6542.T

Overall Financial Performance:

• Total cumulative orders including carry-over decreased 4.7% year-over-year (547 million yen decrease), driven by weak overseas orders.
• Revenue rose 33 million yen year-over-year, as production progress was in line with plan.
• Operating profit increased 113 million yen and ordinary profit increased 92 million yen year-over-year, supported by productivity gains from internal DX initiatives.
• Net profit came to 584 million yen, a 51 million yen year-over-year decrease, as the prior year period included a 220 million yen special gain from insurance contract restructuring at a subsidiary.

Balance Sheet and Cash Flow:

• All key safety financial metrics remain at healthy planned levels. The company became debt-free at the end of the prior fiscal year after repaying long-term borrowing for the Tokyo branch office acquisition, and took on standard seasonal working capital borrowing in the third quarter, resulting in total debt of 2.6 billion yen including a 109 million yen guarantee for the employee stock ownership trust.
• Tangible fixed assets increased 52 million yen from the construction of a new headquarters for a previously leased subsidiary.
• Operating cash flow is on track to reach 630 million yen by year-end. Investment cash flow continues to see planned mid-term spending on R&D, DX, and workplace upgrades including subsidiary headquarters relocation.

• Full year 2025 June fiscal year revenue and profit guidance remains unchanged from the initial plan, with domestic business expected to maintain its solid performance trend into the fourth quarter. Full year consolidated profit is expected to come in broadly in line with plan despite overseas headwinds.
• The planned year-end dividend per share is revised upward from 30 yen to 45 yen, which includes a 10 yen 30th listing anniversary commemorative dividend. This brings the full year consolidated payout ratio to 36.3%.
• The company will cancel 90,000 treasury shares (equal to ~1.3% of total outstanding shares) on June 30, the end of the current fiscal year, to eliminate shareholder dilution concerns. No restart of the paused shareholder benefit program or stock split is planned for the current fiscal year.
• Management targets PBR above 1.0x and PER above 10x by the end of the current fiscal year.

1. Domestic segment: Total third quarter orders decreased 1.4% year-over-year, due to lower multi-year project order volume, though current order momentum has entered an upward trend following the finalization of the Japanese government's annual budget. Revenue and operating profit remained solid. 2. Overseas segment: Orders fell sharply year-over-year, and both revenue and operating profit are below year-ago levels, with the segment reporting an operating deficit at quarter end. 3. Key business segment performance: The core social infrastructure/disaster prevention (focused on disaster response and aging social capital upgrades) and mobility development segments saw mixed performance due to disaster events and overseas headwinds, but remained broadly stable overall.

• Long-standing unresolved regional conflicts and a uncertain global economic environment have suppressed new overseas order activity, leading to lower production volume and an operating deficit in the overseas segment.
• FC Holdings' domestic order volume was impacted by lower multi-year project orders in the third quarter, even though near-term order momentum has improved post-budget finalization.
• The company's PBR remains stuck at 0.8x despite meeting long-term ROE and operating margin targets of over 10%, indicating that market valuation lags behind the company's underlying performance.
• Open market treasury stock purchases are not feasible due to the low trading liquidity of FC Holdings' stock, which would make it hard to meet purchase targets and could further reduce market liquidity.

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