Toto (5332) Q4 2025 earnings summary

Executive summary

• Net sales rose 3% YoY to ¥724.5 billion and operating profit increased 13% to ¥48.5 billion, but net income dropped 67% to ¥12.2 billion due to a ¥34.1 billion impairment loss in Mainland China.

• Japan and International Housing Equipment saw sales growth but profit declines, while advanced ceramics delivered strong sales and profit increases.

• Significant structural reforms and plant closures are underway in Mainland China to restore profitability.

• Advanced the mid-term management plan, focusing on sustainable and innovative products despite global uncertainties.

Financial highlights

• FY2024 net sales: ¥724.5 billion (+3% YoY); operating profit: ¥48.5 billion (+13% YoY); net income: ¥12.2 billion (33% of prior year) due to impairment loss.

• Operating margin improved to 6.7% from 6.1% YoY.

• ROE: 2.4% (down from 6.3% YoY); ROA: 6.0% (+0.4pt YoY); ROIC: 4.8% (-1.1pt YoY).

• FY2025/2026 guidance: net sales ¥753.5 billion (+4% YoY), operating profit ¥52.5 billion (+8% YoY), net income ¥31.0 billion (2.5x YoY).

• Cash and cash equivalents at year-end: ¥120.7 billion, up from ¥102.6 billion.

Outlook and guidance

• FY2025/2026 expects increased sales and profits in Japan and new business domains, but decreased sales and profits in International Housing Equipment due to continued challenges in Mainland China.

• Structural reforms in China to continue, with further extraordinary losses planned.

• Dividend forecast maintained at ¥100 per share; payout ratio to be 40% or higher.