First-quarter progress is ahead of plan on profit, with full-year earnings growth projected

In the first quarter from April to June 2026, revenue was ¥832,519 million, up 6.8% from ¥779,854 million in the same period a year earlier, while operating profit was ¥74,761 million, up 30.7% from ¥57,222 million. Profit before tax was ¥81,431 million, and profit attributable to owners of the parent was ¥50,938 million, increases of 26.8% and 23.0%, respectively, year on year. Progress against the full-year revenue plan of ¥3,700,000 million was 22.5%, while progress against the ¥260,000 million operating profit plan was 28.8%, meaning profit is running ahead of revenue relative to the 25% passage of the fiscal year.

The first-quarter operating margin, calculated from revenue and operating profit, was 8.98%. This was an improvement of approximately 1.6 percentage points from 7.34% in the same period a year earlier and was well above the 5.9% margin for the fiscal year ended March 2026. By contrast, the operating margin implied by the full-year plan for the fiscal year ending March 2027 is approximately 7.03%, so the first-quarter margin should not be assumed to continue unchanged. The first half will reflect the seasonality of vehicle sales, pricing actions, and fluctuations in material costs and foreign exchange, so it will be necessary to determine whether the margin improvement resulted from volume, pricing or cost factors.

The first-quarter earnings summary does not break down the reasons for changes in profit and loss into specific amounts, instead referring readers to the earnings presentation materials. Accordingly, based solely on the summary information provided this time, it is not possible to determine whether the ¥74,761 million operating profit was driven by higher unit sales, pricing actions, foreign exchange, material costs, tariffs or fixed costs. In the second quarter, whether the year-on-year change in operating profit can at least be presented by factor in monetary terms will help assess the reliability of the full-year plan.

At the next earnings release, we will review cumulative second-quarter revenue, operating profit and profit attributable to owners of the parent, along with progress against the full-year plan and the cumulative operating margin. Of particular importance will be whether operating profit exceeds ¥130,000 million, whether revenue reaches around ¥1,850,000 million, and whether the full-year forecast is maintained. Since the full-year forecast had not been revised as of the first quarter, we will track whether the company raises its forecast if first-half results are strong relative to plan, or maintains it after factoring in second-half risks.