| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥1282.0B | ¥1191.5B | +7.6% |
| Operating Income | ¥184.6B | ¥157.3B | +17.4% |
| Ordinary Income | ¥187.9B | ¥159.4B | +17.9% |
| Net Income | ¥130.0B | ¥99.9B | +30.1% |
| ROE | 13.1% | 12.5% | - |
For the fiscal year ended March 2026, the company achieved revenue of ¥1,282B (YoY +¥90.5B, +7.6%), Operating Income of ¥184.6B (YoY +¥27.3B, +17.4%), Ordinary Income of ¥187.9B (YoY +¥28.5B, +17.9%), and Net Income attributable to owners of the parent of ¥130.0B (YoY +¥30.1B, +30.1%), delivering both top-line and bottom-line growth. Gross margin improved to 28.8% (prior year 26.7%), up +2.1pt, and Operating Margin expanded to 14.4% (prior year 13.2%), up +1.2pt. By segment, Motion Machine contributed the most with Operating Income of ¥68.6B (+41.6%), while Clean Transport System delivered high profitability with a 17.1% margin, supporting overall margin expansion. ROE was a healthy 13.1%, and the Equity Ratio was strong at 62.3%, indicating high financial soundness. Operating Cash Flow (OCF) was positive at ¥129.1B (+13.5%), but due to buildup in accounts receivable and work in progress, the OCF/Net Income ratio was 0.89x, somewhat low, highlighting the need to improve working capital efficiency.
[Revenue] Revenue of ¥1,282B represents a YoY increase of +7.6%. By segment, Motion Machine led growth with ¥509.9B (+17.2%). That segment achieved double-digit growth supported by expanding industrial machinery and automation demand, raising its sales composition to 39.8%. Clean Transport System reached ¥280.3B (+11.5%), also achieving double-digit revenue growth driven by steady demand for transport systems for semiconductors and FPDs, securing a 21.9% sales share and solidifying its position as a core business. Engineering And Service was ¥299.0B (+1.5%) with modest increase, and Power Electronics Machine was ¥263.0B (-4.7%) showing a YoY decline. Overall, the company sustained revenue growth supported by an improved segment mix.
[Profitability] Cost of sales totaled ¥912.4B producing gross profit of ¥369.6B (gross margin 28.8%), with a +2.1pt gross margin improvement as the primary driver of stronger profitability. Price pass-through, higher share of high-margin segments, and production efficiency gains contributed. SG&A was ¥184.9B (SG&A ratio 14.4%), up +0.9pt YoY due to headcount increases, R&D, and intensified sales activities; however, gross margin improvement more than offset this, resulting in Operating Income of ¥184.6B (Operating Margin 14.4%), a +1.2pt YoY expansion. Non-operating income was ¥7.7B (including interest and dividend income of ¥4.9B) and non-operating expenses were ¥4.4B (including interest expense of ¥1.9B), for a small net non-operating gain of +¥3.3B, indicating earnings growth was driven by core operations. Ordinary Income was ¥187.9B (+17.9%); after Extraordinary Income of ¥9.2B (gain on sale of investment securities) and Extraordinary Losses of ¥3.2B, Pre-tax Income was ¥193.9B. After income taxes of ¥48.9B (effective tax rate 25.2%), Net Income was ¥130.0B (+30.1%). The net effect of extraordinary items was +¥6.0B, about 4.6% of Net Income, indicating limited reliance on one-off gains and that Ordinary Income is the main earnings driver. In conclusion, growth in high-margin segments and gross margin improvement led to both revenue and profit growth.
Clean Transport System recorded Revenue of ¥280.3B (+11.5%) and Operating Income of ¥48.0B (+19.2%), achieving the highest margin among segments at 17.1%. Growth in demand for semiconductor manufacturing and FPD transport systems contributed and the segment has a high profit contribution. Motion Machine posted Revenue of ¥509.9B (+17.2%) and Operating Income of ¥68.6B (+41.6%) with a margin of 13.5%, showing the largest growth in both revenue and profit among segments. Rising industrial machinery and automation demand underpin this performance; the segment is the largest by revenue and profit and is central to company earnings. Engineering And Service had Revenue of ¥299.0B (+1.5%) and Operating Income of ¥37.0B (+8.5%), margin 12.4%; despite modest revenue growth, margin improvement drove profit growth. Power Electronics Machine reported Revenue of ¥263.0B (-4.7%) and Operating Income of ¥32.8B (-3.6%), margin 12.5%; although revenue and profit declined, margin levels were maintained and the declines appear to reflect temporary demand adjustments. Overall, high-margin Clean Transport System and fast-growing Motion Machine drove an improved segment mix, contributing to the company-wide Operating Margin of 14.4%.
[Profitability] Operating Margin 14.4% (prior year 13.2%) and Net Margin 10.1% (prior year 8.4%) show clear YoY improvements. Gross Margin expanded to 28.8% (prior year 26.7%), up +2.1pt, driven by price pass-through and a higher share of high-margin segments. SG&A ratio rose to 14.4% (prior year 13.5%), up +0.9pt, but gross margin improvement absorbed this and operating leverage functioned. [Investment Efficiency] ROE 13.1% (prior year 12.5%) exceeded the company’s baseline, led by improved net margin. Total Asset Turnover was 0.81x (prior year 0.87x), slightly down due to inventory and accounts receivable buildup, while Financial Leverage was 1.60x (prior year 1.70x), indicating stronger equity base. [Cash Quality] Operating Cash Flow of ¥129.1B versus Net Income ¥130.0B yields an OCF/NI of 0.99x, essentially one-to-one, but working capital movements (accounts receivable -¥36.7B, inventories -¥4.5B cash outflow) delayed cash conversion. Free Cash Flow was ¥64.4B after capex of -¥73.0B, indicating the company can balance investment and shareholder returns. [Financial Soundness] Equity Ratio 62.3% (prior year 58.7%), Current Ratio 197.9% (prior year 201.3%), Debt/Equity 12.4% (prior year 17.9%) all indicate very high financial safety. Cash and deposits were ¥116.2B versus Interest-Bearing Debt of ¥122.0B (Long-term borrowings ¥88.1B + Short-term borrowings etc. ¥33.9B), making net interest-bearing debt minimal. Interest coverage was approximately 97.7x (Operating Income ¥184.6B / Interest expense ¥1.9B), showing ample capacity to service interest.
Operating Cash Flow was ¥129.1B (prior year ¥113.7B, +13.5%). Starting from Pre-tax Income ¥193.9B, non-cash items (Depreciation ¥32.4B, etc.) produced an operating subtotal of ¥181.3B. After working capital changes of -¥55.3B (Accounts receivable -¥36.7B, Inventories -¥4.5B, Contract liabilities +¥17.3B, etc.) and income tax payments -¥55.3B, the resulting OCF was ¥129.1B. OCF/Net Income was 0.99x, nearly matching Net Income, but increases in accounts receivable and work in progress delayed cash realization relative to profit growth. Investing Cash Flow was -¥64.7B, primarily capex of -¥73.0B (2.25x depreciation), partially offset by proceeds from sale of investment securities +¥11.5B. Free Cash Flow of ¥64.4B (OCF + Investing CF) declined from ¥93.8B in the prior year but still comfortably covered dividend payments of ¥32.4B. Financing Cash Flow was -¥56.5B, mainly due to long-term borrowings repayments -¥32.9B, reduction in short-term borrowings -¥4.0B, and dividend payments -¥32.4B. Cash and cash equivalents increased from ¥102.2B at the beginning of the period to ¥116.2B at the end, a +¥14.0B increase, preserving liquidity. Working capital increases (DSO 105 days, DIO 102 days, CCC 142 days deteriorated YoY) reflect order/delivery timing imbalances and buildup of WIP; improving turnover is key to medium-term enhancement of cash generation.
Earnings quality is driven by Ordinary Income; non-operating income of ¥7.7B (0.6% of revenue), comprised of interest and dividend income, represents low dependence. Extraordinary Income of ¥9.2B (gain on sale of investment securities) accounted for 7.1% of Net Income, indicating limited one-off contribution. Extraordinary Losses of ¥3.2B were also small, so the quality of recurring earnings remains intact. The accrual ratio (change in operating assets/liabilities / Net Income) is approximately 15% (Working capital increase ¥19.3B / Net Income ¥130.0B), somewhat high, indicating accounts receivable and WIP increases are creating timing differences between profit and cash. Comprehensive Income was ¥221.1B, ¥91.1B above Net Income ¥130.0B, contributed by Valuation difference on available-for-sale securities +¥35.4B, Remeasurements of defined benefit plans +¥35.4B, Foreign currency translation adjustments +¥5.4B, etc. The increase in unrealized gains on investment securities is valuation-based and does not directly affect the quality of Ordinary Income, but it deepens the layer of unrealized gains on the balance sheet and expands potential financial flexibility. The tax burden of 25.2% is within a normal range with no abnormal tax items observed. Overall, earnings are driven by recurring Ordinary Income with low dependency on one-offs, and earnings quality is good, though the short-term challenge is the cash conversion lag caused by working capital increases.
Full-year guidance forecasts Revenue ¥1,400B (YoY +9.2%), Operating Income ¥210B (+13.7%), Ordinary Income ¥210B (+11.7%), and Net Income attributable to owners of the parent ¥150B (+15.4% vs. prior year ¥130B), with EPS of ¥531.64. Progress against the half-year results implies year-to-date attainment rates of 91.6% for Revenue, 87.9% for Operating Income, 89.5% for Ordinary Income, and 86.7% for Net Income, indicating a slightly front-loaded plan for the second half. Continued demand from semiconductors and industrial machinery, and increased production capacity from enhanced capital expenditures are assumed to drive revenue and profit growth. If working capital reversal (order backlog digestion and WIP compression) progresses, the second half has considerable cash generation potential, and FCF improvement is expected. Dividend guidance is listed as ¥0, but given year-end actual dividend of ¥155, it appears the company will disclose next fiscal year’s dividend policy later.
A year-end dividend of ¥155 was paid, resulting in an annual payout ratio of 31.8% (Total dividends ¥3.26B / Net Income ¥130.0B; share buybacks ¥0, so Total Return Ratio also 31.8%), which is within a sustainable range. With Free Cash Flow of ¥64.4B and dividends of ¥32.4B, coverage is 1.99x, indicating dividend funding stability. Net interest-bearing debt is minimal at ¥5.8B (Interest-bearing debt ¥122.0B - Cash ¥116.2B), leaving substantial capacity to continue dividends. Treasury stock purchases during the period were limited at ¥0.16B, so dividends remain the primary return channel. Next fiscal year’s dividend forecast is undisclosed, but maintaining a payout ratio of 31.8% and assuming profit growth would allow room for dividend increases. The balance between growth investment (capex ¥73.0B) and shareholder returns is sound, and retained earnings accumulation (Retained earnings +¥111.6B) strengthens the financial base for future dividend increases or additional investment.
Sensitivity to semiconductor and equipment investment cycles: Clean Transport System and Motion Machine, which occupy the top of the sales composition, serve semiconductor manufacturing equipment and industrial machinery markets. In adjustment phases of capital expenditure cycles, there is risk of rapid declines in orders and utilization. While Operating Margin of 14.4% is high, fixed cost burden (SG&A ¥184.9B) is significant, and in a revenue downturn operating leverage could reverse, causing substantial margin deterioration.
Deterioration in working capital efficiency and delayed cash conversion: DSO 105 days, DIO 102 days, CCC 142 days have worsened YoY, with notable buildup of Accounts Receivable ¥370.4B (28.9% of revenue) and Inventories ¥253.6B (19.8% of revenue, WIP ¥110.8B or 43.6% of inventories). If delivery delays, inspection/timing mismatches, or process bottlenecks persist, increased working capital burden could compress Free Cash Flow and constrain flexible investment and return capacity.
Valuation fluctuation risk of investment securities: Investment securities ¥188.3B (11.9% of total assets) increased by +¥47.4B YoY (+33.7%), and Valuation difference on available-for-sale securities +¥35.4B boosted Comprehensive Income. If equity markets or interest rates move adversely and valuation losses occur, shareholders’ equity could be pressured, potentially negatively impacting ROE and Equity Ratio.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 14.4% | 7.8% (4.6%–12.3%) | +6.7pt |
| Net Margin | 10.1% | 5.2% (2.3%–8.2%) | +4.9pt |
Profitability substantially exceeds the industry median, demonstrating the advantage of a high-margin business model.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 7.6% | 3.7% (-0.4%–9.3%) | +3.9pt |
Revenue growth also exceeds the median, confirming the company’s ability to capture growth in expanding demand.
※ Source: Company compilation
Balancing profitability and financial soundness: Operating Margin 14.4% is +6.7pt above the industry median, combined with ROE 13.1% and Equity Ratio 62.3%, indicating high-level balance between capital efficiency and safety. If the +2.1pt gross margin improvement proves sustainable, a mid-term upward trend in margins is expected.
Room to improve working capital management: DSO/DIO/CCC deterioration has constrained cash conversion (OCF/Net Income 0.99x, Free Cash Flow ¥64.4B). Compression of WIP ratio 43.6% and acceleration of accounts receivable collection could significantly improve cash generation and expand shareholder return capacity.
Capex and evolution of segment mix: Capacity increases from capex of ¥73.0B (2.25x depreciation) and continued expansion of high-margin Clean Transport System and rapidly growing Motion Machine could enable attainment of full-year guidance (Operating Income ¥210B) and mid-term margin improvement.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings release data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are compiled by the company based on public financial statements and are for reference only. Investment decisions should be made at your own responsibility, and, as necessary, after consulting a professional advisor.