Roland (7944) Q3 2024 earnings summary

Executive summary

• Full-year earnings forecast lowered due to market conditions, sluggish demand, and earnings progress.

• Net sales for the nine months ended September 30, 2024, were ¥69.6bn, down 2.5% year-over-year, with operating profit down 16.3% and net income down 25.6%.

• Price competition persists, but price optimization efforts have mostly normalized the situation in Q3.

• New product launches and continued medium- to long-term investments are planned to drive demand recovery.

• Year-end dividend to be paid as planned.

Financial highlights

• Q3 YTD sales: ¥69.6bn, down 2.5% year-over-year; operating profit: ¥6.4bn, down 16.3%; net income: ¥4.2bn, down 25.6%.

• EBITDA for Q3 YTD: ¥8.6bn, down 11.6% year-over-year.

• Gross margin for Q3 YTD: 43.4%–43.5%, slightly down from previous year.

• Ordinary profit fell 25.4% year-over-year to ¥5.3bn.

• Basic earnings per share decreased to ¥155.45 from ¥210.77 in the prior year period.

Outlook and guidance

• Full-year sales forecast revised down to ¥99.9bn (–2.5% YoY); operating profit forecast: ¥10.0bn (–15.8% YoY); net income forecast: ¥6.7bn (–17.8% YoY).

• Year-end dividend forecast maintained at ¥85 per share; total annual dividend: ¥170 per share.

• Q4 expected to see gradual sales recovery and improved selling price/cost ratio; SG&A to rise due to hiring.

• FY2025 outlook anticipates gradual market recovery, especially in the US, with growth driven by new products and expanded sales channels.