SEKISUI CHEMICAL CO.,LTD.

Business Details

Centered on the manufacture, construction, and sale of steel-frame and wood-frame unit housing (SEKISUI HEIM), the segment operates a Residential Business encompassing remodeling (SEKISUI Fami-S), real estate brokerage, rental property management, buy-and-resell operations, and condominiums (HEIM SUITE). The majority of sales are domestic, with the main drivers of earnings improvement being the expansion of sales of higher-priced detached houses and multi-unit housing centered on urban areas, and the expansion of remodeling orders originating from periodic inspections targeting existing homeowners.

Recent Overview

Achieved higher sales and substantial profit growth on higher per-unit prices and remodeling growth despite sluggish new housing market conditions

In FY2026 (ending March 2026), the Housing Company achieved sales of ¥535,944 million (up 2.3% year on year) and segment profit of ¥37,150 million (up 17.9% year on year), a substantial increase in profit. Although the number of units ordered remained at 96% of the previous fiscal year due to sluggish new housing market conditions, sales exceeded the previous fiscal year, aided by an increase in per-unit prices driven by the expansion of multi-unit housing and higher-priced detached houses. The remodeling business achieved orders at 105% of the previous fiscal year, and the Residential Business expanded steadily, aided by newly consolidated companies. Two newly consolidated companies (Ben House and Architec Planning) have been added to the scope of consolidation.

Key Products

Growth Drivers

• Increase in per-unit prices through expanded sales of urban multi-unit housing and higher-priced detached houses (orders received at 102% of the previous fiscal year)
• Expansion of large-scale remodeling orders originating from periodic inspections (orders received at 105% of the previous fiscal year)
• Stable growth of the Residential Business through steady increases in rental management units and expanded buy-and-resell operations
• Strengthening of the product lineup through new product introductions and recovery in the number of units ordered in regional areas (next fiscal year plan: orders received at 102% of the previous fiscal year)
• Strengthening of the product menu centered on insulation remodeling and expansion of external sales orders (next fiscal year plan: orders received at 105% of the previous fiscal year)

Risks

• Continued prolonged slump in the domestic new housing market (declining consumer sentiment due to rising mortgage interest rates and higher prices)
• Sluggish demand recovery in regional areas and the risk that the number of units ordered falls below the previous fiscal year
• Prolonged construction periods and rising construction costs due to labor shortages at construction sites
• Risk of profit pressure from rising prices of raw materials and building materials
• Decline in purchasing intent due to further increases in mortgage interest rates

Business Details

Manufactures, sells, and constructs PVC pipes and fittings, polyethylene pipes and fittings, reinforced plastic composite pipes, chlorinated PVC (CPVC) resin compounds, synthetic wood (FFU) railway sleepers, fire-resistant and non-combustible materials, sewer pipe rehabilitation materials and construction methods, and panel tanks. The segment's main customers are the domestic housing and non-residential construction markets and overseas infrastructure markets, providing a range of products that contribute to solving social challenges such as aging infrastructure renewal, disaster prevention, and labor-saving. The segment consists of three fields: Pipe Systems, Housing & Infrastructure Composite Materials, and Infrastructure Renewal.

Recent Overview

Despite continued sluggish market conditions, operating profit reached a record high for the fourth consecutive fiscal year through spread maintenance

In FY2026 (ending March 2026), sales to external customers slightly declined to ¥225,061 million (down ¥2,340 million year on year), affected by the continued sluggish domestic housing and non-residential market and the decline in CPVC resin demand due to the sluggish market in India. On the other hand, operating income reached a record high for the fourth consecutive fiscal year at ¥23,247 million (up ¥289 million, or 1.3%, year on year), through spread maintenance centered on the domestic business. The Housing & Infrastructure Composite Materials and Infrastructure Renewal fields saw increased sales, while the Pipe Systems field saw decreased sales. For the next fiscal year (FY2027, ending March 2027), the company forecasts sales of ¥255,400 million (up 6.2% year on year) and operating income of ¥25,000 million (up 7.5%), aiming for a record profit for the fifth consecutive fiscal year.

Key Products

Growth Drivers

• Accelerated sales expansion through new adoptions and expanded applications of fire-resistant and non-combustible materials
• Expansion of synthetic wood (FFU) railway sleeper adoption in Europe, plus expansion into the U.S. market
• Capturing large-diameter, large-scale pipe rehabilitation projects driven by domestic aging infrastructure renewal demand (including nationwide priority surveys)
• Expanding orders in overseas infrastructure markets (pipe rehabilitation, panel tanks, new CPVC resin products, expanded sales areas)
• Improved profitability through price improvements (spread maintenance) and expanded sales of priority growth products

Risks

• Slowdown in sales volume growth due to continued sluggish domestic housing and non-residential construction market conditions
• Risk of downside in CPVC resin demand due to continued sluggish conditions in the Indian market
• Prolonged construction periods and deteriorating shipment movement due to labor shortages at construction sites
• Risk of profit pressure from increased fixed costs due to human capital investment and capacity expansion
• Demand fluctuations due to economic conditions in overseas markets (Europe, U.S., Asia)
• Risk of profit pressure from rising raw material costs

Business Details

Manufactures and sells a diverse range of high-performance plastic products, including interlayer film for laminated glass, foamed polyolefin, industrial tape, LCD microparticles, photosensitive materials, carbon fiber reinforced plastic (CFRP) and other composite molded products, and thermal dissipation materials. Centered on the three fields of Electronics (semiconductors, displays), Mobility (automobiles, aircraft, drones), and Industrial (construction, consumer goods), the segment supplies high-value-added materials to a wide range of industrial customers both domestically and internationally. It is a global segment with manufacturing and sales sites in North America, Europe, China, and Asia.

Recent Overview

Increased sales through capture of semiconductor and mobility demand, but operating profit decreased due to one-time costs and impairment losses

In FY2026 (ending March 2026), sales to external customers reached ¥451,722 million (up 2.1% year on year), a record high with increased sales. In the Electronics field, new business acquisition progressed amid buoyant semiconductor and display market conditions. In the Mobility field, growth in interlayer film for head-up displays and expansion into new fields for aircraft and drones contributed. On the other hand, in the Industrial field, sales decreased due to weak construction and consumer goods demand in Europe and Japan. Due to the impact of one-time costs and an impairment loss of ¥2,000 million recorded in the High Performance Plastics field, segment profit decreased to ¥59,325 million (down 3.1% year on year). For FY2027 (ending March 2027), the company aims for a record profit with sales of ¥487,600 million (up 6.8%) and operating income of ¥64,500 million (up 8.7%).

Key Products

Growth Drivers

• Electronics field: continued capture of demand amid buoyant semiconductor and display market conditions, and continued acquisition of new customers and new applications
• Mobility field: expanded sales of high-performance interlayer film, primarily for head-up displays, and capture of recovering aircraft-related demand
• Expansion into new fields such as drones: progress in developing new applications in the Mobility field
• Expanded sales of high-value-added products in the Industrial field: continued acquisition of new business for sensor- and care material-related products, labor-saving products, and environmentally responsive products
• Expanded capital expenditure: increase in property, plant and equipment and intangible assets of ¥32,277 million (versus ¥29,047 million in the previous fiscal year), with continued active investment expanding production capacity
• Foreign exchange effects: increase in yen-converted overseas sales (North America ¥118,076 million, Europe ¥81,050 million, China ¥76,026 million, Asia ¥52,403 million) due to yen depreciation

Risks

• Continued sluggish demand in the Industrial field: risk that weak construction and consumer goods demand in Europe and Japan delays recovery in demand for general-purpose products
• One-time cost and impairment risk: an impairment loss of ¥2,000 million was recorded in FY2026 (ending March 2026), and additional impairment could occur if overseas business plans are not achieved
• Continued stagnation in the EV market: risk that partial weakness in demand for electric vehicles affects sales of mobility products
• U.S. tariff policy risk: risk that changes in U.S. tariff policy affect the North American business (sales of ¥118,076 million)
• Foreign exchange risk: a shift to yen appreciation would reduce the yen-converted value of overseas sales, affecting results
• Uncertainty in global market conditions: fluctuations in semiconductor, display, and automobile production market conditions directly affect demand in each field
• Increased fixed costs due to accelerated development: fixed costs are expected to increase in FY2027 (ending March 2027) due to accelerated development for further growth

Business Details

The Medical Business of the Sekisui Chemical Group manufactures and sells clinical diagnostic reagents, automated analyzers, and blood collection tubes (Diagnostics Business), as well as pharmaceutical APIs, intermediates, drug discovery support, and enzyme raw materials (Medical Business). Major subsidiaries include Sekisui Medical Co., Ltd. (Japan), Sekisui Diagnostics, LLC. (U.S.), and Sekisui Diagnostics (UK) Limited (U.K.), among others. The segment operates across a wide range of regions, from domestic immunoassay and coagulation testing to infectious disease test kits in the U.S. and the Chinese market, with drug discovery support and core APIs also functioning as pillars of earnings.

Recent Overview

Decreased sales and profit due to declining U.S. infectious disease test kit demand and sluggish Chinese market conditions, with large-scale impairment losses also recorded

In FY2026 (ending March 2026), the Medical Business recorded sales of ¥93,721 million (down 5.5% year on year) and operating income of ¥11,130 million (down 13.0% year on year), a decrease in both sales and profit. Declining demand for priority infectious disease test kits in the U.S. and sluggish market conditions in China directly impacted the performance of the overseas Diagnostics business. The Medical business performed steadily but could not fully offset the decline. In addition, impairment losses of ¥3,871 million were recorded for intangible assets, etc. in the U.S. diagnostics business, ¥1,397 million for the U.K. enzyme business, and ¥1,023 million for the U.K. pharmaceutical development business, for a total impairment loss of ¥6,306 million recorded as an extraordinary loss. For FY2027 (ending March 2027), the company forecasts sales of ¥97,300 million (up 3.8% year on year) and operating income of ¥12,000 million (up 7.8% year on year), and plans to pursue new business acquisition in the domestic Diagnostics and Medical businesses and improve profitability in the overseas Diagnostics business.

Key Products

Growth Drivers

• Steady capture of domestic immunoassay and coagulation testing demand, and acquisition of new customers through expansion of the coagulation equipment lineup
• Focus on acquiring new projects in the domestic Diagnostics and Medical businesses
• Steady delivery of contracted projects and acquisition of new orders in the core API and drug discovery support businesses
• Continued pursuit of profitability improvement measures in the overseas Diagnostics business (U.S., China)
• Promotion of profitability improvement measures through fixed cost reduction

Risks

• Risk of continued sluggish demand for priority infectious disease test kits in the U.S.
• Risk of expanding impact from healthcare cost containment policies (drug price and testing fee reductions) in the Chinese market
• Risk of intensifying competition and deteriorating market conditions overseas (U.S., China, U.K.) in the Diagnostics business
• Risk of asset impairment as seen in the large-scale impairment losses recorded in FY2026 (ending March 2026) (total of ¥6,306 million: ¥3,871 million in the U.S., ¥1,397 million in the U.K. enzyme business, ¥1,023 million in the U.K. pharmaceutical development business)
• Risk of future impairment related to the goodwill balance (¥2,812 million)
• Risk of business plan delays due to postponement of public certification acquisition in the U.K. pharmaceutical development business

Business Details

Handles the research and development and commercialization of next-generation technologies such as film-type lithium-ion batteries, the film-type perovskite solar cell (SOLAFIL), and bio-refinery. Also includes insurance services (Sekisui Insurance Service), an accounting center (Sekisui Accounting Center), and overseas regional headquarters companies (Sekisui Europe B.V., Sekisui America Corporation, etc.). Although sales are small in scale, the segment carries heavy upfront investment costs, resulting in a structural operating loss.

Recent Overview

Large impairment loss recorded due to postponement of bio-refinery commercialization, while perovskite solar cell commercialization began

In FY2026 (ending March 2026), an impairment loss of ¥14,891 million (including ¥13,998 million in construction in progress) was recorded in connection with the withdrawal from the bio-refinery plant in Kuji City, Iwate Prefecture, resulting in a sharp increase in the segment's total impairment loss to ¥14,951 million. On the other hand, the film-type perovskite solar cell "SOLAFIL" established 1-meter-wide manufacturing technology and installation specifications for metal roofs, and began commercialization (product provision) in March 2026. Segment assets increased by ¥31,123 million year on year to ¥69,287 million due to expanded capital investment. The operating loss widened to -¥12,710 million year on year.

Key Products

Growth Drivers

• Commencement of commercialization of the film-type perovskite solar cell "SOLAFIL" and expansion of supply volume through the launch of a 100MW production line in fiscal 2027
• Market development leveraging the lightweight and flexible characteristics for locations where conventional solar cell installation is difficult
• Continued investment in strategic creation under the new medium-term management plan (scheduled to be announced in May 2026)
• Stable internal demand for group internal service businesses (insurance, accounting)

Risks

• Materialization of the risk of business withdrawal, with an impairment loss of ¥14,891 million recorded due to the postponement of bio-refinery commercialization (FY2026, ending March 2026)
• Continued and expanding structural operating loss due to heavy upfront investment costs (operating loss of -¥12,710 million in FY2026, ending March 2026)
• Uncertainty in the commercialization timeline for the perovskite solar cell (mass production and monetization are not expected until fiscal 2027 or later, immediately after the start of commercialization)
• Segment assets have sharply expanded to approximately 1.8 times the previous fiscal year at ¥69,287 million, presenting a latent risk of additional impairment
• Sales to external customers have significantly decreased from ¥4,897 million to ¥2,831 million, presenting a risk of business scale contraction
• Risk of additional impairment due to failure to achieve business plans in overseas businesses such as the U.S. diagnostics business (impairment losses were also recorded in the U.K. enzyme business and pharmaceutical development business)