Rinnai Corporation TSE:5947

Rinnai : Fiscal 2027 Outlook(1,503KB)

Published

Source: MarketScreener

‌Fiscal 2027 Outlook

‌Impact of Middle East Situation

  • Impacts in fiscal 2026

    • No impact at this time on production stemming from increased risks to crude oil supply

    • We have not placed any restrictions on orders and there are no significant delivery delays

  • Potential impacts in fiscal 2027

    • Risk that procurement conditions for certain materials, such as solvents, may deteriorate,

      potentially affecting production

    • Rising material costs could negatively impact profits

    • Impact of Middle East situation remains highly uncertain; difficult to accurate estimate financial impact at this time

    • Our earnings forecasts do not factor in potential impact of Middle East situation; we will promptly disclose any significant changes should they occur

‌Fiscal 2027: Consolidated Sales/Income Plan

[Billions of yen]

Fiscal 2026 actual

Fiscal 2027 plan

Comparison with fiscal 2026

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

-

*The above figures are rounded down at first decimal point, excluding % change.

‌Fiscal 2027: Consolidated Operating Income Plan

- Aim to secure profits through cost-reduction measures to address significant cost increases despite expected sales growth both in Japan and overseas

[Billions of yen]

50.53

Effect of domestic revenue increase

+4.00

Effect of local revenue increase at overseas subsidiaries

+4.40

+1.7

0

Projected exchange rates for fiscal 2027 are listed on reference data, page 13

Increased fixed costs in Japan

-2.70

Increased fixed costs overseas

-5.00

-1.30

Effect of raw materials

prices

Cost-cutting efforts, etc.

YOY change

-¥0.03 billion

50.50 -9.00

+0.05

+8.27

Fiscal 2026

Forex effect +0.45

Fiscal 2027

‌* From April 2026 to March 2027

Rinnai (non-consolidated basis), Fiscal 2027 Plan

  • Market concern about environmental issues expected to continue growing as renovation market remains resilient

  • Aim to further increase sales through focus on launching new products in key products

  • Aim to increase profits through higher sales of value-added products and cost



    reductions despite increasingly challenging cost environment

    Rinnai (non-consolidated basis), Fiscal 2027 plan

    • Net sales ■Operating income

      234.68

      242.02

      249.00 [Billions of yen]

      9.7%

      9.4%

      8.0%

      18.72

23.50

23.43



■ Operating income to net sales ratio





Built-in hobs (stovetops) Hybrid water heaters Gas clothes dryers Dishwasher/dryers

Fiscal 2025 Fiscal 2026

Fiscal 2027 (plan)

[Billions of yen]

Fiscal 2026 actual

Fiscal 2027 plan

YOY change

Net Sales

242.02

249.00

+2.9%

Operating Income

23.43

23.50

+0.3%

Operating income to net sales ratio

9.7%

9.4%

-0.3pt

[Sales volume plan in Japan]

YOY Change

Water heater with heating systems

+3.0%

Hybrid water heaters

+15.7%

Built-in hobs (stovetops)

+1.4%

Gas clothes dryers

+5.9%

‌Japan Topics: Expanding Sales of Key Products*1

*1 Key products: High-value-added products that meet consumer needs

①Hybrid water heater with heating systems,

②Air Bubble products, ③Gas clothes dryers

*2 UFB: Ultra-fine bubbles

- Ongoing growth in both sales and income supported by new product launches and market expansion

'26

'24

'25

'22

'23

'21

'22 '27 '32





12.2%

10.6%

7.5%

6.5%

6.3%

13.3%

Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026 Fiscal 2027

(plan)







Sales of high-value-added key products expected to continue growing steadily despite ongoing downward trends in population, number of households, and new housing starts

Hybrid water heater with heating systems

Air Bubble products

Take advantage of

subsidies

- Utilize subsidies for both new and existing homes to promote

home purchases and equipment replacements

Subsidies for Subsidies for

energy-efficient housing high-efficiency water heaters

Region No. 5-8 Maximum

Mirai-eco house ¥1.1 million Energy saving ¥120,000

2026 /household water heaters 2026 /household



Acquire certifications

  • Market for fine bubble products is growing Domestic market size

    (fine bubble category)

  • Obtained industry certification [Billions of yen]

(fine bubble category) regarding

effectiveness evaluation validity for UFB*2

76.3

52.0

24.8

Source: Fine Bubble Industries Association FY2023 FY2028 FY2033

"Survey and Analysis of Market Trends in the Fine Bubble Industry" expected expected



Gas clothes dryers

Launch new products

- Hot-water model (providing greater installation flexibility) scheduled for release in autumn 2026 Installation image

Gas type *Existing lineup Hot-water type Exhaust pipe Hot water pipe

Bathroom

＋ heating

Heat RDO

Indoors Under eaves For indoor use only source series

unit



  • Ratio of key product sales in total sales ■ Key products that will drive domestic sales growth

    ‌Japan Topics: Initiatives Toward GX ZEH

- Revision of the ZEH standards in April 2027 (GX ZEH) presents opportunity to further expand sales of ECO ONE hybrid water heaters

[GJ/year]

Conventional

Gas

-14%

ECO-Jozu

Eco Cute

-32%

-45%

ECO ONE

160L



  • Overview of new ZEH standards (GX ZEH)

    Thermal Insulation Grade 6

    Expand sales ECO ONE

    (which delivers industry-leading energy efficiency)

Storage battery

Advanced energy management (HEMS)

None

Required equipment

Required

Required

Solar power generation

ZEH standard: Raising primary energy consumption reduction rate

Increase in share of ZEH/GX ZEH in new housing construction

Thermal Insulation Grade 5

Building envelope performance

Reduction of 35% or more

Reduction of 20% or more

Primary energy consumption

reduction rate

(excluding renewable energy)

GX ZEH

(effective April 2027)

Previous ZEH standard



90%

ZEH adoption rate (newly built detached houses)

80%

70%

60%

50%

40%

30% 26.4%

73.2%

68.9%

60.8%

55.5%

47.6%

41.7

%

33.3%

30.5%

20%

27.6%

22.7%

14.0% 16.9% 18.6% 14.1%16.3%

10% 5.3% 6.0% 6.6%

3.0% 3.8% 4.7%

0%

8.3% 10.5% 13.1%

9.7%

77.7%

Primary energy consumption (water heaters)

  • Initiatives to increase sales of hybrid water heaters

    ハウスメーカー

    一般工 務店

    全体

    Overall

    2016 2017 2018 2019 2020 2021 2022 2023 2024

    Home-building

    companies

    General contractors

    Source: Sustainable open Innovation Initiative (SII)

    *Source: Rinnai materials from 40th Energy conservation subcommittee meeting on April 22, 2023



    Case Study: "Discover! Rinnai 2026"

    Working with multiple manufacturers, we are planning a residential equipment exhibition to present the full range of systems needed across the home to support the spread of GX ZEH.

    Enhance market presence of ECO ONE

Conventional Gas: Mode thermal efficiency 78.4%

ECO Jozu: Mode thermal efficiency 92.5%, Eco Cute: JIS3.5

‌* From January to December 2026

United States, Fiscal 2027 Plan

  • Aim to improve profit margins and increase market share by continuously improving production efficiency and expanding our lineup of heat pump water heaters

  • New tariff measures expected to have a negative impact on profits, so we will accelerate recovery of investments while looking to implement price increases commensurate with scale of impact

    Rinnai America, Fiscal 2027 plan

    • Net sales ■Operating income

      79.16 [Billions of yen]

      72.13

      66.45

      3.2%

      2.6%

      3.0%

      2.38

1.85

2.13



■ Operating income to net sales ratio



Non-Condensing water heaters

Condensing water heaters

(High efficiency models)

Heat pump

water heaters

Fiscal 2025 Fiscal 2026

Fiscal 2027 (plan)

[Billions of yen]

Fiscal 2026 actual

Fiscal 2027 plan

YOY change

Yen

Local currency

Net Sales

72.13

79.16

+9.8%

+9.7%

Operating Income

1.85

2.38

+28.6%

+27.8%

Operating income to net sales ratio

2.6%

3.0%

+0.4pt

[Sales volume plan]

YOY Change

Tankless water heaters

+0.6%

Condensing water heaters of total

(High-efficiency models)

+4.7%

Heat pump water heaters

+104.5%

‌* From January to December 2026

Shanghai Rinnai, Fiscal 2027 Plan

  • Take proactive measures (such as expanding large-scale online physical retail channels and enhancing brand recognition) despite prolonged downturn in market conditions

  • Maintain profit margins through ongoing control of fixed costs and productivity improvements

    Shanghai Rinnai, Fiscal 2027 plan

    • Net sales ■Operating income

      [Billions of yen]

      65.86

      58.67

      13.7%

      14.1%

      14.1%

      7.42

8.25

9.01

52.76



■ Operating income to net sales ratio



Water heaters

Built-in hobs (stovetops) Range hoods Boilers

Fiscal 2025 Fiscal 2026

Fiscal 2027 (plan)

[Billions of yen]

Fiscal 2026 actual

Fiscal 2027 plan

YOY change

Yen

Local currency

Net Sales

58.67

52.76

-10.1%

-13.0%

Operating Income

8.25

7.42

-10.1%

-13.0%

Operating income to net sales ratio

14.1%

14.1%

-0.0pt

[Sales volume plan]

YOY change

Water heaters

-7.6%

Built-in hob (stovetops)

-7.4%

Range hoods

+1.0%

Boilers

-9.9%

‌China Topics: Initiatives to Reinforce Sales Under Difficult Conditions

- Deploy strategic sales initiatives amid expectations of prolonged market downturn

  • Expand sales via online-affiliated physical stores

  • Strengthen brand recognition through marketing

  • Award received in "JD Gold List" (JD.com Ranking)

    • Expecting an increase in large-scale stores directly operated by major online platforms

    • Strengthen retail sales through online-affiliated physical stores to secure revenue and profit

  • Effectively promote Rinnai's proprietary ultra-fine bubble (UFB) water heaters

  • Promote adoption of high-function water heaters through experiences that resonate with consumers

  • First-time recognition in official rankings based on sales performance and consumer evaluations

  • Enhance brand recognition by leveraging award-related advantages (such as preferential display positioning)

Projected number of stores handling Rinnai products in Shanghai

Advertise across multiple media channels

Appeal to consumers through UFB experiences

First-ever award received in the gas water heater category

'26計画

'25







Number of large-scale stores Physical stores operated by Tmall

among online-affiliated physical outlets

248

300

Fiscal 2026 Fiscal 2027

(plan)



  • Take various initiatives to directly communicate Japanese quality to consumers

  • Highlight brand strength and high quality we have built over time to drive expansion of high-value-added products

‌Major Overseas Subsidiaries: Fiscal 2027 Outlook

[Billions of yen]

Fiscal 2026 actual

Fiscal 2027 plan

YOY change

Sales volume plan YOY change

Rinnai Australia

Net Sales

44.18

49.66

+12.4%

Tankless water heaters

-11.4%

Operating Income

2.48

3.37

+35.7%

Electric tank-based water heaters

+6.2%

Operating Margin

5.6%

6.8%

+1.2pt

Heat pump water heaters

+46.1%

Rinnai Korea

Net Sales

31.11

31.22

+0.4%

Boilers

+13.3%

Operating Income

0.91

0.91

+0.3%

Gas tabletop cookers

-3.5%

Operating Margin

2.9%

2.9%

-0.0pt

Electric tabletop cookers

+5.1%

P.T. Rinnai Indonesia

Net Sales

18.14

18.54

+2.2%

Tabletop cookers

+0.8%

Operating Income

3.84

4.09

+6.5%

Built-in hobs (stovetops)

+26.6%

Operating Margin

21.2%

22.1%

+0.9pt

Range hoods

+16.6%

‌Capital Investment and R&D

  • Concentrate capital investment in growth segments with emphasis on returns

  • Continue investing in R&D to strengthen technological foundation

Capital investment, depreciation

  • Depreciation ■Capital investment

[Billions of yen]

41.1

22.6

26.5

17.6

21.3

11.7

13.2

15.0

16.7

Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026 Fiscal 2027

(plan)

R&D expenditure

[Billions of yen]

  • R&D expenditure

15.9

17.0

12.7

13.4

14.3

14.9

Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026 Fiscal 2027

(plan)

14.7

15.1 16.3



  • Consolidated capital investments and R&D costs: Results and forecasts

    [Billions of yen]

    Fiscal 2026 actual

    Fiscal 2027 plan

    YOY change

    Capital investment

    17.6

    21.3

    +3.6

    Depreciation

    15.0

    16.7

    +1.6

    R&D expenditure

    15.9

    17.0

    +1.1

  • Main capital investment plan in fiscal 2027

    Invest in development and production facilities for electrified products for overseas markets

    ‌Return to Shareholders

- Maintain stable dividends despite expected challenging business conditions in fiscal 2027

  • Dividends per share, Payout ratio

    • Dividends per share



    • Payout ratio

      29.8% 30.1% 32.5%

      [Yen]

      38.2% 38.5% 40.3%

      100.0 106.0

    • Fiscal 2027 dividend policy

Focusing on stable dividends, we plan to increase the dividend payment, with the payout ratio expected to reach around 40%

46.6 53.3 60.0

80.0

■Share buyback policy

Fiscal 2022

Fiscal 2023

Fiscal 2024

Fiscal 2025

Fiscal 2026

Fiscal 2027

Conduct buybacks flexibly while enhancing capital efficiency,

optimizing capital allocation, and being mindful of share price

(Plan)



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