DMW CORPORATION

Business Details

A single segment engaged in the design, manufacture, installation, and sale of fluid machinery such as pumps, blowers (fans & blowers), and valves. The public-sector demand segment (sewerage, agricultural water, power generation plants, etc.) accounts for approximately 67% of sales, with domestic private-sector demand and overseas segments also being developed. All orders are made to order, and because the proportion of public works projects is high, sales are seasonally concentrated at the fiscal year-end. Consolidated subsidiaries include DMW India (an overseas production base), Dengyosha Kouji Co., Ltd., and Eco Advance Co., Ltd.

Recent Overview

Margin improvement through manufacturing cost reduction, with domestic private-sector demand and overseas segments driving sales

In FY2026 (ending March 2026), sales increased only slightly to ¥28,189 million (up 0.4% year on year), but the gross profit margin improved to 27.3% (from 26.1% in the prior year) due to manufacturing cost reductions, and operating profit increased to ¥3,495 million (up 8.0% year on year). By segment, public-sector demand segment sales decreased to ¥18,919 million (down 4.3% year on year), while the domestic private-sector demand segment expanded to ¥3,820 million (up 14.9% year on year) and the overseas segment expanded to ¥5,449 million (up 9.5% year on year). Orders received increased to ¥26,963 million (up 0.8% year on year), driven by increases in both the public-sector and domestic private-sector demand segments. The order backlog at fiscal year-end contracted to ¥27,293 million (down 4.3% year on year). For FY2027 (ending March 2027), sales are forecast at ¥27,300 million (down 3.2% year on year) and operating profit at ¥3,100 million (down 11.3% year on year).

Key Products

Growth Drivers

• Expansion of the domestic private-sector demand segment: orders received increased significantly to ¥5,812 million (up 30.8% year on year) in FY2026 (ending March 2026), driven by expanded sales of products such as DeROs-E amid decarbonization and energy-saving demand
• Steady performance in the overseas segment: sales of ¥5,449 million (up 9.5% year on year) in FY2026 (ending March 2026), with an order backlog of ¥3,752 million secured, expected to contribute to sales in the following period
• Margin improvement through manufacturing cost reduction: profitability improved, with gross profit margin of 27.3% (from 26.1% in the prior year) and operating margin of 12.4% (from 11.5% in the prior year)
• Stable order base in the public-sector demand segment: orders received of ¥17,782 million (65.9% of total) in FY2026 (ending March 2026) continue to form the core of the business, underpinned by resilient public infrastructure investment
• Sales progress through consumption of the prior period's order backlog: under the build-to-order business model, the fiscal year-end order backlog of ¥27,293 million supports sales in subsequent periods
• Announcement of the DMW Medium-Term Management Plan 2028: a dividend payout ratio target of 30% or more was clearly stated, clarifying the shareholder return policy

Risks

• Contraction of the fiscal year-end order backlog: down to ¥27,293 million (down 4.3% year on year) at the end of FY2026 (ending March 2026), a factor pressuring the FY2027 (ending March 2027) sales forecast of ¥27,300 million (down 3.2% year on year) downward
• Decline in overseas segment orders received: orders received in the overseas segment fell sharply to ¥3,369 million (down 32.0% year on year) in FY2026 (ending March 2026), with the overseas order backlog also contracting to ¥3,752 million (down 35.7% year on year)
• US tariff policy and geopolitical risk: developments in US trade policy, the prolonged situation in Ukraine, and heightened tensions in the Middle East could affect overseas orders and procurement costs
• Risk of seasonal concentration of sales: because the proportion of public works projects is high, sales are concentrated at the fiscal year-end, causing significant fluctuations in quarterly results
• Risk of order losses: because production is made to order, additional provisions for order loss reserves may be required if project profitability deteriorates (balance at end of FY2026, ending March 2026, was ¥211 million, up 99.1% year on year)
• Foreign exchange risk: the overseas segment's share of sales rose to 19.3% (from 17.7% in the prior year), increasing the impact of exchange rate fluctuations on results; foreign exchange losses in FY2026 (ending March 2026) were ¥14 million (versus ¥6 million in the prior year)
• Significant decrease in operating cash flow: operating cash flow fell sharply to ¥527 million in FY2026 (ending March 2026) from ¥2,109 million in the prior year, mainly due to a ¥2,346 million decrease in trade payables, requiring attention to working capital management