| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥693.3B | ¥670.8B | +3.3% |
| Operating Income | ¥92.1B | ¥88.1B | +4.5% |
| Ordinary Income | ¥94.7B | ¥89.5B | +5.8% |
| Net Income | ¥59.5B | ¥64.9B | -8.4% |
| ROE | 12.0% | 15.2% | - |
For the fiscal year ended March 2026, Revenue was ¥693.3B (YoY +¥22.4B +3.3%), Operating Income ¥92.1B (YoY +¥4.0B +4.5%), Ordinary Income ¥94.7B (YoY +¥5.2B +5.8%), and Net Income ¥59.5B (YoY -¥5.5B -8.4%). Revenue and operating/ordinary profit increased, with an improving gross margin of 45.4% (+0.4pt) and Operating Margin of 13.3% (+0.2pt). However, the recognition of Special Losses of ¥8.1B led to a decline in Net Income. By segment, Medical & Healthcare Equipment was the largest contributor with Revenue ¥471.8B and Operating Income ¥40.1B, while the Semiconductor-related segment declined to Revenue ¥111.2B (-9.5%) but maintained a high Operating Margin of 32.6%. By region, Japan Measurement (Revenue ¥239.4B +7.9%, Operating Income ¥30.6B +47.5%) and Europe Medical (Revenue ¥106.0B +20.2%) drove growth. Operating Cash Flow was ¥64.7B (YoY -1.7%), Free Cash Flow was ¥26.8B, securing dividend funding. ROE at 12.0% indicates solid profitability, but cash conversion efficiency remains an issue due to working capital reversals from Accounts Receivable increases and Accounts Payable decreases.
Revenue of ¥693.3B represents a YoY increase of +3.3%. By business, Measurement & Instrumentation was ¥387.8B (+2.0%), Medical & Healthcare Equipment ¥471.8B (+4.4%), both expanding. Semiconductor-related declined to ¥111.2B (-9.5%) but retained a high-profit structure with an Operating Margin of 32.6%. By region, Japan Measurement was strong at ¥239.4B (+7.9%) and Europe Medical at ¥106.0B (+20.2%). Conversely, Americas Measurement fell significantly to ¥50.9B (-16.6%), and Asia & Oceania Medical retreated to ¥83.9B (-3.1%). Cost of goods sold was ¥378.8B, with a Cost Ratio of 54.6% (prior year 55.0%), improving by 0.4pt, leading to Gross Profit of ¥314.5B and Gross Margin of 45.4%. The improvement was driven by price revisions and product mix shifts (retention of high-margin segments).
SG&A was ¥222.4B, representing 32.1% of Sales (prior year 31.9%), up 0.2pt, but absorbed by Gross Margin improvement, resulting in Operating Income of ¥92.1B (+4.5%) and Operating Margin of 13.3% (+0.2pt). Non-operating income included Interest Income ¥5.5B and Foreign Exchange Gains ¥1.5B, which exceeded Interest Expense ¥3.0B, producing Net Non-operating Income of +¥2.6B. Ordinary Income improved to ¥94.7B (+5.8%), Ordinary Income Margin 13.7% (+0.3pt). Special items included Special Losses of ¥8.1B (including Impairment Losses of ¥0.7B), resulting in a Pre-tax Income of ¥86.7B, down -4.7% YoY. After deducting Income Taxes of ¥27.2B and Non-controlling Interests of ¥0.2B, Net Income was ¥59.5B (-8.4%), Net Margin 8.6% (-1.1pt). Thus, while the company delivered revenue and operating/ordinary profit growth, one-off factors reduced final net profit.
Measurement & Instrumentation: Revenue ¥387.8B (+2.0%), Operating Income ¥33.9B (+25.3%), improving margin to 8.7%. Japan Measurement posted Revenue ¥239.4B (+7.9%), Operating Income ¥30.6B (+47.5%, margin 12.8%), substantially driving the segment. Europe Measurement recorded Revenue ¥6.2B (-4.9%) but Operating Income ¥0.4B (+246.4%), showing sharp recovery. Americas Measurement declined to Revenue ¥50.9B (-16.6%) with Operating Loss ¥3.5B (prior year -¥0.5B), widening the loss. Asia & Oceania Measurement was slightly up at Revenue ¥91.3B (+0.6%).
Medical & Healthcare Equipment: Revenue ¥471.8B (+4.4%), Operating Income ¥40.1B (-2.4%), margin 8.5%. Japan Medical had Revenue ¥170.5B (-3.7%) but Operating Income ¥32.4B (+0.9%), remaining solid. Europe Medical grew to Revenue ¥106.0B (+20.2%) with Operating Income ¥4.5B (+135.2%), a significant increase. Americas Medical increased Revenue to ¥111.4B (+11.3%) but Operating Income declined to ¥1.7B (-64.4%), lowering margin to 1.5%. Asia & Oceania Medical declined to Revenue ¥83.9B (-3.1%) and Operating Income ¥1.4B (-37.1%).
Semiconductor-related: Revenue ¥111.2B (-9.5%), Operating Income ¥36.3B (-12.0%), but maintained a high margin of 32.6%, contributing roughly 40% of consolidated Operating Income.
Profitability: ROE 12.0%, Operating Margin 13.3% (prior 13.1%), Ordinary Income Margin 13.7% (prior 13.3%), Net Margin 8.6% (prior 9.7%). Gross Margin improved to 45.4%, while SG&A Ratio rose slightly to 32.1%, yet margins expanded at the operating level. Financial income (Interest Income ¥5.5B, FX Gains ¥1.5B) exceeded Financial Expense (Interest Expense ¥3.0B), generating non-operating profit. A one-off Special Loss (¥8.1B) reduced Net Margin, but on an Ordinary Income basis the profitability trend remains positive.
Cash Quality: Operating Cash Flow (OCF) ¥64.7B equals 1.09x Net Income (¥59.5B), indicating acceptable cash realization of earnings, but compared to EBITDA (Operating Income ¥92.1B + Depreciation ¥19.1B = approx. ¥111.2B) the conversion ratio is 0.58x, showing weak conversion efficiency. The primary cause is working capital reversal: Accounts Receivable increased by ¥182.8B and Accounts Payable decreased by ¥112.2B. Free Cash Flow ¥26.8B remained positive, supporting capital expenditure of ¥30.5B (1.6x depreciation) while preserving dividend capacity. Working capital efficiency metrics: DSO approx. 100 days, DIO approx. 107 days, DPO approx. 34 days, yielding CCC approx. 173 days — extended and indicating sizable room for improvement in receivables and inventory management.
Investment Efficiency: EPS ¥216.33 (prior ¥235.63), BPS ¥1,806.70 (prior ¥1,560.29). Total Asset Turnover 0.92x (Revenue ¥693.3B ÷ Total Assets ¥752.8B), standard for manufacturing. CapEx continues to exceed depreciation to expand capacity.
Financial Soundness: Equity Ratio 65.9% (prior 62.0%) improved. Debt/EBITDA 0.96x, Interest Coverage 30.8x, indicating strong financial stability. Current Ratio 239%, Quick Ratio 191% — ample liquidity. Interest-bearing debt is concentrated in Short-term Borrowings ¥104.5B (Short-term Liability Ratio 98%), posing maturity concentration risk that warrants monitoring, but Cash ¥137.6B covers short-term liabilities by 1.32x. Long-term borrowings were substantially reduced to ¥1.7B. Goodwill ¥1.5B and Intangible Asset Ratio 2.0% indicate minimal off-balance or impairment risk.
Operating Cash Flow was ¥64.7B, nearly flat YoY (-1.7%). The subtotal (pre-tax and other adjustments CF) was ¥89.5B, from which Income Taxes Paid ¥25.2B were deducted. Key working capital negatives were Accounts Receivable increase -¥182.8B and Accounts Payable decrease -¥112.2B, partially offset by Inventory decrease +¥28.7B and Provision increases +¥3.7B. Interest and dividend receipts ¥5.9B and Interest paid -¥3.0B are included in OCF, net positive. Investing Cash Flow was -¥37.9B, including CapEx -¥30.5B (prior -¥15.3B), doubling year-on-year, Software and other Intangibles -¥5.8B, and Business Transfers -¥1.4B. Financing Cash Flow was -¥29.1B, with Net Decrease in Short-term Borrowings -¥4.8B, Long-term Debt Repayments -¥7.3B, Lease Liability Repayments -¥5.6B, and Dividends Paid -¥12.5B as main items. Adding Foreign Exchange Effects +¥5.9B, ending Cash was ¥136.2B, +¥3.6B increase. Free Cash Flow ¥26.8B provides 2.1x coverage for Dividends ¥12.5B, indicating shareholder returns are well covered after CapEx; however, the expansion of working capital (AR increase, AP decrease) is pressuring cash generation, so improvements in credit control and inventory turnover are needed.
Of Ordinary Income ¥94.7B, Operating Income ¥92.1B accounts for about 97%, indicating core business earnings dominance. Non-operating income totaled ¥8.7B (Interest Income ¥5.5B, FX Gains ¥1.5B, Other ¥0.7B); Interest Income is recurring from financial asset management, while FX Gains include temporary items subject to exchange rate volatility. Non-operating expenses ¥6.1B were mainly Interest Expense ¥3.0B and are recurring. Special items comprised Special Losses ¥8.1B (Impairment Losses ¥0.7B, Loss on Disposal of Fixed Assets ¥0.1B, etc.), and are one-off. Comprehensive Income ¥80.3B exceeded Net Income ¥59.5B substantially, supported by Other Comprehensive Income ¥20.8B (FX Translation Adjustments ¥15.6B, Retirement Benefit Adjustments ¥5.0B, Available-for-sale Securities Valuation ¥0.3B). The expansion in FX Translation Adjustments reflects valuation gains at overseas subsidiaries, boosting equity. On an accrual basis, the difference between OCF ¥64.7B and Net Income ¥59.5B of +¥5.2B is small; after adjusting non-cash items like Depreciation ¥19.1B, Working Capital movements were a -¥28.2B drag (AR increase and AP decrease). This working capital deterioration appears linked to temporary business expansion, but if persistent, could become a structural constraint on cash generation. Overall, Ordinary Income quality is high and core-business led; the decline in Net Income is mainly due to one-off Special Losses, and improving cash conversion efficiency is the near-term focus.
Full Year Guidance: Revenue ¥680.0B (YoY -1.9%), Operating Income ¥70.0B (-24.0%), Ordinary Income ¥69.0B (-27.1%), Net Income ¥45.0B. Compared to Q3 cumulative results (Revenue ¥693.3B, Operating Income ¥92.1B, Ordinary Income ¥94.7B, Net Income ¥59.5B), the company is materially ahead: Revenue 102%, Operating Income 132%, Ordinary Income 137%, Net Income 132%. Progress rates are Revenue 102%, Operating Income 132%, Ordinary Income 137%, already exceeding company guidance. This divergence is mainly attributable to Japan Measurement’s substantial outperformance (Operating Income +47.5%), Europe Medical’s strong Revenue and Operating Income (Revenue +20.2%, Operating Income +135.2%), and upside in FX and financial income. Semiconductor-related decline (-9.5%) appears to have been anticipated in guidance, with high margins mitigating impact. Risks are visible in the Americas where Measurement’s operating loss widened and Americas Medical’s margin deteriorated; recovery in Q4 is key to meeting company guidance. Net Income has reached 132% of the full-year forecast despite a Special Loss of ¥8.1B; barring further special losses in Q4, final results could substantially exceed guidance.
Annual Dividend ¥55 (Interim ¥25, Year-end forecast ¥30), with Payout Ratio approximately 25.9% against Net Income ¥59.5B, a conservative level. Total Dividends Paid ¥12.5B represent about 47% of Free Cash Flow ¥26.8B, with Dividend Coverage of 2.1x, indicating sustainability. The company substantially increased dividends from prior year ¥20 (+¥35, prior Payout Ratio 17.0%), demonstrating a stronger shareholder return stance despite lower Net Income. No share buybacks were executed this term (prior year -¥2.99B), so returns were delivered via dividends only. With a Payout Ratio of 26% and Cash & Deposits ¥137.6B and Equity Ratio 65.9%, financial strength supports potential future dividend increases. However, if working capital expansion (CCC approx. 173 days) persists, cash generation could be constrained, which would affect the sustainability of dividend increases; thus, improving working capital efficiency is a precondition for continued dividend growth. The absence of share buybacks this term reflects a capital allocation priority favoring growth investment (CapEx ¥30.5B) and dividends.
Semiconductor demand volatility: Revenue ¥111.2B (-9.5%), Operating Income ¥36.3B (-12.0%); while revenue and profit declined, the segment’s high Operating Margin 32.6% accounts for roughly 40% of consolidated Operating Income. Prolonged weakness in semiconductor markets could shrink this high-margin segment and exert downward pressure on consolidated margins. Conversely, demand recovery would materially boost profits, requiring cyclical monitoring.
Deterioration of Americas profitability: Americas Measurement Revenue ¥50.9B (-16.6%) with Operating Loss ¥3.5B, Americas Medical Revenue ¥111.4B (+11.3%) but Operating Income ¥1.7B (-64.4%), margin down to 1.5%. Deteriorating profitability in the Americas is evident and could weigh on consolidated Operating Income due to an unfavorable regional mix. Causes may include cost control lapses in COGS/SG&A and intensified competition; delayed turnaround could necessitate downward revisions to guidance.
Working capital management rigidity: Accounts Receivable ¥190.9B (prior ¥165.7B, +¥25.2B), Inventory ¥111.5B (prior ¥97.6B, +¥13.9B), and Accounts Payable ¥35.0B (prior ¥39.7B, -¥4.7B) show significant working capital deterioration. DSO approx. 100 days and CCC approx. 173 days indicate extended cycles and OCF pressure. Causes may include lax credit controls, slower inventory turns, and weaker supplier terms; failure to improve could generate incremental working capital funding needs, constraining shareholder returns and growth investment.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.3% | 7.8% (4.6%–12.3%) | +5.5pt |
| Net Margin | 8.6% | 5.2% (2.3%–8.2%) | +3.4pt |
Both Operating and Net Margins substantially exceed industry medians, placing the company in the upper tier among manufacturers on profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 3.3% | 3.7% (-0.4%–9.3%) | -0.4pt |
Revenue growth is in line with the industry median, representing an average growth pace.
※Source: Company compilation
Continued operating/ordinary profit increase and margin improvement, underpinned by strong performance in Japan Measurement (Operating Income +47.5%) and Europe Medical (Operating Income +135.2%), which bolster the revenue base. Semiconductor-related revenue declined but maintained a high margin of 32.6%, offering substantial upside when demand recovers. Conversely, deteriorating profitability in the Americas (Measurement & Medical) is a drag, and progress on restructuring will be a turning point for future earnings trends.
Working capital expansion (AR +¥25.2B, Inventory +¥13.9B, AP -¥4.7B) has reduced OCF/EBITDA to 0.58x, weakening cash conversion. CCC approx. 173 days remains extended, highlighting substantial room to improve receivables collection and inventory turns. Normalizing working capital could significantly enhance cash generation and expand capacity for shareholder returns and growth investment.
Financial soundness (Equity Ratio 65.9%, Debt/EBITDA 0.96x) and dividend sustainability (Payout Ratio 26%, FCF Coverage 2.1x) are high. Q3 results materially outperformed full-year guidance, increasing prospects for dividend hikes or additional shareholder returns. However, the short-term borrowing concentration (Short-term Liability Ratio 98%) is a maturity concentration risk to note; extending maturities or progressing repayments will support financial flexibility.
This report was automatically generated by AI analyzing XBRL financial statement data and is intended as a financial analysis document. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by the Company based on public financial disclosures for reference. Investment decisions are your own responsibility; consult professional advisors as needed before acting.