Sintokogio (6339) Investor update summary

Financial performance and outlook

• FY3/25 revenue was ¥150.2bn; FY3/26 forecast is ¥180.0bn revenue, ¥2.5bn operating profit and ¥2.1bn ordinary profit. Operating margin forecast is 1.4%.

• FY3/26 forecast was revised on March 5: ¥20.0bn impairment on Elastikos goodwill and intangible assets changes forecast net income from ¥3.0bn profit to a ¥17.0bn loss; sales and operating profit forecasts were unchanged.

• Elastikos underperformed amid weak European consumables demand and intensifying Chinese competition; the impairment is non-cash, with no direct cash-flow or dividend impact stated.

• FY3/26 annual dividend is forecast at ¥44 per share, including a planned ¥22 year-end dividend; payout policy combines stable dividends with earnings linkage and targets DOE of 2%.

Business trends

• Surface treatment revenue benefited from the E社 merger, while European market deterioration made earnings challenging; priorities include merger synergies and growth-sector expansion.

• Foundry faces stronger Chinese competition in emerging markets and construction labor shortages; initiatives include expansion into India and other emerging markets and products addressing foundry work conditions and labor constraints.

• Wellness-related sales were supported by fire-prevention products; plans include broadening that range and adding sensing for factory workspaces.

• Logistics demand is expanding as labor shortages intensify; product development will focus on labor-saving solutions and improved working environments.

• Special-equipment press sales weakened with slowing battery-market investment; growth priorities include electric cylinders for carbon neutrality and expansion into new and non-industrial fields.

Growth strategy

• Targeting ¥15bn operating profit in FY3/29, with ROE of 8% and ROIC of 6%; key levers are growth investment, broader business domains and stronger after-sales service.

• Growth domains span semiconductors and electronics, aerospace and space, healthcare, automotive and EVs, and shipbuilding; expansion combines forming, materials and surface-treatment capabilities.

• Elastikos and AGTOS acquisition synergies aim to grow market share and sales, with customer-development opportunities across Europe, Asia and North America and stronger peening and precision-machining offerings.

• After-sales strategy combines equipment, consumables and service with digital response and global skills development; the network covers 23 countries and regions through 60 locations.