| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥493.5B | ¥437.9B | +12.7% |
| Operating Income / Operating Profit | ¥65.0B | ¥55.8B | +16.6% |
| Ordinary Income | ¥66.2B | ¥49.5B | +33.9% |
| Net Income / Net Profit | ¥45.0B | ¥30.6B | +46.8% |
| ROE | 3.6% | 2.6% | - |
The results for 2026 FY Q1 showed revenue of ¥493.5B (YoY +¥55.7B, +12.7%), Operating Income of ¥65.0B (YoY +¥9.3B, +16.6%), Ordinary Income of ¥66.2B (YoY +¥16.7B, +33.9%), and Net Income of ¥45.0B (YoY +¥14.3B, +46.8%), indicating growth in both top and bottom lines. Operating margin improved to 13.2% (up +0.4pt from 12.7% a year earlier) and net margin improved to 9.1% (up +2.1pt from 7.0%), reflecting better profitability. The core Small Outdoor Power Equipment segment accounted for 75.2% of revenue, with strong demand in the Americas and a decline in SG&A ratio (19.5%, -2.1pt YoY) driving profits. However, Operating Cash Flow was a large negative at -¥99.4B (YoY -51.3%), with working capital increases—Accounts Receivable +¥118.1B, Inventory +¥18.9B, Accounts Payable -¥30.9B—pressuring liquidity. Short-term borrowings increased by ¥116.8B (+234.2%), supplementing with external funding and maintaining liquidity, but early recovery of cash generation remains a challenge.
[Revenue] Revenue of ¥493.5B (+12.7% YoY) was driven by the core Small Outdoor Power Equipment. By segment, Small Outdoor Power Equipment recorded ¥545.7B (+10.8%), representing 75.2% of the total, with shipments to the Americas at ¥301.5B versus ¥256.0B last year (+17.8%). Agricultural Management Machinery was ¥94.3B (+2.7%), and General Industrial Machinery was ¥75.7B (+16.6%), with all segments recording revenue growth. Regionally, the Americas was largest at ¥327.2B, and Europe grew to ¥50.4B (from ¥41.0B, +22.7%). Revenue growth was supported by robust demand in the Americas, price maintenance, and an improved sales mix.
[Profitability] Gross margin declined to 32.7% (down -1.7pt from 34.4% a year earlier), but SG&A ratio improved to 19.5% (down -2.1pt from 21.6%), leading to an improved operating margin of 13.2% (up +0.4pt from 12.7%). Operating Income of ¥65.0B (+16.6%) was aided not only by revenue growth but also by restraint in SG&A (¥96.3B, up only ¥1.6B YoY, +1.7%). Non-operating items included foreign exchange gains of ¥1.9B but also FX losses of ¥5.5B, yielding a net FX impact of -¥3.6B. Interest income was ¥0.3B and equity-method income ¥0.0B, leaving non-operating income at ¥3.0B versus non-operating expenses including interest expense of ¥1.3B and total non-operating expense of ¥1.8B, resulting in Ordinary Income of ¥66.2B (+33.9%). Extraordinary items were minor (gain on sale of investment securities ¥0.1B, loss on disposal of fixed assets ¥0.0B, net +¥0.1B). Pre-tax income was ¥66.3B and income taxes were ¥21.3B (effective tax rate 32.2%), producing Net Income of ¥45.0B (+46.8%). In summary, revenues and profits rose and profitability improved, though the decline in gross margin and FX effects warrant monitoring.
Small Outdoor Power Equipment: Revenue ¥545.7B (+10.8%), Operating Income ¥88.6B (+9.9%), margin 16.2% — the largest profit contributor. Shipments to the Americas were ¥301.5B (+17.8% YoY) and Europe grew to ¥49.4B (from ¥39.9B, +23.7%). Agricultural Management Machinery: Revenue ¥94.3B (+2.7%), Operating Income ¥0.2B (from ¥0.1B, +109.0%), turning profitable though margin remains low at 0.2%. General Industrial Machinery: Revenue ¥75.7B (+16.6%) grew, but Operating Income declined to ¥1.5B (-48.2%), margin 1.9%, indicating deteriorated profitability. Other segments: Revenue ¥9.7B (+6.0%), Operating Income ¥1.1B (-38.5%), margin 11.9%. High dependence on Small Outdoor Power Equipment means improving profitability in other segments is key to stabilizing company-wide earnings.
[Profitability] Operating margin 13.2% (up +0.4pt from 12.7%), Net margin 9.1% (up +2.1pt from 7.0%), Gross margin 32.7% (down -1.7pt from 34.4%). The decline in SG&A ratio to 19.5% (down -2.1pt from 21.6%) contributed to margin improvement. ROE 3.6% (up +1.0pt from 2.6%) driven primarily by improved net margin. EBITDA was ¥75.6B (Operating Income ¥65.0B + Depreciation ¥10.6B), with an EBITDA margin of 15.3%. [Cash Quality] Operating CF / Net Income is -2.21x, indicating quality concerns. OCF / EBITDA is -1.32x, showing insufficient cash conversion. Free Cash Flow was -¥116.7B (Operating CF -¥99.4B + Investing CF -¥17.2B). Working capital expansion led to large negative cash generation. [Investment Efficiency] Total asset turnover 0.27x, Days Sales Outstanding 362 days, Inventory Turnover Days 285 days, Days Payable Outstanding 143 days, resulting in a Cash Conversion Cycle of 927 days — a markedly prolonged cycle. [Financial Soundness] Equity Ratio 67.8% (down -3.0pt from 70.8%), Current Ratio 313.5%, Quick Ratio 223.9% indicating ample liquidity. Debt/EBITDA is 3.42x which is moderately high, but EBITDA interest coverage is a strong 56.8x. Short-term liabilities ratio 64.4% and Cash/Short-term Debt 0.89x indicate high reliance on short-term funding, making rollover management important.
Operating Cash Flow was -¥99.4B (previous year -¥65.7B, YoY -51.3%), a large negative, leaving Operating CF/Net Income at -2.21x and presenting quality issues. Deterioration in working capital was the main driver: Accounts Receivable increase -¥118.1B, Inventory increase -¥18.9B, Accounts Payable decrease -¥30.9B, totaling -¥167.9B cash outflow. Operating CF before working capital changes was -¥85.7B; taking into account corporate tax payments -¥12.9B, interest & dividend received ¥0.4B, and interest paid -¥1.2B. Investing CF was -¥17.2B, mainly for acquisition of tangible and intangible fixed assets. Depreciation was ¥10.6B versus CapEx ¥17.3B, with CapEx/Depreciation of 1.63x, reflecting continued proactive investment. Free Cash Flow was -¥116.7B (Operating CF -¥99.4B + Investing CF -¥17.2B). Financing CF was +¥94.8B, centered on net increases in short-term borrowings of ¥113.7B. Dividend payments were -¥17.2B, other financing activities -¥1.7B. Cash and deposits were ¥148.0B (from ¥168.9B, -¥20.9B YoY), with FX translation effect +¥1.0B; year-end balance declined versus prior period.
Earnings quality is generally recurring, with minor extraordinary impacts (extraordinary gains ¥0.1B, extraordinary losses ¥0.0B, net <0.2% of net income). Non-operating income was ¥3.0B (0.6% of revenue), consisting of interest income ¥0.3B, dividend income ¥0.1B, FX gains ¥1.9B, etc. Non-operating expenses were ¥1.8B, notably FX losses ¥5.5B, with net FX impact -¥3.6B (equivalent to -5.5% of Operating Income) — limited in scope. The gap between Ordinary Income ¥66.2B and Net Income ¥45.0B is mainly due to tax burden (effective tax rate 32.2%), with no abnormal divergence. However, from an accrual perspective, Operating CF lags Net Income significantly (-2.21x), and working capital increases from receivables and inventory are impairing the conversion of profits to cash. Comprehensive Income was ¥57.0B, ¥12.0B above Net Income ¥45.0B, driven by FX translation adjustments +¥11.2B and valuation differences on securities +¥2.2B. Earnings sustainability remains high, but improvement in cash quality will be decisive for future assessments.
Full Year guidance remains unchanged: Revenue ¥1850.0B (YoY +6.3%), Operating Income ¥210.0B (YoY +6.5%), Ordinary Income ¥200.0B (YoY +2.4%), Net Income ¥150.0B. Q1 progress rates are Revenue 26.7%, Operating Income 31.0%, Ordinary Income 33.1%, Net Income 30.0%, exceeding a standard quarter pace (25%). Profit front-loading is notable, driven by SG&A efficiency and strong core segment performance. However, if the negative trend in Operating CF persists, liquidity management for the full year becomes increasingly important. Going forward, normalization of working capital (receivables collection and inventory reduction) from Q2 onward and sustained demand in the Americas are prerequisites for achieving the full-year plan. No forecast revisions have been made; current confidence in the company plan is high.
No dividend was disclosed at Q1; the full-year DPS forecast of ¥55 (from ¥45, +¥10) is maintained. Estimated total dividends are approximately ¥2.25B, implying a payout ratio of about 15% against full-year Net Income forecast of ¥150.0B, a sustainable level. However, Q1 Net Income was ¥45.0B while Free Cash Flow was -¥116.7B, and short-term external funding (short-term borrowings +¥113.7B) was used in the short term. CapEx was ¥17.3B and Depreciation ¥10.6B (CapEx/Depreciation 1.63x) indicating continued proactive investment, and dividend payments are not currently covered by internal funds. Cash balance ¥148.0B and retained earnings ¥874.3B provide a solid financial base, and full-year coverage of dividends is expected if profits are generated and working capital normalizes. No share buybacks were confirmed; the company maintains a dividend-focused shareholder return policy.
Working Capital Expansion Risk: With Days Sales Outstanding 362 days, Inventory Turnover Days 285 days, and a Cash Conversion Cycle of 927 days, the cycle is extremely prolonged and Operating CF/Net Income -2.21x indicates cash generation materially lags net income. If collection and inventory compression do not progress after Q2, additional external funding may be required, increasing interest burden and reducing financial flexibility.
Short-term Liability Dependence and Rollover Risk: Short-term liabilities ratio 64.4% and Cash/Short-term Debt 0.89x reflect high dependence on short-term funding. Short-term borrowings rose to ¥166.7B (YoY +¥116.8B, +234.2%), and interest rate increases or credit tightening at rollover could pressure liquidity. Although Current Ratio is 313.5% indicating ample liquidity, timing of converting receivables and inventory to cash could jeopardize liquidity.
FX Volatility and Gross Margin Pressure: Net FX impact was -¥3.6B (equivalent to -5.5% of Operating Income) and gross margin declined to 32.7% (down -1.7pt YoY). With a high Americas ratio, yen depreciation could raise import costs and USD-denominated transaction translation effects could affect profitability. Further increases in raw material prices or logistics costs could further compress gross margin and offset SG&A efficiency gains.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.2% | 6.8% (2.9%–9.0%) | +6.3pt |
| Net Margin | 9.1% | 5.9% (3.3%–7.7%) | +3.2pt |
Profitability substantially exceeds the industry median, driven by reduced SG&A ratio and high-margin core segment.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 12.7% | 13.2% (2.5%–28.5%) | -0.5pt |
Revenue growth is in line with the industry median, supported by robust demand in the Americas.
※ Source: Company aggregation
On profitability, the company maintained industry-leading profitability with Operating Margin 13.2% (industry median +6.3pt) driven by a decline in SG&A ratio (-2.1pt). Full-year progress is also front-loaded on the profit side, and if the core Small Outdoor Power Equipment segment continues to perform, likelihood of meeting guidance is high. However, gross margin declined by -1.7pt, and FX and raw material cost fluctuations could materially affect future profitability.
Working capital management is the most important issue. Operating CF -¥99.4B and Cash Conversion Cycle 927 days are markedly prolonged, and delays in receivables collection and inventory reduction are hindering cash generation. Continued reliance on external funding (short-term borrowings +¥116.8B, +234.2%) raises concerns about higher interest expense and reduced financial flexibility. Progress in normalizing working capital from Q2 onward will be the inflection point for assessment.
Payout ratio around 15% (Full-year DPS ¥55) indicates capacity for shareholder returns, but in the short term FCF is negative and dividend payments cannot be covered by internal funds. Full-year coverage is expected with profit generation and working capital improvement, but early recovery of cash generation is a prerequisite for dividend sustainability.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions should be made at your own responsibility, and consult a professional if necessary.