Whether operating profit progress catches up with revenue progress in 2Q

Revenue in the first quarter of the fiscal year ending March 2027 was ¥10,877 million and operating profit was ¥282 million. The company's full-year forecasts are revenue of ¥44,540 million and operating profit of ¥1,510 million, putting simple progress rates at 24.4% for revenue and 18.7% for operating profit. Revenue was close to the 25% quarterly benchmark, but operating profit was below it, indicating that profit is ramping up more slowly than the top line.

First-quarter operating profit increased by 28.1% year on year, but achieving H1 operating profit of ¥755 million, equivalent to 50% of the full-year forecast, will require ¥473 million in the standalone second quarter. For revenue, using ¥22,270 million, half of the full-year forecast, as a mechanical H1 benchmark means that ¥11,393 million will be required in the standalone second quarter. These are not forecasts provided by the company, but reference figures for measuring the distance from plan in the next results.

The supplementary first-quarter materials did not state progress against the full-year forecast, the revenue and operating profit required for the remaining period, or the company's own assessment of whether the plan would be exceeded or missed. Accordingly, in H1 it will be necessary to confirm not only year-on-year revenue and profit growth, but also whether revenue growth is accompanied by an improvement in the operating margin and whether the full-year forecast is revised. In particular, it will be important to determine whether the first-quarter operating margin of 2.6% improves on a cumulative H1 basis and whether profit growth continues across the promotion solutions, content and environmental businesses.