6469.T

Overall Financial Results

• The company achieved three consecutive years of revenue and profit growth from 2024 February term through 2026 February term. It hit the mid-term management plan (Medium-term Management Plan 2027) operating profit target of 890 million yen one year ahead of schedule.
• The balance sheet strengthened: net assets increased on the back of higher profit, tangible fixed assets grew from capacity investments for gas turbine parts, and equity ratio improved 3.8pp to 45.7%.

Mid-term Plan Strategic Progress

• Organizational & Profit Base Improvement: Cross-functional headquarter teams supported growth market investment plans and embedded cost consciousness across the workforce. The company added experienced talent including via technical secondments from partner Mitsubishi Heavy Industries to improve startup reliability and quality assurance. It implemented price adjustments for unprofitable projects, strengthened procurement cost control, standardized company-wide operations, optimized fixed costs, and consolidated the Yokohama plant into the Yamato facility to improve efficiency.
• Business Portfolio Strategy: Prioritize growth of gas turbine parts, aircraft engine parts, and defense equipment in the high-demand aerospace and energy/environment segments to build these into core profit pillars. Focus on efficiency for domestic residential aluminum extrusion molds to maintain stable profit contributions. Push for new market entry for automotive exhaust purification molds and press businesses to drive re-growth.

Segment-specific Operational Progress

• Energy Segment (within Electric Discharge Machining & Surface Treatment): Gas turbine parts demand is supported by growing power demand from data center expansion amid AI adoption, with natural gas power remaining in high demand as a backup for intermittent renewable energy. The company completed large-scale investments totaling more than 1 billion yen in the 2026 February term, will enter gradual mass production in the 2027 February term, and expects full investment recovery to begin in the second half of the period. The company's existing technology supports hydrogen co-firing to align with carbon neutrality goals.
• Aerospace & Defense Segment (within Electric Discharge Machining & Surface Treatment): Demand is supported by growing passenger/cargo air travel, rising demand for new low-fuel-efficiency aircraft replacements and maintenance, and sharply expanded Japanese defense budget. Production volume already exceeds pre-COVID levels, and demand is tracking above the original mid-term plan forecast. The company will add new production lines in 2027 February term, expand hiring to support growth, maintain appropriate pricing to offset rising input costs, and strengthen supply chains for fast-growing defense equipment demand.
• Molds Segment: Domestic aluminum extrusion molds face sustained structural pressure from low birth rate and higher interest rates, so the company is implementing digital transformation to reform production processes and maintain profitability. Ceramic honeycomb extrusion molds are now being developed for new applications including CO2 capture and gas separation to support carbon neutrality, with technical validation ongoing alongside customers; contributions to profit are expected in the next mid-term plan period.
• Machinery & Equipment Segment: The company operates a co-creation business model that supports customers from needs identification through prototyping and mass production. Its core digital servo press is expanding into new applications for fuel cell production and processing resin/composite materials, and the company partners with academia/government to advance circular economy projects including plastic recycling and food waste reprocessing.
• Capacity Investment Progress: Backed by capital and business alliance with Mitsubishi Heavy Industries, the company has expanded production capacity since 2025 February term. It will add new production lines in 2027 February term to accommodate higher-than-forecast demand for aircraft engine components, supporting both volume increases for existing products and startup for new engine models.
• Growth Trajectory: Aerospace (aircraft engine + defense) sales hit 1.8x 2024 February term levels in 2026 February term, one year ahead of target, and are projected to reach 2.1x 2024 February term levels in 2027 February term. Energy/environment (gas turbine) orders are projected to reach 1.4x 2024 February term levels in 2027 February term, slightly above the prior 1.3x forecast.

• For the 2027 February term, the company targets 4 consecutive years of revenue and profit growth, with consolidated revenue of 16.073 billion yen, operating profit of 1.2 billion yen, ordinary profit of 1.081 billion yen, and net profit attributable to parent company shareholders of 708 million yen. Net profit is projected to dip slightly YoY due to a return to normal corporate tax rates.
• Segment guidance: Electric Discharge Machining & Surface Treatment is projected to deliver clear revenue and profit growth, driven by higher volumes for aerospace and energy products, with gas turbine profit contributions starting in the second half of the period; Molds are projected to maintain revenue and profit at 2026 February term levels amid a cautious market outlook; Machinery & Equipment is projected to maintain profit at prior year levels through operational optimization.
• Capital expenditure plans focus on expanding gas turbine production capacity, adding new equipment for mold production efficiency, planned existing line upgrades, and cybersecurity and IT infrastructure strengthening.
• R&D spending prioritizes production automation/labor saving, process improvement, and environmental technology development.
• Shareholder return: The 2026 February term full year dividend is raised 3 yen to 18 yen per share; the 2027 February term dividend is forecast at 20 yen per share.

1. 放電加工・表面処理 (Electric Discharge Machining & Surface Treatment): This is the company's largest segment, accounting for 69% of total revenue. It posted both year-over-year (YoY) and plan-beating growth in revenue and profit. Revenue increased YoY driven by: rising demand for aircraft engine components and defense equipment in the aerospace segment; increased automotive surface treatment parts in the transport segment; and front-loaded shipments of gas turbine parts and growing centrifugal compressor demand for the oil and gas industry in the energy and environment segment. Profit grew YoY from higher volume and selective product price adjustments, and beat plan due to cost reductions from higher production volume for gas turbine and defense products, plus lower planned expenses for hiring and repairs.
2. 金型 (Molds): The segment increased revenue YoY but fell to lower profit YoY, while beating plan on both revenue and profit. Revenue grew due to increased demand at the segment's overseas subsidiary, offsetting lower domestic aluminum extrusion mold revenue (affected by the post-urgent demand pullback after energy efficiency code mandates for residential buildings) and lower large order volume for ceramic honeycomb extrusion molds for automotive applications. Profit fell YoY due to lower domestic mold revenue, but came in roughly in line with plan after planned expense review.
3. 機械装置等 (Machinery & Equipment): The segment posted revenue and profit declines both YoY and versus plan. Revenue fell due to lower sales of press ancillaries and mixing/melting equipment despite higher press unit sales, plus lower-than-planned automotive press parts production. Profit was roughly flat YoY due to improved margins from automotive press part price adjustments, but fell versus plan on lower revenue.

Consolidated full year 2026 February term results: Total revenue 14.312 billion yen (+11% YoY), operating profit 1.122 billion yen (+63% YoY), net profit attributable to parent company shareholders 823 million yen. All three core metrics hit all-time records, beating the company's prior forecast.

• The 2027 February term earnings guidance does not incorporate impacts from the escalating Middle East situation, due to rapidly changing and uncertain conditions.
• Domestic residential mold demand faces sustained structural pressure from rising interest rates, low population growth, and the post-demand pullback from energy efficiency code mandates.
• Automotive-related demand is expected to see slow growth, with automotive surface treatment and press parts production tracking below prior forecasts in 2026 February term.
• Increased selling, general and administrative (SG&A) expenses for frontloaded growth investments will pressure near-term profits.

Full detailed Q&A transcripts were not included in the provided document. The listed topics for Q&A discussion cover: 2026 February term H2 performance, Middle East situation impacts, 2027 February term H1 plans, SG&A increase drivers, new component opportunities for aircraft engine and gas turbine parts, 2027 February term capex plans, long-term growth outlooks for aerospace and energy segments, new aircraft engine product items, 2030 February term operating margin targets for the core electric discharge machining segment, and the company's approach to passing cost increases to customers.