DIC Corporation

Business Details

Manufactures and sells printing materials (gravure inks, offset inks, newspaper inks, jet inks, etc.) and packaging materials (Polystyrene, Packaging Adhesives & Multilayer Films, etc.). Its main applications are food packaging, commercial printing, and digital printing, with global operations spanning Japan, the Americas, Europe, and Asia. It is DIC's largest reporting segment, accounting for approximately 51% of consolidated net sales, and serves as the revenue foundation of the company's core business.

Recent Overview

Q1 2026 net sales of ¥145,223 million (+8.4% YoY) and operating income of ¥8,315 million (+25.0% YoY), with income growth achieved across all regions.

In Q1 2026 (January–March), net sales were ¥145,223 million (+8.4% YoY) and operating income was ¥8,315 million (+25.0% YoY). In Japan, Packaging Inks revenue declined due to a consumption slowdown driven by rising prices, while the Americas and Europe secured revenue growth through pricing measures. In Asia, customer inventory build-up in anticipation of Middle East tensions and sales expansion efforts in various countries proved effective. UV inks grew in each region, and market share was captured from competitors in Europe. As a result of expanding sales of high-value-added products and thoroughgoing pricing measures, income increased across all regions.

Key Products

Growth Drivers

• Growth of UV inks (trading cards, etc.) across regions and revenue growth in Publication Inks driven by market share gains from competitors in Europe
• Securing revenue growth in Packaging Inks in the Americas and Europe through thoroughgoing pricing measures
• Progress in customer development and sales expansion in Asia (centered on China) and capturing demand from customer inventory build-up in anticipation of Middle East tensions
• Steady shipment trends for Jet Inks driven by progress in digitalization
• Positive effect of a weaker yen boosting the yen-translated value of overseas sales

Risks

• Continued structural decline in demand and ongoing price competition for Publication Inks
• Decline in Packaging Inks shipments due to weak consumer goods demand amid rising prices in Japan and Asia
• Risk of sluggish shipment growth due to economic stagnation in the Americas and Europe
• Raw material procurement risk and rising energy costs associated with prolonged Middle East tensions
• Foreign exchange translation impact from weaker emerging market currencies (pressure on yen-denominated profit)
• Risk of a downturn once the effect of customer inventory build-up subsides

Business Details

Centered on the Color Materials Products Division, this segment manufactures and sells Pigments for Coatings & Plastics, ink pigments, Specialty Pigments, Color Filter Pigments, Cosmetic Pigments, and Healthcare Food. Main customers include manufacturers of coatings, plastics, display panels, and cosmetics. In FY2025 (ended December 2025), cost reduction effects from the structural reform of the pigment business in Europe and the Americas materialized, leading to a return to profitability. In Q1 2026, the reversal of a repair liability at a German pigment facility (¥5,800 million) served as a temporary factor boosting income, causing operating income to expand sharply to 3.0 times the year-earlier level.

Recent Overview

The reversal of a ¥5,800 million repair liability at a German pigment facility resulted in a one-time gain, causing operating income to surge to 3.0 times the year-earlier level.

In Q1 2026 (January–March), net sales rose 1.5% YoY to ¥69,668 million (external customer sales of ¥61,380 million). On a local currency basis, sales declined 5.1%. Coatings pigments saw a decline in shipments due to a cold wave in North America, and Cosmetic Pigments revenue declined due to the strategic discontinuation of low-value-added products, while Plastics Pigments and Color Filter Pigments increased. Operating income expanded to ¥8,460 million, approximately 3.0 times the year-earlier level (¥2,812 million), but this was mainly due to a one-time factor: the reversal of ¥5,800 million in a repair liability previously recorded at a German pigment facility under a legal requirement that was later determined unnecessary. The underlying improvement in profitability was limited.

Key Products

Growth Drivers

• Recovery in Color Filter Pigments shipments driven by improved panel manufacturer utilization (in anticipation of increased flat-screen TV demand)
• Increased shipments of Plastics Pigments driven by progress in customer sales expansion in Europe and North America
• Continued materialization of cost reduction effects from structural reform of the pigment business in Europe and the Americas
• Specialty Pigments shipments for agricultural applications exceeding the year-earlier level
• Improved product portfolio through strategic discontinuation of low-value-added Cosmetic Pigments
• Positive effect of a weaker yen boosting the yen-translated value of overseas sales

Risks

• The ¥5,800 million reversal of the repair liability at the German pigment facility is a one-time factor, creating a risk of a reversal effect from Q2 onward
• Weak demand due to a cold wave and economic stagnation in North America, a key market for coatings pigments
• Underlying demand weakness continues, with a 5.1% decline in sales on a local currency basis, posing a risk of profit deterioration once the currency effect fades
• Unstable shipments of Color Filter Pigments due to fluctuations in display panel manufacturer utilization
• Risk of declining Cosmetic Pigments revenue due to stagnant demand among cosmetics manufacturers in Europe and the Americas
• Foreign exchange translation impact from weaker emerging market currencies (including in countries subject to hyperinflation accounting)
• Rising crude oil and energy costs and supply concerns for naphtha-derived petrochemical products due to escalating Middle East tensions
• Impact on the supply chain from renewed US-China trade friction and changes in tariff policy

Business Details

Comprises chemitronics products such as Epoxy Resins, Industrial Tapes, and UV-Curable Resins; composite materials such as PPS Compounds; and synthetic resins such as acrylic, urethane, and epoxy. Its main customers are in the digital field, such as AI semiconductors and smartphones, and the industrial field, such as automobiles and industrial machinery, positioning the segment as a growth business supporting an AI-integrated society.

Recent Overview

Driven by high-value-added products for AI semiconductors and smartphones, operating income increased sharply by 75.3% YoY.

In Q1 FY2026 (ending December 2026) (January–March), net sales to external customers were ¥75,779 million (+8.4% YoY, +4.1% on a local currency basis), and segment income was ¥9,057 million (+75.3% YoY). Active ester-type hardeners used in Epoxy Resins for AI semiconductors saw strong shipments, Industrial Tapes benefited from expanded adoption in high-end smartphones, and PPS Compounds showed solid shipments for both mobility and housing equipment applications. For some resin products, mainly overseas, customer inventory build-up was observed in anticipation of Middle East tensions.

Key Products

Growth Drivers

• Steady shipments of Epoxy Resins (including active ester-type hardeners) driven by robust growth in demand for AI semiconductor devices
• Capturing demand through expanded adoption of Industrial Tapes in new (high-end) smartphone models
• Sustained solid shipments of mobility-related and housing equipment products such as PPS Compounds
• Promotion of expanded sales of high-value-added products by positioning the chemitronics business as a growth business supporting an 'AI-integrated society'
• Improved profitability through thoroughgoing pricing measures across products

Risks

• Impact on shipments to the automotive market and mobility-related products from US tariff measures and renewed US-China trade friction
• Raw material procurement risk and upward pressure on energy costs from prolonged Middle East tensions
• Risk of a downturn following customer inventory build-up (for some resin products)
• Risk of fluctuating demand for smartphone-use Industrial Tapes due to deterioration in the memory chip market, among other factors
• Capital expenditure has sharply decreased from ¥19,366 million in the prior period to ¥12,299 million, warranting attention to future capacity for growth investment

Business Details

The 'Others' segment consolidates businesses that do not belong to the three reporting segments of Packaging & Graphics, Color & Display, and Functional Products. In Q1 FY2026 (ending December 2026), net sales to external customers were ¥108 million, accounting for only 0.04% of consolidated net sales of ¥282,489 million, making its contribution to the group as a whole extremely limited. Segment income remained in modest positive territory at ¥14 million.

Recent Overview

External sales decreased 45.7% YoY to ¥108 million, while income showed a slight improvement.

In Q1 FY2026 (ending December 2026), net sales to external customers decreased substantially to ¥108 million (from ¥199 million in the year-earlier period). Meanwhile, segment income improved slightly to ¥14 million (from ¥11 million in the year-earlier period). Note that, from this first quarter of the consolidated fiscal period, the method of aggregating segment information has been changed (to more accurately reflect the asset and capital efficiency of each segment from the perspective of improving capital efficiency under DIC Vision 2030 Phase 2), and the year-on-year comparison is based on the revised aggregation method.

Key Products

Growth Drivers

• Segment profit margin has improved year on year, indicating rising profitability despite the small scale
• Progress in efficient allocation of management resources through the transfer and integration of businesses into the reporting segments

Risks

• Net sales to external customers are extremely small at ¥108 million, limiting the contribution to consolidated results
• The segment aggregation method may continue to change, making the content and scale of this category subject to fluctuation
• Businesses in the 'Others' category may shrink further as integration and transfer into the reporting segments progress