| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥591.2B | ¥542.9B | +8.9% |
| Operating Income / Operating Profit | ¥47.1B | ¥39.4B | +19.5% |
| Ordinary Income | ¥52.1B | ¥47.6B | +9.3% |
| Net Income / Net Profit (attributable to owners of parent) | ¥48.0B | ¥36.7B | +30.9% |
| ROE | 9.1% | 7.8% | - |
For the fiscal year ended March 2026, Revenue was ¥591.2B (YoY +¥48.3B, +8.9%), Operating Income was ¥47.1B (YoY +¥7.7B, +19.5%), Ordinary Income was ¥52.1B (YoY +¥4.4B, +9.3%), and Net Income attributable to owners of parent was ¥48.0B (YoY +¥11.3B, +30.9%). Gross profit margin improved to 24.9% (up 1.8pt from 23.1% a year earlier) and operating margin improved to 8.0% (up 0.7pt from 7.3%), indicating improved profitability. The large increase in Net Income was driven by higher Operating Income and the recording of ¥12.4B in gain on sale of investment securities. Total assets expanded to ¥702.8B (YoY +¥75.6B) and total equity to ¥525.8B (YoY +¥57.9B), with an Equity Ratio maintained at 74.8%.
【Revenue】 Revenue reached ¥591.2B (YoY +8.9%), achieving top-line growth. While segment disclosures are omitted given a high weighting of measuring instrument–related businesses within all segments, the revenue increase likely reflects steady demand for core measuring instruments and improvements in price/product mix. Cost of goods sold was ¥443.9B, yielding a cost of sales ratio of 75.1% (improved 2.1pt from 77.2%), and gross margin expanded to 24.9% (up 1.8pt). Improvements in production efficiency and disciplined cost control contributed to the margin improvement.
【Profitability】 Selling, general and administrative expenses (SG&A) increased to ¥100.1B (from ¥84.4B, +¥15.7B), but the SG&A ratio rose only modestly to 16.9% (from 15.5%), as absorption from revenue growth took effect. As a result, Operating Income rose to ¥47.1B (+19.5%), outperforming revenue growth and demonstrating operating leverage. Non-operating income was ¥5.8B, including dividend income ¥3.4B and foreign exchange gains ¥0.8B. Non-operating expenses were limited at ¥0.8B (including interest expense ¥0.1B), resulting in Ordinary Income of ¥52.1B (+9.3%). Extraordinary income of ¥12.4B was entirely gain on sale of investment securities, bringing pre-tax profit to ¥64.5B. After deducting corporate taxes and others of ¥16.5B, Net Income was ¥48.0B (+30.9%), yielding a net margin of 8.1% (up 1.3pt from 6.8%). Excluding the contribution of extraordinary income, core profitability also improved, confirming a revenue-and-profit growth trend.
【Profitability】Operating margin was 8.0% (up 0.7pt from 7.3%), and net margin was 8.1% (up 1.3pt from 6.8%), indicating improved profitability. ROE was 9.1% (up 1.3pt from 7.8%), primarily driven by the net margin improvement. ROA was 7.8% (up 0.1pt from 7.7%), as profit growth outpaced asset expansion. EBITDA was ¥58.0B (Operating Income ¥47.1B + Depreciation ¥10.9B), with an EBITDA margin of 9.8% (prior year 9.2%). 【Cash Quality】Operating Cash Flow / Net Income was low at 0.59x, indicating challenges in converting profits to cash. Increases in working capital were the main cause: accounts receivable increased by ¥17.6B and inventories increased by ¥13.9B, weighing on OCF. Operating Cash Flow / EBITDA remained at 0.49x; although an increase in provision for product warranties of ¥11.3B temporarily boosted OCF, improving working capital efficiency remains a future priority. 【Investment Efficiency】Total asset turnover was 0.84x (down from 0.87x), with higher inventory and receivables dragging asset efficiency. Cash Conversion Cycle (CCC) was 156 days, DSO 72 days, and DIO 122 days, all lengthened, indicating scope to improve working capital management. Capital expenditures were ¥20.0B, 1.8x depreciation, showing proactive investment; tangible fixed assets expanded to ¥104.2B (from ¥90.9B, +14.6%). 【Financial Soundness】Equity Ratio remained high at 74.8% (prior year 74.6%), and the current ratio was 310% (prior year 339%), underscoring very strong short-term payment capacity. Interest-bearing debt was ¥7.0B (short-term borrowings ¥6.7B, long-term borrowings ¥0.3B), Debt/EBITDA was 0.12x, and interest coverage was 523x, reflecting a conservative capital structure. Cash and deposits ¥91.7B plus short-term investment securities ¥20.0B give liquidity on hand of ¥111.7B, covering short-term liabilities of ¥136.1B at 0.82x.
Operating Cash Flow was ¥28.2B (YoY +51.9%) but remained only 0.59x of Net Income ¥48.0B, indicating slower cash conversion of profits. The subtotal before working capital changes was ¥39.8B and was robust, but increases in accounts receivable ¥17.6B and inventories ¥13.9B absorbed cash that could not be offset by accounts payable increase ¥2.3B. Although the increase in provision for product warranties ¥11.3B temporarily boosted OCF, corporate tax payments of ¥15.0B were also a cash outflow. Investing Cash Flow was -¥23.7B, led by capital expenditures ¥20.0B, acquisition of short-term investment securities ¥2.0B, and acquisition of investment securities ¥0.1B. These were partially offset by proceeds from sale of investment securities ¥16.1B. As a result, Free Cash Flow was limited to ¥4.5B, covering only ¥11.5B in annual dividends at 0.39x. Financing Cash Flow was -¥15.8B, mainly dividend payments ¥12.9B, share buybacks ¥1.7B, and lease liability repayments ¥1.2B. Including foreign exchange effects on cash of ¥0.4B, cash and cash equivalents decreased by ¥10.9B year-on-year to ¥89.2B at period-end. In the short term, ample liquidity supports payment capacity, but medium-term sustainability depends on normalizing working capital and restoring the Operating Cash Flow / Net Income ratio to at least 1.0x.
Against Ordinary Income of ¥52.1B, Net Income was ¥48.0B, with limited divergence between the two. Non-operating income of ¥5.8B includes dividend income ¥3.4B (regular income from investment securities) and foreign exchange gains ¥0.8B, representing approximately 1% of Revenue and not materially distorting the business structure. However, extraordinary income of ¥12.4B (gain on sale of investment securities) accounted for about 19% of pre-tax profit ¥64.5B and temporarily lifted Net Income. Excluding extraordinary income, underlying pre-tax profit was ¥52.1B, which can be viewed as the recurring earning power. The gap between OCF and Net Income (OCF / Net Income 0.59x) is mainly due to accrual increases from working capital buildup (receivables and inventories). The ¥11.3B increase in provision for product warranties is a reserve that will involve future cash outflows and should be recognized as a temporary upward factor for OCF. Comprehensive income was ¥72.3B, well above Net Income ¥48.0B, with other components such as valuation differences on available-for-sale securities ¥14.2B and adjustments related to retirement benefits ¥10.1B contributing positively. The sustainability of underlying earnings depends on the reversal of extraordinary gains and improvements in working capital efficiency.
Full-year guidance is Revenue ¥604.8B (YoY +2.3%), Operating Income ¥49.6B (YoY +5.3%), Ordinary Income ¥53.2B (YoY +2.1%), and Net Income attributable to owners of parent ¥46.1B (vs. current-period actual -4.0%). Progress against the current-period results is: Revenue 97.8%, Operating Income 95.0%, Ordinary Income 97.9%, and Net Income 104.1% — Revenue, Operating Income and Ordinary Income landed slightly below guidance, while Net Income exceeded guidance due to the ¥12.4B extraordinary gain. The projected decline in Net Income for next fiscal year appears to be a conservative plan incorporating the reversal of extraordinary gains. EPS forecast is ¥300.49 (versus actual ¥312.16, -3.7%), and dividend forecast is ¥60 (down sharply from ¥113 actual). The reduced dividend forecast likely reflects mid-term dividend adjustment or special factors, but the forecast payout ratio of 32.6% is expected to remain within an appropriate range. Assumptions underpinning the forecasts will be disclosed in supplementary materials and the earnings presentation scheduled for publication on June 2, 2026.
Annual dividend was ¥113 (interim dividend ¥45, year-end dividend ¥68), corresponding to a payout ratio of 36.2% (based on basic EPS ¥312.16). This is a significant increase from prior year dividend ¥35 (payout ratio 15.2%), reflecting profit growth passed to shareholders. Share buybacks amounted to ¥1.7B, bringing total return to shareholders to ¥13.0B and the Total Return Ratio to 27.1% (based on Net Income ¥48.0B). Treasury stock moved from -¥0.59B at the beginning of the period to -¥1.96B at period-end, reflecting an active capital policy. Total return ¥13.0B was not covered by Free Cash Flow ¥4.5B, leaving FCF coverage at 0.35x. However, strong liquidity on hand — cash and deposits ¥91.7B and total liquidity including investment securities ¥111.7B — supports short-term sustainability of returns. Next fiscal year’s dividend forecast of ¥60 (payout ratio ~20%) is a large cut from ¥113, likely reflecting the reversal of extraordinary gains and the aim to normalize working capital under a conservative design. Over the medium term, improvement in Operating Cash Flow and working capital efficiency will be key to sustaining returns on a FCF basis.
Deterioration in working capital efficiency: Accounts receivable ¥117.1B (DSO 72 days), inventories ¥148.8B (DIO 122 days; work-in-progress ¥120.8B representing 81.2%) have driven expansion in working capital and extended CCC to 156 days. Against revenue growth of +8.9%, receivables rose +¥17.6B and WIP +6.4%, resulting in faster asset growth that pressures Operating Cash Flow / Net Income of 0.59x. The high WIP ratio suggests long-term project-type make-to-order or delayed acceptance risk, which could lead to inventory write-downs or cash-flow deterioration.
Dependence on extraordinary gains and earnings quality: Of Net Income ¥48.0B, extraordinary income ¥12.4B (gain on sale of investment securities) accounts for about 19% of pre-tax profit ¥64.5B. Extraordinary income is by nature one-off and non-recurring, and Net Income is forecast to decline to ¥46.1B next year due to reversal. Investment securities of ¥108.5B carry market value volatility risk, and in adverse market conditions valuation differences or reduced sale gains could materially affect earnings.
Increase in product warranty costs: Provision for product warranties of ¥11.3B (1.9% of Revenue) was booked and increased year-on-year. Upside in quality costs or expansion of long-term warranty contracts could require further provisions, pressuring future operating margins. Warranty obligations on past sales imply future cash outflows, so monitoring the adequacy of provisions and actual claims is important.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.0% | 7.8% (4.6%–12.3%) | +0.2pt |
| Net Margin | 8.1% | 5.2% (2.3%–8.2%) | +2.9pt |
Profitability exceeds the industry median, notably Net Margin which is +2.9pt above the median, confirming superior profit generation capability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 8.9% | 3.7% (-0.4%–9.3%) | +5.2pt |
Revenue growth outperforms the industry median by +5.2pt, achieving high growth driven by demand capture in core business and price improvements.
※ Source: Company compilation
Improving profitability trend: Gross profit margin 24.9% (YoY +1.8pt) and Operating Margin 8.0% (YoY +0.7pt) indicate improved core profitability, supported by price/product mix improvements and production efficiency gains. Operating Income +19.5% outpaced revenue growth of +8.9%, confirming operating leverage. Compared with industry benchmarks, both Operating and Net margins exceed medians, indicating competitive advantage in profit generation. Excluding the reversal of extraordinary income, improvements in gross margin and SG&A control support a reinforced revenue base sustaining competitive advantage.
Scope to improve working capital efficiency: CCC 156 days, DSO 72 days, DIO 122 days indicate weakened working capital efficiency, limiting Operating Cash Flow / Net Income to 0.59x and Free Cash Flow to ¥4.5B. High WIP ratio 81.2% reflects the characteristics of long-term project business, but inventory turnover improvement and faster receivables collection will determine future cash generation. Normalization of working capital next year could improve OCF, and recovery in FCF coverage (relative to dividends/returns) is key to sustaining shareholder returns.
Balance of conservative finances and capital policy: Equity Ratio 74.8%, Debt/EBITDA 0.12x, and liquidity on hand ¥111.7B indicate a highly conservative balance sheet with strong downward resilience. At the same time, a moderate shareholder return policy (Total Return Ratio 27.1%) and share buybacks ¥1.7B demonstrate attention to capital efficiency. Next year’s dividend forecast ¥60 (vs. ¥113 this year) represents a cut, but is likely a conservative design reflecting extraordinary gain reversal and working capital normalization, implying a profit-linked stable dividend policy.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your responsibility; please consult professionals as necessary before making investment decisions.