KYB Corporation (7242): FY2025 Results Summary — Sales and Profit Up, with a Lower Profit Outlook for FY2026

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

KYB Corporation closed FY2025 with net sales of ¥481.5 billion, up ¥43.2 billion from the previous period, and operating profit of ¥34.9 billion, up ¥12.3 billion. The company described the year as an “Increase in Net Sales and Profit (Operating Profit ¥22.7bn → ¥34.9bn),” citing higher sales of automotive OEM and construction machinery products, the consolidation of Chita Kogyo as a subsidiary, and price pass-through of higher energy cost. Profit attributable to owners of the parent came to ¥29.0 billion. Alongside the results, KYB presented its 2026 Medium-Term Management Plan and guided for an “Increase in Net Sales, Decrease in Profit” in FY2026, with operating profit projected to fall from ¥34.9 billion to ¥24.0 billion.

Consolidated Results (FY2025 Full Year)

Net sales, segment profit and profit attributable to owners of the parent all came in above the FY2025 forecast, while operating profit of ¥34.9 billion finished below the ¥36.0 billion forecast. Segment profit — which the company notes corresponds to operating income in JGAAP — rose to ¥29.4 billion, lifting the segment profit ratio to 6.1% from 4.5%. Figures are prepared under IFRS.

(¥ Billion), IFRS	FY2024 actual	FY2025 forecast	FY2025 actual	Differences (Previous period)
Net sales	438.3	475.0	481.5	43.2
Segment profit*	19.8	27.5	29.4	9.6
[Segment profit ratio]	[ 4.5% ]	[ 5.8% ]	[ 6.1% ]	[ 1.6% ]
Operating profit	22.7	36.0	34.9	12.3
[Operating profit ratio]	[ 5.2% ]	[ 7.6% ]	[ 7.3% ]	[ 2.1% ]
Profit attributable to owners of the parent	14.9	27.5	29.0	14.1
FOREX (Average) JPY/ US$	152.57	147.31	150.77	—
FOREX (Average) JPY/ EUR	163.73	170.13	174.79	—

The deck breaks the ¥12.3 billion (2.1%) increase in operating profit into the following factors: segment profit +9.6, equity in earnings of affiliates +0.4, negative goodwill +6.1, provisions for product warranties related to nonconforming acts for seismic isolation/mitigation oil dampers and product guarantee countermeasure costs (0.4), impairment loss (6.3), foreign exchange gain +4.5 (an FY2024 loss of ¥1.7bn versus an FY2025 gain of ¥2.8bn), and other expenses (1.7), taking operating profit from ¥22.7 billion to ¥34.9 billion.

Segment Results

Automotive Components (AC) and Hydraulic Components (HC) both grew sales and segment profit. AC net sales rose ¥36.4 billion to ¥344.1 billion with segment profit up ¥6.2 billion to ¥23.4 billion, while HC net sales rose ¥7.7 billion to ¥123.9 billion with segment profit up ¥2.7 billion to ¥4.5 billion. Aircraft Components turned a segment loss of ¥0.4 billion into a ¥0.4 billion profit, and Special-Purpose Vehicles saw net sales decline to ¥6.9 billion.

(¥ Billion)	Net Sales FY2024 actual	Net Sales FY2025 actual	Net Sales Differences	Segment Profit FY2024 actual	Segment Profit FY2025 actual	Segment Profit Differences
AC	307.6	344.1	36.4	17.2	23.4	6.2
HC	116.2	123.9	7.7	1.7	4.5	2.7
Aircraft Components	3.7	6.7	3.0	(0.4)	0.4	0.8
Special-Purpose Vehicles	10.8	6.9	(4.0)	1.3	1.1	(0.2)
Total	438.3	481.5	43.2	19.8	29.4	9.6

By region, Japan net sales rose to ¥184.1 billion from ¥163.7 billion (12.4% versus the previous period) and Europe rose to ¥100.7 billion from ¥84.3 billion (19.4%). The overseas sales ratio moved from 62.6% to 61.8%.

FY2025 Net Sales by Region (¥ Billion)	FY2024 actual	FY2025 actual	Differences (Previous period)
Japan	163.7	184.1	12.4%
Europe	84.3	100.7	19.4%
America	52.4	55.8	6.6%
Southeast Asia	30.5	33.4	9.6%
China	24.3	29.5	21.1%
Other	83.0	78.0	(6.1)%
Total	438.3	481.5	—

FY2026 Forecast

KYB guides for an “Increase in Net Sales, Decrease in Profit (Operating Profit ¥34.9bn → ¥24.0bn).” Net sales are seen rising ¥7.5 billion to ¥489.0 billion on higher sales of aftermarket products for automobiles, while operating profit is expected to decrease due to the non-recurrence of one-off factors from FY2025, including a gain on negative goodwill. The company states that the impact of the situation in the Middle East is not incorporated into the forecasts at this time.

(¥ Billion), IFRS	FY2025 actual	FY2026 forecast	Differences (Previous year)
Net sales	481.5	489.0	7.5
Segment profit*	29.4	20.0	(9.4)
[Segment profit ratio]	[ 6.1% ]	[ 4.1% ]	—
Operating profit	34.9	24.0	(10.9)
Profit attributable to owners of the parent	29.0	16.0	(13.0)
Dividend (¥)	156	162	6
FOREX (Average) JPY/ US$	150.77	155.00	—
FOREX (Average) JPY/ EUR	174.79	180.00	—

By sales division, AC net sales are forecast at ¥349.6 billion (up ¥5.5 billion) with segment profit of ¥15.6 billion (down ¥7.7 billion); HC at ¥126.8 billion (up ¥2.9 billion) with segment profit of ¥3.8 billion (down ¥0.6 billion); Aircraft Components at ¥6.0 billion with segment profit of ¥0.0 billion; and Special-Purpose Vehicles at ¥6.6 billion with segment profit of ¥0.5 billion.

Shareholder Returns

The FY2025 annual dividend is ¥156 per share, up ¥6 from the figures announced in February, comprising an interim dividend of ¥75 per share and a year-end dividend of ¥81 per share. For FY2026 the company forecasts an annual dividend of ¥162 per share (interim ¥81 / year-end ¥81). The FY2025 dividend payout ratio is 24.7%; excluding the non-cash gain (¥6.1 billion of negative goodwill from the acquisition of Chita Kogyo) from profit, the payout ratio is 31.6%. KYB also completed a tender offer and repurchase of treasury shares at a total acquisition cost of approximately ¥12.2 billion, with a repurchase period from Feb. 13 to Mar. 16, 2026 and settlement commencing Apr. 8, 2026. Under the 2026 Medium-Term Management Plan the policy is to maintain stable and continuous dividends, aiming for a dividend payout ratio of 30% or higher, together with flexible repurchases of treasury shares including the reduction of cross-shareholdings.

Dividends (¥/share)*1	FY2022	FY2023	FY2024	FY2025	FY2026
Interim	35	50	50	75	81
Year-end	65	50	60	81	81
Annual	100	100	110	156	162
Dividend payout ratio	19.4%	33.9%	39.1%	24.7%	41.3%

Equity attributable to owners of the parent company grew to ¥249.8 billion as of Mar. 31, 2026 from ¥225.5 billion a year earlier, with the parent company ownership interest ratio rising from 48.7% to 50.6%. Dividends are stated based on the 2-for-1 stock split on December 3, 2024, and retroactively adjusted for FY2022 (pre-split dividend × 1/2).

Medium-Term Management Plan

Reviewing the 2023 Medium-Term Management Plan, KYB reports that “Net sales, equity ratio, and ROE met their targets, while segment profit was below target.” Against the 2023 Mid-Term targets for FY2025, net sales of ¥481.5 billion exceeded the ¥470.0 billion target by ¥11.5 billion, and the ratio of equity attributable to owners of the parent reached 50.6% against a 45.0% target, while segment profit of ¥29.4 billion fell ¥8.6 billion short of the ¥38.0 billion target and the segment profit ratio of 6.1% was 2.0 points below the 8.1% target. ROE was 12.2% against a 12.0% target (9.8% excluding ¥6.1 billion in negative goodwill).

The new 2026 Medium-Term Management Plan is positioned to “Pursue profit improvement while implementing upfront investments and measures for growth under the 2029 Mid-Term Management Plan (FY2029–FY2031).” It targets net sales of ¥514.0 billion, segment profit of ¥25.0 billion, a segment profit ratio of 4.9% and ROE of 8.1% in FY2028, versus ¥489.0 billion, ¥20.0 billion, 4.1% and 6.6% planned for FY2026. By division, the FY2028 targets are AC net sales of ¥362.9 billion (segment profit ratio 5.0%), HC ¥140.6 billion (5.1%) and Special-purpose vehicles ¥7.3 billion (10.9%).

For cash allocation over the 2026 Mid-Term Plan period (FY2026-2028), KYB plans income of ¥135.0 billion in CF from operating activities, ¥67.0 billion of financing and ¥6.0 billion from the sale of cross-shareholdings, against expenses of ¥58.0 billion in capital expenditure, ¥96.0 billion of growth investment, ¥34.0 billion of shareholder returns, ¥12.5 billion for the redemption of preferred shares and ¥7.5 billion of other outflows. Growth investments of ¥96.0 billion (including M&As) are directed at capital investment — strengthening production capacity for electronically controlled shock absorbers, strengthening the business structure for the Indian market, and increasing production of mini excavators and CTLs — and at R&D investments in electronic control technologies for autonomous driving and autonomous control, AI capabilities, and new businesses based on electronic control and AI technologies.

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.