SHIBAURA MACHINE CO., LTD.

Business Details

The core segment of Shibaura Machine, which manufactures and sells injection molding machines, extrusion molding machines, die casting machines, and other products. In addition to domestic operations, manufacturing is conducted at overseas locations in China, Thailand, and India, supporting a global business footprint. In FY2026 (ending March 2026), sales of lithium-ion battery separator film manufacturing equipment for China declined sharply, causing the segment's share of consolidated net sales to fall from 81.5% in the prior period to 74.4%. The overseas sales ratio stood at 80.0%.

Recent Overview

Net sales fell 27.9% and operating profit fell 80.6% due to the drop-off in special demand for separator film equipment for China

In the Molding Machine Business in FY2026 (ending March 2026), sales of lithium-ion battery separator film manufacturing equipment (extrusion molding machines) for China, which had driven sales in the prior period, declined sharply, resulting in a rapid deterioration with net sales of ¥98,854 million (down 27.9% YoY) and operating profit of ¥2,739 million (down 80.6% YoY). On the other hand, orders received of ¥75,353 million (up 0.2% YoY) remained essentially flat. In Europe, the company acquired SHIBAURA MACHINE LWB GmbH but recorded a goodwill impairment loss of ¥2,067 million as an extraordinary loss. The order backlog stood at ¥61,528 million (down 26.9% YoY), leaving limited room for sales recovery in the following period.

Key Products

Growth Drivers

• Capturing demand through the establishment of an increased production system for injection molding machines in the Indian market (new plant, start of electric-type production, opening of a technical center) and expanding exports to the Middle East, Africa, Europe, the US, and Southeast Asia
• Re-entry into the European injection molding machine market leveraging the acquisition of SHIBAURA MACHINE LWB GmbH (Germany) (cross-selling centered on the packaging and medical domains)
• Expanding orders for ultra-large die casting machines (6,000 to 12,000-ton class) in response to gigacasting demand, and adding a 4,500-ton class to the lineup
• Development of extrusion molding machine technology for next-generation batteries (all-solid-state batteries, dry electrodes) and entry into the dry electrode market through investment in AM Batteries Inc.
• Orders for extrusion molding machines for China have turned upward, capturing demand for energy storage system batteries for renewable energy and data center applications

Risks

• The segment has not yet completed its shift away from dependence on sales of lithium-ion battery separator film manufacturing equipment for China, and its performance remains structurally susceptible to capital expenditure trends in the Chinese market
• The slowdown in the EV market and continued wait-and-see capital expenditure stance in the automotive market due to US trade policy (tariffs) are hindering the recovery of orders for injection molding machines and die casting machines
• The order backlog stands at a low level of ¥61,528 million (down 26.9% from the end of the prior period), risking a limited scope of sales recovery in FY2027 (ending March 2027)
• Following the acquisition of SHIBAURA MACHINE LWB GmbH, a divergence from the business plan occurred, leading to a full impairment of ¥2,067 million in goodwill; uncertainty remains regarding the profitability of the European business
• The overseas sales ratio is high at 80.0%, creating a risk of profit pressure from exchange rate fluctuations (particularly yen appreciation)
• Business restructuring costs associated with the closure of the existing manufacturing subsidiary in China (Shanghai) and the establishment of a new subsidiary in Anhui Province, along with quality and supply management risks associated with the shift to OEM outsourcing

Business Details

The Machine Tool Business manufactures and sells machine tools such as large machines, gantry machines, horizontal boring machines, and vertical lathes, as well as ultra-precision machining machines for optical lenses, semiconductors, and optical communications. Its main targets are the energy, aerospace, and optical communications/semiconductor markets driven by AI proliferation, with an overseas ratio of 51.7%. In FY2026 (ending March 2026), both net sales and operating profit increased significantly, making it the only segment to achieve increased sales and profit YoY.

Recent Overview

Achieved the only significant increase in both sales and profit among all segments, with net sales up 18.6% and operating profit up 3.5x

In FY2026 (ending March 2026), the Machine Tool Business saw substantial improvement, with net sales of ¥25,278 million (up 18.6% YoY) and operating profit of ¥2,066 million (3.5 times the prior period). This was driven by increased demand for ultra-precision machining machines for optical communications in China amid expanding AI adoption, as well as increased sales of machine tools for domestic industrial machinery and Indian energy applications. Orders received also expanded sharply to ¥34,946 million (up 44.9% YoY), with the order backlog building up to ¥31,302 million (up 44.7% YoY). As a subsequent event, in May 2026 the company decided to acquire all equity interests in the US precision machine tool manufacturer Moore Nanotechnology Systems, LLC for approximately ¥23,982 million, making it a subsidiary (acquisition expected in the second half of 2026).

Key Products

Growth Drivers

• Expanding demand for ultra-precision machining machines for optical communications (in China and the West) due to increased demand for large servers driven by expanding AI adoption
• Increased orders for machine tools for energy and aerospace applications in North America
• Increased orders for machine tools for wind power generation applications in China
• Increased sales of machine tools for domestic industrial machinery applications and Indian energy applications
• Full-scale entry into the Western and Chinese ultra-precision machining machine market through the acquisition of Moore Nanotechnology Systems, LLC (subsequent event)
• Strategic focus on growth domains such as energy, aerospace, construction machinery, mining, shipbuilding, and defense industries
• Capturing demand for connector molds driven by the expansion of data centers

Risks

• Prolonged economic slowdown in China creating a risk of stagnating demand for machine tools and ultra-precision machining machines
• Continued risk of a wait-and-see stance on capital expenditure due to US trade policy (tariffs)
• Risk of spillover effects on machine tool demand from stagnation in the automotive market
• Goodwill recognition and integration risks associated with the acquisition of Moore Nanotechnology Systems, LLC (approximately ¥23,982 million)
• Foreign exchange risk associated with the 51.7% overseas ratio (full-year forecast assumption: 1 USD = ¥150)
• Revenue volatility risk associated with the timing of revenue recognition for the ¥31,302 million order backlog

Business Details

Manufactures and sells industrial robots, electronic control equipment (servo motors, CNC devices), and system engineering (rationalization and labor-saving systems). The overseas ratio is low at 7.0%, resulting in a business structure whose performance is highly susceptible to trends in domestic demand for electronic control equipment. In FY2026 (ending March 2026), sales of domestic electronic control equipment declined, causing both net sales and profit to deteriorate significantly YoY. Orders received increased, and this is expected to contribute to future revenue recognition.

Recent Overview

Fell into an operating loss due to declining sales of domestic electronic control equipment, while orders received increased

In FY2026 (ending March 2026), sales of domestic electronic control equipment declined, resulting in net sales of ¥6,501 million (down 19.9% YoY) and an operating loss of ¥488 million (compared to operating profit of ¥108 million in the prior period), turning the segment into the red. On the other hand, orders received increased to ¥6,813 million (up 6.2% YoY), and the order backlog built up to ¥3,456 million (up 9.9% YoY), which is expected to contribute to future revenue recognition. The overseas ratio remained low at 7.0%.

Key Products

Growth Drivers

• Increased investment in labor-saving and automation amid a declining working-age population in domestic manufacturing
• Improved profitability through the shift toward direct sales of system engineering equipment under the Medium-Term Management Plan 2026
• Orders received are on a recovery trend, up 6.2% YoY, with the buildup in order backlog expected to contribute to future revenue recognition
• Expanding demand for manufacturing automation driven by the proliferation of AI and data centers

Risks

• Continued weak domestic demand for electronic control equipment led to an operating loss of ¥488 million for full-year FY2026 (ending March 2026), with the timing of recovery uncertain
• The overseas ratio is low at around 7.0%, limiting the capture of global growth opportunities
• US trade policy and the wait-and-see stance on capital expenditure in the automotive market indirectly suppress domestic demand for control machinery
• Against segment assets of ¥9,630 million, the increase in tangible and intangible fixed assets was only ¥43 million, indicating limited investment capacity to strengthen competitiveness
• The segment's sales scale is small, at approximately 5% of the company's total, creating a structure in which fixed cost burden tends to pressure profit margins

Business Details

The "Other" segment consists of businesses outside the reportable segments, including Material Processing & Environmental Measurement and other businesses. Its sales scale is small, accounting for approximately 1.6% of consolidated totals, and it serves a complementary role to the group's three core segments (Molding Machine, Machine Tool, and Control Machinery). The overseas ratio is extremely low (0.6% in the current period), reflecting a domestically-focused business structure. In FY2026 (ending March 2026), the segment achieved a turnaround to profitability from an operating loss in the prior period.

Recent Overview

Turned around to profitability from a significant operating loss in the prior period, with net sales also increasing sharply by 31.8%

In FY2026 (ending March 2026), net sales in the "Other" segment increased significantly to ¥2,182 million (up 31.8% YoY). Operating income turned around from a loss of ¥725 million in the prior period to a profit of ¥24 million. Orders received also maintained an increasing trend, reaching ¥2,043 million (up 27.2% YoY). On the other hand, the order backlog decreased to ¥352 million (down 28.3% YoY), indicating that orders were progressively recognized as revenue. Depreciation was ¥560 million, a slight decrease from the prior period (¥596 million).

Key Products

Growth Drivers

• Achieved a significant increase in net sales, up 31.8% YoY (FY2026, ending March 2026)
• Maintained an increasing trend in orders received, up 27.2% YoY (FY2026, ending March 2026)
• Achieved a turnaround from an operating loss to an operating profit of ¥24 million (FY2026, ending March 2026)
• Depreciation decreased YoY (from ¥596 million to ¥560 million), reducing the fixed cost burden

Risks

• The order backlog decreased significantly by 28.3% YoY to ¥352 million, a concerning leading indicator for next-period sales
• The overseas ratio is extremely low (0.6%), resulting in high dependence on the domestic market
• The segment's scale is small, at approximately 1.6% of consolidated net sales, limiting its overall contribution to the group
• Although a turnaround to profitability was achieved, the operating profit level of ¥24 million remains low, and the stability of the earnings base continues to be a challenge