| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2275.1B | ¥2201.1B | +3.4% |
| Operating Income / Operating Profit | ¥75.1B | ¥82.2B | -8.7% |
| Equity-method Investment Gains / Losses | - | - | - |
| Ordinary Income | ¥91.2B | ¥86.9B | +4.9% |
| Net Income | ¥66.0B | ¥63.1B | +4.6% |
| ROE | 6.3% | 6.6% | - |
FY2026 results: Revenue ¥2,275.1B (YoY +¥74.0B +3.4%), Operating Income ¥75.1B (YoY -¥7.1B -8.7%), Ordinary Income ¥91.2B (YoY +¥4.3B +4.9%), Net Income attributable to owners of parent ¥66.0B (YoY +¥2.9B +4.6%). While top-line increased and operating profit declined, non-operating income ¥17.7B (foreign exchange gains ¥7.1B, dividends received ¥5.8B) and extraordinary gains ¥19.2B (gain on sale of investment securities ¥14.4B, gain on sale of fixed assets ¥4.8B) supported the bottom line. By segment, the core FA Systems business maintained strength with Operating Income ¥50.4B (+1.3%), whereas the Semiconductor Devices business posted a significant decline to ¥14.5B (-42.3%), worsening mix pulled the consolidated operating margin down to 3.3% (from 3.7%, -0.4pt). Final profit increased due to non-operating and extraordinary items, but recurrence is limited.
[Revenue] Revenue ¥2,275.1B (+3.4%). By segment: FA Systems ¥1,098.7B (+1.1%, composition 48.3%), Semiconductor Devices ¥891.6B (+6.1%, composition 39.2%), Facilities ¥217.2B (+2.1%, composition 9.5%), Others ¥67.7B (+9.2%, composition 3.0%). By region: Japan ¥1,864.5B (+1.9%, composition 81.9%), Asia ¥397.6B (+8.4%, composition 17.5%), Other ¥13.0B (+235.7%, composition 0.6%). Growth was driven by expansion in Semiconductor Devices and overseas sales.
[Profitability] Cost of sales ¥1,981.1B, gross profit ¥294.0B (gross margin 12.9%, down -0.4pt from 13.3%). SG&A ¥218.9B (+3.7%), SG&A ratio 9.6% (unchanged YoY). Salaries and allowances ¥98.6B (+3.9%) were the main driver of higher SG&A. Operating Income ¥75.1B (-8.7%), operating margin 3.3% (down -0.4pt YoY). Non-operating income ¥17.7B (dividends received ¥5.8B, interest income ¥3.0B, foreign exchange gains ¥7.1B) contributed to Ordinary Income ¥91.2B (+4.9%), ordinary margin 4.0% (up +0.1pt YoY). Extraordinary gains ¥19.2B (gain on sale of investment securities ¥14.4B, gain on sale of fixed assets ¥4.8B) lifted profit before tax. After deducting income taxes ¥34.3B, Net Income attributable to owners of parent was ¥66.0B (+4.6%), net margin 2.9% (unchanged YoY). In conclusion, despite revenue growth, lower gross margin and higher SG&A led to operating profit decline; non-operating and extraordinary items drove final profit increase.
FA Systems: Revenue ¥1,098.7B (+1.1%), Operating Income ¥50.4B (+1.3%), margin 4.6%. Stable earnings base as the core segment. Semiconductor Devices: Revenue ¥891.6B (+6.1%) increased, but Operating Income ¥14.5B (-42.3%) fell sharply, margin deteriorated to 1.6%; suggests intensified price competition and inventory adjustments. Facilities: Revenue ¥217.2B (+2.1%), Operating Income ¥9.3B (+31.7%), margin improved to 4.3%. Others: Revenue ¥67.7B (+9.2%), Operating Income ¥0.9B (+225.9%), margin 1.3%. Consolidated operating profit decline mainly driven by margin pressure in the Semiconductor Devices business; improving segment mix is a key challenge.
[Profitability] Operating margin 3.3% (from 3.7%, -0.4pt), net margin 2.9% (unchanged). Gross margin 12.9% (from 13.3%, -0.4pt), primarily due to margin deterioration in Semiconductor Devices. SG&A ratio 9.6% unchanged, but personnel cost growth (salaries and allowances +3.9%) prevented operating leverage. ROE 6.3% (from 7.5%, -1.2pt).
[Cash Quality] Operating Cash Flow / Net Income = 1.19x (Operating Cash Flow ¥78.7B ÷ Net Income ¥66.0B), indicating good cash backing of profits. Accrual ratio = (Net Income ¥66.0B - Operating CF ¥78.7B) ÷ Total Assets ¥1,793.0B = -0.7%, within healthy range. OCF/EBITDA = Operating CF ¥78.7B ÷ (Operating Income ¥75.1B + Depreciation ¥7.1B) = 0.96x, showing no major cash conversion issues.
[Investment Efficiency] Total asset turnover 1.27x (Revenue ¥2,275.1B ÷ Total Assets ¥1,793.0B). ROA 5.1% (Ordinary Income ¥91.2B ÷ Total Assets ¥1,793.0B), down -0.2pt YoY.
[Financial Soundness] Equity Ratio 58.5% (from 57.4%, +1.1pt). Current ratio 203.3% (Current Assets ¥1,316.2B ÷ Current Liabilities ¥647.5B), Quick ratio 154.0% ((Current Assets ¥1,316.2B - Inventories ¥318.8B) ÷ Current Liabilities ¥647.5B), both high and indicating sufficient liquidity. Interest-bearing debt = short-term borrowings ¥88.2B + long-term borrowings ¥6.6B = ¥94.8B. Net interest-bearing debt = -¥166.9B (Cash and deposits ¥247.9B + short-term securities ¥13.9B - interest-bearing debt ¥94.8B), effectively debt-free. Debt/EBITDA = interest-bearing debt ¥94.8B ÷ EBITDA ¥82.2B = 1.15x. Interest coverage (Operating CF ¥78.7B ÷ interest paid ¥1.2B) ≈ 65.6x, indicating strong financial resilience.
Operating CF ¥78.7B (from ¥164.6B prior year, -52.2%). Subtotal (pre-tax cash flow) ¥98.5B. Working capital movements: inventory decrease +¥30.6B and accounts payable increase +¥27.1B provided cash inflows, while accounts receivable increase -¥25.0B used cash. After income taxes paid -¥27.7B, operating CF halved YoY but remains solid at 1.19x relative to Net Income ¥66.0B. Investing CF recorded an inflow of ¥7.6B: capital expenditure -¥10.8B offset by sale of securities +¥16.7B, sale of fixed assets +¥10.1B, and net decrease in time deposits +¥16.5B. Free Cash Flow ¥86.3B (from ¥155.3B prior year, -44.4%). Financing CF -¥63.1B: net increase in short-term borrowings +¥55.5B, repayment of long-term borrowings -¥4.6B, dividend payments -¥22.7B, share buybacks -¥29.4B. Cash and cash equivalents at period end ¥227.97B (from ¥204.22B, +11.6%). Working capital improvement (inventory compression and accounts payable increase) supported OCF, but days sales outstanding at 111 days (accounts receivable ¥689.3B ÷ monthly sales ¥2,275.1B × 365 ÷ 12) is long and collection efficiency warrants scrutiny.
This period’s Net Income increase was due to non-operating and extraordinary items offsetting operating weakness. Non-operating income ¥17.7B (0.8% of sales) included foreign exchange gains ¥7.1B, dividends received ¥5.8B, and interest income ¥3.0B; FX is market-dependent and not highly repeatable. Extraordinary gains ¥19.2B (0.8% of sales) comprised gain on sale of investment securities ¥14.4B and gain on sale of fixed assets ¥4.8B, both one-off. Extraordinary losses were minor at ¥1.8B. The gap between Ordinary Income ¥91.2B and Net Income ¥66.0B is mainly income taxes ¥34.3B, giving an effective tax rate of 31.6% (income taxes ¥34.3B ÷ profit before tax ¥108.5B). Accrual quality is good: Operating CF / Net Income 1.19x and accrual ratio -0.7%; no major concerns over cash backing of profits. For sustainable profit levels, restoring operating margin is the primary issue; this year’s results can be summarized as dependent on non-operating and extraordinary items.
Full Year guidance: Revenue ¥2,300.0B (YoY +1.1%), Operating Income ¥78.0B (YoY +3.8%), Ordinary Income ¥85.0B (YoY -6.8%), Net Income attributable to owners of parent ¥60.0B (EPS forecast ¥273.02). Compared with this year’s results, operating income is expected to tick up slightly, but ordinary income is planned to decline -6.8% under a conservative scenario that assumes elimination of this year’s non-operating income (FX, interest/dividends) and extraordinary gains. Improvement in operating margin (recovery of Semiconductor Devices margins and SG&A efficiency) is a prerequisite. Dividend forecast is annual ¥60.00, a cut from this year’s ¥100, reflecting a conservative stance consistent with removal of one-off items.
Annual dividend ¥100 (interim ¥50 + year-end ¥50), payout ratio 33.4% (dividend ¥100 ÷ EPS ¥299.74). Total dividends ¥22.7B; FCF coverage is 3.8x (FCF ¥86.3B), indicating high sustainability. Share buybacks ¥29.4B were executed, total shareholder returns ¥52.1B, Total Return Ratio 78.9% (total returns ¥52.1B ÷ Net Income ¥66.0B), demonstrating an assertive shareholder return stance. Cash and deposits ¥247.9B and net interest-bearing debt -¥166.9B indicate ample financial flexibility to balance returns and investment. Next fiscal year dividend guidance ¥60 indicates a cut, reflecting a conservative level premised on the loss of this year’s extraordinary and non-operating items and prioritizing dividend stability.
Risk of further deterioration in Semiconductor Devices profitability: This period Operating Income ¥14.5B (-42.3%) with margin down to 1.6%. Prolonged semiconductor market price declines or inventory adjustments could further pressure consolidated operating margin. As a major segment accounting for 39.2% of revenue, delayed recovery here is a downside risk.
Sustainability risk of working capital management: This period’s Operating CF relied on inventory decrease +¥30.6B and accounts payable increase +¥27.1B. Days sales outstanding 111 days is long; if inventory compression reverses or accounts payable increases normalize, OCF could decline. A qualitative review of working capital is needed.
Market value risk of investment securities: Investment securities increased to ¥362.2B (20.2% of total assets) and OCI gains +¥70.9B boosted comprehensive income this period; market deterioration could reduce equity. Gain on sale of securities ¥14.4B being a component of extraordinary gains highlights earnings volatility from securities sales.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.3% | 3.4% (1.4%–5.0%) | -0.0pt |
| Net Margin | 2.9% | 2.3% (1.0%–4.6%) | +0.6pt |
Operating margin is around the industry median and standard; net margin exceeds median due to contribution from non-operating and extraordinary items.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 3.4% | 5.9% (0.4%–10.7%) | -2.5pt |
Revenue growth lags the industry median; top-line expansion pace is relatively slow.
※ Source: Company compilation
Decline in operating margin (3.3%, YoY -0.4pt) was mainly due to margin deterioration in Semiconductor Devices; improving segment mix and gross margin recovery are the top priorities. Next fiscal year guidance projects Operating Income +3.8% but recovery depends on semiconductor market improvement and SG&A efficiency.
This period’s Net Income increase depended on non-operating income ¥17.7B (FX, dividends, interest) and extraordinary gains ¥19.2B (gain on sale of investment securities, gain on sale of fixed assets), with limited repeatability. Next fiscal year EPS decline to ¥273.02 (from this year ¥329.81, -17.2%) assumes the removal of these one-offs; improving core operating performance is essential for sustainable growth.
Financial soundness is high (Equity Ratio 58.5%, Net interest-bearing debt -¥166.9B, Current ratio 203.3%), and shareholder returns are proactive (Total Return Ratio 78.9%). Working capital improvements (inventory compression and accounts payable increase) supported OCF, but Days Sales Outstanding 111 days is long and collection efficiency should be reviewed. Investment securities ¥362.2B (20.2% of total assets) increase raises OCI and special item volatility; sensitivity to market movements should be monitored.
This report was 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 statements. Investment decisions are your responsibility; consult a professional if necessary.
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