4574.T

Consolidated 2025 Fiscal Year Performance

• Total consolidated revenue: 6.397 billion yen, up 1.7% YoY, driven by steady performance of the pharmaceutical business and revenue growth in the infection control business. Gross profit is 3.481 billion yen with a gross margin of 54.4%, down 3.9 percentage points YoY. Selling, general and administrative expenses (SG&A) decreased slightly YoY to 3.022 billion yen. Operating profit is 459 million yen, ordinary profit is 482 million yen, and net profit attributable to parent company shareholders is 923 million yen (up YoY) after counting special gains. Although operating and ordinary profit decreased YoY, the full-year result exceeded the original forecast and is considered generally solid.
• SG&A changes: Overall SG&A decreased 14 million yen YoY. Breakdown: Advertising and promotion expenses increased 29 million yen YoY mainly for the overseas pharmaceutical business; transportation costs decreased 26 million yen YoY due to lower storage costs from inventory optimization; personnel expenses decreased 55 million yen YoY as a decrease in retirement benefit expenses from discount rate adjustments offset salary increases from wage raises; R&D expenses increased 25 million yen YoY to 208 million yen, mainly due to increased testing costs for JSA standard compliance in the infection control business.
• Extraordinary gains: 347 million yen from gain on sales of investment securities, and 140 million yen from reversal of foreign currency translation adjustment account after completion of liquidation of the Shanghai subsidiary in August 2025.
• Balance sheet: Total assets decreased 643 million yen YoY to 12.27 billion yen, driven by decreases in cash and deposits and the sale of investment securities. Total liabilities decreased 1.196 billion yen YoY mainly due to lower borrowings. Net assets increased 553 million yen YoY to 8.518 billion yen, and equity ratio improved to 69.4%.
• Cash flow: Operating cash flow reached 814 million yen, a solid result driven by higher pre-tax profit. Investing cash flow was positive 142 million yen, as proceeds from the sale of investment securities offset 304 million yen in capital expenditure. Financing cash flow had an outflow of 1.227 billion yen mainly due to debt repayment. Ending cash balance is 4.256 billion yen, which maintains sufficient liquidity.
• Result vs forecast: Revenue was 1.5% above the February 2025 forecast (9.7 million yen higher than planned), driven by higher infection control revenue and weaker-than-planned yen that boosted overseas revenue. All profit levels were 50% to 60% above forecast, driven by lower-than-planned cost of goods sold and SG&A, as well as lower retirement benefit expenses from discount rate adjustments.

Mid-Term Management Strategy

• The 3-year mid-term plan is positioned as a critical period to accelerate global growth in line with the corporate mission of "delivering great happiness of health to customers around the world", with long-term targets to become a global Taiko Pharmaceutical by 2035, increase overseas and new product revenue, promote social implementation of low-concentration chlorine dioxide gas, and reach a market capitalization of 100 billion yen and the No.1 position in the Asian gastrointestinal drug market.
• Four core strategic pillars:
  • Concentrate investment on the pharmaceutical business, expand both supply and demand to serve as the core driver of sales growth.
  • Make strategic investments in new products and new businesses, restructure the R&D organization, promote brand extension, and increase the proportion of new product revenue in future mid-term plans while advancing high-quality new product development.
  • Strengthen capital cost-focused business portfolio management, and achieve steady profitability for the infection control business.
  • Drive organizational cultural transformation and promote human capital management. The company defines "quality management" as its core operating principle, which includes improving product, operational, and governance quality. It invests in organizational transformation and human capital to improve customer satisfaction and achieve sustainable growth.
• 2028 mid-term targets: Revenue of 8.5 billion yen, operating profit of 1 billion yen, ROE of 10% to 11%, and a target DOE of 3.0% or higher with a policy of steady and stable dividend increases.

2026 Fiscal Year Operational Initiatives

• Domestic Pharmaceutical Supply Chain:
  • Launched the Seirogan production capacity expansion project in 2025, completed planned facility relocation for the transition to a 2-factory system, and will focus on increasing production capacity in 2026. Seirogan is a soft pellet product that is harder to automate than standard tablets; the plan increases the number of operating pellet-making machines from 4 to 6, reduces manufacturing lead time, and improves productivity by approximately 40% compared to previous levels. Higher capacity is expected to launch in H2 2026; while temporary operational dips are expected from facility installation, annual supply volume is forecast to increase by more than 20% YoY. The company aims to recover the full SKU assortment of Seirogan through supply expansion.
  • Marketing: Strengthen marketing for high value-added products including Seirogan Tōi A and Seirogan Quick C. Strengthen the core brand image of "Anytime, anywhere, when you have stomach trouble, it's Seirogan with the trumpet mark", and expand awareness around differentiated products Seirogan Tōi A and Seirogan Quick C. Expand product positioning beyond just diarrhea to include other stomach concerns such as loose stool, food poisoning, and indigestion to increase usage occasions, and strengthen promotions for usage scenarios such as travel and out-of-home use.
• Overseas Pharmaceutical:
  • Forecast 2026 revenue of 3.09 billion yen, an increase of approximately 830 million yen YoY driven by increased Seirogan supply. Plans include launching new Seirogan Tōi A products and implementing price adjustments to improve profitability. Strengthen investment in the Trumpet brand, with planned marketing spend on TV commercials, digital promotion, and out-of-home advertising in Greater China to expand the mid-term customer base.
• Infection Control:
  • Focus on expanding the B2B segment as a core revenue base, prioritize stable revenue sectors such as the cleaning and funeral industries (which are less volatile than office demand tied to influenza outbreaks), and target double-digit revenue growth in B2B. For B2C, strengthen sales of JSA standard-compliant packaged products but maintain a conservative sales forecast due to high volatility from infectious disease outbreak trends. Continue to review unprofitable distribution channels and cut fixed costs to improve profitability, and make steady progress toward the mid-term target of turning the segment profitable.

Sustainability and Social Initiatives

• Environmental initiative: Moved package inserts from separate enclosed paper inserts to printing on the back of product packaging, plus added a QR code linking to the full online insert. This is expected to reduce annual paper usage by 14.6 tons, and the company will continue advancing environmentally friendly practices.
• Community initiative: To mark the company's 80th anniversary in November 2026, the company launched disaster preparedness outreach aligned with its identity as a emergency medication manufacturer. A survey it conducted found that while households have adequate preparations for emergency food and power, only 17% have emergency sound signaling devices for disaster rescue. Leveraging its historic trumpet brand identity, the company donated disaster preparedness whistles to elementary schools in Suita City (its founding location) and hosted special lectures by disaster preparedness advisors that taught participants how to use whistles to signal SOS, with participation from the company's official characters Seirogan-kun and Seirogan Tōi A-chan.

Shareholder Return

• The original mid-term plan announced in November 2025 scheduled dividend resumption for the 2026 December fiscal year. Based on steady progress in improving profitability and strengthening the balance sheet, the company has moved dividend resumption forward 1 year, and will resume dividends with a 3.3 yen per share year-end dividend for the 2025 fiscal year. A 3.5 yen per share dividend is planned for the 2026 fiscal year, and the company aims to deliver stable, steady dividend increases going forward.

• For the 2026 December fiscal year (the first year of the mid-term management plan), the company forecasts total consolidated revenue of 7.2 billion yen, an increase of 12.5% YoY; operating profit of 500 million yen, an increase of 8.9% YoY; and net profit of 550 million yen (down YoY due to the absence of the extraordinary gains recorded in 2025).
• All sales growth is expected to come from the pharmaceutical business, with large revenue growth driven by the overseas pharmaceutical segment (the core growth driver of the mid-term plan), while the infection control business uses a somewhat conservative sales forecast due to difficulty predicting B2C demand.
• For 2026 operating profit, the company expects a 697 million yen profit increase from overseas pharmaceutical revenue growth, offset by a 523 million yen increase in SG&A driven by higher marketing and advertising spending for the Trumpet brand in both domestic and overseas markets, in line with the plan to strengthen investment for mid-term sales growth.

1. Pharmaceutical Segment (centered on Seirogan and Seirogan Tōi A): Total revenue is 5.771 billion yen, with flat overall performance (domestic revenue slightly down, overseas revenue slightly up). Segment profit is 1.573 billion yen (down year-over-year due to rising cost ratios), segment profit margin is 27.3%. Key product breakdown:

• Domestic Seirogan: 1.722 billion yen, down 12.9% YoY due to supply restrictions.
• Domestic Seirogan Tōi A: 2.015 billion yen, up 14.5% YoY, exceeding Seirogan's performance after supply issues were resolved, driven by strong sales of bottle-type products and net growth from the newly launched portable version.
• Overseas Pharmaceutical: 2.266 billion yen, up 2% YoY, with steady demand in core markets of China, Hong Kong, and Taiwan. It reached planned sales after production and shipment progressed as scheduled in the second half of the year following negative impacts from manufacturing schedule adjustments through Q3. Revenue contribution: The pharmaceutical segment accounts for 90.2% of total consolidated revenue.

1. Infection Control Segment: Total revenue is 619 million yen, up 110 million yen YoY. The segment loss narrowed by 213 million yen YoY to 254 million yen. Breakdown:

• Domestic consumer use: Up 15.3% YoY, driven by the launch of JSA standard-compliant POP seal products and an earlier-than-usual influenza epidemic.
• Domestic business use: Reached 186 million yen, with new orders for pouch-type products obtained in the second half offsetting declines from existing products.
• Overseas: 50 million yen, up 39.7% YoY, driven by increased sales in Taiwan. Revenue contribution: The infection control segment accounts for 9.8% of total consolidated revenue.

• Seirogan supply constraints negatively impacted 2025 domestic and overseas revenue, and while capacity expansion is planned for 2026, temporary production disruptions from facility installation could impact near-term output.
• Domestic antidiarrheal market share has seen a slight downward trend recently, due to the end of 2024 price adjustment impacts, resumption of supply from competitor products, and Seirogan supply shortages, which has negatively impacted near-term market position.
• B2C infection control revenue is highly sensitive to unpredictable factors such as influenza and infectious disease outbreak timing and severity, making accurate forecasting difficult and creating volatility for segment results.
• Seirogan's soft pellet formulation is harder to automate and scale than standard tablet products, which could create execution risk for the planned production capacity improvement project.

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