5187.T

Company Overview

• Create Medic is a global medical device manufacturer that handles end-to-end development, manufacturing, and sales of catheters, with 3 overseas group subsidiaries.
• The company's core competitive advantage is its biocompatible silicone catheters, where it holds high market share in the urology and gastroenterology fields, with over 100 product SKUs, strict quality control across domestic and overseas production sites, and agile product development that responds quickly to market demand.

2025 Fiscal Year Full-Year Results

• Total consolidated revenue was 13.617 billion yen, a 4.5% increase year-over-year, beating initial forecasts. Both domestic and export sales performed strongly.
• Operating profit was 1.005 billion yen, a 45.1% increase year-over-year, driven by sales growth and the full impact of price adjustments. SG&A expenses decreased overall: personnel costs increased due to wage and bonus improvements, but this was offset by a decrease in retirement benefit expenses; R&D expenses increased by 24 million yen, but overall expenses fell due to the absence of one-time head office relocation costs (consumables and depreciation) from the prior year.
• Ordinary profit was 988 million yen, a 31.7% increase year-over-year, with increased foreign exchange losses from yen depreciation weighing on results. Net profit was 713 million yen, a 15.1% decrease year-over-year, due to the absence of the prior year's special gain from head office property sale.
• Balance Sheet: Total assets reached 20.143 billion yen, a slight 95 million yen increase year-over-year. The company raised capital via convertible bonds in partnership with Yokohama Capital, but cash and deposits decreased due to debt repayment, and increased inventory for new product launches.
• Cash Flow: Operating cash flow was +530 million yen, with increased net profit offsetting decreases from inventory changes and corporate tax payments. Investment cash flow was -573 million yen, primarily due to capital expenditures on production equipment. Financing cash flow was -600 million yen, with convertible bond proceeds offset by debt repayment, dividend payments, and treasury stock purchases.

Medium- to Long-Term Management Plan Progress

• 10-year target by 2034: 3 billion yen in operating profit, 15% operating profit margin. Through 2030, the company will pursue new business opportunities beyond existing operations and expand into new overseas markets.
• 2027 target: 1.3 billion yen in operating profit, 8% operating profit margin, with key initiatives including domestic product portfolio restructuring and profit structure improvement.
• Key Strategic Priority 1: Secure profit growth for the consolidated group. In 2025, the company strengthened its business portfolio, reviewed the supply chain for urological products to improve profitability, optimized manufacturing functions across group companies to build a long-term stable production system, and implemented pricing measures to offset raw material and exchange rate-driven cost increases. The 2025 operating margin reached 7.4%, progressing toward the 2027 8% target.
• Key Strategic Priority 2: Strengthen overseas business. The 2027 target is 5.7 billion yen in overseas sales. In 2025, the company strengthened its overseas business strategy organizational structure, began preparations to establish a local sales subsidiary in India, and initiated market research for product penetration in Thailand, Vietnam, and Malaysia. The long-term 2034 target is 50% overseas revenue share and 10 billion yen in overseas sales, leveraging the company's existing market strength in silicone catheters for urology and gastroenterology to capitalize on rapidly growing market demand in India and Southeast Asia.
• Key Strategic Priority 3: Launch new businesses. The 2027 target is to complete 2 M&A and alliance transactions. In 2025, the company advanced discussions for alliances to strengthen its core urology and gastroenterology businesses, exploring synergies from joint new product development, production cost reduction, and cross-sales partnerships. The company also began exploring new future business opportunities in the healthcare and agriculture sectors.

• For the 2026 December fiscal year, the company forecasts total consolidated revenue of 13.96 billion yen, a 2.5% increase year-over-year, and operating profit of 1.06 billion yen, a 5.5% increase year-over-year. Management expects only slight profit growth due to planned increases in investment spending for long-term growth.
• In-company domestic sales: 3 new products are scheduled for launch, and sales activities for both new and existing products will be strengthened. Ongoing sales price reviews will continue to support profit margins.
• Overseas sales: Export sales to Europe are expected to remain steady as the transition to the EU Medical Device Regulation (MDR) progresses. The company is developing countermeasures for the expected expansion of centralized purchasing to the national level in China. Full-scale market entry via the new Indian sales subsidiary and entry into Thailand, Malaysia, and Indonesia is expected to drive further overseas business growth.
• OEM sales: Continued strong growth is expected from the 2024-launched new OEM product.
• The company revised its shareholder return policy to improve shareholder value and address a PBR below 1.0x: the target consolidated payout ratio is raised to 50% or higher, the company targets a 4% dividend on equity (DOE) as a medium- to long-term capital policy indicator, and the company will flexibly implement treasury stock purchases to improve capital efficiency and corporate value.
• Based on the new policy, the 2025 full-year annual dividend is increased from the prior year's 39 yen to 45 yen per share. For 2026, the company plans a further dividend increase to an annual 47 yen per share (20 yen interim dividend, 27 yen year-end dividend).

1. Domestic Sales (In-Company Sales): Revenue was 7.734 billion yen, a 7.7% increase year-over-year. This segment accounts for approximately 56.8% of total company revenue, driven by strong performance of core urological products, successful new product launches, and the positive impact of price adjustments implemented to offset rising raw material costs. 2. Overseas Sales: Revenue was 4.598 billion yen, a 0.2% decrease year-over-year. This segment accounts for 33.8% of total company revenue. European export sales performed strongly, but sales in China decreased due to the impact of provincial-level centralized bulk purchasing policies for urological products, leading to a slight overall decline for the segment. 3. OEM Sales: The 2024-launched new OEM product maintained strong performance, with further growth expected in 2026, though full 2025 full-year revenue figures were not disclosed in the transcript.

• Foreign exchange volatility: Yen depreciation led to increased foreign exchange losses in 2025, and continued exchange rate fluctuations can impact raw material costs and overseas profit conversion.
• Chinese market policy changes: Centralized bulk purchasing for medical devices expanded from the provincial to national level in China, which is expected to negatively impact sales and profit margins for the company's urological products in that market.
• Rising input costs: Raw material price inflation and currency-driven cost increases create pressure on margins, requiring ongoing pricing adjustments to maintain profitability.
• Increased investment spending: Planned investments in manufacturing optimization, new market expansion in India and Southeast Asia, and new business development will increase near-term expenses, limiting 2026 profit growth.

No structured question and answer section content was included in the provided transcript.