Roland (7944) Q2 2024 earnings summary

Executive summary

• Sales and profit exceeded H1 plan, rising 1.3% and 4.0% YoY respectively, aided by a weaker JPY and cost controls.

• Dealer inventory adjustment largely completed, but demand is slowing in North America and China.

• The global environment remains uncertain due to geopolitical risks, high prices, interest rates, yen depreciation, and economic stagnation in China.

• SG&A expenses were actively managed to offset weaker demand.

• No change to full-year forecast or dividend outlook.

Financial highlights

• H1 sales: JPY46.7bn (+1.3% YoY, +3.5% vs guidance); operating profit: JPY4.4bn (+4.0% YoY, +34.1% vs guidance); net income: JPY3.6bn (+15.6% YoY, +47.7% vs guidance).

• Q2 sales: JPY24.6bn (+6.0% YoY); operating profit: JPY2.86bn (+28.0% YoY); net income: JPY2.71bn (+51.9% YoY).

• Gross profit margin improved to 43.8% in Q2 2024 from 40.9% in Q4 2023; H1 gross profit was JPY20.2bn.

• EBITDA for H1: JPY5.86bn (+5.0% YoY).

• FX impact and sale of Roland DG shares (+JPY400mn) boosted results; allowance for US retailer Chapter 11 (-JPY150mn) offset gains.

Outlook and guidance

• Full-year sales forecast unchanged at JPY99.9bn, operating profit JPY11.4bn, and annual dividend per share JPY170.

• Profit attributable to owners of parent forecast at JPY8.5bn (+4.3% YoY); EPS JPY308.37.

• Assumed H2 exchange rates revised to JPY/USD 148 and JPY/EUR 160.

• Dividend payout ratio expected at 68.2%.