Q1: higher revenue but lower profit; assess operating margin recovery in FY2027-H1

Consolidated revenue in FY2027-Q1 was ¥9,599 million, up 8.6% year on year, while operating profit was ¥692 million, down 5.1%. Calculated from revenue and operating profit, the operating margin declined by approximately 1.0 percentage point, from approximately 8.3% a year earlier to approximately 7.2% in the current quarter. Ordinary profit was ¥829 million, up 17.3%, and net profit attributable to owners of the parent was ¥605 million, up 38.8%, so the decline in operating profit coexisted with increases in ordinary profit and net profit.

Regarding the factors behind the change in profit, supplementary materials explained that gross profit increased by ¥359 million year on year, while packaging and transportation costs increased by ¥166 million. However, no complete bridge was disclosed showing by how many millions of yen higher raw material prices, other selling, general and administrative expenses, and foreign exchange translation effects each reduced operating profit. Gross margin and operating margin were also not directly disclosed in the materials, and the operating margin is calculated from revenue and operating profit. Q1 profitability also remains below the full-year level, given the FY2026 full-year operating margin of 12.3% and gross margin of 43.4%.

The company left its FY2027 full-year forecasts unchanged at ¥42,900 million in revenue and ¥5,620 million in operating profit. If 50% of the full-year forecasts is used simply as an H1 benchmark, the confirmation levels would be ¥21,450 million in revenue and ¥2,810 million in operating profit, while Q1 operating profit was only approximately 12.3% of the full-year forecast. In the H1 results, the points to confirm are whether revenue growth can be maintained after the rush demand ahead of price revisions in Europe has run its course, whether higher packaging and transportation costs and raw material costs will continue, and whether the reasons for the increases in ordinary profit and net profit will be explained, including the breakdown of non-operating income and expenses and taxes.