NISSEI ASB MACHINE CO.,LTD. FY2026 Q2 Earnings Report

クイックビュー

Executive Summary

FY2026 Q2 cumulative results showed revenue of ¥240.4B (YoY +¥21.4B +9.8%), Operating Income of ¥65.1B (YoY +¥10.3B +18.8%), Ordinary Income of ¥66.8B (YoY +¥9.4B +16.3%), and Net Income of ¥47.8B (YoY +¥7.6B +19.0%), indicating a revenue and profit increase trend. Operating margin improved to 27.1%, up 2.1pt from 25.0% in the prior-year period, and gross margin expanded to 49.5% (up 2.6pt from 46.9%), which contributed to results. By segment, East Asia delivered a large profit increase with Operating Income of ¥45.6B (+49.7%), Europe showed high growth with Revenue +33.5% and Operating Income +30.9%, while the Americas saw Revenue +17.4% but Operating Income -27.5%, indicating margin deterioration. Contract liabilities (advance receipts) rose to ¥67.9B from ¥47.6B a year earlier (+42.5%), showing a solid backlog. Progress against Full Year guidance is broadly on track at 48.1% for Revenue, 50.0% for Operating Income, and 52.6% for Net Income.

業績変動要因

【Revenue】Revenue was ¥240.4B (YoY +9.8%), securing top-line growth. By region, Europe led growth at ¥51.8B (+33.5%), followed by the Americas at ¥82.6B (+17.4%). Core East Asia was ¥154.1B (+4.6%), and South & West Asia was ¥139.4B (+4.2%), both showing stable growth. External customer sales are entirely derived from contracts with customers, and intersegment internal transactions increased to ¥187.5B from ¥171.2B a year earlier. Contract liabilities (advance receipts) rose to ¥67.9B (YoY +¥20.2B), and the accumulation of backlog supports future revenue. Regional growth in Europe and the Americas was notable, supported by larger project sizes and improved product mix.

【Profitability】Operating Income was ¥65.1B (YoY +18.8%), outpacing revenue growth. Gross margin expanded to 49.5% (up 2.6pt from 46.9%), primarily due to improvements in cost of sales (product mix improvement and cost control). SG&A was ¥53.9B (SG&A ratio 22.4%), up from ¥47.9B (21.9%) a year earlier (+0.5pt), but gross margin expansion more than offset this. By segment, East Asia's operating margin improved markedly to 29.6% (up 8.9pt from 20.7%), and Europe maintained a high level at 16.1% (slight decrease from 16.7%). Conversely, the Americas' operating margin deteriorated to 11.7% (down 7.2pt from 18.9%), suggesting impacts from project mix and start-up costs. Ordinary Income was ¥66.8B (+16.3%), broadly in line with Operating Income; non-operating income was ¥2.5B (mainly interest income ¥1.4B) and non-operating expenses were ¥0.7B (mainly interest expense ¥0.1B), so non-operating items had minimal impact. Net Income was ¥47.8B (+19.0%), outpacing Ordinary Income growth, with an effective tax rate of 28.4% (down 1.7pt from 30.1%). Extraordinary items consisted only of impairment loss on fixed assets of ¥0.01B, so one-off effects were negligible. In conclusion, the revenue and profit increase is driven primarily by gross margin improvement.

セグメント別分析

East Asia posted Revenue ¥154.1B (+4.6%) and Operating Income ¥45.6B (+49.7%, margin 29.6%), a substantial improvement in profitability. Margin rose 8.9pt from 20.7% in the prior year, likely driven by concentration in high-value-added projects and product mix improvement. South & West Asia recorded Revenue ¥139.4B (+4.2%) and Operating Income ¥19.9B (-1.8%, margin 14.3%), showing revenue growth but slight profit decline, with margin down 0.8pt from 15.1% a year earlier. Europe maintained high growth with Revenue ¥51.8B (+33.5%) and Operating Income ¥8.3B (+30.9%, margin 16.1%), aided by customer base expansion. The Americas showed Revenue ¥82.6B (+17.4%) and Operating Income ¥9.6B (-27.5%, margin 11.7%), a revenue-up profit-down pattern with margin down 7.2pt from 18.9% in the prior year. The margin deterioration may be due to temporary project factors and, if persistent, could weigh on consolidated margins. Corporate expenses totaled ¥18.4B (¥16.1B prior year), serving as an adjustment between segment profit total of ¥83.5B and Operating Income of ¥65.1B.

主要財務指標

【Profitability】Operating margin improved to 27.1% (prior 25.0%, +2.1pt) and Net Income margin to 19.9% (prior 18.3%, +1.6pt). Expansion of gross margin to 49.5% (prior 46.9%, +2.6pt) was the primary driver, absorbing the SG&A ratio increase to 22.4% (prior 21.9%, +0.5pt). EBITDA was ¥74.6B (margin 31.0%), indicating a high level of profit generation. 【Cash Quality】Operating Cash Flow (OCF) was ¥45.7B, which is 0.95x of Net Income ¥47.8B and generally healthy, but OCF/EBITDA was 0.61x, leaving cash conversion efficiency comparatively low. On working capital, Days Sales Outstanding (DSO) were 174 days, Days Inventory Outstanding (DIO) 564 days, and Cash Conversion Cycle (CCC) 688 days, indicating material elongation, influenced by the make-to-order nature (Work-in-progress ¥75.7B, inventory ratio 40.3%). Free Cash Flow was ¥36.0B, sufficient to cover dividend payments of ¥30.0B and capital expenditures of ¥9.6B. 【Investment Efficiency】ROE of 7.7% is consistent with Net Income margin 19.9% × Total Asset Turnover 0.29 × Financial Leverage 1.33, improving 0.4pt from ROE 7.3% in the prior year. The improvement was mainly driven by higher Net Income margin; Total Asset Turnover rose slightly and leverage was flat. CapEx of ¥9.6B is nearly equal to depreciation of ¥9.5B (CapEx/Depreciation 1.00x), indicating a focus on renewal investment. 【Financial Soundness】Equity Ratio was 75.1% (prior 75.2%), very high, with interest-bearing debt of ¥53.7B, Debt/EBITDA 0.72x, and Debt/Equity 8.7%, maintaining a conservative capital structure. Current ratio 446.1%, Quick ratio 423.6%, and Cash and Deposits ¥331.4B (22.2x to short-term borrowings ¥14.9B) indicate robust liquidity.

キャッシュフロー分析

OCF was ¥45.7B (YoY -5.7%), a decrease, but maintained coverage at 0.95x relative to Net Income ¥47.8B. Operating cash subtotal (before working capital changes) was ¥62.5B, up from ¥60.9B a year earlier, but working capital absorption increased. Main drivers were increase in trade receivables -¥15.1B (longer collection due to revenue growth), increase in inventories -¥7.1B (elevated WIP), and decrease in trade payables -¥8.0B (shortened payment terms), while increase in contract liabilities +¥17.4B (accumulation of advance receipts) contributed to cash inflow. Corporate tax payments were ¥18.1B, interest and dividends received ¥1.4B, interest paid ¥0.1B, representing cash adjustments against pre-tax profit ¥66.8B. Investing CF was -¥9.6B, consisting of CapEx ¥9.6B (mainly tangible fixed assets), acquisition of investment securities ¥0.1B, and proceeds from disposals ¥0.3B. Financing CF was -¥37.9B, mainly dividend payments ¥29.9B and long-term loan repayments ¥7.5B. Free Cash Flow was ¥36.0B (OCF ¥45.7B - Investing CF ¥9.6B), sufficient to cover dividend payments during the period and demonstrating net autonomous cash generation. Cash increased to 33,143百万円 (opening 32,469百万円, net increase ¥6.7B including foreign exchange translation gain ¥8.6B), and there is no concern over liquidity.

収益の質

Earnings quality is reliant on recurring operations; non-operating income ¥2.5B (1.0% of sales) mainly comprises interest income ¥1.4B and dividend income ¥0.1B. Foreign exchange gains were minor at ¥0.03B, and non-operating expenses ¥0.7B were interest expense ¥0.1B and small other expenses ¥0.2B. Extraordinary items were only impairment loss on fixed assets ¥0.01B, so one-off impacts on Net Income are negligible. The difference between Ordinary Income ¥66.8B and Net Income ¥47.8B is explained by corporate tax, etc. of ¥19.0B (effective tax rate 28.4%), and no abnormal divergence is observed. Comprehensive income was ¥59.0B, ¥11.2B higher than Net Income ¥47.8B; the main component of other comprehensive income ¥11.2B was foreign currency translation adjustment ¥10.2B (translation differences from overseas subsidiaries), valuation difference on available-for-sale securities ¥0.8B, and actuarial gains/losses on retirement benefits adjustment ¥0.2B. The accrual ratio (Net Income - OCF)/Total Assets is 0.3%, low, indicating a high degree of cash realization of profits. However, OCF/EBITDA at 0.61x remains a caution on cash conversion, primarily due to elongated working capital (DSO 174 days, DIO 564 days, CCC 688 days). The ¥2.2B difference between OCF and Net Income is attributable to working capital absorption and non-cash depreciation expense ¥9.5B, with no signs of manipulative accounting.

業績予想・ガイダンス

Full Year guidance is Revenue ¥500.0B (YoY +14.5%), Operating Income ¥130.0B (YoY +22.2%), Ordinary Income ¥131.0B (YoY +20.0%), and Net Income ¥91.0B (YoY +19.5%). As of the Q2 cumulative period, progress rates are Revenue 48.1% (standard 50% -1.9pt), Operating Income 50.0% (on plan), Ordinary Income 51.0% (+1.0pt), and Net Income 52.6% (+2.6pt), generally on track. Net Income is somewhat ahead of the Full Year forecast due to a higher share of high-margin projects and a decrease in the effective tax rate. Full Year EPS forecast ¥607.03 and Q2 cumulative EPS ¥319.14 imply progress of 52.6%; if the same pace continues in H2, achieving guidance is feasible. Full Year dividend forecast ¥240 is highly achievable given current Free Cash Flow generation (H1 ¥36.0B) and Equity Ratio 75.1%. Guidance was revised in this quarter, though details of the upward revision were not specified; given progress and improving profitability, there is room for revenue and profit to be on plan or slightly ahead.

株主還元

Interim dividend: no distribution (¥0). The cash dividend payment ¥29.9B during the period was the year-end dividend payment for the prior year. Full Year dividend forecast is ¥240, implying a Payout Ratio of approximately 39.5% based on Full Year EPS forecast ¥607.03, a sustainable level. A Payout Ratio below 40% is supported by H1 Free Cash Flow ¥36.0B covering cash dividends ¥29.9B by 1.2x. With Equity Ratio 75.1% and Cash and Deposits ¥331.4B, the financial base is solid and capacity to continue dividends is sufficient. No share repurchase has been confirmed, so Total Return Ratio equals the Payout Ratio. Dividend policy appears conservative, with emphasis on stable distributions. Prior-year dividend record is unclear, but Full Year dividend forecast ¥240 and H1 dividend payment indicate dividends are being paid stably.

リスク要因

1. Working capital elongation risk: With DSO 174 days, DIO 564 days, and CCC 688 days, collections and inventory turnover are extended, and OCF/EBITDA 0.61x remains low. High WIP ratio 40.3% and the make-to-order nature are underlying factors; if process bottlenecks or customer collection delays persist, short-term funding needs could increase and constrain effective use of surplus cash. Trade receivables grew YoY +21.2%, significantly outpacing revenue growth +9.8%, making credit management and collection cycle improvement urgent.

2. Volatility in segment profitability: The Americas segment saw Revenue +17.4% but Operating Income -27.5%, with margin declining from 18.9% to 11.7% (down 7.2pt). While Europe and East Asia high-margin projects are driving margin improvement, delayed margin recovery in the Americas would increase consolidated margin volatility. Structural risk from regional mix concentration requires ongoing monitoring.

3. Foreign exchange risk: Given a presumed high share of foreign-currency revenue, the foreign currency translation adjustment of ¥10.2B contributed to comprehensive income, but sharp FX moves could affect project profitability and valuation differences on financial statements. FX gains in non-operating income were minor at ¥0.03B, but mismatches between contract currencies and settlement timing could pressure earnings. Translation differences of overseas subsidiaries' assets and liabilities are accumulated in equity, and yen appreciation could compress net assets via negative foreign currency translation adjustment.

業種ベンチマーク（参考・当社調べ）

収益性・リターン

Profitability substantially exceeds the industry median, ranking high on both Operating and Net Margin.

成長性・資本効率

Revenue growth is slightly below the industry median but within the IQR, positioned as stable growth.

※Source: Company compilation

決算上の注目ポイント

1. Sustainability of high-margin model and regional mix are key: Achieved Operating Margin 27.1% and Gross Margin 49.5%, well above industry medians, driven by high-value projects in East Asia (margin 29.6%) and Europe (16.1%). Contract liabilities ¥67.9B (YoY +42.5%) indicate a deep backlog and are a positive leading indicator. However, margin deterioration in the Americas (margin 11.7%, YoY -7.2pt) is a potential drag on consolidated margins, and regional mix improvements will determine margin sustainability.

2. Room to improve cash conversion efficiency: OCF/EBITDA 0.61x and CCC 688 days show working capital elongation is pressuring cash conversion. High WIP ratio 40.3% and make-to-order characteristics are background factors, but trade receivable growth (YoY +21.2%) greatly exceeded revenue growth (+9.8%), highlighting collection management issues. While increasing contract liabilities add support for future revenue as advance receipts, smoothing process progress and collection cycles is key to expanding Free Cash Flow. Full Year progress is on plan and dividend forecast ¥240 (Payout Ratio 39.5%) is highly achievable given financial soundness (Equity Ratio 75.1%, Cash ¥331.4B).

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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 particular security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed before making investment decisions.