Menicon Company (7780) Q4 2024 earnings summary

Executive summary

• FY2023 net sales rose 5.4% YoY to ¥116.2bn, while operating profit fell 25.8% to ¥9.0bn and profit attributable to owners of parent fell 38.5% to ¥4.5bn.

• Growth was led by 1DAY lenses and lens care products in priority regions; higher procurement costs, stepped-up growth investment and one-time expenses weighed on profitability.

Financial highlights

• Gross profit increased 4.3% to ¥61.0bn; SGA rose 12.2% to ¥52.1bn, exceeding gross profit growth and reducing operating profit.

• Ordinary profit declined 30.0% to ¥8.2bn; profit attributable to owners of parent declined 38.5% to ¥4.5bn.

• Adjusted for ¥0.9bn of extraordinary provisions, reported profit included doubtful-account allowances related to the food business and a guarantee-loss provision linked to termination of a stock benefit trust.

Outlook and guidance

• FY2024 forecast: net sales ¥122.7bn (+5.6%), operating profit ¥10.0bn (+11.7%), ordinary profit ¥9.5bn (+15.5%) and parent-attributable profit ¥7.0bn (+54.2%).

• FY2024 forecast EBITDA is ¥20.4bn (+19.2%); operating margin is 8.1% and EBITDA margin 16.7%.

• Vision Care sales are forecast at ¥115.1bn (+7.7%); 1DAY lens sales at ¥32.0bn (+12.6%) and healthcare and life care at ¥7.6bn (-18.3%).

• Growth plans center on 1DAY lens supply and sales, orthokeratology-related products, overseas expansion and higher-value products; FY2027 targets include sales above ¥140bn and ROE of 12%.