NORITZ CORPORATION

Business Details

Centered on the Company (Noritz Corporation), subsidiaries such as Taisei Kogyo Co., Ltd., Shinwa Kogyo Co., Ltd., and Harman Co., Ltd. handle the manufacturing of products and parts, which are sold through agents from branch sales offices nationwide. The segment focuses primarily on the Hot Water/HVAC Segment (residential and non-residential water heaters) and the Kitchen Segment (built-in stoves and range hoods), while also expanding After-Sales Service & Maintenance Contracts. Under the medium-term management plan "V-Plan 26," the Company is promoting a transformation away from its residential hot water-focused business structure and expanding sales of high-value-added, environmentally friendly products.

Recent Overview

Higher revenue, lower profit: sales increased on expanded sales of high-value-added products, but rising purchased material prices squeezed profit

In the Domestic Business segment for the first quarter of FY2026 (ending December 2026) (January to March 2026), net sales were ¥36,686 million (up 1.2% year on year) and segment profit was ¥1,422 million (down 9.3% year on year). In the hot water/HVAC segment, the new product "HPHB R290" expanded beyond demand expectations, and sales volume of high-value-added products also progressed steadily. Strengthened adoption activities for commercial water heaters and growth in the cumulative number of maintenance contracts also contributed. On the other hand, the Domestic Business as a whole saw higher revenue but lower profit due to the impact of rising costs from higher purchased material prices. Additionally, from this first quarter, the Company changed its depreciation method for molds from the declining-balance method to the straight-line method, and also revised useful lives to more accurately reflect actual conditions; this change increased segment profit by ¥146 million.

Key Products

Growth Drivers

• Expanding demand for environmentally friendly, energy-efficient products such as the natural refrigerant hybrid water heater "HPHB R290"
• Improvement in average selling price through increased sales volume of high-value-added products
• Steady sales volume trends due to strengthened adoption activities for large commercial water heaters
• Expansion of service revenue (stock-type revenue) through growth in the cumulative number of maintenance contracts
• Favorable sales volume trends for range hoods
• Mitigation of the impact on profit from increased capital expenditure associated with the introduction of a modular production method, through the change in depreciation method (to the straight-line method)

Risks

• Cost pressure from rising prices of purchased materials (the main cause of higher revenue but lower profit in the current first quarter as well)
• Continued cost increases due to persistently high raw material and energy prices
• Risk of weak personal consumption and declining housing starts due to continued price inflation
• Vulnerability to demand fluctuations due to the structure overly weighted toward residential hot water (structural transformation still in progress)
• Risk of fluctuations in estimates for product warranty provisions (changes in actual burden rate)
• Risk of impairment of fixed assets (due to changes in future cash flow assumptions)