| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1668.4B | ¥1505.3B | +10.8% |
| Operating Income / Operating Profit | ¥337.4B | ¥297.0B | +13.6% |
| Ordinary Income | ¥348.2B | ¥299.4B | +16.3% |
| Net Income / Net Profit | ¥241.2B | ¥230.0B | +4.9% |
| ROE | 12.6% | 13.1% | - |
For the fiscal year ended March 2026, Revenue was ¥1668.4B (YoY +¥163.1B +10.8%), Operating Income was ¥337.4B (YoY +¥40.4B +13.6%), Ordinary Income was ¥348.2B (YoY +¥48.8B +16.3%), and Net Income was ¥241.2B (YoY +¥11.2B +4.9%). The Semiconductor Manufacturing Equipment business delivered Revenue of ¥1278.8B (+12.7%), accounting for 76.6% of consolidated Revenue and driving double-digit growth. Operating margin improved to 20.2% (from 19.7% YoY +0.5pt), and SG&A ratio declined to 21.1% (from 21.8% YoY -0.7pt), enabling Operating Income growth to outpace Revenue growth at +13.6%. Ordinary Income expanded by +16.3%, exceeding Operating Income growth, supported by higher non-operating income (foreign exchange gains ¥6.5B, etc.). Net Income growth was restrained to +4.9% due to the recording of Special Losses of ¥18.3B; nevertheless, ROE was 12.6%, Equity Ratio 76.9%, and Free Cash Flow was ¥135.2B, indicating overall high profitability, financial soundness, and cash generation capacity.
Revenue: Revenue totaled ¥1668.4B (YoY +¥163.1B +10.8%). The core Semiconductor Manufacturing Equipment segment delivered ¥1278.8B (+12.7%), representing 76.6% of consolidated Revenue and driving double-digit growth. The Measurement Instruments segment recorded ¥389.6B (+5.1%), showing mid-single-digit growth and remaining solid. Gross margin slightly declined to 41.3% (from 41.5% YoY -0.2pt) but gross profit increased to ¥688.6B (YoY +¥26.2B +4.2%) due to scale expansion. Foreign exchange gains of ¥6.5B were recorded, and a weaker yen supported both Revenue and profit.
Profitability: Operating Income was ¥337.4B (YoY +¥40.4B +13.6%) with an Operating margin of 20.2% (+0.5pt). SG&A was ¥351.2B (YoY +¥24.7B), but increased by only +7.6%, below the Revenue growth rate, improving the SG&A ratio to 21.1% (from 21.8% YoY -0.7pt) and enabling Operating Income growth to exceed Revenue growth. Ordinary Income was ¥348.2B (YoY +¥48.8B +16.3%), aided by increased non-operating income (total non-operating income ¥14.8B including foreign exchange gains ¥6.5B and investment partnership gains ¥2.2B), resulting in faster growth at the ordinary level. Net Income was ¥241.2B (YoY +¥11.2B +4.9%); although Special Gains of ¥43.0B from fixed asset disposals were recognized, Special Losses of ¥18.3B (details not disclosed, but include loss on disposal of fixed assets) were also recorded, leading to a large reduction from Ordinary Income to Net Income and a Net margin decline to 14.5% (from 15.3% YoY -0.8pt). Excluding one-off items (net Special Gains +¥1.6B), corporate taxes of ¥83.5B (effective tax rate 25.2%) increased YoY, reducing the conversion from pre-tax profit to Net Income. Conclusion: revenue and profit both increased.
Semiconductor Manufacturing Equipment segment: Revenue ¥1278.8B (YoY +¥144.0B +12.7%), Operating Income ¥284.0B (YoY +¥40.9B +16.8%), Operating margin 22.2% (from 21.4% YoY +0.8pt). Recovery in the semiconductor market and expanded capex demand improved both volumes and mix, generating 84.2% of consolidated Operating Income. Scale merits materialized and margins improved. Measurement Instruments segment: Revenue ¥389.6B (YoY +¥19.1B +5.1%), Operating Income ¥53.3B (YoY -¥0.6B -1.1%), Operating margin 13.7% (from 14.6% YoY -0.9pt). While Revenue grew, increases in SG&A and other factors slightly reduced profit. The segment accounts for 15.8% of consolidated Operating Income and has lower margin levels than the Semiconductor Manufacturing Equipment segment.
Profitability: Operating margin 20.2% (from 19.7% YoY +0.5pt), Net margin 14.5% (from 15.3% YoY -0.8pt), Gross margin 41.3% (from 41.5% YoY -0.2pt), SG&A ratio 21.1% (from 21.8% YoY -0.7pt). Operating-level profitability improved due to SG&A efficiency, but Net margin declined because of special items. ROE 12.6% (from 15.5% YoY -2.9pt) deteriorated due to lower Net margin and slower total asset turnover. Cash quality: Operating Cash Flow (OCF) ¥250.1B, OCF/Net Income 1.04x is healthy, but OCF/EBITDA (Operating Income + Depreciation) fell to 0.64x (from 0.83x). Increases in Accounts Receivable (+¥94.0B) and persistent Work in Progress (WIP) (¥403.7B, from ¥400.5B) weakened cash conversion efficiency. DSO 93 days, DIO 253 days, CCC 313 days, indicating notable working capital expansion. Investment efficiency: Total Asset Turnover 0.67x (from 0.63x YoY +0.04x) slightly improved. Capital expenditure ¥109.9B and Depreciation ¥55.8B yield CapEx/Depreciation ratio 1.97x, indicating continued growth investment. Financial soundness: Equity Ratio 76.9% (from 73.2% YoY +3.7pt), Current Ratio 364.7%, Debt/EBITDA 0.24x, Interest Coverage approximately 158x — extremely robust. Interest-bearing debt ¥93B (short-term borrowings ¥13B + long-term borrowings ¥80B), reduced by ¥87B from ¥180B the prior year. Cash and deposits ¥530.7B, indicating ample liquidity.
OCF was ¥250.1B (from ¥288.2B YoY -13.2%), with coverage of Net Income at 1.04x, maintaining a healthy level. Pre-working-capital subtotal of OCF was ¥355.7B (from ¥345.1B YoY +3.1%) increased, but working capital changes were a cash outflow of -¥98.0B due to Accounts Receivable increase -¥70.9B, Inventory increase -¥19.4B, Trade Payables decrease -¥2.1B, and Contract Liabilities decrease -¥5.5B. Combined with corporate tax payments of -¥107.6B, this constrained OCF growth. Investing Cash Flow was -¥114.9B (from +¥25.4B prior year), driven primarily by CapEx -¥109.9B. Free Cash Flow (OCF minus CapEx) was ¥135.2B (from ¥178.3B YoY -24.2%), approximately 1.33x the dividend payments of ¥101.8B, indicating dividends are sufficiently covered by internally generated cash, though Free Cash Flow declined YoY. Financing Cash Flow was -¥156.7B, driven by long-term borrowings repayment -¥50.0B and dividend payments -¥101.8B. Cash and deposits were ¥530.7B (from ¥545.4B YoY -¥14.7B) — a slight decrease. OCF/EBITDA ratio declined to 0.64x (from 0.83x), and prolonged DSO (93 days) and elevated inventories (notably WIP ¥403.7B, from ¥400.5B) have slowed cash conversion efficiency, posing a future challenge.
Ordinary Income of ¥348.2B exceeds Operating Income of ¥337.4B by about ¥10.8B, driven by non-operating income. Non-operating income totaled ¥14.8B, primarily foreign exchange gains ¥6.5B, investment partnership gains ¥2.2B, and dividend income ¥2.4B; the FX uplift effect is limited at the ordinary level (approximately 1.9% of Operating Income). Non-operating expenses were ¥3.9B (interest expense ¥2.1B, foreign exchange losses ¥2.5B, etc.), down from ¥6.8B prior year, reducing financial burden. Net Special Items were +¥1.6B (Special Gains ¥19.1B, Special Losses ¥18.3B), with a major Special Gain of ¥43.0B from fixed asset disposals — a temporary profit boost. The reduction from Ordinary Income ¥348.2B to Pre-tax Income ¥331.9B (a decrease of -¥16.3B) was mainly due to the Special Losses ¥18.3B. The gap between OCF and Net Income is small (OCF ¥250.1B / Net Income ¥241.2B = 1.04x), indicating limited accrual-driven profit inflation and overall healthy earnings quality. However, the increase in Accounts Receivable and extended DSO indicate delayed cash collection, and future collection progress will be key to sustaining earnings quality.
Full Year guidance: Revenue ¥1815.0B (YoY +¥146.6B +8.8%), Operating Income ¥400.0B (YoY +¥62.6B +18.6%), Ordinary Income ¥400.0B (YoY +¥51.8B +14.9%), Net Income attributable to owners of parent ¥280.0B (EPS forecast ¥689.87). Achievement rates to date: Revenue 91.9%, Operating Income 84.4%, Ordinary Income 87.1%. Second-half plan assumes Revenue ¥146.6B and Operating Income ¥62.6B, Ordinary Income ¥51.8B, with Revenue in Q3–Q4 roughly flat year-on-year and substantial increases in Operating and Ordinary Income. Full-year Operating margin is expected at 22.0% (from 20.2% prior year +1.8pt), assuming further profitability improvements in Q3–Q4. Dividend forecast is annual ¥138 (already paid interim ¥111, year-end forecast ¥151 — possibility of upward revision), implying a projected payout ratio of 40.1%. The full-year guidance indicates continued revenue and profit growth, but achieving the second-half margin improvement and Revenue momentum will be critical.
Annual dividend paid/forecast is ¥262 (interim ¥111, year-end ¥151), with a payout ratio of 40.1% (based on EPS ¥610.02). DOE (Dividend on Equity) is approximately 5.8%, representing an appropriate return level against equity. Total dividend amount is approximately ¥101.8B, which is 75.3% of Free Cash Flow ¥135.2B, indicating dividends are well covered by internally generated cash. Share buybacks were minor at ¥0.03B, so the Total Return Ratio is effectively at the dividend payout level. The full-year dividend forecast of ¥138 appears lower than the current realized dividend of ¥262, but this is based on the FY EPS-based estimate and there is room for upward revision depending on year-end results. With cash and deposits ¥530.7B, Equity Ratio 76.9%, and interest-bearing debt ¥93B, financial capacity is ample and dividend sustainability is not a concern.
Concentration risk to Semiconductor Manufacturing Equipment: Dependence on the segment for 76.6% of Revenue and 84.2% of Operating Income. Rapid reversal of the semiconductor cycle or a reduction in capex demand could cause significant swings in Revenue and profit, creating structural vulnerability. In a peak-out phase of the semiconductor cycle, utilization declines and margin compression could accelerate.
Risk of deteriorating cash conversion efficiency from working capital expansion: Accounts Receivable ¥425.2B (YoY +28.4%), WIP ¥403.7B (from ¥400.5B) and expanded working capital with DSO 93 days, DIO 253 days, CCC 313 days. OCF/EBITDA has fallen to 0.64x; if order/shipment balance worsens or collections are delayed, cash generation could weaken further, constraining dividend funding and growth investments.
Risk of higher fixed cost burden from expanded CapEx: CapEx ¥109.9B and CapEx/Depreciation ratio 1.97x indicate ongoing growth investment. Depreciation burden will rise and if Revenue growth falls short of plan, fixed cost pressure could rapidly erode Operating margins. This is particularly relevant given volatility in demand for Semiconductor Manufacturing Equipment, where capacity underutilization could further pressure profitability.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | 20.2% | 7.8% (4.6%–12.3%) | +12.5pt |
| Net margin | 14.5% | 5.2% (2.3%–8.2%) | +9.3pt |
The company outperforms the manufacturing sector median by a wide margin on both Operating and Net margins, exhibiting top-tier profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth rate (YoY) | 10.8% | 3.7% (-0.4%–9.3%) | +7.1pt |
Revenue growth also ranks above peers, offering an advantage in growth.
※ Source: Company compilation
High profitability and solid financial base: Operating margin 20.2% (exceeding industry median 7.8% by +12.5pt), Equity Ratio 76.9%, interest-bearing debt ¥93B (Debt/EBITDA 0.24x) — profitability and financial health are top-tier in manufacturing. Improvement in SG&A ratio (21.1%, YoY -0.7pt) allowed Operating Income growth +13.6% to outpace Revenue growth +10.8%, evidencing scale benefits. With continued growth investment (CapEx/Depreciation 1.97x) and strong financial capacity, shareholder returns (payout ratio 40.1%, DOE 5.8%) are likely sustainable.
Slowing cash conversion efficiency and working capital management challenges: OCF ¥250.1B (YoY -13.2%), OCF/EBITDA 0.64x (from 0.83x), DSO 93 days, DIO 253 days, CCC 313 days — increases in Accounts Receivable and WIP are weighing on cash generation. Free Cash Flow ¥135.2B covers dividends but improvement in order/shipment balance, collection terms, and WIP management is essential to restore cash generation and preserve dividend and investment capacity. Degree of working capital efficiency improvement will be key for FCF growth from next fiscal year.
Dependence on Semiconductor Manufacturing Equipment and sensitivity to market conditions: 76.6% of Revenue and 84.2% of Operating Income derive from Semiconductor Manufacturing Equipment, which has high margins (22.2%) but exposes results to semiconductor capex cycles. Full-year guidance assumes continued revenue and profit growth, but second-half margin improvement (full-year Operating margin forecast 22.0%) depends on continued recovery in the semiconductor market. Accelerating growth in Measurement Instruments (margin 13.7%) and development of new businesses to diversify revenue sources are important medium-term tasks for stable growth.
This report is an earnings analysis document automatically generated by AI from XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your own responsibility; consult a professional if necessary before making any investment decisions.