| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥593.4B | ¥570.0B | +4.1% |
| Operating Income / Operating Profit | ¥94.4B | ¥99.9B | -5.4% |
| Ordinary Income | ¥100.6B | ¥106.2B | -5.2% |
| Net Income / Net Profit | ¥56.4B | ¥67.1B | -16.0% |
| ROE | 8.4% | 10.4% | - |
For the fiscal year ended March 2026, Revenue was ¥593.4B (¥+23.3B YoY +4.1%), Operating Income was ¥94.4B (¥-5.4B YoY -5.4%), Ordinary Income was ¥100.6B (¥-5.5B YoY -5.2%), and Net Income attributable to owners of the parent was ¥56.4B (¥-10.7B YoY -16.0%). Despite revenue growth, Operating Income declined as SG&A increased to ¥131.8B (¥+13.7B YoY +11.6%), outpacing sales growth and compressing the Operating Margin to 15.9% (prior year 17.5%, -1.6pt). Gross margin remained largely unchanged at 38.1% (prior year 38.2%). Non-operating income (dividends received ¥4.2B, rental income ¥1.8B, etc.) supported Ordinary Income. The larger decline in Net Income reflects the disappearance of prior-year special gains of ¥10.2B (current year ¥1.1B) and a relatively higher tax burden. Comprehensive Income rose significantly to ¥108.0B (+32.9% YoY), with valuation gains on investment securities of ¥37.1B boosting Equity.
Revenue of ¥593.4B (+4.1%) grew on contributions from both the Japan segment ¥513.3B (+3.1%) and the Asia segment ¥80.9B (+10.9%). In Japan, the core Air Conditioning Equipment Manufacturing & Sales business accounted for ¥537.1B (+4.1%), driven by refurbishment demand in non-residential construction and energy-efficiency investments. Building management and related businesses remained steady at ¥56.3B (+4.1%). Asia benefited from a recovery in the Chinese market. By region: Domestic sales ¥506.6B (+3.1%), China ¥80.1B (+10.6%), Other Asia ¥6.0B (+11.2%). Cost of sales was ¥367.2B (+4.3%), raising the cost-to-sales ratio slightly to 61.9% (prior year 61.8%), leaving Gross Margin at 38.1% (a minor decline of -0.1pt YoY).
On the profit side, the increase in SG&A to ¥131.8B (+11.6%) was the main cause of the decline in Operating Income, with the SG&A ratio rising to 22.2% (prior year 20.7%, +1.5pt). Goodwill amortization of ¥1.4B was unchanged YoY, while higher personnel costs, promotional expenses, and digital investments drove SG&A up. As a result, Operating Income was ¥94.4B (-5.4%) with an Operating Margin of 15.9% (-1.6pt). Non-operating income included dividends received ¥4.2B (prior year ¥3.5B), equity-method investment gains ¥0.8B (prior year ¥1.7B), and rental income ¥1.8B (prior year ¥1.7B), bringing non-operating income to ¥8.7B (prior year ¥8.0B). Non-operating expenses totaled ¥2.5B (prior year ¥1.7B), including interest expense ¥0.4B, resulting in Ordinary Income of ¥100.6B (-5.2%). Special gains totaled ¥1.1B (investment securities sale gains ¥5.3B, fixed asset sale gains ¥0.8B, etc.; prior year ¥10.2B) and special losses totaled ¥1.9B (fixed asset retirement loss ¥1.9B; prior year ¥1.5B), sharply reducing one-off net contribution versus the prior year. Profit before tax was ¥99.8B (prior year ¥114.8B, -13.1%); after deducting income taxes of ¥30.6B (effective tax rate 30.7%) and minority interests of ¥1.0B, Net Income attributable to owners of the parent was ¥56.4B (-16.0%), lowering Net Margin to 9.5% (prior year 11.8%, -2.3pt). In conclusion, the company experienced revenue growth but profit contraction.
The Japan segment recorded Revenue ¥513.3B (+3.1%), Operating Income ¥95.3B (-6.8%), and an Operating Margin of 18.6%, representing effectively the entire company’s Operating Income and serving as the core business. Despite steady sales growth, higher SG&A led to lower profits. The Asia segment posted Revenue ¥80.9B (+10.9%) and an Operating Loss of ¥1.2B (prior year -¥2.8B, a 59.0% improvement in loss size), narrowing the deficit. While Asia is expanding in scale, it has yet to achieve full profitability, with an Operating Margin of -1.4%, creating a significant profitability gap versus the Japan segment. Inter-segment profit adjustments were minor at ¥0.3B.
Profitability: Operating Margin 15.9% (prior year 17.5%, -1.6pt), Net Margin 9.5% (prior year 11.8%, -2.3pt), Gross Margin 38.1% (prior year 38.2%, -0.1pt); rising SG&A ratio pressured profitability. ROE was 8.4%, down from 12.8% in the prior year, due to both increased Equity (valuation gains) and lower Net Income.
Cash quality: Operating Cash Flow (OCF) was ¥80.1B, 1.17x Net Income of ¥68.3B (consolidated basis), indicating solid cash backing of earnings. The OCF/EBITDA ratio was 0.71x (EBITDA ¥112.8B = Operating Income ¥94.4B + Depreciation ¥18.4B), below the 1.0x benchmark, indicating room to improve cash conversion. Days Sales Outstanding (DSO) was long at 128 days (Receivables ¥207.6B ÷ Annual Revenue ¥593.4B × 365), and the extended collection cycle depressed cash generation.
Investment efficiency: Total Asset Turnover was 0.64x (Revenue ¥593.4B ÷ Total Assets ¥932.9B), down from 0.67x prior year. Increases in tangible fixed assets (¥250.8B, ¥+43.0B YoY +20.7%) and investment securities (¥186.4B, ¥+54.2B YoY +41.1%) temporarily diluted asset efficiency. Capital expenditures were ¥62.4B, 3.4x depreciation ¥18.4B, indicating an aggressive investment phase.
Financial soundness: Equity Ratio was 71.7% (prior year 75.6%), remaining high. Current Ratio 348.6% and Quick Ratio 341.8% indicate solid short-term liquidity. Cash and deposits were ¥174.2B versus short-term borrowings of ¥9.0B, yielding a Cash/Short-term Liabilities ratio of 19.4x, a very strong liquidity cushion. Interest-bearing debt totaled ¥80.8B (short-term borrowings ¥9.0B, long-term borrowings ¥11.8B, convertible bond-type bonds with warrants ¥60.0B), Debt/EBITDA was 0.72x, and Interest Coverage was 242x (EBIT ¥94.4B ÷ Interest Expense ¥0.4B), indicating negligible interest burden.
Operating Cash Flow was ¥80.1B (+39.5% YoY), generated from Pre-tax Income before adjustments ¥114.8B (subtotal basis) after changes in working capital and income tax payments of ¥38.8B. In working capital, Inventories decreased ¥9.5B (prior year increase ¥3.7B), contributing cash, while Accounts Receivable increased ¥1.9B (prior year decrease ¥7.3B) and Accounts Payable decreased ¥8.2B (prior year decrease ¥37.6B), which were cash outflows. Investing Cash Flow was -¥37.7B, driven primarily by Capital Expenditures of -¥62.4B (prior year -¥30.5B), and intangible asset acquisitions -¥5.8B (software, etc.), reflecting proactive investments to expand domestic production capacity. Offsetting inflows included redemption of securities ¥15.7B (prior year ¥20.0B) and fixed asset sales ¥0.8B. Financing Cash Flow was -¥25.0B, with share buybacks of -¥49.3B (prior year -¥47.2B) and dividend payments of -¥36.7B (prior year -¥30.7B) as the main outflows. Net borrowings were essentially flat, with a net increase in short-term borrowings of ¥1.6B and repayments of long-term borrowings of -¥3.8B. Free Cash Flow (FCF) was positive at ¥42.4B (OCF ¥80.1B − Investing CF ¥37.7B), but FCF covered total shareholder returns of ¥85.9B (dividends plus buybacks) by roughly half, indicating shareholder returns were funded from available cash.
Core recurring earnings are centered on Operating Income ¥94.4B from Air Conditioning Equipment Manufacturing & Sales, complemented by stable non-operating income such as dividends received ¥4.2B and rental income ¥1.8B. Non-operating income ¥8.7B represents 1.5% of revenue and is modest, showing no excessive reliance. One-off items included Special Gains ¥1.1B (investment securities sale gains ¥5.3B, fixed asset sale gains ¥0.8B, and other adjustments) and Special Losses ¥1.9B (fixed asset retirement loss ¥1.9B), yielding a net minor negative contribution of -¥0.8B. Prior-year Special Gains of ¥10.2B were not repeated, contributing to the YoY decline in Net Income. The gap between Ordinary Income ¥100.6B and Net Income attributable to owners of the parent ¥56.4B is explained by tax expense ¥30.6B and minority interests ¥1.0B, and is consistent. From an accrual perspective, OCF being 1.17x Net Income indicates good cash support for earnings, but the OCF/EBITDA ratio of 0.71x points to weak cash conversion efficiency, largely attributable to the prolonged DSO of 128 days. Comprehensive Income ¥108.0B substantially exceeded Net Income ¥68.3B, with Other Comprehensive Income ¥38.7B (investment securities valuation differences ¥37.1B, foreign currency translation adjustments ¥2.4B, etc.) boosting Equity.
Full Year guidance is Revenue ¥630.0B (+6.2% YoY), Operating Income ¥100.0B (+5.9%), Ordinary Income ¥106.0B (+5.3%), and Net Income attributable to owners of the parent ¥72.0B (based on FY EPS projection ¥107.23). Compared with current results, achievement rates are: Revenue 94.2%, Operating Income 94.4%, Ordinary Income 94.9%, indicating slight shortfalls. The shortfall in Operating Income was mainly due to an elevated SG&A ratio and continued losses in the Asia segment. However, if capital expenditures ramp up production toward year-end and Asia profitability improves, there remains scope to revert toward the full-year plan.
Dividends were ¥20 at the end of Q2 and a year-end forecast of ¥30, totaling ¥50 for the year (Payout Ratio 53.1%, DOE below 0.10%). A 1:3 stock split was implemented on December 1, 2024, and the prior-year annual dividend adjusted for the split was also ¥50, maintaining the same level. The Payout Ratio of 53.1% is sustainable, and OCF ¥80.1B sufficiently covers the annual dividend total ¥36.1B (¥50 × 68,543 thousand shares). Separately, share buybacks totaled ¥49.3B (prior year ¥47.2B), bringing total shareholder returns to approximately ¥85.9B. With FCF at ¥42.4B, total returns were about 2.0x FCF, supported by ample cash on hand (¥174.2B) and low leverage. Continued total returns will depend on FCF expansion in subsequent years, but the current financial position supports sustainability.
Dependence on Japan segment and domestic market volatility: The Japan segment accounts for 86.4% of Revenue and effectively 100% of Operating Income, making performance highly correlated with domestic construction investment and non-residential refurbishment demand. The rising SG&A ratio (22.2%, +1.5pt YoY) is compressing Operating Margin; balancing price pass-through with cost control is urgent. Maturation of domestic operations and a potential peak-out in the construction cycle are concerns.
Deterioration in cash conversion efficiency: OCF/EBITDA 0.71x and DSO 128 days indicate a lengthening cash conversion cycle. Increases in Receivables (¥207.6B, ¥+15.2B YoY) and decreases in Payables (¥63.1B, ¥-3.6B YoY) are raising working capital needs, constraining OCF growth. Delays in improving order, construction, and collection processes could constrain investment funding and financial flexibility.
Delay in Asia profitability and market risk in investment securities: While the Asia segment grew Revenue +10.9%, an Operating Loss of ¥1.2B persists and the timing of a switch to profitability is unclear. Investment securities ¥186.4B (20.0% of Total Assets) posted valuation gains of ¥37.1B, but market declines could produce valuation losses and increase deferred tax liabilities (¥35.9B, +17.6% YoY), raising Equity volatility. Approximately 34% of Comprehensive Income ¥108.0B derived from valuation differences, highlighting vulnerability of the capital structure to valuation swings.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 15.9% | 7.8% (4.6%–12.3%) | +8.2pt |
| Net Margin | 9.5% | 5.2% (2.3%–8.2%) | +4.3pt |
Profitability ranks above peers, with Operating Margin and Net Margin substantially exceeding industry median.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.1% | 3.7% (-0.4%–9.3%) | +0.4pt |
Revenue growth slightly outpaced the industry median, indicating steady expansion in a mature market.
※Source: Company compilation
Structural drivers of rising SG&A ratio and declining Operating Margin: SG&A ¥131.8B (+11.6%) far outpaced Revenue growth of +4.1%, reducing Operating Margin to 15.9% (prior year 17.5%, -1.6pt). Increases in payroll, promotional spending, and digital investments are key drivers; progress on price adjustments and cost controls will be critical to restore profitability. While Operating Margin remains well above the industry median of 7.8%, the downward trend versus historical levels requires measures to curb SG&A growth.
Aggressive investment as foundation for medium-term growth: Capital Expenditures ¥62.4B (3.4x depreciation ¥18.4B) and intangible investments ¥5.8B were made to expand domestic production capacity and improve operational efficiency. Tangible fixed assets rose to ¥250.8B (¥+43.0B YoY +20.7%), which should support capacity expansion and yield improvements in coming periods. In the short term, asset efficiency has been diluted (Total Asset Turnover 0.64x), but the new assets’ commissioning and revenue growth could drive medium-term improvement. Asia’s narrowing losses (-¥2.8B → -¥1.2B) suggest that scale expansion coupled with profitability is a medium-term growth driver.
Robust financial base and sustainability of shareholder returns: Equity Ratio 71.7%, cash ¥174.2B, Debt/EBITDA 0.72x reflect a conservative financial profile, enabling dividends (Payout Ratio 53.1%) and share buybacks ¥49.3B for total returns of ¥85.9B. Although total returns were approximately 2.0x FCF, abundant cash reserves support these actions. Comprehensive Income ¥108.0B (≈+58.3% relative to Net Income) was driven by investment securities valuation gains ¥37.1B, which bolstered Equity but also increases volatility risk from market swings and higher deferred tax liabilities (¥35.9B, +17.6% YoY), which warrants attention.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; consult professionals as necessary.