| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥6057.5B | ¥6252.7B | -3.1% |
| Operating Income | ¥1225.2B | ¥1356.8B | -9.7% |
| Ordinary Income | ¥1243.2B | ¥1382.7B | -10.1% |
| Net Income | ¥920.1B | ¥994.7B | -7.5% |
| ROE | 18.9% | 23.6% | - |
For the fiscal year ended March 2026, Revenue was ¥6,057.5B (YoY -¥195.2B, -3.1%), Operating Income was ¥1,225.2B (YoY -¥131.6B, -9.7%), Ordinary Income was ¥1,243.2B (YoY -¥139.5B, -10.1%), and Net Income was ¥920.1B (YoY -¥74.7B, -7.5%), resulting in declines in both sales and profits. The primary cause was the core Semiconductor Production Equipment (SPE) business entering a down phase of the investment cycle, with sales declining 6.5%. Conversely, the Display Manufacturing Equipment and Thin Film (FT) business improved significantly with sales up 24.9% and Operating Income up 181.9%, demonstrating portfolio diversification benefits. Operating margin fell to 20.2% (prior year 21.7%), down 1.5pt but remained in double digits, and ROE stayed at a high level of 18.9%. Operating Cash Flow was ¥927.1B (YoY +30.1%), Free Cash Flow was ¥630.0B, showing cash generation sufficient to cover dividend payments (¥297.0B).
Revenue was ¥6,057.5B (YoY -3.1%), marking the first decline in two periods. By segment, Semiconductor Production Equipment (SPE) recorded ¥4,859.8B (YoY -6.5%) and, as the core business accounting for 80.2% of company-wide sales, its adjustment pulled down overall revenue. Graphic Arts equipment (GA) was ¥574.9B (YoY +8.5%) and performed steadily, but Operating Income deteriorated to ¥36.0B (YoY -16.1%). Display Manufacturing Equipment and Thin Film (FT) achieved significant revenue growth to ¥447.6B (YoY +24.9%) and Operating Income recovered sharply to ¥86.0B (YoY +181.9%). Printed Circuit Board related equipment (PE) saw a modest increase in sales to ¥145.4B (YoY +2.6%) but Operating Income fell to ¥3.8B (YoY -64.2%). Other businesses grew to ¥279.5B (YoY +7.1%) but Operating Loss widened to ¥24.4B (prior year loss ¥18.2B). Gross profit margin improved 0.9pt to 38.5% (prior year 37.6%), and the absolute gross profit was ¥2,331.7B (prior year ¥2,352.9B), a slight decline.
Selling, general and administrative expenses (SG&A) were ¥1,106.5B (YoY +11.0%), increasing in contrast to lower sales, and SG&A ratio rose 2.4pt to 18.3% (prior year 15.9%). As a result, Operating Income was ¥1,225.2B (YoY -9.7%) and Operating Margin declined 1.5pt to 20.2% (prior year 21.7%). Non-operating income/expense net contributed ¥18.0B (prior year ¥25.8B), a contraction; interest income was ¥11.7B and dividend income ¥9.7B increased, while foreign exchange losses of ¥10.8B (prior year ¥5.4B) pressured profits. Ordinary Income was ¥1,243.2B (YoY -10.1%). Extraordinary items produced a net gain of ¥24.2B mainly due to gain on sale of investment securities of ¥31.2B, bringing profit before tax to ¥1,267.4B (YoY -8.8%). Income taxes were ¥347.4B (effective tax rate 27.4%), and Net Income was ¥920.1B (YoY -7.5%), with Net Margin of 15.2% (prior year 15.9%).
SPE recorded Revenue ¥4,859.8B (YoY -6.5%), Operating Income ¥1,227.1B (YoY -10.4%), and Operating Margin 25.2% (prior year 26.4%), a profit decline exceeding the revenue decline. This segment, accounting for 90.7% of company Operating Income, transmitted the semiconductor investment cycle adjustment across overall results. GA achieved Revenue ¥574.9B (YoY +8.5%) but Operating Income fell to ¥36.0B (YoY -16.1%) and Operating Margin declined to 6.3% (prior year 8.1%), showing a notable deterioration in profitability. FT posted Revenue ¥447.6B (YoY +24.9%), Operating Income ¥86.0B (YoY +181.9%), and Operating Margin 19.2% (prior year 8.5%), a 10.7pt improvement and the strongest recovery. PE reported Revenue ¥145.4B (YoY +2.6%) but Operating Income decreased to ¥3.8B (YoY -64.2%), Operating Margin 2.6% (prior year 7.5%). Other segments grew Revenue to ¥279.5B (YoY +7.1%) but Operating Loss widened to ¥24.4B (prior year loss ¥18.2B) as investment costs in new business areas led.
Profitability: Operating Margin was 20.2%, down 1.5pt from 21.7% the prior year, but remained at a high double-digit level. Gross Profit Margin improved 0.9pt to 38.5% (prior year 37.6%), and absolute gross profit was ¥2,331.7B (prior year ¥2,352.9B), a slight decline. SG&A ratio rose 2.4pt to 18.3% (prior year 15.9%) and absolute SG&A was ¥1,106.5B (YoY +11.0%), increasing despite lower sales. Net Margin was 15.2% (prior year 15.9%), down 0.7pt but still double digits, and ROE was 18.9%, a strong level (>15%). DuPont decomposition: Net Margin 15.2% × Total Asset Turnover 0.838 × Financial Leverage 1.48 ≈ 18.9%; the decline in Total Asset Turnover from 0.932 the prior year (≈10% decrease) was the main driver of ROE decline.
Cash quality: Operating Cash Flow was ¥927.1B, exceeding Net Income ¥920.1B, yielding an OCF/NI ratio of 1.01x, indicating good cash backing for earnings. However, OCF/EBITDA was 0.68x (EBITDA = Operating Income + Depreciation = ¥1,370.7B), showing weak cash conversion efficiency, with working capital movements being a drag. Inventory Days (DIO) were 155 days (prior year ~145 days), Receivables Days (DSO) 61 days, both elevated, and Cash Conversion Cycle (CCC) extended to 173 days. Investment efficiency: Total Assets increased ¥511.3B to ¥7,224.2B (prior year ¥6,712.9B), and Total Asset Turnover declined to 0.838x (prior year 0.932x). Capital Expenditure was ¥255.1B (CapEx/Sales 4.2%), Depreciation was ¥145.8B, giving a CapEx/Depreciation ratio of 1.75x, indicating continued capacity expansion and modernization investments. Intangible assets rose ¥63.7B (+89.7%) to ¥134.7B (prior year ¥71.0B) as digital investments in software increased.
Financial soundness: Current Ratio was 228.2% (Current Assets ¥5,085.7B / Current Liabilities ¥2,228.8B), and Quick Ratio was 189.4%, both very high, indicating robust short-term payment capacity. Interest-bearing debt totaled ¥25.7B (Short-term borrowings ¥24.9B, Long-term borrowings ¥0.8B), Debt/EBITDA was 0.02x, effectively a net cash position. Equity Ratio improved 4.7pt to 67.4% (prior year 62.7%), and Equity rose ¥659.9B to ¥4,866.8B (prior year ¥4,206.9B). Cash and deposits were ¥1,473.7B and short-term securities ¥800.0B, giving liquidity on hand of ¥2,273.7B, exceeding Current Liabilities ¥2,228.8B and providing a substantial liquidity buffer.
Operating Cash Flow was ¥927.1B (prior year ¥712.3B, YoY +30.1%), exceeding Net Income ¥920.1B, yielding OCF/NI ratio of 1.01x and demonstrating good cash backing of earnings. In working capital movements, a decrease in inventory contributed +¥124.1B (prior year was -¥879.3B), an increase in trade receivables was -¥72.5B (prior year +¥1,203.7B), and a decrease in trade payables was -¥50.5B (prior year -¥2,386.6B). A decrease in contract liabilities (advances received) was -¥190.9B (prior year -¥3,557.8B), and shrinking backlog became a cash outflow factor. An increase in other current liabilities contributed +¥206.8B, as increases in provisions and accrued expenses offset cash outflows. Income tax payments were ¥468.4B (prior year ¥246.7B), increasing cash outflow substantially. Investing Cash Flow was -¥297.1B, with tangible fixed asset acquisitions -¥255.1B and intangible fixed asset acquisitions -¥53.6B as growth investments, while proceeds from sale of investment securities ¥46.7B contributed inflows. Free Cash Flow was ¥630.0B (Operating CF + Investing CF), sufficient to cover dividend payments of ¥297.0B. Financing Cash Flow was -¥402.0B, with dividend payments -¥297.0B, net treasury stock acquisition -¥104.2B (repurchases -¥161.8B, disposals +¥57.6B) as main outflows. Cash and cash equivalents at period-end rose ¥272.5B to ¥2,257.3B (prior year ¥1,984.8B), strengthening liquidity on hand. The weak cash conversion efficiency (OCF/EBITDA 0.68x) is mainly due to elevated inventory and receivables and working capital volatility; compression of DIO and DSO will be key into the next fiscal year.
Operating Income ¥1,225.2B and Ordinary Income ¥1,243.2B indicate a ¥18.0B uplift from non-operating items, so non-operating income contributed positively. Non-operating income of ¥49.3B comprised interest income ¥11.7B, dividend income ¥9.7B, subsidy income ¥11.5B, etc., reflecting recurring financial income and policy support. Non-operating expenses ¥31.3B were led by foreign exchange losses ¥10.8B (prior year ¥5.4B), with valuation losses on foreign-currency denominated assets in a yen appreciation environment weighing on earnings. Equity-method investment income was ¥3.2B, small in scale, indicating the recurring nature of non-operating items is generally high. Extraordinary items were a net gain of ¥24.2B (gain on sale of investment securities ¥31.2B - impairment losses ¥5.9B - loss on retirement of fixed assets ¥5.0B, etc.), temporarily boosting profit before tax by 1.9%. Operating Cash Flow ¥927.1B closely matched Net Income ¥920.1B (OCF/NI 1.01x), indicating low accruals and high earnings quality. Comprehensive income was ¥1,057.3B (Net Income ¥920.1B + Other Comprehensive Income ¥137.2B); foreign currency translation adjustments ¥49.8B, valuation difference on available-for-sale securities ¥48.7B, and retirement benefit adjustments ¥38.7B exceeded Net Income drivers but are balance sheet valuation adjustments with limited recurring impact on operating income. Overall, on an Ordinary Income basis, earning power is high, impacts from extraordinary and non-operating items are minor, cash backing is secured, and earnings quality is judged good.
Full-year guidance is Revenue ¥7,250.0B (YoY +19.7%), Operating Income ¥1,500.0B (YoY +22.4%), Ordinary Income ¥1,500.0B (YoY +20.7%), Net Income ¥1,100.0B, EPS ¥581.74, projecting increases in both sales and profits. Annual dividend forecast is ¥60 (post 1-for-2 stock split effective April 1, 2026; pre-split basis ¥350). Progress against current results is Revenue 83.6%, Operating Income 81.7%, Ordinary Income 82.9%, implying plans assume significant H2 growth. Assumptions include recovery of the SPE investment cycle and continued growth in FT; however, Contract Liabilities decreased to ¥831.5B (prior year ¥1,004.0B), indicating some reduction in backlog depth and warranting attention. The company will hold an earnings briefing for institutional investors and analysts on May 13, 2026, where order trends and customer investment plans are expected to be disclosed in detail. Achieving the full-year plan depends on order recovery in H2, normalization of inventory and working capital (compression of DIO and DSO), and restraining SG&A growth.
Annual dividend was ¥293 (Q2-end ¥123 + year-end ¥170). Based on total dividends of ¥297.2B relative to Net Income ¥920.1B, the payout ratio computes to 32.3%. Note that average shares outstanding during the period were 189,065 thousand shares and total shares for dividend payments were 189,088 thousand shares, broadly consistent with the company-disclosed payout ratio of 30.1%. Dividend payments of ¥297.0B against Free Cash Flow ¥630.0B represent 47.1%, indicating sustainability on an FCF basis. Treasury stock net acquisition during the period was ¥110.8B (repurchases ¥161.8B - disposals ¥57.6B; treasury stock balance decreased from ¥282.6B to ¥68.0B), and total shareholder return (dividends + treasury stock acquisition ÷ Net Income) was approximately 44.4%, within a healthy range. Treasury stock disposals are presumed to have been used for stock-based compensation and transfers to employee shareholding plans, contributing to capital efficiency. With an effectively net cash position (Interest-bearing debt ¥25.7B, Debt/EBITDA 0.02x), liquidity on hand ¥2,273.7B (Cash ¥1,473.7B + Short-term securities ¥800.0B), the company has substantial capacity for dividends. Next fiscal year forecast dividend is ¥60 (post-split; pre-split annual ¥350), indicating an increase from this period and suggesting continuation of a progressive dividend policy.
SPE cycle dependence: SPE accounts for 80.2% of Revenue and 90.7% of Operating Income; performance fluctuates materially with the semiconductor investment cycle. This period saw Revenue -6.5% and Operating Income -10.4%; timing and pace of WFE (Wafer Fab Equipment) investment recovery are the key swing factors for outlook. Geopolitical risks and customer capex postponements also affect results.
Deterioration in working capital efficiency and weak cash conversion: Inventory Days (DIO) 155 days, Receivables Days (DSO) 61 days, CCC 173 days remain elevated and OCF/EBITDA 0.68x indicates weakened cash conversion efficiency. Inventory buildup and elongated receivable collection suggest product mismatch or worsening customer payment terms, carrying risks of future markdowns or write-offs. Contract Liabilities decreased to ¥831.5B (prior year ¥1,004.0B), reducing backlog depth and posing concerns for near-term sales pipeline.
SG&A increase and reversal of operating leverage: SG&A rose to ¥1,106.5B (YoY +11.0%), increasing despite lower sales, and SG&A ratio climbed 2.4pt to 18.3% (prior year 15.9%). Likely driven by hiring and upfront R&D investment, but if sales recovery slows, fixed cost burden could continue to pressure margins. Operating Margin is 20.2% (prior year 21.7%), down 1.5pt; achieving next year’s targets requires realization of operating leverage via revenue growth to absorb fixed costs.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 20.2% | 7.8% (4.6%–12.3%) | +12.5pt |
| Net Margin | 15.2% | 5.2% (2.3%–8.2%) | +10.0pt |
Profitability significantly exceeds industry medians, with both Operating Margin and Net Margin in the top tier.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -3.1% | 3.7% (-0.4%–9.3%) | -6.8pt |
Revenue growth lags the industry median, reflecting the SPE cycle adjustment.
※ Source: Company aggregation
A high-ROE, high-margin earnings base is robust, but the decline in Total Asset Turnover pressured ROE. Elevated DIO 155 days, DSO 61 days, CCC 173 days, and weak cash conversion efficiency (OCF/EBITDA 0.68x) are confirmed. If inventory and receivables compression and working capital normalization proceed into the next fiscal year, improvements in Total Asset Turnover and cash generation could lead to ROE and valuation re-rating.
High concentration in SPE (Sales 80.2%, Operating Income 90.7%) increases earnings volatility tied to the semiconductor investment cycle. Conversely, FT’s Sales +24.9%, Operating Income +181.9%, Operating Margin 19.2% (prior year 8.5%) and +10.7pt improvement indicate progress in portfolio diversification. Contract Liabilities decreased to ¥831.5B (prior year ¥1,004.0B), somewhat reducing backlog depth; thus H1 order trends and ramp-up in demand for leading-node and advanced packaging equipment are key to achieving the full-year plan (Revenue +19.7%, Operating Income +22.4%). The company’s plan assumes substantial H2 growth, so timing and scale of order recovery are the main monitoring points.
The financial position is among the strongest: effectively net cash (Interest-bearing debt ¥25.7B, Debt/EBITDA 0.02x), Cash + short-term securities ¥2,273.7B, Equity Ratio 67.4%. Free Cash Flow ¥630.0B comfortably covers dividends ¥297.0B, and total shareholder return of 44.4% is within a healthy range. Next fiscal year forecast dividend ¥60 (post-split, pre-split annual ¥350) suggests an increase year-on-year and implies continuation of a progressive dividend policy. A strong balance sheet supports both growth investments (CapEx/Depreciation 1.75x) and shareholder returns, and in a recovery of orders there is ample scope for M&A and technology investments.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from public financial statement data. Investment decisions should be made at your own responsibility; consult a professional advisor as necessary.