Sangetsu Corporation (8130): FY2025 Results Summary — Record Sales and Profit, New Medium-Term Plan Targets JPY25 Billion Operating Profit by FY2029

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Sangetsu Corporation reported record net sales and record profit for FY2025 (the fiscal year ended March 31, 2026), with net sales up 3% year on year to JPY206,441 million, operating profit up 7% to JPY19,408 million, and profit attributable to owners of the parent up 16.7% to JPY14,642 million. The company also announced a new four-year medium-term business plan, “Medium-term Business Plan 2029,” covering the fiscal years ending March 2027 through March 2030, targeting consolidated operating profit of JPY25 billion and ROE of 14% in the final year.

Consolidated Results (Full-Year Actual)

Figures below are as presented in the source presentation, in units of 100 million yen unless otherwise noted. The company notes that the provisional accounting treatment for business combinations was finalized during the fiscal year under review, and accordingly the FY2024 figures shown have been restated to reflect the finalization of this treatment.

Item	FY2025 (Full-Year Results)	FY2024 (Full-Year Results, Restated)	YoY Change	FY2025 Forecast	Achievement Rate
Net Sales	2,064.4	2,003.7	+60.6 (+3.0%)	2,100.0	98.3%
Gross Profit	647.2	623.7	+23.5 (+3.8%)	658.0	98.4%
GP Margin	31.4%	31.1%	–	31.3%	–
SG&A Expenses	453.2	442.3	+10.8 (+2.5%)	468.0	96.8%
Operating Profit	194.0	181.4	+12.6 (+7.0%)	190.0	102.1%
OP Margin	9.4%	9.1%	–	9.0%	–
Ordinary Profit	201.5	185.7	+15.8 (+8.5%)	195.0	103.3%
Profit Attributable to Owners of the Parent	146.4	125.5	+20.9 (+16.7%)	130.0	112.6%

Management attributed the year-on-year increase in profit to the positive effect of a price revision implemented in December of the year before last, improvement of the product portfolio driven by growth in strategic products, and improved performance at group companies including overseas subsidiaries. This was achieved despite shipment restrictions on some flooring materials caused by a fire accident at a key supplier and continued weak demand in the company’s main Japanese market. Profit attributable to owners of the parent also included an extraordinary profit of approximately JPY800 million, comprising subsidy income related to past employment retention at a U.S. subsidiary and a gain from the termination of a retirement benefit plan in North America.

Segment Results

The company reports results in three segments: Domestic Interior, Domestic Exterior, and Overseas. In the mainstay Domestic Interior segment, net sales were roughly flat year on year while operating profit rose on the strengthening of solution-proposal functions and lower SG&A expenses. Within Domestic Interior, net sales of the Wallcoverings and Fabrics units increased, while the Flooring Materials unit declined due to the supplier fire-related supply restrictions. The Domestic Exterior segment exceeded its plan on higher sales prices and sales expansion in the Tokai and Tokyo metropolitan areas. In the Overseas segment, operating profit improved by nearly JPY0.8 billion year on year, which fell short of the break-even point; North America continued to improve profitability, having achieved an improvement in operating profit of nearly JPY2.5 billion over the past four years compared to the lowest level in the fiscal year ended March 2022, and Southeast Asia returned to profitability for the first time, while China and Hong Kong remained loss-making (though the deficit narrowed).

Segment / Unit	Metric	FY2025 (Full-Year)	FY2024 (Full-Year)	YoY Change	FY2025 Forecast	Achievement Rate
Domestic Interior	Net Sales	1,641.0	1,639.8	+1.2 (+0.1%)	1,660.0	98.9%
— Wallcoverings Unit	Net Sales	799.4	786.4	+13.0 (+1.7%)	–	–
— Flooring Materials Unit	Net Sales	556.1	573.7	-17.6 (-3.1%)	–	–
— Fabrics Unit	Net Sales	101.2	96.0	+5.1 (+5.4%)	–	–
— Construction and Others	Net Sales	184.1	183.5	+0.6 (+0.3%)	–	–
Domestic Interior	Operating Profit	193.3	189.4	+3.9 (+2.1%)	188.5	102.6%
Domestic Exterior	Net Sales	73.1	66.1	+6.9 (+10.6%)	72.5	100.8%
Domestic Exterior	Operating Profit	1.1	0.1	+1.0 (+586.7%)	0.5	236.3%
Overseas	Net Sales	350.2	297.9	+52.3 (+17.6%)	367.5	95.3%
Overseas	Operating Profit	-0.4	-8.2	+7.7 (-)	1.0	–
Consolidated	Net Sales	2,064.4	2,003.7	+60.6 (+3.0%)	2,100.0	98.3%
Consolidated	Operating Profit	194.0	181.4	+12.6 (+7.0%)	190.0	102.1%

FY2026 Forecast

For FY2026 (the fiscal year ending March 31, 2027), Sangetsu forecasts net sales to increase by 3.2% year on year to JPY213 billion, while operating profit is projected to decrease to JPY19 billion. Management cited the near-total elimination of supply restrictions on flooring materials related to the earlier supplier fire and growth of the overseas business as positive factors, offset by increases in raw material and logistics costs, higher SG&A expenses including personnel costs, and growth-strategy investments. The company stated that in April of this year it announced a planned price revision of 18% to 30% for July of this year, but that the effect of this revision, together with potential cost impacts from the situation in the Middle East, has not been factored into the current forecast, as these could not be reasonably quantified at this time.

Item	FY2025 H1 (Results)	FY2025 H2 (Results)	FY2025 Full-Year (Results)	FY2026 Full-Year (Forecast)	YoY Change
Net Sales	988.9	1,075.4	2,064.4	2,130.0	+65.5 (+3.2%)
Gross Profit	306.2	341.0	647.2	663.0	+15.7 (+2.4%)
GP Margin	31.0%	31.7%	31.4%	31.1%	–
SG&A Expenses	224.3	228.8	453.2	473.0	+19.7 (+4.4%)
Operating Profit	81.8	112.2	194.0	190.0	-4.0 (-2.1%)
OP Margin	8.3%	10.4%	9.4%	8.9%	–
Ordinary Profit	85.2	116.2	201.5	192.0	-9.5 (-4.7%)
Profit Attributable to Owners of the Parent	63.1	83.2	146.4	135.0	-11.4 (-7.8%)

Shareholder Returns

The annual dividend for FY2025 is planned at JPY155 per share, which the company describes as its 12th consecutive year of dividend increases. For FY2026, in light of the extremely uncertain situation in the Middle East, Sangetsu currently forecasts a total dividend of JPY155 per share including interim and year-end, the same as the previous fiscal year, and has decided to leave the dividend forecast unchanged at this early stage. Management stated there is no change to its basic stance of emphasizing shareholder returns. Under the new medium-term business plan, the company’s shareholder return policy targets a minimum annual dividend of JPY155 per share and a dividend payout ratio of 60% or more, together with flexible consideration of share buybacks depending on market conditions, capital efficiency, and growth investments.

Fiscal Year	Interim Dividend (yen)	Year-End Dividend (yen)	Annual Dividend per Share (yen)
FY2023	–	–	140.0
FY2024	–	–	150.0
FY2025 (Plan)	77.5	77.5	155.0
FY2026 (Forecast)	77.5	77.5	155.0

Medium-Term Plan / Topics

Sangetsu announced “Medium-term Business Plan 2029,” a new four-year plan running from the fiscal year ending March 2027 to the fiscal year ending March 2030, aligned with the final four years of the company’s long-term vision “DESIGN 2030.” Under the slogan “Transformation, Challenge, and the Driving of Innovation,” the plan centers on returning to the company’s core strength of “total interior,” with six basic policies including strengthening the interior business, nurturing the space solutions and exterior businesses, growing the overseas business, exploring next-generation businesses, and strengthening human and digital capital. Management lowered its operating profit target from the original JPY27 billion to JPY25 billion, citing recent changes in the business environment and the characteristics, potential, and challenges of each business. The company also plans to expand overseas net sales from JPY35 billion to JPY54.2 billion and overseas operating profit from zero to JPY3 billion over the plan period. As with the FY2026 forecast, the medium-term targets do not factor in potential cost impacts from the situation in the Middle East or the planned price revision.

Metric	FY2025 (Results)	FY2029 (Plan)
Net Sales (billion yen)	206.4	250.0
Operating Profit (billion yen)	19.4	25.0
Profit Attributable to Owners of the Parent (billion yen)	14.6	17.0
ROE	12.5%	14.0%
ROIC	13.7%	11.0%

Segment (billion yen)	Metric	FY2025 (Results)	FY2029 (Plan)
Domestic Interior	Net Sales	164.1	188.0
Domestic Interior	Operating Profit	19.3	21.5
Domestic Exterior	Net Sales	7.3	7.8
Domestic Exterior	Operating Profit	0.1	0.5
Overseas	Net Sales	35.0	54.2
Overseas	Operating Profit	-0.04	3.0
Total	Net Sales	206.4	250.0
Total	Operating Profit	19.4	25.0

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.