| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1186.1B | ¥1110.5B | +6.8% |
| Operating Income / Operating Profit | ¥94.0B | ¥71.2B | +32.2% |
| Ordinary Income | ¥107.2B | ¥76.1B | +40.8% |
| Net Income / Net Profit | ¥81.3B | ¥79.1B | +2.8% |
| ROE | 6.6% | 6.9% | - |
For the fiscal year ended March 2026, Komori Corporation achieved revenue of ¥1186.1B (YoY +¥75.6B +6.8%), Operating Income of ¥94.0B (YoY +¥22.9B +32.2%), Ordinary Income of ¥107.2B (YoY +¥31.1B +40.8%), and Net Income of ¥81.3B (YoY +¥2.2B +2.8%), representing revenue and profit growth. Operating margin improved to 7.9% (up 1.5pt from 6.4% prior year). Ordinary Income expanded to ¥107.2B aided by non-operating income of ¥16.4B (including foreign exchange gains ¥3.8B and dividends received ¥4.0B). Net Income growth was muted at +2.8% mainly due to an increase in the effective tax rate to 31.8% (prior year 20.9%). By segment, Japan led with ¥870.4B (+5.2%) revenue and Operating Income ¥96.4B (+37.0%), while North America recovered strongly to ¥127.4B (+37.1%) revenue and Operating Income ¥6.2B (+7712.5%). Europe, despite revenue growth to ¥284.8B (+13.0%), saw operating loss widen to ¥19.2B (-146.7%), posing a challenge. Gross margin was 36.8% and SG&A ratio 28.9%, indicating steady improvement in operating profitability.
Revenue: Revenue of ¥1186.1B (+6.8%) was driven by the Japan segment ¥870.4B (+5.2%) and overseas expansion in North America ¥127.4B (+37.1%) and Europe ¥284.8B (+13.0%). Japan was supported by recovery in domestic demand and increased service revenue. North America achieved large revenue gains from both new projects and replacement demand. Europe posted higher revenue but deteriorating profitability. Greater China revenue was ¥136.0B (-14.9%) affected by weak regional conditions. Other regions (India, Singapore, Malaysia) totaled ¥71.3B (+21.1%), capturing growth in emerging markets. Segment revenue composition: Japan 73.4% · Europe 24.0% · North America 10.7% · Greater China 11.5% · Other 6.0%, indicating continued high domestic dependence.
Profitability: Gross profit was ¥436.5B (gross margin 36.8%) on cost of sales ¥749.6B. SG&A was ¥342.5B (SG&A ratio 28.9%, down -0.3pt from 29.2% prior year), controlled at +5.8% vs revenue growth +6.8%, demonstrating cost discipline. Operating Income ¥94.0B (Operating margin 7.9%, up +1.5pt from 6.4%) rose +32.2% driven by price revisions, product mix improvement, and SG&A control. Non-operating income was ¥16.4B (including dividends received ¥4.0B and foreign exchange gains ¥3.8B), non-operating expenses ¥3.3B (including interest expense ¥2.4B and foreign exchange losses ¥2.5B), leading to Ordinary Income ¥107.2B (+40.8%). Extraordinary gains totaled ¥5.96B (gain on sale of investment securities ¥4.3B and gain on sale of fixed assets ¥1.7B), extraordinary losses ¥4.99B (impairment losses ¥3.1B and loss on disposal of fixed assets ¥3.5B included), resulting in profit before income taxes of ¥108.1B. After deducting corporate taxes ¥34.4B (effective tax rate 31.8%), Net Income was ¥81.3B (Net margin 6.9%, down -0.2pt from 7.1% prior year). In conclusion, revenue and profit growth were driven by Japan and North America, but widening losses in Europe and higher effective tax rate constrained Net Income growth.
Japan segment reported revenue ¥870.4B (+5.2%) and Operating Income ¥96.4B (+37.0%; margin 11.1%), accounting for over 90% of consolidated profit, supported by stable domestic demand and effective price and cost management. North America posted revenue ¥127.4B (+37.1%) and Operating Income ¥6.2B (+7712.5%; margin 4.9%), turning significantly profitable from ¥0.08B prior year, driven by market recovery and strengthened sales structure. Europe recorded revenue ¥284.8B (+13.0%) but Operating Loss ¥19.2B (margin -6.7%), falling from operating profit ¥4.1B prior year due to demand slowdown, higher costs, MBO, and profitability deterioration in the Komori-Chambon group. Greater China saw revenue ¥136.0B (-14.9%) and Operating Income ¥1.3B (-48.6%; margin 1.0%) with weak local demand and intensifying competition. Other regions had revenue ¥71.3B (+21.1%) and Operating Income ¥4.9B (+19.7%; margin 6.9%), steadily monetizing emerging market expansion. Regionally, Japan’s high profitability underpins consolidated profit, while resolving Europe’s losses and restoring Greater China are key to improving consolidated margins next fiscal year.
Profitability: Operating margin 7.9% (up +1.5pt from 6.4%) is +0.2pt above the industry median 7.8%, supported by SG&A control and stable gross margin. Net margin 6.9% (down -0.2pt from 7.1%) is +1.7pt above industry median 5.2%, but the rise in effective tax rate to 31.8% (prior year 20.9%) limited Net Income growth. ROE 6.6% (prior year 6.3%) is decomposed as Net margin 6.9% × Total asset turnover 0.666 × Financial leverage 1.45×, with asset efficiency and low leverage capping ROE.
Cash Quality: Operating Cash Flow (OCF) was ¥35.3B, only 0.43× of Net Income ¥81.3B, pressured by accounts payable decrease ¥57.4B, inventory increase ¥7.3B, and tax payments ¥32.9B. OCF/Sales 3.0% is low, indicating issues in cash generation. The decline from OCF subtotal ¥63.6B to cash ¥35.3B was mainly due to reductions in trade payables and tax payments.
Investment Efficiency: Total asset turnover 0.666x improved from 0.642x prior year, as sales growth (+6.8%) outpaced asset growth (+3.0%). Inventory ¥186.1B (15.7% of sales) decreased from ¥212.3B prior year, but work-in-process increased to ¥168.2B (up +35.9% from ¥123.8B), suggesting room to improve inventory efficiency.
Financial Soundness: Equity Ratio 69.0% (up +2.2pt from 66.8%), current ratio 298.6%, quick ratio 252.8% — liquidity is very strong and short-term solvency is solid. Interest-bearing debt of ¥191.6B (corporate bonds maturing within 1 year ¥100.0B · bonds ¥90.0B · long-term borrowings ¥0.6B · short-term borrowings ¥1.0B) is covered by cash and marketable securities ¥544.2B, yielding a net cash position and Debt/EBITDA 0.16x, effectively near debt-free. Interest coverage 39.5x (Operating Income ¥94.0B ÷ interest expense ¥2.4B) indicates minimal interest burden.
OCF was ¥35.3B, only 0.43× of Net Income ¥81.3B, with large working capital movements weighing on cash. From OCF subtotal ¥63.6B, reductions in trade payables ¥57.4B and corporate tax payments ¥32.9B were primary reasons for constrained realized cash flow. Inventory increase ¥7.3B and accounts receivable increase ¥3.5B also absorbed cash. Depreciation ¥22.8B and goodwill amortization ¥2.6B were non-cash expenses, but working capital efficiency remains a challenge. Investing cash flow was -¥29.1B, with capital expenditures -¥38.4B (gross increase in tangible/intangible assets about ¥49.0B) while generating proceeds from sale of investment securities ¥5.6B and net withdrawal of time deposits ¥21.2B. Free Cash Flow was ¥6.2B (OCF ¥35.3B + Investing CF -¥29.1B), insufficient to cover dividends ¥44.4B, leading to a drawdown of cash on hand. Financing cash flow was -¥60.7B, mainly dividends -¥44.4B, bond redemption -¥100.0B, bond issuance +¥89.5B (net -¥10.5B), and loan repayments -¥0.7B. Cash decreased ¥45.5B to ¥528.5B (cash and deposits ¥500.9B + marketable securities ¥43.3B), but liquidity remains ample. Improving working capital (especially accounts payable and inventory management) is key to expanding OCF and achieving FCF surplus in coming fiscal years.
Of Ordinary Income ¥107.2B, Operating Income ¥94.0B is the core, with non-operating income ¥16.4B (mainly dividends received ¥4.0B and foreign exchange gains ¥3.8B) added. Non-operating income represents about 1.4% of revenue, small in scale, indicating stability of operating earnings. Net extraordinary gains ¥0.97B (Extraordinary gains ¥5.96B less extraordinary losses ¥4.99B) are about 1.2% of Net Income ¥81.3B, so one-off items are limited. However, OCF ¥35.3B is significantly below Net Income ¥81.3B (OCF/NI 0.43x), indicating accrual intensity and that earnings require time to convert to cash. Comprehensive income ¥118.3B exceeds Net Income ¥81.3B by ¥37.0B, with foreign currency translation adjustments ¥12.9B, valuation gains on marketable securities ¥28.4B, and retirement benefit adjustments ¥3.3B recorded in Other Comprehensive Income. The valuation gains on investment securities bolster equity but also entail market value volatility risk. The discrepancy between Ordinary Income and Net Income of approximately ¥26B (24%) is attributable to the effective tax rate 31.8% and net contributions from extraordinary items; careful attention is required as operating-level earnings are not being fully converted into Net Income.
Full Year guidance: Revenue ¥1240.0B (+4.5%), Operating Income ¥95.0B (+1.0%), Ordinary Income ¥92.0B (-14.2%), Net Income ¥72.0B (-11.3%). Progress rates against guidance are Revenue 95.6%, Operating Income 99.5%, Ordinary Income 116.5%, Net Income 102.4%. Operating Income and Net Income are generally within reach, and revenue can be achieved with additional gains in the remaining period. Ordinary Income already exceeds the full-year forecast by +16.5% at the half-year point, likely due to higher-than-expected non-operating income (foreign exchange gains and dividends/interest). However, the company projects full-year decreases in Ordinary Income and Net Income (-14.2% and -11.3% respectively), likely factoring in a pullback in non-operating income and potential one-off losses in the second half. Given first-half results, there is upside potential for Operating Income and Ordinary Income revisions, but the company maintains a conservative outlook. Full-year EPS forecast ¥135.69 vs first-half realized ¥138.92 indicates EPS performance is already in the achievable range, assuming maintenance of second-half profitability.
Annual dividend ¥70 (interim ¥35 · year-end ¥35). Dividend payments ¥44.4B relative to Net Income ¥81.3B imply a payout ratio of 49.8%. The company maintained prior-year dividend ¥70 (payout ratio 49.8%), continuing a stable dividend policy. Free Cash Flow ¥6.2B cannot cover dividends ¥44.4B, so abundant cash on hand ¥544.2B supports dividend continuity. Total Return Ratio is 49.8% (dividends only, no share buybacks), returning about half of earnings to shareholders. From dividend yield and total return perspective, shareholder returns are moderate, but OCF/dividend 0.80x on a cash basis indicates weak dividend coverage; improving inventory and working capital efficiency to boost OCF is key for sustainability. Strong cash reserves and low leverage enhance confidence in dividend maintenance, while achieving FCF surplus will determine capacity for dividend increases next fiscal year.
Worsening profitability in Europe segment: Europe generated revenue ¥284.8B (+13.0%) but an Operating Loss ¥19.2B (turned from Operating Profit ¥4.1B prior year), with margin -6.7%, weighing on consolidated profitability. Demand slowdown, higher costs, MBO group issues, etc., are factors. Quantitatively, this represents a negative contribution of -¥19.2B against consolidated Operating Income ¥94.0B (about a 20% downward impact). Prolonged failure to eliminate European losses risks capping improvement in consolidated ROE and operating margins.
Weakness in working capital efficiency and cash generation: OCF ¥35.3B is only 0.43× of Net Income ¥81.3B, with accounts payable reduction ¥57.4B and inventory increases (notably work-in-process +35.9%) primarily absorbing cash. OCF/Sales 3.0% is low; without improvements in inventory compression and receivables/payables management, FCF generation will remain weak and the company may not be able to fund dividends and investments from internal funds. Contract liabilities ¥169.1B (prior year ¥161.9B) and strong order backlog provide revenue visibility, but slow inventory turnover delays cash conversion.
FX/interest rate volatility and sustainability of non-operating income: Of Ordinary Income ¥107.2B, non-operating income ¥16.4B (1.4% of revenue) includes foreign exchange gains ¥3.8B and dividends received ¥4.0B, but foreign exchange losses ¥2.5B were also recorded. Fluctuating FX rates could eliminate non-operating income and push Ordinary Income back toward Operating Income levels. Market value fluctuations in investment securities ¥178.3B (+29.7%) affect equity through other comprehensive income; realization of valuation losses would impair net assets.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.9% | 7.8% (4.6%–12.3%) | +0.2pt |
| Net Margin | 6.9% | 5.2% (2.3%–8.2%) | +1.7pt |
| Operating margin is in line with the industry median; Net margin outperforms median by +1.7pt, indicating favorable profitability. |
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 6.8% | 3.7% (-0.4%–9.3%) | +3.1pt |
| Revenue growth rate exceeds the industry median by +3.1pt, maintaining relatively strong growth. |
※ Source: Company compilation
Operating margin 7.9% (improved +1.5pt) and stable gross margin 36.8% indicate that price adjustments, product mix improvement, and SG&A control have effectively strengthened the earnings profile. High profitability in Japan and North America is driving consolidated margins, and the likelihood of achieving full-year Operating Income guidance (99.5% progress) is high. Eliminating the Europe loss of ¥19.2B is key to a step-up in next fiscal year’s margins and ROE.
The largest attention point is weak OCF ¥35.3B (0.43× of Net Income), driven by elevated work-in-process ¥168.2B (+35.9%) and reduced accounts payable ¥57.4B. Contract liabilities ¥169.1B and strong order backlog provide high revenue visibility, but unless inventory compression and receivables/payables management improve, FCF surplus and dividend sustainability will be constrained. Cash on hand ¥544.2B provides a short-term buffer, but mid- to long-term expansion of shareholder returns requires improving OCF/Sales ratio (target >5%).
Financial health is very strong: Equity Ratio 69.0%, Debt/EBITDA 0.16x, Interest Coverage 39.5x, indicating ample capacity for reinvestment, M&A, and dividend increases. Valuation gains on investment securities ¥178.3B (+29.7%) support equity but require monitoring for market value volatility. Progress against full-year guidance (Ordinary Income 116.5% progress · Net Income 102.4% progress) reflects contribution from non-operating income; even assuming a conservative second-half outlook, upside remains. Recovery of Europe profitability and improvement in inventory efficiency are catalysts for improving ROE and ROA from next fiscal year onward.
This report is an earnings analysis document automatically generated by AI from 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 based on public financial statements. Investment decisions are your responsibility; please consult a professional if necessary.