| Metric | Current Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2177.5B | ¥2123.4B | +2.5% |
| Operating Income / Operating Profit | ¥204.6B | ¥188.4B | +8.6% |
| Ordinary Income | ¥220.1B | ¥183.2B | +20.1% |
| Net Income / Net Profit | ¥206.6B | ¥122.0B | +69.3% |
| ROE | 12.8% | 8.4% | - |
For the fiscal year ended March 2026, Fujiseal International achieved higher revenue and profit: Revenue ¥2,177.5B (YoY +¥54.1B +2.5%), Operating Income ¥204.6B (YoY +¥16.2B +8.6%), Ordinary Income ¥220.1B (YoY +¥36.9B +20.1%), Net Income ¥206.6B (YoY +¥84.6B +69.3%). Operating margin improved to 9.4% (up +0.5pt from 8.9% prior year) and Net income margin expanded substantially to 9.5% (up +3.8pt from 5.7%), demonstrating marked profitability improvement. Net Income was driven by net positive non-recurring items of ¥23.2B (Special Gains ¥50.0B − Special Losses ¥26.8B) and a decline in the effective tax rate to 15.1% (prior year 31.7%), resulting in a YoY increase of +69.3%. Double-digit growth in the Europe segment (Revenue +11.6%) and margin improvement across all regions led performance, while non-operating items added momentum to Ordinary Income via foreign exchange gains of ¥13.0B (prior year foreign exchange losses ¥7.8B).
[Revenue] Revenue totaled ¥2,177.5B (YoY +2.5%), achieving top-line growth. Regional mix: Japan ¥1,006.4B (46.2% of total, YoY -1.9%), Americas ¥682.7B (31.4%, +3.2%), Europe ¥387.4B (17.8%, +11.6%), ASEAN ¥194.2B (8.9%, -0.6%), with double-digit growth in Europe driving corporate growth. Japan remained the core market and was essentially flat, while Europe benefited from new customer wins and pricing measures; ASEAN saw a slight decline in revenue but significant profitability improvement. Gross margin improved to 22.2% (up +1.0pt from 21.2%) due to price adjustments, improved regional mix, and stabilization of raw material costs.
[Profitability] Operating Income was ¥204.6B (YoY +8.6%), with Operating Margin improving to 9.4% (up +0.5pt from 8.9%). SG&A was ¥278.7B (SG&A ratio 12.8%), up +6.6% YoY, but increases in gross profit (¥483.4B, up from ¥449.9B +7.5%) more than offset SG&A growth, producing higher operating profit. By segment, Japan Operating Income ¥96.4B (margin 9.6%) remained the core contributor; Americas ¥66.0B (9.7%) contributed stably; Europe ¥26.3B (6.8%, YoY +23.3%); ASEAN ¥17.2B (8.9%, +83.8%)—profitability improvements in Europe and ASEAN supported overall margin expansion. Ordinary Income was ¥220.1B (YoY +20.1%), with Non-operating Income ¥19.8B (FX gains ¥13.0B, Interest Income ¥4.2B, Dividend Income ¥1.0B) significantly contributing, while Non-operating Expenses were restrained at ¥4.4B (Interest Expense ¥2.8B). Net Income was ¥206.6B (YoY +69.3%), aided by net positive special items of ¥23.2B and a reduction in the effective tax rate to 15.1% (prior year 31.7%). In conclusion, the company achieved growth in revenue and profit while improving profitability at the gross, operating, and net levels.
The Japan segment maintained its core position with Revenue ¥1,006.4B (YoY -1.9%), Operating Income ¥96.4B (YoY -2.6%), margin 9.6%, representing a slight decline in revenue and profit. The Americas segment continued steady growth with Revenue ¥682.7B (+3.2%), Operating Income ¥66.0B (+1.7%), margin 9.7%. The Europe segment achieved double-digit revenue growth and margin improvement with Revenue ¥387.4B (+11.6%), Operating Income ¥26.3B (+23.3%), margin 6.8%, driving corporate results. The ASEAN segment posted Revenue ¥194.2B (-0.6%), Operating Income ¥17.2B (+83.8%), margin 8.9%, where efficiency measures substantially improved operating profit despite flat revenue. Margin differentials persist across regions: Europe’s margin at 6.8% remains relatively low but is improving, while ASEAN’s recovery to 8.9% and the Americas’ stable 9.7% underpin overall profitability.
[Profitability] Operating Margin 9.4% (up +0.5pt from 8.9%), Net Income Margin 9.5% (up +3.8pt from 5.7%), improving across all stages. ROE was 12.8%, reflecting a structure of Net Income Margin 9.5% × Total Asset Turnover 0.96 × Financial Leverage 1.40x, where the large improvement in net income margin is the primary driver. Gross profit margin was 22.2% (up +1.0pt from 21.2%) supported by price revisions and stabilizing raw material costs.
[Cash Quality] Operating Cash Flow / Net Income ratio was 1.04x, generally healthy, but Operating CF / EBITDA ratio remained at 0.75x, constrained by increases in working capital (Accounts Receivable +¥33.8B, Accounts Payable -¥27.8B). Days Sales Outstanding (DSO) 94 days, Days Payable Outstanding (DPO) 35 days, Days Inventory Outstanding (DIO) 62 days, resulting in a relatively long Cash Conversion Cycle (CCC) of 121 days.
[Investment Efficiency] Capital expenditures totaled ¥169.8B, representing 7.8% of Revenue and 2.0x Depreciation (Depreciation ¥84.2B), indicating continued active investment. Construction in progress was ¥137.9B (up +159.0% from ¥53.3B prior year), reflecting large-scale investment projects underway.
[Financial Soundness] Equity Ratio 71.3% (prior year 69.2%), Debt/Equity 8.0% (prior year 6.4%), indicating very low leverage. Interest-bearing debt was ¥101.5B (short-term borrowings ¥40B + long-term borrowings ¥56.1B + lease obligations etc.), with Debt/EBITDA ratio 0.33x and Interest Coverage 73x, maintaining healthy levels. Cash and deposits were ¥358.0B, providing ample coverage against short-term liabilities of ¥529.2B. Current ratio 262%, Quick ratio 241% indicate strong short-term liquidity and high financial safety.
Operating Cash Flow was ¥215.5B (YoY +1.0%), representing 1.04x of Net Income ¥206.6B, a generally favorable level. However, increases in working capital reduced Operating CF from the subtotal before working capital changes of ¥259.1B, leaving Operating CF / EBITDA at 0.75x. Increases in Accounts Receivable (CF impact -¥14.3B), decreases in Accounts Payable (-¥27.8B), and increases in Inventory (-¥4.1B) negatively affected working capital and compressed cash generation. Investing Cash Flow was -¥124.8B, primarily due to CAPEX -¥169.8B, reflecting active investment at 2.0x depreciation, partially offset by net increases in time deposits of +¥49.7B. Free Cash Flow was ¥90.7B (Operating CF ¥215.5B + Investing CF -¥124.8B). In Financing Cash Flow, dividends -¥39.3B and share repurchases -¥10.8B produced total shareholder returns of ¥50.1B, covered 1.86x by Free Cash Flow. Net increase in long-term borrowings +¥28.3B and net decrease in short-term borrowings -¥20.0B partially extended and reduced interest-bearing debt, with cash and deposits rising from ¥343.9B at the beginning of the period to ¥358.0B at the end (+¥14.1B). Improvement in working capital turnover (CCC 121 days) is key to strengthening cash generation.
Core earnings are Operating Income ¥204.6B, supported by a recurring earnings base with an Operating Margin of 9.4%. Non-operating income ¥19.8B (0.9% of Revenue) is modest in scale and includes items sensitive to market/financial conditions: FX gains ¥13.0B, Interest Income ¥4.2B, Dividend Income ¥1.0B. Given the prior year recorded FX losses of ¥7.8B, FX volatility increases variability in Ordinary Income. Special items netted to a positive ¥23.2B (Special Gains ¥50.0B − Special Losses ¥26.8B), boosting pre-tax profit. Special Gains included proceeds from sale of investment securities ¥0.4B, sale of fixed assets ¥0.1B, and subsidies/grants ¥49.0B; Special Losses included impairment losses ¥2.0B, loss on disposal of fixed assets ¥3.1B, valuation losses on investment securities ¥4.1B, etc. The ¥49.0B in subsidies is a one-off factor with limited continuity into subsequent periods. The effective tax rate fell to 15.1% from 31.7% prior year, aided by increases in deferred tax assets and tax incentives, but there is risk of normalization. Operating CF / Net Income ratio 1.04x and accrual ratio -0.4% are favorable, yet Operating CF / EBITDA 0.75x falls short of the standard (≥0.9), with working capital retention somewhat restraining cash quality. The divergence between Ordinary Income ¥220.1B and Net Income ¥206.6B reflects amplification of Net Income due to net positive special items and a low tax rate; assumptions should be made that one-off items may unwind in the next fiscal year.
Full-year guidance: Revenue ¥2,286.0B (YoY +5.0%), Operating Income ¥222.0B (+8.5%), Ordinary Income ¥224.0B (+1.8%), Net Income ¥153.0B (-25.9%). Versus guidance, the results represent progress of Revenue 95.3%, Operating Income 92.2%, Ordinary Income 98.2%, Net Income 135.1%, with Net Income exceeding guidance by 35.1% while Revenue and Operating Income slightly missed. The significant beat on Net Income was primarily due to net positive special items of ¥23.2B and a decline in the effective tax rate to 15.1%, indicating the company plan underweighted these one-off factors. Slight shortfall in Operating Income likely reflects SG&A growth (YoY +6.6%) outpacing revenue growth (+2.5%) and a small decline in Japan segment profit. Ordinary Income was largely within range at 98.2% of guidance, with FX gains slightly outperforming plan. No revision to full-year guidance has been disclosed at this time; recovery in the second half will be required to meet full-year Revenue and Operating Income targets. Net Income was conservatively guided, assuming the removal of one-off factors, and a decline in Net Income margin is expected if special items normalize and the effective tax rate reverts.
Dividends: interim dividend ¥35, year-end dividend forecast ¥46, total ¥81 (prior year ¥30, +¥51), with Payout Ratio 23.6% (total dividends ¥39.3B / Net Income ¥206.6B × approximately 89% considered; effective payout around ~21%), remaining at a conservative level. The year-end dividend was increased by ¥10 from the initial forecast, demonstrating an intention to strengthen shareholder returns in light of the large increase in Net Income. Share buybacks of ¥10.8B were executed, bringing total shareholder returns to approximately ¥50.1B, and Total Return Ratio to 24.3% (¥50.1B / ¥206.6B), maintaining a balance between growth investment and shareholder returns. Free Cash Flow of ¥90.7B covers total returns of ¥50.1B by 1.86x, indicating high dividend sustainability. With cash and deposits ¥358.0B and low leverage (Debt/Equity 8.0%), there is scope for gradual increases in payout ratio. Dividend policy does not explicitly announce consecutive increases, but the upward revision to the year-end dividend signals stronger shareholder return intent; a performance-linked dividend policy is expected to continue.
Working Capital Retention Risk: DSO 94 days and CCC 121 days indicate a lengthy working capital cycle, reflected in a low Operating CF / EBITDA ratio of 0.75x, which constrains cash generation. If accounts receivable collection elongation (YoY +¥33.8B) and compression of accounts payable (-¥27.8B) continue, securing funds for growth investment and shareholder returns could be constrained.
SG&A Expansion Risk: SG&A of ¥278.7B (YoY +6.6%) is rising faster than revenue growth (+2.5%), pushing the SG&A ratio to 12.8% (up +0.5pt from 12.3%). If economies of scale are insufficient and revenue growth slows, improvements in Operating Margin could stall. The main driver is increased salaries and allowances ¥107.8B (prior year ¥97.7B, +¥10.3B), so balancing responses to labor cost inflation with productivity improvements is a challenge.
One-off Item Reversal and Tax Rate Normalization Risk: Net Income ¥206.6B is supported by net positive special items of ¥23.2B (mainly subsidies ¥49.0B) and a low effective tax rate of 15.1%; these are transient. From the next fiscal year onward, normalization of special items and a return of the effective tax rate to the 30% range would likely cause Net Income margin to decline materially from 9.5%, posing downside risk to absolute Net Income. The full-year forecasted Net Income ¥153.0B (YoY -25.9%) incorporates the removal of these one-offs, making communication of market expectations important.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 9.4% | 7.8% (4.6%–12.3%) | +1.6pt |
| Net Income Margin | 9.5% | 5.2% (2.3%–8.2%) | +4.3pt |
Profitability exceeds the industry median, ranking the company in the upper range for both Operating Margin and Net Income Margin.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 2.5% | 3.7% (-0.4%–9.3%) | -1.2pt |
Revenue growth is 1.2pt below the industry median of 3.7%, indicating a somewhat modest growth pace within the industry.
※ Source: Company compilation
Profitability improvement at the operating level is taking hold: Gross margin 22.2% (YoY +1.0pt) and Operating Margin 9.4% (YoY +0.5pt) indicate improving earnings structure, driven by price adjustments and improved regional mix (margin improvements in Europe and ASEAN). Operating Income has increased for three consecutive periods (2024 ¥188.4B → 2025 ¥204.6B), confirming strengthening of operating profit capacity.
Net Income was boosted by one-off items and is expected to normalize next year: Net Income ¥206.6B (YoY +69.3%) was supported by net positive special items of ¥23.2B (including subsidies ¥49.0B) and a low effective tax rate of 15.1%, with a large portion being transient. The full-year forecasted Net Income ¥153.0B (YoY -25.9%) assumes these one-offs abate; thereafter, operating and ordinary income improvements will be the main drivers of Net Income growth. Market assessments should discount one-off effects and focus on trend evaluation based on operating and ordinary income.
Balance between financial soundness and growth investment: Debt/EBITDA 0.33x, Equity Ratio 71.3%, Cash ¥358.0B show a strong financial base while maintaining active investment with CAPEX ¥169.8B (7.8% of Revenue, 2.0x Depreciation). Accumulation of Construction in Progress ¥137.9B (YoY +159.0%) is laying groundwork for medium-term capacity expansion and efficiency gains; subsequent commissioning could drive EBITDA growth and improve Operating CF / EBITDA. There is substantial room to improve working capital efficiency (CCC 121 days), and optimizing DSO/DPO will be a key lever for further value creation.
This report is an AI-generated financial analysis document created by analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on disclosed financial statements. Investment decisions are your responsibility; please consult advisors as necessary.