| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2278.7B | ¥2216.4B | +2.8% |
| Operating Income / Operating Profit | ¥89.4B | ¥156.2B | -42.8% |
| Ordinary Income | ¥82.5B | ¥148.4B | -44.4% |
| Net Income / Net Profit | ¥70.7B | ¥115.9B | -39.0% |
| ROE | 4.9% | 8.7% | - |
The full year results for the fiscal year ended March 2026 recorded Revenue ¥2,278.7B (YoY +¥62.3B +2.8%) and achieved top-line growth, but Operating Income ¥89.4B (YoY -¥66.8B -42.8%), Ordinary Income ¥82.5B (YoY -¥65.9B -44.4%), and Net Income attributable to owners of the parent ¥70.7B (YoY -¥45.2B -39.0%) declined significantly. Gross profit margin fell to 16.0% from 19.0% a year earlier, down approximately 300bp, and operating margin deteriorated to 3.9% (prior year 7.0%), a 312bp decline. The core Connector Business maintained revenue growth but its operating margin dropped to 6.0% (prior year 9.2%), down 320bp, exerting substantial pressure on consolidated profitability. Meanwhile, one-off factors such as gain on sale of investment securities ¥22.6B and net foreign exchange gains ¥6.2B supported profit before tax. ROE declined to 4.9% (prior year 8.9%). Operating Cash Flow was solid at ¥169.9B, but aggressive CapEx ¥237.5B resulted in Free Cash Flow of -¥74.0B.
【Revenue】 Revenue ¥2,278.7B (YoY +¥62.3B +2.8%) showed only modest growth. By segment, the Connector Business remained the core, recording ¥1,992.0B (+3.3%) and accounting for 87.4% of consolidated revenue. Breakdown includes Automotive ¥1,110B, Mobile Devices ¥652B, Industrial & Infrastructure ¥176B, etc. The Aerospace / Aviation Business achieved high growth with ¥204.7B (+6.0%), driven by Aerospace ¥111B and Industrial & Infrastructure ¥93B. Conversely, the Interface & Solutions Business declined significantly to ¥76.9B (-14.5%), with Automotive ¥46B and Industrial & Infrastructure ¥30B both below prior year. Other segments were ¥5.0B (-1.6%) slightly down. The revenue increase was mainly due to volume gains in Connectors and Aerospace and FX effects, but the growth rate remained low.
【Profitability】 Cost of goods sold expanded to ¥1,914.4B (prior year ¥1,795.8B, +6.6%), outpacing revenue growth, resulting in gross profit declining to ¥364.3B (-13.4%). Gross margin deteriorated to 16.0% from 19.0% a year earlier, an approximate 300bp deterioration, likely driven by higher material costs and adverse product mix. SG&A rose to ¥274.9B (prior year ¥264.5B, +4.0%), increasing faster than revenue, with an SG&A ratio of 12.1% (prior year 11.9%), up 14bp. Consequently, Operating Income fell to ¥89.4B (-42.8%), with an operating margin of 3.9% (prior year 7.0%). Non-operating items comprised interest income ¥5.2B, dividend income ¥3.7B, FX gains ¥12.2B — non-operating income totaling ¥24.0B — against interest expense ¥8.2B and FX losses ¥6.0B among non-operating expenses totaling ¥30.9B, yielding a net -¥6.9B and Ordinary Income of ¥82.5B (-44.4%). Extraordinary items consisted of Extraordinary Gains ¥22.6B (mainly gain on sale of investment securities) and Extraordinary Losses ¥3.6B (including impairment losses on investment securities and loss on disposal of fixed assets), netting to +¥19.1B and producing Profit Before Tax ¥101.5B. After deducting income taxes ¥30.8B, Net Income attributable to owners of the parent was ¥70.7B (-39.0%). Comprehensive income was ¥134.4B, with other comprehensive income of ¥63.7B contributed by foreign currency translation adjustments ¥51.1B and retirement benefit adjustments ¥18.6B. In summary, results were higher revenue but much lower profits (+2.8% revenue, -42.8% operating income), with declining gross margin and rising costs significantly compressing profits.
The Connector Business posted Revenue ¥1,992.0B (+3.3%), Operating Income ¥118.7B (-32.8%), and an operating margin of 6.0% (prior year 9.2%). While revenue grew, margin declined by 320bp, mainly due to higher material costs and adverse product mix. The Interface & Solutions Business recorded Revenue ¥76.9B (-14.5%), Operating Income ¥1.4B (-55.3%), and an operating margin of 1.9% (prior year 4.3%), with weaker demand in Automotive and Industrial segments driving significant deterioration. The Aerospace Business achieved Revenue ¥204.7B (+6.0%), Operating Income ¥21.9B (-14.3%), and an operating margin of 10.7% (prior year 13.2%); although margin decreased by 255bp, it remained the highest among segments, led by growth in Aerospace ¥111B. Other segments were Revenue ¥5.0B (-1.6%), Operating Income ¥1.1B (+21.5%), and an operating margin of 22.6%, maintaining high profitability despite small scale. On a consolidated basis, revenue and profit concentration in the Connector Business is high, and deterioration in that segment’s margin propagated to consolidated performance.
【Profitability】Operating margin 3.9%, Ordinary profit margin 3.6%, Net margin 3.1% — all materially down from prior year (Operating 7.0%, Ordinary 6.7%, Net 5.2%), largely due to a 300bp contraction in gross margin to 16.0% (prior year 19.0%). ROE declined to 4.9% (prior year 8.9%); DuPont decomposition shows contributions from Net Margin 3.1% × Total Asset Turnover 0.98 × Financial Leverage 1.61. EBITDA was ¥286.7B, with an EBITDA margin of 12.6% (prior year 16.5%), indicating deterioration in earnings quality. 【Cash Quality】Operating Cash Flow / Net Income ratio was a healthy 2.40x, but Operating Cash Flow / EBITDA ratio was 0.59x, reflecting reduced cash conversion efficiency due to working capital expansion. The accrual ratio was -4.3% (Operating CF materially exceeding Net Income), suggesting healthy cash quality. 【Investment Efficiency】Total Asset Turnover was 0.98x (prior year approx. 1.03x), slightly lower. CapEx / Revenue ratio was 10.4%, and CapEx / Depreciation ratio was 1.20x, indicating an ongoing active investment phase. Inventory turnover days were approximately 63 days (COGS basis, prior year approx. 59 days), and Days Sales Outstanding were about 62 days (prior year about 62 days), showing worsening DIO and an extended Cash Conversion Cycle as a challenge. 【Financial Soundness】Equity Ratio 62.2% (prior year 62.0%), Current Ratio 247%, Quick Ratio 185% — all high levels. Debt / EBITDA was 1.46x, Debt / Capital ratio 22.4%, Interest Coverage 35x (EBITDA / interest paid), indicating strong financial safety. Cash and deposits were ¥485.0B versus interest-bearing debt ¥417.5B (short-term ¥110.0B, long-term ¥307.5B), effectively close to net cash.
Operating Cash Flow was ¥169.9B (prior year ¥363.4B, -53.3%) but, relative to Profit Before Tax ¥101.5B, additions included Depreciation & Amortization ¥197.3B, decrease in trade receivables ¥1.2B, decrease in trade payables ¥29.0B, increase in inventories ¥26.4B, and corporate tax payments ¥38.0B, resulting in an Operating CF subtotal of ¥206.7B and ultimately generating ¥169.9B after working capital changes and tax payments. Operating CF / Net Income ratio of 2.40x indicates strong cash generation, but Operating CF / EBITDA ratio of 0.59x points to cash conversion slowdown due to working capital buildup (inventory increase, decrease in payables). Investing Cash Flow was -¥243.8B, centered on CapEx ¥237.5B, and included long-term loan recoveries ¥7.3B, proceeds from sale of investment securities ¥27.7B, and purchases of investment securities ¥13.0B. Free Cash Flow was -¥74.0B (Operating CF + Investing CF), a significant deterioration from prior year +¥171.4B. Financing Cash Flow was ¥4.5B and included net increase in short-term borrowings ¥40.0B, long-term borrowings ¥100.0B, long-term borrowings repayments ¥92.5B, dividend payments ¥40.4B, and proceeds from sale of treasury stock ¥0.6B. The Free Cash Flow deficit was financed by short-term borrowings and on-hand cash, with cash and deposits decreasing from ¥528.7B at the end of the prior fiscal year to ¥485.0B at year-end, down ¥43.8B. Improving working capital efficiency and realizing benefits from CapEx execution to restore Operating CF / EBITDA will be a future focal point.
Operating Income ¥89.4B represents core earnings, but one-off items — gain on sale of investment securities ¥22.6B and impairment on investment securities ¥3.6B (net +¥19.1B) — were recorded as extraordinary items, lifting Profit Before Tax to ¥101.5B. In non-operating items, net FX gains (¥12.2B gains vs. ¥6.0B losses) contributed net +¥6.2B. The total of one-off and non-recurring items is approximately ¥25.3B, accounting for about 25% of Profit Before Tax. Operating CF ¥169.9B is 2.40x Net Income ¥70.7B, and the accrual ratio of -4.3% is favorable, indicating solid cash backing for earnings. Conversely, Operating CF / EBITDA ratio 0.59x shows weakened cash conversion due to working capital expansion (inventory increase, reduction in payables). The ¥19.1B difference between Ordinary Income ¥82.5B and Profit Before Tax ¥101.5B essentially matches the net extraordinary items, highlighting the large contribution of one-off factors. Recurring non-operating income such as dividends and interest is limited to 1.1% of revenue, so improving core operating profitability is key to enhancing quality of earnings.
Full year guidance remains unchanged at Revenue ¥2,400.0B (YoY +5.3%), Operating Income ¥95.0B (YoY +6.3%), Ordinary Income ¥85.0B (YoY +3.0%), and Net Income attributable to owners of the parent ¥60.0B (YoY -15.2%). Projected operating margin is about 4.0%, a slight improvement from the current 3.9%, assuming recovery in gross margin and disciplined cost control. Forecast EPS is ¥88.98, and forecast dividend is ¥25.00 (Payout Ratio approx. 28%), representing a substantial cut from the current fiscal year dividend of ¥60 (Payout Ratio 59.7%), as the company prioritizes investment and working capital needs. With Revenue growth forecast +5.3% versus Operating Income +6.3%, profit growth is expected to slightly outpace top-line growth, but the magnitude is limited and realization depends on price adjustments and cost reductions. Versus current fiscal results, revenue achievement rate is 94.9% and operating income achievement rate is 94.1%, with steady progress, but given the large contribution of one-off items, improving core profitability will be required going forward.
The company paid interim ¥30 and year-end ¥30 for a total annual dividend of ¥60 (Payout Ratio 59.7%) this fiscal year. However, with Free Cash Flow -¥74.0B and total dividends paid ¥40.4B, FCF coverage was -1.75x, insufficient. Next fiscal year’s forecast dividend is set at ¥25 annually (Payout Ratio approx. 28% on forecast EPS ¥88.98), a dividend cut to realign payout with earnings and cash flow. No share buybacks were conducted this or prior fiscal year; shareholder returns are limited to dividends. The Payout Ratio this fiscal year was high at 59.7%, but given weaker FCF generation, management plans to compress the ratio to 28% next year to prioritize sustainability. The total return ratio via dividends alone is 59.7%, and DOE (Dividend on Equity) is approximately 3.1%. In the medium term, as depreciation impact from CapEx declines and Operating CF recovers, dividend capacity should improve, but the near-term outlook points to continued investment.
Continued deterioration in gross margin and profitability: This fiscal year, gross margin declined to 16.0% (prior year 19.0%), a ~300bp deterioration, and operating margin fell to 3.9% (prior year 7.0%), down 312bp. The Connector Business operating margin declined to 6.0% (prior year 9.2%), down 320bp, likely due to higher material costs and adverse product mix. The next fiscal year’s projected operating margin of 4.0% is a modest improvement, but risks remain that recovery in gross margin may be delayed due to raw material price moves, FX, and competitive pressures. Quantitatively, a 1pt deterioration in gross margin would reduce Operating Income by approximately ¥23B and lower operating margin by about 1pt.
Working capital expansion and worsening cash conversion efficiency: Inventory days are about 63 days (prior year about 59 days), and Days Sales Outstanding are about 62 days, with inventories increasing to ¥328.1B (prior year ¥291.8B, +12.5%). Working capital movements caused approximately ¥37B cash outflow from Operating CF subtotal ¥206.7B to Operating CF ¥169.9B, and Operating CF / EBITDA ratio remains low at 0.59x. Delays in inventory optimization or declines in demand forecast accuracy could further build working capital and materially impair OCF generation capacity.
Concentration risk in the Connector Business and dependence on one-off profits: The Connector Business accounts for 87.4% of revenue and the majority of operating profit, creating concentration risk where demand or price fluctuations in that segment materially affect consolidated results. Additionally, roughly 25% of this fiscal year’s Profit Before Tax ¥101.5B derived from one-off items such as gain on sale of investment securities ¥22.6B and net FX gains ¥6.2B, indicating fragile core profitability. If one-off gains disappear while core margins remain weak in coming periods, Net Income could be materially pressured.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.9% | 7.8% (4.6%–12.3%) | -3.8pt |
| Net Margin | 3.1% | 5.2% (2.3%–8.2%) | -2.1pt |
Both operating and net margins are below industry medians, placing the company in the lower tier of profitability within manufacturing.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 2.8% | 3.7% (-0.4%–9.3%) | -0.9pt |
Revenue growth also lags the industry median, indicating somewhat weaker top-line expansion capability.
※Source: Company compilation
The most important observation is the extent to which gross margin recovery is realized. This fiscal year saw gross margin at 16.0% (down 300bp from 19.0%) and operating margin at 3.9% (down 312bp from 7.0%). The next fiscal year’s projected operating margin of 4.0% is only a slight improvement; progress in reducing material costs, passing through prices, and correcting product mix will be critical to recovery. Given the structure where a 1pt change in gross margin affects Operating Income by about ¥23B, monitoring quarterly gross margin trends is essential.
Improving working capital efficiency and restoring cash generation are focal points. Inventory days are 63 and Operating CF / EBITDA is 0.59x, with Free Cash Flow -¥74.0B and dividend payments not self-funded. While active CapEx (CapEx / Depreciation ratio 1.20x) aims to improve medium-term productivity, near-term measures to optimize inventory and shorten DSO to compress CCC and restore Operating CF / EBITDA to above 0.8x are indispensable to sustain dividends and investments.
Distinguishing between the loss of one-off gains and structural improvement in core profitability is important. Of Profit Before Tax ¥101.5B, about 25% derived from one-off items (gain on sale of investment securities ¥22.6B, net FX gains ¥6.2B). The next fiscal year’s forecast Net Income ¥60.0B (down 15.2%) aligns with the dividend reduction but incorporates the effect of one-off item drop-off. Execution of measures to restore the Connector Business operating margin (currently 6.0% vs prior 9.2%) through pricing, cost reduction, and mix improvement, and monitoring quarterly segment margin trends will be key to judging structural recovery in core earnings.
This report was auto-generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional as needed before making investment decisions.