| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥389.7B | ¥363.4B | +7.2% |
| Operating Income | ¥19.1B | ¥22.2B | -14.1% |
| Ordinary Income | ¥21.0B | ¥22.6B | -7.2% |
| Net Income | ¥3.3B | ¥14.1B | -76.7% |
| ROE | 0.9% | 4.0% | - |
For the fiscal year ended March 2026, Revenue increased to ¥389.7B (YoY +¥26.3B, +7.2%), while Operating Income declined to ¥19.1B (YoY -¥3.1B, -14.1%), Ordinary Income to ¥21.0B (YoY -¥1.6B, -7.2%), and Net Income to ¥3.3B (YoY -¥10.8B, -76.7%), showing stepwise profit deterioration. Revenue maintained a third consecutive year of growth. Non-operating income (foreign exchange gains ¥1.2B, dividend income ¥0.8B) supported Ordinary Income, but the recording of Special Losses ¥7.9B (impairment losses ¥3.8B, loss on disposal of fixed assets ¥1.9B) heavily depressed Net Income. Operating margin worsened by 1.2pt to 4.9% (prior year 6.1%). Gross margin at 38.8% remained roughly flat year-on-year, but SG&A increased to ¥132.0B (+¥3.8B) and operating leverage did not work. By segment, the Home Appliances segment maintained profitability with Revenue ¥297.9B (+3.5%) and Operating Income ¥18.5B (margin 6.2%), while Industrial Equipment posted strong Revenue growth to ¥68.8B (+24.0%) but an expanded operating loss of -¥5.4B. IT-related achieved high profitability with Revenue ¥34.6B (+12.9%) and Operating Income ¥5.4B (+33.9%).
[Revenue] The Revenue increase to ¥389.7B (+7.2%) was driven by growth across all major segments: Home Appliances (+3.5%), Industrial Equipment (+24.0%), and IT-related (+12.9%). Home Appliances accounts for the largest share at 76.5% of sales composition (before inter-segment eliminations), with regional variation: North America +13.3%, Europe -1.7%, Other -9.3%; recovery in Japan (+13.5%) and expansion in North America were driving forces. Industrial Equipment posted a substantial YoY increase of +24.0%, indicating topline recovery, but profitability deteriorated into larger losses. IT-related sustained stable growth at +12.9% with high profit contribution. By region, Revenue was Japan ¥98.8B (+12.3%), North America ¥119.2B (+13.1%), Europe ¥91.5B (-1.4%), Other ¥80.2B (+3.9%), led by Japan and North America while Europe was somewhat soft.
[Profit and Loss] Gross profit was ¥151.1B (YoY +¥0.7B), a marginal increase, and gross margin fell 2.6pt to 38.8% (prior year 41.4%). SG&A rose to ¥132.0B (YoY +¥3.8B, +3.0%), and as a percentage of Revenue improved slightly to 33.9% (prior year 35.3%), but failed to absorb the decline in gross profit, resulting in Operating Income down to ¥19.1B (-14.1%). Non-operating income totaled ¥3.5B, mainly foreign exchange gains ¥1.2B and dividend income ¥0.8B, offset by non-operating expenses ¥1.6B (interest expense ¥0.4B, foreign exchange loss ¥0.7B, etc.), yielding Ordinary Income of ¥21.0B (-7.2%). Special Losses of ¥7.9B were largely impairment losses ¥3.8B and loss on disposal of fixed assets ¥1.9B, which reduced Net Income by ¥5.9B. Income taxes were ¥7.2B, implying an effective tax rate of about 52%, representing a heavy tax burden against pre-tax income of ¥13.7B. Excluding Net Income attributable to non-controlling interests of ¥0.6B, Net Income attributable to owners of the parent was ¥3.3B, a substantial YoY decline of -76.7%. By segment, Home Appliances Operating Income was ¥18.5B (-14.1%), Industrial Equipment -¥5.4B (widening deficit -28.4%), and IT-related ¥5.4B (+33.9%); the Industrial Equipment deficit materially damaged consolidated profits. In conclusion, despite Revenue growth, operating profit declined and Special Losses together with high tax burden led to a large decrease in Net Income.
Home Appliances: Revenue ¥297.9B (+3.5%), Operating Income ¥18.5B (-14.1%), margin 6.2% (down 1.3pt from 7.5% prior year), indicating deterioration in profitability despite being the core business. Industrial Equipment: Revenue ¥68.8B (+24.0%) achieved strong top-line growth, but Operating Loss -¥5.4B (widened from -¥4.2B prior year), margin -7.9%, posing major profitability challenges. IT-related: Revenue ¥34.6B (+12.9%), Operating Income ¥5.4B (+33.9%), margin 15.5% (improved 2.4pt from 13.1% prior year), maintaining high profitability and strong contribution to companywide profits. Other (real estate leasing, etc.): Revenue ¥2.1B (-24.3%), Operating Income ¥0.6B (-29.5%), margin 28.8%; small scale but high margin. The contrast between high-profit IT-related and expanding loss in Industrial Equipment is clear; turning Industrial Equipment profitable is the top priority to improve consolidated operating margin.
[Profitability] Operating margin deteriorated to 4.9% (down 1.2pt from 6.1% prior year), gross profit margin 38.8% (down 2.6pt from 41.4%), SG&A ratio 33.9% (improved 1.4pt from 35.3%); the drop in gross margin pressured operating margin. ROE declined significantly to 0.9% (down 4.3pt from 5.2% prior year), mainly due to sharp fall in Net Income margin to 0.8% (prior year 3.9%). The decline in Net Income margin was caused by Special Losses ¥7.9B and a high effective tax rate of about 52%, combining deteriorating recurring earnings and one-off factors. EBITDA was ¥28.1B (EBITDA margin 7.2%), representing Operating Income ¥19.1B plus depreciation ¥9.0B.
[Cash Quality] Operating Cash Flow / Net Income ratio is 5.40x, indicating strong cash backing of profit. Operating CF / EBITDA ratio is 0.63x, somewhat low, as working capital increases (Inventory +¥6.2B, Trade receivables +¥6.2B) restrained cash conversion. Accrual ratio is -1.4% (= change in working capital -¥3.8B / Total assets ¥506.2B), low, indicating generally healthy earnings quality.
[Investment Efficiency] Total asset turnover is 0.77x (= Revenue ¥389.7B / Total assets ¥506.2B), Inventory turnover is 3.66x (= COGS ¥238.6B / Inventory ¥65.2B), indicating somewhat low inventory efficiency. Receivables turnover is 4.77x (= Revenue ¥389.7B / Trade receivables ¥81.6B), DSO about 76 days, DIO about 100 days, and CCC about 225 days, indicating room to improve working capital efficiency. CapEx / Depreciation ratio is 0.44x (= CapEx ¥4.0B / Depreciation ¥9.0B), low and below replacement investment levels.
[Financial Soundness] Equity Ratio is 70.4% (down 1.0pt from 71.4% prior year), remaining high. Current Ratio is 343.9% (= Current assets ¥290.7B / Current liabilities ¥84.5B), and Quick Ratio 266.7%, indicating very strong liquidity. Debt/EBITDA is 0.95x (= short-term borrowings ¥26.7B / EBITDA ¥28.1B), low, and Interest Coverage (EBITDA / interest paid) is 70.3x, indicating very high ability to service interest. Interest-bearing debt consists only of short-term borrowings ¥26.7B with no long-term borrowings, implying high refinancing concentration and interest rate exposure. Cash and deposits are ¥86.1B, and Cash / Short-term borrowings ratio is 3.23x, providing a thick cushion.
Operating CF decreased to ¥17.8B (prior year ¥26.3B, -32.2%), but is 5.40x Net Income ¥3.3B, indicating strong cash backing of profits. Operating CF subtotal (before working capital changes) was ¥24.8B, supported by non-cash charges such as depreciation ¥9.0B and impairment losses ¥3.8B. In working capital, Inventory decreased by ¥6.2B (positive CF effect), while Trade receivables increased ¥6.2B and Accounts payable increased ¥3.0B, resulting in a net working capital drag of -¥3.8B on CF. Payments of corporate taxes totaled ¥7.7B, interest and dividend income received ¥1.1B, and interest paid ¥0.4B, culminating in Operating CF of ¥17.8B. Investing CF was a positive ¥1.7B: despite investments (CapEx -¥4.0B, intangible asset acquisitions -¥0.7B), proceeds from sales of tangible fixed assets ¥16.1B (prior year ¥8.7B) significantly exceeded outflows, boosting CF via asset sales. Free Cash Flow was ¥19.5B (= Operating CF ¥17.8B + Investing CF ¥1.7B), ample and sufficient to cover dividends ¥8.1B and share buybacks ¥14.1B. Financing CF was -¥14.2B, with main items being net increase in short-term borrowings ¥8.9B, dividend payments -¥8.1B (of which -¥0.2B to non-controlling interests), share buybacks -¥14.1B, and proceeds from disposal of treasury stock ¥2.0B. After adding foreign exchange effects +¥5.4B, cash increased by ¥10.7B from opening balance ¥71.0B to closing balance ¥81.5B. Operating CF / EBITDA ratio of 0.63x reflects working capital stagnation and one-off factors; if inventory and receivables efficiency improve, cash generation should strengthen.
Recurring income centered on Operating Income ¥19.1B, with non-operating income ¥3.5B (dividend income ¥0.8B, foreign exchange gains ¥1.2B, etc.) supporting results. The ratio of non-operating income to Revenue is limited at 0.9%, so dependency on core operations is high. One-off Special Losses of ¥7.9B (impairment losses ¥3.8B, loss on disposal of fixed assets ¥1.9B, other ¥2.2B) were recorded and reduced Net Income by ¥5.9B. Special Gains were ¥0.6B (gain on sale of investment securities ¥0.1B, gain on sale of fixed assets ¥0.5B) and small; net special items resulted in a loss of ¥7.3B. The gap between Ordinary Income ¥21.0B and Net Income ¥3.3B is largely due to Special Losses ¥7.9B and income taxes ¥7.2B (effective tax rate about 52%), with high tax burden significantly pressuring Net Income. Accrual ratio at -1.4% and Operating CF / Net Income ratio 5.40x indicate generally healthy earnings quality. Conversely, Operating CF / EBITDA ratio 0.63x shows working capital stagnation (trade receivables +¥6.2B, inventory cash conversion +¥6.2B, accounts payable +¥3.0B) limiting cash conversion; improving inventory efficiency and receivables collection is key to enhancing earnings quality. Comprehensive income was ¥24.3B (of which attributable to owners of the parent ¥23.1B), well above Net Income ¥3.3B, driven by positive foreign currency translation adjustments ¥18.1B, valuation differences on securities ¥0.4B, and actuarial differences on retirement benefits ¥0.1B. Although one-off losses heavily depressed Net Income this term, recovery of recurring earnings and elimination of one-off losses suggest Net Income normalization in the next fiscal year.
The company plan for the full year projects Revenue ¥420.0B (YoY +7.8%), Operating Income ¥30.0B (YoY +57.0%), Ordinary Income ¥30.0B (YoY +43.0%), and Net Income attributable to owners of the parent ¥20.0B (substantial increase versus first half results ¥3.3B), EPS ¥117.44, and dividend ¥20. Progress against first half results: Revenue 92.8% (¥389.7B / ¥420.0B), Operating Income 63.7% (¥19.1B / ¥30.0B), Ordinary Income 69.9% (¥21.0B / ¥30.0B); Revenue is generally on track but profit assumptions require significant profit growth in the second half. Net Income projects ¥20.0B for the full year versus ¥3.3B in the first half, implying ¥16.7B of Net Income in the second half, a bullish plan. Achievement depends on improving Industrial Equipment profitability (substantial reduction of first-half deficit of -¥5.4B in second half), SG&A efficiency, elimination of Special Losses, and working capital compression to generate cash. Continued high profitability in IT-related and price/mix improvement in Home Appliances are important drivers. The projected dividend ¥20 is below the midterm actual dividend of ¥55 (interim ¥20 + year-end ¥35), suggesting dividend adjustment over the full year.
Dividends were interim ¥20 and year-end ¥35, totaling ¥55 for the year (a large increase from prior year ¥15), with total dividend payments of ¥9.7B based on a weighted average shares outstanding of 17,679 thousand. Payout ratio is published at 40.5% (= dividends ¥9.7B / consolidated distributable profit), but the ratio of total dividends to Net Income attributable to owners of the parent ¥3.3B is approximately 300% by calculation, implying a high level relative to profit. Share buybacks of ¥14.1B were executed, and total shareholder return (dividends ¥8.1B + share buybacks ¥14.1B) was ¥22.2B, slightly exceeding Free Cash Flow ¥19.5B, indicating an aggressive return stance. The combined total return ratio (total return to Net Income) is over 670% by calculation, extremely high, reflecting continuation of active returns despite profit decline due to Special Losses. Regarding dividend sustainability, Free Cash Flow ¥19.5B sufficiently covers dividends ¥8.1B and the cash/deposits cushion ¥86.1B is ample, so short-term dividend capacity is not an issue. However, to align with profit levels, recovery of Net Income next year (company plan ¥20.0B) is a prerequisite, and dividend policy stability depends on progress in profit recovery. Treasury stock at year-end stood at -¥16.0B (large increase from prior year -¥2.0B), slightly reducing capital flexibility, but Equity Ratio of 70.4% indicates ample financial capacity.
Continued deficit risk in Industrial Equipment segment: Despite Revenue ¥68.8B (+24.0%), Industrial Equipment incurred an operating loss of -¥5.4B (widened -28.4%), with margin -7.9% and significant deterioration in profitability. The deficit likely stems from insufficient fixed-cost absorption, price competition, and adverse product mix; delays in returning to profitability could continue to pressure consolidated earnings. Achievement of company plan (Operating Income ¥30.0B) assumes a turnaround in Industrial Equipment profitability; order trends and market conditions could delay improvement in the second half, risking missed full-year profit targets.
Working capital efficiency deterioration and funding efficiency risk: Inventory ¥65.2B (DIO about 100 days), Trade receivables ¥81.6B (DSO about 76 days), Accounts payable ¥20.2B (DPO about 31 days) result in CCC about 225 days, indicating lengthening. Inventory stagnation carries obsolescence and markdown risks; delays in receivables collection pressure cash flow. Operating CF / EBITDA ratio of 0.63x shows low cash conversion efficiency; without working capital compression, ROIC will remain depressed (current ROIC 3.2%). Failure to reduce inventory and strengthen receivables collection could materialize as weakened cash generation and deteriorating capital efficiency.
Refinancing risk and interest sensitivity: Interest-bearing debt consists only of short-term borrowings ¥26.7B, with no long-term borrowings. The concentration in short-term borrowings exposes the company to higher interest burden in rising rate environments and refinancing risk in deteriorating credit conditions. Although Interest Coverage is 70.3x and currently ample, concentration of short-term debt is a financial vulnerability; shifting to long-term borrowings or reducing interest-bearing debt is desirable. Cash ¥86.1B well exceeds short-term borrowings ¥26.7B, limiting short-term risk, but ongoing delays in working capital compression or weakening cash generation could increase short-term borrowing dependence.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.9% | 7.8% (4.6%–12.3%) | -2.8pt |
| Net Income Margin | 0.8% | 5.2% (2.3%–8.2%) | -4.3pt |
Both Operating Margin and Net Income Margin are below industry medians, placing profitability in the lower peer group.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 7.2% | 3.7% (-0.4%–9.3%) | +3.5pt |
Revenue growth outperformed the industry median by 3.5pt, placing top-line expansion at an upper peer level.
※ Source: Company aggregation
The standout feature this term is Revenue growth accompanied by operating profit decline and a large drop in Net Income due to Special Losses. Operating margin 4.9% (down 1.2pt from 6.1%) is 2.8pt below the industry median of 7.8%, with Industrial Equipment loss of -¥5.4B dragging down consolidated earnings. Conversely, Revenue growth +7.2% exceeded the industry median +3.7%, indicating relatively strong top-line expansion. The key focus for next year is the feasibility of the company plan (Operating Income ¥30.0B, +57.0%), which presumes Industrial Equipment profit reversal, SG&A efficiency, and elimination of Special Losses. Financial condition is robust with Equity Ratio 70.4%, Debt/EBITDA 0.95x, and Current Ratio 343.9%, limiting short-term financial risk; however, concentration in short-term borrowings (100% of interest-bearing debt) and high tax rate (effective tax rate about 52%) are structural issues.
On cash flow, Operating CF ¥17.8B and Free Cash Flow ¥19.5B are ample and can cover dividends ¥8.1B and share buybacks ¥14.1B. However, Operating CF / EBITDA ratio 0.63x and deteriorating working capital efficiency (CCC about 225 days) suppress cash conversion, so inventory compression and receivables collection are key to improving capital efficiency. ROIC 3.2% and ROE 0.9% indicate low capital efficiency; without Industrial Equipment profitability recovery and working capital normalization, sustained return improvement will be difficult. Payout ratio is high relative to profit, and next year’s Net Income recovery (company plan ¥20.0B) underpins dividend sustainability. IT-related high profitability (margin 15.5%) and Home Appliances brand strength are relative advantages, but the pace of Industrial Equipment profitability correction and working capital improvements will be the watershed for future shareholder value creation.
This report was generated by AI analyzing XBRL financial statement data to produce an automated financial analysis. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are company-compiled reference information based on publicly available financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.