Nippon Sanso (4091) Q1 2027 earnings summary

Executive summary

• Sales for Q1 FYE 2027 rose 14.9% year-on-year to JPY 361.7 billion, with core operating income up 19.9% to JPY 54.6 billion and net income attributable to owners of the parent up 54.0% to JPY 43,716 million, driven by strong price management, productivity improvements, favorable FX, and acquisitions in Oceania and Europe.

• Profitability improved across all major regions except Japan, where electronics-related equipment and construction sales declined.

• The electronics-related business benefited from robust semiconductor demand, especially for AI and data centers, supporting high utilization and capital investment.

• New management structure established post-AGM, with increased investment in European engineering capabilities via HYSYTECH.

• Foreign exchange tailwinds, especially JPY depreciation against USD and EUR, favorably impacted revenue and core operating income by JPY 26.9 billion and JPY 4.2 billion, respectively.

Financial highlights

• Revenue: JPY 361.7 billion (+14.9% YoY; +5.9% ex-FX); core operating income: JPY 54.6 billion (+19.9% YoY; +9.8% ex-FX); net income: JPY 44.7 billion (+53.0% YoY).

• Operating income (IFRS): JPY 64.7 billion (+42.1% YoY); EBITDA margin: 25.0% (up from 23.8%).

• Free cash flow increased to JPY 38.2 billion (+JPY 16.2 billion YoY); CAPEX: JPY 28.5 billion.

• Basic EPS: JPY 101.00 (up from JPY 65.60 YoY); overseas sales ratio: 71.8%.

• Non-recurring profit of JPY 10 billion from asset sales, partially offset by rebranding and other costs.

Outlook and guidance

• Full-year FYE2027 revenue forecast: JPY 1,380.0 billion (+1.5% YoY); core operating income: JPY 208.0 billion (+2.4% YoY); net income attributable to owners of the parent projected at JPY 131.0 billion (+5.7% YoY); EPS forecast: JPY 302.64.

• EBITDA margin expected to rise to 25.1%; core operating income margin to 15.1%.

• Q2 performance anticipated to be in line with Q1, with moderate recovery in on-site volumes in Europe.

• Electronics and industrial gas demand expected to remain strong, especially in Asia and the U.S.

• No revisions to previously announced forecasts.