| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1287.9B | ¥1244.1B | +3.5% |
| Operating Income / Operating Profit | ¥311.5B | ¥320.2B | -2.7% |
| Ordinary Income | ¥326.2B | ¥354.5B | -8.0% |
| Net Income / Net Profit | ¥83.4B | ¥147.1B | -43.3% |
| ROE | 6.0% | 11.4% | - |
For the nine months ended March 2026 (Q3 cumulative), Revenue was ¥1,287.9B (YoY +¥43.9B, +3.5%), Operating Income was ¥311.5B (YoY -¥8.7B, -2.7%), Ordinary Income was ¥326.2B (YoY -¥28.3B, -8.0%), and Net Income attributable to owners of the parent was ¥83.4B (YoY -¥63.7B, -43.3%). The company recorded revenue growth but profit decline. Top-line expansion was driven by semiconductor-related equipment shipments to Taiwan, China and the U.S., but a large increase in SG&A (¥215.0B, YoY +¥39.0B, +22.2%) and a contraction in foreign exchange gains (¥14.3B, YoY -¥31.7B) depressed profit through non-operating items. Extraordinary losses of ¥76.2B (impairment on investment securities ¥21.7B, disaster losses ¥3.2B, etc.) significantly reduced Net Income, and a high effective tax rate of 30.1% further weighed on results, resulting in Net Income declining by more than 40% year-on-year.
[Revenue] Revenue was ¥1,287.9B (+3.5%). The core Semiconductor & FPD-related Equipment segment recorded ¥1,276.5B (estimated YoY +2.6%). By region, Taiwan ¥318.5B, China ¥357.7B, and the U.S. ¥328.7B together accounted for approximately 77% of total sales, with continued concentrated shipments to large customers (Applied Materials ¥220.1B, TSMC ¥195.2B). Although the semiconductor investment cycle is in a pause phase, demand for cleanroom-less transfer equipment for leading-edge logic and memory remained firm, and the aftermarket (parts & repairs) ¥113.9B provided support. The Life Sciences business was small at ¥12.0B (YoY +¥0.2B), remaining below 1% of segment mix. By region, Japan ¥99.5B (-1.0%) and Korea ¥66.6B (-6.6%) were somewhat weak, while Taiwan, China and the U.S. each grew in the +5–10% range, reflecting regional divergence in global semiconductor investment.
[Profitability] Cost of sales was ¥761.4B (YoY +1.9%), and the gross margin improved to 40.9% from 39.9% a year earlier (approx. +1.0pt), likely due to a favorable product mix (higher share of high value-added equipment) and production efficiency gains. SG&A increased substantially to ¥215.0B (prior year ¥175.9B, +22.2%), worsening the SG&A-to-sales ratio to 16.7% (prior year 14.1%) by 2.6pt. Within SG&A, goodwill amortization was ¥31.2B (prior year ¥16.9B), reflecting higher M&A-related costs, and fixed-cost items such as personnel, R&D and travel expanded at a pace exceeding sales growth. As a result, Operating Income declined to ¥311.5B (-2.7%) and Operating Margin fell to 24.2% (prior year 25.7%, -1.5pt), meaning revenue gains were absorbed by higher SG&A. In non-operating items, interest income received increased to ¥7.6B (prior year ¥6.1B) reflecting a rising rate environment, while foreign exchange gains sharply decreased to ¥14.3B (prior year ¥331.5B), causing total non-operating income to fall to ¥17.4B (prior year ¥44.3B, -60.7%). Non-operating expenses declined to ¥2.8B (prior year ¥10.0B), but net non-operating income contracted to ¥14.7B (prior year ¥34.3B), and Ordinary Income fell to ¥326.2B (-8.0%).
[Extraordinary Items] Extraordinary income was negligible at ¥0.1B (gain on sale of fixed assets; none in prior year), while Extraordinary losses rose sharply to ¥76.2B (prior year ¥28.9B). Major items included valuation losses on investment securities ¥21.7B (market price declines of held securities), loss on disposal of fixed assets ¥1.9B (prior year ¥3.1B), disaster losses ¥3.2B (flat with prior year ¥3.2B), and other items ¥50.6B. Most of the extraordinary losses are judged to be temporary. Profit before income taxes was ¥250.1B (prior year ¥325.6B, -23.2%), and income taxes were ¥75.2B (effective tax rate 30.1%) versus ¥94.2B (28.9%) in the prior year, representing a somewhat higher tax burden. Net income attributable to non-controlling interests was -¥15.6B (prior year -¥5.0B), reflecting subsidiary performance variability, leading to Net Income attributable to owners of the parent of ¥83.4B (-43.3%).
[Conclusion] Revenue increased while profits declined. The core Semiconductor & FPD-related Equipment business maintained mild top-line growth, but rapid SG&A expansion (notably higher goodwill amortization and fixed costs), contraction in forex gains, and recognition of extraordinary losses compressed profits, resulting in Net Income falling by over 40% year-on-year. Operating margin of 24.2% remains at a high level and indicates underlying profitability, but cost control and the reversal of one-off losses will be focal points in future periods.
The reportable segments are Semiconductor & FPD-related Equipment and Life Sciences. Semiconductor & FPD-related Equipment recorded Revenue of ¥1,276.5B and Operating Income of ¥320.0B (segment margin 25.1%), representing 99.1% of Group Revenue and virtually all operating profit before corporate expense allocation — the core business. Breakdown: Semiconductor-related Equipment ¥1,063.5B (82.6% of total sales), FPD-related Equipment ¥63.0B, Analytical Equipment ¥35.5B, Parts & Repairs and others ¥113.9B, highlighting the dominant contribution of Semiconductor-related Equipment. Year-on-year, Semiconductor-related Equipment was slightly up and Parts & Repairs remained firm. Life Sciences recorded Revenue ¥12.0B and Operating Income ¥0.1B (margin 1.1%), contributing limited profit while being at a new-business development stage. Consolidated Operating Income after corporate expense allocation was ¥311.5B, with corporate expenses estimated at ¥8.6B. The high margin of the core segment supports Group profitability, but dependence on semiconductor market conditions remains very high.
[Profitability] Operating Margin 24.2% (prior year 25.7%, -1.5pt) far exceeds the industry median of 7.8%, reflecting high-value products and a strong customer base. Gross Margin 40.9% (prior year 39.9%) rose from product mix improvements, but the SG&A ratio increase to 16.7% (prior year 14.1%) pressured operating margin. Net Margin 6.5% (prior year 11.8%) declined due to extraordinary losses, though it remains above the industry median 5.2% despite significant YoY deterioration. ROE 6.0% (annualized ~8%) is about the industry median 6.3% but down materially from prior-year 22.5% (annualized). ROA 4.4% (annualized ~5.9%) exceeds the industry median 4.0%, but the decline in Net Margin and lower total asset turnover 0.65x (industry median 0.76x) are negative factors. ROIC (Operating Income ¥311.5B ÷ (Net Assets ¥1,399.6B + Interest-bearing Debt ¥237.8B)) = 19.0% (annualized ~25%), indicating very high capital efficiency. Operating Income before goodwill amortization was ¥342.7B (adding back goodwill amortization ¥31.2B). EBITDA (Operating Income + Depreciation) was ¥342.8B, and EBITDA before goodwill amortization was ¥374.0B; note that, as a JGAAP company, goodwill amortization depresses Net Income by approximately 8%.
[Cash Quality] Operating Cash Flow was ¥311.9B, 3.7x Net Income ¥83.4B, indicating very strong cash conversion. Operating Cash Flow subtotal (before working capital changes) was ¥408.2B, 2.1x consolidated Net Income ¥190.5B, aided by non-cash adjustments including Depreciation ¥31.3B, Goodwill Amortization ¥31.2B and working capital improvements (inventory decrease ¥41.2B). Working capital trends: trade receivables increase -¥11.2B and trade payables decrease -¥5.6B were negative, but inventory decrease +¥41.2B more than offset these, yielding a net positive. DSO (Days Sales Outstanding) 89 days, DIO (Days Inventory Outstanding) 218 days, DPO (Days Payable Outstanding) 34 days, producing a Cash Conversion Cycle (CCC) of 273 days — long compared with the industry median (approx. 85 days). Inventory and receivables stagnation is prominent, so significant room exists to improve working capital efficiency. OCF/EBITDA ratio 0.91x is high, indicating good cash generation quality. The accrual ratio ((Net Income ¥83.4B - Operating CF ¥311.9B) ÷ Total Assets ¥1,973.0B) = -11.6%, markedly negative and indicating a cash-driven earnings structure.
[Investment Efficiency] Capital Expenditure (CapEx) ¥40.9B and Depreciation ¥31.3B yield a CapEx/Depreciation ratio of 1.31x (industry median 1.08x). CapEx exceeds maintenance levels, indicating ongoing investments in capacity expansion and new product development. Intangible asset investment was ¥3.8B (mainly software). R&D is included in SG&A, while goodwill amortization ¥31.2B acts as a fixed cost. Tangible Fixed Asset Turnover (Revenue ÷ Tangible Fixed Assets) is 4.97x (annualized 6.6x), indicating high asset efficiency. Total Asset Turnover 0.65x (industry median 0.76x) is somewhat lagging, largely because large cash balances ¥743.4B (37.7% of total assets) inflate the denominator. Improving working capital (shortening DSO and DIO) could materially raise total asset turnover.
[Financial Soundness] Equity Ratio 70.9% (industry median 60.9%) is very strong. With Interest-bearing Debt ¥237.8B (short-term ¥155.7B + long-term ¥82.1B) and cash ¥743.4B, the company is net cash ¥505.6B and effectively debt-free. Debt/Equity ratio 0.17x, Debt/EBITDA 0.69x (industry median -0.59x, i.e., many firms are net cash), and Net Debt/EBITDA -1.47x reflect a high net cash position. Current Ratio 384% (industry median 266%) and Quick Ratio 368% indicate very high liquidity and no short-term solvency concerns. Cash/Short-term Debt ratio 4.77x covers most short-term debt (¥155.7B) nearly five times over, eliminating refinancing risk. Interest Coverage (Operating Income ÷ Interest Expense) is 177x, indicating negligible interest burden. Financial leverage 1.41x is below industry median 1.60x, reflecting a conservative capital structure. Goodwill ¥63.3B is 4.5% of Net Assets and 0.18x of EBITDA, and intangible assets ¥92.2B together remain about 11% of Net Assets, limiting impairment risk.
Operating CF was ¥311.9B (prior year ¥367.9B, -15.2%), primarily due to lower Net Income and changes in working capital. Operating CF subtotal ¥408.2B (prior year ¥444.8B, -8.2%) adjusts Net Income ¥83.4B for non-cash items including Depreciation ¥31.3B, Goodwill Amortization ¥31.2B, and tax expenses ¥75.2B (with deferred tax adjustment -¥21.1B). The reduced contribution to Operating CF from working capital reflects a narrower inventory decrease (¥41.2B vs prior year ¥93.3B). Trade receivables increased -¥11.2B (prior year -¥36.4B increase) indicating continued collection lag with revenue growth, and trade payables decreased -¥5.6B (prior year +¥5.7B), altering the payment cycle. Corporate tax payments ¥1,027.3B (prior year ¥821.4B) rose sharply due to extraordinary items and deferred tax effects, pressuring Operating CF. Interest and dividends received ¥7.8B and interest paid -¥1.4B resulted in net cash inflow of ¥6.4B, with interest income far exceeding interest expense. Operating CF/Net Income ratio 3.7x and OCF/EBITDA 0.91x remain high, underscoring strong cash conversion.
Investing CF was -¥33.0B (prior year -¥64.6B), driven mainly by CapEx -¥40.9B (prior year -¥19.5B). Net changes in time deposits were neutral (deposits -¥16.6B, withdrawals +¥16.6B), long-term loan recoveries ¥0.4B, proceeds from sale of tangible fixed assets ¥0.2B contributed modestly. M&A-related acquisitions of subsidiary shares -¥11.9B (prior year -¥11.9B) continued. Free Cash Flow (Operating CF + Investing CF) was ¥278.9B (prior year ¥303.3B, -8.0%), ample and covering dividends ¥30.0B by 9.3x and dividends + share buybacks total ¥79.9B by 3.5x, indicating very high sustainability of shareholder returns.
Financing CF was -¥155.2B (prior year -¥91.6B), including net repayment of short-term borrowings -¥14.4B, long-term borrowings proceeds +¥17.6B and repayments -¥81.3B (net -¥63.7B), share buybacks -¥50.0B, dividend payments -¥30.0B, and dividends to non-controlling interests -¥0.4B. Lease liabilities repayment -¥0.1B was immaterial. Cash and cash equivalents increased by ¥130.1B (prior year ¥233.8B), bringing ending cash balance to ¥743.4B (prior year ¥613.3B), further strengthening liquidity.
Recurring income comprises Operating Income ¥311.5B plus Non-operating Income ¥17.4B (mainly interest income ¥7.6B, forex gains ¥14.3B, etc.), totaling approximately ¥329B, with non-operating income representing 1.4% of Revenue. Deducting Non-operating Expenses ¥2.8B (interest expense ¥1.8B, etc.) yields Ordinary Income ¥326.2B as the core recurring profitability. One-off items include Extraordinary Losses ¥76.2B (valuation losses on investment securities ¥21.7B, loss on disposal of fixed assets ¥1.9B, disaster losses ¥3.2B, etc.) and Extraordinary Income ¥0.1B (gain on sale of fixed assets), netting roughly ¥76.1B that depressed Net Income. The ratio of one-off items to Net Income is about 91%, extremely high, indicating Net Income was heavily affected by extraordinary losses this period. The gap between Ordinary Income and Net Income is about ¥242.8B, primarily due to tax expense ¥75.2B, Net Income attributable to non-controlling interests -¥15.6B, and net extraordinary items -¥76.1B, meaning the divergence is largely attributable to temporary items and tax burden rather than structural factors. Comprehensive Income was ¥189.5B (owners of the parent ¥203.5B, non-controlling interests -¥14.0B), and the difference from consolidated Net Income ¥190.5B is minor (foreign currency translation adjustments ¥12.9B, valuation differences on securities ¥1.7B). Accrual quality is strong: Operating CF/Net Income ratio 3.7x and OCF/EBITDA 0.91x confirm a cash-driven earnings profile. Non-operating income composition is interest-income centric, with forex gains sharply reduced (prior year ¥331.5B → ¥14.3B), making non-operating income sustainability dependent on interest rate environment. Overall, Ordinary Income is stable, but Net Income is volatile due to one-off losses; a rebound in Net Income is expected next year as extraordinary losses unwind, while SG&A control will be key to sustaining Ordinary Income.
Full-year guidance: Revenue ¥1,590.2B (YoY +23.5%), Operating Income ¥381.1B (YoY +22.3%), Ordinary Income ¥382.4B (YoY +17.2%), Net Income attributable to owners of the parent ¥278.1B (YoY +88.9%). Q3 cumulative progress rates are Revenue 81.0%, Operating Income 81.7%, Ordinary Income 85.3%, Net Income 30.0% (significantly lagging due to extraordinary losses). Versus a standard progress benchmark (Q3 cumulative ~75%), Revenue, Operating and Ordinary Income are 6–10pp ahead, suggesting the core semiconductor equipment business is progressing well. Net Income progress 30.0% is substantially delayed because of a ¥76.2B extraordinary loss recorded in the Q3 cumulative period, but the full-year forecast appears to assume a reduction of extraordinary losses and suppression of one-off losses in the second half. On an EPS basis, Q3 cumulative EPS was ¥109.33 versus full-year forecast ¥159.62, implying approximately ¥50.29 of Net Income accumulation in Q4 alone. Dividend guidance remains unchanged at annual ¥0 at announcement (note: actual paid dividend was ¥17 — this inconsistency may require revision). Upside/downside risks to guidance include the pace of recovery in the semiconductor investment cycle (order trends to Taiwan and the U.S.), foreign exchange fluctuations (particularly USD/JPY and TWD/JPY), and the possibility of additional extraordinary losses. Because backlog disclosure is not provided, monitoring delivery schedules and shipment progress to large customers (AMAT, TSMC) will be critical for achieving full-year targets.
Dividend is year-end ¥17 (interim ¥0), annual ¥17, with a payout ratio of 15.7% (based on Net Income, and 12.7% when measured on Net Income attributable to owners of the parent after deducting non-controlling interests), a conservative level. Total dividends ¥2.998B against FCF ¥278.9B yield an FCF coverage of 9.30x, indicating extremely low risk of dividend reduction. Share buybacks of ¥50.0B (per CF statement) were conducted, making combined shareholder returns roughly ¥80B and Total Return Ratio about 42% (FCF basis 28.7%, Net Income attributable to owners of the parent basis approx. 96%). While the payout ratio is low, the company uses flexible share buybacks to raise total returns. Dividend sustainability is high given cash ¥743.4B and Operating CF ¥311.9B (annualized approx. ¥416B) versus total dividends ¥30B, which is only 7.2% of Operating CF; there is substantial capacity for maintaining or increasing dividends. Payout ratio 15.7% is well below the industry median 33%, indicating significant room for dividend increases. Considering semiconductor cycle volatility, a strategy to prioritize dividend stability while adjusting buybacks flexibly is rational. With 176,400 thousand shares outstanding (after treasury stock 2,968 thousand shares, outstanding shares 173,432 thousand), the ¥50.0B share buyback corresponds to roughly 2.9% of shares retired, providing a certain EPS accretion.
Semiconductor market cycle and customer/region concentration risk: The Semiconductor & FPD-related Equipment segment accounts for 99.1% of sales and is highly sensitive to semiconductor investment cycles. High concentration to major customers (Applied Materials ¥220.1B, TSMC ¥195.2B) — together about 32% of sales — means changes in their capex plans directly affect performance. Regionally, Taiwan, China and the U.S. account for 77% of sales, exposing the company to geopolitical risks (U.S.-China tensions, Taiwan contingency) and semiconductor industrial policies (U.S. CHIPS Act, China self-sufficiency strategies). Quantitatively, a ±10% change in sales contribution from the top two customers YoY could impact Operating Income by approximately ±¥6.5B (about ±2% of Operating Income).
Working capital inefficiency and cash tie-up risk: DSO 89 days, DIO 218 days, CCC 273 days far exceed industry median (CCC 85 days), indicating prolonged cash tie-up. DIO 218 days is about 3.2x the industry median DIO 68 days; the high degree of product customization and long lead times are primary causes. Inventory ¥67.7B (details of finished goods, WIP, raw materials within total ¥454.9B not fully disclosed) is covered by product warranty provisions ¥18.5B, but prolonged stagnation in WIP ¥120.8B and raw materials ¥266.4B could necessitate additional provisions. A 1% improvement in working capital (¥4.5B) would improve Operating CF by the same amount and could boost ROA and ROE by about 0.2pt each; conversely, deterioration could harm liquidity.
Fixed-cost nature of SG&A and margin pressure risk: SG&A ¥215.0B (YoY +22.2%) grew much faster than revenue (+3.5%), reversing operating leverage. Goodwill amortization ¥31.2B (prior year ¥16.9B) is a persistent fixed cost, and fixed-cost items such as R&D and personnel are downwardly rigid relative to revenue fluctuations. If SG&A ratio remains at 16.7%, maintaining Operating Margin in the mid-20s would require gross margin above 41%, increasing pressure on pricing and cost management. A 1pt rise in SG&A ratio would reduce Operating Income by approximately ¥12.9B (~4% of Operating Income), making expense control the top priority for defending margins.
[Within-industry Position] (Reference, internal analysis) The company is categorized in manufacturing; compared to the 2025 industry medians, the company exhibits the following characteristics. Operating Margin 24.2% is +16.4pt above the industry median 7.8%, reflecting high value-added products and a quasi-oligopolistic market position. Net Margin 6.5% is +1.3pt above the industry median 5.2% but has fallen sharply from 11.8% due to extraordinary losses; underlying profitability remains well above industry average. ROE 6.0% (annualized ~8%) is near the industry median 6.3%, negatively impacted by the Net Margin decline and conservative financial leverage (1.41x vs industry median 1.60x). ROA 4.4% (annualized ~5.9%) exceeds the industry median 4.0%, indicating good total asset efficiency. Equity Ratio 70.9% is +10.0pt above industry median 60.9%, indicating very strong financial safety. Current Ratio 384% is well above the industry median 266%, placing the company among the top in short-term solvency. Payout ratio 15.7% is far below the industry median 33%, indicating internal retention preference, but Total Return Ratio approx. 42% (including ¥50B buybacks) is comparable to industry practice and shows flexible shareholder returns. CapEx/Depreciation ratio 1.31x exceeds industry median 1.08x, reflecting ongoing growth investment. CCC 273 days far exceeds industry median 85 days, revealing working capital efficiency as a relative weakness. Net Debt/EBITDA -1.47x (net cash) demonstrates a stronger balance sheet than the industry median -0.59x. Overall, the company ranks high on profitability and financial safety within the industry but has scope to improve working capital efficiency and to utilize leverage more effectively.
Sustained high profitability and strong financial base: An Operating Margin of 24.2%, EBITDA margin 26.6%, and net cash ¥505.6B reflect the company’s quasi-oligopolistic position in semiconductor transfer equipment and strong customer trust, supporting continued business with major customers (AMAT, TSMC) and resilient demand for leading-edge logic and memory equipment. The unwind of extraordinary losses ¥76.2B could generate a rebound in Net Income next fiscal year, and achieving the full-year Net Income guidance ¥278.1B requires approximately ¥195B of Net Income accumulation in Q4; given solid Operating CF (¥311.9B) and the one-off nature of the extraordinary losses, feasibility is high. Payout ratio 15.7%, FCF coverage 9.3x, and Total Return Ratio ~42% suggest sustainable shareholder returns and room for increases, while continued buybacks (¥50B this fiscal year) will help improve capital efficiency.
Need to improve working capital efficiency and potential to raise ROE: CCC 273 days (industry median 85 days), DSO 89 days, DIO 218 days indicate substantial cash tie-up; reducing CCC toward the industry median (-188 days) could free up about ¥85B (CCC reduction × daily sales), boosting Operating CF by the same amount and potentially raising ROA and ROE by roughly 4pt each. Containing SG&A ratio (goodwill amortization ¥31.2B is fixed but personnel and R&D efficiencies are possible) could raise Operating Margin from the mid-20s to above 26%. By modestly increasing financial leverage from 1.41x to the industry median 1.60x (adjusting Equity Ratio from 70.9% to ~62.5%) and raising payout ratio toward the industry median 33%, ROE could exceed 10%, indicating substantial potential to enhance shareholder value.
Monitor semiconductor investment cycle and geopolitical risks: Regional concentration (Taiwan/China/U.S. 77%) and customer concentration (top 2 customers 32%) yield high operating leverage in recovery phases but downside risk in downturns. Given expected acceleration of leading-edge logic investments for AI/HPC and recovery in NAND/DRAM capex post-2025, demand for clean transfer equipment should remain resilient. However, intensified U.S.-China tensions and export control tightening against China could impact over 30% of sales if realized. Diversifying regionally (Europe, Japan, Southeast Asia) and widening the customer base (IDMs, power semiconductors, compound semiconductors beyond foundries) are medium- to long-term priorities. Enhancing disclosure of order backlog and quarterly order trends would improve transparency for investors; upcoming earnings materials should be monitored for such disclosures.
This report was automatically generated based on AI analysis of XBRL financial disclosure data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed before making investment decisions.