6810.T

Corporate & Business Strategy

• Established a new corporate business line positioning small battery business as the main growth driver, and launched a "Front Runner Strategy" targeting global No.1 in the high-reliability small battery segment.
• Completed acquisition of Murata Manufacturing's primary battery business (Maxell Sakura) in March 2026, expanding scale; currently leveraging existing production bases and each facility's strengths: Koriyama Plant (strong in silver oxide batteries) and Ono Plant (strong in manganese dioxide lithium coin/cylindrical batteries) focus on their core product lines to maximize operational efficiency.
• Partnered with JAFCO to access external advanced battery technology, investing ~1.0 billion yen to accelerate new battery technology development.
• Implemented portfolio restructuring for non-core businesses: transferred optical lens unit business to a subsidiary to improve efficiency, and agreed to sell EF2 semiconductor-related business to Sonocom for ~0.93 billion yen, effective July 1, 2026.

New Business Development

• Accelerating commercialization and market expansion of all-solid-state battery modules; generic FA modules are scheduled to complete development in June 2026, with a focus on replacing existing primary batteries to drive early sales growth.
• Launched a new EMC countermeasure material business centered on analog core technology, starting sample shipments to customers for final products in April 2026, targeting growing demand for magnetic noise suppression.

Financial Strategy

• Continues aggressive growth investment centered on the Energy segment: plans 35.0 billion yen in total growth investment over the MEX26 mid-term plan, with 20.0 billion yen allocated to the Energy segment for primary battery capacity expansion and M&A integration.
• Maintains commitment to 100% total shareholder return payout ratio: completed 13.2 billion yen in share buybacks in 2025 FY, meets the 100% cumulative payout commitment for the 3-year plan, and plans a 6 yen per share dividend increase to 56 yen per share for 2026 FY.

Governance

• Plans to add two new directors at the 2026 annual general meeting, increasing the ratio of independent outside directors to 57.1% and female directors to 28.6% to strengthen governance.

• 2026 Fiscal Year full year guidance: total sales of 143.0 billion yen (13.6 billion yen increase year-over-year), operating profit of 10.0 billion yen (2.1 billion yen increase year-over-year), net income of 6.7 billion yen (down 1.6 billion yen year-over-year due to the absence of 2025 FY's special gain from subsidiary equity transfer), ROIC of 5.5%, ROE of 7.5%. Assumes an exchange rate of 150 JPY/USD.
• Capital expenditure planned at 10.0 billion yen, depreciation at 6.5 billion yen, R&D expenditure at 6.0 billion yen for 2026 FY.
• The 2026 guidance already incorporates the business contribution from the acquired Maxell Sakura primary battery business, and assumes recovery in semiconductor-related products and health/beauty products.
• The Energy segment's 2026 forecast (53.0 billion yen sales, 3.1 billion yen operating profit) already exceeds the original MEX26 mid-term plan target for the segment.
• Growth outlook: small batteries are expected to drive overall company growth, with the global small battery market projected to reach 55.0 billion yen by 2030, growing at a 6-7% annual rate.

2025 Fiscal Year Actual Results:

1. Energy Segment: Sales of 42.5 billion yen (32.8% of total company revenue), flat year-over-year; operating profit of 2.1 billion yen, down 0.3 billion yen year-over-year.
2. Functional Materials Segment: Sales of 32.6 billion yen (25.2% of total company revenue), up 0.8 billion yen year-over-year; operating profit of 1.5 billion yen, up 0.3 billion yen year-over-year.
3. Optical & Systems Segment: Sales of 36.4 billion yen (28.1% of total company revenue), up 0.5 billion yen year-over-year; operating profit of 3.5 billion yen, down 0.9 billion yen year-over-year.
4. Value Co-Creation Business Segment: Sales of 17.9 billion yen (13.8% of total company revenue), down 1.7 billion yen year-over-year; operating profit of 0.8 billion yen, down 0.5 billion yen year-over-year.

Total Company 2025 FY: Sales of 129.4 billion yen, down 0.4 billion yen year-over-year; operating profit of 7.9 billion yen, down 1.4 billion yen year-over-year.

2026 Fiscal Year Forecast:

1. Energy Segment: Sales of 53.0 billion yen, up 10.5 billion yen year-over-year; operating profit of 3.1 billion yen, up 1.0 billion yen year-over-year.
2. Functional Materials Segment: Sales of 34.7 billion yen, up 2.1 billion yen year-over-year; operating profit of 1.9 billion yen, up 0.4 billion yen year-over-year.
3. Optical & Systems Segment: Sales of 35.7 billion yen, down 0.7 billion yen year-over-year; operating profit of 3.9 billion yen, up 0.4 billion yen year-over-year.
4. Value Co-Creation Business Segment: Sales of 19.6 billion yen, up 1.7 billion yen year-over-year; operating profit of 1.1 billion yen, up 0.3 billion yen year-over-year.

Total Company 2026 FY Forecast: Sales of 143.0 billion yen, up 13.6 billion yen year-over-year; operating profit of 10.0 billion yen, up 2.1 billion yen year-over-year.

• Sustained silver price surges have significantly compressed profitability for silver oxide primary batteries in the Energy segment; price pass-through to selling prices has a time lag, which may delay profit improvement in the near term.
• Middle East geopolitical tensions have driven sharp increases in crude oil and naphtha-related raw material costs, creating a several hundred million yen operating profit risk for 2026 Q1, and introducing potential supply chain disruption risks for some raw materials.
• The Functional Materials segment is expected to face the largest negative impact from Middle East-related cost increases and production constraints, while the Optical & Systems segment is expected to see relatively limited impact.
• DMS semiconductor business, centered on general-purpose products, has not benefited from AI-driven market growth, and full recovery is not expected until 2026 FY or later.
• The MEX26 mid-term plan has experienced delays due to unforeseen silver price hikes and slower-than-expected semiconductor recovery, leading to 2025 FY results missing the initial operating profit target (7.9 billion yen actual vs 10.0 billion yen initial plan, 79% achievement rate).

Q: Following completion of the Murata primary battery acquisition, what is the plan for utilizing the Koriyama (former Murata) and existing Ono production facilities? Does the company plan to consolidate product lines at each site for efficiency? / A: There is no current plan for full product consolidation. The company will maintain a broad division based on existing strengths: Ono will focus on coin and cylindrical manganese dioxide lithium batteries, while Koriyama will focus on silver oxide batteries, with each site expanding its core strengths. In the short term, the company will use Koriyama's spare capacity to fulfill unmet demand for high-demand products (after required customer approval processes) to drive top-line and profit growth. In the medium to long term, the company is facilitating engineer exchanges between the two facilities to joint-develop technology updates for existing products, though this will not generate immediate financial results.

Q: What silver price assumption is used for the 2026 fiscal year plan, and how far along is the company in passing higher silver costs to selling prices? / A: The 2026 plan uses the trailing average silver price from the second half of 2025 FY as its base assumption. The company is systematically passing through higher silver costs to customers, with progress varying by product and customer contract, but pass-through is ongoing as scheduled. There is an unavoidable 3-6 month time lag for price adjustments, so profitability will improve gradually through 2026. The plan already accounts for this lag effect and the remaining unpassed cost increase.

Q: What is the recovery outlook for the DMS semiconductor business in 2026 FY? / A: The DMS business, focused on general-purpose semiconductors, saw clear demand recovery starting in Q4 2025 FY, after a full year of weak performance in 2025. The company expects order and revenue growth to continue through 2026, with a focus on expanding AI-related end-market demand to return the segment to profit growth. The 2026 operating profit forecast for the Optical & Systems segment already incorporates this expected DMS recovery, as well as the planned divestment of the underperforming EF2 business.