| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥689.6B | ¥676.0B | +2.0% |
| Operating Income | ¥69.6B | ¥69.4B | +0.2% |
| Ordinary Income | ¥72.4B | ¥73.8B | -1.9% |
| Net Income | ¥45.3B | ¥57.8B | -21.7% |
| ROE | 5.6% | 7.5% | - |
For the fiscal year ended March 2026, Revenue was ¥689.6B (YoY +¥13.6B +2.0%), Operating Income was ¥69.6B (YoY +¥0.2B +0.2%), Ordinary Income was ¥72.4B (YoY -¥1.4B -1.9%), and Net Income Attributable to Owners of the Parent was ¥50.1B (YoY -¥13.1B -20.7%). Revenue increased for a second consecutive year, but Net Income declined materially due to the reversal of non-recurring items and foreign exchange losses. Operating margin fell to 10.1% (prior year 10.3%), and net margin fell to 7.3% (prior year 9.3%). By segment, the Automotive Bearings business remained core with Revenue ¥342.2B (+1.2%) and Operating Income ¥33.9B (+0.9%) showing stable performance; General Bearings achieved Revenue ¥159.9B (+7.8%) and Operating Income ¥16.7B (+47.2%) with substantial profit growth; Construction Equipment posted Revenue ¥57.7B (-2.9%) and Operating Income ¥4.6B (+18.7%) with revenue decline but profit increase; Structural Equipment recorded Revenue ¥112.3B (-0.7%) and Operating Income ¥13.1B (-33.2%) with a large profit decline, and deterioration in segment mix pressured consolidated margins.
Revenue was ¥689.6B (YoY +2.0%) and remained solid. By segment, General Bearings grew +7.8% and Others +7.3%, showing high growth, while Automotive Bearings increased modestly +1.2%. Construction Equipment declined -2.9% and Structural Equipment -0.7%, highlighting contrast across segments. By region, Japan was ¥420.5B (YoY +0.3%) essentially flat, North America ¥63.1B (+1.3%), Asia ¥163.9B (+7.8%) expanded, and Europe ¥36.4B (-1.5%) slightly declined. China performed steadily at ¥85.8B (prior year ¥80.1B). Gross margin remained unchanged at 35.0% (prior year 35.0%), with cost of sales ratio at 65.0%; top-line growth was driven mainly by volume and mix.
Operating Income was ¥69.6B (YoY +0.2%) and rose only marginally. SG&A was ¥171.9B (prior year ¥167.4B, +2.6%), outpacing Revenue growth (+2.0%), pushing SG&A ratio to 24.9% (prior year 24.8%), a 0.1pt deterioration, weakening operating leverage. By segment, General Bearings Operating Income was ¥16.7B (+47.2%), Automotive Bearings ¥33.9B (+0.9%), Construction Equipment ¥4.6B (+18.7%), while Structural Equipment fell to ¥13.1B (-33.2%), constraining consolidated operating income growth. Ordinary Income was ¥72.4B (-1.9%). Non-operating income was ¥7.1B (prior year ¥7.6B), contributed by dividend income ¥2.5B and interest income ¥1.3B, and included foreign exchange gains ¥0.7B (an improvement from prior-year foreign exchange losses). Non-operating expenses were ¥4.2B (prior year ¥3.2B), primarily due to foreign exchange losses ¥2.2B. Special items included gain on sale of investment securities ¥13.8B, but special losses ¥14.8B (no breakdown disclosed) resulted in net -¥1.0B, a reversal from prior-year net +¥7.6B. Profit before income taxes was ¥71.4B (prior year ¥81.4B, -12.3%), income taxes ¥20.9B, and Net Income was ¥45.3B (-21.7%). After deducting non-controlling interests ¥0.4B, Net Income Attributable to Owners of the Parent was ¥50.1B (-20.7%). In conclusion, while Revenue rose slightly, higher SG&A, profit decline in Structural Equipment, and reversal of special items led to a significant decline in bottom-line profit.
Automotive Bearings: Revenue ¥342.2B (+1.2%), Operating Income ¥33.9B (+0.9%), margin 9.9%, remained stable as the core business, contributing about 49% of consolidated Operating Income. General Bearings: Revenue ¥159.9B (+7.8%), Operating Income ¥16.7B (+47.2%), margin 10.4%, achieved high growth and strong profit improvement due to cost absorption and margin recovery. Structural Equipment: Revenue ¥112.3B (-0.7%), Operating Income ¥13.1B (-33.2%), margin 11.6%, faced both revenue decline and margin deterioration, largely due to mix change toward large projects and worsening project profitability, and was the biggest drag on consolidated margins. Construction Equipment: Revenue ¥57.7B (-2.9%), Operating Income ¥4.6B (+18.7%), margin 8.0%, secured profit improvement despite revenue decline through cost reductions. Others: Revenue ¥18.8B (+7.3%), Operating Income ¥1.2B (+30.1%), margin 6.5%, small scale but high growth.
Profitability: Operating margin 10.1% (prior year 10.3%), Net margin 7.3% (prior year 9.3%), Gross margin 35.0% (prior year 35.0%). While gross-stage profitability was stable, non-operating and special items reduced final profit margins. ROE was 5.6%, down from the prior year. Drivers were deterioration in net margin (9.3% → 7.3%) and decline in total asset turnover (0.724 → 0.694), which were not fully offset by a slight increase in financial leverage (1.21 → 1.23). Cash quality: Operating Cash Flow (OCF) ¥106.5B equals 2.35x Net Income ¥45.3B, with accrual ratio -4.8%, indicating cash-led earnings quality. OCF/EBITDA ratio was 1.02x (EBITDA = Operating Income ¥69.6B + Depreciation ¥34.4B = ¥104.0B), showing good cash conversion. However, DSO 98 days (Accounts Receivable ¥185.7B ÷ Revenue ¥689.6B × 365), DIO 100 days (Inventory ¥123.1B ÷ Cost of Sales ¥448.2B × 365), and CCC 153 days indicate a prolonged working capital cycle, leaving room for improvements in collections and inventory management. Investment efficiency: Total asset turnover declined to 0.694x (prior year 0.724x). CapEx was ¥56.7B, 1.65x depreciation ¥34.4B, reflecting an active stance, continuing investments to improve domestic and overseas production capacity and efficiency. Financial health: Equity Ratio 81.1% (prior year 81.6%), Current Ratio 446% (prior year 439%), Debt/EBITDA 0.14x (Interest-bearing debt ¥14.5B ÷ EBITDA ¥104.0B), indicating very strong balance sheet. Cash and deposits ¥285.6B vs current liabilities ¥135.2B, liquidity is robust. Interest coverage was 773x (Operating Income ¥69.6B ÷ Interest expense ¥0.09B), indicating negligible interest burden.
OCF was ¥106.5B (YoY +21.4%) showing strong growth. Before tax profit ¥71.4B contributed, with depreciation ¥34.4B, increase in retirement benefit liabilities ¥10.1B, decrease in trade receivables ¥8.7B, and decrease in inventories ¥12.4B adding positively, while decrease in trade payables ¥6.7B and corporate taxes paid ¥18.6B were negative. OCF subtotal (pre-working capital changes) was ¥121.2B, 2.67x Net Income ¥45.3B, a high level. Investing Cash Flow was -¥44.7B, driven by CapEx ¥56.7B, intangible asset acquisitions ¥2.5B, and purchases of investment securities ¥5.1B, partially offset by proceeds from sale of investment securities ¥18.4B and net increase in time deposits ¥0.7B. Free Cash Flow was ¥61.8B (OCF ¥106.5B + Investing CF -¥44.7B), ample liquidity. Financing Cash Flow was -¥31.0B, with dividends paid ¥26.9B, share buybacks ¥24.6B, proceeds from disposal of treasury stock ¥20.3B, long-term borrowings ¥16.3B and repayments ¥12.8B as main items. Cash and cash equivalents increased ¥34.2B from ¥249.7B at the beginning of the period to ¥283.9B at the end, further strengthening the liquidity buffer. OCF/Net Income ratio 2.35x and FCF/Dividend coverage 2.3x indicate very strong cash backing for profits and dividend payment capacity.
Of Operating Income ¥69.6B, the majority derives from recurring core operations. Non-operating income ¥7.1B (1.0% of Revenue) is mainly stable portfolio income such as dividend income ¥2.5B and interest income ¥1.3B. Non-operating expenses ¥4.2B included foreign exchange losses ¥2.2B caused by yen volatility. Special items recorded gain on sale of investment securities ¥13.8B but special losses ¥14.8B resulted in net -¥1.0B (equivalent to -2.2% of Net Income), a reversal from prior-year net +¥7.6B. Excluding special items, adjusted recurring profit is roughly ¥71.4B + ¥1.0B = ¥72.4B, and considering non-operating foreign exchange losses, core earnings are largely explainable by operating results. On an accrual basis, OCF ¥106.5B / Net Income ¥45.3B = 2.35x and accrual ratio -4.8% indicate cash-led earnings and high earnings quality. Comprehensive income ¥70.8B (parent company portion ¥70.0B) significantly exceeded Net Income ¥45.3B, contributed by Other Comprehensive Income ¥20.3B (foreign currency translation adjustments ¥6.1B, valuation difference on securities ¥6.7B, retirement benefit adjustments ¥7.5B). Valuation differences and pension adjustments are highly sensitive to market fluctuations and are recognized as temporary relative to recurring earnings.
Full-year guidance projects Revenue ¥723.0B (+4.8%), Operating Income ¥71.5B (+2.8%), Ordinary Income ¥72.5B (+0.1%), and Net Income Attributable to Owners of the Parent ¥50.5B (+0.8%), a modest earnings increase plan. Progress rates are very high at Revenue 95.4%, Operating Income 97.3%, Ordinary Income 99.9%, and Net Income 99.2%, suggesting the targets are effectively almost achieved. Forecast Operating margin is 9.9%, slightly below realized 10.1%. Key to achieving next fiscal year’s plan will be controlling SG&A growth and recovery in Structural Equipment profitability. Dividend forecast is ¥47/ share (actual was Q2 ¥42 + year-end ¥43 = ¥85), and the divergence vs guidance is viewed as the full-year result outperforming the forecast; payout ratio is expected to remain roughly in the 50% range on a realized basis.
This period’s dividend was Q2 ¥42 and year-end ¥43, totaling ¥85/ share, with payout ratio 40.8% (based on basic EPS ¥171.77). Prior year dividend was ¥37/ share, thus a substantial increase (+129.7%). Total dividend amount was approximately ¥26.9B, representing 43.5% of Free Cash Flow ¥61.8B, a sustainable level. Share buybacks totaled ¥24.6B, making total shareholder returns ¥51.5B (dividends ¥26.9B + buybacks ¥24.6B), and Total Return Ratio was 102.5% (vs Net Income Attributable to Owners of the Parent ¥50.1B), a high level. Coverage of total returns by Free Cash Flow was 83.3%, indicating returns can be funded by on-hand cash and OCF. Net cash position (Cash ¥285.6B, interest-bearing debt ¥14.5B, net cash ¥271.1B) and low leverage support the sustainability of current shareholder returns. Next fiscal year dividend forecast ¥47/ share is presented conservatively to preserve flexibility in capital policy depending on performance.
Volatility in Structural Equipment profitability: Structural Equipment Operating Income fell YoY -33.2%, and despite an 11.6% margin, project profitability volatility pressured consolidated margins. Mix changes in large projects and construction delays are likely drivers, so future order profitability and progress management warrant close monitoring. Segment profit volatility is a destabilizing factor for consolidated operating margin.
Working capital efficiency deterioration: With DSO 98 days, DIO 100 days, and CCC 153 days, the working capital cycle is extended. Accounts receivable ¥185.7B and inventories ¥123.1B leave room for improvement in collections and inventory control. If cash conversion efficiency deteriorates during growth phases, Free Cash Flow sustainability could be affected.
FX volatility and investment securities valuation risk: Foreign exchange losses ¥2.2B pressured Ordinary Income, and investment securities ¥86.6B (YoY +14.7%) and rising valuation differences increase balance sheet sensitivity to equity markets and interest rate moves. This can materially affect comprehensive income and add volatility to Net Income.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.1% | 7.8% (4.6%–12.3%) | +2.3pt |
| Net Margin | 6.6% | 5.2% (2.3%–8.2%) | +1.4pt |
Profitability exceeds the industry median, with both Operating and Net margins in the upper range.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 2.0% | 3.7% (-0.4%–9.3%) | -1.7pt |
Revenue growth is below the industry median, indicating a conservative top-line expansion pace.
※ Source: Company compilation
Large profit improvement in General Bearings (+47.2%) and stable performance in Automotive Bearings underpin consolidated earnings; recovery in Structural Equipment profitability is key to restoring consolidated margins. Structural Equipment recorded a YoY profit decline of -33.2%, but correction of order profitability and mix improvement could offer margin recovery in subsequent periods.
OCF ¥106.5B equals 2.35x Net Income, and Free Cash Flow ¥61.8B is sufficient to cover dividends and buybacks, demonstrating strong cash generation. However, the prolonged working capital cycle (DSO 98 days, DIO 100 days, CCC 153 days) means efficiency improvements are a prerequisite for sustained cash generation. Tightening receivables and inventory could expand FCF and improve ROE.
CapEx ¥56.7B is 1.65x depreciation, continuing investments to improve production capacity and efficiency domestically and internationally. Tangible fixed assets in Asia, centered on India, increased +12.4%, suggesting medium-term productivity gains and risk diversification. If CapEx translates into higher throughput and yield improvements, it could drive operating margin recovery in coming periods.
This report was auto-generated by AI analyzing XBRL financial statement disclosure data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial disclosures. Investment decisions are your responsibility; consult a professional advisor as needed before acting.
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