Rinnai (5947) investor relations material

Executive summary

• Achieved record-high consolidated net sales of ¥470.3 billion, up 2.2% year-over-year, and record operating income of ¥50.5 billion, up 9.8% year-over-year, despite global economic and geopolitical uncertainty.

• Net income attributable to owners reached ¥36.1 billion, up 21.8% year-over-year, surpassing medium-term business plan targets, supported by foreign exchange gains and higher interest income.

• Growth was driven by high-value-added product sales and cost-reduction initiatives.

• Recall of bathroom heater/dryers largely resolved, with minimal ongoing earnings impact expected.

Financial highlights

• Net sales: ¥470.3 billion (+2.2% YoY); Operating income: ¥50.5 billion (+9.8% YoY, margin 10.7%).

• Ordinary income: ¥57.6 billion (+14.6% YoY, margin 12.3%).

• Net income: ¥36.1 billion (+21.8% YoY, margin 7.7%).

• Gross profit increased to ¥163.7 billion from ¥156.1 billion year-over-year.

• Dividend per share increased to ¥106 (full year), with a payout ratio of 38.5%.

Outlook and guidance

• Fiscal 2027 forecast: net sales ¥500 billion (+6.3%), operating income ¥50.5 billion (-0.1%), net income attributable to owners ¥36.3 billion (+0.4%).

• New medium-term plan "accelerate 2030" targets ¥620 billion net sales and 11.3% operating margin by fiscal 2031.

• Minimal earnings impact from recall expected in fiscal 2027 as employee-led response has ended.

• Earnings forecasts do not factor in potential impacts from Middle East tensions.

• Continued focus on risk management and quality assurance to maintain customer trust.