FUJI CORPORATION FY2027 Q1 Earnings Report

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Executive Summary

Revenue and earnings increased substantially, primarily driven by expanding demand in the Electronic Assembly Equipment (EAE) Business, with Operating Income surging to approximately three times the previous year's level. Revenue was ¥60.60B (+45.9% YoY), Operating Income was ¥15.21B (+192.6%), Ordinary Income was ¥15.88B (+182.0%), and Net Income was ¥12.62B (+121.8%), all representing significant growth. The primary driver of the increase in revenue was the recovery in demand in the EAE segment, while the increase in earnings was mainly attributable to operating leverage resulting from an improved gross margin and a lower SG&A ratio.

Factors Affecting Performance

【Revenue】Revenue of ¥60.60B represented a significant 45.9% increase YoY. The core Electronics Assembly Equipment (EAE) segment led overall performance, generating ¥58.65B (96.8% of total revenue, +52.5% YoY). Meanwhile, Machine Tools continued to experience a substantial decline in revenue, generating ¥1.35B (2.2% of total revenue, -48.6%), while Other Businesses generated only ¥0.67B (+32.2%).

【Profit and Loss】The gross margin improved by +8.4pt to 41.5% (33.1% in the previous year), while the SG&A ratio declined by -4.1pt to 16.4% (20.5% in the previous year), expanding the Operating Income margin by +12.6pt to 25.1% (12.5% in the previous year). Non-operating income exceeded expenses by ¥0.67B (dividend income of ¥0.28B, interest income of ¥0.22B, and foreign exchange gains of ¥0.15B), resulting in Ordinary Income of ¥15.88B. After recording extraordinary income of ¥2.05B (gain on the sale of investment securities, a temporary factor), Profit Before Tax was ¥17.91B and Net Income was ¥12.62B. Revenue and earnings increased.

Segment Analysis

EAE (formerly named the Robotics Solutions Business) recorded revenue of ¥58.65B (+52.5% YoY), Operating Income of ¥16.51B (+167.2%), and a profit margin of 28.1% (+12.0pt from 16.1% in the previous year), representing a significant improvement in profitability and serving as the primary driver of company-wide earnings. Machine Tools generated revenue of ¥1.35B (-48.6%) and recorded an Operating Loss of ¥0.18B, falling into the red from Operating Income of ¥0.12B in the previous year. Other Businesses generated revenue of ¥0.67B (+32.2%) and Operating Income of ¥0.02B, returning to profitability from a loss in the previous year. Consolidated Operating Income after deducting ¥1.13B in company-wide expenses was ¥15.21B.

Key Financial Indicators

【Profitability】The Operating Income margin improved substantially to 25.1% (12.5% in the previous year), the Net Income margin to 20.8% (13.7%), and the gross margin to 41.5% (33.1%). ROE was 5.2% (quarterly actual). 【Cash Flow Quality】Comprehensive Income of ¥14.92B exceeded Net Income of ¥12.62B by +¥2.30B, primarily due to valuation difference on securities of +¥1.77B and foreign currency translation adjustments of +¥0.83B. Extraordinary income of ¥2.05B accounted for 16.3% of Net Income and should be noted as a temporary factor. 【Investment Efficiency】Against total assets of ¥291.20B and net assets of ¥242.97B, the Company recorded quarterly revenue of ¥60.60B and Net Income of ¥12.62B. The ratios of accounts receivable and inventories to revenue declined from the previous year, indicating that asset efficiency is instead improving. 【Financial Soundness】The Equity Ratio was 83.4% (almost unchanged from 83.5% in the previous year), while the current ratio was 440.2% and the quick ratio was 394.2%, indicating extremely high liquidity. The debt-to-equity ratio was 0.20x and interest coverage was approximately 5,071x, indicating that both financial leverage and interest burden were insignificant.

Cash Flow Analysis

Cash and deposits increased to ¥62.84B (¥53.74B in the previous year, +¥9.10B, +16.9%), confirming an accumulation of funds. Accounts receivable of ¥67.50B (+3.3%) and inventories of ¥21.46B (+8.4%) both increased, but remained below the 45.9% growth rate in revenue. As a percentage of revenue, accounts receivable declined from 157% in the previous year to 111%, while inventories declined from 48% to 35%. Accounts payable increased to ¥16.76B (+13.1%), reflecting the expansion of production activity. Overall, even amid a sharp expansion in revenue, the relative burden of working capital was trending downward, and cash management appears to have remained stable, accompanied by an increase in cash and deposits.

Quality of Earnings

Operating Income of ¥15.21B constituted almost all of Ordinary Income of ¥15.88B. Non-operating income was ¥0.68B (dividend income of ¥0.28B, interest income of ¥0.22B, and foreign exchange gains of ¥0.15B), equivalent to only 1.1% of revenue, indicating that operating activities were the primary driver of recurring earnings power. Extraordinary income of ¥2.05B (gain on the sale of investment securities) was a temporary factor and accounted for 16.3% of Net Income of ¥12.62B; therefore, the increase in earnings on an underlying basis excluding this item will be somewhat smaller. Comprehensive Income of ¥14.92B exceeded Net Income by +¥2.30B, with valuation-based unrealized gains and losses, including valuation difference on securities of +¥1.77B and foreign currency translation adjustments of +¥0.83B, contributing to the difference. The divergence from Net Income was primarily attributable to non-operating factors. From an accrual perspective, the growth rates of accounts receivable and inventories were below revenue growth, and there are limited signs of impediments to the conversion of earnings into cash.

Earnings Forecast and Guidance

Progress toward the full-year forecast was 24.8% for Revenue (¥60.60B/¥244.00B), 25.4% for Operating Income (¥15.21B/¥60.00B), 26.0% for Ordinary Income (¥15.88B/¥61.10B), and 28.7% for Net Income (against the forecast of ¥44.00B attributable to owners of the parent). These figures were all at or above the standard quarterly progress level of 25%. The Company revised its earnings forecast during the current quarter (with no revision to the dividend forecast), and the full-year plan appears to reflect strong performance in EAE. However, the relatively high progress rate for Net Income was also supported by the temporary boost from the gain on the sale of investment securities, and the pace of progress for the full year may normalize.

Shareholder Returns

The Company forecasts a full-year dividend of ¥190.00 per share and made no revision to its dividend forecast during the current quarter. The Payout Ratio against forecast EPS of ¥500.50 is approximately 38.0% (¥190/¥500.50). The total dividend based on the average number of shares outstanding during the period (approximately ¥16.70B) divided by the full-year Net Income forecast of ¥44.00B also yields approximately 38%, indicating a consistent Payout Ratio. Given the Equity Ratio of 83.4% and cash and deposits of ¥62.84B, the Company's dividend payment capacity is considered to be high.

Risk Factors

1. Concentration in a business segment: The EAE segment accounts for 96.8% of Revenue (¥58.65B/¥60.60B), indicating a low degree of diversification in the business portfolio. Fluctuations in demand for this segment have a structure that directly affects company-wide performance.

2. Weak performance in the Machine Tools Business: Against Revenue of ¥1.35B (-48.6% YoY), the business recorded an Operating Loss of ¥0.18B, falling into the red from Operating Income of ¥0.12B in the previous year. Continued weakness in this business could depress the company-wide profit margin.

3. Reliance on temporary gains: Extraordinary income of ¥2.05B (gain on the sale of investment securities) accounted for 16.3% of Net Income of ¥12.62B, and part of the 28.7% full-year progress rate was supported by this temporary factor. It is important to monitor progress on an underlying Ordinary Income basis.

Industry Benchmark (Reference, Compiled by the Company)

Industry Benchmark (manufacturing)

Profitability and Returns

The Company's Operating Income margin and Net Income margin both substantially exceeded the industry median and were at the top end of the industry.

Growth and Capital Efficiency

The Company's revenue growth rate substantially exceeded both the industry median and the upper bound of the IQR, representing exceptional growth within the industry.

※Source: Compiled by the Company

Key Points in the Earnings Results

1. The Operating Income margin improved by +12.6pt to 25.1% (12.5% in the previous year), confirming a structural improvement in profitability driven by an improved gross margin (+8.4pt) and a lower SG&A ratio (-4.1pt).

2. Full-year progress rates were 24.8% for Revenue, 25.4% for Operating Income, and 28.7% for Net Income, all around the standard quarterly level of 25%. The Company has already revised its earnings forecast during the current quarter.

3. Extraordinary income (gain on the sale of investment securities of ¥2.05B) accounted for 16.3% of Net Income, making it necessary to continue monitoring the trend in underlying earnings power excluding temporary factors.

Theoretical Stock Price (Reference Value)

This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market price or a recommendation of any specific investment action.

Sensitivity: ¥3,529–¥3,739 at ±1% for the cost of equity, and ¥3,610–¥3,665 at ±0.1 for ω.

Notes:

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

(Calculation model: Residual Income Model / Interest rate reference month: 2026-06 / This value does not predict or guarantee the future stock price)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release 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, and, where necessary, after consulting with a professional advisor.

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