| Indicator | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2898.2B | ¥2699.2B | +7.4% |
| Operating Income | ¥450.4B | ¥385.6B | +16.8% |
| Ordinary Income | ¥437.0B | ¥357.2B | +22.3% |
| Net Income (attributable to owners of the parent) | ¥152.5B | ¥112.0B | +36.2% |
| ROE | 6.6% | 5.6% | - |
The fiscal year ended March 2026 delivered Revenue ¥2898.2B (YoY +¥199.0B +7.4%), Operating Income ¥450.4B (YoY +¥64.9B +16.8%), Ordinary Income ¥437.0B (YoY +¥79.8B +22.3%), and Net Income attributable to owners of the parent ¥152.5B (YoY +¥40.5B +36.2%), achieving revenue growth and double-digit profit growth at all stages. Operating margin improved to 15.5% (up +1.2pt from 14.3% a year ago) and Ordinary Income margin improved to 15.1% (up +1.9pt from 13.2%), reflecting improved profitability. Net Income attributable to owners of the parent rose substantially due primarily to compression of non-controlling interests to ¥85.6B (from ¥131.8B, down ¥46.2B). Operating Cash Flow (OCF) was ¥715.7B (YoY +33.0%), 4.69x consolidated net income, and Free Cash Flow was ¥321.3B, enabling simultaneous coverage of capital expenditures ¥361.3B and dividend payments ¥93.1B, demonstrating ample cash generation.
[Revenue] Revenue ¥2898.2B (YoY +7.4%) was driven by continued recovery in domestic and international passenger demand and sustained high facility utilization. By segment, Facilities Management & Operations recorded ¥1212.1B (＋11.3%) and showed the largest increase, supported by higher rental income and operational services at Haneda Airport passenger terminals. Retail recorded ¥1555.8B (＋4.2%) maintaining revenue growth though at a relatively slower pace. Food & Beverage recorded ¥190.1B (＋7.5%) continuing its recovery trend. Revenue composition: Facilities Management 41.8%, Retail 53.7%, Food & Beverage 6.6%.
[Profitability] Operating Income was ¥450.4B (＋16.8%), with Operating margin improving to 15.5% (up +1.2pt from 14.3%) indicating higher profitability. By segment, Facilities Management & Operations saw Operating Income ¥283.1B (＋45.2%), rapidly expanding to a margin of 23.4%, while Retail turned to decreased profit with Operating Income ¥274.9B (-6.5%) and margin declining to 17.7%. Food & Beverage achieved Operating Income ¥11.5B (＋98.6%), returning to profit and improving margin to 6.1%. SG&A were ¥1438.5B (SG&A ratio 49.6%), up ¥8.8B YoY but absorbed by revenue growth, improving the ratio -0.4pt from 50.0% a year ago. Ordinary Income was ¥437.0B (＋22.3%), with non-operating results improving to -¥13.4B (prior year -¥28.3B). The main drivers were an increase in equity-method investment income to ¥14.1B (from ¥10.0B) and only a modest rise in interest expense to ¥36.6B (from ¥34.0B). Extraordinary items were net -¥3.2B (extraordinary gains ¥5.4B, extraordinary losses ¥8.6B), including gain on sale of available-for-sale securities ¥7.9B. Income taxes were ¥56.8B (effective tax rate 13.1%), reversing from prior year -¥54.7B (prior year had negative tax amount due to deferred tax asset recognition), but remained low relative to pre-tax profit ¥433.8B. Net Income attributable to owners of the parent was ¥152.5B (＋36.2%), aided by a large decline in non-controlling interests to ¥85.6B (prior ¥131.8B). In conclusion, high profitability in Facilities Management and stabilization of Food & Beverage into profitability underpinned the revenue and profit increases.
Facilities Management & Operations recorded Revenue ¥1212.1B (YoY +11.3%) and Operating Income ¥283.1B (＋45.2%), with a segment margin of 23.4% (improved +3.8pt from 19.5%), and was the largest earnings driver. High utilization at Haneda Airport passenger terminals and operational efficiency contributed to margin expansion. Retail maintained the largest scale with Revenue ¥1555.8B (＋4.2%) but Operating Income declined to ¥274.9B (-6.5%), with margin decreasing to 17.7% (down -2.0pt from 19.7%). Rising labor and energy costs appear to have outpaced price passthrough, pressuring profitability. Food & Beverage achieved Revenue ¥190.1B (＋7.5%) and Operating Income ¥11.5B (＋98.6%), marking a substantial return to profitability and improving margin to 6.1% (from prior ¥5.8B profit and 3.3%, an improvement of +2.8pt). A positive mix shift toward higher-margin Facilities Management contributed to raising consolidated Operating margin.
[Profitability] Operating margin 15.5% (up +1.2pt from 14.3%), Ordinary Income margin 15.1% (up +1.9pt from 13.2%), indicating improved profitability. ROE 6.6% is calculated on Net Income attributable to owners of the parent, and Return on Assets (ROA: Ordinary Income / Total Assets) improved to 9.1% (from 7.7%). There remains significant room for ROE improvement, which trades off with a high Equity Ratio (discussed below). [Cash Quality] Operating Cash Flow ¥715.7B is 4.69x consolidated Net Income ¥152.5B, and OCF/EBITDA (OCF to EBITDA) is 0.96x versus EBITDA ¥748.4B (Operating Income + Depreciation), a strong level. The accrual ratio ((Net Income - OCF) / Total Assets) is -11.4%, a negative value indicating very high cash conversion quality. [Investment Efficiency] Total asset turnover was 0.59x (slightly up from 0.57x), reflecting an asset-intensive business model with Property, Plant & Equipment ¥3485.4B (70.8% of Total Assets). Construction in progress (capital work-in-progress) rose to ¥317.7B (from ¥161.8B, +96% YoY), indicating significant buildup expected to contribute to future operations. [Financial Soundness] Equity Ratio 42.7% (up +2.8pt from 39.9%), Current Ratio 196.6% (up +7.0pt from 189.6%), indicating a solid financial base. Interest-bearing debt (Short-term borrowings ¥148.9B + Long-term borrowings ¥1026.2B + Bonds ¥766.8B) totaled ¥1941.9B, yielding Debt/EBITDA 2.59x and Interest Coverage (EBITDA / Interest expense) 20.45x, indicating ample repayment capacity. Cash and deposits ¥968.9B cover short-term borrowings 6.5x, indicating very low liquidity risk.
Operating Cash Flow was ¥715.7B (prior ¥538.1B, +33.0%), generating 1.65x relative to profit before income taxes and adjustments ¥433.8B. From subtotal ¥810.6B, working capital changes resulted in outflow of -¥94.9B (accounts receivable increase -¥16.7B, accounts payable increase +¥13.9B, inventory decrease +¥6.0B), and after income taxes paid -¥76.3B, OCF landed at the reported level. Investing Cash Flow was -¥394.4B (prior -¥128.4B), driven primarily by capital expenditures -¥361.3B (prior -¥184.2B). Proceeds from sale of subsidiary shares ¥13.0B partially offset outflows. Free Cash Flow was ¥321.3B (prior ¥409.7B, -21.6%), still sufficient to cover both dividend payments ¥93.1B (prior ¥71.7B) and capital expenditures. Financing Cash Flow was -¥211.7B (prior -¥305.3B), reflecting long-term borrowings repayment -¥509.1B, new long-term borrowings ¥200.0B, bond issuance ¥200.0B, and bond redemption -¥100.0B, indicating a restructuring of funding composition. Ending cash and deposits totaled ¥968.9B (prior ¥858.1B, +12.9%), maintaining a substantial liquidity cushion.
Core earnings are primarily composed of recurring Operating Income ¥450.4B, with limited one-off items. Non-operating results -¥13.4B consisted mainly of equity-method investment income ¥14.1B and interest expense -¥36.6B, with dividend income ¥5.5B also recorded. Extraordinary items were net -¥3.2B (extraordinary gains ¥5.4B, extraordinary losses ¥8.6B), including gain on sale of available-for-sale securities ¥7.9B offset by loss on retirement of fixed assets ¥8.7B and impairment losses ¥2.3B. Income taxes ¥56.8B (effective tax rate 13.1%) were low due to deferred tax asset recognition effects, and the drop from Ordinary Income ¥437.0B to after-tax profit ¥304.5B (pre-tax profit ¥433.8B - ¥56.8B) was limited. Comprehensive income ¥407.9B far exceeded Net Income ¥152.5B, aided by valuation differences on available-for-sale securities ¥20.3B and actuarial gains/losses on retirement benefits adjustments ¥7.0B. The accrual measure (OCF ¥715.7B - Net Income ¥152.5B = +¥563.2B) is a positive value, indicating cash generation exceeding accounting profit and no signs of earnings manipulation.
Full Year guidance was maintained at Revenue ¥2967.0B (vs. actual +2.4%), Operating Income ¥456.0B (vs. actual +1.2%), and Ordinary Income ¥458.0B (vs. actual +4.8%). Progress vs. guidance: Revenue 97.7%, Operating Income 98.8%, Ordinary Income 95.4%, indicating near-plan outcomes. However, Net Income attributable to owners of the parent actual ¥152.5B reached only 63.0% of the forecast ¥242.0B, while actual EPS ¥313.95 exceeded forecast EPS ¥260.71 (BPS ¥2,265.71), indicating a significant upside on a per-share basis. This divergence suggests differing assumptions regarding non-controlling interests in the forecast. Dividend guidance is ¥48 annual (actual interim ¥45 + year-end ¥50 = ¥95), indicating room for further increases. The slight shortfall vs. full-year guidance is likely attributable to profit deceleration in Retail and the impact of extraordinary items.
Annual dividend was ¥95 (interim ¥45 + year-end ¥50, an increase of +¥60 from prior year ¥35), with payout ratio 30.5% (based on forecast EPS ¥260.71 would be 18.4%), representing a conservative level. Total dividend payments ¥93.1B (prior ¥71.7B) are covered by Free Cash Flow ¥321.3B, yielding a dividend FCF coverage of 3.45x, indicating high sustainability. There were no share buybacks (prior year ¥1.64B executed), so shareholder returns were comprised solely of dividends. Total Return Ratio was not applied; the pure payout ratio of 30.5% defines the return policy. Retained earnings totaled ¥1125.0B (prior ¥926.8B, +21.4%), leaving ample room for further dividend increases.
Demand volatility risk: Retail accounts for 53.7% of revenue and is highly sensitive to passenger demand. Resurgence of infectious diseases, geopolitical risk, or currency fluctuations reducing business and leisure travel could pressure both revenue and margins. Retail already showed Operating Income -6.5% in the period, indicating high dependence on sustained demand recovery.
Cost inflation risk: Retail Operating margin deteriorated from 19.7% to 17.7% (-2.0pt), as labor and energy cost increases outpaced price passthrough. SG&A ¥1438.5B (SG&A ratio 49.6%) shows rigidity that undermines operating leverage, and future wage increases or inflationary pressure may further compress margins.
Investment recovery risk: Construction in progress ¥317.7B (YoY +96%) and large-scale investments are underway; delays in commissioning or deterioration in profitability could trigger impairment risk and downside to future EBITDA plans. Capex / Depreciation is 1.21x indicating a growth investment mode, and securing returns on invested capital (ROIC) will be key over the medium term.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | 15.5% | 10.7% (6.8%–17.9%) | +4.9pt |
| Net margin | 5.3% | 5.8% (2.5%–11.9%) | -0.6pt |
Operating margin 15.5% exceeds the industry median 10.7% by +4.9pt, reflecting the high-margin structure of Facilities Management & Operations and sector outperformance. Net margin 5.3% is -0.6pt below the median 5.8%, but the impact of non-controlling interests ¥85.6B is significant; on a consolidated basis Net margin would be 10.5% (Net Income ¥304.5B / Revenue ¥2898.2B), ranking the company among the industry leaders.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | 7.4% | 12.8% (4.2%–29.2%) | -5.4pt |
Revenue growth 7.4% trails the industry median 12.8% by -5.4pt, indicating a relatively moderate growth pace. Retail growth slowdown (+4.2%) constrained overall growth, while Facilities Management & Operations (+11.3%) showed industry-comparable expansion.
※ Source: Company compilation
High profitability in Facilities Management & Operations drove improvement in consolidated Operating margin to 15.5% (up +1.2pt from 14.3%). The sustainability of segment margin at 23.4% (up +3.8pt from 19.5%) and future pricing strategy and utilization maintenance will be key to medium-term margins. Retail posted Operating Income -6.5% and is loss-pressured, yet as the largest segment by revenue (53.7%) its cost optimization and merchandise mix improvement progress will determine the scope for overall profitability improvement.
Strong cash generation with OCF ¥715.7B (4.69x Net Income) and Free Cash Flow ¥321.3B enabled simultaneous funding of CapEx ¥361.3B and dividends ¥93.1B. The buildup of Construction in progress ¥317.7B (YoY +96%) suggests future reinforcement of the revenue base, but timing of commissioning and realization of ROIC are points to watch. Payout ratio 30.5% and FCF coverage 3.45x indicate substantial return capacity and scope for continued dividend increases as earnings grow.
This report is an AI-generated earnings analysis created by analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by our firm based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as necessary.