NAGASE & CO., LTD. (8012): FY2025 Results Summary — Record Highs at All Profit Levels

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NAGASE & CO., LTD. posted record-high net sales and profits at all levels in fiscal 2025 (April 1, 2025 to March 31, 2026). Net sales came to 9,727 (100 millions of yen), 103% of the previous year, while operating profit rose to 447 (114%) and profit attributable to owners of the parent reached 331 (130%). Fourth-quarter performance exceeded expectations, due in part to pull-forward demand driven by conditions in the Middle East, and profitability improved through ROIC management, improving the gross profit margin by 1.0 percentage point to 19.3%. The Company also announced its new Medium-Term Management Plan “Walk the Talk 2028” together with these results.

Consolidated Results (Full-Year Actual)

Gross profit increased and profit margins improved, driven by strong business performance and pull-forward demand stemming from conditions in the Middle East. Operating profit increased despite an increase in selling, general and administrative expenses, which increased due to higher retirement benefit expenses related to the amortization of actuarial differences. Profit attributable to owners of the parent increased despite a loss on business withdrawal resulting from the fiscal 2020 decision to withdraw from the thin-film processing business for glass substrates in China (-¥2.7 billion); this increase was due in part to posting a gain on negative goodwill (¥1.7 billion) and a gain on sale of investment securities (¥3.9 billion). Results exceeded the forecast published in November 2025 at every level. The impact from foreign exchange was +¥0.3 billion on gross profit and +¥0.3 billion on operating profit.

Item (100 millions of yen)	FY2024	FY2025	Change	Vs. PY	Forecast (Published in November 2025)	Forecast ratio
Sales	9,449	9,727	278	103%	9,640	101%
Gross profit	1,733	1,876	143	108%	1,830	103%
<GP ratio>	18.3%	19.3%	1.0ppt	―	19.0%	―
SG&A expenses	1,342	1,429	87	107%	1,423	100%
Operating profit	390	447	56	114%	407	110%
<OP ratio>	4.1%	4.6%	0.5ppt	―	4.2%	―
Operating profit (excluding the effect of actuarial gains and losses)	355	450	95	127%	410	110%
Ordinary profit	383	440	57	115%	406	109%
Profit attributable to owners of the parent	255	331	75	130%	315	105%
US$ exchange rate (period average)	@ 152.6	@ 150.7	@ 1.9 Strong yen	―	@ 148.0	―
RMB exchange rate (period average)	@ 21.1	@ 21.2	@ 0.1 Weak yen	―	@ 20.6	―

By region, domestic gross profit rose to 875 from 831 (100 millions of yen) and overseas gross profit rose to 1,001 from 901, taking the overseas gross profit ratio to 53.4% from 52.0%. On the balance sheet, total assets stood at 8,715 as of March 2026 versus 8,081 a year earlier, interest-bearing debt was 1,910 versus 1,753, the shareholders’ equity ratio was 48.8% (down 0.6ppt) and the net D/E ratio was 0.34. Operating cash flow was 478, investing cash flow was (465) reflecting the acquisition of the Nagase Circrea Group and Nagase Diagnostics, financing cash flow was (253), and free cash flow was 12.

Segment Results

Gross profit in the trading company business increased roughly ¥2.2 billion, while the manufacturing business increased roughly ¥12.2 billion, mainly due to a recovery in the Prinova Group manufacturing business and an improved profit margin at Nagase Viita, as well as sales of formulated epoxy resins at Nagase ChemteX. By segment, Life & Healthcare and Electronics & Energy saw growth, while Mobility and Functional Materials experienced a decrease. Among the major manufacturing subsidiaries, Nagase ChemteX recorded sales of 270 and operating profit of 29, Nagase Viita recorded sales of 346 and operating profit of 57, and the Prinova Group recorded sales of 2,142 and operating profit of 69 against 25 in the previous fiscal year.

Segment (100 millions of yen)	Sales FY2025	Sales FY2024	Gross profit FY2025	Gross profit FY2024	Operating profit FY2025	Operating profit FY2024
Functional Materials	1,536	1,537	322	325	93	92
Advanced Materials & Processing	2,066	2,106	275	261	76	66
Electronics & Energy	1,728	1,613	453	400	148	123
Mobility	1,302	1,320	159	165	37	42
Life & Healthcare	3,092	2,870	664	581	98	34

FY2026 Forecast

For fiscal 2026 the Company expects to post record-high sales and profits at all levels. Gross profit is likely to increase, despite a negative rebound following the pull-forward demand in the previous fiscal year, as steady business performance and margin improvement support earnings. Operating profit is likely to increase, despite higher costs from upfront investments for growth and office relocation, as steady business performance and lower retirement benefit expenses support earnings. The full-year earnings forecast was formulated based on the external environment as of the end of March 2026. Retirement benefit expenses due to the amortization of actuarial differences are approximately ¥0.3 billion in expenses in fiscal 2025 and approximately ¥4.0 billion in profit in fiscal 2026.

Item (100 millions of yen)	FY2025 Actual	FY2026 Forecast	Change	Vs. PY
Sales	9,727	10,000	272	103%
Gross profit	1,876	1,980	103	105%
<GP ratio>	19.3%	19.8%	0.5ppt	―
SG&A expenses	1,429	1,530	100	107%
Operating profit	447	450	2	101%
<OP ratio>	4.6%	4.5%	(0.1ppt)	―
Operating profit (excluding the effect of actuarial gains and losses)	450	409	(41)	91%
Ordinary profit	440	450	9	102%
Profit attributable to owners of the parent	331	345	13	104%
US$ exchange rate (period average)	@ 150.7	@ 155.0	@ 4.3 Weak yen	―
RMB exchange rate (period average)	@ 21.2	@ 22.5	@ 1.3 Weak yen	―

From fiscal 2026 the Company will reorganize from five segments to three ― Materials, Electronics and Life Sciences ― to clarify its business portfolio and accelerate decision-making. The projection below is presented on the new segment basis. The allocation method for shared corporate expenses was revised in fiscal 2026 to improve segment performance management; fiscal 2025 results reflect the new method but remain preliminary and subject to change. Operating profit is likely to decline across all segments due to higher upfront investments in growth and costs associated with the office relocation, while gross profit is expected to increase across all segments.

New segment (100 millions of yen)	Metric	FY2025 Actual	FY2026 Forecast	Change	Vs. PY
Materials	Sales	4,905	4,955	49	101%
Materials	Gross profit	757	776	18	102%
Materials	Operating profit	214	196	(18)	91%
Electronics	Sales	1,728	1,750	21	101%
Electronics	Gross profit	453	479	25	106%
Electronics	Operating profit	153	144	(9)	94%
Life Science	Sales	3,092	3,294	202	107%
Life Science	Gross profit	664	724	60	109%
Life Science	Operating profit	86	72	(14)	84%
Corporate & Others	Operating profit	(7)	38	45	―
Total	Sales	9,727	10,000	272	103%
Total	Gross profit	1,876	1,980	103	105%
Total	Operating profit	447	450	2	101%

Shareholder Returns

The Company will execute stable dividend increases over the three years through fiscal 2028, with flexible share buybacks (guideline for flexibility: 30% EPS growth over three years). It plans to pay ¥27 per share for fiscal 2026, consisting of an interim dividend of ¥13 per share and a year-end dividend of ¥14 per share, forecasting a 17th consecutive year of dividend increases. The dividend per share for fiscal 2025 was ¥25.00. A four-for-one stock split was conducted effective April 1, 2026, and per-share dividends are presented on a post-split basis. The fiscal 2025 year-end dividend is to be submitted for approval to the 111th general meeting of shareholders scheduled for June 2026. In fiscal 2025, share buybacks amounted to 230 and dividends paid to 101 (100 millions of yen).

Medium-Term Management Plan “Walk the Talk 2028”

Under the previous plan ACE 2.0, NAGASE achieved both of its KGIs ― a sustainable operating profit of JPY 35 billion and an ROE of 8.0% or higher ― finishing fiscal 2025 with operating profit of ¥44.7 billion and ROE of 8.0%. The new plan “Walk the Talk 2028” is positioned as “Building the Foundation for Exponential Growth,” with the aim of achieving a market capitalization of JPY 1 trillion at the earliest opportunity, and the planning period was revised from the previous five years to two consecutive three-year cycles. Company-wide KGIs are operating profit of JPY 50.0 billion or more and ROE of 9.0% or more, alongside a non-financial target of a 32.7% reduction ratio in Scope 1 and 2 emissions compared to fiscal 2021. Fiscal 2028 segment targets are operating profit of JPY 22.0 billion and EBITDA of JPY 23.5 billion for Materials, operating profit of JPY 17.0 billion and EBITDA of JPY 21.6 billion for Electronics, and operating profit of JPY 11.0 billion and EBITDA of JPY 20.0 billion for Life Sciences. The three core policies are execution of growth strategies, development of human capital, and building resilience.

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.