| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1468.6B | ¥1397.0B | +5.1% |
| Operating Income | ¥32.8B | ¥23.4B | +40.2% |
| Profit Before Tax | ¥31.4B | ¥21.8B | +44.2% |
| Net Income | ¥22.0B | ¥11.4B | +92.9% |
| ROE | 10.9% | 6.6% | - |
For the fiscal year ended March 2026, Will Group achieved revenue of ¥1468.6B (YoY +¥71.5B, +5.1%), operating income of ¥32.8B (YoY +¥9.4B, +40.2%), Ordinary Income of ¥16.4B (YoY +¥14.4B, +705.6%), and net income attributable to owners of the parent of ¥23.1B (YoY +¥11.6B, +100.3%), realizing both top- and bottom-line growth. Gross profit was ¥323.9B (gross margin 22.1%, YoY +1.0pt), outpacing revenue growth, supported by improved utilization in the domestic Working Business, enhanced profitability in the overseas Working Business, and favorable FX effects. Operating margin improved to 2.2% (up +0.6pt from 1.7% prior year) and net margin improved to 1.6% (up +0.7pt from 0.8% prior year), reflecting improved earnings structure driven by company-wide cost control and favorable segment mix that delivered operating leverage.
Revenue totaled ¥1468.6B (+5.1%), comprised of Domestic Working Business ¥882.6B (+6.2%, 60.1% of sales) and Overseas Working Business ¥585.0B (+3.6%, 39.8% of sales). Domestically, solid project utilization across sales, call centers, and construction engineers and a higher proportion of high-margin projects contributed to gross margin improvement. Overseas, Australia declined slightly to ¥365.3B (prior ¥373.1B), while Singapore grew strongly to ¥193.5B (prior ¥168.1B, +15.1%), with regional expansion in Asia and yen depreciation supporting revenue. Other businesses amounted to ¥0.9B (prior ¥1.6B, -41.4%) as DX support and similar activities continued to shrink. Cost of sales was ¥1144.6B (cost of sales ratio 77.9%, improved -1.1pt from 79.0%), and the gross margin improvement to 22.1% (prior 21.0%) was driven by optimization of domestic/overseas project mix and strengthened utilization management.
Profit: Operating income was ¥32.8B (+40.2%), as the increase in gross profit (+¥30.1B, +10.2%) outpaced SG&A growth (+¥22.4B, +8.2%), producing operating leverage. SG&A ratio rose to 20.1% (up +0.6pt from 19.5%)—while there remains room to absorb fixed costs with revenue growth, increases in recruitment and personnel-related investments were drivers. By segment, Domestic Working reported operating income of ¥35.8B (+10.1%, margin 4.1%), Overseas Working ¥24.3B (+69.5%, margin 4.1%) with notable margin improvement overseas. Other segment posted an operating loss of ¥-3.1B (improvement from ¥-4.9B prior). Corporate expenses increased to ¥24.2B (prior ¥21.2B) but were offset by rising segment profits. Ordinary Income was ¥16.4B (+705.6%), driven by operating improvement and lower financial expenses of ¥1.9B (prior ¥2.4B), plus equity-method investment income of ¥0.2B. Net income was ¥22.0B (+92.9%), with income taxes of ¥9.4B (prior ¥10.4B) decreasing and an effective tax rate falling to 29.8% (prior 47.5%); after deducting non-controlling interests loss of ¥1.1B, net income attributable to owners of the parent was ¥23.1B (+100.3%). In conclusion, the company delivered revenue and profit growth with improved profit quality beginning at the operating level.
Domestic Working Business: Revenue ¥882.6B (+6.2%), operating income ¥35.8B (+10.1%), margin 4.1%. Core categories such as sales, call centers, and construction engineers showed stable utilization and improved project pricing contributed to gross margin. Overseas Working Business: Revenue ¥585.0B (+3.6%), operating income ¥24.3B (+69.5%), margin 4.1%. Australia saw a slight revenue decline to ¥365.3B but profitability improved; Singapore maintained high growth at ¥193.5B (+15.1%). Yen depreciation (AUD and SGD firm vs JPY) and local operational efficiencies boosted margins. No impairment loss of ¥4.7B was recognized this period (prior year included such impairment), indicating normalization of overseas segment profitability. Other segment: Revenue ¥0.9B, operating loss ¥3.1B; DX support and related operations remain small, with the loss narrowing by ¥1.8B YoY but still not contributing positively. Consolidated operating income after deducting corporate expenses was ¥32.8B; corporate expenses rose ¥3.0B YoY to ¥24.2B, but aggregate segment profit of ¥60.1B (prior ¥46.8B) absorbed the increase.
Profitability: Operating margin 2.2% (up +0.6pt from 1.7%), net margin 1.6% (up +0.7pt from 0.8%), with gross margin 22.1% (up +1.0pt from 21.0%) forming the basis of improved profitability. ROE was 12.3% (up +5.7pt from 6.6%), supported by improved net margin and high asset turnover of 2.60x (Revenue ¥1468.6B ÷ average total assets ¥565.2B). ROA (on Ordinary Income basis) was 5.9% (up +1.6pt from 4.3%). Basic EPS was 101.01円 (prior 50.64円, +99.5%); diluted EPS was 100.95円. BPS was 883.37円 (prior 760.08円, +16.2%), indicating stronger equity base.
Cash Quality: Operating Cash Flow (OCF) was ¥49.6B, 2.25x net income, with working capital increases nearly neutralized (accounts receivable +¥12.6B offset by accounts payable +¥12.5B), indicating strong cash realization of profits. Free Cash Flow (FCF) was ¥36.0B, sufficient to cover dividend payments of ¥10.2B.
Investment Efficiency: Capital expenditures were ¥5.7B, 24.3% of depreciation ¥23.5B, indicating restrained investment. High total asset turnover of 2.60x, days sales outstanding ~50.5 days (accounts receivable ¥203.1B ÷ annual revenue ¥1468.6B × 365), and accounts payable days ~64.1 days denote efficient working capital.
Financial Soundness: Equity ratio 35.8% (up +1.0pt from 34.8%) at a healthy level. Interest-bearing debt was short-term borrowings ¥33.6B + long-term borrowings ¥26.2B = ¥59.8B, with Debt/EBITDA 1.06x (EBITDA = operating income ¥32.8B + depreciation ¥23.5B = ¥56.3B), indicating low leverage. Current ratio 106.1% (current assets ¥299.4B ÷ current liabilities ¥282.1B) secures liquidity, though cash and cash equivalents ¥79.7B is somewhat thin relative to short-term borrowings and other liquid liabilities.
OCF was ¥49.6B (prior ¥18.1B, +174.5%). The increase from profit before tax ¥31.4B was supported by non-cash depreciation ¥23.5B and efficient working capital management. Operating receivables increased ¥12.6B, offset by operating payables increasing ¥12.5B, leaving working capital change nearly neutral. Corporate tax payments were ¥5.9B (large decrease from prior ¥18.0B), reflecting a prior-period tax payment pullback. OCF subtotal before working capital was ¥56.8B (prior ¥37.2B), demonstrating stronger cash conversion. Investing CF was ¥-13.5B (prior ¥-7.0B), driven by capital expenditures ¥5.7B and acquisition of subsidiary shares ¥8.2B. Proceeds from sale of investment securities ¥2.5B partially offset, but overall investment outflows rose. Free Cash Flow was ¥36.0B (OCF ¥49.6B - Investing CF ¥13.5B), ample. Financing CF was ¥-31.2B (prior ¥-12.3B), with net repayment of short-term borrowings ¥-6.2B, repayment of long-term borrowings ¥-29.5B, new borrowings ¥24.6B, lease liability repayments ¥13.4B, and dividend payments ¥10.2B. Including FX translation impact +¥5.5B, cash and cash equivalents increased ¥10.4B to end at ¥79.7B (opening ¥69.4B). With OCF 2.25x net income and FCF covering dividends 3.5x, cash generation remains solid.
The decline from operating income ¥32.8B to Ordinary Income ¥16.4B was mainly due to financial costs ¥1.9B and other non-operating adjustments: finance income ¥0.5B, finance costs ¥1.9B (net -¥1.4B), equity-method investment income ¥0.2B, other income ¥4.6B and other expenses ¥0.6B (net +¥4.0B). Other income ¥4.6B represented 3.1% of revenue (prior ¥7.3B, 5.2%), within ordinary bounds. The movement from Ordinary Income to Net Income was driven by income taxes ¥9.4B (effective tax rate 29.8%) and deduction of non-controlling interests loss -¥1.1B; special items were limited. OCF ¥49.6B is 2.25x net income ¥22.0B; accrual ratio (net income ¥22.0B - OCF ¥49.6B) ÷ OCF = -0.56, indicating cash generation exceeds profit. Comprehensive income was ¥37.7B (net income ¥22.0B + other comprehensive income ¥15.6B), with the primary driver of OCI being translation gains from overseas operations +¥19.6B (reflecting yen depreciation). Fair value changes on financial assets measured through OCI were -¥3.9B. The divergence between net income and comprehensive income is mainly due to temporary translation effects, and operating profitability is confirmed at the operating income level, indicating high quality.
Full-year guidance is revenue ¥1570.0B (YoY +6.9%), operating income ¥34.0B (YoY +3.7%), and net income ¥22.2B (YoY +0.9%). Progress against first-half results is high: revenue progress 93.5%, operating income progress 96.5%, net income progress 99.1%, suggesting the full-year targets are on a solid trajectory. The lower operating income growth (+3.7%) relative to revenue growth (+6.9%) likely reflects a cautious assumption balancing revenue expansion and SG&A increases. Net income is expected to be essentially flat, reflecting normalization of FX assumptions, smoothing of tax burdens, and higher corporate expenses—conservative guidance. Dividend guidance is undisclosed (0円 disclosed), and if a year-end dividend of ¥44 is assumed, the payout ratio would be approximately 44%, which is sustainable. Continued strong utilization and disciplined cost management are key to achieving guidance.
Year-end dividend is ¥44 (interim dividend ¥0), with payout ratio 43.6% (dividend total ¥10.2B ÷ net income attributable to owners of the parent ¥23.1B), within an appropriate range. Prior year dividend was ¥0 (undisclosed, making performance comparisons difficult); this year dividends were resumed. With FCF ¥36.0B covering dividends ¥10.2B 3.5x, and OCF ¥49.6B making the dividend burden light, plus healthy financial indicators (Debt/EBITDA 1.06x, equity ratio 35.8%), payout sustainability is high. No share buyback was disclosed; shareholder returns are via dividends only. A payout ratio of 43.6% leaves room for mid-term increases, but current policy balances growth investments (M&A, CAPEX) and returns.
Short-term debt dependence and liquidity management risk: Current assets ¥299.4B vs current liabilities ¥282.1B yields a current ratio of 106.1%, a limited buffer; cash and cash equivalents ¥79.7B are relatively thin when aggregated against short-term borrowings ¥33.6B and other liquid liabilities. Refinancing conditions at short-term borrowings’ maturities or changes in financial markets could affect liquidity. Lease liabilities (current ¥14.5B, non-current ¥38.7B) are effectively fixed costs and could heighten payment burden during economic downturns.
High goodwill ratio and impairment risk: Goodwill ¥98.6B represents 48.9% of equity ¥201.7B and 17.4% of total assets. It increased ¥16.9B YoY (+20.7%), driven by M&A and FX. Goodwill/EBITDA ratio is 1.75x, implying an acceptable short-term recovery burden, but if acquired businesses underperform, future impairment losses are possible. An impairment of ¥4.7B was recorded in Australia last year, warranting close monitoring for recurrence.
SG&A growth and margin pressure risk: SG&A was ¥295.1B (+8.2%), outpacing revenue growth of +5.1%. Increases in personnel costs, recruitment, and advertising—largely fixed-cost elements—pose a risk of reversing operating leverage. Intensified domestic talent competition or rising overseas management costs could challenge maintaining an operating margin of 2.2%. Medium-term margin improvement depends on controlling SG&A ratio and optimizing project mix.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 12.3% | 10.1% (2.2%–17.8%) | +2.2pt |
| Operating Margin | 2.2% | 8.1% (3.6%–16.0%) | -5.9pt |
| Net Margin | 1.5% | 5.8% (1.2%–11.6%) | -4.3pt |
While ROE outperforms the industry median by 2.2pt, operating and net margins lag the median, reflecting the staffing business characteristics and indicating room to improve gross margin and fixed-cost structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.1% | 10.1% (1.7%–20.2%) | -5.0pt |
Revenue growth trails the industry median by 5.0pt and is moderate relative to IT/communications sector growth. Medium-term acceleration depends on optimized investment allocation and expansion of overseas operations.
※ Source: Company compilation
Improvement in earnings structure and realization of operating leverage: Gross margin 22.1% (YoY +1.0pt), operating margin 2.2% (YoY +0.6pt), net margin 1.6% (YoY +0.7pt) show stepwise improvement driven by domestic/overseas project mix optimization and cost management. Overseas Working operating income grew +69.5%; if FX tailwinds and profitability improvements persist, there is upside to consolidated margins. The fact that SG&A growth +8.2% outpaced revenue growth +5.1% warrants attention, but company-wide cost control and improved utilization may sustain operating leverage—quarterly trends will be critical.
Cash generation and shareholder return sustainability: OCF ¥49.6B (2.25x net income), FCF ¥36.0B covering dividends ¥10.2B 3.5x. Debt/EBITDA 1.06x and equity ratio 35.8% point to a sound financial base, and a payout ratio of 43.6% is within an appropriate range. With restrained investment (CAPEX/Depreciation 24.3%), short-term FCF is ample, though underinvestment in mid-to-long-term growth (M&A, systems, expansion) could impair future revenue growth. Given conservative full-year guidance (revenue +6.9%, operating income +3.7%), the balance between restoring investment levels and margin improvement will be a focal point.
Monitoring goodwill and short-term liquidity risks: Goodwill ¥98.6B (48.9% of equity) rose +20.7% YoY, driven by active M&A and FX. Goodwill/EBITDA 1.75x keeps recovery burden manageable, but impairment risk remains if acquired operations weaken or FX reverses. Current ratio 106.1% and cash cushion ¥79.7B are tight relative to current liabilities ¥282.1B; managing short-term borrowing refinancing and maintaining OCF stability are important. Future quarters should monitor goodwill balance trends, contribution of acquired businesses, working capital swings, and lease liability amortization.
This report is an earnings analysis document automatically generated by AI through analysis of XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed before making investment decisions.