DIC Corporation (4631): FY2025 Results Summary — Operating Income Up 17.2% as Color & Display Returns to the Black

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DIC Corporation (4631, Tokyo Stock Exchange) announced its consolidated financial results for fiscal year 2025 (full term ended December 31, 2025) in February 2026. Net sales declined 1.8% year on year, to ¥1,052.2 billion, owing to falling shipments of mass-market consumer-adjacent products such as packaging inks, pigments for coatings and pigments for plastics. Operating income nonetheless advanced 17.2%, to ¥52.2 billion, on firm shipments of high-value-added products, ongoing price revisions that emphasized spreads, and improved profitability in the Color & Display segment. Net income attributable to owners of the parent surged 51.8%, to ¥32.4 billion, bolstered by an extraordinary gain of ¥6.9 billion from the sale of works of art. The company also announced a new policy on shareholder returns, setting a total payout ratio of 40% or higher and a minimum limit for annual dividends of ¥120 per share.

Consolidated Results (Full-Year Actual)

For fiscal year 2025, net sales fell ¥18.9 billion (down 1.8%, or 1.7% on a local currency basis), to ¥1,052.2 billion. Operating income rose ¥7.7 billion (up 17.2%, or 17.8% on a local currency basis), to ¥52.2 billion, lifting the operating margin from 4.2% to 5.0%. Ordinary income increased 16.7%, to ¥44.2 billion. Extraordinary income of ¥14.7 billion included the ¥6.9 billion gain on the sale of works of art and a ¥4.8 billion gain on sales of shares and investments in capital of subsidiaries and affiliates, while extraordinary losses narrowed to ¥7.3 billion. As a result, net income attributable to owners of the parent climbed ¥11.0 billion, to ¥32.4 billion, and EBITDA grew 14.2%, to ¥109.3 billion. Operating income, ordinary income and net income attributable to owners of the parent all exceeded the previous (November 2025) forecasts.

Item (Billion yen)	FY2025	FY2024	Change	% Change
Net sales	1,052.2	1,071.1	-18.9	-1.8%
Operating income	52.2	44.5	7.7	+17.2%
Operating margin	5.0%	4.2%	+0.8pt	–
Ordinary income	44.2	37.9	6.3	+16.7%
Net income attributable to owners of the parent	32.4	21.3	11.0	+51.8%
EBITDA	109.3	95.7	13.6	+14.2%

On the balance sheet, robust earnings and the sale of assets generated free cash flow of ¥52.4 billion, which contributed to a significant reduction in interest-bearing debt. Net interest-bearing debt decreased ¥33.1 billion, to ¥389.4 billion, and the net D/E ratio improved from 1.05 times to 0.83 times. The equity ratio rose from 32.7% to 37.0%, ROE improved from 5.6% to 7.4%, and ROIC improved from 3.8% to 4.4%.

Segment Results

In the Packaging & Graphic segment, net sales declined 1.9%, to ¥549.7 billion, and operating income edged down 1.7%, to ¥31.1 billion, although operating income rose 1.6% on a local currency basis. In Japan, sales of jet inks were firm, but shipments of packaging inks and polystyrene flagged as higher consumer prices prompted buying restraint. In the Americas and Europe, operating income increased on a local currency basis thanks to sales price adjustments, including tariff surcharges, but declined after translation owing to the depreciation of emerging market currencies.

The Color & Display segment returned to the black: operating income improved ¥5.3 billion, from a ¥(0.3) billion loss in fiscal year 2024 to income of ¥5.0 billion, bolstered by tariff surcharges, sales price revisions aimed at improving margins, and ongoing structural reforms in the pigments business, which underpinned a return to profitability overseas. Segment net sales fell 3.7%, to ¥247.5 billion, partly reflecting withdrawal from the liquid crystal (LC) materials business effective December 2024. In the Functional Products segment, net sales declined 1.7%, to ¥290.9 billion, but operating income rose 7.9%, to ¥23.1 billion, helped by an improved product mix; shipments of high-value-added products for use in electronics equipment were strong. The Chemitronics Business Division, accounted for in this segment, posted net sales of ¥65.3 billion (up 7.0%) and operating income of ¥7.8 billion (up 3.2%), with epoxy resins used in generative AI servers, computers and smartphones performing strongly.

Segment (Billion yen)	Net sales FY2025	Net sales FY2024	Operating income FY2025	Operating income FY2024
Packaging & Graphic	549.7	560.1	31.1	31.6
Color & Display	247.5	257.0	5.0	(0.3)
Functional Products	290.9	296.0	23.1	21.4
Others, Corporate and eliminations	(35.8)	(41.9)	(7.0)	(8.2)
Total	1,052.2	1,071.1	52.2	44.5

FY2026 Forecast

For fiscal year 2026, DIC forecasts net sales of ¥1,100.0 billion (up 4.5%) and operating income of ¥56.0 billion (up 7.3%). Efforts to capitalize on a recovery in demand overseas, together with expanded sales of high-value-added products, are expected to yield increases in net sales and operating income, and ongoing structural reforms in the Color & Display segment are anticipated to further restore profitability. The company notes that, thanks to two years of foundation building, record-high operating income is anticipated in fiscal year 2026. Net income attributable to owners of the parent is forecast at ¥33.0 billion (up 2.0%); the forecast reflects the absence of the extraordinary income from the sale of works of art recorded in fiscal year 2025. By segment, operating income is forecast at ¥30.0 billion for Packaging & Graphic, ¥8.5 billion for Color & Display (up 70.3%) and ¥24.5 billion for Functional Products. Forecasts assume exchange rates of ¥150.00 to the U.S. dollar and ¥168.00 to the euro.

Item (Billion yen)	FY2026 Forecast	FY2025 (Actual)	% Change
Net sales	1,100.0	1,052.2	+4.5%
Operating income	56.0	52.2	+7.3%
Ordinary income	48.0	44.2	+8.5%
Net income attributable to owners of the parent	33.0	32.4	+2.0%
EPS (Yen)	348.54	341.71	–
EBITDA	111.0	109.3	+1.6%

Shareholder Returns

DIC announced a new policy on shareholder returns. Maintaining an emphasis on stable shareholder returns, a minimum level has been set for annual dividends of ¥120 per share, which is higher than the average for ordinary dividends since 2019, and the total payout ratio was set at 40% or higher to bolster returns to shareholders in line with income growth. While shareholder returns will continue to center on dividends, share buybacks will also be used, depending on business performance and financial conditions. For fiscal year 2025, annual dividends per share comprised an ordinary dividend of ¥120.00 and a special dividend of ¥80.00, for a total of ¥200.00, with a payout ratio of 58.5%. For fiscal year 2026, in line with the new policy, the ordinary dividend will be increased by ¥20, to ¥140.00 per share (interim dividend forecast: ¥70.00), for a projected payout ratio of 40.2%.

Item	FY2024	FY2025	FY2026 (Forecast)
Ordinary dividend per share (Yen)	100.00	120.00	140.00
Special dividend per share (Yen)	0.00	80.00	0.00

Medium-Term Plan / Topics

Under DIC Vision 2030, the company positions fiscal year 2026 as part of Phase 2 and, in line with its target for ROE of 10% or higher by fiscal year 2030, will continue to emphasize improving capital profitability. Segment ROIC in fiscal year 2025 was 7.2% for Packaging & Graphic, 1.3% for Color & Display and 7.9% for Functional Products, with measures including a shift toward higher-value-added products, structural reforms and strategic pricing. DIC is also reducing cross-shareholdings, with the goal of bringing them to 4% or less of net assets (based on market capitalization) by fiscal year 2026; in fiscal year 2025 the number of companies in which shares are cross-held was reduced by 15, and the target is expected to be achieved by the end of fiscal year 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.