TOTO LTD. (5332): FY2025 Results Summary — Record Net Sales and Operating Profit Led by Advanced Ceramics

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

TOTO LTD. announced results for the year ended March 31, 2026 — which the company labels FY2025 — on April 30, 2026. Net sales came to 737.4 billion yen (+13.0 billion yen, 102% year on year) and operating profit to 53.8 billion yen (+5.3 billion yen, 111%), with the company stating that both net sales and operating profits reached record highs despite a challenging business environment. Recurring profit was 60.7 billion yen (+10.3 billion yen, 121%) and profit attributable to owners of parent company was 40.3 billion yen (+28.1 billion yen, 3.3 times). Every one of these lines came in above the company’s plan of 734.5 billion yen in net sales, 49.0 billion yen in operating profit, 50.0 billion yen in recurring profit and 29.0 billion yen in profit attributable to owners of parent company.

Consolidated Results (Full-Year Actual)

The company describes the year as one of increased sales and profits in which all businesses achieved the plan. Operating margin improved to 7.3% from 6.7%, and returns improved across the board: ROA 6.6% (+0.5pt), ROE 7.7% (+5.3pt), and TOTO-version ROIC 6.9% (+2.1pt), with adjusted ROIC at 7.4% (+0.9pt). TOTO defines its version of ROIC as operating profits after tax divided by operating capital plus fixed assets.

The materials note that extraordinary losses of 34.1 billion yen in FY2024 and 15.2 billion yen in FY2025 were recorded as restructuring costs for the Mainland China Business, and that the FY2025 amount was already reflected in the initial plan for FY2025. Figures marked with an asterisk in the table below carry that note. On the bridge of operating profits from FY24 to FY25, the company cites cost reduction of +10.2 billion yen and a price revision effect of +12.5 billion yen among the improvement factors, against external procurement cost of -7.3 billion yen and a sales/product-mix factor of -5.8 billion yen.

Item (Unit: Y billion)	FY25	FY24	YoY	plan	vs. plan
Net Sales	737.4	724.5	+13.0 (102%)	734.5	+2.9 (100%)
Operating Profit	53.8	48.5	+5.3 (111%)	49.0	+4.8 (110%)
[Operating Margin]	【7.3%】	【6.7%】	【+0.6pt】	【6.7%】	【+0.6pt】
Recurring Profit	60.7	50.4	+10.3 (121%)	50.0	+10.7 (121%)
Profit attributable to owners of parent Company	40.3	*12.2	+28.1 (3.3 times)	*29.0	+11.3 (139%)
ROA	6.6%	6.0%	+0.5pt	6.2%	+0.4pt
ROE	7.7%	2.4%	+5.3pt	5.7%	+2.0pt
ROIC	6.9%	4.8%	+2.1pt	6.1%	+0.8pt
ROIC (Adjusted)	7.4%	6.5%	+0.9pt	6.7%	+0.7pt

Segment Results

The housing equipment business saw decreases in sales and profits, while the new business domains (Advanced Ceramics business) saw increases in both. Japan Housing Equipment recorded net sales of 479.7 billion yen (99.7%) and operating profit of 20.3 billion yen (93%); International Housing Equipment recorded 190.1 billion yen (99%) and 7.7 billion yen (85%); and the new business domains recorded 67.4 billion yen (134%) and 28.9 billion yen (142%). Note that the subject periods differ by segment: April 2025 to March 2026 for the Japan Housing Equipment business and the new business domains, and January to December 2025 for the International Housing Equipment business (April 2025 to March 2026 for India).

Segment (Unit: Y billion)	Metric	FY25	FY24	YoY
Japan H.E.	Net Sales	479.7	481.3	-1.7 (99.7%)
International H.E.	Net Sales	190.1	192.5	-2.4 (99%)
New business domains (Advanced Ceramics)	Net Sales	67.4	50.3	+17.1 (134%)
Others	Net Sales	0.3	0.3	+0.0
Total	Net Sales	737.4	724.5	+13.0 (102%)
Japan H.E.	Operating Profit	20.3	21.9	-1.6 (93%)
International H.E.	Operating Profit	7.7	9.0	-1.4 (85%)
New business domains (Advanced Ceramics)	Operating Profit	28.9	20.4	+8.5 (142%)
Others	Operating Profit	-3.1	-2.9	-0.2
Total	Operating Profit	53.8	48.5	+5.3 (111%)

Within the Japan Housing Equipment business, remodeling recorded net sales of 346.8 billion yen (101%) and operating profits of 19.9 billion yen (-1.6 billion yen), while new housing recorded net sales of 132.9 billion yen (97%) and operating profits of 0.4 billion yen (-0.1 billion yen). The company notes that although cumulative sales for the Japan housing equipment business decreased, second-half sales for remodeling increased year on year, driven by the effect of expanding new product sales.

International Housing Equipment Business by Region

Sales and profits decreased across the entire international housing equipment business due to the slump in the Mainland China business. In the Americas, sales were 505 million dollars (109%) and operating profits 42 million dollars (-1 million dollars), with sales driven by growth in WASHLET sales and profits down on growth investments and the impact of tariffs, though still ahead of plan. In Asia, sales rose in the Taiwan region (6,186 million Taiwan dollars, 106%), Vietnam (1,558.9 billion dong, 125%) and India (3,112 million Indian rupees, 117%), while Thailand declined (691 million baht, 87%). Europe recorded 34 million euros (113%) and operating profits of 1 million euros (+0.0 million euros), remaining positive for the second consecutive year. Mainland China recorded 2,594 million yuan (82%) and operating profits of -253 million yuan (-158 million yuan), with business restructuring proceeding as planned.

Region (Unit: Y billion)	Metric	FY25	FY24	YoY
Americas	Net Sales	75.6	70.5	+5.1 (107%)
Asian & Oceanian Region	Net Sales	54.9	50.2	+4.7 (109%)
Europe	Net Sales	5.7	4.9	+0.8 (116%)
Mainland China	Net Sales	53.9	66.9	-13.1 (81%)
Total	Net Sales	190.1	192.5	-2.4 (99%)
Americas	Operating Profit	4.8	5.2	-0.4 (93%)
Asian & Oceanian Region	Operating Profit	10.2	8.2	+2.0 (124%)
Europe	Operating Profit	-0.4	-0.8	+0.4
Mainland China	Operating Profit	-6.9	-3.6	-3.4
Total	Operating Profit	7.7	9.0	-1.4 (85%)

In the new business domains (Advanced Ceramics business), sales and profits increased on higher sales of electrostatic chucks and AD components amid robust advanced semiconductor market conditions, with net sales of 67.4 billion yen (134%) and operating profits of 28.9 billion yen (+8.5 billion yen). The company contrasts this with FY09, when the ceramic business had net sales of 5.5 billion yen and an operating loss of 1.7 billion yen; the FY25 operating margin shown for the business is 43%. TOTO states it holds the No. 2 market share in the electrostatic chuck market (2025).

Next-Year Forecast (Year Ending March 2027)

For FY26 — the year ending March 2027 — TOTO plans net sales of 785.0 billion yen (+47.6 billion yen, 106%) and operating profit of 60.0 billion yen (+6.2 billion yen, 112%), aiming for record-high profits for the second consecutive year. Recurring profit is planned at 58.5 billion yen (-2.2 billion yen, 96%) and profit attributable to owners of parent company at 46.0 billion yen (+5.7 billion yen, 114%). Planned returns are ROA 7.2% (+0.6pt), ROE 8.5% (+0.8pt) and ROIC 8.6% (+1.6pt). By segment the plan calls for increased sales and decreased profits in Japan Housing Equipment, and increased sales and profits in International Housing Equipment and the new domain business; the FY25 baselines in that segment table reflect a partial revision of the allocation method for corporate expenses starting this fiscal year.

Item (Unit: Y billion)	FY25	FY26 1st Half	FY26 2nd Half	FY26 Total	YoY
Net Sales	737.4	370.0	415.0	785.0	+47.6 (106%)
Operating Profit	53.8	23.0	37.0	60.0	+6.2 (112%)
[Operating Margin]	【7.3%】	【6.2%】	【8.9%】	【7.6%】	【+0.4pt】
Recurring Profit	60.7	22.2	36.3	58.5	-2.2 (96%)
Profit attributable to owners of parent Company	40.3	19.5	26.5	46.0	+5.7 (114%)

On a segment basis the FY26 plan is: Domestic H.E. net sales 483.0 billion yen (101%) with operating profit of 13.0 billion yen (59%); Overseas H.E. net sales 216.3 billion yen (114%) with operating profit of 13.5 billion yen (2.1 times); New Domain net sales 85.5 billion yen (127%) with operating profit of 36.5 billion yen (127%); and Others net sales 0.2 billion yen with operating profit of -3.0 billion yen. Within Overseas H.E., all four regions are planned to grow sales by double digits — Americas 87.0 billion yen (115%), Asia 62.3 billion yen (113%), Europe 7.0 billion yen (123%) and Mainland China 60.0 billion yen (111%) — with Mainland China planned to return to profitability at an operating profit of 1.5 billion yen (+8.9 billion yen).

The materials also state that impacts of the situation in the Middle East that had materialized as of April 30 are incorporated into the plan, with a full-year impact on operating profits of approximately -7 billion yen. Listed impacts include, in the first quarter, a loss from reduced production due to decreased bathroom sales and a phased resumption of bathroom order intake starting from April 20 in the Japan H.E. business; and from the second quarter onward, an increase in external procurement costs for resins in Japan H.E. and all international regions, plus a decrease in sales in the Middle East for Asia.

Shareholder Returns and Financial Discipline

TOTO’s dividend policy is a payout ratio of at least 40%, ensuring stable or growing dividends. For FY25 the full-year dividend was ¥110.0 per share — ¥50.0 for the first half and ¥60.0 for the second half, a ¥10 increase at the year end against the ¥100.0 plan — for a dividend payout ratio of 45.3% versus the 52.1% planned. For FY26 the company plans an additional ¥10 increase at the year end, giving ¥60.0 for each half and ¥120.0 for the full year, with a planned payout ratio of 42.9%.

On cross-shareholdings, the ratio to consolidated net assets stood at 9.5% at the end of FY25 against a plan of less than 10%, and the plan for the end of FY30 is less than 5%; the number of cross-shareholdings fell from 127 in FY14 to 87 in FY24 and 76 in FY25. Financial discipline targets are an equity ratio of 50% or higher and a DE ratio of 0.5 times or lower; the FY25 equity ratio was 63.8% (-0.3P YoY) with a DE ratio of 0.14 times, and the FY26 plan is 65% and 0.13 times. Free cash flow was +49.4 billion yen in FY25 with a plan of +27.4 billion yen for FY26, and cash and deposits at the end of the period were 132.8 billion yen, planned at 138.5 billion yen.

Medium-Term Plan and Topics

TOTO states there is no change in the Group’s growth strategy under WILL2030: it will adjust the trajectory of the base segments and further accelerate growth in the growth segments. For the Japan Housing Equipment business, the company set out a structural reform program with a 2030 profits target of an operating margin of 8% or higher, contributing to a company-wide ROIC target of 12% or higher, built on three pillars — creation of new value and demand, redefinition of target demand and product strategy in the remodeling market, and optimization of the business cost structure. The Mainland China business aims to turn profitable this fiscal year and to exceed the capital cost (8-9%) in operating margin in FY2030.

Capital expenditure was 43.2 billion yen in FY25 with 52.7 billion yen planned for FY26; depreciation expense was 34.3 billion yen rising to a planned 37.4 billion yen; and R&D expense was 26.3 billion yen rising to a planned 30.5 billion yen. On external evaluation, TOTO was selected as one of the Top 10% in The Sustainability Yearbook – 2026 Rankings for two consecutive years, and its products won the iF Design Award 2026, the Green Good Design Award 2026 and the Home Appliance Awards 2025–2026 Overall Grand Prix, among others.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.