ROHM COMPANY LIMITED FY2026 FY Earnings Report

クイックビュー

Executive Summary

For the fiscal year ended March 2026, Revenue was ¥4,811 B (YoY +¥327 B, +7.3%), Operating Income was ¥109 B (YoY +¥509 B, turning from a ¥401 B loss to profit), and Ordinary Income was ¥192 B (YoY +¥489 B, +87.3%), resulting in higher revenue and profit at the operating level. However, due to recognition of Special Losses totaling ¥2,155 B, including large Impairment Losses of ¥1,936 B mainly in the Semiconductor Devices segment, Net Income was a loss of ¥-1,603 B (YoY -¥1,507 B, widening the loss from a ¥97 B loss in the prior year). Gross Profit was ¥1,152 B (gross margin 23.9%, improvement of +7.3pt from 16.6% prior year), SG&A was ¥1,044 B (SG&A ratio 21.7%, improvement of -3.8pt from 25.5%), reflecting a substantial improvement in the earnings structure and restoring the Operating Margin to 2.3% (improvement of +11.2pt from -8.9% prior year). By segment, ICs led as the core business with Revenue ¥2,200 B (+7.1%) and Operating Income ¥245 B (margin 11.2%); Semiconductor Devices achieved Revenue ¥2,104 B (+9.8%) but continued an operating loss of ¥227 B (margin -10.8%); Modules recorded Revenue ¥317 B (-3.1%) and Operating Income ¥35 B (margin 11.1%), performing steadily.

業績変動要因

【Revenue】Revenue was ¥4,811 B (YoY +7.3%). By segment, ICs was ¥2,200 B (+7.1%) with steady performance in analog, logic and memory product groups; Semiconductor Devices was ¥2,104 B (+9.8%) supported by increased demand for transistors, power devices and optoelectronics. Modules were ¥317 B (-3.1%) as print heads and optical modules saw slight declines, while Other segments at ¥260 B (+3.5%) provided support. By region, Asia was largest at ¥2,719 B (sales composition 56.5%), followed by Domestic ¥1,450 B (30.1%), Europe ¥362 B (7.5%), and Americas ¥281 B (5.8%). YoY, Domestic +10.4%, Asia +6.3%, Europe +4.1%, Americas +5.4%, indicating a global demand recovery trend.

【Profit & Loss】Cost of Sales was ¥3,659 B (cost ratio 76.1%, improved -7.3pt from 83.4% prior year), aided by smoothing of expense allocation from a change in depreciation method (declining-balance to straight-line) and production efficiency improvements, raising gross margin to 23.9%. SG&A was ¥1,044 B (down ¥99 B from ¥1,143 B prior year) due to effective cost control, compressing the SG&A ratio to 21.7% (improved -3.8pt from 25.5%). As a result, Operating Income turned positive to ¥109 B (prior year -¥401 B, +¥509 B), restoring Operating Margin to 2.3% (improved +11.2pt). Non-operating income totaled ¥118 B (interest received ¥56 B, dividends received ¥28 B, foreign exchange gains ¥2 B, etc.), offset by non-operating expenses of ¥35 B (interest paid ¥15 B, foreign exchange losses ¥10 B, fees paid ¥8 B, etc.), leading to Ordinary Income of ¥192 B (prior year -¥297 B, +¥489 B, +87.3%). However, Special Losses of ¥2,155 B (Impairment Losses ¥1,936 B, loss on disposal of fixed assets ¥3 B, disaster losses ¥4 B, valuation losses on investment securities ¥1 B, etc.) exceeded Special Gains of ¥254 B (gain on sale of fixed assets ¥24 B, gain on sale of investment securities ¥20 B, subsidy income ¥106 B), resulting in a pre-tax loss of ¥-1,709 B. After adjusting for income taxes of ¥-125 B (including recognition of deferred tax assets), Net Income was ¥-1,603 B (widening from prior year -¥97 B), producing the pattern of higher revenue and operating profitability but an enlarged final net loss.

セグメント別分析

ICs segment achieved Revenue ¥2,200 B (YoY +7.1%) and Operating Income ¥245 B (turning from -¥8 B prior year to positive, margin 11.2%), delivering high profitability. The change in depreciation method provided a ¥62 B uplift to profit, and solid performance in core analog, logic and memory LSI products established the segment's leading position at the operating level. Semiconductor Devices recorded Revenue ¥2,104 B (YoY +9.8%) but continued to post an Operating Loss of ¥227 B (loss narrowed from -¥459 B prior year, margin -10.8%). The depreciation method change reduced losses by ¥78 B, but price competition and supply-demand adjustments pressured profitability, leaving structural improvement as a challenge. The majority of Impairment Losses of ¥1,916 B were recognized in this segment as asset reviews progressed. Modules posted Revenue ¥317 B (YoY -3.1%) and Operating Income ¥35 B (up ¥8 B, +30.9% from ¥27 B prior year, margin 11.1%), aided by a ¥3 B profit uplift from the depreciation method change and improved profitability of print heads and optical modules. Other segments recorded Revenue ¥260 B (YoY +3.5%) and Operating Income ¥41 B (up ¥16 B, +62.6% from ¥25 B prior year, margin 15.8%), maintaining high profitability with stable contributions from resistor businesses and others.

主要財務指標

【Profitability】Operating Margin was 2.3%, improving +11.2pt from -8.9% prior year; Gross Margin 23.9% (up +7.3pt from 16.6%), SG&A Ratio 21.7% (down -3.8pt from 25.5%), indicating a substantial improvement in the earnings structure. ROE was -21.1% (prior year -5.4%) deteriorating due to the large net loss, primarily attributable to the one-off large impairment, while the operating-level return to profit signals recovery in core business earnings power. 【Cash Quality】Operating Cash Flow (OCF) was ¥894 B versus Net Income ¥-1,603 B, producing an OCF/Net Income of -0.56x which formally signals a quality warning, but this mainly reflects non-cash impairment charges of ¥1,936 B depressing net income; actual cash generation remains solid. Depreciation was ¥570 B versus Capital Expenditure ¥1,110 B, giving CapEx/Depreciation of 1.95x and demonstrating continued growth investment. 【Investment Efficiency】Total Asset Turnover was 0.38x (Revenue ¥4,811 B ÷ Total Assets ¥12,836 B), improving from 0.31x prior year, but Inventory Days were 202 days (Inventories ¥2,023 B ÷ Cost of Sales ¥3,659 B × 365), and WIP ratio 45.6% (WIP ¥923 B ÷ Inventories ¥2,023 B), indicating inventory buildup that impairs efficiency. 【Financial Soundness】Equity Ratio was 59.1% (down -2.6pt from 61.7% prior year) and remains stable, but interest-bearing debt stood at ¥3,000 B (short-term borrowings ¥1,000 B + long-term borrowings ¥1,000 B + bonds ¥2,000 B). Debt/EBITDA was 2.95x (Interest-bearing debt ¥3,000 B ÷ EBITDA ¥1,015 B, where EBITDA = Operating Income ¥109 B + Depreciation ¥570 B + goodwill amortization ¥2 B + pre-impairment adjustment ¥334 B), placing the company near the upper bound of investment-grade leverage. The short-term borrowings ratio is 33.3% (¥1,000 B ÷ ¥3,000 B), indicating refinancing risk, while current ratio 378.8% (Current Assets ¥7,501 B ÷ Current Liabilities ¥1,980 B) and quick ratio 358.2% show very strong liquidity and high short-term payment capacity.

キャッシュフロー分析

OCF was ¥894 B (YoY +6.5%), driven by add-backs of non-cash items including Impairment Losses ¥1,936 B and Depreciation ¥570 B against a pre-tax loss of ¥-1,709 B, and working capital improvements (Inventories decrease ¥101 B, Trade Payables increase ¥45 B). Investing Cash Flow was a net inflow of ¥1,086 B (vs prior year -¥1,157 B, change +¥2,243 B), where Capital Expenditure was ¥-1,110 B but proceeds from sale of investment securities were ¥2,078 B and subsidy receipts ¥106 B far exceeded outflows, resulting in Free Cash Flow (OCF + Investing CF) of a large positive ¥1,980 B. Financing Cash Flow was ¥-208 B (prior year +¥391 B); while bonds issuance ¥1,999 B and long-term borrowings ¥1,000 B provided funding, repayments of short-term borrowings ¥-2,000 B, bond redemptions ¥-400 B, and dividend payments ¥-193 B were made. Cash and cash equivalents including foreign exchange impact (+¥165 B) rose to an ending balance of ¥4,287 B (prior year ¥2,350 B, +¥1,937 B, +82.5%). OCF subtotal before working capital changes was ¥824 B, with taxes paid ¥-42 B, interest/dividends received ¥84 B, and interest paid ¥-14 B leading to the reported OCF. Although cash is abundant due to large sales of investment securities, the current FCF ¥1,980 B depends on asset sales and is not fully repeatable; evaluating sustainability of core CF generation in coming years will be key.

収益の質

Ordinary Income ¥192 B versus Net Income ¥-1,603 B shows a large divergence mainly due to one-off Special Losses ¥2,155 B (including Impairment Losses ¥1,936 B). Impairment breakdown: LSI ¥407 B, Semiconductor Devices ¥1,916 B, Modules ¥13 B, Others ¥2 B, reflecting extensive business-structure reviews in Semiconductor Devices. Non-operating income ¥118 B comprises interest received ¥56 B, dividends received ¥28 B, subsidy income ¥16 B and relatively stable income sources, with foreign exchange gains ¥2 B also contributing. Non-operating expenses ¥35 B include interest paid ¥15 B, foreign exchange losses ¥10 B, and fees paid ¥8 B; while both foreign exchange gains and losses are recorded, the net is a foreign exchange gain. Comprehensive Income was ¥-1,118 B (attributable to owners of parent ¥-1,119 B, non-controlling interests ¥0.3 B) versus Net Income ¥-1,603 B, with Other Comprehensive Income of ¥485 B (foreign currency translation adjustments ¥402 B, valuation difference on securities ¥38 B, retirement benefit adjustments ¥25 B) benefitting from yen depreciation. OCF of ¥894 B far exceeds Net Income, underscoring the non-cash nature of impairments. Performance up to Ordinary Income has improved solidly, and post-special-loss the earnings quality shows structural improvements with Operating Margin 2.3%, Gross Margin 23.9%, and SG&A Ratio 21.7%.

業績予想・ガイダンス

For FY2027 (year ending March 2027), management guidance forecasts Revenue ¥5,100 B (YoY +6.0%), Operating Income ¥300 B (YoY +176.1%, Operating Margin 5.9%), Ordinary Income ¥360 B (YoY +87.3%), Net Income ¥290 B (turning from ¥-1,603 B prior year to profit), and EPS ¥75.12. Versus current year results (Revenue ¥4,811 B, Operating Income ¥109 B, Ordinary Income ¥192 B, Net Income ¥-1,603 B), this implies Revenue +¥289 B, Operating Income +¥191 B, and Net Income improvement of +¥1,893 B due to the one-off special losses having run their course. Operating Margin is expected to improve from 2.3% to 5.9% (+3.6pt), premised on ICs maintaining double-digit margins, shrinkage of Semiconductor Devices losses, and improved Module profitability. Annual dividend guidance is ¥50 (interim ¥25 + year-end ¥25), unchanged from current year, and the forecast payout ratio is 66.6% (dividend ¥50 ÷ EPS ¥75.12). Progress against full-year guidance is Revenue 94.4%, Operating Income 36.2%, Ordinary Income 53.4%, indicating a plan that assumes substantial profit recovery in H2. Key execution factors include profitability improvement in Semiconductor Devices, inventory normalization improving working capital efficiency, and sustained smoothing effects from the depreciation method change, while external assumptions include semiconductor market recovery, stable FX, and favorable demand cycles.

株主還元

Annual dividend is ¥50 (interim ¥25 + year-end ¥25), unchanged from prior year ¥50. With shares outstanding 403,760 thousand (after deducting treasury stock 17,725 thousand, shares outstanding for dividend calculation 386,035 thousand), total dividend payments amount to ¥193 B. The payout ratio versus Net Income would be negative given Net Income ¥-1,603 B, but this is driven mainly by one-off impairment-related losses; cash generation is solid with OCF ¥894 B and Free Cash Flow ¥1,980 B, yielding strong cash coverage of dividends (Free Cash Flow ÷ total dividends) at 10.3x. However, this FCF relies heavily on proceeds from sale of investment securities ¥2,078 B, so sustainability is limited and future dividend coverage should be evaluated assuming normal OCF levels (around ¥900 B). For FY2027 guidance, with Net Income ¥290 B and EPS ¥75.12, the dividend ¥50 implies a payout ratio 66.6% which is relatively high, but with maintained OCF levels dividend sustainability can be judged as medium. No share buybacks were confirmed or announced; shareholder returns appear dividend-focused. Continuation of dividends depends on Semiconductor Devices turning profitable, inventory normalization improving CF, and progress refinancing short-term borrowings ¥1,000 B.

リスク要因

1. Structural continuation of losses in Semiconductor Devices segment: Operating Loss ¥227 B (margin -10.8%) persists, and even accounting for a ¥78 B loss-reduction effect from the depreciation method change, fundamental profitability improvement remains incomplete. The bulk of Impairment Losses ¥1,916 B was recorded in this segment; while asset reviews progressed, further deterioration in demand or price competition could lead to additional earnings deterioration or impairment risk. Achieving Operating Income ¥300 B for FY2027 requires this segment to turn profitable; delays would pose downside risk to the guidance.

2. Inventory buildup and deterioration in working capital efficiency: Inventory Days 202 days and WIP ratio 45.6% are high, with Inventories ¥2,023 B representing 42.1% of Revenue. Worsening working capital efficiency can compress cash generation and keep Total Asset Turnover at a low 0.38x relative to peers. Demand slowdown or delayed production adjustments could necessitate inventory write-downs or increase fixed-cost burdens from production cuts. If inventory normalization lags, sustained FCF improvement will be difficult, potentially impacting dividends and investment capacity.

3. Refinancing risk of short-term liabilities and financial leverage: Short-term borrowings ¥1,000 B (33.3% of interest-bearing debt ¥3,000 B) need refinancing, making execution of refinancing plans important. While current ratio 378.8% and cash ¥4,191 B indicate ample liquidity, the current FCF ¥1,980 B depends heavily on investment securities sale proceeds ¥2,078 B, and normalizing FCF is expected to be about ¥900 B. Debt/EBITDA 2.95x is near the upper bound of investment-grade thresholds; macroeconomic downturns or a weakening semiconductor market that reduce OCF could increase leverage and strain liquidity.

業種ベンチマーク（参考・当社調べ）

収益性・リターン

Operating Margin is 5.5pt below the industry median 7.8%, and Net Profit Margin is substantially below due to one-off impairment losses. Core businesses have returned to profitability, but profitability remains low within the industry.

成長性・資本効率

Revenue growth outperformed the industry median 3.7% by 3.6pt, reflecting ICs segment strength and firm regional demand recovery.

※Source: Company compilation

決算上の注目ポイント

1. Improvement in core business earnings structure and room for operating leverage next year: Operating Income turned from -¥401 B to ¥109 B, with Gross Margin 23.9% (up +7.3pt from 16.6%) and SG&A Ratio 21.7% (down -3.8pt from 25.5%), indicating substantial structural improvement. The change in depreciation method (declining-balance to straight-line) smoothed expense allocation and provided an aggregate uplift of roughly ¥150 B to segment profits. FY2027 guidance of Operating Income ¥300 B (Operating Margin 5.9%) anticipates further improvement. ICs has established itself as the core business with an 11.2% margin; if Semiconductor Devices’ losses are reduced, there is significant potential for operating leverage. Catalysts for margin improvement next year include Semiconductor Devices turning profitable, inventory normalization improving fixed-cost efficiency, and further SG&A compression.

2. Liquidity strengthened by asset sales and implications for capital allocation: Proceeds from sale of investment securities ¥2,078 B and subsidy receipts ¥106 B increased cash to ¥4,191 B (YoY +¥2,225 B, +113.2%), producing current ratio 378.8% and quick ratio 358.2% and a very strong liquidity position. Conversely, investment securities decreased to ¥1,580 B (-55.0%), remixing the balance sheet toward cash. Future capital allocation trade-offs will focus on growth investment (CapEx ¥1,110 B / Depreciation ¥570 B remains high), shareholder returns (payout ratio 66.6%), and debt repayment (refinancing short-term borrowings ¥1,000 B). Cash abundance increases flexibility but the reduction in investment securities implies potential future declines in dividend receipts and valuation gains, making sustained improvement in OCF critical for ongoing capital allocation.

3. Inventory normalization and Semiconductor Devices profitability are keys to mid-term ROE recovery: ROE -21.1% is driven by one-off impairments, but Inventory Days 202 and WIP ratio 45.6% have contributed to a low Total Asset Turnover of 0.38x, indicating substantial scope for capital efficiency improvement. Semiconductor Devices continues to report an operating loss of ¥227 B and accounted for most of the ¥1,916 B impairment, with business-structure revisions underway. FY2027 guidance anticipates Net Income ¥290 B (equivalent to ROE around 3.8%), but returning ROE above 10% in the medium term requires Semiconductor Devices to achieve profitability (matching ICs’ double-digit margins), inventory normalization shortening CCC from current 241 days to about 180 days, and Total Asset Turnover improvement from 0.38x to at least 0.45x. Key monitoring metrics include quarterly segment operating results, trends in Inventory Days and WIP ratio, and order backlog disclosures (manufacturing KPIs).

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