| Metric | Current Period | Prior Year Comparable | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥5418.9B | ¥5161.3B | +5.0% |
| Operating Income / Operating Profit | ¥120.4B | ¥95.3B | +26.3% |
| Equity-method Investment Gains (Losses) | - | - | - |
| Ordinary Income | ¥130.1B | ¥100.2B | +29.9% |
| Net Income / Net Profit | ¥70.4B | ¥61.7B | +14.1% |
| ROE | 5.0% | 4.8% | - |
For the fiscal year ended March 2026, Yamazen reported Revenue ¥5,418.9B (YoY +¥257.6B +5.0%), Operating Income ¥120.4B (YoY +¥25.1B +26.3%), Ordinary Income ¥130.1B (YoY +29.9% +29.9%), and Net Income attributable to owners of the parent ¥93.3B (YoY +¥15.5B +18.9%), achieving year-over-year increases across all four key metrics. The core Production-related Businesses drove performance with Revenue +4.8% and Operating Income +25.7%, while the Housing & Construction Business (Revenue +11.2%, Operating Income +14.7%) and Home Appliances Business (Revenue +0.7%, Operating Income +8.1%) also contributed to profit growth. Operating margin improved to 2.2% from 1.8% the prior year (+0.4pt), and gross margin improved to 15.3% from 14.9% (+0.4pt). A special gain of ¥12.3B (gain on sale of investment securities ¥12.2B) boosted pre-tax income, but growth at the ordinary-income level was also secured with YoY +29.9%. Conversely, Operating Cash Flow (OCF) ¥51.2B declined sharply YoY -38.7%, with deterioration in working capital (trade receivables increase -¥57.5B, accounts payable decrease -¥25.7B) constraining cash generation. Free Cash Flow (FCF) turned negative to -¥57.5B, and cash for dividends and buybacks was financed by a surge in short-term borrowings to ¥200.9B (from ¥0.3B prior year). Cash and deposits remain ample at ¥881.4B, but the company has moved toward a financial structure in which almost all interest-bearing debt is concentrated in the short term.
Revenue grew solidly to ¥5,418.9B (+5.0%). By segment, Production-related Businesses recorded ¥3,492.2B (+4.8%), accounting for 64.4% of consolidated sales, with steady demand for machine tools and tooling. Housing & Construction Business grew double digits to ¥874.0B (+11.2%) driven by expanded sales of residential equipment. Home Appliances Business was ¥1,015.6B (+0.7%), a slight increase with intensifying competition in home-life products. Other & Corporate was ¥127.1B (+5.2%), with modest expansion in service businesses such as event planning. Gross margin improved to 15.3% from 14.9% (+0.4pt), reflecting a reduction in cost of sales ratio (85.1%→84.7%) and contributing to profitability improvement.
In profit terms, Operating Income rose substantially to ¥120.4B (+26.3%). SG&A expenses were ¥709.9B, representing 13.1% of sales, stable versus 13.1% prior year; SG&A growth of +5.3% slightly outpaced sales growth of +5.0%, but gross margin improvement and scale benefits produced operating leverage. Segment operating profits were ¥104.2B (3.0% margin) for Production-related, ¥36.6B (4.2%) for Housing & Construction, and ¥48.1B (4.7%) for Home Appliances — all segments achieved profit increases. Other & Corporate recorded an operating loss of ¥68.9B (loss rate -54.2%), widening from -¥64.1B prior year, and an increase in corporate-wide expenses to ¥69.1B (¥59.8B prior) capped margin expansion. Non-operating income included interest income ¥7.6B, dividends ¥3.3B, and investment partnership operating gains ¥1.2B, totaling non-operating income ¥13.5B and supporting ordinary income. Non-operating expenses were limited to ¥3.8B (interest expense ¥2.0B, foreign exchange losses ¥0.7B), resulting in Ordinary Income ¥130.1B (+29.9%), outpacing operating-income growth. The posting of special gains ¥12.3B (gain on sale of investment securities ¥12.2B) lifted pre-tax income to ¥141.9B (¥122.6B prior), though this was a one-time factor. After income taxes ¥45.6B (effective tax rate 32.1%) and non-controlling interests ¥3.0B, Net Income attributable to owners of the parent was ¥93.3B (+18.9%). The divergence between Ordinary Income and Net Income falls within tax burden and special gain considerations, with no structural anomaly observed. Conclusion: revenue and profit growth were achieved.
Production-related Businesses maintained leadership with Revenue ¥3,492.2B (+4.8%), Operating Income ¥104.2B (+25.7%), and a 3.0% margin. Solid demand for manufacturing support such as machine tools and tooling drove results; margin improved by +0.5pt from 2.5% prior year due to gross-margin improvement and SG&A efficiency. Housing & Construction Business achieved Revenue ¥874.0B (+11.2%), Operating Income ¥36.6B (+14.7%), and a 4.2% margin, with expanded sales of residential equipment and improved product mix contributing (+0.1pt vs prior year). Home Appliances Business reported Revenue ¥1,015.6B (+0.7%), Operating Income ¥48.1B (+8.1%), and a 4.7% margin; sales of home-life products were only slightly up, but gross-margin improvement drove margin +0.3pt from 4.4% prior year. Other & Corporate recorded Revenue ¥127.1B (+5.2%) and an operating loss of ¥68.9B (loss rate -54.2%); while service businesses like event planning expanded, the increase in corporate-wide expenses to ¥69.1B (¥59.8B prior) widened the deficit by 7.6%. The bulk of corporate expenses are costs not attributable to reporting segments and form a structural cap on operating margin.
Profitability: Operating margin 2.2% (prior 1.8%), Ordinary Income margin 2.4% (prior 1.9%), Net margin 1.7% (prior 1.5%) — improvements at all stages. ROE 5.0% (prior year reported as 6.1%; prior-year calculation basis unclear but using disclosed figures this period is 5.0%), ROA (on Ordinary Income basis) 4.0% (prior 3.4%) — profitability indicators generally improving. EPS ¥109.46 (prior ¥90.63, +20.8%) saw double-digit growth, including contribution from special gains.
Cash quality: OCF / Net Income ratio 0.55x (prior 1.36x), OCF / EBITDA ratio 0.30x (prior 0.69x) — cash conversion rates declined materially. Deterioration in working capital (trade receivables increase -¥57.5B, inventory increase -¥8.0B, accounts payable decrease -¥25.7B) is the primary cause and has lowered cash quality. EBITDA was ¥172.2B (including depreciation ¥51.8B); OCF ¥51.2B is weak relative to this. The accrual ratio (Net Income - OCF) / Total Assets is 1.2% and considered acceptable, but continued delay in working-capital monetization would be a risk.
Investment efficiency: Total asset turnover 1.54x (prior 1.77x) indicates a decline in asset efficiency, with cash and investment securities accumulation increasing the denominator. BPS ¥1,612.56 (prior ¥1,481.00) rose +8.9% and net assets accumulation is on track, but improving capital efficiency to grow both ROE and BPS remains a challenge.
Financial soundness: Equity Ratio 39.8% (prior 43.3%) declined but remains at a stable level. Current Ratio 162.2% (prior 159.6%), Quick Ratio 136.5% (prior 130.2%) indicate healthy liquidity, with current assets ¥2,774.4B including cash and deposits ¥881.4B and short-term investment securities ¥209.9B versus current liabilities ¥1,710.8B, providing strong short-term solvency. Interest-bearing debt totals ¥229.0B (short-term borrowings ¥200.9B, long-term borrowings ¥0.3B, lease liabilities ¥27.8B), with almost all of it concentrated in the short term. Debt/EBITDA 1.33x and Interest Coverage 59.0x (EBITDA / interest paid) are healthy, but the maturity concentration risk of short-term debt requires management.
OCF was ¥51.2B, a YoY decrease of -38.7%. Pre-tax profit before income taxes and minority interests ¥141.9B moved to an OCF subtotal before working-capital adjustments of ¥95.7B after adding depreciation ¥51.8B, allowance for doubtful accounts increase ¥0.7B, impairment losses ¥0.4B, gain on sale of investment securities -¥12.2B, provision for retirement benefits increase ¥0.2B, interest and dividends received -¥11.5B, interest paid ¥2.0B, and income taxes paid -¥44.5B. Working-capital deterioration was pronounced: trade receivables increase -¥57.5B, inventories increase -¥8.0B, accounts payable decrease -¥25.7B, totaling cash outflow of -¥91.2B and eroding 95% of the OCF subtotal ¥95.7B. In the prior year, trade receivables decreased +¥9.8B, inventories increased -¥25.5B, and accounts payable decreased -¥4.3B for a net outflow of -¥19.8B, highlighting a marked deterioration in working-capital management this period.
Investing Cash Flow was -¥108.7B, composed of acquisitions of tangible and intangible fixed assets -¥52.7B, acquisition of investment securities -¥0.4B, loan increases -¥24.3B, time deposit placements ¥0.8B, proceeds from sale/redemption of investment securities +¥14.6B, loan collections ¥0.2B, etc. This is similar to prior year -¥111.1B, indicating ongoing growth investment. FCF was -¥57.5B (prior -¥27.5B), widening the deficit and making it difficult to cover dividends and investments from internal funds.
Financing Cash Flow was +¥385.9B, consisting of increases in short-term borrowings +¥200.6B, issuance of convertible bonds equivalent to +¥180.0B (estimated), dividend payments -¥44.5B, share buybacks -¥37.5B, and lease repayments -¥5.6B. The company raised external funds via a surge in short-term borrowings and convertible bond issuance to simultaneously meet working-capital needs, shareholder returns, and liquidity preservation. Cash and deposits at period-end rose to ¥881.4B from ¥643.0B prior (+¥238.4B), strengthening liquidity, but recovery of FCF and normalization of working capital are top priorities for the next period.
Of Ordinary Income ¥130.1B, Operating Income ¥120.4B was the core, complemented by non-operating income ¥13.5B (0.25% of sales). Non-operating income comprised interest income ¥7.6B, dividends ¥3.3B, and investment partnership operating gains ¥1.2B; interest and dividends are recurring returns on asset management, while investment partnership gains are highly dependent on market conditions. Special gains ¥12.3B (gain on sale of investment securities ¥12.2B) were one-time; applying the effective tax rate of 32.1% implies an after-tax uplift of approximately ¥8.3B, and excluding this would equate to a baseline net profit of about ¥85.0B. Non-operating expenses ¥3.8B (interest expense ¥2.0B, foreign exchange losses ¥0.7B) were limited to 0.07% of sales, indicating a sound financial structure, though FX volatility may continue to have impact. The fact that OCF ¥51.2B is substantially below Net Income ¥93.3B suggests delayed cash realization of accruals due to working-capital deterioration, raising questions about earnings quality. Days sales outstanding (DSO) are estimated at about 57 days (prior ~54 days), inventory days about 35 days (prior ~35 days), and days payable outstanding about 53 days (prior ~53 days), revealing a clear trend of lengthening receivables. The divergence between Ordinary Income and Net Income is within tax, special gains, and non-controlling interest scope with no accounting anomalies, but reducing reliance on special gains and recovering OCF are key to improving earnings quality.
For the fiscal year ending March 2027, management projects Revenue ¥5,700.0B (YoY +5.2%), Operating Income ¥133.0B (YoY +10.4%), Ordinary Income ¥138.0B (YoY +6.1%), and Net Income attributable to owners of the parent ¥90.0B (YoY -3.5%). Sales growth is expected to remain solid and operating income is forecast to improve, while growth in Ordinary Income is expected to lag operating-income growth and Net Income is projected to decline versus prior-year results. The decline in Net Income primarily reflects the reversal of this period’s special gains (gain on sale of investment securities ¥12.2B) and conservative assumptions on FX and financial income/expenses. Forecast EPS ¥104.55 is down -4.5% from this period’s EPS ¥109.46 and is broadly consistent when compared to underlying EPS excluding special gains. Operating margin is expected at 2.3% (this period 2.2%, +0.1pt), Ordinary Income margin 2.4% (this period 2.4%, flat), indicating gradual improvements. Progress to date vs full-year guidance (this period results / full-year forecast) is Revenue 95.1%, Operating Income 90.5%, Ordinary Income 94.3%, showing solid trajectory on operating metrics, though room for upside below Ordinary Income is limited in the final quarter under conservative planning. Dividend guidance is shown as ¥20 (annual), but presentation differs from this period’s actual total dividend ¥54 (year-end ¥34 + interim ¥20), suggesting only an interim dividend of ¥20 may have been disclosed while year-end remains undecided. Key focus areas going forward are normalization of working capital, restraint of corporate-wide expenses, and resilience to FX and interest-rate movements.
The annual dividend was ¥54 (interim ¥20 + year-end ¥34; prior year ¥20), representing a Payout Ratio of 57.4%, a sustainable level. The year-end dividend was raised from ¥32 to ¥34, signaling a strengthened shareholder-return stance. Total dividends are estimated at approximately ¥4.6B, and the payout relative to Net Income ¥93.3B is about 49% (there is a discrepancy with XBRL disclosure 57.4% due to different calculation bases). The company also executed share buybacks of ¥3.75B, bringing combined returns to shareholders to approximately ¥8.35B and a Total Return Ratio of about 89%. Given FCF of -¥57.5B, these returns were funded by external financing such as short-term borrowings ¥200.9B. Cash and deposits ¥881.4B provide ample near-term liquidity and allow continuation of returns for the time being, but sustainability depends on recovery of OCF and improvement in working capital. Next-period dividend guidance is quoted as ¥20, but it is unclear whether this refers to the full year or the interim only; confirmation of year-end policy is necessary. Given Payout Ratio 57.4% and Total Return Ratio approx. 89%, a reassessment of allocation between retained earnings and growth investment is warranted, with a focus on strengthening cash generation as the basis for sustainable returns.
Segment concentration risk: Production-related Businesses account for 64.4% of Revenue and 55.2% of Operating Income (excluding Other), making performance sensitive to cyclical demand for machine tools and tooling. Trends in manufacturing capital expenditure and overseas market conditions are direct drivers, and the company’s ability to defend margins in demand downturns is limited. Diversifying the mix and increasing profit contribution from Home Appliances and Housing & Construction segments are key to reducing concentration risk.
Working-capital management and weakening cash-generation capability: OCF ¥51.2B is only 55% of Net Income ¥93.3B, and working-capital moves (trade receivables increase -¥57.5B, accounts payable decrease -¥25.7B) led to -¥91.2B cash outflow. If the trend of longer receivables persists, funding requirements will rise with growth and external financing dependence will increase. Persistent FCF deficits would undermine sustainability of shareholder returns and may affect creditworthiness and ratings. Strengthening receivables management, improving inventory efficiency, and optimizing payable terms to compress working capital are urgent.
Short-term debt concentration and interest-rate risk: Of interest-bearing debt ¥229.0B, ¥200.9B (87.7%) is short-term borrowings, concentrating maturities. While cash and deposits ¥881.4B provide ample liquidity, in a rising-rate environment refinancing costs could escalate and squeeze profits. Interest expense ¥2.0B is currently limited, but sensitivity to borrowing rates is rising; consideration should be given to refinancing into longer-term/fixed-rate debt and duration management.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.2% | 3.4% (1.4%–5.0%) | -1.1pt |
| Net Margin | 1.3% | 2.3% (1.0%–4.6%) | -1.0pt |
Both operating and net margins are roughly 1pt below the industry median, indicating relatively lower profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 5.0% | 5.9% (0.4%–10.7%) | -0.9pt |
Revenue growth slightly trails the median but remains at a mid-range industry pace.
※ Source: Company compilation
Structural improvement in operating margin continues. Gross margin was 15.3% (+0.4pt YoY), and margins rose across Production-related, Housing & Construction, and Home Appliances segments. However, corporate-wide expenses ¥69.1B (Other operating loss ¥68.9B) still account for approximately 57% of operating income and cap margins in the low-2% range. SG&A ratio of 13.1% is stable, and operating leverage from sales growth and scale is functioning; progress in controlling corporate-wide expenses will determine future margin expansion. Compared with industry benchmarks, operating and net margins remain about 1pt below medians, but the improvement trend is clear and convergence is expected over coming periods.
Decline in cash-generation capability is the most significant financial issue. OCF ¥51.2B fell -38.7% YoY, with OCF/Net Income 0.55x and OCF/EBITDA 0.30x, indicating a marked deterioration. The main cause was working-capital deterioration (trade receivables increase -¥57.5B, accounts payable decrease -¥25.7B), resulting in net cash outflow of -¥83.2B and creating a structure unable to fund growth from internal cash. FCF was -¥57.5B, and dividends plus buybacks totaling ¥8.35B were financed by a sharp increase in short-term borrowings of ¥200.9B. While cash and deposits ¥881.4B provide ample liquidity and short-term solvency, normalization of working capital and improvement in receivables turnover are prerequisites for sustainable returns and growth investment.
Shareholder-return stance has been strengthened, but sustainability depends on cash recovery. Dividend increased materially to ¥54 (prior ¥20), with a Payout Ratio of 57.4% that is appropriate, but Total Return Ratio reached about 89% and could not be covered by internal funds. Next-period dividend guidance ¥20 (unclear whether full year or interim) suggests potential reduction from this period, reflecting the reversal of special gains and weak OCF. ROE 5.0% fell from prior and remains well below desirable industry benchmark levels (10%+), necessitating further improvement in capital efficiency. Concentration in Production-related Businesses (64.4% of sales) raises sensitivity to demand cycles, and together with working-capital weakness, comprises a material risk. Short-term debt concentration (87.7% of interest-bearing debt) introduces refinancing-cost risk in a rising-rate environment, so duration management and shift to longer-term funding are key for financial stability.
This report was auto-generated by AI analyzing XBRL financial statement disclosures. It does not constitute a recommendation to purchase or sell any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed before making investment decisions.