| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥354.3B | ¥358.6B | -1.2% |
| Operating Income | ¥47.7B | ¥59.2B | -19.4% |
| Ordinary Income | ¥50.1B | ¥60.0B | -16.5% |
| Net Income | ¥25.2B | ¥33.7B | -25.3% |
| ROE | 9.3% | 13.7% | - |
The fiscal year ending December 2025 results were lower in both revenue and profit: Revenue ¥354.3B (¥-4.4B YoY, -1.2%), Operating Income ¥47.7B (¥-11.5B YoY, -19.4%), Ordinary Income ¥50.1B (¥-9.9B YoY, -16.5%), and Net Income attributable to owners of the parent ¥35.4B (¥-7.1B YoY, -16.6%). The core Process Equipment Business recorded Revenue ¥278.2B (-4.7%) and Operating Income ¥40.9B (-25.4%), reflecting a corrective phase as demand for semiconductor and FPD equipment slowed and product mix deteriorated. Operating margin was 13.5% (down -3.0pt from 16.5%) and was pressured by a gross margin decline to 30.4% and an increase in SG&A ratio to 16.9%. Meanwhile, the Surface Treatment Equipment Business remained steady with Revenue ¥67.5B (+6.3%) and Operating Income ¥6.0B (+4.1%), and the Molds & Plastic Molding Business supplemented performance with Revenue ¥12.5B (+17.9%) and Operating Income ¥0.6B (+144.1%). Operating Cash Flow was strong at ¥94.3B (up +25.6% from ¥75.1B), aided by AR collections and progress in WIP acceptance, securing FCF of ¥62.4B. Actual Operating Income of ¥47.7B exceeded the full year guidance (Operating Income ¥36.0B) by 32.4%, significantly surpassing conservative estimates.
Revenue of ¥354.3B (-1.2%) was partly offset by increases in Surface Treatment Equipment and Molds & Plastic Molding against a slowdown in the core Process Equipment Business. Within Process Equipment, Semiconductor Equipment rose significantly to ¥172.1B (from ¥123.2B, +39.7%), but Conveyance Equipment ¥76.6B (-8.0%), Cleaning Equipment ¥17.6B (-68.8%), and Coaters ¥8.5B (-65.5%) declined substantially, leaving the segment overall down -4.7%. Surface Treatment Equipment held firm at ¥67.5B (+6.3%, +¥4.0B YoY). Molds & Plastic Molding, though small, continued high growth at ¥12.5B (+17.9%). Product mix shifted toward semiconductor equipment (about 48.6% → with unclear breakdown but higher unit price tendency), while declines in Cleaning and Coaters produced mixed effects on average selling price and gross margin. Regional sales were not disclosed, but increases in Cash and Deposits and a foreign currency translation adjustment of -¥2.4B suggest limited benefit from yen depreciation on overseas sales.
Cost of goods sold was ¥246.7B (cost ratio 69.6%, up +2.6pt from 67.0%) as progress accounting adjustments for WIP and worsening product mix reduced gross margin to 30.4% (down -2.7pt from 33.1%). SG&A was ¥59.9B (SG&A ratio 16.9%, up +0.3pt from 16.6%), with higher personnel and fixed costs including Salaries and Allowances ¥13.3B (+¥1.3B) and R&D ¥7.3B (2.1% of sales), eroding operating leverage under flat sales. Operating Income was ¥47.7B (Operating margin 13.5%), a material margin compression of -3.0pt. Non-operating items were minor: Interest income ¥1.1B and equity-method investment income ¥0.002B, offset by interest expense ¥0.8B, resulting in Ordinary Income ¥50.1B. Extraordinary income was ¥0.2B (gain on sale of fixed assets ¥0.2B) and extraordinary loss was ¥0.2B (including impairment losses ¥1.0B, loss on disposal of fixed assets ¥0.1B, valuation loss on investment securities ¥0.4B netted), effectively offsetting each other. Profit before tax ¥50.1B less income taxes ¥14.2B (effective tax rate 28.4%) and minority interests ¥0.4B produced Net Income attributable to owners of the parent ¥35.4B (Net margin 10.0%, down -1.8pt from 11.8%). The gap between Ordinary Income and Net Income was primarily tax burden, with limited transient factors. The decline in revenue and profit was mainly driven by the Process Equipment slowdown and gross margin deterioration; increases in Surface Treatment and Molds were too small to fully offset at the company level.
Process Equipment Business: Revenue ¥278.2B (-4.7%), Operating Income ¥40.9B (-25.4%), margin 14.7% (down -4.1pt from 18.8%). Strong semiconductor equipment revenue increase was offset by declines in Cleaning and Coaters; product mix deterioration and slowing project profitability compressed margins. As the core business accounting for 85.8% of corporate Operating Income, the margin decline hit consolidated results directly.
Surface Treatment Equipment Business: Revenue ¥67.5B (+6.3%), Operating Income ¥6.0B (+4.1%), margin 8.9% (down -0.2pt from 9.1%). Stable demand for PCB manufacturing equipment supported revenue and profit growth, with margins roughly flat. Contribution to consolidated Operating Income was 12.7%, playing a complementary role.
Molds & Plastic Molding Business: Revenue ¥12.5B (+17.9%), Operating Income ¥0.6B (+144.1%), margin 4.5% (improved +2.1pt from 2.4%). Small scale but achieved significant profit increase driven by higher sales of precision molds and molding products and efficiency gains. Contribution to consolidated Operating Income was 1.2%, limited in consolidated impact.
Among segments, Process Equipment's 14.7% margin is the highest but declined sharply YoY; Surface Treatment 8.9% and Molds 4.5% show disparity. Variations in business mix materially affect consolidated margins; recovery of Process Equipment profitability is key to improving consolidated margins.
Profitability: ROE 9.3% (down -10.0pt from prior-year ROE 19.3%) is the product of Net Profit Margin 10.0% (down -1.8pt), Total Asset Turnover 0.756x (up +0.03x), and Financial Leverage 1.73x (down -0.27x). The ROE decline was driven mainly by lower Net Profit Margin and reduced financial leverage; modest improvement in asset turnover could not offset these. Operating margin 13.5% decreased -3.0pt from 16.5%, pressured by both Gross Margin 30.4% (-2.7pt) and SG&A ratio 16.9% (+0.3pt). EBITDA margin was 16.2% (EBITDA ¥57.4B = Operating Income ¥47.7B + Depreciation ¥9.7B), down ~-3.0pt from ~19.2% prior. Process Equipment product mix deterioration and project profitability slowdown depressed profitability, but double-digit margins were preserved.
Cash quality: Operating Cash Flow / Net Income = 2.66x, extremely high, supported by AR collections of ¥48.6B and reductions in WIP. OCF/EBITDA 1.64x is at a strong level, indicating high earnings quality. Accrual ratio is -12.6% ((Net Income ¥35.4B - Operating CF ¥94.3B) / Total Assets ¥468.9B), negative indicating strong cash generation. Large WIP of ¥116.6B (75.6% of inventories) is a driver of CF volatility typical of manufacturers, but acceptance progress improved working capital this term.
Investment efficiency: Total Asset Turnover 0.756x (up from 0.729x) improved via AR reduction and slight total asset decrease. Days Inventory Outstanding (DIO) 228 days (Inventory ¥154.3B (Finished goods ¥0.6B + Raw materials ¥37.0B + WIP ¥116.6B) / COGS ¥246.7B × 365) is long, reflecting project-heavy WIP. Days Sales Outstanding (DSO) 31 days (AR ¥30.2B / Sales ¥354.3B × 365) is very short; even including electronic receivables ¥25.4B, it's about 40 days and excellent. Days Payable Outstanding (DPO) 23 days (AP ¥15.7B / COGS ¥246.7B × 365), leading to Cash Conversion Cycle (CCC) 236 days (DIO 228 + DSO 31 - DPO 23), long but slightly improved YoY. CapEx ¥14.2B (4.0% of sales, CapEx/Depreciation 1.46x) reflects continuation of renewals and capacity enhancements; R&D ratio 2.1% is conservative but allocated to maintain product competitiveness.
Financial soundness: Equity Ratio 57.7% (up +7.6pt from 50.1%) improved materially. Interest-bearing debt ¥79.1B (Short-term borrowings ¥32.7B + Long-term borrowings ¥46.5B) versus Cash ¥162.7B yields Net Cash ¥83.6B. Debt/EBITDA 1.38x, Debt/Equity 0.293x, Interest Coverage 68x (EBITDA ¥57.4B / Interest expense ¥0.8B) indicate very low financial leverage. Current Ratio 262.7% (Current assets ¥378.1B / Current liabilities ¥143.9B) and Quick Ratio 262.3% show ample short-term liquidity. Short-term borrowings ¥32.7B are 22.7% of current liabilities and front-loaded, but Cash/Short-term debt 4.98x mitigates risk. Contract liabilities (advance receipts) ¥36.6B (25.4% of current liabilities) decreased from ¥52.5B, reflecting project progress and acceptance. Lease liabilities are minimal (short-term ¥0.05B, long-term ¥0.11B), indicating low off-balance risk. Backlog-to-sales for manufacturing is contract liabilities ¥36.6B / Sales ¥354.3B ≈ 10.3%, modest; future backlog accumulation and timing of acceptance will be key to cash realization.
Operating Cash Flow was ¥94.3B (up +25.6% from ¥75.1B), a significant increase demonstrating cash generation of 2.66x Net Income ¥35.4B. Starting from Profit before tax ¥50.1B plus Depreciation ¥9.7B giving an OCF subtotal of ¥111.7B, working capital movements included decrease in AR ¥36.2B, decrease in inventories ¥48.6B (progress in WIP acceptance), decrease in contract liabilities -¥16.6B (utilization of advance receipts), and decrease in AP -¥19.3B; after tax payments -¥19.1B, Operating CF of ¥94.3B was achieved. AR collections and WIP compression were significant contributors, yielding OCF/EBITDA 1.64x at a strong level.
Investing CF was -¥31.8B (CapEx -¥14.2B, Intangible assets -¥0.76B, increase in time deposits -¥17.0B, etc.), with CapEx 1.46x depreciation indicating continued renewal and capacity investment. Financing CF was -¥19.6B, including repayment of long-term borrowings -¥31.1B, proceeds from long-term borrowings ¥20.0B, net increase in short-term borrowings ¥2.3B, dividend payments -¥4.9B, and share buybacks -¥5.1B. FCF was ¥62.4B (Operating CF ¥94.3B - Investing CF ¥31.8B), covering total returns of ¥10.0B (dividends ¥4.9B + buybacks ¥5.1B) by 6.2x and providing capacity for internal retention and cash accumulation. Cash and deposits increased from ¥103.4B at the beginning of the period to ¥162.7B at period end, up ¥59.3B, significantly expanding liquidity buffers. Working capital management benefited from early AR collection and accelerated WIP acceptance, improving cash conversion despite long CCC 236 days. The decline in contract liabilities suggests advance receipts were consumed faster than project acceptance, which may expose next period CF to risk if new order intake slows.
Core recurring revenue is Sales ¥354.3B, and non-operating income ¥3.5B (1.0% of sales) mainly comprised interest income ¥1.1B and foreign exchange gains ¥0.004B, so non-recurring elements are minor. Non-operating expenses ¥1.1B (interest expense ¥0.8B, etc.) are within normal range, making Ordinary Income ¥50.1B centered on core operations. Extraordinary items (extraordinary gain ¥0.2B from fixed asset sales and extraordinary loss ¥0.2B including impairment losses ¥1.0B, disposal losses ¥0.1B, valuation loss on investment securities ¥0.4B net) nearly offset, with net one-off impact close to ¥0.0B and limited. The ¥14.7B gap from Ordinary Income ¥50.1B to Net Income ¥35.4B is mainly due to income taxes ¥14.2B (effective tax rate 28.4%) and minority interests ¥0.4B; extraordinary items had minor effect. Accrual ratio -12.6% (Net Income ¥35.4B - Operating CF ¥94.3B = -¥58.9B, over Total Assets ¥468.9B) is negative, indicating high cash profitability; Operating CF / Net Income 2.66x and OCF/EBITDA 1.64x signal good earnings quality. Comprehensive income ¥33.5B (Net Income ¥35.4B - Other comprehensive income -¥2.4B (FX translation adjustment -¥2.4B, etc.)) is roughly aligned with Net Income, with valuation changes modest. Equity-method investment income ¥0.002B and valuation loss on investment securities ¥0.4B are small and have limited impact. Large WIP ¥116.6B (75.6% of inventories) is inherent to project-type operations; this term progress in acceptance improved working capital, but future WIP concentration and variability in acceptance timing remain factors that can influence profit and CF quality. Overall, recurring earnings are predominant, one-off items are minor, and Operating CF aligns well with profits—earnings quality is assessed as good.
Against full year guidance (Sales ¥355.0B, Operating Income ¥36.0B, Ordinary Income ¥35.0B, Net Income attributable to owners of the parent ¥25.0B, EPS ¥170.65), actuals were Sales ¥354.3B (achievement 99.8%, -0.2% short), Operating Income ¥47.7B (achievement 132.4%, +32.4% upside), Ordinary Income ¥50.1B (achievement 143.1%, +43.1% upside), and Net Income ¥35.4B (achievement 141.6%, +41.6% upside), marking a significant beat on profit fronts. Sales slightly missed due to Process Equipment slowdown, but Operating Income exceeded guidance by ¥11.7B, far surpassing conservative estimates. Upside drivers included acceleration of revenue recognition via earlier WIP acceptance, SG&A control, and steady performance in Surface Treatment and Molds businesses. The initial guidance implied a conservative operating margin of 10.1% (forecast Operating Income ¥36B / forecast Sales ¥355B), but actual margin of 13.5% exceeded that. Dividend guidance was initially annual ¥0 but actual annual dividend was ¥34 (year-end ¥34), representing a payout ratio of 11.4% and a modest but restored dividend. No upward revision to guidance was disclosed; the large gap reflects initially conservative assumptions. Outlook for the next fiscal year is undisclosed, but if Process Equipment orders recover and WIP normalizes, the pattern of exceeding conservative guidance could be repeatable.
Dividend was year-end ¥34 (annual dividend ¥34), with Payout Ratio 11.4% (total dividends ¥4.9B / Net Income ¥35.4B), a modest level. After a dividend suspension midterm last year, dividends were reinstated this term; FCF coverage of dividends is 12.4x (FCF ¥62.4B / dividends ¥4.9B), indicating a very wide safety margin. Share buybacks of ¥5.1B (cash flow statement basis) were conducted, bringing total shareholder returns to approximately ¥10.0B and a Total Return Ratio of 28.2% (total returns ¥10.0B / Net Income ¥35.4B), while retaining considerable internal reserves. The shareholder return policy is performance-linked and conservative: targeting double-digit payout via dividends alone and keeping total return ratio below 30% even when combining buybacks, prioritizing growth investment capacity and financial buffer. With Cash and Deposits ¥162.7B and FCF ¥62.4B, there is ample cash to consider raising payout ratios and continuing buybacks in future periods. Dividend sustainability is very high; even if the ¥34 dividend is maintained, payout ratio and FCF coverage remain in safe territory.
Volatility of semiconductor & FPD investment cycles: The Process Equipment Business accounts for 78.5% of sales and 85.8% of Operating Income. Demand for semiconductor & FPD manufacturing equipment strongly correlates to customer CapEx cycles; this term Cleaning Equipment -68.8% and Coaters -65.5% declined sharply. In downside cycle phases, order intake, utilization rates, and product mix can deteriorate rapidly, compressing gross margins as evidenced by Process Equipment Operating margin 14.7% (down -4.1pt from 18.8%). Prolonged semiconductor market adjustment could continue to impair Process Equipment profitability and cause further earnings decline.
WIP concentration and variability in acceptance timing: WIP ¥116.6B (75.6% of inventories) is unavoidable given the project-based nature, but variation in acceptance timing leads to volatility in revenue recognition and profit realization. This term OCF ¥94.3B benefited from acceptance progress, but contract liabilities ¥36.6B (down from ¥52.5B) show advance receipts were consumed; if order accumulation slows, next period CF may decelerate. Long cash conversion cycle (CCC 236 days, DIO 228 days) amplifies CF volatility; project and process management effectiveness will materially affect results.
Low R&D investment ratio and risk to competitiveness: R&D ratio 2.1% (¥7.3B / Sales ¥354.3B) is below manufacturing averages (3–5%). In an environment where Process Equipment technology competition intensifies, insufficient mid- to long-term R&D investment risks eroding product competitiveness. R&D was restrained amid flat SG&A this term; insufficient investment to meet semiconductor & FPD miniaturization and advanced requirements could lead to market share loss and margin deterioration.
Industry positioning (reference, company analysis): The company is a manufacturer with the Process Equipment Business focused on semiconductor & FPD manufacturing equipment. From the past five fiscal periods, EPS ¥244.31, BPS ¥1,834.03, Operating margin 13.5%, Net margin 7.1% (historical trend; actual current term 10.0%), and Payout Ratio 11.4% were observed. Operating margin 13.5% lies at the upper range of equipment manufacturers’ median (approx. 10–15%), indicating good profitability. ROE 9.3% is in line with industry average (~8–12%), though the drop from 19.3% last year was driven by this term’s margin decline and reduced financial leverage, viewed as a cyclical adjustment. Equity Ratio 57.7% is well above equipment manufacturers’ median (approx. 40–50%), placing financial soundness high in the industry. Debt/EBITDA 1.38x and Interest Coverage 68x compare favorably with peers (Debt/EBITDA 2–3x, Interest Coverage 10–20x), indicating extremely low leverage and top-class financial resilience. CCC 236 days is longer than equipment manufacturer averages (150–200 days), reflecting WIP-heavy project characteristics and scope for working capital improvement. Payout Ratio 11.4% is below industry average (20–30%), reflecting a conservative return policy prioritizing internal reserves. FCF coverage 12.4x far exceeds industry average (3–5x), implying very high dividend sustainability. Benchmarking suggests the company ranks highly on profitability and financial health, while growth is temporarily depressed by the cycle; cash generation capacity and financial buffers support recovery when the cycle turns.
Key points are as follows:
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 specific security. Industry benchmarks are compiled by the firm based on publicly available financial statements and are for reference only. Investment decisions should be made at your own responsibility; consult a professional advisor as needed.