Fuji Die Co.,Ltd. Q4 FY2025 earnings call

Mid-term Management Plan 2026 (FY2025 - FY2027 ending March 2027) First Year Progress

• Management Base Strengthening

  • Updated the 20-year core enterprise system, launched in October 2024, with a smooth start
  • Established a new cross-company Quality Assurance Department in January 2025 to strengthen quality management and corporate value
  • Implemented new welfare programs to improve employee engagement, launched a 100th anniversary branding project, and published the first sustainability report
  • Planned transition from a board of auditors to an audit and supervisory committee company (pending June 2025 shareholder approval) to improve governance and speed up decision-making
  • Implemented workflow systems and strengthened information security

• Productivity and Operational Efficiency Improvement

  • Expanded the scope of robotic automation for grinding and metallurgy processes at the Koriyama plant, automated some ultra-precision plane grinding processes
  • Introduced an automated NC processing line for metallurgy at the Kumamoto plant, shifting ~60% of processing to automation as planned
  • Started test operation of CAD/CAM automatic nesting systems to optimize blanking and improve yield, with full operation planned for FY2026

• Overseas Business Expansion

  • Gained brand recognition and acquired new optical equipment (next-generation automotive sensing) customers after opening the Dongguan, China sales office, contributing to sales growth despite a flat overall market
  • ASEAN: Challenged by economic slowdown and weak orders, but expanded the product portfolio beyond automotive. Indonesia saw growing demand for battery-related molds and expanding business with local and Western customers. Malaysia is struggling amid weak semiconductor demand.
  • India: Sales grew steadily, successfully generated multiple business leads from its first trade show exhibition in January 2025. Launched a local subsidiary business restart project in July 2025, targeting a decision by FY2027 ending March.
  • North America: Conducted market research (including first exhibition in Chicago), faces expansion barriers from U.S. tariff policy requiring local production, and will continue research and preliminary expansion work.
  • Final FY2025 overseas sales share reached 19.5%, slightly below target due to ASEAN headwinds, against the FY2027 target of 25%.

• New Business Establishment

  • Progressed a cemented carbide tool/mold recycling business that secures raw material supplies while supporting a circular economy, with commercial launch expected in the near term.

• Growth Sector Product and Technology Development

  • Next-generation energy: Launched a new lower-power catalyst electrode for water electrolysis (uses inexpensive nickel and the company's existing high-pressure manufacturing technology), currently undergoing testing by multiple equipment manufacturers
  • Next-generation optical communication: Developed ultra-high precision connector molds and glass forming molds for next-gen fiber optics, leveraging in-house high-precision processing and measurement capabilities to differentiate from competitors
  • Next-generation automotive: Developing motor core stamping dies for amorphous alloy (high-efficiency next-generation motor material), collaborating with academia to solve die durability challenges from the material's high mechanical hardness
  • Technology: Introduced Materials Informatics (MI) for material development, launched a joint research partnership with Keio University for next-generation processing, established a formal intellectual property strategy, and won multiple industry awards for new material development

Consolidated results for FY2025 (ending March 2025): Total consolidated net sales were 16.595 billion yen, a 0.5% year-over-year decrease. Total consolidated operating profit was 0.488 billion yen, a 39.7% year-over-year decrease. Key segment performance by major industry (standalone basis):

• Can making molds and automotive battery molds: Sales remained solid
• Cemented carbide materials: Overseas sales were strong, resulting in solid overall performance
• Grooved rolls for overseas: Large sales decline due to customer inventory adjustments
• Kneading tools for semiconductors: Demand remained stagnant with no recovery
• Semiconductor manufacturing equipment parts: Demand remained solid By 2025 FY end, overseas sales accounted for 19.5% of total consolidated sales.

• FY2026 (ending March 2026) Guidance: Management forecasts 6.5% year-over-year sales growth to 17.67 billion yen, and 22.9% year-over-year operating profit growth to 0.6 billion yen. Growth is driven by recovering demand for automotive component molds, deepened market penetration in China via the new Dongguan base, and expanded sales in India.
• Mid-term targets (FY2027 ending March 2027): The original targets of 20 billion yen consolidated sales, 2 billion yen operating profit, 10.5% ordinary profit margin, and 7% ROE are maintained despite near-term headwinds, with management committed to achieving these goals.
• Dividend guidance: The FY2026 dividend is maintained at 40 yen per share, consistent with the new 4% DOE target policy introduced in FY2025.
• Capital and share price strategy: Management identifies profitability improvement as the top priority, targeting ROE improvement via productivity gains, overseas sales expansion, and margin improvements via price strategy, and PER improvement via strengthened IR and new growth sector product launches.

• Sustained weak domestic industrial demand that has not recovered to pre-COVID levels, with the domestic wear-resistant tool market not expected to grow rapidly in the future
• Raw material price volatility: APT (key raw material) prices came in higher than the FY2025 forecast, driving higher-than-expected material costs
• Persistent economic slowdown in ASEAN markets, which limited FY2025 overseas sales growth; weak semiconductor demand in Malaysia is also dragging on performance
• U.S. tariff policy creates barriers to North American market expansion, requiring local production that adds complexity and cost to market entry
• Current ROE is well below the company's 4.5-5% cost of capital, and PBR remains below 1x, creating pressure on profitability and share price performance

The Q&A section of the transcript was cut off in the provided source material, so no complete exchanges are available to summarize.