Nippon Kayaku (4272): FY2025 Results Summary — Record Sales and Profit, ROE Reaches 9.0%

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Nippon Kayaku Co., Ltd. (4272) reported consolidated results for FY2025 (the fiscal year ended March 31, 2026) on May 13, 2026. Net sales rose 8.7% year on year to 241.9 bn yen, a record high for the fifth consecutive period, and operating income increased 10.1% to 22.5 bn yen. Profit attributable to owners of the parent jumped 40.7% to 24.6 bn yen — also a record high — lifted by gains on investment security sales of 9.4 bn yen, and ROE reached 9.0%. For FY2026, the company guides for higher revenue and operating income, while profit attributable to owners of the parent is expected to decline on reduced gains on investment securities sales.

Consolidated Results (Full-Year Actual)

Net sales and profit attributable to owners of the parent company reached record highs, and full-year results came in above the forecasts issued in February (net sales at 101% and operating income at 105% of that forecast). Operating income increased due to volume factors, but was impacted by selling prices and manufacturing costs. In non-operating and extraordinary items, extraordinary income increased by 9.4 bn yen due to gains on investment security sales. On the balance sheet, total assets stood at 398.7 bn yen (up 25.0 bn yen from the end of March 2025) with an equity ratio of 70.0%, while the cross-shareholdings to net assets ratio fell to 7.9%. The overseas net sales ratio was 56.0%.

Item (bn yen)	FY2025 (Actual)	FY2024 (Actual)	YoY Change	YoY %
Net sales	241.9	222.6	19.3	8.7%
Operating income by industry segment	32.3	29.4	2.7	9.1%
Operating income	22.5	20.4	2.1	10.1%
Ordinary income	25.5	22.3	3.2	14.4%
Profit attributable to owners of parent	24.6	17.5	7.1	40.7%
Profit attributable to owners of parent per share (yen)	161.18	107.17	54.01	50.4%
ROE	9.0%	6.5%	2.5	38.5%
ROIC	5.3%	4.9%	0.4	8.2%

Segment Results

Mobility & Imaging saw increased revenue but decreased profit due to factors such as soaring raw material prices — notably for gold and explosives in Safety Systems — despite efforts to pass on cost increases through product prices. Within the unit, domestic Safety Systems sales increased on the resolution of issues stemming from production and shipment suspensions related to unauthorized model certification issues, and overseas sales were driven by continued strength in the Chinese market. Fine Chemicals and Life Science both posted increased revenue and profit: Functional Materials benefited from expansion of the semiconductor market in advanced fields including AI and high-end servers, Catalysts recorded record-high sales concentrated in the fourth quarter, and in Pharmaceuticals the new drug IBTROZI was launched in November while Bevacizumab BS raised its market share to about 64% in March and Adalimumab BS to about 19%.

Segment	Metric (bn yen)	FY2025 (Actual)	FY2024 (Actual)	YoY Change
Mobility & Imaging	Net sales	94.7	91.4	3.3
Fine Chemicals	Net sales	74.1	66.2	7.9
Life Science	Net sales	73.0	65.0	8.0
Total	Net sales	241.9	222.6	19.3
Mobility & Imaging	Operating income by industry segment	10.7	13.3	(2.7)
Fine Chemicals	Operating income by industry segment	11.9	9.9	2.0
Life Science	Operating income by industry segment	9.7	6.4	3.3
Total	Operating income by industry segment	32.3	29.6	2.7

FY2026 Forecast

For FY2026 (April 2026 to March 2027), the company forecasts net sales of 260.6 bn yen (up 7.8%) and operating income of 25.4 bn yen (up 13.1%), with increased revenue and profit in all business units. Profit attributable to owners of the parent is forecast at 22.3 bn yen, a decrease of 9.5%, due to factors such as reduced gains on investment securities sales. Capital investments are projected to increase by 11.0 bn yen year on year (FY2025 actual capital expenditure was 16.1 bn yen, below the 20.2 bn yen projected as of Q3 due to a review of investment contents and timing), and R&D expenses are projected to rise by 3.0 bn yen, while depreciation and amortization are expected to remain flat. Regarding the impact of the Middle East situation, the assumptions include a Strait of Hormuz blockade continuing for several months with supply chain disruptions throughout the year and continued high raw material prices; the company notes a possibility of a downward revision in the first half due to production adjustments, but the full-year forecasts are expected to hold.

Item (bn yen)	FY2026 (Forecast)	FY2025 (Actual)	Change	%
Net sales	260.6	241.9	18.7	7.8%
Operating income by industry segment	35.2	32.3	2.9	9.1%
Operating income	25.4	22.5	2.9	13.1%
Ordinary income	25.2	25.5	(0.3)	-1.1%
Profit attributable to owners of parent	22.3	24.5	(2.3)	-9.5%
Profit attributable to owners of parent per share (yen)	154.50	160.19	(5.69)	-3.6%
ROE	8.2%	9.0%	(0.8)	-8.9%
Exchange rate (JPY/USD)	148.00	150.67	(2.67)	-1.8%

Shareholder Returns

The company plans an increased dividend of 66 yen per share for FY2025, under a policy of a dividend payout ratio of 40% or higher and continuation of progressive dividends. It plans 15 bn yen of treasury stock purchases in FY2026, with a planned total payout ratio of 106.2%, implemented flexibly. In addition, 11.3 million shares, equivalent to 7.06% of the outstanding shares, are planned for cancellation on May 22, 2026.

Item	Detail
Annual dividend per share (FY2025)	66 yen planned (an increase)
Dividend policy	Payout ratio of 40%+; continuation of progressive dividends
Treasury stock purchases (FY2026)	15 bn yen, with planned total payout ratio of 106.2%
Share cancellation	11.3 million shares (7.06% of outstanding shares) planned for May 22, 2026

Medium-Term Plan Review / Topics

FY2025 marked the final year of the mid-term business plan KAYAKU Vision 2025. Net sales of 241.9 bn yen exceeded the initial plan target of 230.0 bn yen, and ROE of 9.0% cleared the target of 8% or more, but operating income of 22.5 bn yen fell short of the 26.5 bn yen target. The company states that while certain results were delivered in terms of improving management efficiency, strengthening profitability remains a challenge. Company-wide ROIC (after tax) improved to 5.3% in FY2025 from 4.9% in FY2024, and is projected at 5.6% for FY2026. In the new pharmaceuticals pipeline as of May 13, 2026, the ASTROPIC Test (aminolevulinic acid hydrochloride) is in Phase III and the NEO-GEAR Test (necitumumab) is in Phase II, both as indication expansion studies.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.