| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥8996.2B | ¥8545.5B | +5.3% |
| Operating Income / Operating Profit | ¥370.0B | ¥349.5B | +5.9% |
| Ordinary Income | ¥352.4B | ¥337.7B | +4.4% |
| Net Income / Net Profit | ¥15.7B | ¥61.6B | -74.5% |
| ROE | 0.6% | 2.5% | - |
For the fiscal year ended March 2026, Revenue was ¥8996.2B (YoY +¥450.7B +5.3%), Operating Income was ¥370.0B (YoY +¥20.5B +5.9%), Ordinary Income was ¥352.4B (YoY +¥14.7B +4.4%), and Net Income was ¥15.7B (YoY ▲¥45.9B ▲74.5%). Revenue growth was driven by steady expansion in the core Distribution business and growth in the Trading and Life Support businesses, while Operating Income exceeded the prior year due to profit gains across segments. Increase in interest expense (¥43.5B, YoY +¥11.9B) somewhat dampened growth at the Ordinary Income level. Net Income declined significantly due to impairment losses of ¥35.1B; however, Net Income attributable to owners of the parent was ¥193.2B (YoY +¥7.1B +3.8%), securing an increase. Extraordinary gains included gains on sale of investment securities of ¥4.2B and negative goodwill recognized of ¥4.0B, but impairment losses and provisions resulted in a net extraordinary loss of ▲¥34.8B.
Revenue of ¥8996.2B (YoY +5.3%) was led by the core Distribution business at ¥5744.2B (+4.3%), accounting for 63.9% of total and driving top-line growth. Trading and Commerce was ¥1929.5B (+8.4%), Life Support was ¥685.0B (+8.7%), and Business Support grew to ¥175.6B (+13.3%), achieving double-digit growth. Only Product declined slightly to ¥457.6B (▲2.9%), but overall revenue growth was sustained by expansion across segments. Cost of sales was ¥7532.9B (YoY +4.7%), yielding a gross margin of 16.3% (prior 15.8%), an improvement of 0.5pt. SG&A was ¥1093.3B (prior ¥1000.7B, +9.3%), rising faster than revenue and increasing the SG&A ratio to 12.2% (prior 11.7%), up 0.5pt.
Profit: Operating Income of ¥370.0B (+5.9%) exceeded the prior year due to improved gross margin and profit increases across businesses. By segment, Distribution generated Operating Income of ¥340.6B (+5.2%), contributing the bulk of profits and achieving an operating margin of 5.9%. Trading and Commerce recorded ¥36.7B (+26.4%), Life Support ¥18.8B (+61.6%) — both sizable increases — and Product improved to ¥6.6B (+115.6%) with materially enhanced profitability. On non-operating items, increased interest expense of ¥43.5B (prior ¥31.6B) was a heavy burden, and Ordinary Income of ¥352.4B (+4.4%) lagged the rise in Operating Income. Extraordinary items were impacted by impairment losses of ¥35.1B (prior ¥22.9B), resulting in Profit Before Tax of ¥317.6B (prior ¥331.6B, ▲4.2%). After tax expense of ¥108.0B (effective tax rate 34.0%), Net Income was ¥15.7B (▲74.5%). Excluding non-controlling interests of ¥16.3B, Net Income attributable to owners of the parent was ¥193.2B (+3.8%). In conclusion, the company maintained a revenue and operating profit growth trend, but extraordinary losses temporarily reduced Net Income.
Distribution posted Revenue of ¥5744.2B (+4.3%), Operating Income of ¥340.6B (+5.2%), and a margin of 5.9%, remaining the solid core segment accounting for approximately 92% of consolidated Operating Income. Trading and Commerce reported Revenue of ¥1929.5B (+8.4%) and Operating Income of ¥36.7B (+26.4%), improving margin to 1.9%. Life Support achieved Revenue of ¥685.0B (+8.7%) and Operating Income of ¥18.8B (+61.6%), raising margin to 2.7%. Business Support continued high growth with Revenue of ¥175.6B (+13.3%), but Operating Income declined slightly to ¥27.3B (▲4.0%), and margin decreased from the prior year to 15.5% though remaining high. Product saw Revenue decline to ¥457.6B (▲2.9%) but Operating Income rose to ¥6.6B (+115.6%), turning margin positive to 1.4%. After corporate/adjustments, consolidated Operating Income totaled ¥370.0B.
Profitability: Operating margin was 4.1% (prior 4.1%), flat; Net margin declined to 0.2% (prior 0.7%), while Net margin on a parent-company-owner basis was 2.1% (prior 2.2%), largely maintained. ROE was 0.6% (ROE on parent-company-owner basis 8.7%); excluding the effect of extraordinary losses, capital efficiency shows an improving trend. ROA was 4.6% (Ordinary Income basis), driven by asset turnover of 1.094x × Ordinary Income margin of 3.9%. Cash quality: Operating Cash Flow / Operating Income was 1.65x, and Operating Cash Flow / Net Income was 38.9x, indicating very high cash realization quality, supported by non-cash expenses of depreciation ¥325.3B and goodwill amortization ¥28.7B. Free Cash Flow was ▲¥7.4B due to capital expenditure of ¥428.4B and M&A spend of ¥177.6B, but strong Operating Cash Flow of ¥611.2B (YoY +36.7%) underpinned investment capacity. Investment efficiency: Capex / Depreciation was 1.32x, indicating ongoing growth investments to strengthen medium-term earnings base. Financial soundness: Equity Ratio improved to 32.1% (prior 30.2%), D/E ratio rose slightly to 2.11x (prior 1.96x), but Interest-bearing Debt / EBITDA was 3.56x, maintaining interest payment capacity. Liquidity was healthy with Current Ratio 142.2% and Quick Ratio 129.8%. Cash and deposits of ¥940.5B covered short-term borrowings of ¥413.8B by 2.27x, indicating sufficient short-term debt coverage.
Operating Cash Flow was ¥611.2B (YoY +36.7%). Against subtotal operating profit of ¥779.9B, working capital movements were roughly neutral with inventories up ¥15.9B and trade receivables down ▲¥10.5B; after payment of corporate taxes of ¥152.4B, cash quality remained high. Investing Cash Flow was ▲¥618.6B, primarily driven by Capex ¥428.4B (prior ¥528.7B) and acquisition of subsidiary shares ¥177.6B, reflecting aggressive growth investment. Financing Cash Flow was positive ¥212.2B as bond issuance ¥348.3B and long-term borrowings ¥495.8B exceeded long-term borrowings repayments ▲¥141.9B, dividends ▲¥84.1B, and share buybacks ▲¥85.0B, resulting in cash and deposits increasing to ¥940.5B. FCF was ▲¥7.4B, an investment excess, but strong Operating Cash Flow supports both reinvestment and shareholder returns. Ending cash balance was ¥893.6B (YoY +¥220.5B), significantly increased and expanding the financial buffer.
Against Operating Income of ¥370.0B, non-operating items were a net ▲¥17.7B, with interest expense of ¥43.5B weighing heavily and equity-method investment income of ¥3.3B partially offsetting. The decline from Ordinary Income ¥352.4B to Profit Before Tax ¥317.6B was due to net extraordinary loss of ▲¥34.8B, with impairment losses ¥35.1B and loss on retirement of fixed assets ¥2.0B as one-off negatives, while negative goodwill recognized ¥4.0B and gains on sale of investment securities ¥4.2B were one-off positives. Comprehensive Income was ¥287.8B (attributable to owners of the parent ¥265.3B); the increase over Net Income ¥15.7B was driven by other comprehensive income items including foreign currency translation adjustments ¥34.1B, valuation difference on available-for-sale securities ¥21.4B, and actuarial gains/losses adjustments ¥22.3B, indicating substantive capital growth. Goodwill amortization ¥28.7B compresses operating profit as a recurring cost. Accrual perspective: Operating Cash Flow ¥611.2B ÷ Operating Income ¥370.0B = 1.65x, reflecting high cash realization quality and good earnings sustainability.
Full-year forecast: Revenue ¥1,0200B (progress 88.2%), Operating Income ¥430B (progress 86.0%), Ordinary Income ¥393B (progress 89.7%), Net Income attributable to owners of the parent ¥234B (first-half results ¥193.2B, progress 82.6%). The plan targets Operating Income growth of +16.2% YoY on a full-year basis, reflecting expectations of substantial profit increase in H2. Full-year operating margin is expected to slightly improve to 4.2%, assuming utilization and price improvements in core logistics and profitability enhancements in peripheral businesses. EPS for the full year is forecast at ¥139.77, anticipating further profit growth in H2 from first-half EPS of ¥113.68. Dividend is planned at ¥28 for the full year (interim already ¥25), targeting a payout ratio around 20%, a cautious level indicating prioritization of growth investment and financial buffers.
Annual dividend is ¥50 (interim ¥25, year-end ¥25), totaling ¥84.1B, with a payout ratio of 38.7% (XBRL stated value). On a Net Income attributable to owners of the parent basis, the payout ratio is approximately 43.6%, a sustainable level. Additionally, share buybacks of ¥85.0B were executed, bringing total shareholder return to ¥169.1B and Total Return Ratio to approximately 87.5% (based on Net Income attributable to owners of the parent ¥193.2B). FCF was ▲¥7.4B, so dividend funding depends on Operating Cash Flow, but given Operating Cash Flow of ¥611.2B, shareholder return sustainability is maintained. Next fiscal year dividend forecast is ¥28, implying a cut, interpreted as prioritizing growth investment and leverage management. Treasury stock increased to ¥123.4B at year-end (prior ¥49.9B), reflecting an active stance on shareholder returns.
Business concentration risk: The Distribution business accounts for 63.9% of Revenue and 92% of Operating Income, creating high dependency and risk that deterioration in that market or intensified competition would directly impact consolidated performance. Slower domestic logistics demand growth or rising labor and fuel costs could pressure profitability.
Interest rate risk: Interest-bearing debt is ¥2,478B (D/E 2.11x) and leverage is relatively high; interest expense of ¥43.5B this period rose YoY +37.6%. In a rising interest rate environment, interest burden could further expand and compress Ordinary Income. The timing of bond refinancing of ¥85.0B requires attention.
Impairment risk: Impairment losses this period totaled ¥35.1B (prior ¥22.9B), and goodwill balance is ¥223.7B; if returns on M&A investments fall short of expectations, additional impairments may occur. In particular, impairment of ¥22.8B was booked in corporate/elimination segments, suggesting weakening profitability in some investments.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 4.1% | 6.3% (3.7%–8.5%) | -2.2pt |
| Net Margin | 0.2% | 2.7% (1.6%–4.7%) | -2.6pt |
Profitability lags the industry median, highlighting a low-margin profile.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.3% | 5.0% (-0.4%–9.4%) | +0.3pt |
Revenue growth slightly exceeds the median, maintaining an industry-average growth pace.
※Source: Company compilation
Stable growth in the core Distribution business and profit improvements in peripheral businesses secured top- and bottom-line growth trends, and strong cash generation with Operating Cash Flow of ¥611.2B (YoY +36.7%). The company executed Capex ¥428.4B and M&A ¥177.6B while delivering total shareholder returns of ¥169.1B (Total Return Ratio 87.5%), confirming the ability to balance growth investment and shareholder returns.
Low profitability remains an issue, with Operating Margin 4.1% and Net Margin 2.1% below industry medians; rising SG&A ratio (12.2%) and increased interest expense (¥43.5B, YoY +37.6%) hinder margin improvement. Achieving the next fiscal year plan of Operating Income +16.2% requires price pass-through, utilization improvements, and control of interest and labor costs.
Leverage is somewhat elevated at D/E 2.11x and Debt/EBITDA 3.56x, so attention is needed on increased financial burden in a rising rate environment, though liquidity and repayment capacity are secured with Current Ratio 142.2% and Operating Cash Flow / Interest-bearing Debt 24.7%. Monitoring impairment risk (¥35.1B this period) and goodwill balance ¥223.7B will be focal points for investment recovery.
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 our firm from publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.