| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| 売上高 | ¥629.8億 | ¥633.2億 | -0.5% |
| 営業利益 | ¥28.0億 | ¥38.1億 | -26.5% |
| 経常利益 | ¥31.7億 | ¥41.6億 | -23.8% |
| 純利益 | ¥24.7億 | ¥36.2億 | -31.9% |
| ROE | 3.5% | 5.4% | - |
For the cumulative Q2 of FY2026, revenue was ¥629.8B (YoY -¥3.3B -0.5%), Operating Income was ¥28.0B (YoY -¥10.1B -26.5%), Ordinary Income was ¥31.7B (YoY -¥9.9B -23.8%), and Net Income attributable to owners of the parent was ¥24.7B (YoY -¥11.5B -31.9%), indicating materially deteriorated profitability despite flat sales. Cost of goods sold ratio worsened by 1.1pt YoY to 57.9%, SG&A rose to 37.6% (+0.8pt YoY), and Operating Margin fell to 4.4% (prior 6.0%), down 1.6pt. By segment, the core Japan segment recorded revenue of ¥538.6B (-4.2%) and profit of ¥15.9B (from ¥25.6B, -37.9%), a large decline; North America also posted double-digit decline with revenue of ¥97.8B (-17.9%), while Vietnam maintained strength with revenue of ¥68.2B (+4.1%). In extraordinary items, gains on sale of investment securities of ¥6.8B were recorded but impairment losses of ¥4.6B also occurred, resulting in net profit declining by more than 30% YoY. ROE declined to 3.5% (prior 5.5%), primarily driven by margin deterioration.
[Revenue] Consolidated revenue was ¥629.8B (-0.5%), a slight decline. By segment, the Japan segment, responsible for domestic operations, declined to ¥538.6B (-4.2%) and accounts for 85.5% of total, with demand slowing in the core market. Overseas, North America fell substantially to ¥97.8B (-17.9%), and Europe contracted to ¥42.4B (-2.3%). Conversely, the manufacturing base in Vietnam grew to ¥68.2B (+4.1%), while Thailand was ¥110.1B (-1.8%). External customer sales were comprised of Japan ¥47.6B, North America ¥9.5B, Europe ¥4.2B; including intercompany sales among regions, total sales at each base show declining intra-segment sales in Japan. The sales mix is highly Japan-dependent, and weaker external demand in North America and Europe restrained overall growth.
[Profitability] Operating Income was ¥28.0B (-26.5%), a substantial decline. Gross margin was 42.1% (prior 43.0%), worsening by 0.9pt, with rising cost ratios pressuring profits. SG&A was ¥237.1B (+¥2.8B +1.2%) and increased despite lower sales, raising the SG&A ratio to 37.6% (prior 37.0%). By segment profit, Japan fell to ¥15.9B (prior ¥25.6B), about a 40% decline, and Thailand declined to ¥4.6B (prior ¥6.2B). North America turned profitable to ¥1.5B (prior -¥0.1B), and Europe also turned positive at ¥0.4B (prior -¥0.7B), indicating structural improvement. Non-operating income supported results with dividend income ¥2.3B and interest income ¥1.2B, while foreign exchange losses ¥1.5B (prior ¥1.7B) remained a headwind; Ordinary Income was ¥31.7B (-23.8%). Extraordinary items included gains on sale of investment securities ¥6.8B but also impairment losses ¥4.6B, limiting net effect. Effective tax rate was 27.1%, resulting in Net Income of ¥24.7B (-31.9%). In conclusion, the company recorded lower revenue and lower profits, not higher revenue with lower profits.
The Japan segment reported revenue ¥538.6B (-4.2%) and Operating Income ¥15.9B (prior ¥25.6B), a profit decline of -37.9% YoY. Segment margin fell to 3.0% (prior 4.6%), down 1.6pt, with notable domestic demand slowdown and margin pressure. North America posted revenue ¥97.8B (-17.9%) with Operating Income ¥1.5B (prior -¥0.1B), turning profitable and improving margin to 1.5%. Europe saw revenue of ¥42.4B (-2.3%) and Operating Income ¥0.4B (prior -¥0.7B), turning profitable with a 0.8% margin. Among manufacturing bases, Thailand recorded revenue ¥110.1B (-1.8%) and Operating Income ¥4.6B (margin 4.2%), and Vietnam posted revenue ¥68.2B (+4.1%) and Operating Income ¥3.3B (margin 4.8%), highlighting Vietnam’s growth and higher margins. Other segments (Australia & Singapore) had revenue ¥16.9B (+4.7%) and Operating Income ¥0.3B, modest but steady. Japan accounts for about 57% of consolidated profit (prior 74%), and earnings conversions to profitability at overseas sites slightly improved regional balance.
[Profitability] Operating Margin was 4.4% (prior 6.0%), down 1.6pt, primarily due to gross margin deterioration to 42.1% (prior 43.0%) and SG&A ratio increase to 37.6% (prior 37.0%). ROE was 3.5% (prior 5.5%), mainly driven by decline in Net Profit Margin to 3.9% (prior 5.7%). Return on Assets (ROA) fell to 4.0% (prior 5.4%), indicating broad slowdown in profitability. [Cash Quality] Operating Cash Flow / Net Income ratio was 0.88x, indicating reasonably steady cash conversion of earnings, but OCF/EBITDA was low at 0.56x, and cash generation including depreciation of ¥10.6B is weak. Working capital movements included Accounts Receivable increase -¥10.1B, Inventories decrease +¥6.6B, and Accounts Payable decrease -¥5.3B, with compressed collection and payables cycles restraining cash. Days Inventory Outstanding (DIO) is high at 167 days and Cash Conversion Cycle (CCC) is 215 days, indicating prolonged cash tied up. [Investment Efficiency] Total Asset Turnover was 0.788x (prior 0.822x) down, and Tangible Fixed Assets increased 33% to ¥109.8B (prior ¥82.3B). Capital expenditures were ¥34.2B, 3.2x depreciation of ¥10.6B, indicating an active investment phase. Construction in progress accounted for ¥26.8B (24% of tangible fixed assets), showing large-scale equipment rollouts underway. [Financial Soundness] Equity Ratio was 87.6% (prior 86.7%), very high; Current Ratio was 661%; D/E ratio was 0.14x, indicating solid balance-sheet safety. Cash and deposits were ¥236.0B and short-term investment securities ¥3.0B, totaling liquid resources of ¥239.0B.
Operating Cash Flow was ¥21.7B (prior ¥57.2B, -62.1%), a significant decline. From pre-tax profit of ¥33.9B, subtotal cash from operations including depreciation ¥10.6B amounted to ¥26.9B, but working capital changes—Accounts Receivable increase -¥10.1B, Inventories decrease +¥6.6B, Accounts Payable decrease -¥5.3B—contributed negatively, and corporate tax payments of ¥8.5B were deducted. OCF/Net Income at 0.88x is broadly consistent, but deterioration in working capital efficiency was the main driver of the YoY fall. Investing Cash Flow was -¥22.8B, driven mainly by capital expenditures -¥34.2B, while sales/redemptions of securities were +¥8.8B and purchases -¥5.1B, yielding net proceeds. Free Cash Flow was -¥1.1B, a small deficit, and combined with dividends of ¥21.3B there was an internal cash shortfall. Financing Cash Flow was -¥23.4B, mainly dividend payments -¥21.3B and lease liabilities repayments -¥2.2B. Cash and deposits fell from ¥253.0B at the beginning of the period to ¥235.9B at the end, net decrease of ¥15.1B including foreign exchange effects +¥9.4B. Liquidity remains ample at ¥239B, but the decline in OCF and negative FCF reflect an investment-heavy period; improving inventory turns and collection cycles will be key to cash generation.
Of Ordinary Income ¥31.7B, Operating Income ¥28.0B was from core operations, accounting for 88% of the total. Non-operating income ¥5.6B was mainly dividend income ¥2.3B and interest income ¥1.2B; dividend receipts are stable income from investment securities of ¥97.2B (mainly customer equity holdings). Non-operating expenses ¥1.9B include foreign exchange losses ¥1.5B, temporary fluctuations from foreign currency transactions. Extraordinary items net to +¥2.2B from gains on sale of investment securities ¥6.8B and impairment losses ¥4.6B, and are largely one-off. Non-operating income / Revenue ratio is 0.9%, below 5%, indicating low reliance on non-core income. Comprehensive income was ¥54.0B (prior ¥39.7B); alongside Net Income ¥24.7B, foreign currency translation adjustments ¥20.3B and valuation differences on available-for-sale securities ¥9.0B contributed, so Other Comprehensive Income was ¥29.3B (prior ¥3.5B), substantially higher. OCF/Net Income is 0.88x, indicating overall decent earnings quality, but low OCF/EBITDA at 0.56x with working capital constraints suppressing cash conversion. The accrual ratio (Net Income − OCF)/Total Assets is 0.4%, low, indicating limited divergence between accounting profit and cash. The difference between Ordinary Income ¥31.7B and Net Income ¥24.7B is consistent with tax burden ¥9.2B and net extraordinary items -¥2.2B.
Full-year guidance was left unchanged at Revenue ¥658.0B (+4.5%), Operating Income ¥40.0B (+42.7%), Ordinary Income ¥45.0B (+41.9%), Net Income ¥32.0B, and Dividend ¥50 (per share). Progress against the cumulative Q2 results is 95.7% for revenue, 70.0% for Operating Income, 70.5% for Ordinary Income, and 77.2% for Net Income. Operating and Ordinary Income progress exceed the standard 50% by 20ppt, suggesting either an assumed significant profit deterioration in H2 or that the plan is based on conservative assumptions. To achieve the full-year target, H2 must deliver incremental revenue of ¥28.2B (H2 vs H1 +4.5%), Operating Income ¥12.0B (H2 vs H1 -57.1%), and Ordinary Income ¥13.3B (H2 vs H1 -58.0%), implying H2 margins substantially below Q2 levels. Recovery in North America and Europe, improvement in Japan segment profitability, and gross margin improvement through inventory optimization are assumed; if current revenue decline and margin pressure persist, downside revision risk remains.
Annual dividend is ¥130 (interim ¥50, year-end ¥80), unchanged from prior year. Total dividends are ¥21.3B, representing a Payout Ratio of 86.2% relative to Net Income ¥24.7B, a high level. Prior year Net Income was ¥36.2B with total dividends ¥21.3B (Payout Ratio 58.8%); the current term’s sharp earnings decline has markedly increased the ratio. There were no share buybacks; shareholder returns are dividend-only. Free Cash Flow was -¥1.1B and dividend payments ¥21.3B were not covered by internally generated cash, effectively funded by drawing down cash of ¥239B on hand. Cash balances are ample and short-term dividend sustainability is not an immediate concern, but maintaining a high payout ratio without recovery in OCF would raise medium-to-long-term issues for capital efficiency and growth investment. The Payout Ratio of 86.2% is considered a temporary level during an investment phase, but if earnings recovery is delayed, dividend policy may need to be reexamined.
Domestic demand slowdown risk: The Japan segment accounts for 85.5% of consolidated revenue, and its segment profit declined to ¥15.9B (prior ¥25.6B), a -37.9% decline. The corporate structure ties company performance closely to domestic market demand, posing a significant downside risk in economic downturns or equipment investment restraint. Although regional diversification is progressing, domestic dependence remains high.
Inventory and working capital strain risk: With DIO at 167 days and CCC at 215 days, cash is tied up for extended periods, and OCF ¥21.7B (prior ¥57.2B) dropped significantly. Delays in inventory optimization raise the risk of impairments and obsolescence, reducing cash-generating ability. Slow improvements in working capital management could constrain allocation between growth investment and shareholder returns.
Recovery risk on large capital expenditures: Capital expenditures ¥34.2B (3.2x depreciation) and Construction in Progress ¥26.8B (24% of tangible fixed assets) indicate an active investment phase; ramp-up of operations and yield improvements are prerequisites for earnings recovery. Delays in commissioning or weaker demand could increase depreciation burden and reduce utilization rates, adding fixed-cost pressure and further eroding Operating Margin.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 営業利益率 | 4.4% | 7.8% (4.6%–12.3%) | -3.3pt |
| 純利益率 | 3.9% | 5.2% (2.3%–8.2%) | -1.3pt |
Both Operating Margin and Net Margin are below the industry median, placing profitability in the lower tier among manufacturers.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 売上高成長率（前年比） | -0.5% | 3.7% (-0.4%–9.3%) | -4.2pt |
Revenue growth rate trails the industry median by 4.2pt, reflecting domestic demand weakness and contraction in the North American market.
※Source: Company aggregation
Declining Japan segment margins and sharp revenue drop in North America are pressuring consolidated earnings; recovery in domestic demand and reconstruction of sales strategy in North America are key to near-term recovery. Operating Margin of 4.4% is down 1.6pt from 6.0% and 3.3pt below the industry median 7.8%; execution of cost reductions and SG&A efficiency is urgent.
With DIO 167 days and CCC 215 days, working capital is highly tied up and OCF fell to ¥21.7B (prior ¥57.2B). Progress on inventory optimization and shorter collection cycles would improve cash generation, enabling positive FCF and more sustainable dividends and investments.
Capital expenditures ¥34.2B (3.2x depreciation) and Construction in Progress ¥26.8B indicate large-scale investments underway; successful ramp-up and utilization improvements in new equipment are catalysts for margin improvement in coming periods. Conversely, delays or slow demand recovery could amplify depreciation burden and fixed-cost pressure, so early realization of investment benefits is a monitoring point.
This report is an earnings analysis automatically generated by AI from XBRL earnings release 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 own responsibility; please consult a professional advisor as needed before making any investment decisions.