ZUIKO CORPORATION (6279): FY2025 Results Summary — Back to Operating Profit as Japan and Europe Sales Rebound

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

ZUIKO CORPORATION, a manufacturer of hygiene product manufacturing machinery, reported FY2025 (ended February 20, 2026) net sales of JPY 21,170 million, up 6.1% year on year but short of the initial plan of JPY 22,000 million because of delays in project progress in the fourth quarter. Operating profit returned to positive at JPY 162 million from a loss of JPY 300 million in FY2024, while profit attributable to owners of parent reached JPY 1,972 million, supported by extraordinary gains of JPY 1,925 million from the acquisition of the spunlace nonwoven business. For FY2026 the company forecasts net sales of JPY 27,000 million and operating profit of JPY 1,780 million.

Consolidated Results (Full-Year Actual)

The company noted that delivery delays of new machines for overseas customers led to higher material and labor costs and delay penalties. Gross profit rose to JPY 3,204 million, or 15.1% of sales, while selling, general and administrative expenses increased to JPY 3,042 million. Capital expenditure was JPY 374 million and depreciation was JPY 884 million; ROE is shown as +5.6% for FY2025 against (2.3%) in FY2024. On the operating profit bridge, the increase of JPY 462 million versus FY2024 breaks down into JPY 161 million from the change in net sales and JPY 409 million from the change in gross profit margin, less JPY 107 million from the change in SG&A expenses. Operating cash flow was JPY 1,132 million, investing cash flow was JPY 265 million and financing cash flow was negative JPY 1,710 million, leaving free cash flow of JPY 1,397 million and cash and cash equivalents at the end of the period of JPY 9,400 million. Total assets stood at JPY 52,440 million with net assets of JPY 36,324 million, an equity ratio of 69.1% and a D/E ratio of 0.17.

Item (Millions of yen)	FY2025	FY2024	YoY Change (Amount)	YoY Change (%)	FY2025 Initial Plan
Net sales	21,170	19,950	+1,219	+6.1%	22,000
Gross profit	3,204	2,634	+570	+21.6%	3,960
Selling, general and administrative expenses	3,042	2,934	107	+3.7%	2,960
Operating profit	162	(300)	+462	－	1000
Ordinary profit	350	(142)	+493	－	1050
Profit attributable to owners of parent	1972	(778)	+2,751	－	820
Basic earnings per share	74.51yen	(29.41)yen	+103.92yen	－	30.98yen

Sales by Region

Sales in China and Japan recovered year on year, with Japan including approximately JPY 500 million from the spunlace nonwoven business for the period from January 1 to February 20. Asia sales declined to JPY 3,400 million because of price competition, against a five-year average of JPY 5,400 million from FY2020 to FY2024, while Europe sales rose to JPY 5,300 million supported by the DELTA effect, against a five-year average of JPY 2,700 million. The company notes that the majority of “Other” relates to Egypt.

Region (Millions of yen)	FY2025	Sales composition	FY2024	YoY Change (Amount)	YoY Change (%)
Japan	5,821	27.5%	3,828	+1,993	+52.1%
China	4,357	20.6%	3,506	+850	+24.3%
Asia	3,392	16.0%	6,102	(2,709)	(44.4%)
Europe	5,330	25.2%	3,013	+2,316	+76.9%
North America	532	2.5%	722	(189)	(26.3%)
Latin America	466	2.2%	2,194	(1,727)	(78.7%)
Other	1,268	6.0%	582	+685	+117.8%
Total	21,170	100.0%	19,950	+1,219	+6.1%

Sales by Product Type

By product type, the materials state that sanitary napkin machinery sales were ¥3.3 billion (average of ¥3.5 billion in FY2020–FY2022 versus ¥3.4 billion in FY2023–FY2025, roughly flat), baby diaper machinery ¥6.9 billion (average of ¥10.3 billion versus ¥6.1 billion, down approximately 40%) and adult diaper machinery ¥7.5 billion (average of ¥6.3 billion versus ¥8.0 billion, up approximately 30%). “Other” includes approximately ¥0.5 billion from the spunlace business.

Product type (Millions of yen)	FY2025	Sales composition	FY2024	YoY Change (Amount)	YoY Change (%)
Sanitary napkin mfg. machinery	3,286	15.5%	3,109	+177	+5.7%
Baby disposable diaper mfg. machinery	6,891	32.6%	6,870	+20	+0.3%
Adult disposable diaper mfg. machinery	7,518	35.5%	6,369	+1,148	+18.0%
Other machinery	135	0.6%	398	(263)	(66.1%)
Parts	2,445	11.6%	2,809	(363)	(13.0%)
Other	893	4.2%	393	+500	+127.2%
Total	21,170	100.0%	19,950	+1,219	+6.1%

Orders and Order Backlog

Order intake for FY2025 was JPY 22,246 million, described as remaining roughly flat after bottoming out at JPY 20,041 million in FY2023, and was split between JPY 9,579 million in the first half and JPY 12,667 million in the second half. The order backlog at the FY2025 year-end was JPY 15,848 million, excluding the spunlace nonwoven business, up JPY 1,076 million or 7.3% from FY2024. The materials note that “Other machinery” includes protective clothing. The backlog table does not present Parts or Other.

Product type (Millions of yen)	Orders FY2025	Orders FY2024	Backlog FY2025	Backlog FY2024
Sanitary napkin mfg. machinery	3,055	3,564	1,629	1,860
Baby disposable diaper mfg. machinery	6,329	9,215	6,996	7,557
Adult disposable diaper mfg. machinery	7,441	6,128	5,183	5,260
Other machinery	2,081	(342)	2,038	92
Parts	2,445	2,809	－	－
Other	893	393	－	－
Total	22,246	21,767	15,848	14,772

FY2026 Forecast

For FY2026 the company plans net sales of JPY 27,000 million and operating profit of JPY 1,780 million, described as in line with the mid-term plan. Gross margin is targeted to recover to 20%, and the materials state that potential cost increases from the situation in Iran are not factored in. The drivers cited are strong sales in Japan and China, the contribution from DELTA, the contribution from new businesses (spunlace nonwoven and PPE), completed shipments of new models for overseas customers that are currently under inspection, margin secured through strengthening of parts and service sales, global sourcing, and optimization of shipment lead times. Profit attributable to owners of parent is forecast to fall 35.2% because FY2025 included the extraordinary gains.

Item (Millions of yen)	FY2026 Forecast	% of sales	YoY Change (Amount)	YoY Change (%)
Net sales	27,000	100.0%	+5,830	+27.5%
Gross profit	5,180	19.2%	+1,970	+61.4%
Selling, general and administrative expenses	3,400	12.6%	+358	+11.8%
Operating profit	1,780	6.6%	+1,612	+959.5%
Ordinary profit	1,820	6.7%	+1,465	+412.7%
Profit attributable to owners of parent	1,280	4.7%	(696)	(35.2%)
Basic earnings per share	49.23yen	－	(25.42)	(34.1%)

Note: the FY2025 reference column on the earnings forecast slide shows gross profit of 3,210, operating profit of 168, ordinary profit of 355, profit attributable to owners of parent of 1,976 and basic earnings per share of 74.65yen, which differ slightly from the figures presented on the financial summary slide.

Shareholder Returns

The company states that its basic policy remains unchanged, with dividend levels determined based on the consolidated dividend payout ratio, and that share buybacks will be considered as necessary. The policy targets a consolidated dividend payout ratio of around 35%. For FY2026 a commemorative dividend of JPY 20 will be paid in celebration of the Company’s 80th anniversary (Foundation), shown on the chart as an ordinary dividend of JPY 16.00 plus a special dividend of JPY 4 for a total of JPY 20. FY2022 is shown with a 60th anniversary (Incorporation) special dividend of JPY 9 for a total of JPY 25.20.

Fiscal year	Dividend per share (ordinary dividend)	Dividend payout ratio (consolidated)
FY2020	13.75	22.3%
FY2021	16.20	24.5%
FY2022	16.20	24.9%
FY2023	20.00	26.3%
FY2024	10.00	－
FY2025 (Plan)	12.00	－
FY2026 (Plan)	16.00	－
FY2027 (Plan)	24.00	－

4th Medium-Term Business Plan

The plan targets net sales of 30 billion yen and an operating profit margin of 8.1% in FY2027, the final year, with a sales CAGR of 14.6%. Sales in the hygiene product manufacturing machinery business are expected to remain flat with a focus on improving profitability, at 22 billion yen with a CAGR of 3.8%, while new businesses are targeted at 8 billion yen. New business sales are shown as 950 in FY2025, 5,000 in FY2026 and 8,000 in FY2027 (millions of yen). For cash allocation over the next cumulative three-year period, the company plans growth investment of 5 to 7 billion yen and dividends of approximately 2 billion yen, against operating cash flow of 6 to 7 billion yen and investment to maintain existing businesses of approximately 3 billion yen, with interest-bearing debt used flexibly.

The basic policy is built on three key strategies: rebuilding competitiveness in the hygiene product manufacturing machinery business, expanding the business portfolio by accelerating new businesses, and building an organization to execute “Speed & Challenge.” A new organizational structure was launched on February 1.

Topics and Growth Initiatives

ZUIKO describes itself as a leading manufacturer of hygiene product manufacturing machinery, primarily for disposable diapers, handling the entire process from development and design to production, with a 90% share in Japan and ranking among the top three globally. It was founded in 1946 and incorporated in 1963, has more than 400 employees, has delivered to 41 countries and more than 1,200 machines, and holds more than 800 patents. The 80th anniversary of foundation falls on May 1, 2026. The spunlace business (Tarui Plant) was acquired from Unitika in January 2026, spunlace pilot equipment was relocated to the R&D Center in Settsu City, and an automated warehouse has been introduced at the head office plant to improve logistics efficiency, scheduled for completion in mid-June 2026.

Growth initiatives presented include new product development such as a multi-product machine and a compact base machine that is 30–37% shorter than the company’s conventional machines and designed to fit into standard 40-ft containers; a shift to a service-based model combining equipment and services; turnkey solutions; the cotton spunlace business including COTEX, which became a consolidated subsidiary in 2024; a used diaper-to-fuel recycling model using ZRM-1000/ZRM-2000 systems with processing capacity of 1t or 2t per run, processing time of 16–18 hours or less and output with a calorific value of approximately 5,000 kcal/kg; excretion care equipment; and a PPE business. For the PPE business the materials cite a coverall gowns market of $6.7bn in 2024 (est.) growing to $10.5bn in 2033 (est.), a CAGR of 5.3%, with disposable gowns at $2.5bn (est.) to $4.5bn (est.), a CAGR of 7.5%, approximately $2 per unit, and North America and Europe accounting for approximately 50%.

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.