RHEON AUTOMATIC MACHINERY CO., LTD.

Business Details

The core segment of the Group. Operates a four-region structure covering Japan (the Company and Rheon Alumi Co., Ltd.), North America / South America (Rheon USA), Europe (Rheon Europe), and Asia (the Company), developing, manufacturing, and selling Food Forming Machines, Bread Production Lines, etc. Main customers include major and mid-sized bakeries, and distribution/food service chains. Machines developed and manufactured in Japan are deployed globally through sales subsidiaries in each region, with after-sales services such as Repair, Parts, and Technical Guidance Services also provided. In FY2026 (ending March 2026), net sales to external customers were ¥25,965 million, accounting for approximately 61.8% of the Group's total net sales of ¥42,014 million.

Recent Overview

North America, Europe, and Asia posted substantial sales growth, while Japan saw a slight decline; segment overall sales grew 12.7% year on year

In FY2026 (ending March 2026), net sales to external customers for the Food Processing Machinery Manufacturing and Sales Business total were ¥25,965 million (up 12.7% year on year), and segment profit was ¥6,035 million (up 6.8% year on year). North America / South America grew 22.9% on a local currency basis (driven by artisan bread, concha, and donut production lines), Europe grew 10.0% on a local currency basis (driven by an increase in large-scale lines, with a 6.7% depreciation of the euro also contributing), and Asia grew 56.0% due to a substantial increase in sales in China. In Japan, while Bread Production Lines, etc. increased, Food Forming Machines, repairs and other services, and procured products decreased, resulting in an overall decline of 0.4%. In Europe, segment profit declined 10.0% due to increased advertising expenses from participation in a major trade show.

Key Products

Growth Drivers

• Expanding demand for large-scale bread production lines such as artisan bread, concha, and donuts in North America / South America (up 22.9% on a local currency basis)
• Rapid growth in sales of Food Forming Machines and Bread Production Lines in Asia (China) (up 56.0%), with Taiwan, South Korea, and Southeast Asia also progressing as planned
• Increase in equipment projects utilizing subsidies following registration as an eligible product under Japan's SME labor-saving investment subsidy program
• Continued solid capital investment by major and mid-sized bakeries, and a recovery trend in demand from distribution and food service industries
• Expansion of the sales network through enhanced trade show participation and expanded distributor networks in emerging markets such as the Middle East, India, and Africa
• Strengthened development of new machine models toward realizing smart factories, and cost reduction and lead-time shortening through renewal of manufacturing equipment at the head office factory

Risks

• Foreign exchange risk: Fluctuations in the average USD/EUR exchange rate during the period directly affect yen-based sales (in FY2026 (ending March 2026), a 1.2% appreciation of the yen against the USD weighed on North American sales, while a 6.7% depreciation of the yen against the euro boosted European sales)
• Geopolitical risk: The situation in Ukraine, conflict in the Middle East, US trade policy (tariffs), and US-China trade friction affect demand in Europe and Asia and raw material procurement
• Decline in profitability in the Europe segment: Segment profit fell 10.0% due to increased advertising expenses from participation in major trade shows
• Slight decline in sales in the Japan segment: Sales of Food Forming Machines, repairs and other services, and procured products decreased, resulting in a 0.4% decline
• Risk of stagnation in the Chinese market: Concerns about a slowdown in the pace of economic recovery amid a sluggish real estate market and uncertainty over trade issues create uncertainty regarding the sustainability of this period's substantial sales growth
• Pressure on production capacity and delivery schedule management due to an increase in Bread Production Line projects: Increased orders may affect manufacturing capacity at the head office factory