TAKEBISHI CORPORATION FY2027 Q1 Earnings Report

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Executive Summary

Against a backdrop of expansion in the core FA and Devices Business and margin improvement, the Company reported higher revenue and profits, with the operating margin also improving significantly from the same period of the previous year. Revenue was ¥294.4B (+15.3% YoY), Operating Income was ¥14.5B (+48.7%), Ordinary Income was ¥15.8B (+40.5%), and Net Income attributable to owners of the parent was ¥10.6B (+37.6%), securing profit growth exceeding revenue growth at every profit level. The operating margin improved to 4.9%, from 3.8% in the same period of the previous year, an improvement of 1.1pt, mainly due to simultaneous improvement in the gross margin and a decline in the SG&A expense ratio.

Factors Affecting Performance

【Revenue】Revenue was ¥294.4B, up +15.3% YoY. By segment, the FA and Devices Business led overall performance with revenue of ¥219.1B (composition ratio 74.4%, +20.1%), while the Social Infrastructure and Information & Communications Business remained solid at ¥75.3B (composition ratio 25.6%, +3.1%). The recovery in FA demand and contributions from large-scale projects appear to have been the primary drivers of growth in the high-growth segment.

【Profit and Loss】Operating Income was ¥14.5B (+48.7%, margin 4.9%, +1.1pt YoY). The gross margin improved to 15.1% (+0.4pt), while the SG&A expense ratio declined to 10.2% (10.9% in the previous year, -0.7pt), resulting in positive operating leverage, with profit growth exceeding revenue growth. Segment profit was ¥11.8B for the FA and Devices Business (+63.7%, margin 5.4%) and ¥2.7B for the Social Infrastructure and Information & Communications Business (+5.5%, margin 3.5%), with the expansion of the higher-margin FA and Devices Business lifting the Company-wide profit margin. Ordinary Income was ¥15.8B (+40.5%), supported by ¥1.6B in non-operating income, primarily ¥1.0B in dividend income. Extraordinary gains and losses consisted only of a ¥0.1B gain on the sale of investment securities, and the impact of temporary factors was limited. The difference between Ordinary Income and Net Income remained within a natural range, mainly reflecting income taxes and other taxes of ¥5.2B (effective tax rate approximately 33%). In conclusion, the quarter resulted in higher revenue and profits.

Segment Analysis

The FA and Devices Business led the Company in both revenue and profit, with revenue of ¥219.1B (composition ratio 74.4%, +20.1%) and Operating Income of ¥11.8B (composition ratio approximately 81%, +63.7%). Its profit margin was 5.4%, exceeding the 3.5% margin of the Social Infrastructure and Information & Communications Business, indicating a margin gap between the businesses. The Social Infrastructure and Information & Communications Business maintained higher revenue and profit, with revenue of ¥75.3B (+3.1%) and Operating Income of ¥2.7B (+5.5%), although its growth rate remained moderate. The expanding composition ratio of the high-margin FA and Devices Business has been a structural driver of improvement in the Company-wide operating margin, an important observation for understanding the future earnings structure.

Key Financial Metrics

【Profitability】The operating margin was 4.9%, improving by +1.1pt from 3.8% in the same period of the previous year, while the net profit margin also improved by +0.6pt to 3.6%, from 3.0% in the same period of the previous year. 【Cash Flow Quality】Non-operating income was limited to 0.5% of revenue (¥1.6B), and extraordinary gains and losses were also minor, confirming that most of the profit growth resulted from improved earnings power in the core business. 【Investment Efficiency】ROE was 2.3%, improving from approximately 1.7% in the same period of the previous year, with the expansion in the net profit margin contributing at a faster pace than the total asset turnover ratio of 0.42 times and financial leverage of 1.53 times. 【Financial Soundness】The Equity Ratio remained high at 65.3%, although it declined by -2.8pt from 68.1% in the same period of the previous year. The fact that total assets grew (+7.7%) faster than equity (+3.2%) requires monitoring. Current assets of ¥534.8B substantially exceeded current liabilities of ¥215.4B, indicating ample short-term payment capacity.

Cash Flow Analysis

An examination of fund movements based on changes in the balance sheet shows that cash and deposits increased by +15.9% YoY to ¥104.5B, broadly in line with the revenue growth rate of +15.3%. Accounts receivable increased only +0.6% to ¥253.3B, while total receivables, including electronically recorded monetary claims, grew +6.6%, below revenue growth, with no significant deterioration in collections. Inventories also increased +9.4% to ¥99.6B, below the pace of revenue growth. Meanwhile, accounts payable increased +29.4% to ¥141.4B, and advances received increased substantially to ¥20.4B (+522%). Along with increased purchasing and order-taking activity, the Company appears to be securing working capital through trade credit and advances received. Overall, cash on hand has steadily accumulated even during the revenue expansion phase, indicating limited concerns regarding liquidity management.

Earnings Quality

The profit growth for the quarter was based on improved earnings power in the core business, with low dependence on temporary factors. Extraordinary income consisted only of a ¥0.1B gain on the sale of investment securities, while extraordinary losses were also minimal, and the trend of profit growth was consistent from Ordinary Income through the final profit level. Non-operating income of ¥1.6B mainly consisted of ¥1.0B in dividend income and ¥0.1B in interest income, both stable earnings generated from held assets. Non-operating expenses, including a ¥0.1B foreign exchange loss, were also minor. The difference between Ordinary Income of ¥15.8B and Net Income attributable to owners of the parent of ¥10.6B was primarily due to income taxes and other taxes of ¥5.2B (effective tax rate approximately 33%), with no special factors identified. Comprehensive income was ¥20.4B, exceeding Net Income of ¥10.6B, mainly due to the recognition of ¥8.4B in valuation difference on other securities. Accordingly, this divergence from Net Income reflects changes in the market value of held securities rather than operating accruals.

Earnings Forecast and Guidance

The Q1 progress rates against the Full-Year plan were 24.8% for Revenue (¥294.4B/¥1,187.0B), 29.8% for Operating Income (¥14.5B/¥48.5B), 30.5% for Ordinary Income (¥15.8B/¥51.7B), and 30.5% for Net Income (¥10.6B/¥34.6B). While revenue progress was broadly in line with the simple quarterly allocation of 25%, each profit metric was progressing somewhat ahead of schedule at around 30%. This appears to reflect the early contribution of gross margin improvement and SG&A efficiency gains. During the quarter, the Company revised both its earnings forecast and dividend forecast, and the Full-Year plan calls for higher revenue and profits, with revenue growth of +8.0% and Operating Income growth of +18.7%.

Shareholder Returns

The Company forecasts a Full-Year dividend of ¥95 per share and revised its dividend forecast during the quarter. Based on forecast EPS of ¥215.64, the Payout Ratio is approximately 44.1% (¥95/¥215.64). In addition to a financial foundation comprising cash and deposits of ¥104.5B and an Equity Ratio of 65.3%, interest-bearing debt—consisting of short-term borrowings of ¥12.2B and long-term borrowings of ¥1.0B, for a total of approximately ¥13.2B—is small relative to total assets, indicating ample financial capacity to support the dividend.

Risk Factors

1. Segment Concentration Risk: The FA and Devices Business accounts for 74.4% of Revenue and approximately 81% of Operating Income. Accordingly, changes in the FA demand cycle and capital investment trends could have a relatively significant impact on performance.

2. Changes in the Working Capital Structure: Accounts payable increased substantially by +29.4%, while advances received increased +522%. Although these changes reflect increased purchasing and order-taking activity, the consistency between their pace of increase and the revenue growth rate (+15.3%) requires ongoing monitoring.

3. Declining Equity Ratio Trend: Although the Equity Ratio remains high at 65.3%, it declined by -2.8pt from 68.1% in the same period of the previous year. The fact that the pace of total asset growth (+7.7%) exceeds the pace of equity growth (+3.2%) requires monitoring.

Industry Benchmark (Reference; Compiled by the Company)

Profitability and Returns

The operating margin is slightly above the industry median, while the net profit margin is slightly below the median.

Growth and Capital Efficiency

The revenue growth rate is substantially above the industry median and represents a high level of growth within the industry.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. The operating margin improved from 3.8% in the same period of the previous year to 4.9%, reflecting improved profitability through both gross margin improvement and SG&A efficiency gains. This trend can be viewed as a factor supporting the likelihood of achieving the Full-Year plan, which calls for Operating Income growth of +18.7%.

2. The FA and Devices Business served as the growth driver in both revenue and profit, and the expanding composition ratio of the high-margin business has been a structural driver of improvement in the Company-wide profit margin. At the same time, the high degree of dependence on this business should be noted as a factor contributing to earnings volatility.

3. While the Equity Ratio remains high at 65.3%, it declined from 68.1% in the same period of the previous year. The balance between the pace of asset expansion and capital accumulation will be an important observation point for understanding the future financial structure.

Theoretical Share Price (Reference Value)

This is a mechanically calculated reference range based solely on publicly disclosed data using the Residual Income Model (Ohlson-type, explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥2,632–¥2,784 at cost of equity ±1%, and ¥2,702–¥2,709 at ω±0.1.

Notes:

• Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets as of the end of the quarter are used; there is a timing difference from the Full-Year forecast.
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-06 / This value is not intended to predict or guarantee the future share price)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

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