| Indicator | Current Period | Prior Year Comparable | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥51177.6B | ¥48961.0B | +4.5% |
| Operating Income / Operating Profit | ¥2288.0B | ¥2029.4B | +12.7% |
| Profit Before Tax (tax pre) | ¥2479.4B | ¥1734.4B | +43.0% |
| Net Income / Net Profit | ¥2023.3B | ¥1242.2B | +62.9% |
| ROE | 8.1% | 5.6% | - |
For the fiscal year ended March 2026, Aisin reported Revenue of ¥5兆1,178B (YoY +2,217B +4.5%), Operating Income of ¥2,288B (YoY +259B +12.7%), Ordinary Income of ¥1,198B (YoY +139B +13.1%), and Net Income attributable to owners of the parent of ¥1,717B (YoY +641B +59.6%), achieving revenue and profit growth. Revenue increased for the third consecutive year. Operating margin improved to 4.5% (up +0.4pt from 4.1% prior year), and net margin improved to 3.4% (up +1.2pt from 2.2% prior year), indicating enhanced profitability. By region, ASEAN & India delivered Revenue +16.7% and maintained high Operating Income margin of 12.8%; North America recorded Operating Income +33.5% with substantial profit growth. Conversely, China Revenue -4.9% and Europe -5.5% continued to decline. Financial expenses fell significantly to ¥152B (prior year ¥494B), and the removal of special gains/losses further boosted Net Income, which rose by about 60% YoY. Operating Cash Flow (OCF) was ¥3,761B (+10.7%), Free Cash Flow (FCF) was ¥2,989B, and while implementing shareholder returns of dividends ¥449B and share buybacks ¥784B, cash and deposits increased by ¥1,407B.
[Revenue] Revenue of ¥5兆1,178B (YoY +4.5%) was driven by double-digit growth in North America and ASEAN & India. By segment, Japan was ¥2兆5,181B (+3.2%), North America ¥1兆1,812B (+10.2%), ASEAN & India ¥5,443B (+16.7%) showing robust expansion. Conversely, China was ¥5,661B (-4.9%) and Europe ¥2,687B (-5.5%) showing declines. Regional mix: Japan 49.2%, North America 23.1%, ASEAN & India 10.6%, China 11.1%, Europe 5.2%. North America benefited from increased local production and FX effects; ASEAN & India benefited from demand recovery and xEV-related products. China and Europe were affected by local market slowdown and intensified price competition. Gross margin improved to 12.1% (up +0.6pt from 11.5%) due to cost corrections and higher share of high-margin regions.
[Profitability] Operating Income ¥2,288B (YoY +12.7%) outpaced revenue growth due to gross margin improvement and lower SG&A ratio. SG&A was ¥3,835B (7.5% of sales, improved -0.2pt from 7.7%), reflecting efficiency gains. By segment Operating Income: Japan ¥803B (margin 3.2%), North America ¥391B (margin 3.3%), ASEAN & India ¥696B (margin 12.8%) — ASEAN & India’s high profitability raised the companywide margin. China was ¥307B (margin 5.4%, -5.3%), Europe ¥41B (margin 1.5%, -6.1%) and remained weak. Other income was ¥268B vs. expenses ¥334B, net -¥66B; impairment losses of ¥152B were recorded, weighing on non-operating items. Financial result: income ¥288B, expenses ¥152B, net +¥136B — a large improvement from prior year (-¥189B), as prior-year bond redemption costs fell away. Equity-method gains ¥56B were flat. Ordinary Income ¥1,198B (+13.1%), Profit Before Tax ¥2,479B (+43.0%), driven by improved financial results and reduced one-off expenses. Income taxes ¥456B (effective tax rate 18.4%), Net Income ¥2,023B, Net Income attributable to owners of the parent ¥1,717B, achieving revenue and profit growth.
Japan segment: Revenue ¥2兆5,181B (+3.2%), Operating Income ¥803B (+8.9%), margin 3.2%. Domestic demand grew modestly, while exports and price pass-through supported profits. North America: Revenue ¥1兆1,812B (+10.2%), Operating Income ¥391B (+33.5%), margin 3.3%, aided by expanded local production and higher utilization. Europe: Revenue ¥2,687B (-5.5%), Operating Income ¥41B (-6.1%), margin 1.5%, remaining weak due to slower EV demand and price competition. China: Revenue ¥5,661B (-4.9%), Operating Income ¥307B (-5.3%), margin 5.4%, hit by local market slowdown. ASEAN & India: Revenue ¥5,443B (+16.7%), Operating Income ¥696B (+17.3%), margin 12.8%, highest companywide, driven by xEV-related and thermal management products. Other segments (e.g., Brazil) Revenue ¥395B (+4.1%), Operating Income ¥42B (+20.3%), margin 10.8%. ASEAN & India and North America led company profits; margin normalization in Europe and China remains a challenge.
[Profitability] Operating margin 4.5% (up +0.4pt from 4.1%), Ordinary Income margin 2.3% (up +0.1pt from 2.2%), Net margin 4.0% (up +1.5pt from 2.5%), on a parent-company attributable basis 3.4% (up +1.2pt from 2.2%). Gross margin 12.1% (up +0.6pt from 11.5%), SG&A ratio 7.5% (improved -0.2pt from 7.7%), reflecting cost efficiency. ROE 8.2% (up +3.0pt from 5.2%) supported by improved net margin and retained earnings accumulation. ROA (on Ordinary Income basis) 5.6% (up +1.7pt from 3.9%). [Cash Quality] OCF / Net Income ratio 1.86x (OCF ¥3,761B / Net Income ¥2,023B), indicating solid cash backing of profits. FCF ¥2,989B (OCF ¥3,761B - Investing CF ¥772B), ample, covering dividends ¥449B and buybacks ¥784B total return ¥1,233B at 2.4x. [Investment Efficiency] Capital expenditures ¥2,418B were 0.91x depreciation ¥2,646B, focused on renewals with selective strategic capacity increases. Inventory turnover days approx. 41 days (Inventory ¥5,803B / Cost of Sales ¥4兆4,988B × 365), Accounts receivable turnover days approx. 56 days (Receivables ¥7,738B / Revenue ¥5兆1,178B × 365). [Financial Soundness] Equity Ratio 48.8% (up +2.7pt from 46.1%), Current Ratio 179% (Current Assets ¥2兆403B / Current Liabilities ¥1兆1,418B), D/E ratio 0.25x (Interest-bearing debt ¥6,213B / Net assets ¥2兆4,961B) — conservative. Interest Coverage ~15.0x (Operating Income ¥2,288B / Financial expenses ¥152B) indicates ample financial headroom.
OCF was ¥3,761B (prior year ¥3,399B, +10.7%), from subtotal ¥4,100B minus income taxes paid ¥532B and interest/lease payments. Working capital movements: trade receivables provided inflow of ¥156B, inventories used ¥194B, trade payables used ¥981B, with the large decrease in payables pressuring cash. Depreciation ¥2,646B and impairment losses ¥152B as non-cash charges supported OCF. Investing CF was -¥772B (prior year -¥1,469B); capital expenditures ¥2,418B offset by proceeds from sale of investments/assets ¥1,698B (prior year ¥342B) and increased disposal gains. Lease receivable collections ¥214B also contributed, materially reducing net investment. Financing CF was -¥1,820B (prior year -¥2,702B): proceeds included long-term borrowings ¥695B and short-term borrowings ¥104B, while repayments long-term ¥924B, dividends ¥449B, share buybacks ¥784B, and lease repayments ¥336B were executed. FCF ¥2,989B covered dividends + buybacks ¥1,233B at 2.4x, cash and deposits increased ¥1,407B to ¥5,924B. FX translation effects +¥238B also contributed to cash increases.
Against Operating Income ¥2,288B, financial items net to +¥136B (income ¥288B, expenses ¥152B), a large improvement from -¥189B prior year. Prior year included bond redemption costs of ¥1,400B which did not recur. Other income ¥268B vs. expenses ¥334B net -¥66B, including impairment loss ¥152B. Equity-method gains ¥56B were flat, and dividends received from affiliates ¥214B were recognized in ordinary income. Profit Before Tax ¥2,479B with an effective tax rate of 18.4%, a substantial decline from 28.4% prior year. Comprehensive income ¥3,957B was 1.96x Net Income ¥2,023B, driven mainly by foreign currency translation adjustments of ¥798B for overseas operating units and fair value changes of financial assets through other comprehensive income of ¥980B. Parent attributable comprehensive income ¥3,442B vs. Net Income ¥1,717B, about 2.0x. One-off items include impairment ¥152B, normalization of financial results, and valuation gains in other comprehensive income; underlying earning power should be assessed on Operating Income. OCF ¥3,761B relative to Operating Income ¥2,288B is 1.64x, indicating healthy cash generation after non-cash charges and working capital movements.
Full year forecast: Revenue ¥5兆2,500B, Operating Income ¥2,350B, Net Income attributable to owners of the parent ¥1,500B. H2-to-date results (through Q2) are Revenue ¥5兆1,178B (progress 97.5%), Operating Income ¥2,288B (progress 97.3%), Net Income attributable to owners of the parent ¥1,717B (progress 114.5%). Revenue and Operating Income slightly lag initial guidance, while Net Income beat due to financial result improvements and lower effective tax rate. Shortfall vs. guidance in Operating Income is attributable to declines in China and Europe and partial non-pass-through of raw material and logistics costs. Net Income outperformance stems from greater-than-assumed reduction in financial expenses and tax rate decline. Full-year EPS guidance ¥212.70 vs. actual through Q2 ¥232.64 (already exceeded), limiting upside in H2. Dividend guidance is annual ¥35; Q2 actual maintained interim ¥30 and year-end ¥40 for total ¥70, with payout ratio on actuals 30.1% (on guidance 16.5%). To achieve full-year targets, an additional ¥1,322B in Revenue and ¥62B in Operating Income are required in H2, assuming recovery in China & Europe and FX stability.
Annual dividend ¥70 (interim ¥30, year-end ¥40). Against Net Income attributable to owners of the parent ¥1,717B, total dividend amount is ¥567.52B (the actual dividend paid ¥449B is based on shares outstanding after treasury stock cancellation), payout ratio 30.1%. Prior year annual dividend was ¥90 (equivalent to ¥60 after stock split adjustment), so this represents a substantive increase of ¥10. Share buybacks ¥784B were executed; combined with dividends ¥449B, total shareholder return was ¥1,233B, and Total Return Ratio was 71.8%, indicating an aggressive stance. Against FCF ¥2,989B, total return ¥1,233B corresponds to 41.3% return coverage; dividends alone are 15.0%, indicating ample capacity. BPS ¥3,037.06 (prior year ¥2,609.69, +16.4%) rose due to retained earnings accumulation and valuation gains. Treasury stock balance ¥803B (prior year ¥846B): of ¥784B acquired, ¥110B was cancelled and ¥4B disposed. Deducting treasury shares of 34.45M from issued shares 759M yields effective shares outstanding 725M. Dividend yield depends on share price, but the combination of ~30% payout ratio and ~70% total return ratio reflects balance between sustainability and shareholder returns. With cash ¥5,924B and FCF around ¥3,000B, continued stable dividends and opportunistic buybacks are feasible.
Widening regional profit disparity risk: Europe margin 1.5% and China 5.4% versus ASEAN & India 12.8% — more than 8x gap between regions. Europe Revenue ¥2,687B (-5.5%) with continued decline, and EV demand slowdown plus intensified price competition have worsened profitability. China Revenue ¥5,661B (-4.9%), Operating Income -5.3% shows market contraction impact. Although these two regions account for 16.3% of revenue mix, their profit contribution is limited (15.2% of Operating Income). Further market contraction in China or prolonged structural downturn in Europe could depress companywide margins.
Deterioration in capital efficiency due to working capital volatility: Trade payables decreased ¥981B, inventories increased ¥194B, producing ~¥1,175B working capital cash outflow. Reduction in payables may reflect changes in payment terms or supplier consolidation; if sustained, it will pressure OCF. Inventories ¥5,803B are equivalent to ~47 days of cost of sales; compared to turnover days 41 days, the YoY increase of +9.5% raises inventory risk in a demand slowdown. Shortening CCC and stabilizing payables are keys to improving capital efficiency.
Impact of financial expenses and FX volatility: Financial expenses fell to ¥152B from ¥494B, largely due to non-recurring bond redemption cost drop. Interest-bearing debt ¥6,213B (prior year ¥6,299B) is slightly lower, but in a rising rate environment interest payments could increase. FX: translation adjustments of overseas operating units contributed ¥798B to comprehensive income, but reversal in yen appreciation could produce valuation losses. Approximately half of revenue is overseas; estimated sensitivity is operating profit impact of several ¥10Bs per ¥1 of FX move annually, so increased transparency in hedging strategy is desirable.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity (ROE) | 8.2% | 6.3% (3.2%–9.9%) | +1.9pt |
| Operating Margin | 4.5% | 7.8% (4.6%–12.3%) | -3.3pt |
| Net Margin | 4.0% | 5.2% (2.3%–8.2%) | -1.2pt |
ROE is 1.9pt above the industry median placing the company in the upper group, but Operating Margin is 3.3pt below the median indicating room for improvement.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.5% | 3.7% (-0.4%–9.3%) | +0.8pt |
Revenue growth is 0.8pt above the industry median, driven by expansion in North America and ASEAN markets.
※ Source: Company aggregation
Sustainability of high margins in ASEAN & India: With Operating Income margin 12.8% and Revenue +16.7%, this region is driving company performance due to xEV-related and thermal management product demand. If local vehicle production and EV penetration rates continue to rise, high margins may be sustained. However, competitive entry and price pressure risks exist; progress in product differentiation and customer retention will be key. The region accounts for 30.4% of company Operating Income and is pivotal to lifting companywide Operating Margin from 4.5% above 5%.
Expansion of FCF and shareholder return capacity: FCF ¥2,989B covers total return ¥1,233B at 2.4x and has increased cash to ¥5,924B. Maintaining payout ratio ~30% and Total Return Ratio ~72% while generating ~¥3,000B annual FCF could enable continued dividend increases or expanded buybacks. Normalization of working capital (stabilizing payables, optimizing inventory) would provide upside to FCF.
Path to structural margin improvement: Gross margin 12.1% and Operating Margin 4.5% are low relative to peers; combined with SG&A ratio 7.5% total cost structure review is required. Companywide rollout of high-margin products from ASEAN & India, margin recovery in Europe & China, and higher value-added product mix (xEV, braking, driveline high-value products) could make Operating Margin >5% sustainable. Capex is focused on renewals and restrained, but strategic investment in growth areas and rigorous ROIC management will be the next steps.
This report was auto-generated by AI analyzing XBRL financial statement data to produce an earnings analysis document. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the Company from public financial statements. Investment decisions are your responsibility; please consult experts as needed before acting.