| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥362.3B | ¥383.0B | -5.4% |
| Operating Income / Operating Profit | ¥67.4B | ¥83.0B | -18.8% |
| Ordinary Income | ¥65.7B | ¥80.3B | -18.2% |
| Net Income / Net Profit | ¥38.2B | ¥36.8B | +3.8% |
| ROE | 7.7% | 7.7% | - |
For the fiscal year ended March 2026, Revenue was ¥362.3B (YoY -¥20.7B, -5.4%), Operating Income was ¥67.4B (YoY -¥15.6B, -18.8%), Ordinary Income was ¥65.7B (YoY -¥14.6B, -18.2%), and Net Income was ¥38.2B (YoY +¥1.4B, +3.8%), representing lower sales and profit. At the operating level, margins were compressed due to reduced profit in the core Funeral Revenue segment (-15.4%) and revenue decline in the Funeral Public Service segment (-9.2%), with Operating Margin down to 18.6% (prior year 21.7%), a decline of -3.1pt. Gross margin also contracted to 38.1% (prior year 42.2%), -4.1pt, highlighting deterioration in cost structure. Conversely, a significant reduction in extraordinary losses (impairment loss ¥0.5B, prior year ¥5.77B) supported higher final profit, improving Net Margin to 10.6% (prior year 9.6%), +1.0pt. Operating Cash Flow (OCF) turned strongly positive to ¥208.5B (YoY +346.7%), and Free Cash Flow was ¥215.3B, sufficient to cover ¥62.6B share buybacks and ¥18.2B dividends, building Cash & Deposits to ¥224.2B (+91.4%). Short-term borrowings were sharply reduced to ¥14.0B (-78.1%), with Debt/EBITDA = 1.41x and Interest Coverage = 24x, indicating robust financial resilience. The next fiscal year guidance projects Revenue ¥394.0B (+8.8%) and Operating Income ¥71.0B (+5.3%), targeting revenue and profit growth with margin recovery as a focal point.
[Revenue] Revenue was ¥362.3B, down -5.4% YoY. By segment, Funeral Public Service declined to ¥54.4B (-9.2%), affected by lower cremation operations; Funeral Revenue increased slightly to ¥106.0B (+1.5%), with stable venue operations and funeral services. Information was ¥150.0B (+1.1%), marginally up as restructuring in printing and digital solutions contributed. Human Resources was ¥51.9B (-3.2%), with domestic and international recruitment and staffing underperforming. Asset Consulting declined sharply to ¥3.2B (-82.1%), with weakness in financial and real estate brokerage. Revenue composition: Funeral Revenue 29.3%, Information 41.4%, Funeral Public Service 15.0%, Human Resources 14.3%, Asset Consulting 0.9%, with Information and Funeral Revenue being core. Consolidated top-line was dragged down by declines in Funeral Public Service and the sharp fall in Asset Consulting, and minor increases in Information and Funeral Revenue could not offset the decline.
[Profitability] Operating Income was ¥67.4B, down -18.8% YoY. Operating margin decreased to 18.6% (prior year 21.7%), -3.1pt. Gross profit was ¥138.0B, with Gross Margin 38.1% (prior year 42.2%), -4.1pt, indicating notable upward pressure on Cost of Sales. SG&A expenses were ¥70.6B (SG&A ratio 19.5%, prior year 20.5%), improving by -1.0pt as cost reductions progressed, but insufficient to offset gross margin compression, resulting in operating-level decline. Segment operating results: Funeral Public Service Operating Income ¥11.9B (margin 21.9%, YoY -4.6%), down; Funeral Revenue Operating Income ¥36.3B (margin 34.2%, -15.4%), core segment profit decline pressured consolidated profit. Information Operating Income ¥6.5B (margin 4.4%, +66.2%), structural reforms and the end of impairments supported a move from operating loss to profit. Human Resources Operating Loss ¥-0.7B (margin -1.4%, deficit narrowed +55.1%) indicating signs of bottoming out. Asset Consulting Operating Loss ¥-0.6B (margin -17.4%, turned to loss), weighing on consolidated profit. Ordinary Income was ¥65.7B (YoY -18.2%); Non-operating income ¥3.7B (dividends received ¥0.3B, interest income ¥0.1B), Non-operating expenses ¥5.4B (interest expense ¥2.8B) were modest, and Ordinary Margin was 18.1% (prior year 21.0%), -2.9pt. Extraordinary gains ¥5.5B (gain on sale of fixed assets ¥4.2B, etc.), Extraordinary losses ¥2.2B (impairment loss ¥0.1B, loss on disposal of fixed assets ¥1.2B) produced Pre-tax Income ¥69.0B (YoY -2.4%). After Corporate Taxes ¥21.3B (effective tax rate 30.9%), Net Income was ¥38.2B (YoY +3.8%), Net Margin improved to 10.6% (prior year 9.6%) +1.0pt. The large reduction in extraordinary losses (impairment loss ¥0.5B vs. prior year ¥5.77B) boosted final profit, so despite lower sales and operating profit, Net Income increased.
Funeral Public Service: Revenue ¥54.4B (-9.2%), Operating Income ¥11.9B (margin 21.9%, -4.6%), down in both revenue and profit. Main cause: lower cremation operations. Funeral Revenue: Revenue ¥106.0B (+1.5%), Operating Income ¥36.3B (margin 34.2%, -15.4%), revenue up but profit down. Venue provision and funeral services remained firm but margin contracted by -5.1pt with clear cost pressure. Information: Revenue ¥150.0B (+1.1%), Operating Income ¥6.5B (margin 4.4%, +66.2%), revenue and profit up. Restructuring in printing solutions and digital BPO plus the end of impairments contributed to turning operating loss into profit. Human Resources: Revenue ¥51.9B (-3.2%), Operating Loss ¥-0.7B (margin -1.4%, deficit narrowed +55.1%), revenue down but loss halved as recruitment and staffing improved. Asset Consulting: Revenue ¥3.2B (-82.1%), Operating Loss ¥-0.6B (margin -17.4%, loss), significant revenue decline and loss due to weak financial services and real estate brokerage. Total segment operating profit was ¥53.5B (prior year ¥72.2B, -25.9%); the difference to Adjusted Operating Income ¥67.4B is attributable to corporate-level expenses and allocation of holding company results.
[Profitability] Operating Margin 18.6% (prior year 21.7%) -3.1pt; Net Margin 10.6% (prior year 9.6%) +1.0pt. Gross Margin 38.1% (prior year 42.2%) -4.1pt, indicating pressure on Cost of Sales. SG&A ratio 19.5% (prior year 20.5%) -1.0pt showing cost reductions, but insufficient to absorb gross margin decline. ROE 7.7%; using the decomposition Net Margin 13.1% × Total Asset Turnover 0.503 × Financial Leverage 1.45 yields approximately 9.6% (reporting basis), with no comparable 3-year average provided. Improvement in Net Margin offset by decline in asset efficiency, resulting in stable trend. [Cash Quality] OCF ¥208.5B is 5.5x Net Income ¥38.2B, indicating very high quality. OCF/EBITDA is 2.48x (EBITDA = Operating Income ¥67.4B + Depreciation ¥16.8B ≈ ¥84.2B), showing excellent cash conversion. Free Cash Flow ¥215.3B significantly exceeds CapEx ¥33.0B (estimate, including adjustment vs. Investing CF -¥6.8B), enabling both growth investment and shareholder returns. Working capital changes were small: Accounts receivable increase -¥4.1B, Accounts payable decrease -¥1.4B, Inventory increase ¥0.5B; main sources of OCF were profit and depreciation. [Investment Efficiency] Total assets ¥719.7B with Total Asset Turnover 0.50x (prior year 0.50x), flat. Cash & Deposits ¥224.2B equals 31.2% of total assets, indicating very high liquidity. Tangible fixed asset turnover is about 0.97x (Revenue ¥362.3B ÷ Tangible Fixed Assets ¥371.6B), reflecting capital-intensive business nature. [Financial Soundness] Equity Ratio 68.8% (prior year 62.1%) +6.7pt improvement, indicating very high financial safety. Interest-bearing debt is Short-term borrowings ¥14.0B + Long-term borrowings ¥104.9B = ¥118.9B, Debt/EBITDA = 1.41x, Interest Coverage = EBIT ¥67.4B ÷ Interest Expense ¥2.8B = 24.1x, showing strong debt tolerance. Current Ratio 297.3%, Quick Ratio 296.0% indicating abundant short-term liquidity; Cash ¥224.2B is about 2.2x Current Liabilities ¥101.3B, reducing maturity mismatch concerns.
OCF was ¥208.5B, up +346.7% YoY, turning strongly positive. OCF before working capital changes was ¥227.0B, consisting of Net Income ¥38.2B + Depreciation ¥16.8B + Goodwill amortization ¥1.2B and adjustments for non-cash items including tax adjustments and changes in provisions. Working capital changes were minor: Inventory increase ¥0.5B, Accounts receivable increase -¥4.1B, Accounts payable decrease -¥1.4B, Contract liabilities decrease -¥1.1B, so primary sources of OCF were profit and depreciation. After corporate tax payments ¥18.5B, OCF finalized at ¥208.5B. Investing CF was positive ¥6.8B, as gains on sale of fixed assets ¥21.9B (real estate sales etc.) exceeded capital expenditures ¥33.0B (estimate), reflecting asset efficiency improvement. Growth investments included acquisition of subsidiary shares ¥18.9B and acquisition of investment securities ¥4.4B, yet net positive due to sale gains. Free Cash Flow ¥215.3B is 5.6x Net Income, highly abundant. Financing CF was -¥108.1B, consisting of share buybacks ¥62.6B, dividend payments ¥18.4B (including non-controlling interests ¥0.6B), short-term borrowings repayments ¥52.3B, long-term borrowings net borrowings ¥21.0B - repayments ¥43.6B, etc. Cash increased by ¥107.3B (+91.7%), raising year-end balance to ¥224.2B and greatly enhancing financial flexibility. Overall, cash flow shows very strong operating cash generation and conversion, with asset sale gains further thickening cash on hand.
Operating Income ¥67.4B vs Ordinary Income ¥65.7B, the ¥1.7B difference is the net non-operating result (Non-operating income ¥3.7B - Non-operating expenses ¥5.4B), which is minor. Dividends received ¥0.3B, interest income ¥0.1B, interest expense ¥2.8B indicate modest financial results, so earnings at ordinary level are driven mainly by operations. Extraordinary gains ¥5.5B (gain on sale of fixed assets ¥4.2B etc.) and extraordinary losses ¥2.2B (impairment loss ¥0.1B, loss on disposal of fixed assets ¥1.2B) net about ¥3.3B, contributing roughly 8.6% to Net Income ¥38.2B. Prior year had impairment losses ¥5.8B, so the large reduction in extraordinary losses contributed to improved Net Income this year. The gain on sale of fixed assets ¥4.2B is a one-off, but strategic asset disposals improved asset efficiency. OCF is 5.5x Net Income, and working capital changes are small, indicating excellent cash conversion. Comprehensive Income ¥48.2B exceeds Net Income ¥38.2B by about ¥10.0B; Other Comprehensive Income ¥0.5B (foreign currency translation adjustment ¥0.7B, valuation losses on securities -¥0.2B) is minor, so divergence between Net Income and Comprehensive Income is small and earnings quality is stable. Accrual (Net Income - OCF = -¥170.3B) is heavily negative, meaning cash generation substantially exceeds accounting profit, evidencing very high-quality earnings. While earning power at ordinary level softened due to operating-level decline, reduction in extraordinary losses and marked improvement in OCF enhanced earnings quality.
For FY ending March 2027, guidance projects Revenue ¥394.0B (vs prior year +8.8%), Operating Income ¥71.0B (+5.3%), Ordinary Income ¥69.0B (+5.0%), Net Income ¥46.2B (+20.9%). Progress rate (Q2 results / full-year guidance) is Revenue 91.9%, Operating Income 94.9%, Ordinary Income 95.2%, Net Income 82.7%, indicating that Revenue and operating-level progress are nearly on track while Net Income assumes a recovery in the second half as the effect of extraordinary loss reduction normalizes. Operating Margin is projected at 18.0% (current year 18.6%), a modest decline; margin recovery is conservatively assumed despite expected revenue growth. EPS is projected at ¥31.24 (current year ¥34.26), a decrease, while dividend guidance is ¥6.67 (current year ¥13.34 annual total), implying a Payout Ratio of about 43% and continued shareholder returns. Guidance assumes top-line recovery and stabilization at the operating level, with key risks being utilization and pricing in the core Funeral Revenue segment and maintaining profitability in the Information segment.
Dividend: Interim ¥6.67, Year-end ¥6.67, Annual total ¥13.34. Reported Payout Ratio 40.9%, within a sustainable range. Calculated payout (Total dividend payments ¥18.2B ÷ Net Income ¥38.2B ≒ 47.6%) appears somewhat higher, but both measures are within reasonable levels. Free Cash Flow ¥215.3B vs dividends ¥18.2B implies FCF coverage of ~11.8x, indicating very high sustainability. Share buybacks were ¥62.6B (Financing CF), so combined returns were ¥80.8B, with Total Return Ratio relative to Net Income at 211.6%, indicating very aggressive returns. Given abundant OCF ¥208.5B, cash accumulation continued even after returns, further strengthening financial capacity. Next fiscal year dividend forecast is ¥6.67 (annual equivalent ¥13.34) to be maintained, aiming to balance recovery and sustained returns. Cash ¥224.2B provides ample liquidity, supporting continuation of dividends and buybacks.
Concentration risk in core segment: The Funeral Revenue segment contributes Operating Income ¥36.3B, representing 67.9% of total segment operating profit ¥53.5B, so utilization rates, pricing, and demand fluctuations in this segment directly affect consolidated profit. This year the segment’s operating income declined -15.4%, reducing consolidated Operating Income by 18.8%. Continued regional concentration of cremation demand, seasonal venue utilization swings, or funeral simplification trends that pressure pricing would pose significant downside risk to consolidated profitability.
Margin pressure and cost-structure risk: Gross Margin contracted to 38.1% (prior year 42.2%) -4.1pt and Operating Margin to 18.6% (prior year 21.7%) -3.1pt. Cost of Sales ¥224.2B rose +1.2% YoY despite lower revenue, reducing ability to absorb costs. While SG&A reductions progressed, they could not offset gross margin contraction, revealing structural vulnerability. Continued increases in raw material costs, labor costs, or fixed maintenance costs would risk further margin decline.
Dependence on cash-generation with work-in-progress risk: OCF ¥208.5B is 5.5x Net Income, indicating very high-quality cash generation, but includes one-off items such as gain on sale of fixed assets ¥4.2B. Work-in-progress inventory ¥2.3B represents 43.4% of total inventory ¥5.3B, unusually high for a business with a large proportion of finished goods and materials, suggesting potential project backlog, delivery delays, or cost overruns. If WIP remains elevated, additional costs or recognition delays could increase variability in profit and cash flow.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 18.6% | 7.8% (4.6%–12.3%) | +10.9pt |
| Net Margin | 10.6% | 5.2% (2.3%–8.2%) | +5.4pt |
Profitability substantially exceeds the industry median, with both Operating Margin and Net Margin ranking high, indicating a high-return profile.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -5.4% | 3.7% (-0.4%–9.3%) | -9.1pt |
Revenue growth is -9.1pt below the industry median, confirming a top-line adjustment phase relative to peers.
※Source: Company compilation
Progress on margin recovery at the operating level: With Gross Margin down -4.1pt and Operating Margin down -3.1pt, whether this deterioration reverses next year is critical. Watch for price adjustments, mix improvement, and utilization increases in the core Funeral Revenue segment, and whether the Information segment can raise high-value project mix and improve beyond 4.4% margin. Guidance assumes revenue and profit growth but with conservative margin assumptions; monitor actual results vs. guidance and segment-level margin changes.
Sustainability of cash generation and optimization of capital allocation: With OCF ¥208.5B and Free Cash Flow ¥215.3B and aggressive returns (share buybacks ¥62.6B + dividends ¥18.2B, Total Return Ratio 211%), key questions are whether OCF can sustainably remain in the ¥200B range without relying on one-off asset sale gains, and how deployment of Cash ¥224.2B (growth investment, additional shareholder returns, M&A, etc.) will contribute to capital efficiency and ROE improvement.
This report was automatically generated by AI analyzing XBRL earnings disclosure data to produce a financial results analysis. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the Company from public financial statements. Investment decisions are your own responsibility; consult a professional advisor as necessary.