UNION TOOL CO. (6278): FY2025 Results Summary — Record Sales and Operating Profit on AI-Driven PCB Drill Demand

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UNION TOOL CO. reported net sales of 40,165 million yen and operating profit of 8,728 million yen for FY12/2025 (the fiscal year ended December 31, 2025), and states that both consolidated sales and operating profit reached record highs. Results also exceeded the company’s own forecast, with net sales at 107.1% and operating profit at 110.5% of plan. The company attributes the year to increased demand for its products used in data center servers, driven by the expansion of the generative AI market, and says it rapidly expanded production capacity by leveraging its in-house facilities and strengthening group-wide collaboration on production planning and control.

Consolidated Results (Full-Year Actual)

Net sales rose 7,559 million yen, or 23.2%, year on year, and operating profit rose 1,850 million yen, or 26.9%. The operating profit margin improved to 21.7% from 21.1%. Ordinary profit increased 14.1% to 8,136 million yen and profit attributable to owners of parent increased 15.7% to 6,114 million yen, with EPS of 353.86 yen. Against the FY2025 forecast, net sales were 2,665 million yen higher, operating profit 828 million yen higher, ordinary profit 236 million yen higher and profit attributable to owners of parent 114 million yen higher. The company discloses the effects of FOREX rates as follows: versus FY2024, net sales +602 million yen and operating profit +359 million yen; versus the forecast made in November 2025, net sales +242 million yen and operating profit +141 million yen.

(¥ million)	FY2024	FY2025	YoY Change	YoY Change rate	FY2025 Forecast	vs. Forecast Change	Achievement
Net sales	32,606	40,165	7,559	23.2%	37,500	2,665	107.1%
Operating profit	6,878	8,728	1,850	26.9%	7,900	828	110.5%
Operating profit margin	21.1%	21.7%	–	–	21.1%	–	–
Ordinary profit	7,132	8,136	1,004	14.1%	7,900	236	103.0%
Profit attributable to owners of parent	5,283	6,114	831	15.7%	6,000	114	101.9%
EPS (yen)	305.86	353.86	–	–	347.33	–	–

On a quarterly basis, net sales were 8,802 million yen in Q1, 9,444 million yen in Q2, 9,768 million yen in Q3 and 12,150 million yen in Q4, with operating profit of 2,210 million yen, 1,977 million yen, 2,426 million yen and 2,113 million yen respectively. The quarterly operating profit margin moved from 25.1% in Q1 to 20.9% in Q2, 24.8% in Q3 and 17.4% in Q4. The USD/JPY FOREX rates shown for each quarter were 149.52, 144.81, 148.88 and 156.56.

Sales by Product

PCB drill sales, the largest product line, rose to 29,026 million yen in FY25 from 22,173 million yen in FY24. Endmill sales rose to 6,507 million yen from 6,056 million yen, DUC drill sales to 1,867 million yen from 1,729 million yen, and Other to 2,764 million yen from 2,646 million yen.

Product	FY24 (¥ million)	FY25 (¥ million)
PCB drill	22,173	29,026
Endmill	6,056	6,507
DUC drill	1,729	1,867
Other	2,646	2,764

PCB drill volumes rose through the year: sales quantity was 89, 98, 103 and 112 million pieces in FY25 Q1 to Q4 against an FY24 average of 78 million pieces, while production quantity was 90, 103, 108 and 118 million pieces against an FY24 average of 81 million pieces. The sales ratio of ULF coated products within the PCB drill range rose to 35.0% in FY25 from 31.7% in FY24. In the slide on major PCB drill users — which the company notes is domestic data in Japan for a single month of December — PKG accounted for 54% in FY25 (46% in FY24), automotive 16% (17%), telecommunication 9% (15%), digital & mobile 5% (6%) and others 16% (16%). Consolidated end mill sales are shown at 6,507 million yen for FY25 with an FY26 forecast of 6,873 million yen.

FY12/2026 Forecast

For FY12/2026 the company forecasts net sales of 45,000 million yen (+12.0% year on year), operating profit of 10,000 million yen (+14.6%), ordinary profit of 10,000 million yen (+22.9%) and profit attributable to owners of parent of 7,200 million yen (+17.8%), with an operating profit margin of 22.2% and EPS of 413.47 yen. For the first half it forecasts net sales of 20,600 million yen (+12.9%) and operating profit of 4,500 million yen (+7.5%). The assumed FX rates for FY2026 are 150.00 yen to the US dollar, 165.00 yen to the euro, 20.00 yen to the RMB and 4.60 yen to the NT dollar, against FY2025 actuals of 156.56, 184.33, 22.36 and 4.98 respectively.

(¥ million)	FY2025 First Half result	FY2025 Full-year result	FY2026 First Half forecast	FY2026 Full-year forecast	Full-year YoY Change	Full-year YoY Change%
Net sales	18,247	40,165	20,600	45,000	4,835	12.0%
Operating profit	4,187	8,728	4,500	10,000	1,272	14.6%
Operating profit margin	22.9%	21.7%	21.8%	22.2%	–	–
Ordinary profit	3,838	8,136	4,500	10,000	1,864	22.9%
Profit attributable to owners of parent	2,856	6,114	3,300	7,200	1,086	17.8%
EPS (yen)	165.37	353.86	189.5	413.47	–	–

Shareholder Returns

The dividend slide states that the year-end dividend for FY2025 increased to 70 yen per share, making the annual dividend 130 yen. The chart shows FY25 broken down into an interim dividend of 60 yen, a year-end dividend of 65 yen and a 5 yen commemorative dividend, with a dividend payout ratio of 36.7% against 34.3% in FY24. For FY26 the plan shown is 65 yen interim and 65 yen year-end, with a dividend payout ratio of 31.4%. On fund distribution, the company states that it believes in the importance of generating profits through its business activities and allocating funds by carefully balancing shareholder returns, growth investments, and management stability.

Item (yen)	FY24	FY25	FY26 (Plan)
Interim	45	60	65
Year-end	60	65	65
Commemorative	–	5	–
Dividend payout ratio	34.3%	36.7%	31.4%

Capital Expenditure, R&D and Management Indicators

Capital expenditure was 5,720 million yen in FY2025 against 5,623 million yen in FY2024, of which 3,025 million yen was construction costs for the Mitsuke Plant, third factory. Depreciation was 3,316 million yen against 2,906 million yen. For FY2026 the company plans capital expenditure of 10,469 million yen and depreciation of 4,636 million yen, noting the construction of Factory No. 6 at the Nagaoka Plant, scheduled for completion in June 2027 with a planned investment of approximately JPY 6,200 million, and stating that it will accelerate investment in production equipment toward the start-up of operations. Research and development expenses were 2,341 million yen in FY2025 (5.8% of sales) against 1,968 million yen (6.0%) in FY2024, with 2,349 million yen (5.2%) planned for FY2026.

On the fund distribution slide, BPS was 4,594 yen at the end of FY2025 against 4,234 yen a year earlier, ROE was 8.0% against 7.5%, the closing share price at fiscal year end was 8,530 yen against 5,020 yen, PBR was 1.86 against 1.19 and PER was 24.1 against 16.4.

Topics

The company lists three topics for FY12/2025: demand for its products used in data center servers increased, driven by the expansion of the generative AI market, and it rapidly expanded production capacity by leveraging in-house facilities and strengthening group-wide collaboration on production planning and control; it established an optimal global sales strategy tailored to region-specific needs; and it launched new value-added products to meet increasingly diverse quality requirements. The materials do not contain a breakdown of sales by geographic region.

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.