Kyocera Corporation
Financial Presentation for the Nine Months Ended December 31, 2025
February 3, 2026
Event Summary
[Company Name]
Kyocera Corporation
[Company ID]
6971
[Event Language]
JPN
[Event Type]
Earnings Announcement
[Event Name]
Financial Presentation for the Nine Months Ended December 31, 2025
[Fiscal Period]
Fiscal 2026 3Q
[Date]
February 3, 2026
[Time]
10:30 – 12:06
(Total: 96 minutes, Presentation: 55 minutes, Q&A: 41 minutes)
[Venue]
Webcast
[Number of Speakers]
6
Hideo Tanimoto
Shiro Sakushima
Norihiko Ina
Hiroaki Chida
Koichi Kano
Michinori Yamada
President and Representative Director
Director, Senior Managing Executive Officer
Director, Senior Managing Executive Officer
Director, Managing Executive Officer
Director, Managing Executive Officer
Director, Managing Executive Officer
Presentation
Moderator: We will now begin the presentation of Kyocera Corporation's financial results for the nine months
ended December 31, 2025, and the progress update on the Strategic Business Transformation Project. Today's
presentation will be hold at the venue here, as well as via Zoom webinar.
To begin with, here are our attendees. Hideo Tanimoto, President and Representative Director; Shiro
Sakushima, Director, Senior Managing Executive Officer in charge of Strategic Business Transformation;
Norihiko Ina, Director, Senior Managing Executive Officer in charge of Strategic Business Transformation and
Executive General Manager of the Solutions Business; Hiroaki Chida, Director, Managing Executive Officer,
Executive General Manager of Headquarters (CFO); Koichi Kano, Director, Managing Executive Officer and
Executive General Manager of the Electronic Components Business; and Michinori Yamada, Director,
Managing Executive Officer and Executive General Manager of the Core Components Business.
This event is scheduled to end at 12:00 PM.
“Notice Regarding Change in Representative Directors” and “Transition to a Company with Audit &
Supervisory Committee” announced yesterday, as well as the candidates for Director to be proposed at this
year's Ordinary General Meeting of Shareholders, announced today at 10:00 AM, will be included in the
progress update on the Strategic Business Transformation Project.
First, I would like to explain our 3Q results. President Tanimoto, please.
Tanimoto: We would like to take this opportunity to thank you all for your continued support. Thank you very
much for taking time out of your busy schedule to attend our financial results briefing today.
I will explain the results based on the presentation materials for the financial results for the nine months
ended December 31, 2025.
Today, we will explain what is described here in order.
First, I will provide an overview of the financial results for fiscal 2026 9M.
This slide shows the results for fiscal 2026 9M compared to fiscal 2025 9M.
Sales revenue increased due to higher sales in the Core Components Business especially in the Semiconductor
Components Unit, despite the impact of the stronger yen against the US dollar.
Profit increased significantly due to the effect of higher sales and progress in structural reforms, in addition
to the impact of impairment losses, etc. recorded in fiscal 2025 9M.
As a result, sales revenue for fiscal 2026 9M amounted to JPY1,522 billion, up 2% from fiscal 2025 9M,
operating profit increased 475.3% to JPY70.6 billion, profit before income taxes increased 141.8% to JPY122
billion and profit attributable to owners of the parent increased 434.3% to JPY98 billion.
The average exchange rate was JPY149 against the US dollar, up JPY4 from the same period last year, and
JPY172 against the euro, down JPY7. The impact of the foreign exchange rate fluctuation was approximately
negative JPY12 billion on sales revenue and positive JPY2 billion on profit before income taxes compared to
the same period last year.
As noted below in the table, one-time costs and other factors included in the amount of change in each item
are explained on the next page.
The difference in year-on-year gains between operating profit and profit before income taxes is due to a
foreign exchange loss of approximately JPY13.3 billion, which was recorded in fiscal 2025 9M due to the sharp
appreciation of the yen.
This slide explains one-time costs.
The upper items represent one-time costs included in operating profit and profit before income taxes. In the
same period of the previous year, we recorded approximately JPY43 billion in impairment losses on property,
plant and equipment, etc. in the Organic Packages and Boards Business. In fiscal 2026 9M, we recorded
approximately JPY5 billion in write-downs of idle assets in the Organic Packages and Boards Business, and
approximately JPY2.1 billion in losses related to the execution of the transfer agreement for the silicon diode
power semiconductor business. As a result, we recorded total losses of approximately JPY7.1 billion.
These differences of approximately JPY35.9 billion were one of the factors contributing to the increase in
profit for fiscal 2026 9M.
The bottom items represent one-time costs included in profit attributable to owners of the parent. In the
same period of the previous year, we recorded a total of approximately JPY48 billion, consisting of
approximately JPY30 billion after tax effects as shown under item one in the table above, and approximately
JPY18 billion due to an increase in tax expenses resulting from the reversal of deferred tax assets, etc. at
overseas subsidiaries.
On the other hand, in fiscal 2026 9M, in addition to the amount of approximately JPY5 billion after tax effects
related to the one-time costs under item two and item three in the table above, we recorded a positive impact
of approximately JPY9.6 billion due to a decrease in tax expenses resulting from the sale of KDDI shares,
resulting in a net gain of approximately JPY4.6 billion.
These differences of approximately JPY52.6 billion were one of the factors contributing to the increase in
profit for fiscal 2026 9M.
Here is a summary of results for fiscal 2026 9M. See the sales revenue on the left side of the slide. Sales
revenue of the Core Components Business increased, mainly due to higher sales in the Semiconductor
Components Unit, while sales revenue of the Solutions Business decreased, mainly due to lower sales in the
Document Solutions Unit.
Please see pre-tax profit on the right. Profit before income taxes increased significantly due to the effects of
structural reforms in the Organic Packages and Boards Business and the KAVX Group, as well as cost reduction
efforts in each business and a decrease in one-time costs.
Capital expenditures, depreciation charge of PPE, and R&D expenses are shown here. Capital expenditures on
the left side increased due mainly to completion of new factory buildings constructed in Japan from previous
years to expand production capacities and to promote automation.
Depreciation charge of PPE in the center decreased due mainly to the recording of a loss for impairment in
the Organic Packages and Boards Business in the same period of the previous fiscal year.
R&D expenses on the right decreased slightly due to the selection and concentration of R&D activities.
Here is the list of sales revenue by reporting segment.
Here is the list of business profit by reporting segment.
Changes in sales and profit of each reporting segment are explained on the next page and beyond.
The changes in sales revenue and business profit by reporting segment are explained in the upper row for
fiscal 2026 9M, compared with fiscal 2025 9M. In the lower row for 3Q of fiscal 2026 alone, compared with
2Q of the current fiscal year.
First, the Core Components Business. Please see the sales revenue on the left side. Sales revenue for 9M
totaled JPY477.2 billion, while sales revenue for 3Q totaled JPY169.5 billion.
For 9M as well as 3Q, sales revenue increased due mainly to increased sales in the Semiconductor
Components Unit, including sales of ceramic packages for information and telecommunication-related
markets and organic packages for data centers.
Please see business profit on the right. For 9M, business profit totaled JPY50.3 billion, while business profit
for 3Q totaled JPY20.3 billion.
For 9M, business profit increased significantly due to increased sales and the positive effect of structural
reforms, as well as decrease in amount of one-time costs. For 3Q, business profit increased due to the
increased sales and cost reduction efforts, although a one-time loss was recorded in 3Q.
Next, the Electronic Components Business. See the sales revenue on the left side of the slide. For 9M, sales
revenue totaled JPY267.2 billion, while sales revenue for 3Q totaled JPY92.5 billion.
For 9M, sales revenue was almost flat, as increased demand for capacitors and other products for the
automotive markets and information and telecommunication-related markets in the KAVX Group was offset
by the negative effect of the yen’s appreciation against US dollar.
On the other hand, in 3Q, sales revenue increased slightly, mainly due to the weaker yen, despite a seasonal
decline in sales of ceramic capacitors for the information and telecommunication-related markets.
Please see business profit on the right. For both 9M and 3Q alone, business profit totaled JPY1.9 billion.
For 9M, business profit increased mainly due to the positive effect of structural reforms in the KAVX Group,
which more than offset the negative impact of a one-time cost of approximately JPY2.1 billion incurred during
fiscal 2026 1Q in connection with the execution of an agreement to transfer the silicon diode power
semiconductor business.
On the other hand, business profit decreased due to lower sales of ceramic capacitors for information and
telecommunication-related markets, which more than offset the effects of structural reforms in the KAVX
Group.
Lastly, the Solutions Business. See the sales revenue on the left side of the slide. For 9M, sales revenue totaled
JPY791.3 billion, while sales revenue for 3Q totaled JPY272.3 billion.
For 9M, sales revenue of the Solutions Business as a whole decreased due mainly to the decreased sales in
the Document Solutions Unit and the Communications Unit, which were partly offset by increased sales in the
Printing Devices Business and the Smart Energy Business.
In 3Q, however, sales revenue of the Solutions Business as a whole increased due mainly to the depreciation
of the yen and increased sales in the Document Solutions Unit, which more than offset decreased sales in the
Industrial Tools Unit.
Please see business profit on the right. For 9M, business profit totaled JPY58 billion, while business profit for
3Q totaled JPY20.2 billion.
For 9M, business profit increased as a result of cost reduction efforts in each business, despite the decreased
profit in the Document Solutions Unit.
In 3Q, business profit increased due mainly to the effect of higher sales in the Document Solutions Unit,
despite a decline in profit mainly in the Industrial Tools Unit.
I will explain the progress of the strategic business transformation in fiscal 2026.
To begin, please see the profit improvement of challenging businesses. In the Organic Packages and Boards
Business in the upper row, we have promoted measures related to cost structure transformation, and we
were able to return to profitability in 3Q, excluding one-time losses.
Excluding the impact of one-time losses in fiscal 2026 and fiscal 2025, profits improved by approximately
JPY15 billion compared to fiscal 2025 9M.
As for the KAVX Group in the lower row, it achieved profitability during fiscal 2026 9M by enhancing
production technologies and equipment efficiencies through collaboration with the electronic components
business of Kyocera Corporation. The KAVX Group also improved profits by approximately JPY8 billion
compared with fiscal 2025 9M.
Please see the capital strategies on the right side of the slide. Upper row, regarding the progress of share
repurchase, cumulative purchases through December 31, 2025, totaled approximately JPY120 billion.
The cumulative planned purchase amount through the end of March 2026 will remain unchanged from
approximately JPY200 billion as per the May 2025 resolution.
With regard to the reduction of cross-shareholdings in the lower section, we sold approximately 108 million
shares of KDDI stock for approximately JPY250 billion in June 2025, as it has already been announced.
As a result, the ratio of net assets held in the cross-shareholdings decreased to 47.9% at the end of fiscal 2026
3Q.
This section describes the review of businesses. Please see the transfer of the chemical business on the left
side of the slide. The chemical business is part of the Ceramic Packages Business within the Core Components
Business and manufactures and sells semiconductor-related products, mainly encapsulation materials and
pastes, as well as chemical products and composite materials.
Branches subject to transfer are the Kawasaki Plant, Fukushima Koriyama Plant, and Tochigi Moka Office in
Japan, and a manufacturing subsidiary in China. The scale of the business is approximately JPY23 billion in
sales for fiscal 2025, and the transferee is Sumitomo Bakelite Co., Ltd.
As described in the transfer scheme, the target business will be transferred to a new company which will be
established by Kyocera Corporation through a corporate split, and the shares of the new company will be
transferred to Sumitomo Bakelite at the end of October 2026.
Other items to be reviewed are on the right side of the slide. The transfer of the silicon diode power
semiconductor businesses in the upper row and SouthernCarlson, Inc. in the lower row was completed in
January of this year, respectively, as originally planned. In connection with the sale of SouthernCarlson, Inc.,
Kyocera expects to record a gain of approximately JPY15 billion in fiscal 2026 4Q.
Next, I would like to explain strengthening of the connector business. As announced on October 30, 2025, we
aim to become one of the top 10 global groups in terms of combined sales of the respective companies by
leveraging the strengths of JAE, Kyocera Corporation, and KAVX to work together.
The right side of the slide shows the progress of alliance. Regarding the upper row and initiatives to expand
market share, we plan to dispatch personnel from Kyocera Corporation to strengthen the development
system for products for mobile equipment and ICT equipment at JAE during fiscal 2026.
In the middle section, regarding sales collaboration, from fiscal 2027 1H, we plan to start cross-selling to
European automobile and industrial markets, utilizing Kyocera's sales network.
Regarding the lower part, cooperation in terms of production, KAVX Czech plant is scheduled to start mass
production of JAE's products in fiscal 2028 1H.
I will explain the organizational changes in the Core Components Business. In January 2026, Kyocera
implemented the following three reorganizations in the Core Components Business to strengthen its business
structure in its focus areas.
The first point is to consolidate some of SPE components, which have been manufactured in the Automotive
Components Business, into the Fine Ceramic Components Business.
The second point is to integrate the automotive camera business and the Displays Business, such as head-up
displays and displays for next generation automotive mirrors, into the Automotive Systems Business.
The third point is to consolidate certain ceramic components that had been manufactured in the Automotive
Components Business into the Ceramic Packages Business.
Of these three items, due to the consolidation of certain ceramic components that had been manufactured
in the Automotive Components Business into the Ceramic Packages Business, we have reclassified the
amounts for the Industrial & Automotive Components Unit and the Semiconductor Components Unit in the
forecasts by reporting segment for fiscal 2026, which will be explained later.
Next, I will explain the financial forecasts for fiscal 2026. Yesterday, we revised our full-year forecast for fiscal
2026.
Both sales revenue and profit have been revised upward: sales revenue to JPY2,020 billion, up JPY70 billion
from the previous forecast; operating profit to JPY100 billion, up JPY30 billion; profit before income taxes to
JPY150 billion, up JPY33 billion; and profit attributable to owners of the parent to JPY120 billion, up JPY25
billion.
The exchange rate was revised JPY150 against US dollar, down JPY5 from the previous forecast, and JPY170
against the euro remained unchanged.
Based on the progress through fiscal 2026 9M, we have revised our forecasts for capital expenditures
downward by JPY20 billion from the previous forecast to JPY160 billion, depreciation charge of PPE downward
by JPY8 billion to JPY112 billion, and R&D expenses downward by JPY5 billion to JPY115 billion, respectively.
The main reasons for the revision of the forecast are explained on the next page.
See the sales revenue on the left side of the slide. The upward revision was mainly due to the continued high
level of demand in fiscal 2026, mainly in the semiconductor-related businesses.
By reporting segment, as shown in the graph, we increased the figure by JPY35 billion in the Core Components
Business, by JPY7 billion in the Electronic Components Business, and by JPY28 billion in the Solutions Business.
See pre-tax profit on the right. For profit before income taxes, we have increased by JPY8 billion in the Core
Components Business, mainly due to increased profits from increased demand and cost reduction efforts, and
by JPY22 billion in the Solutions Business, taking into account the positive impacts of approximately JPY15
billion from the transfer of SouthernCarlson, Inc., respectively, from the previous forecast. We have revised
downward our forecast for the Electronic Components Business by JPY3.6 billion in light of the current
situation.
Together, these factors result in a total JPY33 billion upward revisions to the previous forecast for profit before
income taxes.
Please refer to pages 21 and 22 for reporting segment figures.
Since the beginning of fiscal 2026, we have been working to improve challenging businesses and review our
business portfolio, while at the same time implementing a fundamental capital policy, and we believe that
these efforts have paved the way for improvements in performance and ROE. For fiscal 2026 4Q, we will
continue to make steady improvements and achieve the financial forecasts announced yesterday. These are
the financial results for fiscal 2026 9M. Thank you.
Moderator: Thank you. Next topic is to report on the progress of the Strategic Business Transformation
Project.
Tanimoto: Now, I would like to explain the progress of the Strategic Business Transformation Project.
Today, the executive officers in charge of the items listed here will each provide an explanation in the order
given
To begin with, I would like to explain the overview of the project.
We uphold as our Management Rationale “To provide opportunities for the material and intellectual growth
of all our employees, and through our joint efforts, contribute to the advancement of society and humankind”,
and we aim to become “The Company” that gains the respect of the world. Based on Management by All,
Challenge and Creativity, and a solid corporate philosophy, we conduct our business.
We are implementing management reforms based on this management rationale and the vision we aim to
achieve.
Here is a roadmap for enhancing corporate value. We will divide the management reform period into two
phases and steadily implement initiatives to enhance corporate value, with improving ROE as our major
management challenge.
As shown on the left, we have invested aggressively with a long-term target of achieving sales revenue of JPY3
trillion. However, performance declined mainly due to weak demand in semiconductor-related markets and
automotive-related markets, and ROE for the previous fiscal year was 0.7%. As a result, we recognized the
necessity of management reforms, including a revision of management targets.
Based on the results of fiscal 2025, we have set the three-year period from the fiscal 2026 to fiscal 2028 as
the period for rebuilding the management foundation, and have set a target ROE of 5% or more by fiscal 2028.
As the next step, we have set the period from fiscal 2029 to fiscal 2031 as the period for promoting business
growth, with a target ROE of 8% or more by fiscal 2031.
By steadily capturing these goals, we will strive to increase market capitalization by aiming for ROE of 10% or
more in the future.
To achieve the target ROE, we will continue to optimize our capital structure and work on inorganic growth
as well as organic growth.
These are the priority measures in this Strategic Business Transformation Project. We will be working on three
transformations to achieve sustainable ROE improvement.
In the first point, business portfolio management, we are reorganizing our portfolio according to the
characteristics of each reporting segment in order to shift to a management policy that emphasizes
investment efficiency.
In the second point, capital strategies, we will implement financial strategies that contribute to capital
efficiency in order to optimize capital.
In the third point, corporate governance, we plan to shift to a company with an Audit & Supervisory
Committee in fiscal 2027 in order to separate supervision and execution.
More details on these initiatives are explained in the following pages.
First, let me explain how we are strengthening our business portfolio management. We aim to enhance our
corporate value by contributing to solving challenges of customers as well as society using unique
technologies.
The Components Businesses on the left will be positioned as a medium- to long-term growth driver for the
Kyocera Group.
We will utilize the technological capabilities and strong customer base fostered in our original business area
of fine ceramics. Mainly in advanced semiconductor and mobility markets where mid- to long-term growth is
expected, we aim to increase market share and improve profitability by transforming our business portfolio
into one optimized to provide high-value-added customized products and solutions that contribute to solving
customers’ challenges.
The Solutions Business is on the right; they will generate stable profits on an ongoing basis.
Toward transforming into a business portfolio that emphasizes the creation of innovation by taking advantage
of a diverse lineup of products and services and the co-creation of values with customers, we aim to transform
into a business centered on the Products × Experience Value Approach, by fusing high-quality and highperformance manufacturing with services that contribute to solving customers’ challenges.
In addition to the evolution of our Components Businesses and Solutions Business, we will leverage our
strengths, such as our diverse technologies, solid customer base, global structure, and capital strength, both
organically and inorganically.
As an organic growth strategy, we will concentrate our management resources in priority areas, with the
diversified integration of core technologies, including fine ceramics, thin films, electronic and electric control,
optics, and telecommunications and software, serving as the source of our competitiveness.
As an inorganic growth strategy, we will focus on M&A in areas where we can strengthen our technological
capabilities and competitiveness. M&As are considered in areas where synergies with core technologies are
expected to increase market share and profit growth, or where new solutions are expected to be developed
through the combination of products and services.
In working with M&A target companies, we will support the creation of new businesses and business
transformation, while respect independence and emphasizing coexistence and co-prosperity.
To strengthen our business portfolio management, we will start evaluating businesses based on ROIC from
fiscal 2027. We will determine the future business direction and such by quantitative evaluation based on
ROIC and qualitative evaluation such as future potential and sustainability.
As for the operational structure, management will formulate company-wide strategies and manage the
business portfolio. In the business department, they will formulate business plans and manage their progress.
In addition, we will strengthen our monitoring system. We are currently in the process of reorganizing the
jurisdictional organization that will conduct regular monitoring from a company-wide perspective.
This slide summarizes our initiatives through fiscal 2028. Mainly, we will promote the improvement of
profitability of existing businesses and the transformation of internal systems.
The items implemented in the current term on the left were explained at the financial results presentation I
just gave you. As for measures to be implemented by fiscal 2028, on the right, we will first improve ROIC by
thoroughly improving profitability in each reporting segment and aim to achieve ROE of 5% in fiscal 2028,
through a combination of capital strategies and other measures.
In addition, based on ROIC-based business evaluations, we will define medium-term growth strategies and
continue to review our businesses using clear evaluation criteria.
Furthermore, we will reorganize the organizations and processes that are primarily responsible for strategy
and planning from a technology and marketing perspective and continue to study the optimization of the
company-wide personnel structure.
That concludes our explanation of strengthening business portfolio management.
Next, Mr. Sakushima and Mr. Ina, who are in charge of the Components Businesses and the Solutions Business,
respectively, will explain their initiatives for future growth.
Sakushima: Now, I, Sakushima will explain about the Components Businesses.
In the Components Businesses, we will strive to improve corporate value by implementing technology-based
structural reforms and strengthening competitiveness.
First, we aim to restore double-digit business profitability and achieve ROIC of 8% or more by fiscal 2028.
Furthermore, we have positioned the period from fiscal 2029 to fiscal 2031 as a period of new growth by
combining our strengths, with a target ROIC of 10% or more in fiscal 2031.
There are three main measures to achieve this goal. The first is to promote organic growth in our core
businesses. We are committed to consolidating our organization to strengthen our SPE business-related
activities, integrating our automotive system business, and expanding orders by proposing solutions to issues
related to power circuits for AI applications.
The second point is to improve productivity. We will realize a smart factory at the Nagasaki Isahaya Plant,
which is scheduled to begin operations in fiscal 2027, and at KAVX, we will proceed with significant
improvements in productivity by further strengthening personnel and technological support to the KAVX Thai
Plant from Kyocera Corporation.
The third point is M&A and organization reforms. We will promote the consideration of inorganic growth,
mainly in the Electronic Components Business, that is, growth through external collaborations and M&A, while
also conducting periodic reviews of our business portfolio.
I will explain our medium-term growth strategy for fiscal 2031. The core idea is to drive growth by aggressively
expanding into advanced semiconductors and related areas, as well as the mobility field.
In these areas, there is a strong trend toward the integration and matching of diverse cutting-edge
technologies, and we believe that there are numerous growth opportunities for us. Therefore, we will
accelerate collaboration and development with our customers in order to achieve growth.
In the area of advanced semiconductors and peripheral areas on the left side of the slide, we will continue to
respond to various needs in ceramic and optical components for semiconductor processing equipment,
packages for high-speed communications, and capacitors.
In the mobility area on the right, in the AD/ADAS-related area, the Displays Business and the automotive
component-related businesses were integrated to pursue synergies.
In addition, we will expand our product lineup by strengthening relationships with major Tier 1 customers and
strengthen collaboration with OEMs in the development of ITS modules and other products that utilize our
proprietary technologies.
On the other hand, in the ICE-related market, we will continue to monitor market trends while pursuing
residual profit in O2 sensors and other products.
This page shows our product development in advanced semiconductors and peripheral areas. We will leverage
our unique product lineup to grow in response to robust demand.
We are able to offer products that cover a wide range of areas from semiconductor processing equipment,
semiconductor devices, data centers, and even edge AI devices.
Centered on fine ceramic components, we offer a diverse range of components covering front-end to backend processes for advanced SPE. In addition, with a product portfolio spanning semiconductor packages,
passive components, connectors, and oscillators, we are able to deliver optimal solutions for future
technological challenges in advanced semiconductor-related areas, and we will continue to strengthen this as
one of our strengths.
On this page, we show you how the previously mentioned initiatives will change our business portfolio. We
take growth potential on the vertical axis and ROIC on the horizontal axis and classify businesses into five
quadrants.
The position as of fiscal 2025 is shown in a black frame, and the position to be aimed for in fiscal 2031 is shown
without a frame.
The arrows in the graph indicate organizational integration or technology fusion during the period. For
example, fine ceramics, in the center of the graph, is currently plotted in a profit improvement quadrant.
Kyocera is technologically very strong in fine ceramics and it is a profitable product line. However, ROIC is
currently declining due to upfront investment.
In the future, we will strengthen our growth in the booming SPE market. Through growth in the energy and
aerospace fields, where we can leverage our strengths in ceramics, we have indicated that we will advance
into a growth-driving business as a next-generation fine ceramics company.
Similarly, I will explain the contents related to AI power circuit solutions and mobility systems, which are
positioned as future growth drivers, on the next slides.
Here is an explanation of power circuit solution for AI applications. The biggest challenges for AI
semiconductors in the future are to reduce power consumption and heat generation in power circuits.
Kyocera will strengthen these businesses into growth-driving businesses by integrating the Group’s circuit
solution technologies, in addition to developing ceramic cores, component-embedded technologies,
substrate-embedded components, tantalum capacitors, and other packages and electronic components
shown in the upper left. We refer to it collectively as the power circuit solution for AI applications as shown
on the right side in a yellow circle.
Organic Packages and Boards Business and KAVX, shown in the lower left of the diagram, are challenging
businesses that need to be structurally reformed, and their profitability will be improved by fiscal 2028, and
their positioning will be shifted to the right.
At the same time, the progress of this solution proposal, together with ceramic packages and Kyocera
Corporation's electronic components business, will be sublimated into a growth driver by combining our
comprehensive strengths as a power circuit solution for AI applications.
In the Organic Packages and Boards Business and the Electronic Components Business, we will actively
consider flexible approaches to these businesses, including optimal organizational restructuring and, if
necessary, willingness to collaborate with external partners.
This is an explanation of our mobility systems business. Consolidate the mobility systems business and drive
business growth through the use of telecommunications technology.
In January of this year, we integrated the automotive camera business, which was in the Automotive
Components Business, and the Displays Business, including head-up displays and displays for next generation
automotive mirrors, and established the Automotive Systems Business.
In addition, the ITS-related business, which has been promoted by the research division, will be
commercialized and transferred to the Core Components Business in April of this year.
We will promote the creation of new value and product development through the integration of these
technologies to respond to technological advancements such as automated driving and contribute to a safe
and secure society.
This page shows how we intend to evolve our business portfolio from fiscal 2025 to fiscal 2031, including the
initiatives we have described so far, for each of our major products.
In the Components Businesses, we will promote structural reforms and commercialization of next-generation
technologies to achieve a high-growth, highly profitable portfolio and serve as a growth driver for Kyocera.
This concludes our explanation of the medium-term strategy for the Components Businesses. Thank you.
Ina: Next, I, Ina will explain about the Solutions Business.
In the Solutions Business, we will also position ROIC improvement as a major management issue. Our target
is 10% or more for fiscal 2028 and 12% or more for fiscal 2031.
To achieve this, the reform will be divided into two periods. From fiscal 2026 to fiscal 2028, we will continue
to expand highly profitable products, reduce costs, promote productivity improvements, and withdraw from
or downsize unprofitable businesses in order to ensure the realization of double-digit business profit margins.
At the same time, we will work to lay the groundwork for future promotion of Products x Experience Value
Approach.
From fiscal 2029, we will begin the full-scale deployment of the Products × Experience Value Approach, which
aims to drive business growth and improve profitability by combining products and goods with value-added
information and services that are valuable to customers, continuously supporting their success, and
maximizing the value we provide.
This slide shows the business portfolio for achieving double-digit business profitability. The information
equipment business, shown in the base business on the lower right, is the largest business in the Solutions
Business and will generate stable profits, although it has low market growth potential.
The growth-driving businesses in the upper right corner include the ICT and information security business, the
cutting tools business, and the Printing Devices Business, all of which have high ROIC and are expected to
grow in the future.
At the top left are next-generation businesses that we are currently investing in because of their potential for
future growth and profitability, such as digital textile printers, commercial high-speed printers, and
millimeter-wave telecommunications-related businesses.
And shown in the middle row is the profitability enhancement businesses. In the pneumatic and power tools
business, we have sold our North American distribution business for construction and industries, while
growing our pneumatic tools business by utilizing our patents and expanding our cooling jackets business.
In the Smart Energy Business, we are withdrawing from fuel cell equipment, which is not expected to improve
profitability, while strengthening the storage battery business, for which the market is expected to grow
significantly, and entering the renewable energy and electric power businesses. We will continue SOFC cell
stacks, which are key components of fuel cells.
The Telecommunications Equipment Business will be strengthened with a focus on the telecommunications
solutions business for corporate customers.
These are the current business portfolios with an emphasis on improving profitability.
This slide shows the technology and sales capabilities that drive Products × Experience Value Approach. The
core technologies in the Solutions Business are listed on the left side of the slide. We possess numerous
technologies ranging from materials to software, which can be combined to provide a wide variety of products
and services.
On the right side of the slide is the global sales network and IoT connectivity. With a global sales and marketing
network, we currently offer our products and services in more than 170 countries and regions. In addition,
many Kyocera devices and systems are now connected to the IoT worldwide, and the number of connections
is increasing further.
We have already laid the groundwork through the global development of data collection and services for the
development of the Products × Experience Value Approach, which we see as the key to future business growth.
The Products × Experience Value Approach business, which we see as the key to future growth, is a highly
profitable business that contributes to ROIC improvement by providing value-added solutions to customers'
issues.
Currently, we are developing services such as MPS, managed print services, which consistently makes the
office printing environment more comfortable, but our sales ratio of the Products × Experience Value
Approach business for fiscal 2026 is only 6%, and we aim to increase this to more than 30% by fiscal 2031.
This will also increase the revenue composition ratio from 8% to 40% in fiscal 2026.
The business foundation necessary for Products × Experience Value Approach to achieve this is shown on the
right side of the slide. Using data obtained from the topmost diverse business customers as a source, we
analyze them, visualize issues, design optimization, make proposals, and provide ongoing support, cycling
through the cycle of providing optimal solutions for each customer to continuously support their success and
maximize the value we provide.
The algorithms obtained through numerous cycles of this cycle will be leveraged across diverse businesses to
further increase their value.
To this end, we will train dedicated personnel, develop dedicated tools, design processes, and build a platform
that can be utilized in all of our businesses by making maximum use of AI technology.
This slide shows the image of business portfolio in fiscal 2031. As shown on the right side of the slide, we will
evolve our current business portfolio or combine multiple business portfolios and consolidate them into a
portfolio that can solve our customers’ issues.
As a specific example, we will transform our business portfolio to one that can increase the ratio of sales from
Products × Experience Value Approach, such as monozukuri (manufacturing) solutions, environmental
solutions, communication solutions, and printing solutions.
In addition, we will continue to create and invest in next-generation businesses in the upper left corner of the
slide. We will then periodically scrutinize the business potential and make decisions to withdraw from or
downsize unprofitable businesses, as shown in the lower left-hand corner of the slide.
As we have explained, we will work to maximize business growth and earnings by promoting Products ×
Experience Value Approach through initiatives represented by the AI utilization platform and by transforming
our business portfolio.
This concludes the explanation of the Solutions Business. Thank you.
Chida: Next, I, Chida will explain the promotion of capital strategies.
Kyocera will continue its efforts to reduce cross-shareholdings and enhance shareholder returns. On the left
side, the cross-shareholding reduction plan is shown.
First, we sold approximately JPY250 billion of KDDI shares during fiscal 2026. In fiscal 2027, we plan to sell
approximately JPY250 billion. From fiscal 2028 onward, the amount to be sold will be determined at a level
commensurate with our medium-term funding needs and shareholder returns.
As a result, Kyocera aims to achieve a ratio of cross-shareholdings to net assets will be less than 20% by the
end of fiscal 2031.
In terms of shareholder return on the right side, Kyocera will continue to repurchase its own shares. We plan
to acquire JPY200 billion in fiscal 2026 and up to JPY500 billion in total from fiscal 2027 through fiscal 2028.
From fiscal 2029 onward, Kyocera plans to repurchase its own shares based on the balance between
investment in growth to improve ROE.
In addition, Kyocera plans to change its dividend policy to one based on DOE instead of the current dividend
payout ratio beginning in fiscal 2027. By using DOE as the standard, we will also clarify progressive dividends
as a policy and will maintain stable dividends and improve the level of dividends over the medium to long
term.
Here are the capital allocation targets for the two-year period of fiscal 2027 and fiscal 2028.
In addition to operating cash flow, we will use proceeds from the sale of shares held and debt to both invest
in growth and return profits to shareholders.
The capital structure on the right side shows the capital structure at the end of fiscal 2026 3Q and the target
at the end of fiscal 2028. With the aim of increasing corporate value, we will continue to optimize shareholders’
equity after fiscal 2029.
This concludes our explanation of our capital strategies. Thank you.
Tanimoto: Next, I will explain how we are strengthening corporate governance.
In order to strengthen corporate governance, Kyocera plans to submit a proposal to the Ordinary General
Meeting of Shareholders to be held in June of this year to change from the current company with an Audit &
Supervisory Board to a company with an Audit & Supervisory Committee.
After the transition, the Board of Directors will be the monitoring board, which have a majority of Outside
Directors, as shown on the left side of the slide.
Specifically, the current Board of Directors consists of seven Inside Directors and four Outside Directors, for a
total of 11. After the transition, the Board of Directors will consist of six Inside Directors and seven Outside
Directors for a total of 13, of which one Inside Director and two Outside Directors are the member of Audit &
Supervisory Committee.
As shown on the right, the purpose of this transition is to separate supervision and execution, with the aim of
further focusing on management decisions from a company-wide perspective in particular, prioritizing
discussion of medium to long-term management visions, and further strengthening the supervisory function
of the Board of Directors.
This slide shows the candidates for Director to be proposed at the Ordinary General Meeting of Shareholders
to be held in June 2026. To implement the initiatives to enhance corporate value explained today more quickly
and reliably, we have decided to have Sakushima and Ina take the helm of our future management. They are
currently serving as executive officers in charge of the Strategic Business Transformation Project and are
leading the formulation of strategies for the management plan.
To restore the Kyocera Group to a highly profitable, high-growth company and place it on a sustainable growth
trajectory, expanding sales and improving profitability in the Components Businesses by leveraging our core
ceramic technologies is essential. Therefore, we appointed Sakushima, who has been involved in this business
for many years and possesses broad expertise including technology and research and development, as
Representative Director and Chief Executive Officer.
Ina, who will become Vice Chairman of the Board and Representative Director, will be responsible for driving
the growth and development of our group, focusing on expanding sales of our products and services by
leveraging his knowledge of the Solutions Business.
In addition, to ensure the steady execution of the new management plan, the smooth launch of the new
organizational structure, and the orderly succession of the chairmanship to Ina, Yamaguchi will continue to
serve as Representative Director and Chairman of the Board during fiscal 2027, and plans to pass the baton
to the new management team within approximately one year.
I will be replaced by Mr. Sakushima as president effective April 1. Thereafter, I will retire from the Board of
Directors at the Ordinary General Meeting of Shareholders to be held in June and will serve as Special
Executive Advisor, providing advice.
Regarding the candidates for Outside Director on the right side of the slide, we have appointed Mr. Akitoshi
Nakamura, representative of the Aspirant Group, an investment fund, as a new candidate for Outside Director.
The addition of Mr. Nakamura, who has extensive experience as an institutional investor and manager, with
particular expertise in finance and capital strategy, will strengthen our Board of Directors as it seeks to
enhance corporate value through improved profitability and capital efficiency.
Here is a skills matrix for the Board of Directors. We believe that the candidates for Director you have just
seen can fulfill the skills that we consider important.
From the next fiscal year onward, under this structure, we will steadily implement the three reforms explained
today to achieve the ROE targets in the corporate value enhancement roadmap, thereby achieving profit
growth and improving capital efficiency.
Finally, we would like to explain our future schedule.
Today, we explained the direction we are taking to improve ROE, and we will announce specific measures and
other details related to the contents of today's announcement in due course.
In order to achieve the ROE target for fiscal 2028, we plan to announce the planned figures for fiscal 2027 and
2028 at the time of the announcement of the full-year financial results for fiscal 2026.
In addition, at the time of financial results announcement for fiscal 2027 1H, we plan to disclose the planned
figures toward achieving the ROE target for fiscal 2031.
We appreciate your continued support.
This concludes our explanations. Thank you.
Question & Answer
<Questioner 1>
[Q]: Thank you for taking my questions. I have two major questions.
Mr. Sakushima talked about the portfolio shift in the Components Businesses. First, I wonder if there was a
decision that nothing to withdraw, and if target area of M&A remain unchanged since your last talks. Based
on what I have seen today, the organizational restructuring appears to be largely organic, likely driven by
technology integration and improvements in overall company efficiency. I agree that the focus areas to pursue
organically, such as semiconductors, cutting-edge AI-related fields and mobility, are appropriate. However,
these are the areas where other companies are likely to concentrate their efforts, so how do you plan to
differentiate yourselves in these areas? It would be great if you could share a bit more of your thoughts on
how you plan to move things forward toward fiscal 2028.
Sakushima [A]: Thank you very much.
Firstly, the business portfolio shows the mainstays of product group. As you can see from the ROIC map of the
business, there are still many businesses that need to be improved, and some of these product groups will
naturally be strengthened while others will be downsized. We will continue to work on this area by continuing
to review businesses and hope to have it sorted out by fiscal 2028.
On the second point of how we are going to win by growing the business through technology integration, I
believe that the driver of Kyocera's growth in the past was how quickly we were able to realize what our
customers wanted, whether it was ceramic packages or fine ceramics. As the business grows larger, I see some
passive attitude in this area, so we need to strengthen this area. In other words, I believe that we will once
again reclaim our own thorough pursuit of customer value, and that this will serve as the driving force behind
our efforts. We already have this foundation in place, and by revitalizing the organization, I believe we can
position this as a central pillar going forward.
We have determined that we can compete in these areas by integrating the diverse technologies we possess
and by internally working to enhance the usefulness of those technologies within the Company.
[Q]: In other words, you already have a system in place, but it is not sufficiently customer oriented or aligned
with customer needs. By concentrating resources, is it fair to say that you can differentiate your business and
the results will follow?
Sakushima [A]: Yes. We think so and we believe that the answer is something that is created between our
customers and us, which is why we use the term solution. We also believe that our own technologies are well
suited to this approach. I believe that this has been clearly demonstrated in Kyocera's history to date, and we
will work to strengthen this point once again.
[Q]: The second major question is, regarding the process of coming to the overall conclusion of two ROE
targets, 5% by fiscal 2028 and 8% or more by fiscal 2031, and whether you could have made a decision to
accelerate the process a little more by utilizing share repurchases. My understanding is that until now, Kyocera
has not favored formulating capital policy based on numerical targets such as 5% or 8%. This time, however,
I felt that the policy also reflects an idea of adjusting the capital policy more dynamically to some extent in
order to achieve the numbers. Please share your view including if these understandings are correct.
Tanimoto [A]: As you pointed out, in the past, there was a strong emphasis on increasing ROE by expanding
the numerator. However, after posting very disappointing results last year, we reached an internal consensus
that the numerator fluctuates significantly with economic conditions. We therefore concluded that, if we want
to ensure performance targets, it would be difficult without adjusting the denominator, and we decided to
proceed based on that understanding.
In fiscal 2026, we carried out a large-scale sale of KDDI shares for the first time and executed share buybacks
totaling JPY200 billion. At the beginning of the fiscal year, we had indicated share buybacks of around JPY200
billion over the next three years. However, when we worked backward to determine how much capital policy
would be necessary to have confidence in achieving a ROE of 5% in two years' time, we concluded that we
would need to implement share buybacks of around JPY500 billion.
In the past, there has been a belief that, companies with a high level of equity capital were stable. However,
as times passed, we have come to the view that focusing more on increasing corporate value, rather than
maintaining a large amount of equity capital, would lead to greater stability as a company. This way of thinking
has led us to the plan we announced today.
[Q]: There is a view that Kyocera would not be able to reach 5% without implementing capital policy measures
since organic growth takes a certain amount of time. On the other hand, from a different perspective, if the
Components Businesses become more profitable and you are able to achieve a ROE of 5%, would there be an
option to reduce the scale of share buybacks? How should this be structured?
Tanimoto [A]: Up to JPY500 billion, since we have already announced it, we intend to proceed as stated.
Beyond that, if circumstances like those you mentioned arise, it is possible that we may slow the pace of share
buybacks somewhat.
[Q]: I understand. Thank you very much.
<Questioner 2>
[Q]: Thank you for your explanation. I have two questions.
Looking at page 27 of “Progress Update: Strategic Business Transformation Project”, titled “Promoting Capital
Strategies”, shareholders' equity is planned to decline by JPY600 billion, from JPY3.4 trillion at the end of fiscal
2026 3Q to JPY2.8 trillion at the end of fiscal 2028. At the same time, shareholder returns are expected to
total approximately JPY650 billion over the next two fiscal years. Based on a simple backward calculation, this
appears to suggest that net profit may be too low.
Is this correct to assume that ROE will be higher when net profit is higher, or since you mentioned a maximum
of JPY500 billion share buybacks, if you can achieve a 5% ROE, you could reduce the share buybacks a bit
more? Or please explain whether it is possible to increase shareholder returns more or decrease shareholder
equity if the numerator of ROE is low.
Chida [A]: Thank you very much for your questions.
As you point out, there are many patterns. There is a significant portion of our shareholders' equity over which
we have no control. Therefore, we must also look at net profit, and if we use the DOE standard, what kind of
DOE standard we use will also affect the capital structure, so we would like to control various composite
factors.
[Q]: You have given us various figures at this point, but how much net profit do you expect for the next two
years and the year after that?
Chida [A]: I cannot give you a specific detailed figure for profit for fiscal 2028, but we expect it to be 20% to
30% higher than fiscal 2026. As for the denominator, if we use share buybacks and add DOE, the dividend
payout ratio is now 50%, but it would change from that. Therefore, the answer we came up with after
simulating several patterns internally is JPY2.8 trillion.
[Q]: Am I correct in understanding that the share buyback will be executed for approximately JPY500 billion?
Chida [A]: Yes. For the two years, there is a consensus within the Company to do it at a maximum of JPY500
billion.
[Q]: Secondly, in the Document Solutions Business, how will the impact of the memory price increase affect
next fiscal year's performance, or is it becoming more difficult to procure? Please also explain how changes in
the number of smartphone and computer units will affect the Components Businesses.
Ina [A]: Due to the shortage of memory, not just limited for the Document Solutions Unit, we are not assuming
that we will not be able to produce products in short supply during the next fiscal year, but we are assuming
that prices will hike.
In this regard, it is not only Kyocera that will face higher costs, so we are considering passing these costs on
to market prices. However, memory is not the most expensive component in terms of the price composition
of the overall components. We will continue to work on this while keeping an eye on market conditions and
other factors.
Tanimoto [A]: As for the overall impact, I think we will be able to secure the necessary amount by contracts
for the next fiscal year. There is also speculation that the lack of memory in the world will lead to a decrease
in the number of cell phones and PCs that can be set up, but since the manufacturers we are in contact with
are very strong users, we believe that this will not have a major impact on our business.
[Q]: Thank you very much.
<Questioner 3>
[Q]: Thank you very much for your explanation.
What I also would like to ask about is the balance sheet mentioned in the slide regarding the Strategic Business
Transformation Project. I believe it was stated as JPY500 billion over two years for growth and capital
investment. I think the amount is a bit large based on the amount of conventional capital investment. I wonder
if this would include M&As, or plan something in particular. Please tell us if there is anything you are planning
or anything you can tell us about it.
Chida [A]: Thank you very much.
As you mentioned, M&A and other investments are also taken consideration in this amount of investment. It
is not set in stone, but we are assuming that the growth will probably include inorganic growth.
[Q]: So, the target you mentioned earlier of a 20% to 30% increase in net profit also takes into account the
results of these M&As, to some extent?
Chida [A]: Basically, in our current estimation, the amount of net income is almost entirely organic.
[Q]: Next, I would like to know your thoughts on capacitors. Once again, how much of a positive contribution
do you expect from the progress in improving KAVX in the coming fiscal year? Also, it is said that demand for
tantalum capacitors is very strong in the market, but will your company benefit from this in the next fiscal
year and beyond?
Sakushima [A]: Currently, Kyocera Corporation is providing significant support for the improvement of KAVX.
We started the support in MLCCs from the year before last, and in that sense, the improvement seen in this
fiscal year is largely these parts. The main topic is improvement in productivity. Looking ahead, by leveraging
cost reductions achieved through productivity improvements, we plan to further build new product
development on top of this and increase sales.
We are receiving strong inquiries for tantalum capacitors, and we are supporting the startup of a plant in
Thailand to address this as quickly as possible. We are beginning to see the direction of improvement, along
with gradual positive effects. We believe that the specifics will be reflected in the next fiscal year in the form
of figures in that area.
[Q]: Understood. Thank you.
<Questioner 4>
[Q]: Thank you. I have one question regarding the Strategic Business Transformation Project and one question
about the financial results.
First of all, through the Strategic Business Transformation Project, Kyocera has been working on divesting
businesses totaling approximately JPY200 billion sales so far, and I am wondering if you can give me any sense
of what you feel to how far you have come; whether you have done 80% as you have done a lot so far, or
whether you are still at 30%.
Tanimoto [A]: I don't know if it is correct to say how many percentages we are at, but we are not completely
finished yet, and we will probably be able to announce some things in the next term, so we may be at 60% or
so. Also, since things change with the times, even if we think there is no need to withdraw for now, it may
come up again in two or three years. In this sense, we will continue to conduct periodic reviews using ROIC
and other methods.
[Q]: Secondly, can you tell us about your current perception of the Organic Packages and Boards Business and
passive components? I believe that the Organic Packages and Boards Business has improved very significantly,
being profitable if we exclude the one-time loss of about JPY5 billion mentioned earlier. On the other hand, I
believe that market conditions have improved considerably. So, what are the factors contributing to this
improvement? Also, please explain what will be needed for further growth in the future.
I believe market conditions for passive components are very strong, but there appears to be a gap between
that and your plan. Could you share your assessment of the current situation and what you think will be
needed going forward?
Tanimoto [A]: First, I think the improvement in the Organic Packages and Boards Business can be attributed
to three factors: one is the reduction in fixed costs, as we have reduced our workforce; the other is that we
have been withdrawing from products with poor profitability, and orders for switches and other products for
data centers have been strong this year.
However, as you already know, the problem of not being able to obtain materials is expected to continue this
year, and our supplier say they will only be able to improve the situation from next year. I think organic
package manufacturers are having hard time in this fiscal year. Regarding passive components, Mr. Sakushima
will comment.
Sakushima [A]: Regarding the current status of passive components, particularly electronic components
business of Kyocera Corporation, parts for mobile phones form the core base. As such, we expect this area to
move steadily in line with situations on that front. On the other hand, we are working to strengthen
automotive-related, but the situation in this area is very difficult. We feel that it will be difficult to expand this
area.
Therefore, we believe that the source of our value lies in the various challenges that are currently emerging
around power circuits solutions for AI applications, as I explained earlier, and we will focus our efforts on
expanding our business there.
[Q]: Thank you.
<Questioner 5>
[Q]: Thank you for taking my questions.
You mentioned raising corporate value, so I would like to know your company's perspective on this.
Looking at shareholders' equity target by fiscal 2028, it is projected to be JPY2.8 trillion, with a ROE of 5%. It
depends on the ratio of capital cost, but your current market capitalization is close to JPY4 trillion, and based
on a straightforward calculation, it seems that increasing shareholder value could be quite challenging.
What will you appeal to increase shareholder value? At this point, I believe that the impact of share buybacks
is having a significant effect on corporate value. However, I think it would be difficult to do this on a permanent
basis, so please let us know if you have any thoughts on how to appeal to increase corporate value.
Chida [A]: Thank you very much.
With the effect from share repurchase as you mentioned, our market capitalization has risen to about JPY3.5
trillion. Our target is over JPY5 trillion, and of course there is a limit to what we can raise through our capital
policy alone, so we are trying to focus on how we can increase the numerator.
In terms of the denominator in our capital policy, there are significant factors within the capital that are
beyond our control, so we will first eliminate those factors. At the same time, on the numerator side, we will
allocate capital to growth investments to enhance value, with the aim of increasing our market capitalization
to over JPY5 trillion.
[Q]: At that time, I wonder if the funds that can probably be allocated to M&A are a little low, I think roughly
JPY200 billion. You may be thinking of not using M&A so much as a lever? Or do you think that given the scale
of the projects, such a large budget is not necessary as a framework at this time? I would appreciate your
supplemental comment on that.
Chida [A]: It does not mean that we are only interested in small-scale projects, but rather we are willing to
work with good partners and those that have business synergies with us. Since we have not set a budget of
JPY200 billion, we are considering allocating funds to our business strategy while making effective use of our
financial assets. Given that our current D/E ratio is very low, we believe it is possible to apply leverage in this
way and allocate funds to our business strategy.
[Q]: For my second question, I would like to ask President Tanimoto. You have been president for nine years
and have taken on many challenges, including major investments, R&Ds, M&As, and finally structural reforms,
and I believe you have achieved results. From a broad perspective, what aspects do you find most challenging
in managing Kyocera? Also, if there are areas where the Company’s potential has not yet been fully realized,
what do you see as those unrealized aspects, and where do you see future potential going forward?
Tanimoto [A]: Thank you very much.
When I became president, Inamori, the founder of Kyocera, was still with us, so I would sometimes consult
him when making major decisions. However, from around 2020 when the COVID-19 pandemic began, he was
almost no longer coming in, and passed away a little later. So that was when I last consult him.
Amoeba Management is very well-known factor of Kyocera, and while it is important for all employees to
participate in management through this system, it can inevitably lead to a sense of sectionalism or internal
competition. As a result, barriers can form within the organization, making it difficult to generate synergy
across the company’s diverse businesses.
We wanted to break through that, so we did a lot of things, including a introduction of business segment.
Currently, for example, I think the barriers have almost disappeared for those above the division heads.
However, I regret that it has not yet penetrated to the field, and I would like to ask Sakushima to continue to
work in this area.
In addition, because engineers are also assigned to individual Amoebas, they can end up working in isolation,
which makes it difficult to foster synergy and co-creation among engineers. At the same time, engineers are
currently reluctant to relocate to local plants, so we recognize that we still need to continue devising ways to
address these challenges in technology development.
Fortunately, we built a facility called the Production Technology Center in Yasu, Shiga last year. We feel that
we have reached our limits unless we make better use of such facilities and expand an approach where all
engineers work together there during the development phase, and then, once development is completed and
the business is transferred, ask them to work at plants in Kagoshima, etc.
[Q]: Thank you.
<Questioner 6>
[Q]: Thank you very much today. I would like to ask two questions.
First, on page nine, you mentioned business valuation based on ROIC. If it is possible to answer, how do you
see the assumed ROIC/WACC spread and what level of business unit do you apply this way of evaluation in
the Components Businesses and the Solutions Businesses? Also, regarding strengthening of the monitoring
system, it says that the organization with jurisdiction will be reorganized. I would like to know more about the
idea of how this will be reorganized and operationalized in concrete terms.
Chida [A]: Thank you for your questions.
Roughly speaking, the WACC we are assuming right now is 6% to 7%. However, since the markets of each
business differs by whether it is the Components Businesses or the Solutions Business, it may vary back and
forth. We assume our equity cost is around 7%, so we need to exceed that.
As for the spread in the future, we are still assessing the appropriate level at this stage. However, we have
made estimates of the ROIC required for each of the Components Businesses and the Solutions Businesses,
as well as the ROIC needed at the product line level below them, in order to achieve ROE of 5% and 8%,
respectively. Accordingly, we have set ROIC targets for each of our product lines, and based on these targets,
business division heads and executive officers are responsible for managing their operations. The lower levels
of the organization are managed under the Amoeba Management system on a divisional profitability basis.
To avoid conflicts between them, we would like them to formulate appropriate strategies.
As for the organization to trace it, we will take the segment structure of the Corporate Planning Office. Until
now, we have had a segment of the Solutions Business, Electronic Components Business, Core Components
Business, and Headquarters, but in April, we will create a new segment called the Corporate Planning Office,
and I will be in charge of this segment.
In line with the business strategy and the direction for fiscal 2028 and fiscal 2031, we will enhance the clarity
of our strategy and how to achieve it by using ROIC as a key metric. Based on this, we plan to formulate
business policies, including M&A, and to bring together all relevant functions such as R&D, production
technology, and DX investment within the Corporate Planning Office. Therefore, after deciding on a strategy
and direction, we will leave the discretion of the business to each product line, but the direction itself will be
decided based on the overall optimization of the Company, and we will take the helm of management.
[Q]: Secondly, regarding page 27, looking at the Solutions Business, due to the divestment of Southern Carlson,
Inc., assets have lightened to some extent. However, looking at the Document Solutions Unit, it appears to be
relatively asset heavy, including leases.
I don't think you mentioned about ROA in regarding KPIs, but do you have a sense of direction or idea like
making the Document Solutions Business asset-light? Looking at targeted ROIC of the Solutions Business, I
think there are some areas that could be raised a bit more given the current business environment.
Also, I was wondering if there is a sense of direction in terms of collaboration not only within the Company
but also with external parties, and I didn't see much of that kind of direction in this time. So, please tell me
what kind of picture you are painting in a broader sense, or in a longer time frame, maybe up to 2031.
Ina [A]: As for the Document Solutions Unit, most of the sales composition is now for MFPs and printers for
offices. In this area, our focus is on becoming more environmentally friendly, particularly by reducing power
consumption. However, this is a market that is gradually shrinking. Therefore, as I introduced in my business
portfolio today, I would like to balance growth while shifting management resources to digital textile printing
machines, high-speed inkjets, and commercial printers.
This is not a new thing; this has been the direction for the past three or four years. So, at the moment, MFPs
and printers for offices are not shrinking as fast as we thought they would, or rather, some of them are coming
back. We would like to continue in that direction while keeping an eye on the balance.
We established a structure which almost all machines can be produced both in Vietnam and China, and have
completed all of our major capital investments. We are now looking at a picture in which we will not need to
make any major investments in the next two or three years; Therefore, we believe improving ROIC is possible.
[Q]: Thank you.
[END]
Notes
1.
This document was edited from the original recording and transcripts provided by SCRIPTS Asia, Inc.
2.
In this document, the year ended March 31, 2026 is referred to as “fiscal 2026,” six months
ended/ending September 30 is referred to as “1H,” three months ended/ending June 30 is referred to
as “1Q.” Other fiscal years, half-year and quarterly periods are referred to in a corresponding manner.
Cautionary statement
This is an English translation of the Japanese original. This translation is prepared for the reference and
convenience solely for those who do not use Japanese. In the event of any discrepancy between this
translation and the Japanese original, the latter shall prevail. Except for historical information contained
herein, the matters set forth in this document are forward–looking statements that involve risks and
uncertainties including, but not limited to, product demand, competition, regulatory approvals, the effect
of economic conditions and technological difficulties, and other risks detailed in the cautionary statements
with respect to forward–looking statements on the company’s website.
(https://global.kyocera.com/ir/disclaimer.html)
