Revenue and profit increased, but the operating margin declined, making first-half profit progress the focus

FY2027-Q1 revenue was ¥60,352 million, up 9.8% year on year, while operating profit was ¥6,240 million, up 3.9%. Ordinary profit was ¥6,842 million, up 21.4%, and net income attributable to owners of the parent was ¥4,954 million, up 14.3%, indicating that the company maintained profit growth through non-operating income and expenses and after-tax profit. However, operating profit was ¥6,005 million on revenue of ¥54,943 million in the same period a year earlier, so operating profit growth was slower than revenue growth.

The operating margin was approximately 10.3% in FY2027-Q1, down approximately 0.6 percentage points from approximately 10.9% in the same period a year earlier. The full-year forecast is revenue of ¥228,600 million and operating profit of ¥22,200 million, putting progress at approximately 26.4% for revenue and 28.1% for operating profit at the end of FY2027-Q1. Based on a simple half-year split, ¥114,300 million in revenue and ¥11,100 million in operating profit would serve as reference thresholds for FY2027-H1. However, regional seasonality and foreign-exchange effects also apply in practice, so full-year achievement should not be assessed solely on the basis of simple progress rates.

The latest earnings report does not break down the reasons for the decline in the operating margin despite higher revenue into amounts attributable to raw-material costs, logistics costs, price revisions, sales volumes, foreign exchange and other factors. By segment, profits declined in the Americas and Europe but increased in ASEAN. Further detail will be needed in the next earnings release to determine which regional or product cost factors caused the decline in the company-wide margin. In FY2027-H1, the focus will be not only on progress toward operating profit of around ¥11,100 million, but also on whether the margin stabilizes in the low-10% range and whether the full-year operating profit forecast of ¥22,200 million can be maintained.