| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥369.6B | ¥374.7B | -1.4% |
| Operating Income / Operating Profit | ¥29.1B | ¥37.2B | -21.7% |
| Ordinary Income | ¥38.1B | ¥39.0B | -2.3% |
| Net Income / Net Profit | ¥25.7B | ¥23.8B | +8.1% |
| ROE | 3.5% | 3.5% | - |
For the fiscal year ended March 2026, Revenue was ¥369.6B (YoY -¥5.1B, -1.4%), Operating Income was ¥29.1B (YoY -¥8.1B, -21.7%), Ordinary Income was ¥38.1B (YoY -¥0.9B, -2.3%), and Net Income was ¥25.7B (YoY +¥1.9B, +8.1%). Revenue declined slightly, but operating performance deteriorated significantly due to North America turning to an operating loss and increases in SG&A. The decline at the ordinary income level was compressed by non-operating gains including foreign exchange gains of ¥4.3B. Net Income increased YoY primarily because the prior year bore a heavier corporate tax burden; on a pre-tax profit basis, profit declined (Profit before tax ¥33.7B, YoY -¥5.4B, -13.8%). Comprehensive income rose sharply to ¥69.2B (YoY +¥43.5B, +130.2%), driven by valuation gains on securities +¥18.6B and actuarial gains related to retirement benefits +¥12.9B. Operating margin was 7.9% (prior year 9.9%, -2.0pt), and gross margin was 43.8% (prior year 44.5%, -0.7pt).
Revenue: Revenue was ¥369.6B, a slight decline of ¥5.1B (‑1.4%) YoY. By region, Japan was ¥211.8B (57.3% of revenue) essentially flat YoY +¥0.5B (+0.2%), North America declined to ¥113.4B (YoY -¥8.0B, -6.6%), Europe was ¥27.9B (YoY +¥1.6B, +6.2%), and Asia & Oceania was ¥16.6B (YoY +¥0.7B, +4.5%). Including intersegment sales, segment totals were: Japan ¥303.3B (YoY -¥7.2B, -2.3%), North America ¥113.9B (YoY -¥7.5B, -6.2%), Europe ¥27.9B (YoY +¥1.6B, +6.2%), Asia & Oceania ¥18.7B (YoY +¥0.8B, +4.3%). The sizable decline in North America weighed on consolidated revenue. In Japan, product-mix adjustments and sluggish demand were factors; North America appears to be in a temporary adjustment phase due to intensified local competition and a review of sales strategy. Europe and Asia showed resilience.
Profitability: Cost of sales was ¥207.6B, producing gross profit of ¥162.0B (gross margin 43.8%, prior year 44.5%, -0.7pt). SG&A increased to ¥132.8B (SG&A ratio 35.9%, prior year 34.5%, +1.4pt). Major items included advertising expenses ¥9.4B and salaries & allowances ¥35.0B; personnel expenses rose ¥1.0B YoY and advertising +¥0.1B YoY. SG&A increases were mainly due to personnel and fixed cost growth. Operating Income declined substantially to ¥29.1B (Operating margin 7.9%, prior year 9.9%, -2.0pt). By segment, Japan delivered ¥28.3B (margin 9.3%, YoY -¥1.7B, -5.6%), North America recorded an operating loss of -¥3.9B (deterioration of -¥5.2B from prior-year operating profit ¥1.3B), Europe ¥2.2B (YoY +¥0.5B, +33.3%), and Asia & Oceania ¥1.2B (YoY -¥0.3B, -17.6%). North America’s swing to an operating loss was the primary driver of consolidated operating profit decline. Non-operating income was ¥9.1B (prior year ¥4.3B), including interest income received ¥2.8B and foreign exchange gains ¥4.3B. Ordinary Income was ¥38.1B, narrowing the decline to -2.3%. Extraordinary losses were ¥4.4B (of which settlement payment ¥4.0B), leaving Profit before tax ¥33.7B (prior year ¥39.1B, -13.8%). Income taxes were ¥7.1B (effective tax rate 21.0%, prior year 24.6%), reduced from the prior year, resulting in Net Income ¥25.7B (YoY +8.1%). In conclusion, although Net Income rose, the increase was driven by lower tax burden while core operating performance declined.
Japan segment: Revenue ¥303.3B (YoY -2.3%), Operating Income ¥28.3B (YoY -5.6%), margin 9.3%. Japan is the core manufacturing and sales base with external customer sales ¥211.8B and intragroup sales ¥91.5B. While contributing ~97% of consolidated operating profit, gross margin decline and higher SG&A led to lower profits.
North America segment: Revenue ¥113.9B (YoY -6.2%), Operating loss -¥3.9B (turning from operating profit ¥1.3B prior year), margin -3.4%. Intensified local market competition and insufficient cost-structure reforms resulted in lower unit sales and price pressure, deteriorating profitability.
Europe segment: Revenue ¥27.9B (YoY +6.2%), Operating Income ¥2.2B (YoY +33.3%), margin 7.9%. Solid local demand and improved sales efficiency contributed to revenue and profit growth.
Asia & Oceania segment: Revenue ¥18.7B (YoY +4.3%), Operating Income ¥1.2B (YoY -17.6%), margin 6.3%. Despite revenue growth, profit declined slightly due to competitive pressure and higher logistics costs in China, Vietnam, etc. Overall, the company’s Japan-dependent profitability profile is evident; eliminating the North America loss is the top priority.
Profitability: Operating margin 7.9% (prior year 9.9%, -2.0pt); Net profit margin 7.0% (prior year 6.3%, +0.7pt) though on a pre-tax profit basis margin was 9.1% (prior year 10.4%, -1.3pt). ROE was 3.5% (prior year 4.4%, -0.9pt), ROA 3.1% (prior year 3.2%, -0.1pt) indicating low capital efficiency.
Cash quality: Operating CF / Net Income was 1.05x, indicating minimum cash realization of profits. Operating CF was ¥27.0B (prior year ¥25.1B, +7.4%). Operating CF subtotal (pre-working capital changes) after depreciation was ¥34.8B; increases in trade receivables -¥8.5B and inventories +¥0.3B absorbed cash.
Investment efficiency: Total asset turnover declined to 0.451x (prior year 0.507x). Tangible fixed asset turnover was 3.73x. Inventory turnover was 2.50x (annualized, DIO 146 days), indicating low inventory efficiency.
Financial soundness: Equity Ratio was 89.2% (prior year 91.2%, -2.0pt), extremely high. Interest-bearing debt was zero; debt-to-equity (gearing) ratio 0.12x. Current ratio 939.8%, quick ratio 791.2%—very conservative. Cash and deposits ¥272.8B, investment securities ¥115.6B—ample liquidity.
Operating CF was ¥27.0B (prior year ¥25.1B, +7.4%). Profit before tax ¥33.7B; Operating CF subtotal (pre-working capital changes) was ¥34.8B. Depreciation ¥9.6B produced EBITDA of approximately ¥38.5B, yielding Operating CF / EBITDA 0.70x—weak cash conversion. Working capital: trade receivables increased by -¥8.5B (DSO approx. 63 days), inventories increased +¥0.3B (DIO approx. 249 days, remaining high), and trade payables increased +¥2.0B only modestly. CCC (cash conversion cycle) was approximately 287 days—long. Corporate tax payments -¥3.8B were deducted to arrive at Operating CF ¥27.0B.
Investing CF was -¥35.7B, driven by acquisitions of tangible fixed assets -¥12.6B, investment securities acquisitions -¥8.4B, and increases in time deposits -¥17.9B. Free Cash Flow was -¥8.7B (Operating CF + Investing CF), i.e., cash outflows exceeded inflows due to capex and accumulation of financial assets. Financing CF was -¥11.9B, entirely dividend payments -¥11.9B. Cash decreased by -¥17.6B to ending cash ¥272.8B. While liquidity is ample, deteriorating working capital efficiency is hindering cash generation.
Of Ordinary Income ¥38.1B, Operating Income was ¥29.1B and non-operating income contributed ¥9.1B (interest income received ¥2.8B, dividend income received ¥1.3B, securities interest ¥0.3B, foreign exchange gains ¥4.3B, etc.). The foreign exchange gains ¥4.3B are a one-off factor and not necessarily recurring. Comprehensive income ¥69.2B is 2.7x Net Income ¥25.7B, with Other Comprehensive Income ¥43.5B (foreign currency translation adjustment ¥11.0B, valuation difference on securities ¥18.6B, actuarial gains on retirement benefits ¥12.9B) greatly exceeding Net Income. Valuation gains on securities and retirement benefit adjustments are market-dependent, non-recurring factors and not directly related to operating activities. The divergence between Operating CF and Net Income is small (OCF/Net Income 1.05x), but increases in receivables and inventories reflect accrual factors. Improving working capital management is essential for cash realization of earnings. Dependence on non-operating income at the ordinary income level has increased; the Net Income increase was driven by lower tax burden and does not reflect core operating improvement.
Full-year guidance: Revenue ¥375.0B (YoY +¥5.4B, +1.5%), Operating Income ¥38.0B (YoY +¥8.9B, +30.4%), Ordinary Income ¥42.9B (YoY +¥4.8B, +12.5%), Net Income ¥31.0B (YoY +¥5.3B, +20.6%). Operating margin is expected to improve to 10.1% (+2.2pt). Progress vs. guidance (YTD actual / full-year guidance): Revenue 98.6%, Operating Income 76.6%, Ordinary Income 88.9%, Net Income 82.9%—Operating Income shows a risk of shortfall. Assumptions for achieving the plan include elimination of North America losses (improvement of ¥3.9B), recovery of gross margin in Japan, and strict SG&A control. Revenue growth is expected to be modest; profit increase depends on profitability improvements. The guidance presumably assumes: 1) North America will return to profit through local cost reductions and sales strategy revisions, 2) SG&A ratio will be controlled to prior-year levels, and 3) FX will be neutral to mildly favorable. The company needs to reduce reliance on non-operating income and strengthen operating-level profitability.
Annual dividend is ¥75 per share (interim ¥25, year-end ¥50), payout ratio 40.4% (based on current EPS ¥185.69). This is a large increase from prior-year dividend ¥25, but the prior year only disclosed an interim dividend in the quarterly reporting so direct comparison is limited. Full-year guidance contemplates a dividend ¥25 (year-end only, implying annual ¥75 may be maintained). With actual EPS ¥185.69 and projected EPS ¥215.99, the payout ratio on a full-year basis is estimated around 35%. Free Cash Flow was -¥8.7B while dividend payments were ¥11.9B, giving FCF coverage -0.73x—dividends were funded from cash on hand. However, with cash & deposits ¥272.8B and investment securities ¥115.6B, liquidity is abundant and dividend payment capacity is adequate. For medium-to-long-term dividend sustainability, improvement in Operating CF (working capital efficiency, reduced inventories and receivables) and return to positive Free Cash Flow are necessary. Total Return Ratio currently comprises dividends only; no buybacks were executed.
Regional concentration and North America loss risk: Japan accounts for 57.3% of revenue (65.4% including intersegment sales) and about 97% of operating profit, creating high dependence on domestic demand and pricing. North America turned to a loss of -¥3.9B; delays in resolving that loss could drag on consolidated results. If North America does not implement effective sales strategy revisions and local cost reductions, the risk of missing full-year guidance will become pronounced.
Deterioration in working capital efficiency: Increases in trade receivables (-¥8.5B) and persistently high inventories (DIO approx. 249 days, CCC approx. 287 days) impede cash generation. Trade receivable growth lengthened collection cycles (DSO approx. 63 days) and inventory turnover 2.50x is low for manufacturing. Inventory write-downs or discounting pressure could further compress gross margins. Improving working capital management is urgent.
Market risk on investment securities and retirement benefit assets: Investment securities ¥115.6B (YoY +36.8%), retirement benefit assets ¥45.5B (YoY +93.5%) increased, contributing to valuation difference on securities ¥34.8B and cumulative adjustments related to retirement benefits ¥25.2B within equity. A reversal in equity markets or interest rates could generate valuation losses and reduce OCI, impacting equity. The sharp increase in deferred tax liabilities ¥22.0B (YoY +205%) could also raise tax burdens upon market reversals.
Profitability & Return
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.9% | 7.8% (4.6%–12.3%) | +0.1pt |
| Net Profit Margin | 7.0% | 5.2% (2.3%–8.2%) | +1.8pt |
Profitability is around the industry median; operating margin is in line with the median and net profit margin is 1.8pt above the median, placing the company in the upper range within the industry.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -1.4% | 3.7% (-0.4%–9.3%) | -5.1pt |
Growth underperforms the industry median by 5.1pt, lagging the manufacturing sector’s general revenue growth trend.
※ Source: Company aggregation
Priority is resolving the North America loss: North America posted an operating loss of -¥3.9B and returning it to profitability is essential to reach the full-year guidance of Operating Income +30.4%. Effectiveness of local cost reductions and sales strategy implementation will be key; quarterly segment profit monitoring is important. If North America returns to profit quickly, there is significant room for operating margin recovery.
Progress on working capital efficiency improvement: With DSO ~63 days, DIO ~249 days, CCC ~287 days and Free Cash Flow -¥8.7B, cash generation is weak. Inventory reduction and faster receivables collection would likely improve Operating CF/EBITDA and return Free Cash Flow to positive territory, strengthening dividend sustainability. Quarterly trends in CCC and Free Cash Flow improvement are watch points.
Quality of earnings and volatility of valuation differences: Ordinary Income depended on non-operating income such as foreign exchange gains ¥4.3B. Of Comprehensive Income ¥69.2B, the portion exceeding Net Income ¥25.7B was largely due to valuation difference on securities +¥18.6B and retirement benefit adjustments +¥12.9B—non-recurring factors. Market reversals could shrink valuation differences and, together with deferred tax liability impacts, cause equity volatility. Strengthening operating-level profitability (improving gross margin and SG&A ratio) is fundamental to improving earnings quality.
This report is an AI-generated financial analysis document created by 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 from public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed.