THK (6481): FY2025 Results Summary — Revenue Up 7.9% on Continuing Operations, ¥81.6 Billion Loss on Automotive Business Transfer; FY2026 Operating Income Forecast ¥26.0 Billion

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

Note: THK’s fiscal year ends on December 31. The fiscal year ended December 31, 2025 is labeled “Fiscal 2025” (also “FY2025” or “2025/12”) in the company’s materials, which matches this site’s FY2025 classification; the labels used in the company’s materials are retained in the body, tables, and segment data below.

THK CO., LTD. (6481), a manufacturer of LM Guides and other machine component parts, released its “Supplementary Materials For Fiscal 2025 Financial Results” dated February 12th 2026. For Fiscal 2025, consolidated revenue from continuing operations was ¥240.4 billion (+7.9% YoY) and consolidated operating income from continuing operations was ¥14.4 billion (-9.3% YoY); both exceeded the revised plan set in November 2025 (before adjustment). A loss on business liquidation of ¥81.6 billion was recorded in relation to the transfers of shares and assignment of receivables associated with the automotive & transportation business, and profit attributable to owners of the parent was -69,891 million yen. For 2026/12, THK forecasts revenue of 260,000 million yen (+8.1%), operating income of 26,000 million yen (+80.1%) and profit attributable to owners of the parent of 21,500 million yen, with ROE of 8.2%.

Consolidated Results (Fiscal 2025)

According to the presentation, the outlook of the global economy remained uncertain amid concerns such as increasing geopolitical risks including the situation in Ukraine and in the Middle East, continuing inflation, and U.S. tariff policy. Despite this situation, revenue increased in the industrial machinery business due to the recovery in demand mainly in U.S. and China, and consolidated revenue (continuing operations) was ¥240.4 billion (+7.9% YoY). Although revenue increased in the industrial machinery business, operating income decreased to ¥14.4 billion (-9.3% YoY) due to various unfavorable factors, including a deterioration in the sales mix, increased U.S. import tariffs, share of loss of SAMICK THK (an equity method affiliate), costs associated with structural reforms being implemented under the new management policy, and a hike in various costs. On the Financial Forecast (Consolidated) slide, revenue for 2025/12 was 240,444 million yen (2024/12: 222,737 million yen), operating income was 14,436 million yen (15,923 million yen), income before income taxes was 15,746 million yen (-11.9%; 17,870 million yen), profit attributable to owners of the parent was -69,891 million yen (10,439 million yen), and ROE was -21.7% (2.8%).

Item (Millions of Yen)	2025/12	2024/12	Y/Y
Revenue	240,444	222,737	+7.9%
Operating Income	14,436	15,923	-9.3%
Income before income taxes	15,746	17,870	-11.9%
Profit Attributable to Owners of the Parent	-69,891	10,439	–
ROE	-21.7%	2.8%	–

The presentation also shows operating income change factors for the Industrial Machinery business on a “before adjustment” basis (calculated by subtracting the combined figures of the Transportation & Automotive businesses, THK RHYTHM and THK RHYTHM AUTOMOTIVE, from the consolidated results). On this basis, revenue was 233.3 billion yen in FY25 (216.6 billion yen in FY24) and operating income was 15.1 billion yen (16.8 billion yen), a change of -1.7 billions of yen, with the effect due to increased sales (+9.6) offset by the change in variable cost ratio (-7.0), other income and other expense (-3.1), increase in fixed cost (-1.0) and foreign exchange rate difference (-0.2). After an adjustment amount of -0.7, FY2025 operating income on a continuing operations basis was 14.4 billion yen on revenue of 240.4 billion yen.

On the balance sheet, total assets were 472,992 millions of yen, down ¥94,426 million from the previous period. Current assets were 284,367 (down ¥42,436 million), with cash and cash in account down 28,285 (cash flows from operating activities 42,748, investing activities (19,798), financing activities (42,055), and foreign currency translation adjustments on cash and cash equivalents 1,346), trade and other receivables down 17,945, inventories down 26,483, and assets held for sale up 36,126. Non-current assets were 188,624 (down ¥51,989 million), with property, plant and equipment down 40,881 and goodwill and intangible assets down 6,010. Liabilities were 207,242 (up ¥29,619 million), including current liabilities up 19,439 (trade and other payables down 15,454; bonds and borrowings up 9,834; liabilities directly associated with assets held for sale up 28,377) and non-current liabilities up 10,180. Equity was 265,749 (down ¥124,045 million), reflecting profit attributable to owners of the parent of (69,891), dividends paid of 29,359, acquisition and cancellation of treasury stock of 35,982, and other components of equity associated with a disposal group held for sale up 14,142 (all in millions of yen).

Sales by Region and Industry

The presentation shows regional sales (continuing operations; geographic sales is based on where our customers are located) for 2025/12 of 240,444 in total, compared with 222,737 for 2024/12. By region, Japan was 96,415 (96,811 in 2024/12; Y/Y -0.4%), the Americas 27,168 (25,861; +5.1%), Europe 21,611 (21,107; +2.4%), China 71,188 (57,429; +24.0%), and Asia and other 24,059 (21,527; +11.8%). Growth rates by industry, based on the figures in local currency from January to December, were: Japan — machine tools +8.4%, general machinery +20.5%, electronics -17.7%; the Americas — machine tools -1.0%, general machinery +7.6%, electronics -5.0%; Europe — machine tools -11.0%, general machinery -8.8%, electronics +2.2%; China — machine tools +26.8%, general machinery +24.9%, electronics +30.5%; Asia and other — Taiwan +40.5%, Singapore +36.7%, India +13.7%. Exchange rates for 2025/12 were 1US$ 149.61, 1EUR 169.00 and 1CNY 20.82 (2024/12: 151.48, 163.81 and 21.04).

Region	2025/12	2024/12	Y/Y
Japan	96,415	96,811	-0.4%
The Americas	27,168	25,861	+5.1%
Europe	21,611	21,107	+2.4%
China	71,188	57,429	+24.0 %
Asia and other	24,059	21,527	+11.8%
Total (Continuing operations)	240,444	222,737	+7.9%

Fiscal 2026 Forecast

For 2026/12, THK forecasts consolidated revenue of 260,000 million yen (Y/Y +8.1%), operating income of 26,000 million yen (+80.1%), income before income taxes of 26,500 million yen (+68.3%), profit attributable to owners of the parent of 21,500 million yen, and ROE of 8.2%. The supplement to the FY2026 plan shows revenue of 260.0 billion yen (FY25: 240.4; +19.6) and operating income of 26.0 billion yen (FY25: 14.4; +11.6), with the key point being an increase in profit mainly due to the quantity effect associated with higher revenue. The exchange rate impact on revenue is approx. +3.0 billion yen. Major special factors included in the profit increase amount are elimination of unrealized profit +0.6, impact of exchange rates +1.5, resolution of equity-method investment losses (FY25) +1.6, and resolution of prior year financial statement adjustments (FY25) for the subsidiary in India +0.3 (billions of yen). On an unconsolidated basis, THK forecasts net sales of 158,000 million yen (+8.9%; Japan 95,000, +10.4%), operating income of 7,100 million yen (+67.6%), ordinary income of 14,900 million yen (-67.0%) and net income of 13,400 million yen, compared with 2025/12 unconsolidated net sales of 145,070, operating income of 4,235, ordinary income of 45,103 and net income of -24,701 million yen.

Item (Millions of Yen)	2026/12 (Forecast)	2025/12	Y/Y
Revenue	260,000	240,444	+8.1%
Operating Income	26,000	14,436	+80.1%
Income before income taxes	26,500	15,746	+68.3%
Profit Attributable to Owners of the Parent	21,500	-69,891	–
ROE	8.2%	-21.7%	–

Shareholder Returns

On the “Path to ‘ROE of Over 10%'” slide, THK states its dividend policy as DOE 8% + flexible acquisition of treasury shares, and says it will provide appropriate shareholder returns in light of equity capital. Under its capital policy (streamlining balance sheets), the company will reduce cash and bank deposits to net neutral level promptly and tolerate net debt levels of 1-2x EBITDA (in the mid- to long-term), and has set the level of required equity capital at around ¥300.0 billion for the time being, compared with equity capital of ¥383.6 billion in FY2024. During Fiscal 2025, dividends paid were 29,359 million yen and acquisition and cancellation of treasury stock amounted to 35,982 million yen, according to the balance sheet slide. Specific dividend per share amounts for Fiscal 2025 and the Fiscal 2026 forecast are not stated in the presentation and cannot be confirmed from the materials.

New Management Policy: “Early Realization of ROE of Over 10%”

THK’s new management policy targets ROE of over 10%, with FY2024 actual ROE of 2.8%. The path shown in the presentation moves from the current/structural reform phase (FY2025–26) to a growth stage (FY2027–29) and a stable growth stage (FY2030–). The company aims to achieve operating income of ¥40.0 billion in FY2027–29, which is required for ROE of over 10% (operating income required to achieve net profit of ¥30.0 billion), through self-help reforms, with potential for further ROE improvement through M&A and other additional factors; operating income was ¥17.3 billion in FY2024 and ¥14.4 billion in FY2025 as shown on the slide. The five pillars are: (1) “Selection and Concentration” in the automotive & transportation business (revision of business without sanctuary); (2) “Structural Reform” of the industry machinery business, targeting over ¥20.0 billion through establishment of a stable, highly profitable structure; (3) increased profit in the growth areas (+α) through investments in growth and M&A activities; (4) capital policy (streamlining balance sheets); and (5) evolution of corporate governance (deepen the monitoring system). THK completed “Selection and Concentration” with the decision to transfer the automotive & transportation business, having concluded that transferring the business was the best option after thoroughly examining the anticipated cost of capital and the return on invested capital (ROIC); it has entered into a transfer agreement for all the automotive & transportation business, including TRA Holdings, CO., LTD., which has THK RHYTHM CO., LTD. as its group company.

For the structural reform of the industry machinery business, the company has identified and implemented 78 measures in total (77% in progress, 23% policies under review, number-based), with an estimated impact of +over ¥20.0 billion. Measures for variable costs are to accumulate ¥14.4 billion and measures for fixed costs ¥6.0 billion. Expected effects for FY2026 (compared to FY2024) are fixed costs ¥0.4 billion and variable costs ¥3.9 billion. Recognizing the risk of falling short of targets, THK has decided to implement additional measures in 2026, with expected recovery effects of accelerating further workforce optimization ¥2.1 billion, indirect costs reduction WG ¥1.5 billion, and further reduction of logistics costs ¥0.2 billion. In the growth areas, THK plans in 2026 to launch more than twice as many products as the previous year in the machine component parts business, and is expanding the FA solution business combining machine component parts (mechanical), mechatronics modules and IoT・AI (OMNIedge). On governance, 45.5% (5 out of 11) of directors are outside directors and 18.1% (2 out of 11) are female directors; the Audit & Supervisory Committee has a 100% ratio of outside directors, and the Nomination Advisory Committee and Compensation Advisory Committee each 66.7%, with the board meeting 16 times per year and a director attendance rate of 100% (all).

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.