Achieving the FY2027 H1 forecast requires higher Q2 sales and maintenance of the profit level

FY2027 Q1 sales were ¥255,742 million, operating profit was ¥82,626 million, and profit for the quarter attributable to owners of the parent was ¥65,791 million. Year on year, sales increased 16.0%, operating profit 30.0% and net profit 26.9%. Growth in both Life Care and Information & Communications lifted the company's overall start to the year.

The H1 forecast presented by the company at 1Q was sales of ¥521,000 million, profit from ordinary activities of ¥165,000 million, profit before tax of ¥170,000 million and profit attributable to owners of the parent of ¥131,000 million. Q1 sales represented 49.1% of the H1 sales forecast and operating profit approximately 50.1% of the corresponding forecast, meaning that roughly half of the H1 forecast had been achieved numerically. However, Q1 operating profit includes the effects of foreign exchange and product mix, so full-year stability cannot be assessed from the progress rate alone.

Subtracting Q1 actual results from the H1 forecast implies standalone Q2 sales of ¥265,258 million and profit from ordinary activities of ¥82,374 million. This assumes that sales will increase approximately 3.7% from Q1 while profit will remain broadly flat, requiring the continued strength of high-margin Information & Communications products and improved profitability in Life Care in Q2. The H1 forecast does not assume that Q1's profit growth rate of around 30% will continue unchanged, and allows for some moderation in profit growth in Q2.

In the next results release, standalone Q2 sales and profit should be compared with the levels implied by the H1 forecast to determine whether Q1's strength reflected temporary demand pull-forward or the weaker yen. In addition, the company has not disclosed a full-year forecast because of foreign-exchange conditions and the business environment for end-consumer products. Whether it provides full-year guidance at H1 or defers it until the third quarter will therefore also be an important disclosure point.