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• Overall 2025 Fiscal Year Performance • The company achieved 5 consecutive years of revenue growth and 8 consecutive years of profit growth, with order intake, total revenue, and all profit metrics hitting all-time record highs. • Revenue increased 7.8% YoY, operating income increased 29.7% YoY, ordinary income increased 32.5% YoY, net income increased 32.6% YoY, and order intake increased 30.8% YoY. All core and most non-core segments delivered growth, with only the information segment seeing profit decline due to one-time project costs.

• Cash Flow Performance • Operating cash flow increased year-over-year, driven by higher pre-tax profit and improved working capital from increases in trade payables and unearned revenue. • Investing and financing cash flow decreased, as cash from operations was used for growth investments (including construction of the Hibikino R&D Center), shareholder dividends, and debt repayment. • Ending cash and cash equivalents increased by 91 million yen to 3.252 billion yen.

• Shareholder Return • For the 2025 fiscal year, a year-end dividend of 25 yen per share was approved, bringing the full year annual dividend to 50 yen per share, an increase of 10 yen per share from the prior year, continuing the company's streak of consecutive dividend increases. • Starting from the 2026 fiscal year, the shareholder benefit program will be expanded: the value of QuoCards gifted to shareholders who have held shares continuously for 3 years or longer will be increased to raise incentives for long-term shareholding.

• Key Strategic Growth Initiatives for 2026 • AI Data Center: The company will pursue order expansion via full integrated solutions covering power supply equipment and AI servers. It will provide stable power energy solutions (power reception and distribution systems, power generation equipment, the core infrastructure of AI data centers) and leverage global technology to deliver end-to-end support for AI servers (the core IT component of data centers), covering installation, inspection, replacement, and the company's proprietary smart security services. The company aims to expand business as a total solution provider for AI data centers, while building a stock-based business model that includes AI server replacement demand. • Decarbonization Strategy: First, the company will pursue order expansion for total solutions covering extra-high/high voltage power reception, energy storage, and control for grid-scale energy storage stations being built nationwide. Second, the company will develop new next-generation storage battery businesses:

  1. All-solid-state battery business: The company will use battery cells from Taiwan's ProLogium, develop modularized products, collaborate on development and mass production with Kyushu Electric Power, and partner with Sojitz Kyushu to develop overseas sales channels.
  2. Redox flow battery-based power supply and demand control system development: The system will be installed at the Hibikino R&D Center (slated for completion in October 2026) to conduct demonstration testing. • All new decarbonization initiatives will be based at the Hibikino R&D Center to advance development through commercialization and drive business adoption.

• The company expects continued expansion in the energy sector, including AI data centers and energy storage stations, for the 2026 December fiscal year.
• Full year 2026 guidance: Order intake is projected to reach 43 billion yen, an increase of 9.7% YoY; revenue is projected to reach 36 billion yen, an increase of 14.7% YoY; operating income is projected to reach 3 billion yen, an increase of 14.7% YoY; net income is projected to reach 2.3 billion yen, an increase of 12.9% YoY.
• Order backlog has increased by nearly 8 billion yen YoY, concentrated in the public and energy sectors, building a strong pipeline of projects that will convert to future revenue.
• Segment revenue guidance: The company projects continued revenue growth for the Environment and Energy segment, driven by growth in the public sector (supported by a large backlog of existing orders) and growth in the energy sector (AI data centers and energy storage stations, which saw strong order growth in 2025).
• Dividend guidance for 2026: A 27.5 yen per share interim dividend and 27.5 yen per share year-end dividend are planned, bringing the full year annual dividend to 55 yen per share, a 5 yen per share increase from 2025, continuing the streak of consecutive dividend increases.
• The 2026 revenue and operating income guidance is below the original mid-term management plan target, which was 40 billion yen in revenue and 3.6 billion yen in operating income, due to delayed order intake and revenue recognition from the impact of the COVID-19 pandemic in earlier plan years.
• The operating profit margin is projected to remain flat at 8.3% compared to 2025, so no margin expansion is expected in 2026.

1. 電力部門 (Electric Power Segment): Revenue saw a slight decrease year-over-year. Operating income increased 18.3% YoY, driven by higher sales in the high value-added information control field and cost reduction efforts that improved profit margins. This segment is one of the company's core businesses.
2. 環境エネルギー部門 (Environment and Energy Segment): Solid performance from monitoring and control systems for water treatment facilities in the public sector, with successful large project order intake for data centers and energy storage stations. Delayed public sector on-site construction from the previous year progressed smoothly, improving profitability. Operating income increased 118.4% YoY. This segment is the other core business of the company.
3. 情報部門 (Information Segment): Revenue increased YoY, supported by steady performance in smart port-related and system development fields. However, operating income decreased 50.5% YoY due to higher-than-expected development costs for a healthcare development project.
4. サービス部門 (Service Segment): Solid performance from electrical equipment construction for solar power plants, data centers, and energy storage stations, plus facility renewal construction for factories. Revenue increased, and operating income increased 111.9% YoY.
5. その他事業 (Other Business Segment): Both revenue and profit increased, driven by higher sales of electronic control equipment products and liquid crystal composite film, plus solid performance from construction for power plants and substations. Overall, the two core segments (Electric Power and Environment and Energy) account for approximately 70% of total revenue and operating profit. Total company consolidated revenue for the fiscal year was 31.38 billion yen, operating income was 2.615 billion yen, ordinary income was 3.126 billion yen, net income was 2.036 billion yen, and total order intake was 39.183 billion yen.

There was no explicit discussion of material risks or operational failures in the provided transcript. The only negative development noted was a one-time 50.5% YoY profit decline in the information segment from higher-than-expected development costs for a healthcare project, which management has characterized as a transitory event with no expected impact on 2026 fiscal year performance.

• Q: What drove the large order intake increase in 2025, and what is the outlook for 2026 orders?

A: The 9 billion yen YoY order increase in 2025 had two main drivers: (1) The public sector saw approximately 3 billion yen in additional orders from large projects acquired via the business transfer from Panasonic System Solutions Japan, including projects at airports; (2) The energy sector saw approximately 5 billion yen in order growth from power reception and distribution equipment for AI data centers and energy storage stations. For 2026, management expects solid performance from core electric power and public sector businesses, plus continued growth in the energy sector from AI data center and energy storage station projects, so order intake is projected to increase by another 4 billion yen to 43 billion yen.

• Q: Why is the 2026 forecast below the original mid-term management plan?

A: The main reason is that order ramp-up was delayed in the first three years of the mid-term plan due to the impact of the COVID-19 pandemic, which in turn delayed revenue recognition. While order intake has grown since 2025 driven by expansion in the public and energy sectors, most new orders are for large long-lead projects that take 2 to 3 years to complete, so revenue recognition is spread across multiple fiscal years. This leads to slower-than-planned revenue progress: order intake is on track to hit the original plan target of 43 billion yen, but revenue is planned at 36 billion yen (versus the original 40 billion yen target) and operating income at 3 billion yen (versus the original 36 billion yen target).

• Q: Why is the 2026 projected operating profit margin flat at 8.3% compared to 2025?

A: The 2026 sales plan expects high growth from the Environment and Energy segment, but this growth is concentrated in power reception and distribution equipment for AI data centers and energy storage stations, which increases the proportion of lower-margin hardware product sales. In addition, the plan already includes a certain amount of growth investment expenses related to the Hibikino R&D Center (slated for completion in October 2026). These two factors offset margin expansion, so the profit margin is expected to stay flat at 2025 levels.

• Q: What are Seiko Denki Seisakusho's competitive advantages in the Environment and Energy segment?

A: The company's main advantage is its ability to provide total end-to-end solutions from design and manufacturing of electrical equipment, leveraging its accumulated expertise in power grids. It can support customers from the construction planning stage for projects like AI data centers and energy storage stations. In the public sector, the company has built an end-to-end structure that covers design, manufacturing, and installation, and the business has further expanded following the business transfer from Panasonic System Solutions Japan.

• Q: What is the projected total investment for the Hibikino R&D Center?

A: Total investment is projected to be approximately 4 billion yen. The investment will be recouped via new business creation, such as the all-solid-state battery business.

• Q: What percentage of 2025 Environment and Energy segment order intake came from AI data center-related projects?

A: AI data center-related orders accounted for approximately 8% of the segment's total order intake. The company is currently working on planned projects in Osaka, Tokyo, and Kyushu, and expects further order growth in 2026.

• Q: Gross margin improved through the third quarter of 2025, but turned negative YoY in the fourth quarter. What caused this?

A: The main cause is that the sales mix in the fourth quarter shifted to a higher proportion of lower-margin Service segment revenue. In addition, the profit deterioration in the Information segment also had a partial impact. This is a transitory change, and no impact on 2026 fiscal year performance is expected.