A Turning Point for Reexamining Our Business Structure

The fiscal year ended March 31, 2026 began with a clear objective: to strengthen and build upon the foundation for profitability that we established in the previous fiscal year. However, the business environment surrounding our group became significantly more challenging than anticipated. Rapid changes in external conditions, including U.S. trade policy developments, combined with prolonged investment restraint and inventory adjustments across the automotive industry, as well as rising raw material and energy costs. As a result, consolidated net sales totaled 10,992 million yen, down 5.3% year over year. On the earnings front, we recorded an operating loss of 408 million yen, compared with operating income of 153 million yen in the previous fiscal year, and an ordinary loss of 446 million yen, compared with ordinary income of 185 million yen in the previous fiscal year. We also recorded a net loss attributable to owners of the parent of 754 million yen primarily due to impairment losses on fixed assets resulting from a reassessment of profitability in the Precision Parts Business. We take these results very seriously. They reinforced our recognition that transforming our business structure has become an urgent management priority. We will further accelerate structural transformation to build a business foundation with greater earnings power and resilience against changes in the operating environment. Despite these challenges, we have made steady progress in improving our earnings structure through higher production efficiency and tighter control of fixed costs. We believe we are transitioning toward a business structure that can generate operating income more consistently when demand recovers. We regard the experiences of this fiscal year as a turning point for our next stage of growth and will further accelerate our structural reforms.

Prioritizing Earnings Improvement to Return to Operating Income

In the Japanese automotive industry, which represents our principal customer base, we expect manufacturers to continue reviewing production systems and adjusting inventory levels due to a range of factors, including rising parts and material costs stemming from the deterioration of the situation in the Middle East. In addition, we anticipate continued increases in energy, material, and other operating costs, as well as ongoing challenges in procuring rare metals and other critical minerals. These factors continue to make the business outlook uncertain. While the transition toward vehicle electrification has temporarily slowed market growth, development of next-generation automotive technologies continues to accelerate, and supply chain restructuring is expected to remain an important industry trend. Against this backdrop, for the fiscal year ending March 31, 2027, we forecast consolidated net sales of 11,200 million yen, up 1.9% year over year, and operating income of 10 million yen, compared with an operating loss of 408 million yen in the previous fiscal year. We therefore expect to return to profitability at the operating level. However, we also expect to record upfront investments associated with the first fiscal year of operations of Nichidai Sansera Private Limited, which is scheduled to become an entity accounted for using the equity method. As a result, we forecast an ordinary loss of 85 million yen, compared with an ordinary loss of 446 million yen in the previous fiscal year, and a net loss attributable to owners of the parent of 126 million yen, compared with a net loss attributable to owners of the parent of 754 million yen in the previous fiscal year.
In the Precision Dies Business, we will further expand our product portfolio and broaden our customer base to drive sales growth. In the Precision Parts Business, we will focus on the successful launch of new products planned for the fiscal year that are currently attracting customer interest, while improving production efficiency to restore profitability. In the Filter Business, we will leverage the benefits of the absorption-type merger of our Thailand subsidiaries to strengthen our competitiveness across the ASEAN market.

Tangible Progress Across Our Three Strategic Pillars in the Final Fiscal Year of NICHINOVATION 2026

As we advanced initiatives toward the final fiscal year of our Medium-Term Management Strategy “CHANGE ~ NICHINOVATION 2026 ~,” the fiscal year ended March 31, 2026 produced very challenging business results due to the deterioration of external business conditions as described above. While we take these results seriously, we believe that we have made meaningful progress in advancing structural reforms aligned with our three strategic pillars—earnings improvement, technological innovation, and global expansion. These efforts are laying the groundwork for future growth and recovery.
To strengthen our earnings structure, we promoted initiatives aimed at increasing production efficiency and curbing fixed costs, thereby transforming our business structure into one that can generate operating income more consistently. In the Precision Dies Business, we pursued greater precision and longer die life for precision forging dies while strengthening our ability to provide technical proposals from the design phase. These efforts contributed to more stable mass-production launches and lower total manufacturing costs for customers. In the Precision Parts Business, we leveraged our integrated capabilities spanning forging through machining to maintain consistent quality and respond flexibly to fluctuations in customer demand. In the Filter Business, we advanced product design and quality control tailored to specific applications, thereby establishing a stable supply system that supports continued adoption by customers.
To advance technological innovation, our Forging DX (sensing technology), which is being advanced under a cooperation agreement with Toyota Motor Corporation, progressed to a more concrete stage of technical validation aimed at practical implementation. The project focuses on improving quality consistency and productivity through the digitalization of forging processes. Through standardization and broader application of the technology, we aim to establish a technological foundation that will serve as a source of competitive advantage. In new business development, commercialization studies are advancing across several themes, including sensing technologies and battery-related applications. Although these initiatives currently make only a limited contribution to earnings, they are steadily taking shape as medium- to long-term growth drivers.
To expand our business globally, we established a joint venture with Sansera Engineering Limited in India and created a full-scale platform for entering the market with forging operations as the core business. In Thailand, we strengthened the competitiveness of our operations through the merger of the subsidiaries and have steadily expanded our customer base. Beyond Thailand, we are actively developing business opportunities throughout neighboring countries, and our regional supply capabilities across ASEAN continue to strengthen.

Celebrating the 60th Anniversary of Our Founding

The fiscal year ending March 31, 2027 marks a significant milestone for our company—the 60th anniversary of our founding. Since our founding in 1967, we have accumulated technological expertise and earned the trust of customers and many other stakeholders through their continued support. We would like to express our sincere gratitude to everyone who has contributed to our journey.

The fiscal year also marks the final fiscal year of our current Medium-Term Management Strategy. Over the past few years, we have reorganized business divisions and restructured overseas subsidiaries, among other initiatives, to establish a stronger foundation for future growth. One of our important management priorities is to leverage the technological capabilities and customer trust we have cultivated over the past six decades to drive the next stage of growth and improve earnings.

To strengthen earnings power, we are actively reviewing our pricing strategy as a key initiative. As raw material and energy costs continue to rise, we are working with customers to achieve appropriate pricing. At the same time, we are enhancing the unique value we provide mainly through technical proposals from the design phase and highly precise quality assurance. Through these efforts, we aim to improve the profitability and value of our order portfolio.

The foundation for achieving these goals is our people. By maintaining close dialogue with employees and creating an environment in which each individual can take initiative, take on new challenges, and grow professionally, we seek to foster a corporate culture that encourages proactive problem-solving and new value creation.

Promoting sustainable manufacturing is another important responsibility. Following the acquisition of ISO 14001 certification, we will further strengthen our environmental management framework and promote initiatives throughout the group to reduce greenhouse gas emissions and improve energy efficiency. By contributing to the resolution of issues faced by society while enhancing corporate value, we aim to help achieve a more sustainable society.

Our 60th anniversary is not simply a milestone—it is the starting point for a new stage of growth. Building on the technological expertise and trust we have cultivated over the past six decades, we will continue to take on new challenges as we look toward the next decade and beyond.

Dividends

Our group positions the return of profits to shareholders as a key management policy. While securing the necessary internal reserves for future business development and strengthening our management structure, we maintain a basic policy of continuing stable dividends. In light of the challenging business results for the fiscal year ended March 31, 2026, we regret that the year-end dividend will be 2 yen per share, resulting in an annual dividend of 4 yen per share, including the interim dividend of 2 yen per share. For the fiscal year ending March 31, 2027, we will steadily implement company-wide initiatives aimed at restoring profitability and plan to pay an annual dividend of 6 yen per share, consisting of an interim dividend of 2 yen and a year-end dividend of 4 yen. Over the medium to long term, we aim to increase dividend levels in line with improvements in earnings performance and will strive to enhance shareholder returns through sustained enhancement of corporate value. We sincerely appreciate the continued support and encouragement of our shareholders.

Dividend per share

Precision Dies Business

Current Period Overview

Net sales amounted to 4,467 million yen (down 8.1% year on year), due to continued inventory adjustments by customers both in Japan and overseas. In addition to the decline in sales, rising material costs put pressure on profitability, resulting in an ordinary loss of 292 million yen (compared with an ordinary profit of 133 million yen in the same period of the previous year).

Outlook for the Next Period

Although the business environment is expected to remain challenging, the Company will focus on expanding orders for high value-added products and promoting customer acquisition in broader product segments. As a result, an increase in net sales and an improvement in profitability are anticipated.

Net sales

（Millions of Yen）

Sales Composition Ratio by Segment （2026.3）

Precision Parts Business

Current Period Overview

Net sales amounted to 4,244 million yen (down 2.8% year on year), as domestic demand from major customers declined, while some recovery was seen in overseas markets; however, this was not sufficient to offset the overall decrease. In addition, a decline in gross profit due to lower sales resulted in an ordinary loss of 220 million yen.

Outlook for the Next Period

Although a decline in sales is expected for the current fiscal year, the Company will focus on launching new products for which inquiries are currently being received, while also working to improve production efficiency. Through these initiatives, a recovery in business performance is anticipated.

Net sales

（Millions of Yen）

Sales Composition Ratio by Segment （2026.3）

Filter Business

Current Period Overview

Net sales amounted to 2,280 million yen (down 4.1% year on year), due to a decline following domestic special demand and a temporary reduction in overseas demand associated with the restructuring of the Thai subsidiary. In addition, one-time costs related to the restructuring also affected profitability, resulting in ordinary income of 66 million yen (down 61.2% year on year).

Outlook for the Next Period

The Company aims to fully leverage the effects of the merger absorption of its Thai subsidiary to strengthen competitiveness in the ASEAN region and improve operational efficiency. Through these initiatives, an increase in net sales and an improvement in profitability are anticipated.

Net sales

（Millions of Yen）

Sales Composition Ratio by Segment （2026.3）