| 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 | ¥241.2B | ¥230.0B | +4.9% |
| ROE | 12.5% | 13.1% | - |
For the fiscal year ended March 2026, Revenue was ¥1,668.4B (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%), representing higher sales and profits. The core Semiconductor Manufacturing Equipment business led double-digit growth with Revenue +12.7% and Operating Income +16.8%, while gross margin remained high at 41.3% (prior 41.5%). SG&A ratio improved 0.7pp to 21.1% (prior 21.8%), lifting Operating Margin to 20.2% (prior 19.7%, +0.5pp). The Ordinary Income increase of +16.3% was supported by non-operating income including ¥6.5B foreign exchange gains, but Net Income growth was limited to +4.9% due to Special Losses expanding to ¥18.3B (prior ¥1.6B). In summary, improved operating margins and revenue growth boosted profitability, while deterioration in special gains/losses constrained the bottom-line growth.
Revenue of ¥1,668.4B (YoY +10.8%) was driven by Semiconductor Manufacturing Equipment at ¥1,278.8B (+12.7%, composition 76.6%) while Measurement Instruments reached ¥389.6B (+5.1%, composition 23.4%), showing a divergence in growth pace. Semiconductor Manufacturing Equipment achieved double-digit revenue growth on recovery in global semiconductor capital expenditures and share gains; Measurement Instruments posted single-digit growth due to regional and industry mix changes in demand. At the consolidated level, expansion in the core segment drove sales, with Semiconductor Manufacturing Equipment continuing to account for roughly three-quarters of Revenue, reflecting a highly concentrated structure.
Profitability: Operating Income improved to ¥337.4B (+13.6%), with Operating Margin improving to 20.2% (prior 19.7%, +0.5pp). Gross profit was ¥688.6B (Gross Margin 41.3%, prior 41.5%), essentially flat, while SG&A was contained at ¥351.2B (SG&A ratio 21.1%, prior 21.8%, -0.7pp), resulting in operating leverage as SG&A increased only +7.2% against Revenue growth of +10.8%. Non-operating income rose to ¥14.8B (prior ¥9.2B) including dividend income ¥2.4B, foreign exchange gains ¥6.5B, and investment partnership income ¥2.2B; non-operating expenses decreased to ¥3.9B (including interest expense ¥2.1B, prior ¥6.8B). Ordinary Income expanded to ¥348.2B (+16.3%). In Special Items, Special Gains included investment securities sale gains ¥1.9B and fixed asset sale gains ¥43.0B (total special gains ¥1.9B — as stated), while Special Losses of ¥18.3B (prior ¥1.6B) including losses on disposal of fixed assets reduced profit before income taxes to ¥331.9B (prior ¥342.8B, -3.2%). After deducting income taxes ¥83.5B (effective tax rate 25.2%) and non-controlling interests ¥0.9B, Net Income attributable to owners of parent was ¥241.2B (+4.9%), with Net Income Margin 14.5% (prior 15.3%, -0.8pp). Conclusion: while the company achieved revenue and operating profit growth, increased Special Losses constrained growth in Net Income.
The Semiconductor Manufacturing Equipment segment delivered Revenue ¥1,278.8B (YoY +12.7%), Operating Income ¥284.0B (YoY +16.8%), and Operating Margin 22.2% (prior 21.4%, +0.8pp), reflecting improved profitability. Expansion in global semiconductor investment and improved product mix boosted margins, making this segment the primary earnings driver, accounting for 84.2% of consolidated Operating Income. The Measurement Instruments segment posted Revenue ¥389.6B (YoY +5.1%), Operating Income ¥53.3B (YoY -1.1%), and Operating Margin 13.7% (prior 14.5%, -0.8pp), turning into revenue growth but profit decline. Variations in demand by region and industry and adverse product mix affected margins, making profitability improvement a challenge. The divergence between segments highlights the Semiconductor Manufacturing Equipment segment’s high growth and profitability supporting consolidated earnings.
Profitability: Operating Margin 20.2% (improved +0.5pp from prior 19.7%), Net Income Margin 14.5% (down -0.8pp from prior 15.3%), ROE 12.5% (down -3.0pp from prior 15.5%). Operating margin improvement was supported by SG&A containment and margin expansion in the Semiconductor Manufacturing Equipment segment, but expanded Special Losses lowered Net Income Margin and ROE declined due to higher equity and slower Net Income growth.
Cash Quality: Operating Cash Flow (OCF) was ¥250.1B, representing 1.04x of Net Income; OCF/EBITDA was 0.64x (OCF ¥250.1B ÷ EBITDA ¥393.2B (Operating Income ¥337.4B + D&A ¥55.8B)), indicating working capital increases dampened cash generation efficiency. Days Sales Outstanding (DSO) 93 days (Accounts Receivable ¥425.2B ÷ Daily Sales ¥1,668.4B/365), Days Inventory Outstanding (DIO) 253 days (Inventory ¥680.5B ÷ Daily COGS ¥979.8B/365), Days Payable Outstanding (DPO) 34 days (Accounts Payable ¥90.8B ÷ Daily COGS ¥979.8B/365), yielding a Cash Conversion Cycle (CCC) of 312 days (DSO + DIO - DPO), indicating lengthening and deterioration in capital efficiency due to increased receivables and work-in-progress.
Investment Efficiency: Total Asset Turnover 0.67x (Revenue ¥1,668.4B ÷ Total Assets ¥2,505.3B). Capital expenditures were ¥109.9B, 1.97x depreciation ¥55.8B, indicating continued investment to expand production capacity; most of Investing Cash Flow ¥114.9B was directed to capex, with increases in tangible and intangible fixed assets totaling ¥110.3B (prior ¥102.3B).
Financial Soundness: Equity Ratio 77.0% (up +3.8pp from prior 73.2%), Debt/EBITDA 0.33x (Interest-bearing debt ¥130.0B ÷ EBITDA ¥393.2B), Current Ratio 364.7% (Current Assets ¥1,746.1B ÷ Current Liabilities ¥478.8B), indicating a very strong balance sheet. Cash and deposits ¥530.7B are 8.4x short-term interest-bearing debt ¥63.0B, and Interest Coverage is 157.7x (Operating Income ¥337.4B ÷ Interest Expense ¥2.1B), showing ample liquidity and interest-bearing debt capacity.
Operating Cash Flow was ¥250.1B (prior ¥288.2B, -13.2%); increases in Accounts Receivable ¥70.9B and income tax payments ¥107.6B offset the increase in Operating Income. The subtotal OCF was ¥355.7B (prior ¥345.1B); changes in working capital included decrease in contract liabilities ¥5.5B and increase in Accounts Receivable ¥70.9B which reduced funds, while decrease in Inventories ¥19.4B and decrease in Accounts Payable ¥2.1B were other notable working capital movements. Investing Cash Flow was an outflow of ¥114.9B, centered on capex ¥109.9B; additions to tangible and intangible fixed assets totaled ¥110.3B (prior ¥102.3B), reflecting continued capacity-enhancing investment. Free Cash Flow was ¥135.2B (prior ¥183.4B, -26.3%), covering dividends of ¥101.8B with a coverage ratio of 1.33x, indicating sufficient buffer. Financing Cash Flow was an outflow of ¥156.7B, mainly dividend payments ¥101.8B, repayment of long-term borrowings ¥50.0B, and lease liability repayments ¥5.6B. Year-end cash was ¥530.7B (prior ¥545.4B, -2.7%), maintaining strong liquidity. Working capital increases suppressed OCF and FCF growth; improving receivables collection and inventory efficiency will be key to enhancing future cash generation.
Operating Income of ¥337.4B is the core recurring earnings driver; non-operating income ¥14.8B (dividend income ¥2.4B, foreign exchange gains ¥6.5B, investment partnership income ¥2.2B, etc.) contributed positively albeit modestly at 0.9% of Revenue. After deducting non-operating expenses ¥3.9B (interest expense ¥2.1B, foreign exchange losses ¥2.5B, etc.), Ordinary Income ¥348.2B reflects operating earning power. Net Special Items were negative ¥16.4B (Special Gains ¥1.9B - Special Losses ¥18.3B), with one-off factors such as losses on disposal of fixed assets depressing Net Income. The net impact of one-off items on Net Income was about 6.8% (¥16.4B ÷ ¥241.2B), limited, and recurring earning power can be considered generally healthy. Comprehensive Income was ¥267.5B, ¥26.3B above Net Income ¥241.2B, driven by Other Comprehensive Income ¥19.2B (foreign currency translation adjustments ¥9.7B, valuation difference on available-for-sale securities ¥5.0B, retirement benefit adjustments ¥4.4B). The ratio of OCF to Net Income is 1.04x, indicating little divergence between accounting profit and cash, but the OCF/EBITDA ratio 0.64x reflects working capital deterioration from increases in receivables and work-in-progress; the accrual ratio ((Operating Income - OCF) ÷ Total Assets) is 3.5%, signaling that working capital buildup is suppressing quality of earnings.
The full-year forecast for the fiscal year ending March 2027 projects Revenue ¥1,815.0B (YoY +8.8%), Operating Income ¥400.0B (YoY +18.6%), Ordinary Income ¥400.0B (YoY +14.9%), and Net Income attributable to owners of parent ¥280.0B (YoY +16.1%), anticipating higher sales and profits. Revenue assumes continued demand for Semiconductor Manufacturing Equipment and recovery in Measurement Instruments, with high single-digit growth. Operating Income is expected to achieve double-digit growth through SG&A containment and product mix improvements. Ordinary Income growth is projected to moderate slightly with normalization of non-operating items, while Net Income plans for double-digit growth assuming a reduction in Special Items. Progress rates of the current fiscal year results against the full-year forecast were 92.0% (Revenue), 84.4% (Operating Income), 87.1% (Ordinary Income), and 86.1% (Net Income), which, considering a revenue recognition pattern concentrated in Q4, can be regarded as standard progress. EPS is expected to increase to ¥689.87 (prior ¥610.02). Dividend forecast is ¥138 (prior ¥262), representing a decrease of ¥124 year-on-year, which appears to reflect a return to the normal dividend level excluding prior-year commemorative or special dividends. Achievement of the plan depends on shipment progress of work-in-progress, normalization of receivables collection, and sustained semiconductor investment demand; monitoring order intake and inventory trends is important.
For fiscal 2026 (year ended March 2026), dividends were ¥111 at the end of Q2 and ¥151 at year-end, totaling ¥262 (prior ¥114; increased due to year-end forecast revision), implying a Payout Ratio of 40.1% (Dividends ¥262 ÷ EPS ¥610.02). Total dividend amount was ¥101.8B and with FCF ¥135.2B the coverage was 1.33x, indicating ample cushion. Share buybacks were ¥0.0B and not executed, leaving the Total Return Ratio at the same level as the Payout Ratio, 40.1%. For fiscal 2027 the dividend forecast is ¥138 (YoY -¥124) and is expected to be lower due to the lapse of prior special dividends; on a normal dividend basis, the company is considered to be maintaining a stable return policy. With Debt/EBITDA 0.33x, cash ¥530.7B, a healthy balance sheet, Payout Ratio in the 40% range, and ample FCF coverage, the sustainability of ongoing dividend policy is high. If working capital efficiency improves and FCF generation increases, scope for additional returns may expand.
Working Capital Protraction Risk: DSO 93 days, DIO 253 days, CCC 312 days indicate lengthening working capital, which suppresses OCF and FCF generation. In particular, accumulation of work-in-progress ¥403.7B (59.3% of total inventories) suggests longer product lead times and delayed inspection/acceptance timing, contributing to lower OCF/EBITDA 0.64x. Increase in Accounts Receivable ¥70.9B (YoY +28.4%) may indicate relaxed collection terms or collection delays, raising credit risk and cash conversion delays. Delays in improving working capital management could result in downside cash generation versus plan and increased need for additional working capital.
Business Portfolio Concentration Risk: High concentration of the Semiconductor Manufacturing Equipment segment (76.6% of Revenue, 84.2% of Operating Income) makes performance highly sensitive to the semiconductor investment cycle. The Measurement Instruments segment’s profitability has declined (Revenue +5.1%, Operating Income -1.1%), limiting portfolio diversification benefits. In a semiconductor demand adjustment phase, revenue and profits could deteriorate rapidly, making monitoring of order backlog and capex trends essential.
Volatility of Special Items Risk: Prior year included Special Losses ¥18.3B (prior ¥1.6B) which suppressed Net Income growth to +4.9%. Although the net impact of Special Items on Net Income is limited to 6.8%, recurrence of one-off losses such as losses on disposal of fixed assets cannot be ruled out and may increase volatility of Net Income. The fiscal 2027 plan assumes normalization of Special Items, and unexpected special losses would increase the risk of missing targets.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.2% | 7.8% (4.6%–12.3%) | +12.5pp |
| Net Income Margin | 14.5% | 5.2% (2.3%–8.2%) | +9.3pp |
Profitability significantly exceeds the manufacturing median, placing the company among the upper ranks within the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 10.8% | 3.7% (-0.4%–9.3%) | +7.1pp |
Revenue growth outpaces the industry median by 7.1pp, positioning the company among the leaders in growth within the industry.
※ Source: Company aggregation
Operating Margin 20.2% and ROE 12.5% are top-tier within manufacturing; the high-margin structure of the Semiconductor Manufacturing Equipment segment and SG&A containment enabling operating leverage support profitability. Debt/EBITDA 0.33x and cash ¥530.7B represent an extremely robust balance sheet providing downside resilience; Payout Ratio 40.1% and FCF coverage 1.33x indicate sufficient shareholder return capacity. The fiscal 2027 plan (Revenue +8.8%, Operating Income +18.6%) suggests continued profit growth, contingent on a recovery in semiconductor investment demand.
Deterioration in working capital efficiency (CCC 312 days, OCF/EBITDA 0.64x) is suppressing earnings quality and cash generation; accelerating receivables collection and shipment of work-in-progress are keys to the next growth stage. The 76.6% concentration in Semiconductor Manufacturing Equipment is a source of high margins but increases sensitivity to cycles, making order and inventory monitoring important. Improving profitability in the Measurement Instruments segment (raising Operating Margin above 13.7%) remains a challenge for sustainable consolidated margin expansion; progress on product mix improvement and service enhancement should be watched.
This report is an earnings analysis automatically generated by AI from XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm based on public financial data. Investment decisions are your responsibility; please consult a professional advisor as needed.