Investor RelationsMessage from the President

The business environment surrounding our Group remains highly uncertain, with surging resource prices and rising geopolitical risks.

Despite these headwinds, our Group has steadily pushed forward with initiatives based on our medium-term management plan, achieving record highs in both net sales and ordinary profit for the fiscal year ended March 31, 2026.

Moving forward, under our new medium-term management plan, we will strive to further enhance our corporate value. In this regard, we would like to explain our financial results for the fiscal year ended March 31, 2026, and our future strategic direction.

In the fiscal year ended March 31, 2026, our management operated amidst ongoing changes in the external environment, including surging resource prices and rising geopolitical risks. However, by steadily capturing demand in both the semiconductor and general industrial sectors as a whole, the Group achieved the net sales and ordinary profit targets set forth in our medium-term management plan.

On a non-consolidated basis, TOCALO recorded year-on-year increases in both sales and profits. Furthermore, overseas subsidiaries experienced strong order inflows in semiconductor- and steel-related fields. As a result, our consolidated financial results for the fiscal year ended March 31, 2026, reached record highs, with net sales of 58.4 billion yen and ordinary profit of 14.7 billion yen. Regarding shareholder returns, we plan to pay an annual dividend of 85 yen per share for the fiscal year ended March 31, 2026, subject to approval at the General Meeting of Shareholders.

Under the medium-term management plan "TOCALO 2025," which concluded in the fiscal year ended March 31, 2026, we continuously pursued initiatives such as improving production efficiency, strengthening our technological development framework, and promoting global expansion. Through these measures, we achieved meaningful results, including reaching our final-year targets for both net sales and ordinary profit one year ahead of schedule. On the other hand, clear challenges have emerged for the future, including generating profit contributions from new business domains, improving productivity by promoting automation/labor-saving measures, and strengthening our global risk management system.

This fiscal year, we launched our new medium-term management plan, "TOCALO 2030." Under this plan, we aim to consistently achieve financial targets for the fiscal year ending March 31, 2031, including consolidated net sales of 90.0 billion yen, ordinary profit of 20.0 billion yen, an ordinary profit margin of 22% or higher, and an ROE of 15%.

We intend to realize these goals by securely capturing growth primarily in the semiconductor and FPD field, while also expanding our general industrial business, developing new technologies, and pioneering new business domains. Backed by the expansion of generative AI and data centers, the semiconductor field is expected to see mid- to long-term growth, and we recognize it as a vital growth driver for our company. While the semiconductor field is anticipated to continue growing, we will also cultivate new revenue pillars in fields such as the environment, energy, and industrial machinery, thereby building a robust earnings base that is resilient to economic fluctuations. In particular, new demand is expanding in the steel and energy fields, and we are strengthening our initiatives to secure orders.

Regarding capital expenditures to support this growth, we plan a scale of 40.0 billion to 60.0 billion yen over the five-year period. We will strategically allocate management resources with a focus on increasing production capacity in the semiconductor and FPD field, developing new applications in general industries, and expanding operations in overseas markets to achieve sustainable growth. Moving forward, centered on three core pillars—deepening core businesses, expanding strategic business domains, and strengthening the management foundation that supports sustainable growth—we plan to advance our technological capabilities, quality, and services, further enhancing our competitive advantage.

Regarding the outlook for the fiscal year ending March 31, 2027, we recognize that the business environment will continue to be characterized by an even higher degree of uncertainty than before. In addition to soaring materials and energy prices, multiple destabilizing factors, such as emerging procurement risks for rare metals and petroleum products, could potentially impact our business. On the demand side, however, AI-related fields are expected to drive a sharp increase in demand, primarily in the semiconductor field. Furthermore, in fields other than semiconductors, demand that had previously been delayed is expected to materialize all at once. By leveraging our strengths—cutting-edge thermal spraying technology and robust information-gathering capabilities in sales—we will accurately capture demand trends across various industries to drive financial performance.

On the profit front, we have set the maintenance of an ordinary profit margin of 22.0% or higher as a key management indicator, and we will work to ensure profitability through thorough cost management and enhanced value addition. Moreover, by focusing on management that is conscious of capital costs and stock price, and through the integration of business and investment strategies, we aim to build a business structure capable of consistently achieving an ROE of 15% while pursuing the maximization of shareholder and corporate value. Regarding shareholder returns, our basic policy remains to provide stable and continuous dividends. We intend to implement returns targeting a consolidated dividend payout ratio of around 50% and a DOE (dividend on equity ratio) of 5% or higher. We will also dynamically consider share buybacks based on the business environment and our financial position.

To date, we have built relationships of trust with our customers based on our technological capabilities and quality. Concurrently with the formulation of "TOCALO 2030," we have established a new mission: "To continue being a company trusted by all stakeholders." Under this mission, we will strive to achieve sustainable growth and enhance corporate value even within a rapidly changing business environment. We sincerely ask our shareholders for their continued understanding and support.