VALQUA, LTD. (7995): FY2025 Results Summary — Tech-Market Seal Demand Drives 25% Operating Profit Growth

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

VALQUA, LTD. (Ticker: 7995) reported consolidated net sales of 58.56 billion yen and operating profit of 7.10 billion yen for the fiscal year ended March 31, 2026, which the company labels FY3/2026 in its materials (referred to as FY2025 under this site’s naming convention). Net sales declined 2.6% year on year, largely reflecting the divestiture of the silicon wafer reclaim business, while operating profit rose 25.3% as High performance seals for the Tech market drove overall results, even as the High Performance Plastics business recovery was delayed. The company also disclosed that a former employee in its Finance Department had embezzled approximately 220 million yen over more than ten years, recording 65 million yen in related tax expenses in the FY3/2026 consolidated results, with no retrospective correction to past financial statements.

Consolidated Results (FY3/2026 Actual)

Despite lower sales, both sales and profit increased year on year when excluding the impact of consolidated subsidiary restructuring (the sale of the silicon wafer reclaim business and the acquisition of Vulcan Torque Systems). The company achieved its revised full-year forecast on the back of a performance recovery from the second half. Gross profit margin improved to 42.7% from 39.7% a year earlier, and ROE rose to 9.9% from 9.5%.

Item	FY3/2026 (YoY)	FY3/2025	FY3/2024
Net Sales	58.56 (-2.6%)	60.11	61.74
Gross Profit	24.98 (+4.8%)	23.84	25.31
Selling, General and Administrative Expenses	17.88 (-1.6%)	18.17	18.20
Operating Profit	7.10 (+25.3%)	5.67	7.10
Ordinary Profit	7.01 (+16.9%)	6.00	7.40
Profit Attributable to Owners of Parent	5.13 (+9.7%)	4.68	4.91

Unit: billions of yen; figures rounded to the nearest 0.01 billion yen. Impact of the sale of the silicon wafer reclaim business: net sales -2.85, gross profit -0.73, operating profit -0.37 (standalone performance of the business sold). Impact of the acquisition of Vulcan Torque Systems: net sales +1.17, gross profit +0.82, operating profit +0.04 (including 0.12 in goodwill amortization). Impact of business structural reforms: operating profit -0.10, special gains/losses -0.23. Key financial indicators: gross profit margin 42.7% (FY3/2025: 39.7%; FY3/2024: 41.0%), SG&A ratio 30.5% (FY3/2025: 30.2%; FY3/2024: 29.5%), operating profit margin 12.1% (FY3/2025: 9.4%; FY3/2024: 11.5%), ROE 9.9% (FY3/2025: 9.5%; FY3/2024: 10.5%), ROA 6.4% (FY3/2025: 6.1%; FY3/2024: 6.9%), BPS 3,035.13 yen (FY3/2025: 2,869.23 yen; FY3/2024: 2,742.82 yen), EPS 291.16 yen (FY3/2025: 265.80 yen; FY3/2024: 279.45 yen).

Segment Results

Business segments were restated from FY3/2026 following the sale of the silicon wafer reclaim business; products and services previously reported under “Other” (which included that business through FY3/2025) were reclassified under the Seal Products Business, and the historical figures shown are retrospective values under the new standard. In the Seal Products Business, performance in the Tech market remained strong with continued order accumulation, while the Machinery market saw a sales decline on stagnant domestic and overseas capital investment, and the Plant market achieved sales growth despite an off-year for domestic maintenance work. In the High Performance Plastics Products Business, profitability temporarily deteriorated due to new-plant startup costs and structural reform expenses, with fluoropolymer sales to the Tech market slowing and lining-tank sales sluggish before a sharp rebound in the second half.

Segment	Metric	FY3/2026 (YoY)	FY3/2025
Seal Products Business	Net Sales	43.86 (+7.1%)	40.96
Seal Products Business	Segment Profit	6.61 (+35.2%)	4.89
Seal Products Business	Profit Margin	15.1%	11.9%
High Performance Plastics Products Business	Net Sales	14.70 (-10.0%)	16.33
High Performance Plastics Products Business	Segment Profit	0.50 (-12.7%)	0.57
High Performance Plastics Products Business	Profit Margin	3.4%	3.5%

Unit: billions of yen. Seal Products Business sales by industrial market (approximate value, FY3/2026 vs. FY3/2025): Tech market 17.70 (+14.2%) vs. 15.50; Machinery market 13.90 (-3.1%) vs. 14.35; Plant market 12.20 (+10.4%) vs. 11.05. Seal Products sales by region: Japan 29.79 (+4.9%) vs. 28.40; Overseas 14.07 (+12.0%) vs. 12.56 (overseas sales ratio 32.1% vs. 30.7%). High Performance Plastics sales by industrial market: Tech market 6.75 (-19.2%) vs. 8.35; Machinery market 3.75 (flat) vs. 3.75; Plant market 4.15 (flat) vs. 4.15. High Performance Plastics sales by region: Japan 9.76 (-13.9%) vs. 11.34; Overseas 4.94 (-1.1%) vs. 4.99 (overseas sales ratio 33.6% vs. 30.1%).

FY3/2027 Forecast

VALQUA forecasts record-high consolidated results for FY3/2027, driven by the Tech market, with increased sales of High performance seals accelerating growth in the Seal Products Business and improving profitability in the High Performance Plastics Products Business on recovering demand for lining tanks. The forecast includes extraordinary income of 1.4 billion yen from the sale of a site scheduled to be recorded in the first half, and assumes an exchange rate of 1 USD = 155 JPY.

Item	FY3/2027 Forecast (YoY)	FY3/2026 (Actual)
Net Sales	65.0 (+11.0%)	58.56
Gross Profit	28.2 (+12.9%)	24.98
Selling, General and Administrative Expenses	19.2 (+7.4%)	17.88
Operating Profit	9.0 (+26.7%)	7.10
Profit Attributable to Owners of Parent	7.1 (+38.4%)	5.13

Unit: billions of yen. By segment, FY3/2027 forecasts (full year, YoY) are: Seal Products Business net sales 48.0 (+9.4%) and segment profit 7.3 (+10.5%), profit margin 15.2%; High Performance Plastics Products Business net sales 17.0 (+15.7%) and segment profit 1.7 (+243.3%), profit margin 10.0%. Under the NF2026 medium-term business plan, the FY3/2027 forecast falls short of the plan’s targets: net sales 65.0 versus a target of 80.0 (-15.0), operating profit 9.0 versus a target of 12.0 (-3.0), and ROE 12.8% versus a target of 15.3% (-2.5pt). The company attributes the net sales gap to business-related factors of -9.0 (of which -4.0 in Seal Products and -5.0 in High Performance Plastics), M&A/structural reforms of -3.0, and the sale of the Silicon Wafer Reclaim business of -3.0. Strategic investments of 24.5 billion yen over the three-year mid-term plan period, including production capacity expansion, DX promotion and R&D investment, have progressed generally as planned.

Shareholder Returns

VALQUA aims to return profits to shareholders with a target consolidated stockholders’ total return ratio of 50%, calculated as (total dividend of the current fiscal year + treasury stock acquisitions based on the current fiscal year’s results) divided by the current fiscal year’s earnings, while considering the need for funds to advance business strategies and strengthen its foundation. The annual dividend was 150.0 yen in both FY3/2025 and FY3/2026 (75.0 yen interim, 75.0 yen year-end), with a total return ratio of 56.4% and 51.5% respectively. For FY3/2027, the company forecasts an annual dividend of 200.0 yen (85.0 yen interim, and a year-end dividend of 85.0 yen plus a 30.0 yen dividend commemorating the 100th anniversary of the company’s founding), for a forecast total return ratio of 49.6%.

Fiscal Year	Interim Dividend	Year-end Dividend	Annual Dividend	Total Return Ratio
FY3/2025	75.0 yen	75.0 yen	150.0 yen	56.4%
FY3/2026	75.0 yen	75.0 yen	150.0 yen	51.5%
FY3/2027 (Forecast)	85.0 yen	85.0 yen (*) 30.0 yen	200.0 yen (170.00+30.0 yen)	49.6%

(*) The additional 30.0 yen in the FY3/2027 year-end dividend forecast is a dividend commemorating the 100th anniversary of the company’s founding.

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.