Nippon Sanso Holdings (4091.T)

Regional Mix, Yen Reporting

Nippon Sanso, part of the Mitsubishi Chemical group, earns the lowest return on capital of the four gases majors, each on its own definition. It reports four regional gas segments (Japan, the United States, Europe, and Asia & Oceania) plus its Thermos consumer business, in yen, to a March year end. Revenue for the year to 31 March 2026 was ¥1,359.6bn (+3.9%). EBITDA margin, a company KPI defined as core operating income plus depreciation over revenue, was 24.3% (23.3% a year earlier), and ROCE (return on capital employed) after tax was 7.1% (7.2%).

It says "Bulk" for merchant supply (gas trucked to customer tanks) and "Package" for cylinders. Its results presentation splits revenue outside Thermos (¥1,326.3bn) into bulk 30%, package 26%, on-site 12% and specialty gases 8%. Equipment, installation and other make up the remaining quarter: 20% for industrial gases and 5% for electronics. The company's shares sum to 101% on rounding.

Its approved capex backlog, investments approved by group company boards but not yet placed in service, was ¥180bn at 31 March 2026. The company classes 32% as having sustainable traits: projects that help it or its customers towards carbon neutrality, including hydrogen production. At 31 March 2025 it reported ¥140bn under a different label, so the shares do not compare.

How the Numbers Read

Its ROCE after tax compares with Linde's 24.2% adjusted after-tax return on capital, Air Liquide's 11.2% recurring ROCE and Air Products' 10.1% adjusted return on capital, each on its own definition and year end. The ROCE guide sets the four side by side and shows how much of the gap is accounting.

Net interest-bearing liabilities were ¥781.0bn at 31 March 2026. Against EBITDA of ¥330.0bn (core operating income ¥203.1bn plus depreciation ¥126.9bn), that is 2.4x, down from 2.5x a year earlier (our calculation). The adjusted net debt-to-equity ratio it does publish fell to 0.59 from 0.71.

How You Would Value a Business Like This

The method does not turn a return into a multiple. It values contracted on-site cash flow and the cyclical remainder separately, and compares ROCE with the cost of capital as a check that sits outside the value. On the revenue mix above, most of a business like Nippon Sanso's would sit in the cyclical piece.

What to Watch in the Financials

ROCE after tax. The trend on the company's own definition, set against its cost of capital, shows whether new capital is earning its keep.

Supply mix. A shift toward on-site adds contracted floor; a shift toward equipment adds project-driven revenue.

Capex backlog. How the approved projects turn into revenue as they are placed in service, and what that does to net debt against EBITDA.

Key Risks

Equipment and installation weight. Equipment, installation and other made up 43% of revenue in the Japan segment in the year to March 2026. That is a different economic profile from Linde's cylinder density or Air Products' on-site half of sales.

Yen reporting. Restated in US dollars, revenue, backlog and debt move with USD/JPY: a stronger yen lifts them, a weaker one lowers them.