Hosokawa Micron (6277): FY2025 Results Summary — Sales and Profit Decline on European Weakness

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Hosokawa Micron Corporation, a powder processing equipment and blown film machinery maker whose fiscal year ends in September, reported FY2025 net sales of ¥77,994 million, down ¥7,438 million or 8.7% from the record-high previous fiscal year. Operating profit fell 14.8% to ¥7,051 million and net profit fell 18.9% to ¥4,527 million. The company states that domestic sales remained strong but Europe, led by Germany, was sluggish, and that SG&A expenses were reduced by 1.3 billion yen to offset the revenue shortfall. For FY2026 the company forecasts net sales of ¥78,500 million and net profit of ¥5,200 million.

Consolidated Results (Full-Year Actual)

Bookings decreased 4.2% year on year to ¥74,460 million. The company notes that bookings decreased significantly by approx. 8% YoY in the second half, despite being on par with the previous year in the first half. Gross profit margin was maintained at 35.1%, while SG&A expenses declined ¥1,363 million. Net income decreased by approx. 19% due to the net sales decline and extraordinary losses of nearly ¥900 million recorded in the second half.

(¥ Million)	FY2024 Result (a)	FY2025 Result (b)	YoY changes (c=b-a)	YoY changes (%) (c/a)
Bookings	77,717	74,460	-3,257	-4.2%
Net sales	85,432	77,994	-7,438	-8.7%
Cost of sales(%)	55,485(64.9%)	50,638(64.9%)	-4,847(-0.0pp)	-8.7%
Gross profit(%)	29,947(35.1%)	27,355(35.1%)	-2,592(+0.0pp)	-8.7%
SG&A expenses(%)	21,668(25.4%)	20,304(26.0%)	-1,363(+0.6pp)	-6.3%
Operating profit(%)	8,279(9.7%)	7,051(9.0%)	-1,228(-0.7pp)	-14.8%
Ordinary profit	9,241	7,715	-1,525	-16.5%
Net profit	5,580	4,527	-1,052	-18.9%

Average exchange rates were USD ¥149.27 and EURO ¥164.80 in FY2025, against USD ¥150.44 and EURO ¥163.08 in FY2024. The bridge from FY2024 operating profit of ¥8,279 million to FY2025 operating profit of ¥7,051 million comprises a revenue reduction effect of -2,740, an effect of gross profit margin improvement of +44, an FX impact on gross profit of +104, an SG&A net reduction of +1,468, and an FX impact on SG&A of -104 (¥ million). Extraordinary losses were ¥885 million in FY2025 (Germany: business restructuring costs; U.S.A.: impairment loss on assets related to the toll processing business), against ¥1,275 million in FY2024. ROE was 7.0% and ROA was 7.7% in FY2025, where ROE is the ratio of net profit to shareholders’ equity and ROA the ratio of ordinary profit to total assets.

Segment Results

By business segment, the Powder Processing Business accounted for 75% of FY2025 net sales and the Blown Film Business for 25%. In powder processing, aftersales secured stable bookings although bookings for large projects continue to be delayed. In blown film, although large projects were concluded in the current period, net sales decreased due to a reactionary decrease following strong performance in the previous period in the U.S.A. The net sales bridge shows the powder processing business down ¥6,719 million and the blown film business down ¥1,099 million, with an FX impact of +¥380 million.

Segment	Metric	FY2025	YoY
Consolidated	Bookings	74.4 billion	-4.2%
Consolidated	Net sales	77.9 billion	-8.7%
Consolidated	Operating profit	7.0 billion	-14.8%
Powder Processing Business	Bookings	56.2 billion	-2.2%
Powder Processing Business	Net sales	58.6 billion	-9.8%
Blown Film Business	Bookings	18.2 billion	-9.9%
Blown Film Business	Net sales	19.3 billion	-5.1%

By application, FY2025 bookings were composed of blown films 25%, aftersales 22%, chemicals 15%, pharmaceuticals 7%, foods 7%, electronic materials 7%, toll processing 5%, metals & minerals 4%, others 4%, recycle 3% and polymers 0.6%. Against FY2024 bookings of 777 (¥100 million), chemicals rose +28 and electronic materials (incl. LIBs) rose +12, while blown films fell -20, polymers -16, pharmaceuticals -15, others -14, metals & minerals -8, foods -6 and recycle -3; aftersales rose +9 and toll processing was +0, giving FY2025 bookings of 744. Quarterly aftersales service bookings averaged higher in FY2025 than in FY2024, and the company targets raising the aftersales share of total net sales from a 17th Medium-Term Plan average of 17%-18% toward a long-term vision of 25%-30%.

Regional Breakdown

By group company location, FY2025 net sales were 55% Europe, 25% Japan/Asia etc. and 20% Americas. The year-on-year bridge shows Europe down ¥7,112 million and Japan, Asia, etc. down ¥379 million, with the Americas up ¥53 million; the company states that all major European group companies recorded significant net sales declines. By customers’ location (destination), FY2025 net sales were 39% Europe, 21% Americas, 21% Asia, etc. and 19% Japan, with Europe down ¥5,497 million, Americas down ¥1,774 million and Japan down ¥1,263 million, while Asia, etc. rose ¥1,096 million. The appendix breakdown gives FY2025 net sales by group companies’ location as European Group 55.4%, Japan/Asian Group 24.7% and American Group 20.0%, and by customers’ location as European Group 39.3%, American Group 21.0%, Asia/others 20.9% and Japan 18.7%.

On the balance sheet, total assets were ¥102,734 million (+¥4,663 million from the end of FY2024) and net assets ¥67,219 million (+¥5,596 million), lifting the capital adequacy ratio to 65.4% (+2.6pp). Operating cash flow was ¥9,499 million and investing cash flow -¥3,680 million, for free cash flow of ¥5,819 million; cash and cash equivalents at the end of FY2025 were ¥31,084 million. Capital investment was ¥3,345 million (FY2024: ¥3,781 million), depreciation ¥2,328 million and R&D expenses ¥1,140 million, equal to 1.5% of net sales.

FY2026 Forecast

For FY2026 the company forecasts net sales of ¥78,500 million (+0.6%), operating profit of ¥7,000 million (-0.7%), ordinary profit of ¥7,400 million (-4.1%) and net profit of ¥5,200 million (+14.9%), with earnings per share of ¥355.29. Planned assumed rates are USD ¥140.00 and EURO ¥160.00. The forecast reflects two considerations: large project trends show no signs of improvement in the number of projects acquired or total amount, and delivery time has stabilized at around 200 days, with backlog turnover days of 207 days in FY2025 and 206 days forecast for FY2026. Business opportunities cited for FY2026 are enhancement of aftersales services and strengthening profitability in niche markets. Planned FY2026 investment is ¥3,800 million, with depreciation of ¥2,500 million and R&D expenses of ¥1,200 million.

(¥ Million)	FY2025 Results (a)	FY2026 Forecast (b)	YoY changes (c=b-a)	YoY changes (c/a)
Net sales	77,994	78,500	+506	+0.6%
Operating profit (%)	7,051(9.0%)	7,000(8.9%)	-51(-0.1pp)	-0.7%
Ordinary profit	7,715	7,400	-315	-4.1%
Net profit	4,527	5,200	+673	+14.9%
Earnings per share (¥)	306.09	355.29	—	—

Shareholder Returns

The company aims for a total return ratio of 50% or more, including increased dividends and share buybacks, and states that FY2025 also achieved the target with a total return ratio of 61.2%. FY2025 dividends totalled ¥1,772 million at ¥120 per share, alongside treasury stock buybacks of ¥1,000 million. For FY2026 the company plans to pay dividends of ¥65 per share at the end of the interim and fiscal years, for a total of ¥130 per year. The FY2023 treasury stock buyback of ¥3,892 million was larger than in previous years because Nisshin Seifun Group Inc. and Nisshin Engineering Inc. acquired 1.33 million shares of the company’s stock as treasury stock. The FY2026 total dividend and buyback amounts cannot be confirmed from the materials.

Item	FY2023	FY2024	FY2025	FY2026 (Forecast)
Dividends per share (¥)	87.5	120	120	130
Total amount of dividends (¥ Million)	1,318	1,792	1,772	—
Total amount of treasury stock buyback (¥ Million)	3,892	1,000	1,000	—
Total return ratio	87.3%	50.0%	61.2%	—

The cash allocation plan, presented as a cumulative tentative forecast for FY2026-FY2028, assumes operating cash flow of ¥24 billion to ¥25 billion plus financial cash flow of approximately ¥2.5 billion from use of cash holdings and financial leverage. Outputs are approximately ¥8.5 billion to maintain and strengthen infrastructure, ¥4 billion plus alpha for growth investments, and approximately ¥9 billion to ¥10 billion for shareholder returns at a total return ratio of at least 50%.

Medium-Term Plan and Topics

FY2025 was the first year of the 18th Medium-Term Management Plan (FY2025-FY2027), whose group basic policy is “Enhancing Hosokawa’s Market Presence through Differentiation” under the theme Unique & Dominant. The plan targets FY2027 net sales of ¥100.0 billion and operating profit of ¥10.0 billion, an operating profit margin of 10.0%, against FY2025 results of ¥77.9 billion and ¥7.0 billion (9.0%). The long-term vision is net sales of ¥150 billion with an operating profit margin of 12% and ROE of 12-13%.

Topics disclosed with the results include the new Hosokawa Solids Solutions factory in Zarautz, Spain (investment of approximately ¥1 billion, completed October 2025), which is expected to deliver an estimated manufacturing cost and SG&A reduction of ¥360 million per year, or a 15% cost reduction ratio, as some German production is transferred; the Cosmetic Center in Hirakata City, Osaka (investment of approximately ¥1.5 billion, completed November 2025) housing R&D and sales functions for the materials business; and a solar power generation system at the Runcorn, UK site completed in August 2024 with annual generation of 346MWh and an annual CO2 emission reduction of 80t. As of 30 September 2025 the group had 1,957 consolidated employees, with manufacturing bases in 6 countries, R&D bases in 3 countries and test centers in 6 countries.

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.