Sodick (6143): FY2025 Results Summary — Structural Reforms Drive an 89.4% Jump in Operating Profit

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

Sodick Co., Ltd. (TSE Prime, 6143) reported FY2025 (January–December 2025) net sales of ¥80,572 million, up 9.4% year on year, and operating profit of ¥4,224 million, up 89.4%. The company states that net sales increased due to higher unit sales of EDMs (electrical discharge machines), while progress in structural reforms lifted the gross profit margin by 2.3pt to 35.0%. Ordinary profit rose 44.2% to ¥5,231 million and net profit rose 9.7% to ¥4,514 million, both a significant increase compared with the initial forecast disclosed on February 13, 2025. Alongside the results, Sodick set out a rebuilt medium-term management plan targeting ¥100 billion in net sales and ¥10 billion in operating profit in FY2029.

Consolidated Results (Full-Year Actual)

The company attributes the increase in gross profit to higher net sales combined with profitability gains from structural reforms. SG&A expenses rose year on year on higher bonus payments and the consolidation of AltForm S.r.l. (renamed from Prima Additive S.r.l. in December 2025) together with costs associated with its subsidiary conversion; even so, operating profit increased by approximately ¥2.0 billion. Ordinary profit and net profit were supported by ¥0.3 billion in foreign exchange gains from yen depreciation and ¥0.6 billion in gains on the sale of policy-holding stocks. Operating cash flow was ¥7,147 million, investing cash flow was -¥3,955 million and financing cash flow was -¥2,484 million, leaving cash and cash equivalents of ¥44,983 million at the end of the period. Total assets stood at ¥155,695 million, with an equity ratio of 58.1% and a D/E ratio of 0.54 times.

(¥ millions)	FY2024 Full-year	FY2025 Full-year	YoY	FY2025 Forecast*
Net sales	73,668	80,572	9.4%	77,400
Gross profit	24,068	28,207	17.2%	–
GP margin	32.7%	35.0%	2.3pt	–
SG&A expenses	21,837	23,982	9.8%	–
Operating profit	2,231	4,224	89.4%	4,300
OP margin	3.0%	5.2%	2.2pt	5.6%
Ordinary profit	3,627	5,231	44.2%	3,800
Net profit	4,115	4,514	9.7%	2,900
ROE	5.1%	5.2%	0.1pt	3.4%
Capital investment	2,759	2,388	-13.4%	3,600
Depreciation	3,584	3,435	-4.2%	3,400
R&D expenses	3,035	3,464	14.1%	3,100
USD/JPY AR	151.69	149.61	2.08 up	150.00
USD/JPY CR	158.18	156.56	1.62 up	150.00

*Forecast disclosed on February 13, 2025. Please refer to page 45 of the presentation for other major currency exchange rates.

Segment Results

In the Machine tool segment, Sodick reports that demand in Greater China for smartphones, optical connectors for data centers, electronic components and semiconductor-related business remained strong, while automotive-related business was sluggish in Japan, the Americas and Europe; segment profit increased, driven by continued profitability improvements from production consolidation in China and higher factory utilization. Industrial machinery net sales increased on solid demand for optical connectors for data centers and contact lens–related products, but segment profit declined due to increased R&D and labor costs. Food machinery net sales declined as sales of aseptically-packaged cooked rice production systems fell on changes in the competitive environment in Greater China, while segment profit increased, supported by sales of high-margin products. Other segments returned to profitability, driven by cost reductions and improved operational stability in the precision dies and mold operations.

Segment (¥ millions)	Metric	FY2024 Full-year	FY2025 Full-year	YoY
Machine tool segment	Net sales	51,355	58,332	13.6%
Machine tool segment	Segment profit	3,447	5,465	58.5%
Machine tool segment	Segment profit margin	6.7%	9.4%	2.7pt
Industrial machinery segment	Net sales	9,560	9,730	1.8%
Industrial machinery segment	Segment profit	823	518	-37.0%
Industrial machinery segment	Segment profit margin	8.6%	5.3%	-3.3pt
Food machinery segment	Net sales	7,695	6,952	-9.7%
Food machinery segment	Segment profit	969	981	1.2%
Food machinery segment	Segment profit margin	12.6%	14.1%	1.5pt
Other segments	Net sales	5,057	5,557	9.9%
Other segments	Segment profit	-323	428	–
Other segments	Segment profit margin	-6.4%	7.7%	–
Consolidated	Total segment profit	4,916	7,395	50.4%
Consolidated	Adjustments	-2,685	-3,170	–
Consolidated	Operating profit	2,231	4,224	89.4%

EDM Orders and Regional Sales

EDM orders totalled 3,211 units in FY2025 against 2,479 units in FY2024, with Greater China rising to 2,062 units from 1,433 units. EDM shipments were 2,720 units versus 2,412 units. By region, net sales in Greater China were ¥27,156 million, or 33.7% of the consolidated total, followed by Japan at ¥23,157 million (28.7%), the Americas at ¥12,994 million (16.1%), Asia at ¥9,943 million (12.4%) and Europe at ¥7,319 million (9.1%).

Number of EDM orders (unit)	FY2024 Total	FY2025 Total
Americas	270	311
Europe	228	276
Greater China	1,433	2,062
Other Asian Countries	290	307
Japan	258	255
Total	2,479	3,211

FY2026 Forecast

For FY2026, Sodick projects net sales of ¥88.5 billion (up 9.8% YoY) due to an increase in core businesses, and operating profit of ¥5.5 billion (up 30.2% YoY), raising the operating profit margin to 6.2%. Gross profit is projected to increase due to improved profitability through increased production volume, and net profit is also expected to grow. Assumed exchange rates are ¥155.00/USD for both the average rate and the closing rate. The company also notes that, from FY2026, resources previously allocated to external customers in the linear motor business have been refocused on in-house production, and the linear motor business will move from Other segments into the Machine tool segment in its reportable segment disclosure; no changes were made to the Industrial machinery and Food machinery segments.

(¥ millions)	FY2025 Full-year	FY2026 Full-year Forecast	YoY
Net sales	80,572	88,500	9.8%
Operating profit	4,224	5,500	30.2%
OP margin	5.2%	6.2%	1.0pt
Ordinary profit	5,231	6,000	14.7%
Net profit	4,514	5,100	13.0%
ROE	5.2%	5.6%	0.5pt
Capital investment	2,388	6,000	151.2%
Depreciation	3,435	3,400	-1.0%
R&D expenses	3,464	4,000	15.5%
Machine tool segment – Net sales	58,332	64,700	10.9%
Machine tool segment – Segment profit	5,465	6,300	15.3%
Industrial machinery segment – Net sales	9,730	10,500	7.9%
Industrial machinery segment – Segment profit	518	800	54.1%
Food machinery segment – Net sales	6,952	7,700	10.8%
Food machinery segment – Segment profit	981	1,000	1.9%
Other segments – Net sales	5,557	5,600	0.8%
Other segments – Segment profit	428	400	-6.7%

Shareholder Returns

Dividends per share for FY2025 were ¥29 (interim ¥14, year-end ¥15), the same as in FY2024 and FY2023, with DOE of 2.2% and a total return ratio of 33%. Sodick is revising its shareholder return policy from a previous policy of dividend on equity (DOE) of 2% or more and a total return ratio of 40% or more to a new policy of progressive dividends and a total return ratio of 40% or more, with a total shareholder return ratio of 70% or more for FY2026–FY2029. For FY2026 the company plans dividends per share of ¥35, comprising an interim dividend of ¥14, a commemorative interim dividend of ¥6 and a year-end dividend of ¥15, with forecast DOE of 2.5%; it intends to maintain a progressive dividend with a base dividend of ¥35 per share and to carry out share repurchases totaling ¥10 billion. Separately, Sodick decided to repurchase up to 1,000,000 common shares (1.97% of the total number of shares issued, excluding treasury stock) for up to ¥1,000,000,000 between February 16, 2026 and April 15, 2026, through purchases from the open market on the Tokyo Stock Exchange; the treasury shares acquired will be utilized flexibly for future share-based purposes.

Item	FY2023	FY2024	FY2025	FY2026 (plan)
Dividends per share (¥)	29	29	29	35
Interim (¥)	14	14	14	14
Commemorative, interim (¥)	–	–	–	6
Year-end (¥)	15	15	15	15
DOE (%)	2.2	2.3	2.2	2.5 (FCST)
Total return ratio (%)	-*	40%	33%	–
Purchase of treasury shares (¥ millions)	1,201	176	–	–

*Indicated by a hyphen because the total return ratio was calculated to be negative due to the net loss for fiscal 2023.

Medium-Term Plan / Topics

Sodick is replacing its previous three-year rolling plan with a plan that clarifies the desired position in four years (FY2029) and shifts the focus from net sales and operating profit as the main indicators to indicators contributing to enhancing corporate value, such as ROE and PBR. Key targets are net sales of ¥100 billion and operating profit of ¥10 billion in FY2029, ¥20 billion in strategic investments (total over four years), and ¥50 billion in operating cash flow (total over four years, net of R&D). Specific action plans are to be disclosed from May 2026 onward.

Item	FY2025 Actual	FY2026 Forecast	FY2029 Target	FY2025 ➜ FY2029
Net sales	¥80.5 billion	¥88.5 billion	¥100 billion	+5.5%/per year
Operating profit	¥4.2 billion	¥5.5 billion	¥10 billion	+24.0%/per year
OP margin	5.2%	6.2%	10.0%	+4.8pt
PBR	0.5x	–	1.0x	+0.5x
ROE	5.2%	5.6%	8.0%	+2.8pt
EPS	¥89	¥100	¥130	+¥41

Building on the July 18, 2025 disclosure, Sodick launched a joint project with Advantage Partners (AP) to drive a business model transformation through global expansion, solution-oriented offerings and higher value added. The fundraising from AP comprises convertible bonds with share subscription rights of approximately ¥8.0 billion and share subscription rights of approximately ¥2.0 billion, both issued on August 4, 2025, at a conversion/exercise price of ¥931 and a 0% interest rate on the bonds; the proceeds are earmarked for promotion of global expansion (¥3.0 billion), M&A to grow the business (¥4.0 billion) and other growth acceleration strategic investments (¥3.0 billion). Over the four-year period from FY2026 to FY2029 the company plans to allocate ¥20.0 billion to strategic investments (including ¥10.0 billion funded by AP) and ¥16.5 billion to shareholder returns, and to generate ¥50.0 billion in operating cash flow. Other FY2025 topics include the commencement of operations at the Suzhou Tech Center in Jiangsu Province, China, which was repositioned from a production base to a service and solutions hub following the consolidation of production functions into the Amoy factory.

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.