| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1727.1B | ¥1602.6B | +7.8% |
| Operating Income | ¥262.9B | ¥232.3B | +13.2% |
| Ordinary Income | ¥265.1B | ¥236.8B | +12.0% |
| Net Income | ¥195.0B | ¥168.6B | +15.6% |
| ROE | 4.3% | 3.7% | - |
FY2026 Q1 results delivered revenue of ¥1,727.1B (YoY +¥124.5B, +7.8%), Operating Income ¥262.9B (YoY +¥30.6B, +13.2%), Ordinary Income ¥265.1B (YoY +¥28.3B, +12.0%), and Net Income ¥195.0B (YoY +¥26.4B, +15.6%), representing year-over-year revenue and profit growth. Operating margin improved to 15.2% (up +0.7pt from 14.5% a year ago) and Net margin improved to 11.3% (up +0.8pt from 10.5%), indicating enhanced profitability. Gross margin expanded to 25.1% (up +1.9pt from 23.2%), reflecting effective cost control. By segment, CFI recorded a rapid expansion with sales of ¥203.9B (+129.6%), and "Other" grew strongly to ¥438.3B (+42.9%), while core DAIFUKU sales declined to ¥705.2B (-7.2%) and DSA decelerated to ¥76.2B (-28.1%). Progress against the full year plan (Revenue ¥7,000B, Operating Income ¥1,050B) stands at 24.7% for revenue and 25.0% for Operating Income, a typical level, and Contract Liabilities of ¥691.2B (YoY -¥50.6B) remain elevated, supporting revenue recognition into Q2 onward.
[Revenue] Revenue rose to ¥1,727.1B (YoY +7.8%). Segment composition: DAIFUKU ¥705.2B (YoY -7.2%, sales mix 40.8%), "Other" ¥438.3B (+42.9%, mix 25.4%), DNA ¥404.2B (+0.5%, mix 23.4%), CFI ¥203.9B (+129.6%, mix 11.8%), DSA ¥76.2B (-28.1%, mix 4.4%), Contec ¥66.0B (+8.6%, mix 3.8%). Rapid expansion at CFI and strong growth in "Other" drove the company-wide revenue increase, but core DAIFUKU posted a year-on-year decline and DSA saw a significant drop, suggesting timing concentration of projects and geographic mix skew. Regional and product-level disclosure is limited, but high backlog and steady Contract Liabilities indicate underlying progress in order fulfillment.
[Profitability] Gross margin improved to 25.1% (up +1.9pt from 23.2%), evidencing progress in cost management; cost of sales ratio was held to 74.9%. SG&A was ¥169.9B (YoY +22.4%), outpacing revenue growth (+7.8%), pushing SG&A ratio to 9.8% (up +1.1pt from 8.7%). While there are signs of front-loaded costs for personnel reinforcement and installation capacity expansion, gross margin improvement absorbed the SG&A increase, yielding Operating Income of ¥262.9B (+13.2%) and Operating margin of 15.2% (improved +0.7pt). Non-operating income/expense contributed net +¥2.2B, with Interest Income ¥9.0B offset by Foreign Exchange Losses ¥10.3B, and Ordinary Income rose to ¥265.1B (+12.0%). Extraordinary items were minor (Extraordinary Gains ¥0.04B, Extraordinary Losses ¥0.91B). Pre-tax income was ¥264.3B, from which Income Taxes of ¥69.3B (effective tax rate 26.2%) were deducted, resulting in Net Income ¥195.0B (+15.6%). In conclusion, growth in CFI and "Other" lifted revenues, and gross margin improvement plus operating leverage drove the revenue-and-profit expansion.
Reported segment sales and operating profit (2026 Q1, segment totals including intersegment transactions): DAIFUKU Sales ¥705.2B / Profit ¥139.1B (margin 19.7%), DNA Sales ¥404.2B / Profit ¥25.6B (margin 6.3%), CFI Sales ¥203.9B / Profit ¥33.5B (margin 16.4%), DSA Sales ¥76.2B / Profit ¥18.7B (margin 24.5%), Contec Sales ¥66.0B / Profit ¥3.0B (margin 4.6%). "Other" posted Sales ¥438.3B / Profit ¥56.4B. There are wide differences in segment margins: high profitability in DSA and DAIFUKU (around 20%) drives company margins, while DNA (6.3%) and Contec (4.6%) have room for improvement. CFI more than doubled sales YoY with a high margin of 16.4%, achieving both growth and profitability. DAIFUKU saw lower sales but maintained a high margin, suggesting effective project selection. DSA experienced a large sales decline, likely due to project timing shifts and regional factors.
[Profitability] Operating margin 15.2% (up +0.7pt from 14.5%) was achieved through improved gross margin (25.1%, up +1.9pt from 23.2%) and appropriate SG&A control. Net margin 11.3% (up +0.8pt from 10.5%) reflects improved operating efficiency. ROE was 4.3% (prior year 4.1%)—a modest improvement—largely due to a sizable shareholder equity base (Equity Ratio 61.7%). EBITDA margin was 17.2% (EBITDA ¥296.8B / Revenue ¥1,727.1B), with minimal goodwill amortization impact (Goodwill ¥17.6B / EBITDA 0.06x). [Cash Quality] Operating Cash Flow / Net Income was 0.84x, below the benchmark 1.0x, mainly due to timing of corporate tax payments. OCF/EBITDA was 0.55x, weak due to working capital movements (Accounts Receivable +¥104.2B, Inventory +¥32.6B, Accounts Payable -¥120.5B, Contract Liabilities -¥56.2B) and tax payments. The accrual ratio (Net Income - Operating CF)/Total Assets was 0.4%, low, indicating high accounting quality of earnings. [Investment Efficiency] Total Asset Turnover was 0.232x (annualized 0.93x), reflecting an asset-intensive business. Inventory Days (DIO) were 126 days, long and indicative of project-type lead times. Capital Expenditure was ¥110.4B, significantly above Depreciation ¥33.9B, showing ongoing expansion of production and installation capacity. [Financial Soundness] Equity Ratio 61.7% (up +1.8pt from 59.9%), Current Ratio 277.1%, Quick Ratio 271.4%—liquidity remains ample. Interest-bearing debt was only ¥6.5B (short-term borrowings ¥6.5B), Debt/EBITDA 0.02x, Debt/Capital 0.1%, effectively net-debt-free. Cash and Deposits ¥2,518.9B far exceed current liabilities ¥2,031.2B (Cash / Short-term Liabilities 123.9%), indicating very high financial flexibility. Interest Coverage was 313x (Operating Income ¥262.9B / Interest Expense ¥0.84B), making interest burden negligible.
Operating Cash Flow was ¥164.2B (YoY -16.3%), 0.84x of Net Income ¥195.0B, below the standard range (≥1.0x), primarily due to timing of tax payments of ¥129.8B (prior year ¥44.7B, +¥85.1B). Operating CF subtotal (before working capital changes) was ¥284.1B; decreases in Accounts Receivable (¥104.2B) and Inventory (¥32.6B) contributed cash inflows, while decreases in Accounts Payable (¥120.5B) and Contract Liabilities (¥56.2B) were cash outflows, leaving a modest net positive contribution from working capital. Investing CF was -¥92.7B, driven mainly by Capital Expenditure ¥110.4B (tangible fixed asset acquisitions) and net changes in time deposits. Financing CF was -¥167.1B, primarily due to dividend payments ¥154.5B and net repayment of short-term borrowings ¥10.5B. Free Cash Flow (Operating CF + Investing CF) was ¥71.6B, insufficient to cover dividend payments of ¥154.5B for the quarter, but this shortfall reflects seasonality and concentrated tax payments rather than a structural decline in cash generation. Cash and Cash Equivalents decreased by ¥8.1B from opening ¥245.3B to closing ¥237.2B, but closing balances remain ample and liquidity concerns are absent. The low OCF/EBITDA 0.55x is mainly due to tax payments and Contract Liability decreases (reflecting backlog consumption), and cash conversion is expected to improve as tax burdens normalize in Q2 onward.
Earnings quality is high: Operating Income ¥262.9B, with negligible extraordinary items (Extraordinary Gains ¥0.04B, Extraordinary Losses ¥0.91B), indicates that recurring business activities account for the bulk of profits. Non-operating income of ¥13.6B comprised Interest Income ¥9.0B (0.5% of revenue), Dividend Income ¥0.1B, and Other ¥4.0B, showing low revenue dependence and a focus on interest income. Non-operating expense ¥11.4B was mainly Foreign Exchange Losses ¥10.3B, apparently a temporary valuation loss from yen appreciation and thus largely non-recurring. The gap between Ordinary Income ¥265.1B and Net Income ¥195.0B (about -26%) is driven by Income Taxes ¥69.3B (effective rate 26.2%), with no abnormal tax items. The accrual ratio (Net Income - Operating CF)/Total Assets was 0.4%, very low, indicating limited divergence between profit and cash. Operating CF / Net Income 0.84x reflects tax timing, while Operating CF subtotal (before working capital changes) ¥284.1B equals 1.46x Net Income ¥195.0B, showing robust cash generation from core operations when excluding working capital timing. Foreign Exchange Losses ¥10.3B appear temporary and are partially offset by higher Interest Income (¥9.0B, up ¥1.8B from ¥7.2B). Overall, recurring operating activities are the primary earnings source, one-off distortions are minor, and accounting earnings quality is high.
Full year plan: Revenue ¥7,000B (YoY +5.9%), Operating Income ¥1,050B (YoY +4.2%), Ordinary Income ¥1,085B (YoY +3.7%). Q1 progress ratios: Revenue 24.7%, Operating Income 25.0%, Ordinary Income 24.4%, Net Income 24.4% (against Full Year Net Income forecast ¥800B), aligning with standard Q1 pacing (~25%). Operating margin for the full year is planned at 15.0% (¥1,050B / ¥7,000B), and Q1 actual was 15.2%, above plan, indicating better-than-expected profitability. Contract Liabilities ¥691.2B (YoY -¥50.6B) remain high and will support revenue recognition from backlog into subsequent quarters. However, SG&A growth (YoY +22.4%) outpacing revenue growth (+7.8%) means that if cost front-loading continues, the ability to absorb these expenses in H2 will be a focal point. Foreign exchange volatility and progress on large projects are key to achieving the full year target, but given Q1 results and Contract Liabilities, the likelihood of reaching plan is high. There was reportedly a revision to earnings guidance this quarter; the post-revision figures are the aforementioned full year plan, and no explicit indication was given whether the revision was upward or downward.
Dividend guidance is Full Year DPS ¥36, with no intermediate dividend disclosed at Q1 end, implying a single year-end dividend. Payout Ratio, calculated from Full Year Net Income forecast ¥800B and shares outstanding (after treasury shares) 368M shares, is approximately 16.6% (¥36 × 368M / ¥800B), a conservative level. Prior year DPS was ¥34, and this year’s plan is a ¥2 increase. Q1 Free Cash Flow ¥71.6B did not cover dividend payments ¥154.5B (for prior year), but this reflects concentrated tax payments and quarterly seasonality; there is no concern regarding dividend payment capacity on a full-year basis. With Cash and Deposits ¥2,518.9B and Interest-bearing Debt ¥6.5B, Net Cash ¥2,512.4B sufficiently underpins dividend sustainability. The low payout ratio suggests a capital allocation policy balancing growth investment (Capital Expenditure ¥110.4B considerably exceeding Depreciation ¥33.9B) with shareholder returns, leaving room for future dividend increases. No disclosure was made on share buybacks or Total Return Ratio measures; at present shareholder returns are dividend-focused.
Extended Inventory Days (DIO) at 126 days: Inventory totals include Products ¥11,573百万円 and Raw Materials ¥33,134百万円, aggregate ¥44,707百万円. Using Cost of Sales ¥1,294.2B ÷ 365 days × 126 days yields inventory turnover reflecting long project lead times typical of project-type businesses. Project delays or demand-supply swings could cause inventory buildup, margin pressure, or impairment risk. Q1 inventory increased by ¥774百万円 YoY, reflecting timing concentration of projects and stocking for future orders; delayed digestion would impair working capital efficiency and pressure cash flows.
Decline in Contract Liabilities and uneven segment growth: Contract Liabilities remain high at ¥691.2B but decreased YoY by ¥50.6B (-6.8%), indicating backlog consumption while warranting attention to the pace of new order accumulation. Segment-wise, DAIFUKU (-7.2%) and DSA (-28.1%) decelerated while CFI (+129.6%) and "Other" (+42.9%) drove growth. Prolonged weakness in core businesses could threaten sustainability of company growth and alter margins via mix change. The balance between Contract Liability consumption speed and new order intake is a prerequisite for achieving the full year plan.
Foreign exchange volatility and swings in non-operating items: Foreign Exchange Losses ¥10.3B were recorded in non-operating expenses, double prior year FX losses of ¥4.5B. Foreign currency translation adjustments added ¥32.3B to comprehensive income, but FX losses in non-operating items pressure Ordinary Income. Interest Income ¥9.0B (up ¥1.8B from ¥7.2B) partially offsets FX losses, but sharp FX movements can increase volatility of Ordinary Income and Net Income via non-operating items. With unclear natural hedging and FX hedging policies, structural FX exposure warrants monitoring.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 15.2% | 6.8% (2.9%–9.0%) | +8.4pt |
| Net Margin | 11.3% | 5.9% (3.3%–7.7%) | +5.4pt |
Profitability considerably exceeds industry medians and ranks at the upper end among manufacturers.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 7.8% | 13.2% (2.5%–28.5%) | -5.4pt |
Growth trails the median, driven by a temporary slowdown in core DAIFUKU, while high growth in CFI and "Other" raises the company average.
※ Source: Company compilation
Margin improvement and strong financial position: Operating margin 15.2% (up +0.7pt) and Gross margin 25.1% (up +1.9pt) reflect improved profitability, exceeding the industry median 6.8% by 8.4pt. Near net-debt-free status (Debt/EBITDA 0.02x) and Cash and Deposits ¥2,518.9B provide ample liquidity to withstand economic cycles and support large investments. Interest Income ¥9.0B indicates use of surplus cash and partially offsets Foreign Exchange Losses ¥10.3B. Operating leverage is evident: despite front-loaded SG&A, Operating margin improved, suggesting economies of scale are emerging.
High Contract Liabilities and backlog supporting revenue recognition: Contract Liabilities ¥691.2B (YoY -6.8%) remain elevated, roughly 10% of the full year revenue plan ¥7,000B, and will underpin revenue recognition into Q2 onward. Q1 progress ratio 24.7% is standard; if Contract Liability consumption pace is maintained, the probability of meeting the full year plan is high. No disclosure was made of order backlog typically monitored for manufacturers, but Contract Liabilities function as a proxy for future revenue.
Room to improve cash conversion and inventory efficiency: Operating CF / Net Income 0.84x and OCF/EBITDA 0.55x show temporary weakness in cash conversion, mainly due to timing of tax payments ¥129.8B (prior year ¥44.7B). Operating CF subtotal (before working capital changes) was ¥284.1B, or 1.46x Net Income, indicating healthy cash generation excluding working capital timing. Long Inventory Days at 126 days reflect project-type operations, and improvements in project management and maximizing Contract Liability prepayment effects could enhance working capital efficiency. Tax smoothing in Q2 onward is expected to improve OCF/EBITDA and enhance cash margins (OCF / Revenue), which will be a key next evaluation metric.
This report is an AI-generated financial analysis document based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.