| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1483.3B | ¥1395.8B | +6.3% |
| Operating Income / Operating Profit | ¥40.6B | ¥35.1B | +15.7% |
| Equity-method Investment Gains/Losses | - | - | - |
| Ordinary Income | ¥47.8B | ¥38.1B | +25.2% |
| Net Income / Net Profit | ¥26.9B | ¥17.2B | +56.0% |
| ROE | 5.1% | 3.5% | - |
For the fiscal year ended March 2026, Revenue was ¥1483.3B (YoY +¥87.5B +6.3%), Operating Income was ¥40.6B (YoY +¥5.5B +15.7%), Ordinary Income was ¥47.8B (YoY +¥9.6B +25.2%), and Net Income attributable to owners of the parent was ¥32.7B (YoY +¥8.2B +33.7%), resulting in year-on-year increases in both revenue and profit. Growth in the Japan segment (Revenue +12.4%, Operating Income +34.1%) drove overall performance; gross margin improved to 14.1% (YoY +0.4pt) and operating margin improved to 2.7% (YoY +0.2pt). At the ordinary income level, interest and dividend income added ¥7.2B to Operating Income, and the final profit landed with an effective tax rate of 30.7%. Cash and deposits were ¥245.9B and the Equity Ratio was 52.4%, maintaining financial soundness. Operating Cash Flow (OCF) was ¥37.6B and Free Cash Flow (FCF) was ¥33.0B, generating 1.67x the total dividend amount of ¥19.8B, indicating ample capacity for shareholder returns.
Revenue of ¥1483.3B (+6.3%) comprised Japan ¥1143.7B (+12.4%), Asia ¥462.8B (-1.3%), Europe & Americas ¥64.4B (+1.0%), and Others ¥8.5B (-1.0%). The Japan segment accounted for 77.1% of the total, with growth in the FA Solutions and Electronic Components divisions. By destination, sales to Japanese customers expanded solidly to ¥1031.5B (prior year ¥933.4B), while sales to China weakened to ¥273.6B (prior year ¥294.7B). On a consolidated basis including intersegment transactions, Japan’s growth drove overall top-line expansion.
Cost of sales of ¥1274.5B (+6.4%) rose roughly in line with revenue, resulting in gross profit of ¥208.8B (+9.0%) and gross margin of 14.1% (prior year 13.7%, +0.4pt). The gross margin improvement was mainly due to a higher weighting of the Japan segment and a favorable product mix from the FA Solutions division. Selling, general and administrative expenses were ¥168.2B (+7.5%), but gross profit growth (+¥17.3B) outpaced SG&A increases (+¥11.8B), producing Operating Income of ¥40.6B (+15.7%) and an operating margin of 2.7% (prior year 2.5%, +0.2pt). Non-operating income was ¥9.5B (prior year ¥6.4B), aided by interest income ¥2.0B (prior year ¥0.8B), dividend income ¥1.6B (prior year ¥1.5B), and an increase in foreign exchange gains of ¥0.7B. Non-operating expenses were ¥2.4B (prior year ¥3.3B), including interest expense ¥1.7B and foreign exchange losses ¥0.9B. Extraordinary items were net -¥0.8B (impairment on investment securities ¥1.0B, gain on sales of investment securities ¥1.7B, etc.), with limited impact. Profit before income taxes was ¥46.9B (+23.9%); after deducting income taxes of ¥14.4B (effective tax rate 30.7%), Net Income was ¥32.7B (+33.7%). In conclusion, significant revenue growth and gross margin improvement in the Japan segment drove the year-on-year increase in revenue and profit.
The Japan segment achieved Revenue ¥1143.7B (+12.4%), Operating Income ¥29.1B (+34.1%), and an operating margin of 2.5% (prior year 2.1%, +0.4pt), recording substantial profit growth. Strong domestic demand and expansion of the FA Solutions division contributed, and segment profit accounted for 71.7% of consolidated profit, making it the core business. The Asia segment posted Revenue ¥462.8B (-1.3%), Operating Income ¥10.1B (-10.0%), and an operating margin of 2.2% (prior year 2.4%, -0.2pt), reflecting weaker demand in the Chinese market. The Europe & Americas segment recorded Revenue ¥64.4B (+1.0%), Operating Income ¥0.5B (+8.7%), and an operating margin of 0.8% (prior year 0.7%, +0.1pt), showing only marginal improvement. Others reported Revenue ¥8.5B (-1.0%) and Operating Income ¥0.3B (prior year ¥0.1B), maintaining a relatively high margin of 3.7%. Japan overwhelmingly contributed to segment profits, and recovery in Asia remains a key issue going forward.
Profitability: Operating margin was 2.7% (prior year 2.5%, +0.2pt), supported by gross margin improvement to 14.1% (prior year 13.7%, +0.4pt). ROE was 5.1% (prior year 3.5%, +1.6pt), mainly due to improved net profit margin. ROA on an ordinary income basis rose to 4.9% (prior year 4.0%).
Cash Quality: OCF was ¥37.6B, generating 1.40x of Net Income ¥26.9B, indicating solid cash backing for profits. FCF was ¥33.0B (OCF ¥37.6B - Investing CF ¥4.6B), covering total dividends of ¥19.8B by 1.67x. OCF/EBITDA was 0.82x (EBITDA = Operating Income ¥40.6B + Depreciation ¥5.4B = ¥46.0B); an increase in trade receivables (-¥20.1B) partly pressured cash flow, while an increase in trade payables (+¥35.4B) supported it.
Investment Efficiency: Total asset turnover was 1.46x (Revenue ¥1483.3B ÷ Total Assets ¥1013.9B), slightly down from 1.50x the prior year. Inventory turnover days were 31 days (Inventories ¥126.4B ÷ daily sales ¥4.06B), and trade receivables turnover days were 94 days (Trade receivables ¥380.2B ÷ daily sales ¥4.06B), indicating lengthy receivables collection and room to improve working capital efficiency. Capital expenditures were ¥1.3B, well below depreciation of ¥5.4B, with a CapEx/Depreciation ratio of 0.24x, indicating restrained investment in asset maintenance and renewal.
Financial Soundness: Equity Ratio was 52.4% (prior year 52.8%), maintaining a high level. Current ratio was 205.3% (Current assets ¥887.0B ÷ Current liabilities ¥432.1B), and quick ratio was 176.1%, indicating sufficient short-term payment capacity. Interest-bearing debt totaled ¥77.5B (short-term borrowings ¥47.5B and long-term borrowings ¥30.0B), with Debt/Equity at 14.6% and Debt/EBITDA at 1.69x, both at low levels. Cash and deposits of ¥245.9B were 5.18x short-term borrowings, limiting liquidity risk. Interest coverage was 26.6x (OCF subtotal ¥46.3B ÷ interest expense ¥1.7B), demonstrating high ability to service interest-bearing debt.
OCF was ¥37.6B, landing after taxes paid ¥10.2B and working capital changes from an OCF subtotal of ¥46.3B. The OCF subtotal included depreciation ¥5.4B and goodwill amortization ¥0.6B; non-cash charges adjusted the gap to profit before tax of ¥46.9B. In working capital, trade receivables increased by ¥20.1B, constraining cash, while increases in trade payables of ¥35.4B and a decrease in inventories of ¥3.6B provided support. Investing CF was -¥4.6B, primarily due to capital expenditures ¥1.3B and other investing activities ¥3.0B. The company realized gains on sales of investment securities of ¥1.7B while purchases were limited to ¥0.1B, indicating a phase of investment recovery. Financing CF was -¥28.9B, mainly due to dividend payments ¥19.8B, net decrease in short-term borrowings ¥7.6B, and lease liability repayments ¥1.5B. FCF was ¥33.0B, covering dividends by 1.67x and securing capacity for growth investment through retained earnings. Cash and deposits increased ¥14.6B from opening balance ¥231.3B to closing ¥245.9B, aided by cash inflow from newly consolidated subsidiaries ¥3.6B and foreign exchange effects ¥4.5B.
Operating Income of ¥40.6B is the core of earnings; non-operating income ¥9.5B (0.6% of revenue) comprised interest income ¥2.0B, dividend income ¥1.6B, and foreign exchange gains ¥0.7B, all within recurring financial income. Non-operating expenses ¥2.4B included interest expense ¥1.7B and foreign exchange losses ¥0.9B, leaving net foreign exchange impact at -¥0.2B, a neutral level. Extraordinary items were minor at net -¥0.8B, with investment securities valuation loss ¥1.0B booked as a one-time loss but partially offset by negative goodwill gain ¥0.2B and sales gains ¥1.7B. OCF ¥37.6B to Net Income ¥26.9B ratio was 1.40x, evidencing healthy cash backing of profits. The accruals (Receivables-backed accruals: OCF - Net Income = ¥10.7B) are explained by working capital changes from increased trade receivables, with no signs of earnings management. Comprehensive income was ¥47.2B, exceeding Net Income ¥26.9B by ¥20.3B due to increases in unrealized gains on other securities ¥11.3B and foreign currency translation adjustments ¥3.4B; these are valuation, non-cash items with limited impact on earnings quality.
For the fiscal year ending March 2027, management forecasts Revenue ¥1730.0B (vs prior year +16.6%), Operating Income ¥60.0B (vs prior year +47.8%), Ordinary Income ¥62.0B (vs prior year +29.8%), and Net Income attributable to owners of the parent ¥42.0B (vs prior year +28.6%). Achieving the full-year forecast from the mid-term results (Revenue ¥1483.3B, Operating Income ¥40.6B) requires an increase in Revenue of ¥246.7B (+19.9%) and Operating Income of ¥19.4B (+47.8%) in the second half. The full-year operating margin is projected to improve to 3.5% from 2.7% this period, premised on further gross margin improvement and containment of SG&A growth. Dividend guidance is ¥65 per share (interim ¥30, year-end ¥35); although lower than this period’s ¥122 (interim ¥60, year-end ¥62), the prior year’s year-end dividend included a ¥10 commemorative dividend for the 75th anniversary, so on an ordinary dividend basis the increase is from ¥55 to ¥65 (+¥10). Forecast payout ratio is high at 74.5%, but FCF coverage remains ample provided forecast OCF levels are maintained. Achieving targets requires continued strength in the Japan segment, recovery of Asia profitability, and sustained growth in the FA Solutions division.
Annual dividend for the period was ¥122 (interim ¥60, year-end ¥62), a large increase from the prior year dividend of ¥50. The year-end dividend of ¥62 consisted of ordinary dividend ¥52 and a 75th anniversary commemorative dividend ¥10. Payout ratio was 74.5% (total dividends ¥19.8B ÷ Net Income ¥26.9B), a high level, but OCF ¥37.6B and FCF ¥33.0B produced 1.90x and 1.67x coverage of total dividends, respectively, indicating solid cash backing. DOE was effectively 3.7% (total dividends ¥19.8B ÷ shareholders’ equity ¥531.2B), reflecting a shareholder-return stance mindful of capital efficiency. Treasury stock at period-end was ¥8.8B, down ¥6.8B from ¥15.6B in the prior period, with disposal of treasury shares used to improve shareholder returns and capital liquidity. Dividend guidance for FY2027 is ¥65 (on an ordinary dividend basis excluding commemorative items, an increase from ¥55 → ¥65 of +¥10), with forecast payout ratio maintained at a high 74.5%. Given cash and deposits ¥245.9B and a robust financial position, dividend sustainability is assessed as high.
Low-margin structure and pricing competition risk: With an operating margin of 2.7% and gross margin of 14.1% at low levels, deterioration in supply-demand conditions or intensified price competition could cause significant profit volatility. SG&A represents 11.3% of revenue, so with high fixed-cost burden, stagnant revenue could reverse operating leverage and further compress margins. YoY SG&A increase of +7.5% slightly outpaced revenue growth of +6.3%, highlighting the importance of future cost control.
Working capital efficiency deterioration and liquidity risk: DSO of 94 days is long; trade receivables balance of ¥380.2B increased ¥19.3B from ¥360.9B in the prior year. OCF was pressured by a ¥20.1B increase in receivables, and prolonged DSO could affect liquidity. Inventories of ¥126.4B are sizable, increasing the risk of valuation losses and tighter cash ties in a demand downturn. An increase in trade payables ¥248.7B has temporarily supported working capital, but changes in supplier terms could reduce procurement financing.
Regional profit disparity and Asia slowdown risk: While Japan accounts for 71.7% of operating profit, Asia posted Revenue -1.3% and Operating Income -10.0%. Continued weakness in China could further deteriorate Asia segment profitability and constrain consolidated results. The company’s high dependence on Japan (77.1% of revenue) makes domestic demand swings directly affect performance. Recovery in Asia is a prerequisite for meeting full-year forecasts; external conditions may present downside risk.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.7% | 3.4% (1.4%–5.0%) | -0.6pt |
| Net Profit Margin | 1.8% | 2.3% (1.0%–4.6%) | -0.5pt |
Profitability trails the industry median slightly, and a low-margin structure persists.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 6.3% | 5.9% (0.4%–10.7%) | +0.4pt |
Revenue growth exceeds the industry median, driven by expansion in the domestic segment.
※ Source: Company compilation
Japan segment growth and gross margin improvement: The Japan segment delivered Revenue +12.4% and Operating Income +34.1%, lifting gross margin to 14.1% (prior year 13.7%, +0.4pt). Expansion in the FA Solutions division and improved product mix contributed to profitability gains. Management targets an operating margin of 3.5% for the full year. If a structural improvement in gross margin persists, there is potential to mitigate the low-margin profile. The planned ordinary dividend increase from ¥55 to ¥65 indicates a clear approach to reflect profit growth in shareholder returns.
Financial solidity and capital allocation capacity: Equity Ratio 52.4%, cash ¥245.9B, and Debt/EBITDA 1.69x show a very solid financial position, and FCF ¥33.0B covers dividends by 1.67x. However, CapEx ¥1.3B is substantially below depreciation ¥5.4B (CapEx/Depreciation 0.24x), demonstrating restrained investment. Insufficient investment in asset maintenance and renewal could affect medium- to long-term competitiveness, so clarification of growth investment plans will be a focus. High liquidity provides resilience to adverse external conditions, while from a capital efficiency perspective it suggests potential room for additional growth investment or shareholder returns.
Working capital efficiency and Asia recovery as key challenges: DSO of 94 days is long, and OCF was reduced by ¥20.1B due to increases in receivables. There is significant scope to improve working capital; shortening DSO would further enhance cash generation. The Asia segment continues to show Revenue -1.3% and Operating Income -10.0%; recovery in Asia is necessary to meet the full-year forecast. Trends in Chinese demand and the pace of expansion in the Europe & Americas markets will be key upside and downside drivers.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company based on public financial statement data. Investment decisions are your own responsibility; consult a professional advisor as needed.