| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥529.9B | ¥461.8B | +14.7% |
| Operating Income / Operating Profit | ¥37.7B | ¥18.2B | +106.9% |
| Ordinary Income | ¥34.7B | ¥18.9B | +83.7% |
| Net Income / Net Profit | ¥15.4B | ¥2.5B | +520.6% |
| ROE | 4.3% | 0.7% | - |
For the fiscal year ended March 2026, results came in with Revenue ¥529.9B (YoY +¥68.1B +14.7%), Operating Income ¥37.7B (YoY +¥19.5B +106.9%), Ordinary Income ¥34.7B (YoY +¥15.8B +83.7%), and Net Income ¥15.4B (YoY +¥12.9B +520.6%), representing revenue and profit growth. Revenue achieved double-digit growth driven by an increase in high-margin projects in the FPD equipment business and expansion in the Semiconductor & Photomask equipment business. Operating Income doubled as profitability improved from both gross margin of 27.8% (YoY +1.5pt) and SG&A ratio of 20.7% (YoY -1.6pt). Ordinary Income was pressured by equity-method losses of ¥-7.4B and interest expense of ¥1.8B in non-operating items, partly offset by foreign exchange gains of ¥3.8B. Net Income surged 5.2x YoY despite recording special losses of ¥3.8B (impairment losses ¥3.6B, etc.), as pretax income rose substantially; EPS was ¥243.48 (prior year ¥84.07), up 189.6%.
[Revenue] Revenue ¥529.9B was up +14.7% YoY, achieving double-digit growth. By segment, the FPD Equipment Business recorded ¥319.8B (sales mix 60.3%, +7.2% YoY) and the Semiconductor & Photomask Equipment Business recorded ¥195.9B (37.0%, +31.5%), with both core businesses expanding. The FPD Equipment Business grew steadily due to a higher proportion of high-value-added projects and progress on acceptance of large-scale equipment. The Semiconductor & Photomask Equipment Business grew over 30% due to a rebound from a low base in the prior year and acquisition of new projects. Other businesses were ¥18.1B (+2.8%), showing only modest growth. Geographic breakdowns were not disclosed, but foreign exchange gains of ¥3.8B suggest expanded contribution from overseas sales.
[Profitability] Operating Income ¥37.7B was up +106.9% YoY, doubling, and the operating margin recovered to 7.1% (prior 3.9%, +3.2pt). The profit increase was mainly driven by gross margin improvement to 27.8% (prior 26.3%, +1.5pt) and a reduction in SG&A ratio to 20.7% (prior 22.3%, -1.6pt); a higher share of high-margin FPD projects and operating leverage were effective. By segment, the FPD Equipment Business led with Operating Income ¥32.2B (margin 10.1%, +253.1% YoY), while the Semiconductor & Photomask Equipment Business reported ¥6.5B (margin 3.3%, -47.3%)—revenue increased but profit declined. The semiconductor side continued to see low margins due to ramp-up costs and price competition. Ordinary Income ¥34.7B (+83.7%) was driven by operating gains, but equity-method loss of ¥-7.4B (prior ¥-3.1B) and interest expense ¥1.8B pressured non-operating income, partially offset by foreign exchange gains of ¥3.8B. Special items included gains on sales of fixed assets ¥3.1B and impairment losses ¥3.6B, nearly offsetting and resulting in a net special charge of ¥-0.5B. From pretax income ¥34.2B, after deducting income taxes and others ¥10.6B (effective tax rate 30.9%) and non-controlling interests ¥0.7B, profit attributable to owners of the parent was ¥15.4B (prior ¥2.5B, +520.6%). In sum, both revenue and profits increased.
The FPD Equipment Business posted Revenue ¥319.8B (+7.2% YoY) and Operating Income ¥32.2B (+253.1%), with the share of high-margin projects rising and operating margin rapidly improving to 10.1% (prior 3.1%), becoming the company's flagship segment accounting for 85.5% of consolidated Operating Income. The Semiconductor & Photomask Equipment Business recorded Revenue ¥195.9B (+31.5%)—a large increase—but Operating Income declined to ¥6.5B (-47.3%), lowering margin to 3.3% (prior 8.3%). Revenue growth was driven by new project wins and recovery from a low prior-year base, but ramp-up costs and price competition squeezed profitability. Other businesses recorded Revenue ¥18.1B (+2.8%) and Operating Loss ¥1.1B (prior -¥3.3B; loss narrowed). These are small-scale businesses including IT, OLED lighting, and agriculture, showing improvement trends despite ongoing losses.
[Profitability] Operating margin 7.1% improved +3.2pt from 3.9% in the prior year; Net Margin 2.9% (prior 0.5%, +2.4pt); ROE 4.3% (prior 0.7%, +3.6pt), indicating a comprehensive recovery in profitability. Gross margin improvement to 27.8% (+1.5pt) was due to a higher mix of high-margin FPD projects and manufacturing efficiency; SG&A ratio decline to 20.7% (-1.6pt) was helped by fixed-cost absorption and operating leverage. ROA rose to 4.8% (prior 2.5%), and total asset turnover improved to 0.73x (prior 0.63x), indicating better asset efficiency. [Cash Quality] Operating Cash Flow (OCF) ¥57.5B is 3.7x Net Income ¥15.4B, indicating high quality; OCF/EBITDA ratio was 1.28x, showing good cash conversion. EBITDA was ¥45.1B after adding depreciation ¥7.4B, and OCF at 1.28x EBITDA reflects solid cash-generating ability. Working capital efficiency shows DSO 120 days, DIO 135 days, DPO 41 days, and CCC 215 days—indicating notable working capital buildup; in particular WIP ¥101.6B (71.5% of inventories) suggests delayed acceptance and project concentration. [Investment Efficiency] Capital expenditures ¥10.6B were 2.0% of Revenue, exceeding depreciation ¥7.4B, indicating continued growth investment. Investment securities increased to ¥20.5B (YoY +96.2%), reflecting increased surplus fund deployment and strategic equity accumulation. [Financial Soundness] Equity Ratio 49.6% (prior 45.8%) remains healthy; current ratio 283.1% and quick ratio 280.3% indicate very ample liquidity. Interest-bearing debt ¥148.8B vs. cash and equivalents ¥294.8B yields net cash +¥146.0B, Debt/EBITDA 3.30x, and interest coverage 20.7x, signifying strong financial resilience. Short-term borrowings increased to ¥21.6B (+66.9%), but cash/short-term liabilities ratio of 13.6x suggests low liquidity risk.
Operating Cash Flow was ¥57.5B (YoY +7.6%). From pretax income ¥34.2B, addbacks included depreciation ¥7.4B, goodwill amortization ¥2.1B, equity-method losses ¥7.4B and other non-cash expenses. Changes in working capital included decreases in trade receivables +¥26.9B and inventories +¥19.4B as cash inflows, while a decrease in trade payables -¥20.4B was a cash outflow. After deducting corporate taxes paid ¥10.4B, operating cash subtotal was ¥68.6B, adjusted to OCF ¥57.5B. Investing Cash Flow was -¥17.0B, with capital expenditures ¥10.6B and acquisition of investment securities ¥3.3B as main outflows; net changes in time deposits and gains on sales of fixed assets ¥0.9B partially offset outflows. Free Cash Flow was ¥40.5B (OCF + Investing CF), showing ample cash generation. Financing Cash Flow was -¥15.7B: long-term borrowings drawn ¥48.8B and repayments -¥60.4B resulted in net long-term repayment -¥11.6B; net short-term borrowings increased ¥50.4B then decreased -¥46.5B, netting +¥3.9B of borrowing activity; dividend payments ¥7.7B were a key outflow. Adding positive effect of foreign exchange translation adjustments ¥2.9B, cash and equivalents increased from ¥261.2B at the beginning of the period to ¥289.0B at the end (+¥27.8B). On working capital quality, high receivables DSO 120 days and inventory DIO 135 days extended CCC to 215 days; notably high WIP ratio 71.5% reflects uneven acceptance and prolonged projects. Compression of working capital and smoothing of acceptance timing will be key to improving cash efficiency.
Of Ordinary Income ¥34.7B, Operating Income ¥37.7B accounts for the majority, indicating sound operating-level earnings. Non-operating items are persistently pressured by equity-method losses ¥-7.4B, while foreign exchange gains ¥3.8B served as a temporary tailwind. Special items (gains on sales of fixed assets ¥3.1B and impairment losses ¥3.6B) nearly offset, netting ¥-0.5B—a minor impact—but the ratio of one-off items to Net Income is about 30%, which warrants attention as a volatility factor. Comprehensive Income ¥34.9B exceeded Net Income ¥15.4B significantly, with OCI items—foreign currency translation adjustments ¥5.8B and valuation difference on securities ¥4.8B—adding ¥11.2B. Cash generation is strong: OCF ¥57.5B is 3.7x Net Income, indicating accruals are within a healthy range. Working capital shows pronounced DSO 120 days and DIO 135 days, and thick WIP ¥101.6B is a source of risk for margin erosion and timing mismatches; OCF subtotal ¥68.6B vs. OCF after working capital ¥57.5B indicates working capital cash outflow and room for improvement.
The FY2027 guidance expects Revenue ¥600.0B (YoY +13.2%), Operating Income ¥55.0B (+45.9%), Ordinary Income ¥47.0B (+35.3%), and Net Income ¥30.0B—anticipating revenue and profit growth. Operating margin is assumed to improve to 9.2% (+2.1pt) premised on maintaining high-margin FPD projects and profitability improvement in the Semiconductor & Photomask Equipment Business. Progress toward the current guidance is: Revenue 88.3%, Operating Income 68.5%, Ordinary Income 73.8% against the full-year plan; Revenue is on track but profit achievement will require accumulation in H2. Dividend forecast is ¥40.0 (annualized), with EPS guidance ¥317.35 implying a payout ratio of 12.6%, reflecting a conservative stance.
Annual dividend is ¥80.0 (interim ¥40.0, year-end ¥40.0), with payout ratio 32.9% versus EPS ¥243.48—an appropriate level. Total dividend payout ¥7.7B against Free Cash Flow ¥40.5B yields an FCF coverage of 5.3x, indicating high sustainability. With cash and equivalents ¥294.8B buffer and Equity Ratio 49.6% as a healthy capital structure, the company is positioned to balance growth investment and shareholder returns. The FY2027 dividend forecast is maintained at ¥40.0, which would lower the payout ratio to 12.6% against EPS guidance ¥317.35, though actual policy may be adjusted depending on performance and investment opportunities. No share buyback has been disclosed; returns are provided solely via dividends.
Segment concentration and FPD demand cycle: The FPD Equipment Business accounts for 60.3% of revenue and 85.5% of operating income, making performance highly sensitive to customers' capex plans and demand cycles. Peak-out in FPD demand or cancellation of large projects could cause sharp earnings declines.
Working capital stagnation and WIP risk: CCC 215 days and WIP ratio 71.5% indicate significant stagnation; delays in acceptance or process bottlenecks could lead to margin erosion or timing mismatches. Project prolongation and concentration pose concerns for capital efficiency.
Low profitability in Semiconductor & Photomask Equipment and equity-method investment losses: Semiconductor business margin of 3.3% remains low and equity-method losses ¥7.4B are trending larger. Price competition and ramp-up cost burdens increase short-term profit volatility, and deterioration in affiliates' performance could be a source of full-year profit volatility.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.1% | 7.8% (4.6%–12.3%) | -0.6pt |
| Net Margin | 2.9% | 5.2% (2.3%–8.2%) | -2.3pt |
Profitability is slightly below the industry median: Operating Margin -0.6pt and Net Margin -2.3pt. Low profitability of the semiconductor equipment segment and one-off items are relative weaknesses.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 14.7% | 3.7% (-0.4%–9.3%) | +11.0pt |
Revenue growth outpaces the industry median by +11.0pt, indicating a top-tier growth pace within the manufacturing sector, driven by expansion in both the FPD and Semiconductor equipment businesses.
※ Source: Company compilation
Reversal in profitability and realization of operating leverage: Operating margin 7.1% (+3.2pt YoY), Net Margin 2.9% (+2.4pt), ROE 4.3%—profitability has broadly recovered, with operating leverage effective due to declines in SG&A ratio and improved gross margin. A higher share of high-margin FPD projects has driven this, and if semiconductor equipment profitability improves, there is scope for re-rating of profit levels.
Strong cash generation and dividend sustainability: OCF ¥57.5B and FCF ¥40.5B demonstrate solid cash generation, with FCF coverage 5.3x for dividend payments ¥7.7B, indicating high sustainability. Ample cash buffer ¥294.8B and Equity Ratio 49.6% support coexistence of growth investment and shareholder returns.
Working capital efficiency and scope to improve segment mix: CCC 215 days and WIP ratio 71.5% show pronounced working capital stagnation; smoothing acceptance timing and reducing WIP are near-term improvement tasks. Semiconductor equipment margin at 3.3% remains low, and recovery after ramp-up costs is a prerequisite to achieve the FY2027 guidance (Operating Margin 9.2%). If high-margin FPD projects are maintained and semiconductor profitability recovers, structural improvement in margins and ROE uplift can be expected.
This report is an AI-generated earnings analysis document produced from XBRL financial statement data. It is not intended as an investment recommendation for any specific security. Industry benchmark figures are compiled by the Company based on public financial statement data and provided for reference. Investment decisions are your responsibility; please consult professionals as necessary before making investment decisions.