| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4413.8B | ¥4019.9B | +9.8% |
| Operating Income / Operating Profit | ¥476.1B | ¥464.8B | +2.4% |
| Equity-method Investment Income | ¥0.4B | ¥0.3B | +9.1% |
| Ordinary Income | ¥490.9B | ¥499.0B | -1.6% |
| Net Income / Net Profit | ¥432.0B | ¥102.4B | +321.8% |
| ROE | 11.3% | 2.9% | - |
For the fiscal year ending March 2026, Revenue / Net Sales were ¥4,413.8B (YoY +¥393.9B +9.8%), Operating Income ¥476.1B (YoY +¥11.3B +2.4%), Ordinary Income ¥490.9B (YoY -¥8.1B -1.6%), and Net Income attributable to owners of the parent ¥432.0B (YoY +¥329.6B +321.8%). While both revenue and operating income increased, the large rise in net income is attributable to a significant decline in the effective tax rate to 16.2% (prior year 26.6%) despite a slight decrease in profit before tax (¥485.0B, prior ¥499.4B). The operating margin declined by 0.8pt to 10.8% from 11.6% a year ago, but non-operating items such as interest income ¥18.6B (down substantially from ¥41.6B prior year) helped support the ordinary income level. By segment, the VONA Business drove operating income growth of +28.8% and the FA Business led revenue growth of +18.2%, although FA operating income declined by -9.9% due to goodwill amortization burden and upfront investments. Gross margin of 46.7% remained stable versus 46.5% prior year, while SG&A ratio rose 1.0pt to 35.9% from 34.9%.
[Revenue] Revenue of ¥4,413.8B (+9.8%) by region expanded in China ¥919.5B (prior ¥793.3B, +15.9%), Asia ¥720.5B (prior ¥640.1B, +12.6%), Americas ¥633.1B (prior ¥447.0B, +41.6%), Europe ¥276.8B (prior ¥268.0B, +3.3%), while Japan was slightly down at ¥1,772.2B (prior ¥1,776.9B, -0.3%). By segment, FA Business ¥1,605.0B (+18.2%), VONA Business ¥1,925.2B (+7.1%), Mold Components Business ¥883.7B (+2.2%) all recorded revenue increases, with FA’s double-digit growth and a doubling of sales in the Americas driving overall performance.
[Profitability] Gross profit ¥2,060.2B (gross margin 46.7%) increased by ¥190.2B from ¥1,870.0B (46.5%) a year ago, improving gross margin by 0.2pt. SG&A ¥1,584.0B (SG&A ratio 35.9%) rose ¥178.9B (+12.7%) from ¥1,405.1B (34.9%), outpacing sales growth of +9.8%. Recognition of goodwill amortization ¥22.1B, post-M&A integration costs, and investments in IT and logistics infrastructure pushed SG&A higher. As a result, Operating Income ¥476.1B (operating margin 10.8%) was only marginally higher than prior year ¥464.8B (11.6%), with margin down 0.8pt. Ordinary Income ¥490.9B (-1.6%) reflects non-operating income ¥26.2B (primarily interest income ¥18.6B) less non-operating expenses ¥11.3B (including foreign exchange losses ¥5.7B); the decline in interest income (prior year ¥41.6B) contributed to the ordinary income decrease. Extraordinary items were net +¥4.2B (extraordinary gains ¥10.2B, extraordinary losses ¥6.0B including impairment loss ¥5.97B), limited in scale. Profit before tax ¥485.0B (-2.9%) combined with a substantial reduction in corporate taxes to ¥78.7B (effective tax rate 16.2%, prior year 26.6%) produced Net Income attributable to owners of the parent ¥432.0B (+321.8%). In conclusion, while revenue and profit increased, operating-level margins decreased and the final net income increase chiefly reflects a temporary tax burden reduction.
The VONA Business reported Revenue ¥1,925.2B (+7.1%), Operating Income ¥186.3B (+28.8%), and operating margin 9.7% (improved +1.7pt from 8.0%), with margin expansion driven by revenue growth and cost efficiency. The FA Business recorded Revenue ¥1,605.0B (+18.2%), Operating Income ¥202.8B (-9.9%), and operating margin 12.6% (down 4.0pt from 16.6% prior year); goodwill amortization ¥28.6B and amortization of intangible assets related to the Fictiv acquisition weighed on operating profit, while pre-amortization operating income remained high at ¥231.4B (operating margin 14.4%). Mold Components Business posted Revenue ¥883.7B (+2.2%), Operating Income ¥86.9B (-8.5%), and operating margin 9.8% (down 1.2pt from 11.0%), where a mild revenue increase was offset by demand mix and cost increases, reducing margin. Company-wide pre-amortization operating income was ¥504.7B (operating margin 11.4%); excluding the amortization burden of ¥28.6B, margins are broadly maintained at prior-year levels.
[Profitability] Operating margin 10.8% (prior 11.6%), Net margin 9.8% (prior 2.5%), ROE 11.3% (prior 10.5%); operating margin declined 0.8pt, but lower tax rate drove a large improvement in net margin and ROE rose 0.8pt. Gross margin 46.7% improved 0.2pt from 46.5%, and SG&A ratio rose 1.0pt to 35.9% from 34.9%. [Cash Quality] Operating Cash Flow (OCF) ¥521.9B is 1.21x of Net Income ¥432.0B, with an accrual ratio of -20.8%, indicating solid cash backing. OCF/EBITDA was 0.80x (EBITDA = Operating Income ¥476.1B + Depreciation & Amortization ¥179.4B = ¥655.5B), and increases in working capital (accounts receivable +¥116.0B, inventories +¥3.4B) constrained cash conversion. [Investment Efficiency] ROA (on ordinary income basis) 10.6% (prior 11.9%), total asset turnover 0.95x (prior 0.96x), with total assets increased by M&A to ¥4,649.7B (prior ¥4,195.7B), slightly reducing turnover. [Financial Soundness] Equity Ratio 82.3% (prior 83.9%), current ratio 453.6%, quick ratio 361.3%, maintaining high liquidity. Interest-bearing debt totaled ¥65.5B (current ¥2.5B, non-current ¥63.0B) yielding D/E ratio 0.02x—extremely low. Interest coverage 258.8x (Operating Income ¥476.1B ÷ interest expense ¥1.8B) indicates minimal debt burden. Goodwill is ¥439.6B, 11.5% of shareholders’ equity ¥382.5B; intangible assets ¥903.7B represent 19.4% of total assets—post-M&A intangible growth is notable but within healthy range.
OCF was ¥521.9B (prior ¥604.6B, -13.7%), derived from profit before tax ¥485.0B plus depreciation & amortization ¥179.4B, goodwill amortization ¥22.1B and other non-cash charges to subtotal OCF ¥626.8B, less corporate tax payments -¥127.3B and working capital movements including accounts receivable increase -¥116.0B and accounts payable increase ¥58.9B. Investing Cash Flow was -¥432.0B (prior -¥324.5B), centered on acquisition of subsidiary shares -¥484.8B (primarily Fictiv acquisition), tangible fixed asset additions -¥142.9B, and net change in time deposits ¥36.1B (placements -¥123.2B, withdrawals ¥360.7B). Financing Cash Flow was -¥418.0B (prior -¥317.6B), primarily share repurchases -¥251.3B (prior -¥201.6B), dividend payments -¥113.2B (prior -¥96.5B), and lease liability repayments -¥19.1B. Free Cash Flow (OCF + Investing CF) was ¥89.9B (prior ¥280.1B), substantially reduced as M&A investment and working capital increases compressed cash generation. Cash and cash equivalents declined from ¥1,282.6B at the beginning of the period to ¥1,042.0B at period-end after foreign exchange effects +¥87.6B, a decrease of ¥240.6B.
Of Ordinary Income ¥490.9B, Operating Income ¥476.1B is core earnings. Non-operating income ¥26.2B mainly comprised interest income ¥18.6B and equity-method investment gains ¥0.4B. Non-operating expenses ¥11.3B included interest expense ¥1.8B and foreign exchange losses ¥5.7B, indicating stability at the ordinary income stage. Extraordinary items were net +¥4.2B (extraordinary gains ¥10.2B, extraordinary losses ¥6.0B), limited in magnitude. OCF ¥521.9B is 1.21x of Net Income ¥432.0B with an accrual ratio of -20.8%, indicating good cash backing of earnings. Comprehensive income ¥656.8B significantly exceeded Net Income ¥404.6B, with other comprehensive income ¥247.6B driven by foreign currency translation adjustments ¥247.6B reflecting valuation gains on overseas assets from yen depreciation. The large rise in Net Income (+321.8%) occurred despite a slight decline in profit before tax (-2.9%) due to the fall in the effective tax rate to 16.2% (prior 26.6%); the sustainability of the tax benefit is uncertain. Goodwill amortization ¥22.1B is small (3.4% of EBITDA ¥655.5B), and EBITDA-based assessment better reflects underlying earning power.
Company guidance targets Revenue ¥4,915.0B (+11.4%), Operating Income ¥550.0B (+15.5%), Ordinary Income ¥559.0B (+13.9%), and Net Income attributable to owners of the parent ¥374.0B (-13.4%). First Half results were Revenue ¥4,413.8B (progress 89.8%), Operating Income ¥476.1B (progress 86.6%), Ordinary Income ¥490.9B (progress 87.8%), and Net Income attributable to owners of the parent ¥432.0B (progress 115.5%). Operating-level performance is behind plan, but Net Income exceeded plan due to the lower tax rate. To achieve the full-year plan, the Second Half must deliver additional Revenue ¥501.2B (+11.4% growth), Operating Income ¥73.9B (operating margin 14.7%), and Ordinary Income ¥68.1B, requiring a substantial improvement from the First Half operating margin of 10.8%. The Second Half will be key for investment payback and cost efficiency. Forecast EPS is ¥141.17 versus First Half actual ¥149.30. Forecast dividend ¥22.07 versus interim actual ¥18.02, with a year-end dividend scheduled at ¥34.96.
Dividends were interim ¥18.02 and year-end ¥34.96 for an annual dividend of ¥52.98 (prior year dividend ¥19.83, change +¥33.15). Dividend payout ratio was 35.5% (annual dividend ¥52.98 ÷ EPS ¥149.30). Total dividend payments were ¥113.2B (prior ¥96.5B); combined with share repurchases ¥251.3B (prior ¥201.6B), total shareholder returns were ¥364.5B, yielding a Total Return Ratio of 84.4% (¥364.5B ÷ Net Income ¥432.0B). Total returns substantially exceeded FCF ¥89.9B, implying part of the return was funded from cash on hand. With cash and deposits ¥1,129.4B and OCF ¥521.9B, short-term sustainability of returns is secured, but medium-to-long-term expansion of FCF is necessary. Dividend payout is at an appropriate level, but the high Total Return Ratio and insufficient FCF coverage mean rebalancing of returns will be a focus next fiscal year.
Risk of deteriorating working capital efficiency: Increases in accounts receivable ¥985.2B (prior ¥783.9B, +25.7%) and inventories ¥601.7B (prior ¥571.9B, +5.2%) depressed OCF by -¥116.0B (accounts receivable increase) and -¥3.4B (inventory increase). DSO estimated at 81 days (receivables ÷ daily sales) and DIO 51 days (inventories ÷ daily COGS) indicate lengthening collection and turnover. If sustained, this may raise credit costs and inventory valuation loss risk.
M&A integration risk and goodwill amortization burden: ¥484.8B was spent on acquisition of subsidiary shares, with goodwill ¥439.6B and intangible assets ¥903.7B recognized. In the FA Business, amortization burden ¥28.6B pressured operating income, reducing operating margin to 12.6% (prior 16.6%). Delays in integration or shortfalls in synergy could crystallize impairment risk.
Tax rate fluctuation and sustainability of earnings risk: The drop in effective tax rate to 16.2% (prior 26.6%) was the main driver of Net Income +321.8%, while profit before tax fell slightly by -2.9%. If the lower tax rate proves transitory, Net Income growth may slow. Additionally, SG&A growth +12.7% outpaced sales growth +9.8%, posing risk of delayed improvement in operating leverage.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.8% | 3.4% (1.4%–5.0%) | +7.4pt |
| Net Margin | 9.8% | 2.3% (1.0%–4.6%) | +7.5pt |
Profitability substantially exceeds the industry median, with operating and net margins at top-class levels.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 9.8% | 5.9% (0.4%–10.7%) | +4.0pt |
Revenue growth outpaces the industry median by 4.0pt, maintaining a healthy growth pace.
※ Source: Company aggregation of public financial statements
Focus on controlling SG&A and arresting decline in operating margin: Operating margin fell to 10.8% from 11.6% prior year (down 0.8pt) while SG&A ratio rose to 35.9% from 34.9% (up 1.0pt). SG&A growth +12.7% outpaced sales growth +9.8%, with post-M&A integration costs and goodwill amortization ¥22.1B weighing on results. In the FA Business, pre-amortization operating margin of 14.4% demonstrates underlying business strength; completion of integration and realization of scale effects could restore margins.
Improving working capital efficiency is key to expanding OCF and FCF: Accounts receivable +¥116.0B and inventories +¥3.4B reduced OCF, shrinking FCF to ¥89.9B (prior ¥280.1B). OCF/EBITDA 0.80x underperformance indicates normalization of receivables and inventory turnover is central to improving cash generation. Total shareholder returns of ¥364.5B (dividends ¥113.2B + buybacks ¥251.3B) far exceeded FCF, so monitoring OCF expansion and rebalancing total returns will be important.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm from public financial data. Investment decisions are your responsibility; consult a professional advisor as needed before making investment decisions.
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