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Financial results presentation6753Sharp CorporationElectrical Equipment and Precision Instruments

FY2025 Financial Results and Progress on the FY2025–2027 Medium-Term Management Plan

In FY2025, revenue declined, while operating income, ordinary income and net income increased. The financial base also improved, including the equity ratio and interest-bearing debt. For FY2026, the company expects revenue, ordinary income and net income to decline, but plans to increase operating income.

Worth reading
61In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
77.6
Year-on-year change in operating profit (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Medium-Term Management Plan PresentationFull-year FY2025 results and full-year FY2026 earnings forecast9 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥1,892.8 billion-12.4%
Operating profit¥48.5 billion+77.6%
Ordinary income¥57.9 billion+228.3%
Net income¥47.4 billion+31.4%
Operating profit marginFY2025 full-year: 2.6%; FY2024 full-year: 1.3% (up 1.3 percentage points year on year)
Results for the three months of the current quarterThe figures include FY2025 fourth-quarter operating income of ¥7.5 billion, ordinary income of ¥10.2 billion and net income of -¥20.0 billion.
Full-year earnings forecast
Net Sales
¥1,770 billion
Operating profit
¥49 billion
Ordinary income
¥39 billion
Net income
¥42 billion
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Revenue, operating income and ordinary income exceeded the published forecasts, while net income fell short of the published forecast.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Non-Operating Income and ExpensesFY2025: +¥9.3 billion; year-on-year change: +¥18.9 billion
Foreign-Exchange Gains and LossesFY2025: +¥3.4 billion; year-on-year change: +¥16.0 billion
Interest expensesFY2025: -¥8.6 billion; year-on-year change: +¥1.6 billion
Extraordinary Gains and LossesFY2025: +¥5.4 billion; year-on-year change: -¥30.5 billion
Gain on sale of non-current assetsFY2025: +¥36.1 billion; year-on-year change: -¥41.9 billion
Business-Structure Reform CostsFY2025: -¥19.8 billion; year-on-year change: +¥9.8 billion
Impairment lossFY2025: -¥6.0 billion; year-on-year change: +¥48.3 billion
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Dollar-yen¥156 per US dollar (FY2026 average)
EUR/JPY¥183 per euro (FY2026 average)
Memory and SSD pricesPrice increases are generally reflected in selling prices
Resin and fuel pricesThe impact of higher resin and fuel prices resulting from a deterioration in the Middle East situation is not reflected in the current earnings forecast
New initiatives
  • Commercialization and global expansion of AI services
  • Expansion of generative AI-enabled devices and related services
  • Expansion of COCORO HOME into ASEAN
  • Expansion of ERP and managed IT services across the existing customer base
  • Expansion of the robotics business and consulting services
  • Advancement of the proof of concept for the satellite communications business
  • Preparation to enter the AI server business during FY2027
  • Deepening collaboration with Hon Hai
Key KPIsA metric the company considers important as a management benchmark.
  • Equity ratio19.6 %
    Year on year against the same period last year+9.1 percentage points
  • Interest-Bearing Debt¥492.5 billion
    Year on year against the same period last year-75.1%
  • Net interest-bearing debt¥254.1 billion
    Year on year against the same period last year-34.2%
  • Net debt-to-equity ratio0.9 times
    Year on year against the same period last year-1.0 percentage points
  • Free cash flow¥71.5 billion
    Year on year against the same period last year-30.6%
  • Inventories¥250.3 billion
    Year on year against the same period last year+8.3%
Segment results
Smart Life
Net Sales
¥597.9 billion-7.1%
Operating profit
¥28.4 billion+29.5%
Smart Workplace
Net Sales
¥833.8 billion-0.3%
Operating profit
¥57.5 billion-3.5%
Brand business
Net Sales
¥1,431.8 billion-3.3%
Operating profit
¥86 billion+5.4%
Display Devices
Net Sales
¥423.5 billion-6.4%
Operating profit
¥-18.2 billion
Medium-term management plan targets
As the first year of the FY2025–2027 Medium-Term Management Plan, the company is working to build a foundation for renewed growth, strengthen its earnings base and transform its businesses. Actual results versus the numerical targets: not disclosed.
Market Size / Share
The company states that it maintained the leading unit share of the domestic PC market. The specific share percentage was not disclosed.
Annual Dividend
Annual dividend per share¥0
Interim¥0
End of period¥0
Contents of this document
ItemDetails
Document typeMedium-Term Management Plan Presentation
Fiscal Period CoveredFull-year FY2025 results and full-year FY2026 earnings forecast
Net Sales¥1,892.8 billion (YoY -12.4%)
Operating profit¥48.5 billion (YoY +77.6%)
Ordinary income¥57.9 billion (YoY +228.3%)
Net income¥47.4 billion (YoY +31.4%)
Operating profit marginFY2025 full-year: 2.6%; FY2024 full-year: 1.3% (up 1.3 percentage points year on year)
Results for the three months of the current quarterThe figures include FY2025 fourth-quarter operating income of ¥7.5 billion, ordinary income of ¥10.2 billion and net income of -¥20.0 billion.
Full-year earnings forecastNet Sales ¥1,770 billion / Operating profit ¥49 billion / Ordinary income ¥39 billion / Net income ¥42 billion
Self-assessment against the planRevenue, operating income and ordinary income exceeded the published forecasts, while net income fell short of the published forecast.
Segment resultsSmart Life Net Sales ¥597.9 billion (YoY -7.1%) / Operating profit ¥28.4 billion (YoY +29.5%) / Smart Workplace Net Sales ¥833.8 billion (YoY -0.3%) / Operating profit ¥57.5 billion (YoY -3.5%) / Brand business Net Sales ¥1,431.8 billion (YoY -3.3%) / Operating profit ¥86 billion (YoY +5.4%) / Display Devices Net Sales ¥423.5 billion (YoY -6.4%) / Operating profit ¥-18.2 billion
Breakdown of Factors Affecting the ChangeNon-Operating Income and Expenses FY2025: +¥9.3 billion; year-on-year change: +¥18.9 billion / Foreign-Exchange Gains and Losses FY2025: +¥3.4 billion; year-on-year change: +¥16.0 billion / Interest expenses FY2025: -¥8.6 billion; year-on-year change: +¥1.6 billion / Extraordinary Gains and Losses FY2025: +¥5.4 billion; year-on-year change: -¥30.5 billion / Gain on sale of non-current assets FY2025: +¥36.1 billion; year-on-year change: -¥41.9 billion / Business-Structure Reform Costs FY2025: -¥19.8 billion; year-on-year change: +¥9.8 billion / Impairment loss FY2025: -¥6.0 billion; year-on-year change: +¥48.3 billion
Key KPIsIndicator name Equity ratio / Value 19.6 % / Year on year against the same period last year +9.1 percentage points, Indicator name Interest-Bearing Debt / Value ¥492.5 billion / Year on year against the same period last year ¥-75.1 billion, Indicator name Net interest-bearing debt / Value ¥254.1 billion / Year on year against the same period last year ¥-34.2 billion, Indicator name Net debt-to-equity ratio / Value 0.9 times / Year on year against the same period last year -1.0 percentage points, Indicator name Free cash flow / Value ¥71.5 billion / Year on year against the same period last year ¥-30.6 billion, Indicator name Inventories / Value ¥250.3 billion / Year on year against the same period last year ¥8.3 billion
Assumptions Underlying the Business OutlookDollar-yen ¥156 per US dollar (FY2026 average) / EUR/JPY ¥183 per euro (FY2026 average) / Memory and SSD prices Price increases are generally reflected in selling prices / Resin and fuel prices The impact of higher resin and fuel prices resulting from a deterioration in the Middle East situation is not reflected in the current earnings forecast
Medium-term management plan targetsAs the first year of the FY2025–2027 Medium-Term Management Plan, the company is working to build a foundation for renewed growth, strengthen its earnings base and transform its businesses. Actual results versus the numerical targets: not disclosed.
Annual DividendAnnual dividend per share ¥0 / Interim ¥0 / End of period ¥0
Market Size / ShareThe company states that it maintained the leading unit share of the domestic PC market. The specific share percentage was not disclosed.
New initiativesCommercialization and global expansion of AI services, Expansion of generative AI-enabled devices and related services, Expansion of COCORO HOME into ASEAN, Expansion of ERP and managed IT services across the existing customer base, Expansion of the robotics business and consulting services, Advancement of the proof of concept for the satellite communications business, Preparation to enter the AI server business during FY2027, Deepening collaboration with Hon Hai
Items this document does not state (13)
Gross Profit MarginSelling, general and administrative expensesProgress against full-year forecastUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookFinancial targetsPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The decline in FY2025 revenue was due to intensifying competition and weak demand in the Brand Business, as well as lower revenue in the Display Devices Business. The improvement in profitability was attributed to improvements in the automotive, mobile and industrial applications businesses, lower fixed costs resulting from optimization of production capacity, and improved foreign exchange gains and losses. Factors behind the expected decline in revenue and profit in FY2026 include the reversal of special demand related to the transition to Windows 11, higher memory and SSD prices, and a deterioration in the external environment.

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FY2025 Financial Results and Progress on the FY2025–2027 Medium-Term Management Plan | Sharp Corporation (6753) timely disclosure | Komori