ¥1268.2B divided by current liabilities of ¥629.5B, representing a robust level. Short-term borrowings declined significantly from the previous year, resulting in an effectively low-leverage capital structure.

Cash Flow Analysis

Although direct data from the statement of cash flows were not presented, funding trends can be inferred from changes in the balance sheet. Cash and deposits totaled ¥485.1B, increasing from ¥394.3B in the previous year, indicating greater financial flexibility. While accounts receivable and notes receivable declined significantly year on year, inventories increased to ¥176.4B (a significant increase YoY). The offsetting movements in collections and inventories warrant close attention when assessing the quality of working capital. Short-term borrowings declined substantially from the previous year, resulting in a shift in the funding structure toward lower reliance on borrowings. Increases in property, plant and equipment and intangible assets were limited, and there was no significant acceleration in large-scale investment activity.

Earnings Quality

Against Ordinary Income of ¥103.5B, Profit Before Tax was ¥119.8B, with the ¥16.2B difference attributable to the non-recurring gain on the sale of investment securities. Of the ¥9.9B in non-operating income, dividend income accounted for ¥7.0B and contributed to stabilizing Ordinary Income as recurring earnings. Approximately 20% of net income attributable to owners of the parent of ¥82.6B appears to have originated from the aforementioned gain on sale, and the resulting reversal effect should be considered in comparisons from the next period onward. Accounts receivable declined while inventories increased simultaneously. When assessing cash flow quality, it is necessary to monitor the impact of inventory accumulation on future profitability as part of accruals—the difference between accounting earnings and cash flow.

Earnings Forecast and Guidance

The full-year forecast calls for Revenue of ¥1670.0B (+10.5% YoY), Operating Income of ¥152.0B (+12.3%), and Ordinary Income of ¥160.0B (+13.5%), with revisions made to both the earnings forecast and dividend forecast. The Q3 cumulative progress rates were 68.1% for Revenue, 62.5% for Operating Income, and 64.7% for Ordinary Income, all below the standard level of 75%. Given the project-based nature of the business and its tendency for revenue and profit to be weighted toward Q4, the recognition and acceptance of large domestic projects in Q4 will be the key to achieving the full-year forecast.

Shareholder Returns

The Q2 dividend was ¥39.00 per share, while the full-year dividend forecast is ¥87.00 per share. Based on the full-year EPS forecast of ¥174.00, the forecast Payout Ratio is 50.0%, a level that is not excessively high relative to earnings. Interest-bearing debt is minimal compared with cash and deposits of ¥485.1B, providing substantial balance-sheet capacity to sustain dividends. Treasury shares increased from the previous year, and capital allocation trends in addition to dividends will continue to warrant monitoring.

Risk Factors

1. Profit concentration in the domestic business: Segment profit of ¥100.5B from the domestic Environment & Energy Business accounted for 86.4% of the total reported segment profit of ¥116.4B. As a result, fluctuations in orders, project schedules, and profitability in this business have a significant impact on overall Company performance.

2. Project profitability and inventory risk: Inventories increased significantly from the previous year to ¥176.4B, indicating accumulation of materials and work in progress associated with ongoing orders. If project delays or specification changes occur, the Company may face risks of valuation losses and deteriorating project profitability.

3. Contraction in the overseas and Facilities & Systems businesses: Revenue in the overseas Environment & Energy Business declined by 31.9% YoY, and segment profit fell to ¥0.3B. Revenue in the Facilities & Systems Business also declined by 36.3% YoY. Changes in project progress, foreign exchange rates, and the bidding environment may drive earnings volatility in both businesses.

Industry Benchmark (For Reference; Compiled by the Company)

Key Points from the Financial Results

1. Higher revenue and earnings in the domestic Environment & Energy Business have strengthened the earnings foundation of the core business. However, higher SG&A expenses have limited expansion of the Operating Income margin, and the effect of the improved gross margin has not sufficiently flowed through to the operating level; this is a key structural point of interest.

2. Net income includes the ¥16.2B gain on the sale of investment securities. When assessing recurring earnings power, it is appropriate to use Operating Income and Ordinary Income as the primary benchmarks.

3. Progress rates toward the full-year forecast were below the standard 75% level for all indicators. The extent to which large projects generate recognized revenue and profit in Q4 will determine full-year performance.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,558–¥1,647 at ±1% for the cost of equity, and ¥1,599–¥1,605 at ±0.1 for ω.

Notes:

• Net assets as of the quarter-end were used (there is a timing difference from the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type; explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated using only publicly available data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmark is reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional adviser as necessary.

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