| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥16447.6B | ¥14792.4B | +11.2% |
| Operating Income / Operating Profit | ¥902.5B | ¥878.5B | +2.7% |
| Ordinary Income | ¥917.8B | ¥888.7B | +3.3% |
| Net Income / Net Profit | ¥595.4B | ¥583.1B | +2.1% |
| ROE | 10.9% | 10.0% | - |
For the fiscal year ended March 2026, Revenue was ¥16447.6B (YoY +¥1655.2B, +11.2%), Operating Income was ¥902.5B (YoY +¥24.0B, +2.7%), Ordinary Income was ¥917.8B (YoY +¥29.1B, +3.3%), and Net Income was ¥595.4B (YoY +¥12.3B, +2.1%). Strong performance in the Delivery Business and scale expansion from an international forwarding acquisition (34 newly consolidated entities) drove double-digit revenue growth, while deterioration in profitability of Global Logistics limited Operating Income growth to single digits, resulting in a revenue increase with modest profit improvement. Operating margin declined 0.4pt to 5.5% (prior year 5.9%) as post-M&A integration costs and inclusion of lower-margin projects diluted profitability. EPS was ¥98.17 (prior year ¥92.92, +5.7%), boosted by a reduction in outstanding shares from share buybacks.
[Revenue] Revenue of ¥16447.6B (+11.2%) was led by the Delivery Business at ¥10485.1B (+4.5%, revenue mix 63.7%) which achieved stable growth driven by penetration of parcel price revisions and resilient volumes; the Logistics Business at ¥2027.98B (+41.7%, mix 12.3%) recorded high growth due to expansion of warehouse operations and 3PL projects. The Global Logistics Business at ¥3215.96B (+25.4%, mix 19.6%) expanded rapidly due to new consolidation of overseas forwarding firms, but weakening international freight markets and margin deterioration during integration pressured profitability. The Real Estate Business at ¥154.34B (-35.6%, mix 0.9%) saw revenue decline depending on timing of property sales, though high-margin leasing management remained core. Other revenue ¥564.21B (+6.9%, mix 3.4%) rose slightly from staffing and systems sales.
[Profitability] Gross profit was ¥1898.9B (gross margin 11.5%), down 0.3pt year-on-year. SG&A was ¥996.4B (SG&A ratio 6.1%), increasing in absolute terms with revenue growth (prior year ¥725.8B) but only slightly higher as a percentage of sales. Operating Income ¥902.5B (+2.7%) was driven more than 77% by Delivery operating income of ¥701.4B (+2.6%, margin 6.7%). Logistics operating income expanded to ¥62.78B (+48.5%, margin 3.1%), while Global Logistics deteriorated to ¥1.37B (-96.1%, margin 0.0%). Real Estate maintained high margin with operating income ¥103.74B (-1.4%, margin 67.2%). Non-operating items contributed net ¥15.3B, with interest income ¥11.4B, equity-method gains ¥4.1B, and foreign exchange gains ¥9.2B offsetting interest expense ¥51.4B. Ordinary Income ¥917.8B (+3.3%) outpaced Operating Income due to support from non-operating income. Extraordinary gains totaled ¥55.7B (including gains on sale of marketable securities ¥36.2B) and extraordinary losses ¥55.5B (impairment losses ¥16.5B, losses on disposals of fixed assets ¥6.3B), largely offsetting to produce profit before tax of ¥918.1B. After corporate taxes of ¥322.7B (effective tax rate 35.2%), Net Income was ¥595.4B (+2.1%), resulting in revenue growth with modest profit increase.
The Delivery Business recorded Operating Income ¥701.4B (+2.6%) with a stable margin of 6.7%, supported by price revision penetration and steady parcel demand. The Logistics Business achieved Operating Income ¥62.78B (+48.5%) with margin improving to 3.1% as warehouse utilization rose and economies of scale began to take effect. The Global Logistics Business saw Operating Income plunge to ¥1.37B (-96.1%) and margin fall to 0.0%, driven mainly by integration costs from newly consolidated overseas forwarding firms and weak market conditions. The Real Estate Business reported Operating Income ¥103.74B (-1.4%) with an extremely high margin of 67.2%, as leasing management and asset operations remained highly profitable. Other segments produced Operating Income ¥26.37B (+39.2%) with margin 4.7%, supported by expansion in staffing and insurance agency revenues.
[Profitability] Operating margin of 5.5% declined 0.4pt from 5.9% last year, mainly due to post-M&A integration costs and deteriorating profitability in international logistics. ROE improved to 10.9% (prior year 10.0%) driven by higher Net Income and capital efficiency from share buybacks. DuPont five-factor decomposition shows tax burden coefficient 0.649, interest burden coefficient 1.000, EBIT margin 5.5%, total asset turnover 1.338, and financial leverage 2.24, highlighting constraint in EBIT margin. Total asset turnover fell from 1.421 last year, reflecting temporary expansion of the denominator due to M&A assets.
[Cash Quality] Operating Cash Flow (OCF) was ¥1248.2B, 2.1x Net Income of ¥595.4B, with an accrual ratio of -53.0%, indicating strong cash conversion. OCF/EBITDA was 0.85 (EBITDA ¥1470.2B = Operating Income ¥902.5B + Depreciation ¥475.6B + Goodwill amortization ¥81.8B), placing cash conversion in a healthy range.
[Investment Efficiency] Capital expenditures were ¥792.2B, 1.67x depreciation ¥475.6B, indicating a growth investment mode. Capex-to-sales ratio was 4.8%, focused on logistics locations and system upgrades to expand future capacity. Goodwill was ¥1455.6B (prior year ¥646.9B), +125% from M&A, with goodwill/total equity 26.5% and goodwill/EBITDA 0.99x, at a reasonable level.
[Financial Soundness] Equity Ratio was 44.6% (prior year 56.1%), declining due to a sharp rise in short-term borrowings but remaining acceptable medium-to-long term. Debt/EBITDA was 2.25 (interest-bearing debt ¥3308.1B ÷ EBITDA ¥1470.2B), and Interest Coverage was 28.6 (EBITDA ¥1470.2B ÷ interest payments ¥51.4B), indicating good solvency. However, current ratio 86.1% and quick ratio 86.0% are below 1.0x due to expansion of short-term liabilities, signaling short-term liquidity concerns. Cash was ¥967.1B versus short-term borrowings ¥2047.9B, cash/short-term liabilities 0.47x, revealing maturity mismatch.
OCF ¥1248.2B (+5.2% YoY) derived from profit before tax ¥918.1B plus non-cash charges including depreciation ¥475.6B and goodwill amortization ¥81.8B, less corporate tax payments ¥328.0B, and after small working capital movements (accounts receivable △¥10.9B, accounts payable +¥63.4B). Investing Cash Flow was △¥2167.6B, driven by capex △¥792.2B and acquisition of subsidiary shares △¥1338.6B, reflecting significant growth investment via M&A and site development, partially offset by proceeds from sale of marketable securities of ¥32.3B. Financing Cash Flow was ¥657.6B, funded by net increase in short-term borrowings ¥2018.99B (opening ¥49.1B → closing ¥2047.9B) and long-term borrowings raised ¥1300B, while repaying long-term borrowings △¥235.5B, paying dividends △¥320.9B, and purchasing treasury stock △¥749.9B. Free Cash Flow was △¥919.3B (OCF ¥1248.2B − investing CF net growth investments), a substantial deficit due to active M&A and capex, with financing relying on short-term debt and raising liquidity risk. Cash and deposits declined ¥201.5B to ¥967.1B (prior year ¥1168.6B), and short-term debt ratio 61.9% (short-term interest-bearing debt ¥2047.9B ÷ total interest-bearing debt ¥3308.1B) highlights concentration and refinancing risk.
Net Income ¥595.4B was driven mainly by recurring earnings; extraordinary gains ¥55.7B (gains on sale of marketable securities ¥36.2B, gains on sale of fixed assets ¥7.7B) and extraordinary losses ¥55.5B (impairment losses ¥16.5B, losses on disposal of fixed assets ¥6.3B) roughly offset, so net one-off impact was limited. Non-operating income ¥72.3B was small at 0.44% of Revenue and included foreign exchange gains ¥9.2B and dividend income ¥5.3B, indicating low dependence on non-core operations. OCF ¥1248.2B was 2.1x Net Income with accrual ratio △53.0%, showing excellent cash realization. The gap between Ordinary Income ¥917.8B and Net Income ¥595.4B (35.1%) is attributable to the effective tax rate of 35.2%. Comprehensive income ¥732.0B expanded due to foreign currency translation adjustments of +¥148.3B, and there is no structural concern over earnings quality. Goodwill amortization ¥81.8B (prior year ¥34.6B) increased but remains 5.6% of EBITDA; note that comparisons with IFRS peers may slightly suppress Net Income.
For the fiscal year ending March 2027, management forecasts Revenue ¥17400.0B (vs current period +5.8%), Operating Income ¥970.0B (+7.5%), Ordinary Income ¥950.0B (+3.5%), and Net Income ¥600.0B (+0.8%), expecting continued revenue and profit growth. Achievement ratios are 94.5% for Revenue and 93.1% for Operating Income, indicating generally steady full-year progress. Forecast EPS is ¥99.72 with expected dividend ¥27 (payout ratio 27.1%), maintaining continuity from the current period dividend of ¥53 (interim ¥26 + year-end ¥27). Key assumptions include continuation of domestic Delivery price revisions and stable volumes, sustained high growth in Logistics, a recovery and stabilization of profitability in Global Logistics, and improvement in liquidity via replacement of short-term borrowings with long-term debt or repayment. Planned Operating Income growth (+7.5%) outpaces Revenue growth (+5.8%), relying on profitability improvements in Global Logistics and cost efficiency measures.
Annual dividend is interim ¥26 + year-end ¥27 for a total of ¥53, resulting in a payout ratio of 56.0% (total dividends ¥317.9B ÷ Net Income ¥595.4B × after considering outstanding shares), near the upper sustainable range. Including share buybacks of ¥749.9B, the Total Return Ratio is approximately 179% ((dividends ~¥320.9B + share buybacks ¥749.9B) ÷ Net Income ¥595.4B), extremely high; under Free Cash Flow deficit of △¥919.3B, shareholder returns were funded by debt financing. FCF coverage for dividends alone is △2.9x (dividends ¥320.9B ÷ FCF △¥919.3B), failing to cover distributions, and total returns are materially short. While Debt/EBITDA 2.25 and Interest Coverage 28.6 indicate financial capacity, continuing high returns amid a short-term debt ratio of 61.9% increases refinancing risk. The forecast dividend ¥27 for FY2027 signals intent to maintain a dividend-growth stance, but share buybacks should be managed flexibly in line with FCF and leverage.
Continued profitability weakness in Global Logistics: Operating Income ¥1.37B (-96.1%) sharply declined and margin fell to 0.0%. Prolonged delays in integration of overseas forwarding firms or sustained weakness in international freight markets could trigger impairment risk on goodwill ¥1455.6B and significantly pressure consolidated earnings. Goodwill/EBITDA 0.99x is currently reasonable, but if Global Logistics’ OCF generation weakens, the ratio could deteriorate rapidly.
Short-term liquidity risk: Short-term borrowings surged to ¥2047.9B (prior year ¥49.1B), resulting in a short-term debt ratio of 61.9%, current ratio 86.1%, and cash/short-term liabilities 0.47x, exposing maturity mismatch. In stressed short-term markets or rising interest rate environments, rollover costs could increase and liquidity could tighten. Immediate actions include shifting to long-term debt or repayment through expanded OCF.
Inflation risk for labor and fuel costs: Under low-margin structure with Operating Income margin 5.5%, simultaneous driver shortages/wage demands related to supply issues and fuel price increases could outpace price pass-through and further compress margins. The Delivery Business’ Operating Income ¥701.4B (margin 6.7%) assumes continued penetration of price revisions; weakening customer negotiation power would directly hit earnings.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.5% | 6.3% (3.7%–8.5%) | -0.8pt |
| Net Margin | 3.6% | 2.7% (1.6%–4.7%) | +0.9pt |
Operating margin is 0.8pt below the industry median, while net margin is +0.9pt above, indicating final profit supported by management of non-operating items and tax effects.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 11.2% | 5.0% (-0.4%–9.4%) | +6.2pt |
Revenue growth significantly exceeds the industry median, driven by M&A and robust domestic Delivery.
※ Source: company aggregation
Stability of domestic Delivery and penetration of price revisions: The Delivery Business continues stable growth with Revenue +4.5% and Operating Income +2.6%, and parcel price revisions contributed to maintenance of a 6.7% margin. Sustaining price pass-through amid tightening supply-demand conditions post-2024 issues is key to continued earnings stability. The Logistics Business showed high growth (Revenue +41.7%, Operating Income +48.5%), with scale economies contributing to margin improvement to 3.1%, and is expected to enlarge its medium-term profit contribution.
Monitoring recovery of Global Logistics profitability and goodwill impairment risk: Global Logistics’ Operating Income plunged to ¥1.37B (-96.1%), contrasting with a ¥1455.6B (+125%) increase in goodwill. Market bottoming and realization of integration synergies are essential for next-year improvement; delayed recovery would raise goodwill impairment risk. Goodwill/EBITDA 0.99x is currently reasonable, but a decline in OCF generation would rapidly impair financial soundness.
Improve short-term liquidity and rebalance capital policy: Rapid rise in short-term borrowings to ¥2047.9B (prior year ¥49.1B) resulted in current ratio 86.1% and cash/short-term liabilities 0.47x, putting short-term liquidity at a cautionary level. High Total Return Ratio (~179%) under FCF △¥919.3B relied on debt funding and created maturity mismatch. Immediate measures required include replacement with long-term borrowings, expanding OCF, or revising return policy to correct short-term debt ratio 61.9%. With OCF ¥1248.2B and moderation of capex/M&A pace, a turn to positive FCF and liquidity improvement from FY2027 could materially enhance financial sustainability.
This report is an AI-generated financial analysis document based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the company using public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.