OKAMOTO MACHINE TOOL WORKS,LTD.

Business Details

This segment manufactures and sells grinders (Surface Grinders, Cylindrical Grinders / Form Grinders, etc.), Precision Gears, and Castings. Domestically, sales are made directly or through distributors, while overseas, consolidated subsidiaries in the U.S., Europe, Singapore, Thailand, and China conduct local operations. The segment also captures demand for precision gears used in robots. Although this is the core segment accounting for approximately 68% of consolidated net sales, in FY2026 (ending March 2026), sales declined 6.2% year on year due to a decrease in sales of large surface grinders.

Recent Overview

Orders rose over 15% year on year, but sales and profit deteriorated sharply due to a decline in large machine sales

In FY2026 (ending March 2026), net sales were ¥28,946 million (down 6.2% year on year) and segment profit was ¥103 million (down 92.5% year on year), representing a significant deterioration. The main cause was a decrease in sales of large surface grinders, which had been strong in the previous fiscal year. On the other hand, orders received were on a recovery trend at ¥30,547 million (115.4% year on year), and the order backlog also built up to ¥11,239 million (116.6% year on year). In the U.S., both orders and sales exceeded the prior-year level, supported by demand for the aerospace industry and preferential tax treatment. In China, orders for large machines for industrial machinery, molds, and semiconductor equipment were strong. In Europe, both orders and sales fell below the prior-year level due to delayed recovery in Germany's manufacturing industry.

Key Products

Growth Drivers

• Orders received increased to 115.4% year on year and the order backlog to 116.6% year on year, raising expectations that this will translate into sales in the next fiscal period
• Continued benefit from capital expenditure demand for the aerospace industry and preferential government tax treatment in the U.S. market
• Continued strength in orders for large surface grinders for industrial machinery, molds, and semiconductor equipment in the Chinese market
• Replacement demand for small and medium-sized surface grinders driven by subsidies for domestic small and medium-sized enterprises, and demand for precision gears for robots
• Strengthening earnings power through new market development and securing procurement routes leveraging the capital and business alliance with Mitsui & Co.
• Strengthening of customer proposal capability and sales structure through the opening of the Tokyo Technical Center
• Expansion of capital expenditures (¥3,052 million in the current period) toward the goal of ¥70.0 billion in net sales by FY2030 (ending March 2030) under the medium-term management plan "INOFINITY 700"

Risks

• Risk of business slowdown during the period before order recovery is reflected in sales, due to the time lag between order receipt and sales recognition
• Risk of continued weakness in orders and sales due to delayed recovery and economic stagnation in the European (especially German) manufacturing industry
• Impact of U.S. trade policy (tariffs) trends on customers' capital expenditure appetite and the company's procurement costs
• Risk of demand slowdown due to a deceleration in the Chinese economy (currently strong, but caution is warranted regarding continued geopolitical risk and U.S.-China trade friction)
• Low earnings stability due to large period-to-period fluctuations in sales and profit caused by variability in large surface grinder sales
• Geopolitical risk from the prolonged situation in Ukraine and heightened tensions in the Middle East, and European economic stagnation
• Foreign exchange risk (rising raw material and procurement costs due to yen depreciation)
• Profit margin pressure from increased selling, general and administrative expenses (mainly personnel costs: salaries and allowances of ¥3,390 million, an increase year on year)