Kubota (6326) Q4 2024 earnings summary

Executive summary

• FY 2024 revenue was 3,016.3 billion yen, nearly flat year-over-year, with overseas sales up 0.3% and Japan down 1.7%.

• Operating profit declined 4.0% to 315.6 billion yen, mainly due to weaker sales in Europe and North America and higher sales incentives.

• Profit attributable to owners fell 3.4% to 230.4 billion yen.

• Free cash flow turned positive at 73.2 billion yen, a significant improvement from the previous year.

Financial highlights

• Revenue: 3,016.3 billion yen (down 0.1% YoY); overseas revenue up 0.3%, Japan down 1.7%.

• Operating profit: 315.6 billion yen (down 4.0% YoY); profit before tax: 335.3 billion yen (down 2.0%).

• Profit attributable to owners: 230.4 billion yen (down 3.4% YoY); ROE: 9.9% (down from 11.8%).

• Free cash flow: 73.2 billion yen (up 263.9 billion yen YoY); operating cash flow: 282.1 billion yen.

• Total assets increased to 6,018.7 billion yen; equity attributable to owners rose to 2,477.3 billion yen.

Outlook and guidance

• FY 2025 revenue forecast: 3,050.0 billion yen (+1.1% YoY); Japan +4.0%, overseas +0.3%.

• Operating profit expected to decline 11.3% to 280.0 billion yen; profit attributable to owners forecast at 196.0 billion yen (-14.9%).

• Machinery segment revenue forecast at 2,650.0 billion yen (+13.1 billion yen YoY); Water & Environment at 385.0 billion yen (+22.4 billion yen YoY).

• Operating profit margin expected to decrease to 9.2% from 10.5%.

• Outlook assumes exchange rates of 145 yen/USD and 152 yen/EUR, with growth in North America and Asia, but stagnation in Europe.