| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥949.1B | ¥884.8B | +7.3% |
| Operating Income / Operating Profit | ¥83.2B | ¥69.0B | +20.5% |
| Ordinary Income | ¥83.8B | ¥68.9B | +21.6% |
| Net Income | ¥52.3B | ¥50.0B | +4.6% |
| ROE | 6.8% | 7.3% | - |
For the fiscal year ended March 2026, Revenue was ¥949.1B (YoY +¥64.2B +7.3%), Operating Income was ¥83.2B (YoY +¥14.2B +20.5%), Ordinary Income was ¥83.8B (YoY +¥14.9B +21.6%), and Net Income attributable to owners of parent was ¥60.8B (YoY +¥13.0B +27.2%), resulting in year-over-year increases in both sales and profit. Operating margin improved to 8.8% (up +1.0pt from 7.8% a year earlier) and gross margin was 21.9%; cost control proved effective and SG&A ratio improved to 13.2% reflecting efficiency gains. By segment, Semiconductor-related business led high growth with sales +19.6%, Automotive Business maintained high profitability with Operating Income of ¥51.4B and margin of 11.8%, while the Semiconductor Business saw a decline in operating margin to 6.7%, creating profitability dispersion. Cash flow was robust with Operating Cash Flow (OCF) of ¥165.5B (YoY +75.5%), securing FCF of ¥127.8B and covering dividend payments of ¥12.3B by 5.7x. On the balance sheet, short-term borrowings were reduced by 84.4%, improving to a net cash position; Debt/EBITDA was 1.01x and interest coverage 30.2x, indicating very strong financial health. Contract liabilities rose to ¥44.5B (YoY +97.2%), indicating an increase in advance-received demand; construction in progress (CIP) up +438% is a leading indicator of an expanding CapEx pipeline. Against the full-year company plan (Revenue ¥1,000B, Operating Income ¥90B), results achieved 95% of Revenue and 92% of Operating Income, largely covering conservative guidance. Going forward, restoring profitability in the Semiconductor segment and improving inventory turnover (current 86 days) and work-in-progress ratio (55.6%) will be key to margin expansion.
[Revenue] Revenue ¥949.1B (YoY +7.3%) was driven by Semiconductor-related sales of ¥361.1B (+19.6%) showing double-digit growth, while Automotive Business was steady at ¥434.8B (+1.0%). Other industrial automation equipment was ¥125.7B (-4.0%) a slight decline, and Other segments (non-reportable) expanded to ¥27.5B (+28.4%). Sales composition was Automotive 45.8%, Semiconductor 38.0%, Other industrial automation equipment 13.3%, maintaining a two-pillar structure of Automotive and Semiconductor. Contract liabilities increased from ¥22.6B to ¥44.5B (+97.2%), indicating accumulated advance-received orders and a positive bridge to future sales. Contract assets decreased from ¥304.6B to ¥208.6B (-31.5%) as amounts recognized as assets were converted to cash following progress in acceptance. Regional breakdown is not specified, but forex gains ¥0.77B and forex losses ¥1.02B yielded net impact of -¥0.25B, which is minor, suggesting limited impact from the overseas sales ratio.
[Profitability] Gross profit was ¥208.1B, with gross margin 21.9% (up +0.5pt from 21.4% prior year). SG&A was ¥124.9B; SG&A growth was restrained relative to revenue growth (+7.3%), improving the SG&A ratio to 13.2% (down -0.4pt from 13.6%) and demonstrating positive operating leverage. Operating Income was ¥83.2B (+20.5%), expanding margin to 8.8%. By segment, Automotive Business delivered Operating Income ¥51.4B (+22.6%) with margin 11.8%, contributing roughly 62% of consolidated Operating Income as the core business. Semiconductor-related segment posted Operating Income ¥24.2B (-15.4%) with margin down to 6.7%, suggesting impacts from product mix and project-level profitability. Other industrial automation equipment improved substantially with Operating Income ¥6.7B (+758.4%), and Other segments produced Operating Income ¥0.8B (+239.8%) turning profitable. Non-operating income was ¥5.4B (including dividend income ¥0.8B and forex gains ¥0.8B) and non-operating expenses were ¥4.9B (including interest expense ¥2.8B and forex losses ¥1.0B), resulting in Ordinary Income of ¥83.8B (up +21.6%) roughly in line with Operating Income growth. Extraordinary items were income ¥0.2B and losses ¥0.4B, net -¥0.2B, minor and reflecting gains on disposal of fixed assets versus impairment/retirement losses. Pre-tax income ¥83.5B less corporate taxes ¥22.8B, and after non-controlling interests contribution of -¥0.08B, Net Income attributable to owners of parent was ¥60.8B (+27.2%), outpacing Operating Income growth; effective tax rate fell to 27.3% from 31.5% a year earlier. In conclusion, the company achieved revenue and profit growth, margin improvement, supported by high margins in Automotive Business and cost containment.
Automotive Business reported Revenue ¥434.8B (YoY +1.0%) and Operating Income ¥51.4B (+22.6%), achieving margin 11.8% and accounting for approximately 62% of consolidated Operating Income as the primary segment. The margin improved substantially from 9.7% a year earlier, likely reflecting a higher mix of high-margin projects and cost efficiencies. Semiconductor-related business achieved high growth with Revenue ¥361.1B (+19.6%) but Operating Income declined to ¥24.2B (-15.4%) and margin fell to 6.7%. The deterioration from 8.5% indicates product mix and individual project profitability issues, making recovery of this segment a priority. Other industrial automation equipment saw Revenue ¥125.7B (-4.0%) but Operating Income improved sharply to ¥6.7B (+758.4%) with margin 5.3%, indicating progress in correcting the earnings structure. Other segments (non-reportable) posted Revenue ¥27.5B (+28.4%) and Operating Income ¥0.8B (+239.8%) with margin 2.9%, reflecting monetization of solar power generation and point management systems. Margin dispersion across segments is significant: while Automotive sustains high profitability and drives consolidated earnings, restoring profitability in Semiconductor will be key to further improving overall margins.
[Profitability] Operating margin 8.8% (up +1.0pt from 7.8% prior year), EBITDA margin 10.8% (EBITDA ¥102.4B = Operating Income ¥83.2B + Depreciation ¥19.2B) achieving double digits. Gross margin 21.9% reflects effective cost containment and SG&A ratio 13.2% indicates efficiency improvement. ROE is 6.8% (XBRL reported), consistent with Net Profit Margin 6.4% × Total Asset Turnover 0.723 × Financial Leverage 1.71x; improvement in net profit margin and asset turnover contributed to ROE uplift. ROA (based on Ordinary Income) is 6.4%, improved from 5.3% last year, confirming better asset efficiency. Return on equity relative to net income is 6.8%, higher than prior year, indicating shareholder value creation via retained earnings. [Cash Quality] OCF ¥165.5B is 2.72x Net Income ¥60.8B, showing excellent conversion of profit to cash; OCF/EBITDA is 1.62x, demonstrating superior cash conversion. Accrual ratio is -8.0%, favorable, and extraordinary items are minimal (net -¥0.2B), indicating high quality of earnings. On working capital, inventory turnover days are 86 days (inventory ¥17.45B ÷ (COGS ¥741.0B ÷365)) which is relatively long, and WIP ratio is 55.6% (WIP ¥6.00B ÷ inventory ¥17.45B) high, suggesting project progress bottlenecks. Days sales outstanding are 48 days ((Accounts receivable ¥11.90B + Notes receivable ¥1.32B + Contract assets ¥20.86B) ÷ (Revenue ¥949.1B ÷365)), which is standard. [Investment Efficiency] CapEx ¥3.51B is 1.83x depreciation ¥1.92B, indicating growth investment mode and capacity expansion ahead of returns. CIP increased from ¥0.49B to ¥2.62B (+438%), confirming an expanding investment pipeline. OCF ¥165.5B sufficiently funds CapEx and produced FCF ¥127.8B. [Financial Soundness] Equity Ratio 58.6% (up +5.8pt from 52.8% prior year), Current Ratio 211.7%, Quick Ratio 166.5% indicating very healthy liquidity. Interest-bearing debt is ¥10.34B (estimated from short-term borrowings ¥1.40B + short/long repayment portions ¥12.55B + long-term borrowings ¥8.94B), and cash ¥13.00B exceeds this, yielding a net cash position. Debt-to-equity ratio is 0.71x, Debt/EBITDA 1.01x, and interest coverage 30.2x (EBIT ¥83.2B ÷ interest expense ¥2.8B), showing strong financial resilience. Improvements from prior year include reduction of short-term borrowings from ¥8.95B to ¥1.40B (-¥7.55B, -84.4%), significantly reducing maturity mismatch risk.
Operating Cash Flow was ¥165.5B, a substantial increase of +75.5% from ¥94.3B prior year, aided by improvements in working capital relative to pre-tax profit ¥83.5B. Operating cash flow subtotal (before working capital changes) was ¥186.8B; after adjusting non-cash items including Depreciation ¥19.2B, the main positive drivers were decrease in accounts receivable +¥76.4B (including effects from decline in contract assets) and increase in contract liabilities +¥20.1B. Inventory increased by -¥16.6B causing cash outflow, and corporate tax payments -¥19.4B, resulting in FCF of ¥127.8B. Investing CF was -¥37.6B, primarily CapEx -¥35.1B; purchase of investment securities -¥0.5B and sales +¥0.1B were minor net. Financing CF was -¥129.8B, prioritizing reduction of interest-bearing debt via long-term borrowings proceeds +¥119.5B versus repayments -¥156.8B and net reduction in short-term borrowings -¥75.6B. Dividend payments -¥12.3B and share buybacks -¥0.03B were both small, reflecting balanced capital allocation alongside financial repair. After forex impact +¥3.1B, ending cash was ¥13.00B (slight increase from ¥12.88B prior year), maintaining ample liquidity. OCF/Net Income 2.72x and OCF/EBITDA 1.62x indicate excellent cash realization, with working capital management improvements and increased contract liabilities (advance cash) boosting OCF.
Earnings quality is high and driven by recurring operations. Non-operating income ¥5.4B (0.6% of sales) comprised dividend income ¥0.8B, forex gains ¥0.8B, subsidies ¥0.6B, and other ¥1.6B — all small and with some repeatability. Non-operating expenses ¥4.9B (0.5% of sales) included interest expense ¥2.8B, forex losses ¥1.0B, and other ¥0.4B; net forex impact was -¥0.25B (about 0.3% of Operating Income), minor. Extraordinary items were special gains ¥0.2B (gain on disposal of fixed assets) and special losses ¥0.4B (loss on retirement of fixed assets), net -¥0.2B (0.2% of Operating Income), indicating minimal one-off effects. Accrual ratio is -8.0% (estimated as (total working capital change − OCF) ÷ total assets), and OCF ¥165.5B is 2.72x Net Income ¥60.8B, signaling strong cash generation. The small difference between Ordinary Income ¥83.8B and Pre-tax profit ¥83.5B is minor; the gap between pre-tax profit and Net Income aligns with corporate taxes ¥22.8B (effective tax rate 27.3%). Comprehensive income was ¥92.2B exceeding Net Income ¥60.8B by ¥31.4B, primarily due to Other Comprehensive Income (currency translation adjustments ¥3.2B, valuation difference on available-for-sale securities ¥8.4B, retirement benefit adjustments ¥20.4B, etc.), indicating mainly temporary valuation movements. Overall, earnings are largely recurring and high quality, with limited influence from extraordinary items or non-operating items.
The full-year company plan was Revenue ¥1,000B, Operating Income ¥90B, Ordinary Income ¥89B, and Net Income attributable to owners of parent ¥65B. Actuals were Revenue ¥949.1B (95% achieved), Operating Income ¥83.2B (92%), Ordinary Income ¥83.8B (94%), and Net Income attributable to owners of parent ¥60.8B (93%), broadly covering conservative guidance. The primary reason for shortfall is presumed to be the decline in Semiconductor segment operating margin (down to 6.7%), while Automotive’s high margin (11.8%) supported consolidated results. Order momentum appears solid as indicated by contract liabilities up +97.2%, and the remaining 5% shortfall in Revenue likely reflects slippage or margin erosion in some semiconductor projects. The 8% shortfall in Operating Income was dragged by Semiconductor segment’s -15.4% decline, but Automotive +22.6% and other improvements offset to deliver consolidated high growth of +20.5%. Ordinary Income and Net Income achieved levels similar to Operating Income achievement rates, with non-operating and extraordinary items within expected ranges. Dividend guidance matches actual at year-end ¥70 per share. If Semiconductor profitability is restored and inventory efficiency improves (shortening inventory turnover from 86 days and reducing WIP ratio 55.6%), upside is likely in the next fiscal year.
Year-end dividend was ¥70 per share with payout ratio around 37% (XBRL reported payout ratio 25.9% may reflect a different EPS-based definition). FCF coverage was 5.66x (FCF ¥127.8B ÷ total dividends ¥22.6B), indicating ample capacity. Total dividends include ¥0.2B paid to the stock compensation trust for directors, with effective dividends of ¥12.5B and share buybacks essentially zero (-¥0.003B), so total return ratio is dividend-centric. Given low financial leverage (Equity Ratio 58.6%, net cash) and strong OCF ¥165.5B, the current dividend level appears sustainable, and there is scope for dividend increases in line with earnings growth. However, balancing with growth investments (CapEx/Depreciation = 1.83x) seems to be the base policy, making sudden large increases in shareholder returns unlikely. The XBRL-reported dividend payout ratio 25.9% is within typical manufacturing sector norms and suggests limited concerns about dividend continuity. Absence of share buybacks makes future capital allocation choices — dividend increases, special dividends, or share repurchases — a focal point for investors.
Risk of further deterioration in Semiconductor segment profitability: Operating margin at 6.7% (down from 8.5% prior year) suggests project mix and large individual project profitability deterioration. Margin decline despite +19.6% sales growth indicates structural issues; delayed improvement would limit upside in consolidated margins (current weighted average 8.8% versus Automotive margin 11.8%). Semiconductor investment cycle volatility and evolving customer requirements could further pressure profitability.
Risk of working capital efficiency deterioration: Inventory turnover days 86 and WIP ratio 55.6% indicate pronounced inventory/wip retention. Although WIP decreased from ¥8.53B to ¥6.00B, it remains high relative to sales and, absent throughput improvements, may lead to inventory valuation losses or increases in provision for construction losses (current ¥0.5B). Prolonged supply chain constraints or procurement delays could worsen inventory efficiency and reduce OCF generation.
Risk from automotive and semiconductor investment cycle fluctuations: The core Automotive Business (62% of consolidated Operating Income) and Semiconductor Business (29% contribution) are dependent on customers’ CapEx cycles. Slowdown in EV/automation investments in automotive or inventory adjustments in semiconductors could cause sharp order declines. While contract liabilities up +97.2% provide short-term support, sustained demand weakness would not be fully mitigated. Project-based business inherently faces revenue and profit volatility and the risk of individual project losses that could materially impact consolidated earnings.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | 8.8% | 7.8% (4.6%–12.3%) | +1.0pt |
| Net profit margin | 5.5% | 5.2% (2.3%–8.2%) | +0.3pt |
Operating margin is 1.0pt above the industry median and net profit margin slightly exceeds the median, placing the company in a favorable profitability range within manufacturing.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | 7.3% | 3.7% (-0.4%–9.3%) | +3.6pt |
Revenue growth outperforms the industry median by 3.6pt, indicating above-median growth within peers.
※ Source: Company aggregation
Note the combination of revenue and profit growth, margin improvement, and strong cash generation. Operating margin 8.8% (up +1.0pt from 7.8%), OCF ¥165.5B (up +75.5%), and FCF ¥127.8B all exceed industry medians. Coupled with a strong financial base (net cash, Debt/EBITDA 1.01x, interest coverage 30.2x), the company is positioned to balance sustained shareholder returns and growth investment. Contract liabilities +97.2% indicate accumulation of advance orders and serve as a positive leading indicator for next fiscal year revenue.
Restoring Semiconductor segment profitability and improving inventory efficiency are key to additional margin upside next fiscal year. Although Semiconductor sales grew +19.6%, margin fell to 6.7%; inventory turnover 86 days and WIP ratio 55.6% indicate bottlenecks. If these are addressed, consolidated operating margin could expand into the 10% range. CIP +438% increase points to an expanding CapEx pipeline; post-investment utilization improvements could drive incremental EBITDA margin expansion (current 10.8%).
This report was auto-generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; consult advisors as needed.