TOYOBO CO., LTD

Business Details

Manufactures and sells packaging film (food packaging, etc.) and industrial film (Cosmoshine SRF (LCD Polarizer Protective Film), Release Film for Ceramic Capacitors, etc.). In FY2026 (ending March 2026), industrial film expanded steadily, driven mainly by AI server and LCD applications, while packaging film profitability also improved due to productivity improvements from new equipment. Both net sales and operating profit increased substantially, driving the recovery in profit for the group as a whole.

Recent Overview

Strong performance in industrial film and improved profitability in packaging film drove a substantial 140.4% year-on-year increase in operating profit.

In the Film segment for FY2026 (ending March 2026), net sales increased substantially to ¥175,169 million (up ¥8,327 million, or 5.0%, year on year), and operating profit rose to ¥16,638 million (up ¥9,718 million, or 140.4%, year on year). Sales of Release Film for Ceramic Capacitors expanded steadily, driven mainly by AI server applications, while Cosmoshine SRF (LCD Polarizer Protective Film) also performed steadily, supported by strong demand. Although shipment volume of packaging film remained sluggish, profitability improved due to productivity improvements from new equipment. Capital expenditure (increase in property, plant and equipment and intangible assets) decreased substantially to ¥10,055 million from ¥18,582 million in the prior period, suggesting a shift from a large-scale investment phase to a profit-harvesting phase.

Key Products

Growth Drivers

• Expanding demand for Release Film for Ceramic Capacitors from AI server applications
• Continued strong demand for Cosmoshine SRF (LCD Polarizer Protective Film)
• Improved profitability in the packaging film business due to productivity improvements from new equipment
• Emergence of production capacity expansion effects from aggressive capital investment in the prior period (FY2025, ended March 2025: ¥18,582 million)

Risks

• Risk of continued deterioration in packaging film shipment volume due to consumers' entrenched frugality amid rising food prices
• Risk that the pace of demand expansion for Release Film for Ceramic Capacitors falls short of expectations (due to fluctuations in the AI server investment cycle)
• Risk of cost pressure from supply disruptions or price increases in petroleum- and naphtha-derived raw materials due to escalating tensions in the Middle East
• Risk of spillover effects on industrial film demand from a prolonged economic slowdown in the Chinese market
• Risk of adverse effects on exports and the global supply chain from the impact of U.S. reciprocal tariff policy