Zeon Corporation (4205): FY2025 Results Summary — Operating Income Up 24% on Specialty Materials Strength

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Zeon Corporation (TSE: 4205) reported its consolidated results for FY2025 (April 1, 2025 to March 31, 2026) on May 13, 2026. Net sales came to ¥412.0 billion (YoY -2%), while operating income rose to ¥36.4 billion (YoY +24%), ordinary income to ¥40.0 billion (YoY +21%), and net income to ¥36.2 billion (YoY +38%). ROE was 9.9%.

Consolidated Results (Full-Year Actual)

By driver, net sales in the Specialty Materials business rose 2% YoY on higher shipments of optical films and battery materials, while Elastomers sales fell 5% YoY due to selling price declines reflecting lower raw material prices. Operating income increased 28% YoY in Specialty Materials on improved operating rates driven by higher shipments of optical films and battery materials as well as fixed cost reductions, and rose 7% YoY in Elastomers on fixed cost reductions. Ordinary income was further lifted by increased foreign exchange gains toward the fiscal year-end, and net income by a higher gain on sale of investment securities. The company notes that Zeon Korea Co., Ltd. has been included in the scope of consolidation starting from FY2025.

Item (JPY 100m)	FY2024	FY2025	YoY
Net Sales	4,206	4,120	-87
Operating Income	293	364	+71
Ordinary Income	331	400	+70
Net Income	262	362	+100

On the business environment, the average exchange rate for FY2025 was ¥150.2 to the US dollar (YoY -2%) and ¥173.8 to the euro (YoY +6%), while naphtha averaged ¥65,600 per KL (YoY -13%, company estimate) and Asian butadiene US$1,157 per MT (YoY -19%).

Segment Results

For the full year (unit: JPY 100m), Specialty Materials posted net sales of 1,242 (YoY +26) and operating income of 224 (YoY +49), while the Elastomer business posted net sales of 2,237 (YoY -129) and operating income of 117 (YoY +7). Results also exceeded the company’s forecast as of January 30: consolidated operating income of 364 (JPY 100m) came in 54 above the forecast of 310, with Specialty Materials beating its forecast on higher shipments including optical films and fixed cost reductions, and Elastomers on selling price increases reflecting higher raw material prices and fixed cost reductions.

Segment	Metric (JPY 100m)	FY2024	FY2025	YoY
Specialty Materials Biz.	Net Sales	1,216	1,242	+26
Elastomer Business	Net Sales	2,366	2,237	-129
Others/Eliminations, etc.	Net Sales	625	641	+16
Net Sales (consolidated)	Net Sales	4,206	4,120	-87
Specialty Materials Biz.	Operating Income	176	224	+49
Elastomer Business	Operating Income	109	117	+7
Others/Eliminations, etc.	Operating Income	8	23	+15
Operating Income (consolidated)	Operating Income	293	364	+71

Within Specialty Materials, shipments of both COP and optical films remained firm; demand for COP for semiconductor use increased alongside FAB construction in China and Taiwan, while optical-use demand for smartphone lens applications stayed sluggish for the full year. In battery materials, EV demand slowed YoY although shipments recovered QoQ in China and Europe, while shipments for ESS — mainly for AI data centers — and consumer applications remained solid. In Elastomers, synthetic rubber net sales were maintained on firm demand for specialty rubbers and yen depreciation, and the Tokuyama NBR latex facilities were suspended at the end of March, ahead of schedule, achieving a reduction of approximately ¥0.5 billion in fixed costs reflected in FY2025 results.

FY2026 Forecast

For FY2026, Zeon forecasts net sales of ¥405.0 billion (YoY -2%), operating income of ¥38.0 billion (YoY +5%), ordinary income of ¥37.0 billion (YoY ▲8%), and net income of ¥36.0 billion (YoY ▲1%). The forecast is a base case that does not include the impact of a closure of the Strait of Hormuz, and assumes US$=¥150, €=¥175, naphtha at ¥63,000/KL, and Asian butadiene at US$950/MT. By segment, Specialty Materials operating income is forecast at 280 (JPY 100m, +56 vs FY2025) while Elastomer operating income is forecast at 85 (-32). Sensitivity of annual operating income to exchange rates is approximately ¥0.3 billion per ¥1/US$ and approximately ¥0.1 billion per ¥1/€.

Item	FY2026 Forecast	FY2025 (Actual)	YoY
Net Sales	¥405.0 billion	¥412.0 billion	-2%
Operating Income	¥38.0 billion	¥36.4 billion	+5%
Ordinary Income	¥37.0 billion	¥40.0 billion	▲8%
Net Income	¥36.0 billion	¥36.2 billion	▲1%

Shareholder Returns

Based on the policy of a DOE (dividend on equity) of at least 4%, the FY2025 year-end dividend was revised upward by 4 yen, bringing the annual dividend to 76 yen per share. The company also completed a purchase of treasury stock of 10 million shares for ¥10 billion in FY2025, part of a planned ¥40.0 billion share buyback for FY2024–FY2026 (FY2024: ¥20.0B carried out; FY2025: ¥10.0B carried out; FY2026: ¥10.0B planned). For FY2026, the annual dividend is forecast at 79 yen (YoY +3 yen), which would mark the 17th consecutive annual increase since FY2010; the timing of the FY2026 treasury stock purchase will be determined following a thorough review. The FY2026 dividend payout ratio is expected to remain high at 40%, with the total return ratio at 65%, and the most recent dividend yield is 3.68% (based on the closing price on May 11, 2026).

Item	FY2025 (Actual)	FY2026 (Forecast)
Annual dividend per share	76 yen	79 yen (YoY +3 yen)
Purchase of treasury stock	10 million shares / ¥10 billion (completed)	¥10.0B planned; timing to be determined following a thorough review
Dividend policy	DOE of at least 4%	DOE of at least 4%

Growth Investments and Topics

On growth investments, construction of the new COP production plant is progressing with no delays and no change to the completion timing (first half of FY2028). The capacity expansion facility for single-walled carbon nanotubes targets production capacity of more than tenfold from current levels, with operation expected to start by the end of 2028, to address growing battery demand in consumer applications such as EVs, drones, and eVTOLs as well as industrial sectors including AI server BBUs, stationary ESS, and robotics; the project has been certified by METI under its Ensuring Supply Plan for Storage Batteries. A facility for re-extracting high-purity DCPD (dicyclopentadiene) from C5 raffinate feedstock will increase capacity by approximately 20% from current levels, with completion expected in September 2028.

On the balance sheet, total assets stood at 5,482 (JPY 100m, +145 vs the end of FY2024) as of the end of March 2026, with an equity ratio of 68.9% (+1.9) and a D/E ratio of 0.04 (-0.03). The ratio of cross-shareholdings to net assets was 14.1% at the end of FY2025, and the company will continue reducing this ratio to improve capital efficiency, with an FY2026 year-end target of less than 5% of net assets. Zeon announced that its Medium-Term Business Plan would be presented on June 10, 2026.

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.