H-ONE (5989): FY2025 Results Summary — Structural Reforms Lift Operating Profit Even as Revenue Falls

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

Note: H-ONE’s results presentation labels the most recently completed fiscal year as “FY2026”; this article follows the site convention of using “FY2025” in the title and slug only, and keeps the presentation’s own year labels in all text, tables and segment data below.

H-ONE CO., LTD. reported revenue of 2,096.5 (100 million yen) for FY2026, down 184.9 year on year, while operating profit rose 27.8 to 146.4, lifting the operating margin to 7.0% from 5.2% in FY2025. Profit before tax increased 44.5 to 152.7 and profit attributable to owners of parent rose 2.5 to 109.7. Units produced for the major client fell to 2,847,000 from 3,177,000, a decline of 330,000 units, but structural reforms and the divestiture of the Indian subsidiary supported profitability across all four regions.

Consolidated Results (Full-Year Actual)

Amounts are stated in 100 million yen, as presented in the materials. ROIC improved to 8.7% from 7.1%, while ROE was 15.3% against 18.0% in the previous fiscal year. The average exchange rate during the period was 150.7 yen per USD, 1.9 yen stronger than the 152.6 yen of FY2025.

Item	FY2025	FY2026	YoY change
Revenue	2,281.4	2,096.5	-184.9
Operating profit	118.6	146.4	+27.8
Profit before tax	108.2	152.7	+44.5
Profit attributable to owners of parent	107.2	109.7	+2.5
Basic earnings per share	382.82 yen	390.06 yen	+7.24
ROIC	7.1%	8.7%	—
ROE	18.0%	15.3%	—
Average exchange rate during the period (per USD)	152.6 yen	150.7 yen	1.9 yen stronger

Production volumes for the major client (unit: 10,000 units) totalled 284.7 in FY2026 against 317.7 in FY2025, a decline of 33.0. Japan rose 1.4 to 70.6, while North America (USA, Canada) fell 5.2 to 134.1, China fell 11.6 to 63.7, Thailand fell 1.2 to 10.1 and Indonesia fell 4.2 to 6.0. India recorded no unit sales in the current period due to the divestment of the subsidiary, against 12.1 in FY2025. Mexico, accounted for by the equity method, fell 3.0 to 16.3. By client, Honda Motor accounted for 1,811 (100 million yen), or 86.4% of consolidated revenue, compared with 1,998 and 87.6% in FY2025.

Segment Results by Region

Operating profit rose in every region. Japan’s operating margin improved to 7.9% from 4.9%, North America to 5.2% from 3.8%, China to 9.5% from 6.0% and Asia to 11.6% from 0.3%. Japan was the only region with higher revenue, helped by die equipment of 81 (100 million yen), while Asia revenue declined mainly on the impact of the divestiture of the Indian subsidiary of -45.

Region	Revenue FY2025	Revenue FY2026	Operating profit FY2025	Operating profit FY2026
Japan	580	638	28.3	50.7
North America	1,153	1,126	43.9	58.6
China	389	329	23.5	31.4
Asia	258	184	0.9	21.3
Consolidation adjustments	-99	-181	22.0	-15.6
Total	2,281	2,096	118.6	146.4

Financial Position and Cash Flow

Total assets stood at 2,054 (100 million yen) at the end of FY2026, up 269 from 1,785 at the end of FY2025. Equity increased 174 to 829, and the ratio of equity attributable to owners of parent improved to 38.7% from 35.8%. Interest-bearing debt was 692 against 665, the current ratio was 130.4% against 109.3%, and dependency on interest-bearing debt fell to 33.7% from 37.3%. Cash flows from operating activities were 285.9 and cash flows from investing activities were -238.5, leaving free cash flow of 47.4. Cash and cash equivalents at the end of the period were 223.4, up from 193.1 at the beginning of FY2026.

FY2027 Forecast

For FY2027 the company forecasts revenue of 2,300.0 (100 million yen), up 203.5, and operating profit of 160.0, up 13.6, with the operating margin unchanged at 7.0%. Profit before tax is forecast at 150.0, down 2.7, and profit attributable to owners of parent at 110.0, up 0.3. The forecast assumes an average exchange rate of 150.0 yen per USD. Targets of 7% or higher for ROIC and 10% or higher for ROE are shown in place of forecast figures.

Item	FY2026	FY2027 Forecast	YoY change
Revenue	2,096.5	2,300.0	+203.5
Operating profit	146.4	160.0	+13.6
Profit before tax	152.7	150.0	-2.7
Profit attributable to owners of parent	109.7	110.0	+0.3
Basic earnings per share	390.06 yen	390.80 yen	+0.74 yen
ROIC	8.7%	Target: 7% or higher	—
ROE	15.3%	Target: 10% or higher	—
Average exchange rate during the period (per USD)	150.7 yen	150.0 yen	0.7 yen stronger

Units produced for the major client are forecast at 283.5 (10,000 units), down 1.2 from 284.7. North America is expected to rise 11.4 to 145.5 and Japan 0.4 to 71.0, while China is expected to fall 13.3 to 50.4. Thailand is forecast at 11.6 and Indonesia at 5.0, with Mexico (equity method) at 21.1. By region, FY2027 revenue is planned at 591 for Japan, 1,330 for North America, 338 for China and 203 for Asia, with consolidation adjustments of -162.

Shareholder Returns

The dividend policy is based on maintaining stable dividends while remaining mindful of the dividend payout ratio, distributing the results of business operations to shareholders consistently and over the long term while taking into account business development and capital investment needs. The company plans to steadily raise the consolidated dividend payout ratio to 30%. It plans to submit to the General Meeting of Shareholders a proposal to pay a FY2026 year-end dividend of 32 yen per share, for a total annual dividend of 64 yen per share when combined with the interim dividend of 32 yen already paid. The dividend for FY2027 is projected to be 70 yen per share annually, comprising an interim dividend of 35 yen and a year-end dividend of 35 yen. Shareholder returns are funded from operating cash flow alongside growth and renewal capital investments, and the materials also list acquisition of own shares under shareholder returns.

Fiscal year	Annual dividend (yen)	Dividend payout ratio (%)
FY2023	20	—
FY2024	20	—
FY2025	50	13.1%
FY2026	64	16.4%
FY2027 (projected)	70	17.9%
Target	—	30%

Medium-Term Plan and Topics

Under “Change 2027” (FY2025–FY2027), H-ONE is boosting profits from the existing business base, described as establishing a foundation for 16 billion yen in operating profit, and accelerating client and business diversification toward a future goal of 1 trillion yen in revenue. The structure of operating profit is presented as follows: FY2025 operating profit of 118 (100 million yen) plus 24 for one-time factors in the previous period and 59 for the impact of initiatives, less 27 for changes in the environment, gives FY2026 structural profit of 174; after 28 for preemptive structural reforms and impairment, FY2026 operating profit was 146. FY2027 structural profit is put at 188, reflecting 14 from the impact of FY2027 initiatives, with the FY2027 profit forecast of 160 after 28 for changes in the environment and one-time factors.

Capital investment was 284.8 (100 million yen) in FY2026 against depreciation of 97.8, and is planned at 450.5 in FY2027 against depreciation of 87.7. Reported progress on Change 2027 includes a review of the business structure in India, consolidation of bases and lines in Japan (Eastern Japan region), China, Thailand and Indonesia, the establishment of a Manufacturing Innovation Department and a Business Development Department, introduction of a business division system, and the adoption of ROIC as a management indicator. The company also announced a joint venture in China, Hangyu Aiji Intelligent (Wuhan) Auto Manufacturing Co., Ltd. (HAIA), with Aerospace intelligent manufacturing (Beijing) engineering technology, under a planned ownership structure of 51% for the partner, 39% for W-Hapii and 10% for H.One, aimed at acquiring know-how in HMGF (Hot Metal Gas Forming) high-value-added products and expanding globally from China to North America and then Asia and Japan.

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.