Investor relationsManagement policyMessage from the President

Our core semiconductor operations supported a strong overall performance in the fiscal year ended March 2025, despite an ongoing uncertain environment, resulting in record highs in both net sales and profits.

We continue to invest strategically and strengthen our human resources to prepare for trends expected to grow in the future and to further enhance our corporate value.

It is my pleasure to share our fiscal year 2025 results and present our management direction for the year ahead.

Semiconductor business drives record high sales and profits

In the fiscal year ended March 2025, brisk demand for semiconductor manufacturing equipment accompanying the recovery of the semiconductor market supported high utilization rates at our plants in Japan and overseas. While earnings were solid in all business fields, the semiconductor and FPD operations recorded significant year-on-year growth, and we ultimately posted record-high consolidated net sales of ¥54.2 billion and ordinary profit of ¥12.5 billion.

Iron & steel operations, a core field since the Group’s founding, benefited from a relatively strong domestic market but faced severe conditions overseas due to intensified price competition and a shifting demand structure. Overseas subsidiaries, particularly in Southeast Asia and China, were affected by greater competitor focus on cost performance, which impacted demand for all steel products, including high-grade steel plate.

However, the TOCALO Group has maintained its focus on competing with products offering high value-added technologies rather than low-cost mass-produced products. By leveraging cutting-edge technologies to differentiate our businesses, we are steadily building trust, increasing orders, and improving performance. We are also steadily expanding our business in overseas markets, and net sales by overseas subsidiaries surpassed ¥9 billion for the first time in the fiscal year 2025.

Anticipating advances in surface modification technologies by overseas competitors, we will strengthen cost competitiveness and accelerate technological innovation to keep our coating technologies on the cutting edge. As we expand overseas, we will develop solutions tailored to the specific needs of each region.

Achieving our targets ahead of schedule, investing and developing technologies for our next leap forward

We have been steadily implementing the initiatives in key areas under the Medium-Term Management Plan to March 2026, and our efforts have enabled us to achieve the plan’s targets a year ahead of schedule.

Among our existing businesses, we have achieved remarkable growth in the semiconductor and FPD fields. We expect to continue generating growth from the growing number of solutions we offer for emerging trends in the semiconductor industry. We are also increasing our projects in the energy and aerospace fields, which we expect to provide a major boost to our growth.

As our business expands, we are preparing to accommodate increasing demand at all Group companies. We have therefore launched activities to increase our supply capacity in the medium and long term, including plans to begin construction of new plants in Kitakyushu and Tokyo in fiscal 2025.

We are also advancing our technical capabilities in various areas. We are developing physical vapor deposition (PVD) thin coatings with our subsidiary Japan Coating Center to offer an alternative surface modification technology to thermal spraying. We are also preparing to introduce our original large-scale manufacturing equipment using thermal spraying technology for super diffusion coating (SDC).

Our plan is to broaden the application of our core surface modification technologies from components for semiconductor manufacturing equipment makers into various industries, including new businesses in the energy and medical fields.

We have also made internal changes to facilitate our business growth. We proposed a new executive composition for the Board of Directors to the Ordinary General Meeting of Shareholders. Two individuals with strong technical backgrounds have been added, enhancing the Board’s ability to provide effective leadership for our growth strategy.

Our vision is for the Group to continue increasing net sales with an aim of surpassing consolidated net sales of ¥80 billion, with non-consolidated net sales of over ¥60 billion, by 2030. In line with this growth, we have formulated a corporate growth model incorporating 4% annual wage increases for employees. This growth model has qualified us to receive subsidies from the Ministry of Economy, Trade and Industry. We will be announcing concrete strategies to fulfill these growth targets in our medium-term management plans from fiscal 2026 onward.

Forecast for the fiscal year ending March 2026

For the fiscal year ending in March 2026, we are taking a cautious stance in light of trends in tariff policies in major countries, geopolitical risks, and concern about an economic slowdown. We expect net sales to continue to grow, but anticipate moderate profit growth due in part to increasing capital expenditures and personnel expenses.

We continue to anticipate a scenario of growing demand in the semiconductor industry through the medium and long term. We are accordingly moving ahead with efforts to expand our production capacity to ensure we are prepared and positioned to keep pace with the growth curve.

Our current investment plans, including the construction of the Kitakyushu and Tokyo plants, exceed ¥11 billion. These facilities will be essential to meeting supply needs for future growth. We will continue to carefully assess our investment priorities.

Our surface modification technology is becoming a fundamental element to manufacturing. We believe we have the technical capabilities and human resources to continue pioneering innovation and raising our corporate value. We revised our Multi-Stakeholder Policy in March 2025 to further increase management focus on returning value to our employees and supporting our business partners. In addition, we intend to continue fostering management that is richly diverse in human capital and partnerships.

I would like to express my deepest gratitude to our shareholders for their warm support in the fiscal year ended March 2025. We ask for your continued understanding and support.