6036.T

Overall Financial Results

• Full-year FY2025 (June 2025) revenue hit 23.093 billion yen, up 12.2% YoY; operating profit hit 7.098 billion yen, up 16.3% YoY, both all-time records.
• A 60 yen per share full-year dividend was declared, consisting of a 54 yen base dividend (1 yen up from original plan) plus a 6 yen 40th founding anniversary special dividend.

New Car Market Strategic Progress

• New car market is the core growth driver for the product business, with large remaining room for expansion: KeePer product attachment rate across total domestic new car registrations is still below 10%.
  • SUBARU: Current attachment rate 23.7%; the new high-value EX Keeper was recently adopted as SUBARU EX Keeper, with growth expected to push attachment rate to 30-35%.
  • Toyota: Has grown at doubling rates for multiple years, with the company's owned KeePer LABO network enabling co-location with Toyota dealerships to generate synergy; 10 additional co-located stores are planned for FY2026, with large upside potential as penetration is still very low (around 3% attachment rate). Central approval for LEXUS adoption is a pending key milestone.
  • Volvo: Has had a strong start since OEM adoption in April 2025, showing strong fit between imported auto brands and KeePer products.
  • Mercedes-Benz Japan: EX Keeper was adopted starting August 2025, with 100% of all matte paint models specified to use KeePer's matte texture coating, showing full commitment from the brand.

KeePer LABO Expansion Strategy

• Multiple new stores are already planned and in progress for September 2025 to March 2026, including a mix of company-owned directly operated and franchise locations, with growing interest from existing gasoline station operators.
• The long-term target is 500 KeePer LABO locations within 5 years, seen as achievable given the ~20,000 existing gasoline stations in Japan and analogies to Starbucks' successful domestic expansion.
• The company expects widespread conversion of existing gasoline stations to gasoline-plus-KeePer LABO locations, similar to historic conversion of tobacco shops to convenience stores, and is actively pursuing partnerships with major oil retailers. New additional services like car share cleaning solutions with NTT Docomo are being explored for existing stores.

Non-Automotive Focus Adjustment

• Narrowed focus from over-diversification across low-potential industries to concentrate on high-prospect segments with existing traction, improving resource allocation.

Soft99 Share Transaction

• The company received an unsolicited offer to acquire a 12.38% stake in Soft99, a long-time industry partner, and will realize a 2.3 billion yen gain from the transaction. The company is evaluating use of the proceeds for future growth investment and additional shareholder returns, with a formal policy to be announced by Q1 FY2026.

• For FY2026 (June 2026), the company projects revenue of 26.3 billion yen and operating profit of 8 billion yen, representing continued YoY revenue and profit growth. A full mid-term management plan is not released yet due to ongoing uncertainty around large-scale strategic shifts, so this guidance is a bottom-up build from current operations.
• The dividend guidance sets a 60 yen per share lower bound, with a final dividend to be announced after Q1 FY2026.
• Aftermarket revenue is projected to decline 8% YoY, while new car market product revenue is projected to grow ~55% YoY.
• Operating profit margin is expected to see a slight upward trend after adjusting for one-time special bonus expenses in FY2025.
• KeePer LABO expansion pace is expected to increase as the company expands its pool of construction contractors to address delayed store openings from high construction costs and limited capacity.

1. キーパーLABO (KeePer LABO) Direct Operation Segment: Current store count is 159 locations. Visits grew 11.6% YoY in FY2025. Aggressive hiring was implemented to support growing demand, enabling full acceptance of all incoming customers. Revenue contribution details were not explicitly provided in the transcript.
2. KeePer Products Related Business (Subsegments):
   • Aftermarket (gasoline station-centered): FY2025 revenue fell 0.8% YoY, marking the first ever YoY decline in company history. This segment represents the declining portion of product-related revenue, with an expected 8% further YoY decline planned for FY2026.
   • New Car Market: Grew 3 consecutive years at ~2x annual growth, centered on Toyota. This is the highest growth subsegment, with 55% YoY revenue growth projected for FY2026.
3. Non-Automotive & Overseas Business: 80% of non-automotive revenue comes from mobile device coatings and house cleaning, after narrowing focus from over-diversification into low-potential segments (e.g. post boxes, fishing gear) to focus on high-priority areas including mobile, home appliances, golf equipment, railway, marine, and wheel coatings. Overseas: First KeePer LABO opened in Singapore in August 2024, with monthly revenue of 2 million yen to 3 million yen, and growing visitor counts driven by repeat customers.

• Declining gasoline demand and ongoing consolidation of gasoline stations is driving a permanent long-term decline in the aftermarket business, which the company has planned for through its 5-year focus on the new car market, but the decline is proceeding faster than some past projections.
• KeePer LABO store expansion has faced delays due to persistently high construction costs and limited construction capacity, even after the Osaka World Expo ended, with the company currently working to expand its contractor network to mitigate this issue.
• Large-scale strategic shift to convert gasoline stations to KeePer LABO locations is still in early stages, with many industry stakeholders in a wait-and-see position, leading to difficulty producing a definitive mid-term forecast at this stage.
• Trump tariffs are expected to negatively impact Subaru and Toyota new car production allocations to the Japanese domestic market, which could temporarily slow new car product growth.
• Overseas expansion is early stage and unproven, with a slower than initially expected ramp-up in Singapore, requiring long-term investment before profitability.
• The current customer base for KeePer LABO is overwhelmingly male (92%), creating limited penetration of the broader consumer market, which the company is working to address but remains a headwind for mass-market growth.

Q: How much has the number of KeePer PRO SHOP locations declined, will the aftermarket decline continue, and can conversion to KeePer LABO reverse the trend? / A: Currently, the total number of PRO SHOP locations has not declined yet, as the existing quality-based disqualification system has not produced elevated failures. However, the broader gasoline station industry is clearly committed to reducing store counts and limiting capital investment and hiring. Management expects that the total number of gasoline stations (and thus PRO SHOP locations tied to them) will fall by roughly half over the next 10 years, so the 8% YoY decline projected for FY2026 is part of a continuing long-term trend.

Q: What synergies were expected from the Soft99 stake holding, and will the planned sale impact these synergies? / A: Management saw potential synergy because the two companies have historically operated in separate market niches: Soft99 supplies chemicals to independent polishers and has strong retail distribution channels through AutoBacks and home centers, while KeePer has strong channels through gas stations and automaker dealers. The companies have moved closer to the same market over time, creating potential distribution synergies, but Soft99 is now privately held via MBO and the company will maintain a policy of not forcing integration to respect the other party's independence.

Q: Why has average revenue per unit stagnated, what is the outlook for unit pricing next fiscal year, and can high-margin premium products drive growth? / A: After a product price increase, average unit price remained flat because while demand for high-priced premium coatings is growing, demand for lower-priced coating products is growing faster, offsetting price increases. Management expects upward pressure on average unit price from new OEM premium products for Mercedes and potential LEXUS adoption, but will leave product choice to consumers and does not have a mandatory target to increase average prices. To drive broader market growth, the company is targeting entry into the large household consumer product market, to expand beyond its current core base of male automotive enthusiasts.

Q: What is the overseas expansion strategy going forward: direct-operated LABO or licensed PRO SHOP model, and what is the profitability outlook? / A: The company acknowledges overseas expansion is still at an early stage, and notes that the PRO SHOP model allows for faster expansion. However, management has committed to a long-term strategy of building direct-operated KeePer LABO locations for better long-term growth. The Singapore location is the first step, and the company will invest time to build out a local organizational structure, with FY2026 marking the formal start of focused efforts to grow the market.