LINTEC Corporation Q2 FY2026 earnings call

• Consolidated First Half Overall Performance

  • Total consolidated net sales for the first half of FY2026 (ending March 2026) were 154.752 billion yen, down 2.4% YoY; operating profit 12.767 billion yen, down 6.7% YoY; ordinary profit 12.487 billion yen, down 12.5% YoY; net income attributable to parent company shareholders 8.928 billion yen, down 17.4% YoY.
  • Parent company (single entity) net sales rose 4.4% YoY to 89.341 billion yen, operating profit rose 11.0% YoY to 7.419 billion yen; consolidated subsidiaries' net sales fell 5.0% YoY to 95.986 billion yen, operating profit fell 27.7% YoY to 5.234 billion yen.
  • Overseas sales fell 5.530 billion yen YoY to 96.766 billion yen due to yen appreciation, with overseas sales ratio decreasing from 64.6% to 62.5%.

• Key Operational Updates

  • For the parent entity, positive profit drivers were: 1.7 billion yen from increased sales volume in the Advanced Materials Division, 0.7 billion yen from price adjustments in the Electronics & Optics segment, and 0.9 billion yen from favorable product mix change from increased semiconductor-related adhesive tape sales. Negative drivers were 0.9 billion yen from higher raw material, energy, fuel and logistics costs, and 1.6 billion yen in higher fixed costs including 0.5 billion yen from impairment of paper production assets.
  • In the Advanced Materials Division: Semiconductor-related adhesive tape performed strongly driven by rising generative AI-related demand; MLCC (multi-layer ceramic capacitor) related tape was solid on higher high-end demand from data center and smartphone end markets; HBM manufacturing equipment orders completed their cycle and declined.
  • In the Paper Division: The company has identified structural reform as necessary, and has decided to shut down one operating paper machine at the Kumagaya plant in March 2026, and will continue to optimize production structure to improve profitability.
  • The company is currently in the second year of its mid-term management plan "LSV 2030 - Stage 2", the midpoint of its long-term vision "LSV 2030" ending FY2030, and will focus on three core priorities: solving social challenges, strengthening corporate resilience via innovation, and creating new products and businesses for sustainable growth.

1. Printing Materials & Industrial Materials Segment: Total net sales of 89.865 billion yen (down 2.8% YoY), accounting for 58.1% of total consolidated revenue. Operating profit was 1.673 billion yen, down 53.0% YoY. Breakdown by division: (1) Printing & Information Materials Division: Net sales 71.324 billion yen (down 3.0% YoY); 71.3% of division revenue is overseas. (2) Industrial Materials Division: Net sales 18.541 billion yen (down 1.9% YoY); 52.2% of division revenue is overseas.
2. Electronics & Optics Segment: Total net sales of 46.946 billion yen (down 2.5% YoY), accounting for 30.3% of total consolidated revenue. Operating profit was 10.456 billion yen, up 10.2% YoY. Breakdown by division: (1) Advanced Materials Division: Net sales 42.675 billion yen (up 2.4% YoY); 73.4% of division revenue is overseas. (2) Optical Materials Division: Net sales 4.271 billion yen (down 34.2% YoY).
3. Paper & Processing Materials Segment: Total net sales of 17.940 billion yen (up 0.3% YoY), accounting for 11.6% of total consolidated revenue. Operating profit was 0.592 billion yen, down 3.7% YoY. Breakdown by division: (1) Paper Division: Net sales 7.357 billion yen (down 3.0% YoY). (2) Processing Materials Division: Net sales 10.582 billion yen (up 2.6% YoY); 35.3% of division revenue is overseas.

• Full-year consolidated guidance is maintained unchanged from the initial announcement in May 2025: net sales 317 billion yen, operating profit 24 billion yen, ordinary profit 24 billion yen, net income attributable to parent company shareholders 18 billion yen.
• The first half result was broadly in line with plan: despite MacTac America coming in below initial forecast, the Advanced Materials Division performed solidly overall.
• For the second half, management expects MacTac America and Madico to continue to perform below initial plan, but semiconductor-related adhesive tape, semiconductor-related equipment, and MLCC-related tape will all outperform their first half results.
• Dividend guidance is maintained unchanged: interim dividend of 55 yen per share, year-end dividend of 55 yen per share, for a full-year total dividend of 110 yen per share.

• Yen appreciation had a negative impact of 3.6 billion yen on consolidated net sales and 0.8 billion yen on operating profit in the first half.
• North American consumer demand remains weak, raw material prices remain elevated, which continues to pressure profitability at MacTac America.
• Rising labor costs, higher raw material procurement costs in both domestic and overseas operations, and higher fixed costs from depreciation, labor and R&D investment weigh on segment margins.
• Mid-to-low end MLCC-related tape markets face intensifying competition from overseas manufacturers, which led to the decision to liquidate the company's Malaysian subsidiary for this business line.
• Weak demand in China, ASEAN, and the North American window film market has pressured performance in the printing and industrial materials segments.

Q: How did semiconductor-related adhesive tape perform in the first half against plan, and were there any changes between Q1 and Q2? / A: All major product lines (dicing tape, back-grind surface protection tape, chip back protection tape) grew year-over-year in the first half. There was no major change in market and regional trends from the prior period: Taiwan and China remain the largest markets, followed by ASEAN, and performance is broadly in line with expectations.

Q: What is the revenue outlook for semiconductor-related adhesive tape from Q3 onward, compared to Q2 levels? / A: Management expects revenue growth to continue from Q3 onward. While Q4 will see a typical seasonal decline from year-end adjustments at overseas subsidiaries, full-year revenue will still exceed the original forecast.

Q: What are MacTac America's plans for profit improvement, and will the narrowing deficit trend continue into the second half? / A: The North American roll label market will remain weak in the second half amid soft consumer spending, and raw material prices will stay high. MacTac America will pursue price increases to improve margins, and is progressing with plans to close two logistics facilities to optimize its fixed cost base and network. These measures will be implemented to drive profit improvement even amid the tough market environment.

Q: Can you update the development status and commercial launch timeline for EUV pellicles for exposure tools, and are there any current development bottlenecks? / A: Development is progressing roughly on schedule towards the target of establishing mass production capability by the end of FY2025, with no unexpected new bottlenecks. Samples have been provided to customers for evaluation. The company will first focus on establishing a stable mass supply system by the end of FY2025, and will announce a commercial launch timeline once plans are finalized.