Rinnai Corporation (5947): FY2025 Results Summary — Record Net Sales and Operating Income; Fiscal 2027 Plan Targets ¥500.0 Billion in Sales

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

Note: Rinnai Corporation labels the fiscal year ended March 31, 2026 as “Fiscal 2026” and the year ending March 2027 as “Fiscal 2027”; this site classifies the period as FY2025. Labels in the tables below follow the company’s presentation materials.

Rinnai Corporation (5947) reported year-on-year increases in both sales and income for Fiscal 2026 (ended March 31, 2026) despite ongoing uncertainty in the global economy. Net sales reached ¥470.3 billion (up 2.2% year on year), a record high, and operating income rose 9.8% to ¥50.5 billion, also a record, thanks to increased revenue and rigorous cost-reduction measures despite rising costs across the board. Ordinary income increased 14.6% to ¥57.6 billion, supported by foreign exchange gains and higher interest income, and net income attributable to owners of the parent company grew 21.8% to ¥36.1 billion. For Fiscal 2027, the company plans net sales of ¥500.0 billion (up 6.3%) and operating income of ¥50.5 billion (down 0.1%), and plans to raise the annual dividend to ¥106.0 per share.

Consolidated Results (Full-Year Actual)

According to the Financial Results presentation, net sales of ¥470.3 billion were a record high despite uncertain economic conditions in major countries, and were up 0.1% versus target. Operating income of ¥50.5 billion (operating income to net sales ratio 10.7%) was a record high and 1.1% above target. Ordinary income of ¥57.6 billion (ratio to net sales 12.3%) was 7.8% above target, and net income attributable to owners of the parent company of ¥36.1 billion (ratio to net sales 7.7%) was 9.6% above target. The company noted record-high net sales in each fiscal year of the medium-term business plan (Fiscal 2022 onward) and steady improvements in both income levels and margins despite unstable market conditions and rising raw material costs.

Item	Fiscal 2026 (ended Mar. 2026)	YoY change	Ratio to net sales	vs target
Net sales	¥470.3 billion	+2.2%	–	+0.1%
Operating income	¥50.5 billion	+9.8%	10.7%	+1.1%
Ordinary income	¥57.6 billion	+14.6%	12.3%	+7.8%
Net income attributable to owners of the parent company	¥36.1 billion	+21.8%	7.7%	+9.6%

The consolidated operating income analysis shows an increase of ¥4.53 billion year on year, from ¥46.00 billion in Fiscal 2025 to ¥50.53 billion in Fiscal 2026, attributed to ongoing cost reduction efforts and higher sales despite rising costs including tariffs. The provision for the bathroom heater/dryer recall (recorded at the Fiscal 2025 year-end) is included in “cost reduction efforts, etc.” The forex effect was -0.32.

By product, water heaters accounted for ¥281.92 billion (59.9% of total, up 1.5%), kitchen appliances ¥93.27 billion (19.8%, down 3.1%), air conditioning appliances ¥24.26 billion (5.2%, up 10.3%), commercial-use equipment ¥11.92 billion (2.5%, up 1.6%) and others ¥59.00 billion (12.5%, up 12.2%), for total net sales of ¥470.39 billion (up 2.2%).

Product	Fiscal 2025 amount	Fiscal 2026 amount	% of total (Fiscal 2026)	YoY change
Water heaters	277.73	281.92	59.9%	+1.5%
Kitchen appliances	96.26	93.27	19.8%	-3.1%
Air conditioning appliances	22.01	24.26	5.2%	+10.3%
Commercial-use equipment	11.73	11.92	2.5%	+1.6%
Others	52.57	59.00	12.5%	+12.2%
Total	460.31	470.39	100.0%	+2.2%

Unit: billions of yen.

Segment Results

Consolidated sales/income results by region were as follows. In Japan, net sales rose 1.7% to ¥207.20 billion and operating income increased 21.5% to ¥27.11 billion (operating margin 13.1%, up 2.1pt), with the overall housing market supported by continued stable replacement demand despite contraction of new housing; on a non-consolidated basis, Rinnai posted net sales of ¥242.02 billion (up 3.1%) and operating income of ¥23.43 billion (up 25.1%). In the United States, net sales rose 8.5% to ¥72.13 billion on stable sales of condensing water heaters, but operating income fell 12.8% to ¥1.85 billion, with bottom-line income at a low level partly due to tariffs; the full-year tariff-related impact was approx. ¥2.7 billion, and tariff-related cost increases in 2025 have already been passed on through price increases. In China, net sales declined 11.5% to ¥60.68 billion and operating income fell 6.7% to ¥9.41 billion, with the operating margin improving 0.8pt to 15.5% thanks to reduced promotional expenses and enhanced production efficiency. In Australia, net sales grew 20.3% to ¥44.04 billion and operating income rose 88.6% to ¥2.11 billion, helped by favorable sales of heat pump water heaters and storage batteries and a corporate acquisition with resulting synergy benefit. South Korea recorded net sales of ¥34.28 billion (down 1.3%) and operating income of ¥1.09 billion (up 17.7%), and Indonesia net sales of ¥17.55 billion (up 3.2%) and operating income of ¥3.84 billion (up 0.0%), maintaining a high profit margin of 21.9%.

Segment	Net sales (¥ billion)	YoY change	Operating income (¥ billion)	YoY change	Operating margin	YoY change
Consolidated	470.39	+2.2%	50.53	+9.8%	10.7%	+0.7pt
Japan	207.20	+1.7%	27.11	+21.5%	13.1%	+2.1pt
United States	72.13	+8.5%	1.85	-12.8%	2.6%	-0.6pt
Australia	44.04	+20.3%	2.11	+88.6%	4.8%	+1.7pt
China	60.68	-11.5%	9.41	-6.7%	15.5%	+0.8pt
South Korea	34.28	-1.3%	1.09	+17.7%	3.2%	+0.5pt
Indonesia	17.55	+3.2%	3.84	+0.0%	21.9%	-0.7pt
Others	34.48	+3.9%	5.17	+3.1%	15.0%	-0.1pt
Adjustments	–	–	0.08	–	–	–

Regarding the recall of bathroom heater/dryers announced April 15, 2025 (372,398 affected units), the company stated that recall response measures have advanced steadily and response by Rinnai personnel has now concluded. As of March 31, 2026, 223,861 requests had been received and 219,204 inspections completed (completion rate of 97.9% to requests received and 58.9% to affected units). The ¥2.54 billion allowance recorded in the previous fiscal year was fully covered during the period in review, with the excess amount (approx. ¥480 million) recorded as an expense in the period; the impact in Fiscal 2027 is expected to be minimal.

Fiscal 2027 Forecast

For Fiscal 2027 (ending March 2027), the company plans consolidated net sales of ¥500.0 billion (up ¥29.7 billion, or 6.3%), comprising domestic sales of ¥205.0 billion (up 3.2%) and overseas sales of ¥295.0 billion (up 8.6%), with the overseas ratio rising 1.2pt to 59.0%. Operating income is planned at ¥50.5 billion (down ¥0.3 billion, or 0.1%), with the operating margin at 10.1% (down 0.6pt). The company aims to secure profits through cost-reduction measures to address significant cost increases despite expected sales growth both in Japan and overseas. The earnings forecasts do not factor in the potential impact of the Middle East situation, which the company says remains highly uncertain; it will promptly disclose any significant changes should they occur.

Item	Fiscal 2026 actual	Fiscal 2027 plan	Change (amount)	Change (%)
Net sales	470.3	500.0	+29.7	+6.3%
Domestic	198.6	205.0	+6.4	+3.2%
Overseas	271.7	295.0	+23.3	+8.6%
Overseas ratio	57.8%	59.0%	+1.2pt	–
Operating income	50.5	50.5	-0.3	-0.1%
Operating margin	10.7%	10.1%	-0.6pt	–

Unit: billions of yen. Figures are rounded down at the first decimal point, excluding % change, as noted in the materials.

By major company, Rinnai (non-consolidated) plans net sales of ¥249.00 billion (up 2.9%) and operating income of ¥23.50 billion (up 0.3%); Rinnai America plans net sales of ¥79.16 billion (up 9.8% in yen) and operating income of ¥2.38 billion (up 28.6%), with heat pump water heater sales volume planned to rise 104.5%; Shanghai Rinnai plans net sales of ¥52.76 billion (down 10.1%) and operating income of ¥7.42 billion (down 10.1%); Rinnai Australia plans net sales of ¥49.66 billion (up 12.4%) and operating income of ¥3.37 billion (up 35.7%); Rinnai Korea plans net sales of ¥31.22 billion (up 0.4%) and operating income of ¥0.91 billion (up 0.3%); and P.T. Rinnai Indonesia plans net sales of ¥18.54 billion (up 2.2%) and operating income of ¥4.09 billion (up 6.5%). Consolidated capital investment is planned at ¥21.3 billion (up ¥3.6 billion from ¥17.6 billion), depreciation at ¥16.7 billion and R&D expenditure at ¥17.0 billion, with investment concentrated in development and production facilities for electrified products for overseas markets.

Shareholder Returns

Rinnai’s Fiscal 2027 dividend policy states that, focusing on stable dividends, it plans to increase the dividend payment, with the payout ratio expected to reach around 40%, and to maintain stable dividends despite expected challenging business conditions in Fiscal 2027. Dividends per share were ¥80.0 for Fiscal 2025 (payout ratio 38.2%) and ¥100.0 for Fiscal 2026 (38.5%), and are planned at ¥106.0 for Fiscal 2027 (40.3%). On share buybacks, the company will conduct buybacks flexibly while enhancing capital efficiency, optimizing capital allocation, and being mindful of share price.

Item	Fiscal 2025	Fiscal 2026	Fiscal 2027 (plan)
Dividends per share (yen)	80.0	100.0	106.0
Payout ratio	38.2%	38.5%	40.3%

Topics

In Japan, the company aims to expand sales of key products (hybrid water heaters with heating systems, Air Bubble products and gas clothes dryers), whose ratio of total sales is projected to reach 13.3% in Fiscal 2027 (plan), and sees the revision of ZEH standards in April 2027 (GX ZEH) as an opportunity to further expand sales of ECO ONE hybrid water heaters. Domestic sales volume plans for Fiscal 2027 include hybrid water heaters up 15.7% and gas clothes dryers up 5.9%. In the United States, new tariff measures are expected to have a negative impact on profits, and the company will accelerate recovery of investments while looking to implement price increases commensurate with the scale of impact. In China, it plans to expand sales via online-affiliated physical stores, increasing the number of large-scale stores among such outlets from 248 in Fiscal 2026 to 300 in Fiscal 2027 (plan).

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.