Sumitomo Rubber Industries (5110): FY2025 Results Summary — Record-High Business Profit and a Raised 77 Yen Dividend

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

Sumitomo Rubber Industries, Ltd. reported sales revenue of 1,207.1 billion yen for the fiscal year from January to December 2025, or 100% of the prior year, while business profit rose to a record high of 90.8 billion yen (103% year on year) and the business profit ratio improved to 7.5% from 7.3%. Operating profit recovered to 82.6 billion yen from 11.2 billion yen a year earlier, and profit attributable to owners of parent reached 50.4 billion yen against the November 12th forecast of 45.0 billion yen. Reflecting that outperformance, the year-end dividend was raised by 7 yen from the November 12th forecast to 42 yen, bringing the total annual dividend to 77 yen.

Consolidated Results (2025 Jan.-Dec. Actual)

The quarterly business profit ratio improved through the year, moving from 4.9% in January-March to 5.0% in April-June, 7.0% in July-September and 12.2% in October-December. Sales revenue of 1,207.1 billion yen exceeded the November 12th forecast of 1,200.0 billion yen, while business profit of 90.8 billion yen came in below the 95.0 billion yen forecast; profit of 50.4 billion yen exceeded the 45.0 billion yen forecast.

Item (Billions of Yen)	2025 Actual	2024 Actual	YOY	Nov. 12th 2025 Forecast
Sales Revenue	1,207.1	1,211.9	100%	1,200.0
Business Profit	90.8	87.9	103%	95.0
Business Profit (%)	7.5%	7.3%	–	7.9%
Operating Profit	82.6	11.2	738%	84.0
Operating Profit (%)	6.8%	0.9%	–	7.0%
Profit	50.4	9.9	511%	45.0
ROIC	6.2%	6.5%	–	6.6%
ROE	7.3%	1.5%	–	6.8%
ROA	6.5%	6.7%	–	6.8%
D/E Ratio	0.6	0.5	–	0.6

The gap between business profit and operating profit narrowed sharply. Other expenses were (11.9) billion yen versus (81.0) billion yen in 2024, an improvement of +69.1 billion yen, as impairment losses and related items tied to the termination of production and dissolution of a U.S. factory amounted to (0.2) billion yen, an improvement of +69.2 billion yen year on year. Financial income was 17.9 billion yen (+5.6) including a gain on net monetary position of 13.2 billion yen, while financial expenses widened to (22.8) billion yen (-15.5) including a foreign exchange loss of (14.3) billion yen. Profit before tax was 77.8 billion yen (+61.5) and income tax expense was (25.1) billion yen (-21.8).

Segment Results

By reportable segment, Tires sales revenue was 1,043.7 billion yen (100% year on year) and Tires business profit rose to 79.8 billion yen (105%), described in the materials as a record high. Sports sales revenue was 125.6 billion yen (100%) with business profit of 6.8 billion yen (87%), and Industrial & Other posted sales revenue of 37.8 billion yen (95%) with business profit of 4.1 billion yen (107%).

Metric	Segment	2025 Actual	2024 Actual	YOY
Sales Revenue	Tires	1,043.7	1,046.4	100%
Sales Revenue	Sports	125.6	125.7	100%
Sales Revenue	Industrial & Other	37.8	39.8	95%
Sales Revenue	Total	1,207.1	1,211.9	100%
Business Profit	Tires	79.8	76.2	105%
Business Profit	Sports	6.8	7.9	87%
Business Profit	Industrial & Other	4.1	3.9	107%
Business Profit	Total	90.8	87.9	103%

Within the Tire business, business profit by region in 2025 was 35.1 billion yen in Japan, 34.6 billion yen in North America, 13.2 billion yen in Asia / Oceania and (3.0) billion yen in Europe / Middle East / Africa. Overseas tire business profit totalled 44.8 billion yen, or 56% of tire business profit, against 56.0 billion yen and 74% in 2024. Direct export sales from Japan that do not go through group sales companies are aggregated in Japan.

Total tire sales volume was 97,560 thousand units in 2025, 94% of the prior year, against 103,330 thousand units in 2024. The premium tire composition ratio rose to 47% from 46%, with the O.E. ratio at 57% and the replacement ratio at 44%. The company notes that the definition of premium tires was changed and that the 2024 premium tire ratio has been updated from the November 12th forecast.

Full-Year Forecast (2026 Jan.-Dec.)

For the 2026 fiscal year the company forecasts sales revenue of 1,320.0 billion yen (109%), business profit of 112.0 billion yen (123%) for a business profit ratio of 8.5%, operating profit of 100.0 billion yen (121%) and profit of 55.0 billion yen (109%). The first-half forecast is sales revenue of 620.0 billion yen (108%), business profit of 38.0 billion yen (134%), operating profit of 34.0 billion yen (126%) and profit of 20.0 billion yen (139%).

Item (Billions of Yen)	2026 Annual Forecast	2025 Actual	YOY	2026 First Half Forecast
Sales Revenue	1,320.0	1,207.1	109%	620.0
Business Profit	112.0	90.8	123%	38.0
Business Profit (%)	8.5%	7.5%	–	6.1%
Operating Profit	100.0	82.6	121%	34.0
Operating Profit (%)	7.6%	6.8%	–	5.5%
Profit	55.0	50.4	109%	20.0
ROIC	6.9%	6.2%	–	–
ROE	7.5%	7.3%	–	–
ROA	7.5%	6.5%	–	–
D/E Ratio	0.6	0.6	–	–

By segment, the 2026 annual forecast calls for Tires sales revenue of 1,154.5 billion yen (111%) and business profit of 100.5 billion yen (126%), Sports sales revenue of 127.5 billion yen (102%) and business profit of 7.0 billion yen (102%), and Industrial & Other sales revenue of 38.0 billion yen (101%) and business profit of 4.5 billion yen (109%). Total tire sales volume is forecast at 103,480 thousand units (106%) with the premium tire composition ratio rising to 51%. Assumed average exchange rates for 2026 are USD 150 and EUR 180, against USD 150 and EUR 169 in 2025, and assumed prices are 1.70 $/kg for natural rubber (TSR20) and 67 $/bbl for crude oil (DUBAI), against 1.83 $/kg and 72 $/bbl in 2025.

Shareholder Returns

The basic policy is to ensure a long-term, stable stream of shareholder returns, aiming for a consolidated dividend payout ratio of 40% or more. From 2026 the company will target a DOE of 3%+ and a consolidated dividend payout ratio of 40%+ to ensure stable dividends even amid new structural reforms. For 2025 the year-end dividend was increased by 7 yen from the November 12th forecast to 42 yen, giving a total annual dividend of 77 yen, and the 2026 annual dividend forecast is 84 yen.

Item	2026 Forecast	2025	2024
Interim Dividend (Yen)	42	35	29
Year-end Dividend (Yen)	42	42	29
Annual Dividends (Yen)	84	77	58
Dividend Payout Ratio (Consolidation %)	40.1	40.2	154.6
DOE	–	3.0%	2.3%
Dividend Yield	–	3.2%	3.3%
Total Shareholder Return	–	304.0%	224.4%

The company also continued to reduce cross-shareholdings in 2025, selling 10 stocks and raising 7.6 billion yen of cash, with a profit on sales of investment securities of 6.1 billion yen on a non-consolidated financial statement basis only. The book value of stock holdings fell from 16.3 billion yen at the end of 2024 to 10.0 billion yen at the end of 2025, and the number of stocks held fell from 72 to 62.

Topics: U.S. Tariffs, Structural Reform and Financial Position

The impact of U.S. tariffs in 2025 was 13.0 billion yen, improved from the May 15th forecast of 18.0 billion yen and the August 7th forecast of 14.5 billion yen, and was addressed through price pass-through and cost and expense reductions. For 2026 the February 12th forecast puts the tariffs impact at 28.8 billion yen, an increase of 15.8 billion yen year on year, because 2026 reflects a full 12 months of impact against 9 months in 2025; the additional tariff rate remains unchanged since the November 12th 2025 announcement. The action plan combines price pass-through, profit contribution through sales and cost and expense reductions with 10.0 billion yen from Project ARK. Project ARK, launched in May 2025 with operations starting in July, contributed +2.8 billion yen to business profit in 2025.

Structural reform is described as largely finalized for all approximately 10 business units and product lines, and ROIC-based management will continue. The SYNCHRO WEATHER size lineup expanded to 100 sizes at the end of December 2025 and is planned to reach 112 sizes by the end of March 2026. DUNLOP brand expansion continued with sales of own products starting in Australia in August 2025 and in the U.S. in December 2025, and sales starting in Europe in January 2026 on an offtake basis followed by own products.

Total assets stood at 1,459.9 billion yen as of December 31, 2025, up 118.8 billion yen, with total equity attributable to owners of parent of 716.1 billion yen and an equity ratio of 49.0%. Interest-bearing debt rose to 406.6 billion yen from 331.2 billion yen and the D/E ratio was 0.6. Cash flows from operating activities were 150.4 billion yen and cash flows from investing activities were (186.6) billion yen, including consideration for the acquisition of the DUNLOP trademark rights of (98.5) billion yen, giving free cash flow of (36.1) billion yen. Capital expenditure on tangible assets was 62.8 billion yen in 2025 against depreciation of 55.6 billion yen, with 2026 forecasts of 110.0 billion yen and 58.8 billion yen respectively.

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.