Makino Milling Machine Co., Ltd.

Business Details

Comprises Makino Milling Machine Co., Ltd. itself and its domestic consolidated subsidiaries. In addition to the manufacture, sale, and repair of machine tools, the segment provides an integrated offering of control device design and manufacturing, Flexible Manufacturing Systems (FMS), and after-sales service. Principal sales regions are Japan, South Korea, China (excluding the region covered by Segment II), Oceania, Norway, the United Kingdom, and others. It bears the manufacturing function for the entire Group, and internal transfer sales to other segments (¥90,044 million in FY2026 (ending March 2026)) greatly exceed external sales, a distinctive structural feature of this segment.

Recent Overview

Domestic orders fell short of the prior year, but recovered in the second half, led by semiconductor manufacturing equipment-related demand.

For the full year of FY2026 (ending March 2026), domestic orders for Segment I fell below the prior fiscal year. The first half was sluggish, mainly due to weakness in automotive-related demand, but the second half turned to growth, driven mainly by parts processing demand related to industrial machinery, including semiconductor manufacturing equipment. External customer sales decreased to ¥46,668 million (down 8.7% year on year), while internal transfer sales to other segments expanded to ¥90,044 million (up 10.5% year on year), supporting overall Group sales growth. Segment profit slightly exceeded the prior year (¥11,982 million) at ¥12,063 million, and segment assets expanded to ¥250,024 million, due in part to a significant increase in construction in progress.

Key Products

Growth Drivers

• A recovery trend from the second half onward in orders for parts processing related to industrial machinery, including semiconductor manufacturing equipment
• Domestic orders for the next fiscal year (FY2027, ending March 2027) are planned to exceed the current fiscal year, with a forecast of continued solid demand for parts processing related to industrial machinery, including semiconductor manufacturing equipment
• Enhancement of value-added offerings through continued focus on increasing orders for 5-axis machines and automation systems
• Securing business deals through exhibitions of new models, automation equipment, and operational software at JIMTOF (Japan International Machine Tool Fair), to be held in October 2026
• Support and expansion of the global sales structure through internal transfers to other Group segments (¥90,044 million)
• Enhancement of product value-added through expansion of intelligent software centered on iKnowledge Technology

Risks

• External customer sales decreased 8.7% year on year to ¥46,668 million, and the pace of recovery in domestic demand remains uncertain
• Risk of order fluctuations due to changes in the capital expenditure cycles of major customer industries, as seen in the sluggish automotive-related demand in the first half
• Risk of increased fixed costs associated with large-scale capital expenditures and pressure on profitability in the event of demand fluctuations, as segment assets expanded to ¥250,024 million (including a significant increase in construction in progress)
• Impact on sales regions (the United Kingdom, Norway, etc.) from ongoing geopolitical risk in Europe and the Middle East
• Impact on Group-wide manufacturing and procurement costs from changes in the trade environment, including US tariff policy
• Increasing difficulty in securing profits amid an expected rise in expenses, including personnel costs