Yokogawa Electric Corporation
6841・Prime Market・Electric Appliances
Business
Yokogawa Electric is an industrial automation company founded in 1920, with a core focus on measurement, control, and information technology. Its main Control Business (accounting for approximately 94% of net sales) provides comprehensive solutions covering the entire lifecycle—from Field Instruments (Flowmeters, Transmitters, Analyzers) to Production Control System (DCS), MES, and consulting—for diverse industries including oil and gas, chemicals, electric power, pharmaceuticals, and food. In the Measuring Instruments Business, the company offers Waveform Measuring Instruments, Optical Communication Measuring Instruments, and Power Measuring Instruments, while New Business and Others is cultivating IIoT and cloud services. Overseas sales account for approximately 73% of net sales, with a well-balanced regional mix spanning the Middle East, Asia, Europe, and the Americas. The company has delivered more than 30,000 projects worldwide.
Business Model
In the Control Business, the company wins large EPC orders for plant construction and renovation, earning initial revenue from engineering and equipment sales, and then secures stable, ongoing revenue over the long term through maintenance and operation services (Lifecycle Services). The Measuring Instruments Business follows a product sales model. In New Business and Others, the company is promoting a shift toward a subscription-based recurring revenue model for IIoT cloud services. An order backlog of ¥466,208 million (+8.9% year on year) enhances visibility into future revenue.
Company Strengths
The company has accumulated a track record of delivering more than 30,000 projects worldwide through approximately 70 years of global business operations. It has established local subsidiaries in the Middle East and Africa, Southeast Asia, Europe and the Americas, and China, achieving an overseas sales ratio of approximately 73%. Compared to competitors, its well-balanced regional composition diversifies region-specific risk, forming a stable order backlog base.
The order backlog at the end of FY2026 (ending March 2026) reached ¥466,208 million (up 8.9% year on year), with the Control Business alone securing ¥453,396 million. The order backlog for the Measuring Instruments Business also surged 290.9% year on year. The structure whereby the accumulated order backlog converts into sales in subsequent periods gives high predictability to business performance.
R&D expenses for FY2026 (ending March 2026) amounted to ¥33,011 million (approximately 5.5% of sales). The company continuously introduces new products in the Control, Measurement, and digital domains—including the next-generation CENTUM VP, the dynamic digital twin platform "OmegaLand V4," and the new industrial IoT wireless sensor "Sushi Sensor"—maintaining its technological edge.
ENVALITH's Perspective
Performance Trend
Revenue grew for five consecutive fiscal periods, from ¥389,901 million in FY2022 (ended March 2022) to ¥604,829 million in FY2026 (ending March 2026), a CAGR of approximately 11.6%. Operating profit remained at a high level but turned to a slight decline, moving from ¥78,800 million in FY2024 (ended March 2024) to ¥83,523 million in FY2025 (ended March 2025) and then to ¥82,555 million in FY2026 (ending March 2026). While gross profit increased along with higher revenue, changes in business mix, price declines in certain regional markets, and the recording of provisions for losses on construction contracts pushed the gross margin down to 13.6% (from 14.9% in the prior period). Profit attributable to owners of parent increased to ¥58,113 million (up 11.5% year on year), partly due to the rebound from a goodwill and other impairment loss of ¥3,987 million recorded in the prior period. For FY2027 (ending March 2027), the company forecasts modest revenue and profit growth, with revenue of ¥615,000 million (up 1.7%) and operating profit of ¥85,000 million (up 3.0%). External risk factors include geopolitical risk from the Middle East situation and the slowdown in the Chinese economy, which could affect customers' investment decisions.
Growth Strategy
Under GS2028, the company aims to achieve sustainable growth and social value creation in tandem through SoS-type business, DX, and M&A.
The company is shifting toward providing services, software, and solutions (SoS-type) across the entire plant lifecycle, expanding stable recurring revenue. Order intake in the Control Business of ¥570,881 million (FY2026, ending March 2026) and a high order backlog indicate progress in this transformation.
The company views the energy transition toward realizing a decarbonized society as a business opportunity, converting robust energy investment demand in the Middle East, Africa, and other regions into orders. The projected order intake for the Control Business of ¥603,000 million (up 5.6% year on year) in FY2027 (ending March 2027) indicates continued underlying demand. Geopolitical risk related to the situation in the Middle East is an external factor that could cause short-term fluctuations in orders.
The company has expanded its scope of consolidation through the acquisition of Web Synergies (S) Pte. Ltd. (Singapore, digital services), Intellisync S.r.l. (Italy, Energy Management Solutions), and others. Expenditure for the acquisition of subsidiary shares accelerated to ¥8,508 million in FY2026 (ending March 2026) (up ¥4,037 million year on year). Goodwill balance increased to ¥12,987 million (from ¥6,563 million in the previous fiscal year), with realizing integration effects remaining a challenge.
The company is capturing expanding demand centered on Optical Communication Measuring Instruments and power measuring instruments, with order intake surging to ¥41,974 million (up 38.5% year on year) in FY2026 (ending March 2026). For FY2027 (ending March 2027), the company forecasts increased revenue and profit, with net sales of ¥39,000 million and operating profit of ¥9,000 million (operating margin of 23.1%). Trends in data center investment in China remain an external factor of fluctuation.
The company is cultivating a solutions business that provides hardware, software, and cloud environments for industrial IoT. The scale remains small, with net sales of ¥5,300 million and order intake of ¥4,983 million in FY2026 (ending March 2026), and an operating loss of ¥391 million continuing. In FY2027 (ending March 2027), the loss is expected to expand further (forecast at ¥500 million), reflecting an ongoing stage of upfront investment, with the timing of monetization remaining a challenge.
Last updated: July 19, 2026