Kyocera Corporation
Financial Presentation for the Year Ended March 31, 2026
April 30, 2026
Event Summary
[Company Name]
Kyocera Corporation
[Company ID]
6971
[Event Language]
JPN
[Event Type]
Earnings Announcement
[Event Name]
Financial Presentation for the Year Ended March 31, 2026
[Fiscal Period]
Fiscal 2026 Annual
[Date]
[Time]
April 30, 2026
16:50 – 17:56
(Total: 66 minutes, Presentation: 31 minutes, Q&A: 35 minutes)
[Venue]
[Number of Speakers]
Webcast
2
Shiro Sakushima President, Representative Director, CEO
Hiroaki Chida Director, Managing Executive Officer, CFO,
Executive General Manager of Corporate Planning Office and
Headquarters
1
Presentation
Moderator: Ladies and gentlemen. Thank you for taking time out of your busy schedule to participate in
today's Kyocera Corporation webinar. It is time to commence the full-year financial results briefing for the
year ended March 31, 2026. Please refer to our website for the presentation materials that will be used today.
Please note that today's webinar is being recorded and thank you for your understanding in advance.
First, I would like to introduce today's attendees: Shiro Sakushima, President, Representative Director, CEO.
Hiroaki Chida, Director, Managing Executive Officer, CFO, Executive General Manager of Corporate Planning
Office and Headquarters.
We will now begin the explanation. President Sakushima, please.
2
Sakushima: I 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 today to participate in our financial result briefing. Again, I am
Sakushima, who assumed the position of President in April of this year. Thank you.
I will now explain the results for the year ended March 31, 2026, in accordance with the presentation material.
Today, we will explain in turn what is described here.
3
First, let me explain my basic approach to steering Kyocera's management.
4
We have carefully inherited the management philosophy and management rationale set forth by our founder
as the basis for universal management. In this era of rapidly changing expectation of companies, I will continue
to place these values at the core of my own management and promote management with a high sense of
ethics and a strong sense of mission. At the same time, I believe that my most important mission as CEO,
which I have assumed in April of this year, is to promote prompt and flexible business operations by evolving
our unique Amoeba Management System in order to adapt to the rapidly changing global situation and
business environment and to overcome the various management challenges we face.
First, on the business side, we will create valuable innovations and enhance our value in the industry through
proactive enhancement of our business portfolio management.
Next, in terms of human resources, we will return to our founding spirit and promote cross-functional
organizational revitalization to maximize the potential of each and every employee through the practice of
the concept of Management by All.
In terms of capital and financial perspective, we will emphasize dialogue with the stock market, maintain an
appropriate proportion between investment in growth and shareholder returns, and appropriately allocate
management resources from a company-wide perspective to achieve both medium- to long-term business
growth and improved capital efficiency.
Through these efforts, Kyocera will create a new story of value creation and enhance its corporate value,
aiming to become "The Company" that is respected around the world.
5
In April of this year, we established the Corporate Planning Office as an organization responsible for promoting
the initiatives I have just described.
The Corporate Planning Office is an organization that takes a more company-wide perspective on the three
areas of "Focus Business Areas," "Investment Decisions," and "Capital Allocation," and leads the construction
of fields and systems that will allow each business/amoeba to maximize its potential.
In fiscal 2026, high-level company-wide policies, such as business portfolio reorganization and capital policy,
were formulated in the Strategic Business Transformation Project. From fiscal 2027, the Corporate Planning
Office will work to upgrade the management structure, including portfolio management using ROIC and
investment management for this purpose.
The role and main functions of the Corporate Planning Office are described on the right side of the slide. The
role is responsible for formulating growth strategies and monitoring progress toward the realization of
medium-term management targets by linking M&A, R&D, production facility investment, IT/DX investment,
and other activities.
6
Let me explain the details of the overview of financial results for the year ended March 31, 2026.
7
Sales revenue for fiscal 2026 increased due to higher sales in the Core Components Business, particularly in
the Semiconductor Components Unit, despite the impact of sales decrease resulting from the transfer of
SouthernCarlson. Profits increased significantly due to the impact of one-time costs and profits recorded in
fiscal 2025 and fiscal 2026, as well as the effect of increased revenues and progress in structural reforms.
As a result, sales revenue for fiscal 2026 were JPY2.0702 trillion, up 2.8% from fiscal 2025. Operating profit
was JPY118.1 billion, up 332.8%, profit before income taxes was JPY169 billion, up 165.6%, and profit
attributable to owners of the parent was JPY141 billion, up 485%. These results exceeded the forecasts
announced in February of this year.
The average exchange rate was JPY151 against the US dollar, up JPY2 from fiscal 2025, and JPY175 against the
euro, down JPY11. Compared to fiscal 2025, this foreign exchange impact increased approximately JPY9 billion
to sales revenue and JPY6.5 billion to profit before income taxes.
As noted below in the table, one-time costs and profits and other items included in each step of profit are
explained on the next page. The difference between the amount of change in operating profit and profit
before income taxes is mainly due to a significant decrease in foreign exchange losses by approximately
positive JPY14 billion, whereas foreign exchange losses surged in fiscal 2025 because of the rapid appreciation
of the yen.
8
Next, I will explain one-time cost and profit.
The top table represents one-time cost and profit included in operating profit and profit before income taxes.
For fiscal 2025, we recorded approximately JPY43 billion loss, including impairment losses on property, plant,
and equipment in the Organic Packages and Boards Business. On the other hand, for fiscal 2026, we recorded
a one-time cost of approximately JPY5 billion from the write-down of idle assets in the Organic Packages and
Boards Business, a loss of approximately JPY1.5 billion from the transfer of the silicon diode power
semiconductor business, and an impairment loss of approximately JPY5 billion on property, plant and
equipment, etc. related to the former Displays Business in the Automotive Systems Business. In addition, a
one-time gain of approximately JPY17 billion from the transfer of SouthernCarlson was recorded. As a result,
we had a net gain of approximately JPY5.5 billion. These differences of approximately JPY48.5 billion are one
of the reasons for the increase in profit for fiscal 2026.
The lower table shows one-time cost and profit included in profit attributable to owners of the parent. For
fiscal 2025, we recorded a negative JPY48 billion in total, consisting of approximately JPY30 billion after tax
effects in the table above and an increase of approximately JPY18 billion in tax expenses due to the reversal
of deferred tax assets, etc. by overseas subsidiaries. On the other hand, in fiscal 2026, in addition to the abovementioned one-time cost and profit of approximately JPY8 billion after considering tax effects, there is an
impact of approximately JPY12 billion due to a decrease in tax expenses resulting from the sale of KDDI shares,
for a total positive impact of approximately JPY20 billion. These differences of approximately JPY68 billion are
one of the reasons for the increase in profit attributable to owners of the parent for fiscal 2026.
9
Here is a summary of results for fiscal 2026.
See the sales revenue figures on the left side of the slide. Sales revenue increased due to higher sales in the
Core Components Business, mainly driven by increased sales in the Ceramic Packages Business.
Then look at the profit before income taxes on the right side. Profit before income taxes increased significantly
due in part to a one-time gain from the sale of SouthernCarlson and in part to an impairment loss in the
Organic Packages and Boards Business for fiscal 2025.
10
This chart shows capital expenditures, depreciation charge of PPE, and R&D expenses.
Capital expenditure on the left side increased mainly due to the completion of the construction of a new
building at the domestic plants, which had been started in previous years to expand the scale of production
and automation in the future.
Central depreciation charge of PPE decreased mainly due to the impact of impairment losses in the Organic
Packages and Board Business in fiscal 2025, despite an increase due to the completion of a new building at a
domestic plant.
R&D expenses on the right side decreased slightly due to a review of R&D themes.
11
Here is a list of sales revenue by reporting segment.
Here is a list of profit by reporting segment.
Changes in sales revenue and profit of each reporting segment are explained on the following pages.
12
The changes in sales revenue and business profit by reporting segment are explained in the upper row for the
full-year of fiscal 2026 compared with fiscal 2025, and in the lower row for 4Q compared to 3Q.
First, the Core Components Business. Please refer the sales revenue figures on the left side of the slide. Sales
for the full-year were JPY653.4 billion, and for 4Q were JPY176.2 billion. For the full-year, the increase was
mainly due to higher sales in the Semiconductor Components Unit, including sales of ceramic packages for
the information and telecommunication-related markets and organic packages for data centers. The increase
in 4Q was mainly due to higher sales of components for semiconductor processing equipment, etc.
Please refer the business profit on the right side. Business income for the full-year was JPY63.1 billion, and for
4Q was JPY12.8 billion. Full-year sales increased significantly due to higher revenues and the positive effect of
structural reforms, as well as a decrease in one-time losses. In 4Q, despite the positive impact of increased
sales, the segment as a whole reported a decrease in profit due to a one-time loss and a rise in raw material
prices, etc.
13
Next, the Electronic Components Business.
Please refer the sales figures on the left side of the slide. Sales revenue for the full-year were JPY363.5 billion,
and for 4Q were JPY96.3 billion. For the full-year, the increase was mainly driven by higher sales of capacitors
for the automotive and the information and telecommunication-related markets in KAVX Group, which more
than offset the negative impact of the appreciation of the yen against the US dollar. In 4Q, sales revenue
increased mainly due to the higher sales of sensors and control components, as well as capacitors, etc.,
primary for the automotive markets.
Please refer the business profit on the right side. Business income for the full-year was JPY7.3 billion, and for
4Q was JPY5.4 billion. For the full-year, profit increased, mainly due to the higher sales revenue and the
positive effects of structural reforms in KAVX Group, which more than offset the negative impact of a onetime cost of approximately JPY1.5 billion in connection with the transfer of the silicon diode power
semiconductor business. The increase in 4Q was mainly due to the effect of higher sales and cost reductions.
14
Then, the Solutions Business.
Please refer the sales figures on the left side of the slide. Sales for the full-year were JPY1.0709 trillion, and
for 4Q were JPY279.6 billion. The decrease for the full-year was mainly due to a revenue decrease of
approximately JPY27 billion resulting from the completion of the transfer of SouthernCarlson. The increase in
4Q was mainly due to higher sales in the Document Solutions Unit and the Communications Unit.
Please see the business profit on the right side. Business income for the full-year was JPY103.9 billion, and for
4Q was JPY45.9 billion. For the full-year, the increase was due to a one-time gain of approximately JPY17
billion from the transfer of SouthernCarlson, as well as profit improvement efforts in each business. The
increase in 4Q was due to a one-time profit of approximately JPY17 billion and the effect of increased sales.
15
I will then explain the main initiatives for fiscal 2026, beginning with the return of the challenging business to
profitability.
In the Organic Packages and Boards Business in the upper row, Kyocera promoted measures to transform its
cost structure, including a write-down of approximately JPY5 billion for idle assets in fiscal 2026. As a result,
excluding the write-down, we have achieved profitability for full-year basis, and business profit for fiscal 2026,
excluding the impact of the one-time loss, was approximately JPY18.5 billion higher than in fiscal 2025.
In the KAVX Group shown in the lower row, during fiscal 2026, we worked on the measures described in the
lower part of this slide through collaboration with Kyocera’s electronic components business to enhance
production technology and facility efficiency. As a result, the KAVX Group achieved full-year profitability, and
its business profit for fiscal 2026 increased by approximately JPY12.6 billion compared to fiscal 2025.
16
Next, I will explain business transfers and reorganizations.
The table in the upper row shows the details of business transfers carried out in fiscal 2026, as well as the
progress of these transfers. The transfer of the silicon diode power semiconductor business in the top row of
the table and the pneumatic and power tools business in the middle row were completed in January of this
year. As for the chemical business in the lower part of the table, the subject business is scheduled to be
transferred to Sumitomo Bakelite Company, Ltd. at the end of October this year. We believe that the transfer
of each of these businesses to their best owners has allowed us to make progress in reforming our portfolio.
The bottom row shows the reorganization that took place in January of this year. In the integration of the SPE
components-related businesses, some SPE parts manufactured in the Automotive Components Business were
integrated into the Fine Ceramic Components Business, which is expected to create technological synergies
to expand new high-value-added products. In the consolidation of automotive camera business and displays
business, we expect to reduce the cost of sales ratio in addition to improving sales through new product
development, as we recorded an impairment loss of approximately JPY5 billion in fiscal 2026 4Q on property,
plant, and equipment, etc. of the former display business.
17
Next, I will explain shareholder returns and other relevant matters for fiscal 2026.
Please refer the dividend on the left. Our basic policy is to set dividends within a range based on "profit
attributable to owners of the parent" on a consolidated basis, and to maintain a dividend payout ratio of
around 50% of profit attributable to owners of the parent. Based on this policy and our business performance,
we plan to pay an annual dividend of JPY52 per share for fiscal 2026, representing an increase of JPY2 per
share from the previous forecast.
Then please refer the share repurchase on the upper right-hand side of the slide. Based on the resolution
passed in May 2025, Kyocera Corporation proceeded with the repurchase of its own shares, which was
completed in March of this year, amounting to approximately 91 million shares and approximately JPY200
billion.
Regarding 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 a result, the ratio of net assets held in the
cross-shareholdings decreased to 48.3% as of the end of fiscal 2026.
18
I will now move on to an explanation of the earnings forecast for fiscal 2027.
For fiscal 2027, we forecast sales revenue of JPY1,940 trillion, operating profit of JPY130 billion, profit before
income taxes of JPY170 billion, and profit attributable to owners of the parent of JPY141 billion. Capital
expenditures are expected to be JPY225 billion, depreciation charge of PPE JPY120 billion, and R&D expenses
JPY120 billion.
19
I would like to explain the assumptions underlying our forecast for fiscal 2027.
The upper row is the market environment. Regarding the macro economy, we believe that there are concerns
about continued uncertainty in both the domestic and global economies due to rising raw material prices,
geopolitical risks, and other factors. In the semiconductor-related market, which is one of our main markets,
we expect AI-related investment to accelerate, while the automotive-related market is expected to slow down.
The middle row is the assumption for the financial forecasts. For the raw materials listed in the table below,
for which supply is tight and prices are rising, we have formulated our financial forecasts based on market
prices in fiscal 2026 2H. As measures to cope with price increase, we will promote passing on costs to our
product price and shift to alternative materials and procurement sources. The impact of difficulties in
procuring petroleum-derived products and price increase due to the worsening situation in the Middle East
has not been reflected in the earnings forecast, as it is difficult to quantify the impact at this time.
20
Please refer the sales figures on the left side of the slide. In terms of sales revenue, we expect a decrease in
in the Solutions Business, mainly due to decrease in sales revenue resulting from the transfer of
SouthernCarlson.
Then look at the pre-tax profit on the right side. Regarding profit, while we expect an increase in the Core
Components Business and the Electronic Components Business due to the effects of restructuring, we expect
a decrease in the Solutions Business due to a one-time gain of approximately JPY17 billion from the sale of
SouthernCarlson in fiscal 2026. Others is expected to decrease due to a decrease in dividend income resulting
from the sale of KDDI shares and an increase in production technology development, etc.
21
Please refer to the sales revenue forecast by reporting segment on page 23 and the profit forecast on page
24.
22
I will explain by segment. First, the Core Components Business.
Please refer the sales revenue on the left side of the slide. The negative impact of approximately JPY11 billion
from the sale of the chemical business in the Ceramic Packages Business will be offset by the expansion of
other businesses, resulting in an almost flat outlook.
Business profit shown in the middle is expected to increase due to the expansion of high-value-added products
and the effect of a one-time loss in fiscal 2026.
Capital expenditures on the right side are expected to increase, due to the planned completion of the Nagasaki
Isahaya Plant in fiscal 2027.
23
Next, the Electronic Components Business.
Sales revenue on the left are expected to be flat. Negative impact of the transfer of silicon diode power
semiconductor business will be offset by sales increase of MLCC and tantalum capacitors for growth markets
centering semiconductors and AI servers.
Business profit at the center is expected to increase due to product launch in growth markets, in addition to
improvement in production efficiency of MLCCs, tantalum capacitors, and connectors.
Capital expenditures on the right side are expected to increase mainly due to new investments in growth
areas, including the introduction of MLCC production equipment for new factory building in Kagoshima
Kirishima Plant.
24
Finally, there is the Solutions Business.
Sales revenue on the left side are expected to decrease due to special factors such as the sale of
SouthernCarlson in fiscal 2026, although sales are expected to increase in the Printing Devices Business.
Although profits are expected to improve in all businesses, business profit at the center is expected to decline
in fiscal 2026 due to the impact of the gain from the sale of SouthernCarlson.
Capital expenditures on the right side are expected to increase mainly due to increased production in the
Printing Devices Business and investments for manufacturing new products in the Document Solutions Unit.
25
Next, I will explain shareholder returns and other relevant matters for fiscal 2026.
First of all, please refer the change in dividend policy and the dividend forecast for fiscal 2027 on the left side
of the slide. From fiscal 2027, we will adopt DOE (dividend on equity ratio) as a new dividend indicator and
implement a progressive dividend policy that maintains or increases dividends per share. The level of DOE for
fiscal 2027 and 2028 will be approximately 3.5%. Shareholders' equity, which is the basis for DOE, is defined
as equity attributable to owners of the parent less other components of equity that are highly subject to
fluctuations due to the market value of equity holdings and the foreign exchange rates movement. Based on
the new dividend policy, the annual dividend for fiscal 2027 is projected to be JPY56 per share, an increase of
JPY4 compared to fiscal 2026.
Next, please look at the top right-hand corner of the slide, which shows the cancellation of treasury stock.
Due to the acquisition of treasury stock totaling JPY200 billion in fiscal 2026, the ratio of treasury stock held
to the number of shares outstanding has increased and will be cancelled to an appropriate level. The number
of treasury shares after the cancellation will be approximately 102 million shares.
Please refer the share repurchase on the upper right-hand side of the slide. Following fiscal 2026, Kyocera
Corporation has decided to repurchase approximately JPY250 billion of its own shares in fiscal 2027. This
amount is the largest planned market purchase that can be implemented during fiscal 2027, based on trading
volume on the Tokyo Stock Exchange and the terms and conditions of the entrusted financial institution.
26
Next, I will explain our management plan for the year ending March 31, 2028.
For fiscal 2028, we forecast sales revenue of JPY2.050 trillion, operating profit of JPY160 billion, profit before
income taxes of JPY192 billion, profit attributable to owners of the parent of JPY150 billion, and ROE of 5%.
Capital expenditures is expected to be JPY176 billion, depreciation charge of PPE and R&D expenses JPY130
billion respectively.
27
From this point onward, the explanation will be divided into two segments: the Components Businesses,
which includes the Core Components Business and the Electronic Components Business, and the Solutions
Business.
Kyocera expects to largely complete the reorganization of management foundation by fiscal 2027, and to
return to a growth trajectory from fiscal 2028. The left graph shows sales revenue, and the right graph shows
profit before income taxes. For fiscal 2028, we plan to increase both sales revenue and profits in both the
Components Businesses and the Solutions Businesses compared to fiscal 2027.
28
We will explain the changes in sales revenue, operating profit, and capital expenditures by segment for fiscal
2028 compared with fiscal 2027.
First, the Components Businesses. Sales revenue on the left side are expected to increase due to business
expansion in priority areas such as advanced semiconductors and peripheral areas.
Business profit at the center is expected to increase due to improved profitability of the Organic Packages and
Boards Business and the Electronic Components Business, as well as increased sales of high-value-added
products in priority areas. However, ROIC has not reached the target figure of 8%, which we recognize as an
issue.
Capital expenditures on the right are expected to rise in fiscal 2027 due to new investments in growth areas,
before declining to normal levels in fiscal 2028.
29
Next, I will explain our business strategy in the focused areas of the Components Businesses.
We have a unique product line that captures the strong demand for advanced semiconductors and peripheral
areas. In the area of components for advanced semiconductor processing equipment, opportunities to
increase demand for target equipment and to expand market share are expected in response to market trends
such as increasing miniaturization and high-layer stacking demand, and increasing number of processes for
lithography, development, etching.
In AI data center components, demand for optical communication spreads and demand for surrounding
devices such as switches are expected to increase in response to the market trend toward higher performance
for high-speed and large-capacity processing in line with the growing popularity of AI servers.
We will strengthen the adoption of these high market share products via major semiconductor processing
equipment manufacturers, optical transceiver manufacturers, and AI related equipment manufacturers for AI
data centers by US big tech companies.
30
Here is the business plan.
We aim to further expand our market share in the advanced semiconductor and related areas on the strength
of our core technologies and customer base.
The graph on the left shows planned sales expansion in the advanced semiconductor and AI related area
business. We plan to increase the share of advanced semiconductors, which accounted for about 40% of our
semiconductor business in fiscal 2026, to about 55% in fiscal 2031, and to increase sales revenue by 2.8 times.
Expansion strategies by major item and technology are listed on the right. In fine ceramic components for SPE
in the upper row, we will increase production of structural ceramic components, where we have a high market
share, and focus our resources on components for lithography and etching process. In addition, we will also
newly launch next-generation electrostatic chucks, highlighted in blue, where our current market share is low.
In the middle section, network packages for AI related, we will invest heavily in packages for high-speed optical
communications, where we have an overwhelming market share as shown in the pie chart on the right, and
promote the development of ceramic core substrates for chiplet-designed packages as a new product.
In the lower tier of high capacitance and high reliability capacitors, we will continue to gain market share in
MLCCs and polymer tantalum for AI servers and data centers.
31
Next, the Solutions Business.
Sales revenue on the left side are expected to increase due to the introduction of new high-value-added
products and services in each business, including the Document Solutions Unit and the Communications Unit.
Business profit shown at the center is expected to increase due to the higher revenue, cost reduction, and
productivity improvement in each business, and the withdrawal or downsizing of unprofitable businesses,
sites, and products. ROIC is expected to reach 10%, in line with our target.
Capital expenditures on the right indicate plans to continue aggressive investment in fiscal 2028, as in fiscal
2027.
32
I will then explain the initiatives of the Solutions Business for fiscal 2027 and 2028.
In the Solutions Business, we will further improve profitability to achieve ROIC of 10% and, at the same time,
promote the creation of a foundation for next growth.
As a typical example of the expansion of highly profitable products and services described in the upper row,
the Document Solutions Unit will launch new high-speed MFPs and commercial inkjet printers. In the
Communications Unit, in addition to strengthening the engineering business of grid-scale storage battery, we
will work to expand industry-specific communications solutions. In the Printing Devices Business, Kyocera will
expand production capacity through capital investment to meet growing demand for inkjet print heads for
textile printing.
In the cost reduction and productivity improvement initiatives described in the middle section, we will realize
the effects of integrating our European organizations and expanding production in Vietnam in the Document
Solutions Unit and the Industrial Tools Unit. In addition, we will promote in-house production of parts in the
Document Solutions Unit, etc. Furthermore, we will promote the shift to smart factories, including in the
Document Solutions Unit and the Printing Devices Business.
In addition, the withdrawal or downsizing of unprofitable businesses, sites and products in the lower section
will continue to be executed in all product lines. Furthermore, we will promote human resource development,
process design, and platform development to create a foundation for the “Products X Experience Value
Approach.”
33
We seek to balance investment in growth with shareholder returns and to optimize shareholder equity with
the goal of increasing corporate value.
The following information has been updated from that announced on February 3, this year, taking into
account the financial forecasts for fiscal 2027, and the management plan for fiscal 2028, as well as the market
value and exchange rate of the shares held as of the end of fiscal 2026.
The left side of the slide shows the two-year capital allocation targets for fiscal 2027 and 2028.
Also shown on the right side of the slide is the capital structure at the end of fiscal 2026, and the target capital
structure at the end of fiscal 2028. We aim to optimize shareholders' equity to increase corporate value with
a target of approximately JPY3 trillion in shareholders' equity at the end of fiscal 2028.
34
As shown on this slide, our ROE results for fiscal 2026 were 4.3%. Progress in management reform has enabled
us to improve the situation. For fiscal 2027, we plan 4.3%, the same level as fiscal 2026, considering
macroeconomic risks, but we will consider and promote further strengthening of our business portfolio and
further improvement of challenging businesses.
For fiscal 2028, we aim to achieve ROE of 5% by further promoting a series of measures under the new
management structure, including organic growth through expansion of AI related products and the Solutions
Business, continuous optimization of capital structure by reducing cross-shareholdings and strengthening
shareholder returns, and investment for growth and shareholder returns.
On this basis, for fiscal 2031, we aim to achieve an ROE of 8% by increasing earnings through the contribution
of new products and new businesses to management promotion, as well as through inorganic growth such as
M&A. We are planning to hold a business strategy briefing in late November this year, at which we will explain
our plans for achieving our goals. By steadily implementing the various measures announced today, we aim
to achieve profit growth and improve capital efficiency, and in the future, we aim to increase ROE to over 10%
and market capitalization to over JPY5 trillion.
This concludes my explanation. Thank you for your attention.
35
Question & Answer
<Questioner 1>
[Q]: First, with President Sakushima becoming CEO, what has been the greatest focus of your efforts over the
past three months? Related to that, you plan fiscal 2028 sales revenue up JPY110 billion as compared to fiscal
2027 and I would like you to introduce us the products that you have high expectations. Conversely, to what
extent does the plan include withdrawals or downsizing? You are planning to increase investments in fiscal
2027, could you please clarify whether these investment are related to this? I would also appreciate an
overview of your overall approach.
Sakushima [A]: First, regarding what I focused on during my first few months as CEO, during fiscal 2026, I have
been working on various business portfolio restructuring, mainly in the components business, in the Strategic
Business Transformation Project. As we need to take a company-wide perspective, my main focus over the
past few months has been to understand the overall business, including the Solutions Business. In
implementing the policy I mentioned at the beginning of this presentation, we promoted the consolidation of
information and discussion to promote company-wide management. We believe that this should continue in
the current fiscal year, and we are therefore working to further strengthen this structure.
[Q]: Is it correct to think that this is linked to what you mentioned earlier about the Corporate Planning Office?
Sakushima [A]: We were focusing our efforts to launch it.
Also, we are increasing capital investment in the immediate future. These investments are aimed at increasing
production of products in which we have strengths. As for the Core Components Business, the Isahaya Plant
in Nagasaki will be completed, and we are investing in the increased production of components for
semiconductor processing equipment and increased production of ceramic packages, which is related to the
information and telecommunication-related markets. We believe that this investment will steadily contribute
to the improvement of our profitability.
With regard to the Electronic Components Business, inquiries especially for embedded small MLCCs related
to AI have been very strong, and we are planning to expand our facilities for the start-up of these components.
We are planning to start up production facilities in the new building completed at Kagoshima Kirishima Plant,
which will also contribute to sales.
In the Solutions Business, the inkjet business in the Printing Device Business in particular have been
performing very well. We intend to increase sales in the current and next fiscal years by investing to meet the
demands of our customers. We believe that we are investing in product areas where the market is highly
demanding and where we have strengths.
[Q]: How much has been incorporated for the areas you may discontinue or reduce for fiscal 2028? Or may I
assume that you have already completed it by fiscal 2026?
Sakushima [A]: Specifically, within the Organic Packages and Boards Business, we planned to withdraw from
some low-profit products, and expect to accelerate this plan. We are continuing to downsize products in line
with structural reforms, and we are also working on the consolidation of sites.
[Q]: Thank you.
36
Lastly, I would like to confirm. In the media, Mr. Sakushima was described as the type of person who, once
convinced through discussion, follows through thoroughly. I understand that in the previous announcement,
a very detailed picture was drawn, and a strategy was formulated to determine where and how to proceed,
which has now been presented. What are the problems and challenges in changing the entire culture of a
large company like yours? Have you already grasped the challenges and ready to move forward with
implementation? How do you see it now?
Sakushima [A]: We have been implementing the Amoeba Management System, under which each
department formulates and executes its own strategy. However, our efforts have been somewhat lacking in
terms of sharing information and technologies across departments to explore new opportunities.
For fiscal 2027 and 2028, we can foresee growth, especially in existing businesses, due to the business
environment and by strengthening components that are an extension of existing businesses, but if we aim for
fiscal 2031, we believe it will be necessary to create something new out of that. In fiscal 2026, we were mainly
examining issues in existing businesses, but from fiscal 2027, we believe it is necessary to clearly identify our
key challenges and efforts to address them in order to drive growth in new areas. We are currently considering
addressing this at the business strategy meeting in November, 2026.
[Q]: Understood. Thank you.
<Questioner 2>
[Q]: How is the traditional Amoeba Management System changing now? How do you plan or intend to make
further changes in the future? Please tell me how we should think this will lead to increased shareholder value.
Sakushima [A]: Regarding the Amoeba Management System, each department has been independent,
designing its own business field and proceeding accordingly, until now. However, the sense of challenge is
that there are some areas that cannot be overcome by that approach alone.
As I mentioned earlier, I think it is important to emphasize that we should create new products through mutual
cooperation, or flexibly change the shape of the amoeba. That is, not only closely monitoring individual
profitability figures, but also flexibly changing the shape of the amoeba in response to changes in the world.
The recent integration of the Automotive Components Business and the Displays Business into the
Automotive Systems Business is one example. As many such things are created, we believe that by creating
new products and new businesses, we can provide value to the world by regaining our flexible structure. At
this point, we believe that providing value equals providing value to shareholders.
[Q]: Thank you very much.
What impact has the increase in memory prices or the difficulty in procuring memory had on the Document
Solutions Unit and other businesses? Please tell us what impact you perceive the memory price increase is
having on the number of sets of smartphones, PCs, and other devices.
Sakushima [A]: As you commented, the price of memory has affected the Document Solutions Unit and the
Communications Unit. As for procurement, we have secured sufficient memories at this point, so we do not
foresee any problems in fiscal 2027. On the other hand, prices have been soaring, and we are currently
consulting with our customers to pass on prices.
In addition, we believe that the soaring price of memory will probably have a significant impact on the
production of smartphones and PCs. The customers we provide our components mainly are a relatively large
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company, so we believe that the impact will be minor. With regards to Chinese smartphone makers, we
believe that the impact on our business will be relatively small. That’s said, this is a factor that cannot be
ignored for sure, and we will continue to monitor it closely.
[Q]: Thank you very much.
<Questioner 3>
[Q]: I would like to ask you about the areas of focus for the Components Businesses. I believe that you have
been emphasizing the expansion of the advanced semiconductor-related areas where you have core
technologies. I know that you have these areas spanning each reporting segment, but can you tell us size of
sales in these area quantitatively?
Also, please tell us how certain you are in each area of your entry into next-generation electrostatic chucks,
AI peripherals, and efforts to expand your market share of the polymer tantalum capacitors? Regarding
electrostatic chucks, we were aware that the relationship between equipment makers and electrostatic chuck
makers is a strong one and that it is not easy for other companies to enter the market due to market share
expansion, so please tell us about your strategy regarding this.
In addition, I think that sales of MLCC and polymer tantalum capacitors for servers are currently growing, but
I would like to know how much these areas are growing and how much they are expected to grow in fiscal
2027.
Sakushima [A]: We would like to refrain from providing a detailed amount of sales in this area, as we are not
disclosing this information at this time. As a percentage, as I explained earlier in the material, we will raise the
ratio from 45% to 55% for advanced semiconductor-related components. We are aiming for a 2.8x sales, which
is qualitative, but I hope you can measure the extent of our growth in that area.
As for entering the electrostatic chuck business, as you mentioned earlier, it is true that we need to work
closely with equipment manufacturers, as you mentioned. As for the expansion of electrostatic chucks, we
are negotiating with customers for their adoption. We believe that we can steadily gain market share if we
can properly clear technical issues, and we intend to increase our market share by steadily advancing
technological development.
Regarding MLCCs, etc., we are currently receiving a great number of inquiries, not just inquiries, but some of
them are moving ahead of others to secure them. We are also receiving offers from several customers for
long-term contracts. As for the parts here, the customer may consider that procurement will be very tight.
Since this is a cutting-edge component, there are only a limited number of manufacturers who can handle it.
We hope to increase sales here as well by solving technical problems and firmly gaining market share.
For tantalum capacitors, due to an internal productivity issue, the start-up of the Thailand Plant was very slow.
Since fiscal 2026, we have been actively promoting productivity and yield improvement with the participation
of members of the electronic components business of Kyocera Corporation and production technology
division, and these efforts are steadily showing up in the figures. We believe that continued improvement in
fiscal 2027 will surely lead to improved sales and profits.
[Q]: Thank you.
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<Questioner 4>
[Q]: In response to the recent increase in demand for AI servers and changes in technology, could you please
introduce any developments in your company's related products that could be perceived as points of change
during this January to March period? For example, with the CPO direction coming out, your company's certain
components are increasing, or with the movement to change the ratio of CPUs, GPUs, and accelerators, there
may be business opportunities in the packages. With the changes in the world, are there any new
opportunities emerging for your company?
Sakushima [A]: Regarding AI-related issues, I used the term AI power circuit solution at last presentation.
Once you introduce AI, electricity consumption will increase. We are well aware that our customers are
continuously and strongly promoting design and development to reduce power consumption. As we have
been talking with these customers about how we can reduce power consumption, through simulation
technology, we have come to realize that our products are a good match for them. In this sense, we have
come to realize that what we have been working on is a product that is firmly demanded by our customers.
This may be the point of change for us, but we have come to believe that steadily moving toward this point
may be a factor in the growth of our business. The other fact is that our customers are becoming quite
demanding, especially from this year. In both of these respects, in terms of technology and market trends, we
have seen changes over the past few months.
[Q]: I see. Is it correct that rather than specific items, the overall trend is that demand is rising and your
company's market share is increasing, and that is the change? Are you saying that, in your current situation,
you are feeling a positive response from the product lines as shown in the map you showed us when you
explained 3Q financial result?
Sakushima [A]: You may understand it that way.
[Q]: I see. Thank you.
The second is about DOE. What is your view on the 3.5% rate set this time, and how it may change in the
future? Last time, you mentioned that you would do what you could and that you would strengthen control
of the denominator side. Could you also tell me what 3.5% means in that process?
Chida [A]: Regarding a DOE of 3.5%, we discussed it internally. This is also the extension of the current
dividend payout ratio. While keeping an eye on the degree of business recovery, we decided to stick with a
3.5% DOE for fiscal 2027 and 2028.
Beyond that, we believe that the 3.5% DOE will need to be revised in the future as we look toward fiscal 2031
for business growth and improved business profits. I cannot give you a specific figure, but we are assuming
that we will have to generate at least that much more for business profits, and that our approach to DOE will
also have to be more than 3.5%.
[Q]: I see. Thank you.
<Questioner 5>
[Q]: First, regarding the Electronic Components Business, I think the industry saw quite a few price increases
from January to March because of the price correction of tantalum capacitors since the price of tantalum
powder has gone up, and some in MLCCs as well. Is it correct to understand that the profit margin, including
the price response, increased in 4Q?
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Regarding Organic Packages and Boards Business, demand for CPUs is strong right now, and I assume that
your company has been doing some CPU packages that are unique for hyperscalers. Do you feel that demand
for CPUs is actually increasing from your point of view? If the operation is up and running, are you going to
consider capital investment for organic packages again? Please let us know what you are going to do, as I
believe there is a very strong demand for this business now.
Sakushima [A]: Regarding the first point, the price of tantalum powder has risen sharply, and we have raised
the price appropriately. However, the increase in profits in 4Q is not so much due to the effect of the price
increase, but rather to the improvement of yields through productivity improvements, etc.
For high-reliability products other than polymer tantalum capacitors, in the past, when the market was very
stagnant, there was an overabundance of inventory. This overabundance of inventory has been resolved
slowly. The number of high-reliability products in this area has risen slightly, which has boosted profits in some
areas. Due to this combined factor, we believe that the numbers are rising for tantalum capacitors in the
Electronic Components Business.
With regard to Organic Packages and Boards Business, the current strong demand is for custom organic
substrates used in devices around switches. We are aware that the supply of glass cores has been very tight,
but we are working with our existing customers to improve the internal structure and yield rate in order to
raise the volume as much as possible, while coordinating with our customers on the supply. That is now the
biggest factor behind the rise in the Organic Packages and Boards Business.
As you mentioned, procurement of core materials may be difficult this year, but we are hearing that the
volume will increase in fiscal 2028 or so. In such cases, we have to be cautious about our own investment
decisions in the near future.
Even if market conditions have risen considerably, we have to be careful about making investments
immediately, as changes happen rapidly, and we have to think about what to do when the market drops. We
consider this area to be one of the major issues in considering whether or not the Organic Packages and
Boards Business will proceed or not.
[Q]: In other words, if there is a prospect that a technology, such as ceramic cores, which differentiates your
company, will be adopted, it will be a very big barrier to entry, so you will be more aggressive in your approach.
Is this what you mean?
Sakushima [A]: We have to make a decision on large investments where we have a strong product line. We
experienced the risk of investing in products whose orders are coming or not coming depending on the
increase or decrease in market conditions. We believe that we need to make an investment that is suited to
the situation of the company, and that is the approach we take toward the Organic Packages and Board
Business.
[Q]: About one-time costs and gains in fiscal 2027. Please tell us how you are planning to set up something
like one-time expenses.
Sakushima [A]: One-time gains and losses, etc., were very diverse in fiscal 2025 and 2026, but we do not
expect any large amount of onetime costs or profits that we had in previous fiscal years in fiscal 2027.
Regarding the business areas in which we are growing, although we are seeing improvement in profitability, I
think it will take another year before we see an increase in both sales and profits. In that sense, I hope you
understand that this is the content of our current plan for fiscal 2028.
[Q]: I understand. Thank you.
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[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)
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