FUJIFILM Holdings Corporation
Earnings Presentation for the First Quarter Ended June 30, 2026
August 6, 2026
Event Summary
[Company Name]
FUJIFILM Holdings Corporation
[Company ID]
4901-QCODE
[Event Language]
JPN
[Event Type]
Earnings Announcement
[Event Name]
Earnings Presentation for the First Quarter Ended June 30, 2026
[Fiscal Period]
FY2027 Q1
[Date]
August 6, 2026
[Number of Pages]
26
[Time]
16:40 – 17:37
(Total: 57 minutes, Presentation: 13 minutes, Q&A: 44 minutes)
[Venue]
Webcast
[Number of Speakers]
6
Masayuki Higuchi
Naoki Hama
Chisato Yoshizawa
Tetsuya Iwasaki
Toshihisa Iida
Yujiro Igarashi
Director & Corporate Vice President and
Chief Financial Officer
Director
President, Representative Director, FUJIFILM
Business Innovation Corp.
Director & Corporate Vice President, General
Manager of Corporate Communications
Division and ESG Division
Director & Executive Vice President, General
Manager of Electronic Materials Business
Division, FUJIFILM Corporation
Director & Corporate Vice President, General
Manager of Bio CDMO Division, FUJIFILM
Corporation
General Manager of Imaging Business
Division, FUJIFILM Corporation
1
Presentation
Moderator: We will now begin the earnings presentation for FUJIFILM Holdings Corporation for Q1 of the
fiscal year ending March 2027. Thank you very much for joining us today.
Let me introduce today's speakers. First, Masayuki Higuchi, Director and Corporate Vice President, CFO of
FUJIFILM Holdings Corporation.
Higuchi: This is Higuchi. Thank you.
Moderator: Next, Chisato Yoshizawa, Director and Senior Vice President, General Manager of the Corporate
Communications Division, and General Manager of the ESG Division.
Yoshizawa: This is Yoshizawa. Thank you.
Moderator: Naoki Hama, Director of FUJIFILM Holdings Corporation and President, Representative Director,
FUJIFILM Business Innovation Corp.
Hama: This is Hama. Thank you.
Moderator: Tetsuya Iwasaki, Director & Executive Vice President, General Manager of Electronic Materials
Business Division of FUJIFILM Corporation.
Iwasaki: This is Iwasaki. Thank you.
Moderator: Toshihisa Iida, Director and Corporate Vice President, General Manager of the Bio CDMO Division,
FUJIFILM Corporation.
Iida: This is Iida. Thank you.
Moderator: And Yujiro Igarashi, General Manager of the Imaging Solutions Division.
Igarashi: This is Igarashi.
I am Nagasawa from the Corporate Communications Division, and I will serve as today's moderator.
We will proceed according to today's agenda displayed on the screen. After the presentation, we will move
to the Q&A session.
Please also note that the Zoom chat function will not be used during today's briefing.
With that, I will turn it over to Higuchi.
2
Higuchi: This is Higuchi. I will explain the consolidated results of FUJIFILM Holdings Corporation for Q1 of the
fiscal year ending March 2027.
Revenue for Q1 was JPY826.5 billion, operating income was JPY51.2 billion, and net income attributable to
FUJIFILM Holdings was JPY37.4 billion.
Revenue reached a record high for Q1. Growth was driven by strong performance in the Healthcare segment,
particularly endoscopes, as well as solid sales in the Electronics segment, including Semiconductor Materials
such as CMP slurry, and data tapes. Foreign exchange effects also contributed to revenue growth.
Operating income increased in the Electronics and Imaging segments. However, overall operating income
declined, reflecting higher fixed costs in the Bio CDMO business, one-time expenses associated with
strengthening the organizational structure in the Business Innovation segment, and higher raw material costs.
I will now explain our full-year consolidated forecasts.
We forecast revenue of JPY3,560.0 billion, reflecting strong sales in the Electronics segment and favorable
foreign exchange effects.
Our operating income forecast remains unchanged. While we expect higher profit in the Electronics segment,
this is expected to be offset by a slower profit ramp-up in the Bio CDMO business and the impact of higher
semiconductor memory prices.
We continue to forecast record highs in revenue, operating income, and net income attributable to FUJIFILM
Holdings.
3
Next, I will speak about the key topics for Q1.
Today, we would like to announce that we will begin evaluating strategic options for the Business Innovation
segment, including a partial spin-off, to support its sustainable growth. Although the specific schedule has not
yet been determined, if we proceed with this spin-off, we will move forward with our plans with a view to
implementing it in two to three years.
We have continued to strengthen investments in our growth businesses, the Healthcare and Electronics
segments, and to accelerate their expansion. Together with the Imaging segment, which has a strong business
foundation and generates strong cash flow, we will build an optimal business portfolio capable of delivering
sustainable growth.
At the same time, for the Business Innovation segment, one of our core businesses, we will evaluate strategic
options, including a spin-off, to enable more agile decision-making. By fully leveraging its solid earnings base
and strong cash-generation capability, we aim to further enhance corporate value.
If the spin-off is executed, FUJIFILM Holdings Corporation would retain less than a 20% equity stake in
FUJIFILM Business Innovation Corp. We also expect the Business Innovation segment to continue using the
FUJIFILM brand and to continue creating synergies with other Fujifilm Group companies.
4
I will now explain our consolidated results and business overview.
As shown on the opening slide, revenue increased YoY in the Healthcare, Electronics, and Imaging segments,
reaching a record high for Q1.
Operating income declined, reflecting higher fixed costs in the Bio CDMO business, one-time expenses in the
Business Innovation segment, and higher raw material costs. However, performance was broadly in line with
our internal plan across all businesses.
5
Revenue and operating income by segment are shown here.
Q1 results include an approximately JPY10.0 billion positive impact on profit from U.S. tariff refunds.
I will now explain the performance of the Healthcare segment.
Revenue rose 12.4% YoY to JPY256.8 billion. In the Medical Systems business, endoscope sales were strong in
the U.S. and Europe, as well as in Japan and China, continuing the momentum from the previous quarter.
Medical IT also grew, contributing to higher revenue. The Bio CDMO revenue increased as new large-scale
6
facilities began operations, and the LS Solutions also grew as major pharmaceutical companies increased their
use of culture media.
Operating income was a loss of JPY12.7 billion. This was due to higher raw material costs driven by rising silver
prices and up-front expenses associated with the start-up of new large-scale Bio CDMO facilities in the U.S.
Next is the Electronics segment.
Revenue rose 25% YoY to JPY127.7 billion. Growth was driven by the Semiconductor Materials business,
including copper interconnect CMP slurry and NTI developer, as well as other advanced-node materials used
for generative AI applications. The AF materials business also increased revenue, supported by higher data
tape sales to major IT companies.
Operating income rose 38.2% YoY to JPY31.1 billion. With higher revenue in both businesses, operating
income increased by JPY8.6 billion overall.
7
Moving on to the Business Innovation segment.
Revenue was JPY273.2 billion, down 0.1% YoY. The Business Solutions business grew, supported by solid
performance in overseas ERP systems and implementation support services. The Graphic Communications
business also increased revenue, driven by inkjet printhead sales. However, the Office Solutions business
declined due to lower exports to Europe and reduced replacement demand in China, resulting in overall flat
revenue for the segment.
Operating income was a loss of JPY1.4 billion. This reflected the absence of last year's overseas BPO revenue
recorded in the Business Solutions, lower gross profit due to reduced Office Solutions revenue, initial expenses
related to ERP system renewal, and higher expenses associated with strengthening the organizational
structure. We will restore profitability through the introduction of new AI-equipped office products from H2
and continued benefits from price increases, enabling us to achieve our full-year forecast.
8
Finally, the Imaging segment.
Revenue rose 16.2% YoY to JPY168.8 billion. Both the Consumer Imaging business, driven by strong instax
sales including new products, and the Professional Imaging business, supported by strong digital camera sales,
posted higher revenue.
Operating income rose 3.9% YoY to JPY43.4 billion. Gross profit increased with higher instax sales. However,
digital cameras benefited from strong new-product sales in the same period last year, resulting in a difficult
YoY comparison. Excluding temporary factors, operating income decreased 4.1% on an operational basis.
9
Next, I will explain cash flow for the three-month period.
Cash inflows decreased by JPY28.3 billion YoY to JPY76.4 billion. This reflected higher corporate tax payments
and lower proceeds from the sale of securities compared with the previous year.
Cash outflows decreased by JPY20.4 billion YoY to JPY111.2 billion, mainly due to lower capital investment.
As a result, adjusted free cash flow excluding business acquisitions was a cash outflow of JPY34.8 billion.
10
Next, I will explain our forecast for the fiscal year ending March 2027.
As mentioned at the beginning, we forecast record highs in revenue, operating income, and net income
attributable to FUJIFILM Holdings for the full year.
For operating income, we have factored in the recent rise in semiconductor memory prices. At the same time,
we expect continued benefits from pricing initiatives and higher gains on the sale of non-core assets. As a
result, we are maintaining our previous operating income forecast.
11
Turning to segment forecasts, we expect higher revenue in the Electronics segment and continued positive
foreign exchange effects. We have raised our revenue forecast by JPY90.0 billion from the previous outlook
and now forecast revenue of JPY3,560.0 billion. Details by segment are shown on page 26.
For operating income, we have lowered our forecast for the healthcare segment to reflect a slower profit
ramp-up in the Bio CDMO business. Meanwhile, we have raised our forecasts for the Electronics and Business
Innovation segments. Overall, we are maintaining our full-year operating income forecast of JPY365.0 billion.
This forecast includes an approximately JPY6.0 billion positive impact on profit from U.S. tariff refunds.
12
Next, I will explain the impact of higher semiconductor memory and IT-related component prices.
In our previous forecast, we expected a full-year negative impact of JPY11.0 billion. However, price increases
have now spread beyond semiconductor memory to IT-related components such as PCs and servers. We have
also seen additional price increases recently, along with longer procurement lead times. Reflecting these
conditions, we have factored in an additional JPY14.0 billion increase in costs. As a result, we now expect a
full-year cost increase of JPY25.0 billion.
We will continue to closely monitor market trends and advance pricing initiatives and alternative procurement
measures to minimize the impact on our performance.
13
Lastly, I will address the impact of the 2026 Kumamoto earthquake.
First, we would like to express our sincere sympathy to everyone affected by the huge earthquake.
Regarding the impact on our operations, we have confirmed the safety of all employees and their families and
verified that no major damage occurred to production equipment at our Display Materials and Semiconductor
Materials manufacturing site in Kikuyo, Kumamoto.
Production at the site resumed in stages from August 2 after safety checks and equipment inspections were
completed.
Regarding the impact on our business results, we expect some delays in customer deliveries for certain
products. Further assessment is required, but at this stage, we expect the overall impact on our performance
to be limited.
We sincerely hope for the swift recovery of the affected areas.
That concludes my explanation.
Moderator: That concludes our presentation.
14
Question & Answer
Moderator: We will now move on to the Q&A session.
Each participant is limited to three questions. If you have more than one question, please ask them one at a
time. If you have a question, please raise your hand.
We will begin with Mr. Shibano from Citigroup Global Markets.
Shibano [Q]: This is Shibano from Citigroup Global Markets. I have three questions.
My first question is about your assessment of Q1. Mr. Higuchi mentioned earlier that results were broadly in
line with the internal plan on a consolidated basis. However, my initial impression was that the results
appeared somewhat weaker than expected. Could you explain the strengths and weaknesses by segment in
more detail? It would also be helpful if you could comment on any one-time factors, including tariffs.
Higuchi [A]: I will explain the differences versus our internal plan for Q1.
As shown on the slide, operating income was JPY51.2 billion, while our internal plan was approximately
JPY52.0 billion to JPY53.0 billion, so overall performance was roughly in line. As you noted, however, there
were differences by segment. Healthcare was approximately JPY13.0 billion below plan. Electronics exceeded
plan by more than JPY8.0 billion. Business innovation was roughly in line. Imaging exceeded plan by more than
JPY4.0 billion. Therefore, the Imaging and Electronics segments significantly exceeded plan, while the
Healthcare segment underperformed.
Within the Healthcare, the shortfall mainly came from the Bio CDMO business. There were two major factors.
At our small- to mid-scale facilities in North Carolina in the U.S., unplanned shutdowns were required to
accommodate a regulatory inspection. In addition, at the large new facility in North Carolina in the U.S, the
technology transfer has been more difficult than expected, and we have not been able to manufacture
batches as planned. These two issues resulted in the Bio CDMO business falling short by around JPY10.0 billion.
As for tariff refunds, after netting refunds to customers, the impact is around JPY1.0 billion, so the effect on
overall company results is limited.
15
Shibano [Q]: Thank you.
My second question is about Bio CDMO. As always, you have provided detailed information in the appendix.
I would like to ask how Q1 performed from an operating income perspective.
After the full-year results announcement, my understanding was that you expected an operating loss of just
under JPY40.0 billion for this fiscal year. Based on the latest developments, how should we view the current
full-year outlook for operating income?
And regarding next fiscal year, you had originally expected to reach break-even. Given this year's downside,
should we expect a similar impact next year?
Iida [A]: This is Iida, responsible for the Bio CDMO business. I will answer your question.
First, regarding Q1 results and the full-year forecast. The operating loss in Q1 was in the high JPY20.0 billion
range, which was approximately JPY10.0 billion below our internal plan. We had originally expected a loss in
Q1 because fixed costs at our North Carolina facilities were scheduled to come ahead of revenue, and the
absence of cancellation fees that were received in the previous year. However, the actual result was JPY10.0
billion weaker than planned.
Reflecting this, we have revised our full-year guidance. The previous outlook assumed an operating loss of
just under JPY40.0 billion. We have now incorporated a downward revision of more than JPY30.0 billion into
the Healthcare segment forecast.
16
Looking ahead to next fiscal year, the current downside is driven by operational issues. As Higuchi explained
earlier, the ramp-up pace at the large North Carolina facility has been slower than expected. In addition to
equipment and staffing factors, the characteristics of the drug-substance processes we have taken on require
time to master.
In practical terms, the cadence (manufacturing cycle), or the interval between batch starts, has not yet been
shortened. As a result, the number of batches produced within a given period is below our initial assumptions.
We are currently improving automation systems, software and other elements. We expect the ramp-up pace
to accelerate toward H2.
At the large-scale North Carolina site, customer contracts remain in place. We will work to improve operations
so that performance strengthens heading into next fiscal year.
At the small- to mid-scale North Carolina site, production has been paused for regulatory reasons. Once we
reach an agreement with the regulatory authorities, we expect to resume operations, removing another
constraint.
Regarding early-stage projects, orders for initial clinical development work have been insufficient. We are
enhancing our commercial structure and taking various actions to address this issue. By combining these
efforts, we aim to improve the business environment for FY2027.
At this stage, however, we are not yet able to provide a specific operating income figure for FY2027.
Shibano [Q]: Thank you.
Just to confirm, you originally expected an operating loss of just under JPY40.0 billion for this fiscal year. Now
that the loss has expanded by more than JPY30.0 billion, should we understand that the loss will be around
JPY70.0 billion?
Iida [A]: Yes, that is correct.
17
Shibano [Q]: Thank you.
Regarding next fiscal year, while you cannot provide a definitive view at this stage, should we assume that
profitability could deteriorate rather than improve, or is it simply too early to tell?
Iida [A]: At this stage, it is too early to comment.
Shibano [Q]: Thank you.
My third question is about the Business Innovation segment. You announced the spin-off plan, and I am very
interested in how this will develop. You mentioned that completion is expected within two to three years.
What kind of business profile are you aiming to achieve at that point? As things stand, I am concerned that
the spin-off may not achieve an attractive valuation. Over the next two to three years, what do you intend to
achieve so that the partial spin-off can proceed from a stronger position? If you can share anything at this
stage, I would appreciate it.
Hama [A]: This is Hama. I will answer your question.
As you noted, we are currently in the process of strengthening our business structure, and Q1 results were
challenging. The biggest issue is that the cleanup of legacy businesses in the Graphic Communications business,
has been delayed. This work may extend slightly into the beginning of FY2027, but our plan is to substantially
complete it during FY2026 or by the beginning of FY2027.
At the same time, we are accelerating the shift from printing toward solutions across the entire business. This
is a major priority. It is difficult to discuss details because external partners are involved, but the industry has
many players, and consolidation is likely. We hope that the partial spin-off will position us to take a leading
role in that consolidation.
Higuchi [A]: To add to that, we are implementing structural reforms this fiscal year in overseas sales channels
and production capacity. We expect these reforms to generate benefits of around JPY10.0 billion next year.
This should help improve profitability. By strengthening profitability ourselves, we aim to position the
Company for the next step, which is to grow further as a printing and solutions company.
Shibano [M]: Thank you very much.
Moderator: Thank you, Mr. Shibano.
We will now move to Mr. Wakao from JPMorgan Securities.
Wakao [Q]: Thank you. This is Wakao from JPMorgan. I have a few questions regarding Bio CDMO.
First, regarding the additional JPY30.0 billion increase in the operating loss this fiscal year, could you break
down that incremental loss between the large-scale facilities and the small-to-mid-scale facilities? My
understanding was that, cell and gene therapy accounted for a relatively large portion of the original operating
loss of just over JPY35 billion. So, for this additional JPY30.0 billion, is the larger portion attributable to the
large-scale facilities or the small-to-mid-scale facilities? I would appreciate clarification on the breakdown.
Iida [A]: This is Iida.
The majority of the roughly JPY30.0 billion downside is coming from the small-to-mid-scale facilities. At the
large-scale site in North Carolina, the shortfall reflects the slower-than-expected production ramp-up, while
Denmark is performing broadly in line with plan.
18
In contrast, the small-to-mid-scale North Carolina site is facing the impact of regulatory matters and responses
to FDA requirements, which is creating a larger gap.
In terms of scale, the large-scale portion is just under JPY10.0 billion, and the remainder is from the small-tomid-scale facilities.
Wakao [Q]: Understood.
And since the small-to-mid-scale facilities in North Carolina are antibody-related, is it correct to interpret that
this gap is mainly from antibody projects?
Iida [A]: Yes. The gap this time is larger in antibody projects than in cell and gene therapy (CGT).
Wakao [Q]: Thank you.
Given that, while next fiscal year's outlook is still uncertain, it seems that for the large-scale facilities, once
technology transfer progresses, visibility should improve. And for antibody projects in the small-to-mid-scale
facilities, I assume that shorter-cycle projects could help fill the gap. Is it difficult to implement such measures
at this stage?
Iida [A]: As you noted, the large-scale North Carolina site is supported by long-term customer contracts. Once
operations ramp up, profitability will improve accordingly. We believe that addressing the operational issues
will allow earnings to follow.
For the small-to-mid-scale facilities, project cycles are indeed shorter. As shown on page 25, early-stage
projects, particularly those involving process development, have very short cycles. Strengthening our
operational capabilities and expanding these early-stage projects will help reduce the gap heading into FY2027.
Wakao [Q]: Thank you.
My final question is about next fiscal year. Achieving break-even had originally been positioned as a key target.
Given the current situation, cell and gene appears to have relatively high fixed costs, and it seems there may
be room for structural reform. If cost reductions cannot be achieved solely through operational improvements,
would it be necessary to implement some form of structural measures in order to reach break-even? Is that
something you are considering at this stage?
Iida [A]: Achieving break-even as early as possible is a key management priority. We intend to develop the
FY2027 plan from all perspectives, not only by strengthening the top line but also by addressing costs.
Wakao [M]: Understood. Thank you. That concludes my questions.
Moderator: Thank you, Mr. Wakao.
We will now move to Mr. Tokumoto from SMBC Nikko Securities.
Tokumoto [Q]: This is Tokumoto. Thank you for the presentation.
I have a question about the Bio CDMO. At the small-to-mid-scale North Carolina site, there was an unplanned
shutdown due to regulatory inspections. In your guidance, when do you assume operations will resume, and
is there a risk that the restart could be delayed further?
Iida [A]: This is Iida.
19
We are currently gathering the data requested by the regulatory authorities and engaging in scientific,
evidence-based dialogue with them. Our current view is that we would like to resume operations at the site
during Q2.
As a result, Q1 reflects the full impact of the shutdowns, but we are working to resume operations in Q2. We
are currently in the stage of compiling the necessary data.
Tokumoto [Q]: Understood.
So, from Q2 onward, will performance begin to recover?
Iida [A]: Yes. Once operations resume, revenue generation from that site will recover, and we expect
normalization from Q2 onward.
Tokumoto [Q]: Understood.
My second question is about the Electronics segment, particularly the Semiconductor Materials business. You
have raised the full-year outlook, and when I look at the annual numbers, it appears that the full-year plan is
roughly equivalent to annualizing Q1 result. Given the strong demand we are seeing now, and considering
that revenue may expand further as we move through each quarter, should we expect further upside potential
in the segment, or was Q1 exceptionally strong, meaning we should view the full-year plan as the appropriate
baseline? I would appreciate your thoughts on the Electronics outlook.
Iwasaki [A]: This is Iwasaki, responsible for the Semiconductor Materials business.
In Q1, revenue grew by 31% YoY, or about 20% YoY excluding FX, demonstrating continued strong momentum.
We review the market outlook while exchanging three-year forecasts with major semiconductor
manufacturers. Although geopolitical and economic-security issues can create volatility, our view is that the
underlying demand trend is unlikely to change significantly.
Demand continues to strengthen as nodes advance, and AI-related semiconductor demand, including in
Taiwan and South Korea, remains robust. Demand for Intel CPUs is also beginning to improve. Taking all of
this into account, we do not expect the full year to simply be four times Q1. At the same time, we are mindful
of external risks, including developments in the Middle East, and have incorporated such uncertainties into
our planning.
Tokumoto [M]: Understood. Thank you very much.
Moderator: Thank you, Mr. Tokumoto.
We will now move to Mr. Shimamoto from Okasan Securities.
Shimamoto [Q]: This is Shimamoto from Okasan Securities.
I would like to ask about the rationale behind the Business Innovation spin-off plan. Could you explain more
about the background that led to this announcement? In the past, President Goto often described the
Business Innovation segment as a cash-generating business that would support investments in the Bio CDMO.
Now, the Bio CDMO is facing a very challenging situation, yet you have announced a plan to spin off the
Business Innovation segment. From a group-wide perspective, why is this the right timing? I assume you have
been considering various options for some time, but I would appreciate your comments on why this moment
was chosen.
Higuchi [A]: This is Higuchi.
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As you noted, we regularly review the optimal shape of our business portfolio. This year is the final year of
our current medium-term management plan, and we are now formulating Phase II of VISION2030, which
covers FY2027 through FY2030.
As mentioned earlier, we are currently implementing structural reforms, including optimizing overseas sales
channels capacity and production capacity. Together with the launch of new AI-enabled products, we remain
committed to our goal of achieving a 10% operating margin in FY2030. Over this fiscal year and next, we intend
to establish a clear path toward that goal while laying the groundwork for Business Innovation to operate
independently as a listed company.
A spin-off requires financial audits and various listing procedures. At the same time, we also want to improve
Business Innovation's profitability through our own initiatives. Considering the time required for both, we
believe the current timing is appropriate.
As we begin formulating our next medium-term management plan, announcing the start of this review now
will allow us to incorporate the spin-off into that plan and move forward in a structured manner.
Shimamoto [Q]: Thank you.
So, in that sense, should we understand that this is a plan that you are firmly committed to, and that the
outlook for other businesses is unlikely to cause major changes to this direction?
Higuchi [A]: The Bio CDMO business is currently facing challenges, but our strategic scenario has not changed.
We will continue strengthening execution capabilities.
The Electronics segment, including the Semiconductor Materials business, remains a key growth driver. The
Imaging segment continues to deliver strong profitability through our market investment and product
innovation. These three businesses have strong technological synergies, and we believe they will continue to
create value as an integrated group.
Shimamoto [M]: Understood. Thank you very much. That is all from me.
Moderator: Thank you, Mr. Shimamoto.
We will now move to Mr. Okazaki from Nomura Securities.
Okazaki [Q]: Thank you. This is Okazaki from Nomura.
I would like to ask about the Imaging segment. The full-year outlook has been revised downward, excluding
the impact of foreign exchange, even though Q1 results exceeded expectations. Could you explain why you
are taking a somewhat conservative view?
Igarashi [A]: This is Igarashi from the Imaging business.
As you noted, our business continues to perform well, and that strength is reflected in our Q1 results. However,
we are facing procurement risks related to semiconductors. Although we have secured the DRAM we need,
prices have risen more than expected. To ensure that we can continue meeting demand, our priority has been
to secure component supply. Our revised outlook reflects those procurement risks.
Okazaki [Q]: Thank you. Regarding memory prices, you have increased the estimated impact this time. To
what extent have pricing measures been incorporated into your earnings outlook?
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Igarashi [A]: We have already announced price increases in certain areas based on market conditions. We will
continue to implement price adjustments as needed, and those pricing measures have already been factored
into our outlook.
Okazaki [Q]: Understood.
My next question is about the Business Innovation segment. Q1 results were in line with your internal
expectations, but the segment posted a loss. I assume there were several one-off factors. Could you explain
how performance will improve from Q2 onward to achieve full-year profitability?
Hama [A]: This is Hama.
As you noted, compared with last year, the results appear challenging. However, performance is progressing
largely as planned and we are taking the necessary actions to improve results.
One of the key factors behind the particularly weak Q1 performance was delays in server installation due to
tight server availability. As a result, certain service revenues were deferred. Importantly, this reflects timing
rather than lost business, and we expect these revenues to be recognized in the coming quarters. In addition,
the structural reforms we implemented early this fiscal year will begin contributing in the coming quarters.
We also plan to raise prices by 10% starting in September. Taken together, we believe we can bring the
segment back into the black for the full year.
Okazaki [Q]: Thank you.
My third question is about the Electronics segment. You mentioned strong performance in the AF Materials
business, particularly data tape. Revenue appears to be growing significantly. Could you comment on the
drivers behind this growth and whether you believe it is sustainable?
Higuchi [A]: I will answer this question.
Global demand for data-center capacity remains extremely strong. Against that backdrop, data tape is gaining
increasing attention as a highly secure solution for long-term data archiving. Part of the demand reflects the
current tight supply of memory chips, but the more structural driver is that customers no longer want to rely
solely on semiconductor memory or disk-based storage for archiving. They are increasingly adopting data tape
because it offers higher security and significantly better energy efficiency.
Okazaki [M]: Understood. Thank you very much.
Moderator: Thank you, Mr. Okazaki.
We will now move to Mr. Kohtani from Mizuho Securities.
Kohtani [Q]: This is Kohtani.
I have a question for Mr. Iida. When a regulatory audit triggers the shutdowns, it usually means there were
observations and you are now responding to them. Typically, companies respond within 15 days and then
receive feedback from the FDA. Has the FDA already provided its response? My point is that without the FDA's
feedback, it seems difficult to estimate the restart timing. How do you see this?
Iida [A]: This is Iida.
As you noted, the FDA conducted an unannounced inspections, and we have received the inspection
observations. We are now communicating our corrective actions to the FDA. We provide responses roughly
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once a month, and the FDA has been requesting additional supporting data. We are currently in that exchange
process.
Based on the data we are compiling, we intend to determine the appropriate timing for resuming operations.
Our goal is to complete this process within Q2. We are maintaining regular communication with the FDA.
Kohtani [Q]: It is surprising that the entire site had to be shut down. Was this related to a specific tank, or was
it more of a site-wide issue?
Iida [A]: We assessed the matter as affecting the site as a whole. We therefore decided to voluntarily suspend
operations, compile the necessary data, and review all relevant processes. We believe this approach is the
most appropriate way to respond to the authorities.
Kohtani [Q]: And at this point, you do not expect any additional equipment to be required?
Iida [A]: Correct. We do not anticipate any equipment-related issues. The observations relate to
manufacturing processes and operational workflows.
Kohtani [Q]: Understood.
My final question is about early-stage Bio CDMO projects. You mentioned earlier that orders have been soft.
Looking at the market more broadly, particularly in the U.S., it seems that funding is flowing into the biotech
sector and activity is picking up. In your case, is the weakness mainly in antibody projects, CGT projects?
Iida [A]: We see softness across the board, but the most notable weakness is in antibody projects, where we
need to continue securing new contracts, particularly in early-stage work involving complex modalities such
as bispecific antibodies.
For Antibody-Drug Conjugates (ADCs), we are now establishing a full-service capability at our Toyama site.
Strengthening our capabilities in ADCs and bispecific antibodies is a key focus for us.
Kohtani [Q]: And you already have a track record in ADCs and bispecifics?
Iida [A]: Yes, we do. For bispecific antibodies, we have experience not only in early-stage projects but also in
commercial-scale manufacturing. For ADCs, we have historically handled the antibody portion. The new
Toyama site will be our first facility to perform the conjugation process and the subsequent manufacturing
processes, and we will begin offering those services there.
Kohtani [M]: That's very clear. Thank you very much.
Moderator: Thank you, Mr. Kohtani.
We will now move to Ms. Yoshihara from UBS Securities.
Yoshihara [Q]: This is Yoshihara from UBS. Thank you.
I would like to ask about Semiconductor Materials for back-end processes. Some industry peers have
commented that demand for back-end processes is very strong and that new business will begin in H2. Could
you explain your business opportunities in back-end materials, both for H2 onward?
Iwasaki [A]: This is Iwasaki, responsible for the Semiconductor Materials business.
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In back-end processes, our main product is our ZEMATES polyimide materials, which delivered very strong
growth in Q1. This demand continues to increase in Q2 and beyond.
We supply insulating materials for interposers and encapsulation applications. While panel-level packaging
has not yet entered full-scale production, major semiconductor manufacturers and OSATs (Outsourced
Semiconductor Assembly and Test) are already in the final stages of evaluating our polyimide films. Even at
the prototype stage, these films are contributing to revenue. We are also developing polyimide materials used
in build-up substrates, and they are receiving positive customer evaluations.
In addition, we are seeing growth opportunities in advanced packaging applications. Our CMP slurry for backend stacking processes is already on the market. It has been adopted by a Korean manufacturer for NAND
applications, and we also expect their use to expand into DRAM as well. Thermal-management materials will
also begin contributing to revenue.
Considering all of this, our original FY2030 revenue target of JPY500.0 billion did not fully reflect the
contribution from back-end materials. The strong growth in polyimide-based buffer coats and insulating
materials suggests that we can achieve that target ahead of schedule.
We recently held a media briefing on back-end materials, and we believe it helped deepen understanding of
the business and its future potential.
Yoshihara [Q]: As a quick follow-up, if my understanding is correct, back-end materials saw a sharp
acceleration in growth in H2 of last fiscal year. Should we expect further growth from that already high base
in the same period of this fiscal year?
Iwasaki [A]: That is correct.
Yoshihara [M]: Understood. Thank you very much.
Moderator: Thank you, Ms. Yoshihara.
We will now move to Ms. Yamazaki from Morgan Stanley MUFG Securities.
Yamazaki [Q]: This is Yamazaki from Morgan Stanley MUFG. I have two questions.
My first question concerns the delay in ramp-up at the large-scale Bio CDMO facility. You explained that most
of the downward revision this time comes from the small-to-mid-scale facilities, and that the large-scale site
is experiencing only a modest delay. Could you elaborate on the outlook for resolving the remaining techtransfer issues, the difficulty of the operational challenges, and whether there is any risk that the ramp-up
could be delayed further?
Iida [A]: This is Iida.
At the large-scale North Carolina facility, the technology transfer itself has already been completed. The
remaining challenge lies in our operations, specifically how quickly and at what cadence we can produce
batches.
The drug manufacturing process we are handling has certain unique characteristics, so we have rebuilt the
automation system to match those requirements. We are also improving operator proficiency, and production
is progressing, although at a slower pace.
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The key is how much we can shorten the cadence, meaning the interval between batch starts. The shorter
that interval becomes, the more batches we can produce per tank. At this stage, the issue is primarily
operational.
If we accelerate too aggressively, we could compromise quality. For that reason, we intend to carefully
manage the pace based on our level of proficiency and accumulated operating experience, and gradually bring
operations up to the desired pace.
Yamazaki [Q]: Thank you.
My second question concerns tariff refunds. Your forecast for this fiscal year incorporates approximately
JPY6.0 billion in tariff refunds, and I assume this reflects the net impact of those refunds. I also assume that
the gross tariff burden was somewhat higher. Could you explain how you think about the difference between
the net and gross amounts, and whether there could be further upside from refunds going forward?
Higuchi [A]: As you noted, the figure is net. It represents the tariffs we paid minus the portion that was passed
on to customers. The degree of pass-through varies by business, depending on customer contracts and the
nature of those customer relationships. When tariffs increased last year, some businesses were able to pass
through more than others.
The approximately JPY6.0 billion we have incorporated reflects all refund decisions made by the current US
administration. For that reason, we do not expect any significant change in the net amount going forward.
Yamazaki [M]: Understood. Thank you. That's all from me.
Moderator: Thank you, Ms. Yamazaki.
As we have now reached the scheduled closing time, we will conclude the Q&A session.
This concludes today's earnings briefing for FUJIFILM Holdings Corporation.
Thank you very much for joining us today.
[END]
Document Note
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides an answer
from the Company, or [M] neither asks nor answers a question.
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