| Metric | Current Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥3290.3B | ¥3145.3B | +4.6% |
| Operating Income / Operating Profit | ¥241.4B | ¥239.3B | +0.9% |
| Ordinary Income | ¥258.4B | ¥264.6B | -2.3% |
| Net Income / Net Profit | ¥225.2B | ¥215.4B | +4.5% |
| ROE | 10.9% | 11.5% | - |
For the fiscal year ended March 2026, results were: Revenue ¥3290B (YoY +145B +4.6%), Operating Income ¥241B (YoY +2B +0.9%), Ordinary Income ¥258B (YoY -6B -2.3%), and Net Income attributable to owners of the parent ¥224B (YoY +4B +1.7%). Revenue expanded steadily, but Operating Margin compressed to 7.3% (down 0.3pt from 7.6% a year earlier), slowing profit growth; at the ordinary income level, deterioration in non-operating income/expenses led to a decrease. Net income increased, but the gain was limited relative to revenue growth. Total assets rose to ¥3019B (+4.4%), net assets to ¥2061B (+10.3%), and the Equity Ratio remained strong at 68.3%.
[Revenue] Revenue was ¥3290B (YoY +4.6%), showing solid trends. By segment, the Office Environment Business recorded ¥1919B (+14.6%) driving the overall increase; the Commercial Environment Business was ¥1162B (-1.8%) slightly down; the Logistics Systems Business was ¥147B (-34.9%) sharply lower. The Office Environment Business achieved double-digit growth capturing post-COVID office return demand and public facility renewals, accounting for 58.3% of total revenue and contributing to the increase. The Commercial Environment Business declined due to a pause in store investment and stagnant consumer conditions, and the Logistics Systems Business fell significantly on the back of last year’s large projects. Other (including Powertrain Business) was ¥63B (+1.3%) broadly flat.
[Profitability] Operating Income was ¥241B (+0.9%) a modest increase, with Operating Margin at 7.3% (down 0.3pt from 7.6%). By segment, the Office Environment Business led with ¥226B (+30.3%) of segment profit, the Commercial Environment Business declined to ¥28B (-41.6%), and the Logistics Systems Business swung to a segment loss of ¥15B (previous year ¥16B profit). Company-wide raw material cost increases, lags in price pass-through, and reduced Logistics Systems projects pressured margins. Recognition of impairment losses of ¥13B also reduced profit. Ordinary Income was ¥258B (-2.3%), primarily due to Equity-method investment income falling to ¥9B (from ¥14B). Net income attributable to owners of the parent was ¥224B (+1.7%), with Net Profit Margin at 6.8% (down 0.2pt from 7.0%). Despite recording special loss (impairment losses ¥13B), improved tax effects enabled an increase at the net income level. In conclusion, while both revenue and profit increased, profit expansion was limited relative to revenue growth.
The Office Environment Business posted Revenue ¥1919B (+14.6%) and Segment Profit ¥226B (+30.3%), with a margin of 11.8% (improved 1.4pt from 10.4%), achieving revenue and profit growth driven by office return demand and renewal projects. The Commercial Environment Business posted Revenue ¥1162B (-1.8%) and Segment Profit ¥28B (-41.6%), with a margin of 2.4% (down 1.7pt from 4.1%) as retail investment restraint and raw material cost inflation pressured profitability. The Logistics Systems Business recorded Revenue ¥147B (-34.9%) and a Segment Loss of ¥15B (previous year ¥16B profit), falling into loss due to the swing from large logistics facility projects in the prior year and fixed cost burdens. Other recorded Revenue ¥63B (+1.3%) and Segment Profit ¥2B (+16.7%) with modest profit gains.
[Profitability] Operating Margin was 7.3%, down 0.3pt from 7.6% last year, impacted by raw material cost inflation and price pass-through lags. Net Profit Margin was 6.8%, down 0.2pt from 7.0%. ROE was 10.9% (prior year 12.3%), declining mainly due to compressed net profit margin. ROA was 8.7% (prior year 9.3%), also down. [Cash Quality] Operating Cash Flow / Net Income ratio was 1.21x, indicating good conversion of profit to cash. The accrual ratio was -1.6%, a healthy level, reflecting high quality of earnings. [Investment Efficiency] EPS was 236.8円 (prior year 232.9円 +1.7%) slightly up, and BPS was 2156.1円 (prior year 1956.3円 +10.2%) markedly higher. Total Asset Turnover was 1.09x, stable. [Financial Strength] Equity Ratio was 68.3% (up 4.3pt from 64.0%), very robust, and Financial Leverage was conservative at 1.46x. Cash and Deposits increased to ¥319B (prior year ¥254B +25.4%), improving liquidity.
Operating Cash Flow was ¥272B (YoY +2669%), a large improvement from ¥10B the prior year, indicating rapid cash generation exceeding Net Income ¥225B and strong cash conversion. Operating Cash Flow / Net Income ratio was 1.21x. Investing Cash Flow was -¥54B (prior year -¥143B) as outlays were restrained, balancing capital expenditure and growth investments. Free Cash Flow was ¥219B (prior year -¥133B), a substantial turnaround, confirming ample internal cash generation. Financing Cash Flow was -¥162B (prior year -¥2B), reflecting shareholder returns including dividend payments of ¥89B. Cash and Deposits increased by ¥65B to ¥319B (prior year ¥254B), with ample liquidity. Free Cash Flow covers dividend payments 2.45x, indicating high sustainability of shareholder returns.
Operating Income of ¥241B versus Ordinary Income of ¥258B shows non-operating income contributed +¥17B, but year-on-year Equity-method investment income fell from ¥14B to ¥9B, worsening non-operating results. Special items included impairment losses of ¥13B, which pressured net income. Comprehensive income was ¥288B (exceeding Net Income ¥225B) with Other Comprehensive Income contributing +¥63B, including non-cash gains such as foreign currency translation adjustments and valuation differences on securities. Operating Cash Flow of ¥272B exceeded Net Income ¥225B, and the Operating Cash Flow / Net Income ratio of 1.21x indicates good earnings quality. The accrual ratio of -1.6% is at a healthy level. The proportion of non-operating income in Ordinary Income was limited at 6.6%, indicating the earnings base relies on core operations.
Full Year guidance is for Revenue ¥3470B (YoY +5.5%), Operating Income ¥260B (+7.7%), Ordinary Income ¥275B (+6.4%), and Net Income attributable to owners of the parent ¥211B (-5.9%). Progress against first-half results stands at 94.8% for Revenue, 92.8% for Operating Income, and 94.0% for Ordinary Income, indicating steady progress. Operating Income is expected to increase, but Net Income is projected below the prior year, reflecting higher tax burden and conservative estimates for special items. Operating Margin is assumed at 7.5% (improving 0.2pt from 7.3%), premised on cost reductions and the penetration of price revisions. The second half is expected to see a large drop in Operating Income to ¥19B (7.9% relative to first-half ¥241B), possibly reflecting seasonality and concentrated investment expenses.
Annual dividend is ¥104 (interim ¥52, year-end ¥52), unchanged from the prior year. Payout Ratio is 40.4%, at an appropriate level and sustainable on a Net Income basis. Total dividend amount is ¥89B, and dividend payment ratio against Free Cash Flow is 40.7%, indicating sufficient coverage. DOE (Dividend on Equity) is 4.9%, reflecting an appropriate balance between capital efficiency and shareholder returns. Full-year dividend guidance is disclosed as ¥52.5, and combining with interim ¥104 suggests an annual total of ¥156.5, which should be interpreted as cumulative dividend guidance and implies a year-end dividend of ¥52.5 in expectation. Details of dividend policy should be confirmed in future disclosures, but a stable dividend policy is likely to continue. No share buyback has been disclosed; shareholder returns are dividend-focused.
Raw material and component price inflation and price pass-through lag: Operating Margin declined to 7.3% (from 7.6% prior year, -0.3pt), reflecting the impact of rising procurement costs. The Commercial Environment Business margin deteriorated significantly to 2.4% (from 4.1% prior year, -1.7pt), with delayed price pass-through squeezing margins. Further rises in resource prices or exchange rate volatility could further erode profitability.
Losses and dependence on large projects in the Logistics Systems Business: The Logistics Systems Business recorded Revenue ¥147B (-34.9%) and a Segment Loss of ¥15B (prior year ¥16B profit), highlighting structural risk where performance is highly sensitive to the presence of large projects. Heavy fixed costs mean delays in project wins could expand losses.
Deterioration in non-operating income/expenses and variability in equity-method investments: Equity-method investment income decreased to ¥9B (from ¥14B, -36%), contributing to lower Ordinary Income. Fluctuations in the performance of equity-method affiliates or increased financial costs from rising interest rates could continue to pressure Ordinary Income.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.3% | 7.8% (4.6%–12.3%) | -0.4pt |
| Net Profit Margin | 6.8% | 5.2% (2.3%–8.2%) | +1.7pt |
Operating Margin slightly trails the industry median, while Net Profit Margin exceeds the median by 1.7pt, indicating strong position at the net income level thanks to tax effects and control of non-operating items.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.6% | 3.7% (-0.4%–9.3%) | +0.9pt |
Revenue growth rate outperformed the industry median by 0.9pt, maintaining above-average growth within the sector.
※ Source: Company compilation
Strength in Office Environment Business and loss in Logistics Systems Business: The Office Environment Business achieved substantial revenue and profit growth of +14.6% and +30.3%, with margin improvement to 11.8% (up 1.4pt from 10.4%). Conversely, the Logistics Systems Business saw Revenue -34.9% and a ¥15B loss, materially deteriorating due to the swing from large prior-year projects. Recovery in Logistics Systems orders and profitability will be key for overall company performance.
Margin compression and weak operating leverage: While Revenue rose +4.6%, Operating Income increased only +0.9%, indicating operating leverage is not fully effective. Operating Margin was 7.3% (down 0.3pt from 7.6%), and ROE fell to 10.9% (from 12.3%). Causes include raw material inflation, price pass-through lags, and the Logistics Systems loss. Progress in price revision implementation and cost reduction measures will be critical to restoring profitability.
Strong financial position and ample cash generation: Operating Cash Flow improved to ¥272B (from ¥10B prior year), Free Cash Flow was ¥219B, and financials are very healthy with Equity Ratio 68.3% and Cash and Deposits ¥319B. Annual dividend ¥104 with Payout Ratio 40.4% and Free Cash Flow coverage 2.45x supports high sustainability of shareholder returns. With a strong balance sheet, there is scope for strategic investment or expanded shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary.