DAIFUKU CO., LTD.

Business Details

Daifuku Co., Ltd. is the core group company responsible for the manufacturing, sales, and after-sales service of Material Handling Systems, equipment, and car wash machines. Its primary customer areas are General Manufacturing & Distribution Industries, semiconductor production lines, automotive production lines, and Airport Systems, with design and manufacturing centered on domestic production sites (such as the Shiga Works). It has built a vertically integrated value chain, procuring electronic equipment from the Contec Group and outsourcing the design and manufacture of logistics equipment to domestic consolidated companies.

Recent Overview

1Q orders increased significantly for semiconductor and automotive segments, but sales and profit declined year-on-year

In the first quarter of FY2026, ending March 2026 (January to March 2026), orders received increased significantly to ¥64,617 million (up 23.0% year-on-year), driven by systems for semiconductor production lines and automotive production lines. On the other hand, sales were ¥57,936 million (down 15.5% year-on-year) and segment profit was ¥13,907 million (down 14.9% year-on-year), falling short of the prior-year results in all areas, resulting in lower sales and profit. Although efforts were made to improve production efficiency and reduce costs, these were not sufficient to offset the impact of the sales decline. As a subsequent event, on April 17, 2026, the company resolved to acquire shares of EISENMANN GmbH (Germany), a European manufacturer of industrial coating and surface treatment equipment (approximate acquisition price of EUR 60 million, execution scheduled for July 2026), aiming to expand its business foundation in the European automotive market.

Key Products

Growth Drivers

• Increasing demand for Cleanroom Transport Systems accompanying the expansion of advanced semiconductor investment for generative AI (orders for semiconductor production line systems increased significantly in 1Q FY2026 orders)
• Recovery of orders for automotive production line systems due to the resolution of delayed investment decisions by automotive industry customers caused by U.S. trade policy (orders increased significantly in 1Q FY2026)
• Continued demand for labor-saving and automation investment against a backdrop of labor shortages and rising labor costs in the General Manufacturing & Distribution Industries in Japan and the U.S.
• Strengthening of system solution capabilities for the European automotive market and expansion of the European business base through the acquisition of EISENMANN GmbH
• Improved profitability through efforts such as production efficiency improvement and cost reduction
• Improvement in production capacity and productivity through strategic investments such as the redevelopment of the Shiga Works
• Expansion of sales to Taiwan, led by TSMC (FY2025, ending March 2025: ¥94,137 million)

Risks

• Risk of changes to investment plans by automotive and semiconductor industry customers due to U.S. trade policy (reciprocal tariffs)
• Delayed recovery in sales for automotive production line systems (decreased year-on-year in 1Q FY2026)
• Foreign exchange risk (fluctuations toward a weaker U.S. dollar/stronger yen pressure sales and profit)
• Risk of order fluctuations due to changes in the investment cycle for semiconductors for generative AI
• Uncertainty in demand from China due to the economic slowdown and geopolitical risks in China
• Integration risk and European business expansion risk associated with the acquisition of EISENMANN GmbH
• Instability in quarterly results due to fluctuations in the timing of sales recognition associated with construction progress

Business Details

Contec Co., Ltd. and its consolidated companies develop, manufacture, and sell Industrial Computers, PC Peripherals & Interface Boards, and Network Equipment, and provide After-Sales Service, both domestically and overseas. The segment also supplies electronic equipment incorporated into Daifuku's logistics equipment. Its main customers are in the domestic medical and social infrastructure sectors and the North American medical sector. Within the group, it is positioned as the core company for electronic equipment and operates as an independent management unit.

Recent Overview

Strong domestic sales of Industrial Computers led to significant increases in both orders and sales, with improved profitability

In the first quarter of FY2026, ending March 2026 (January to March 2026), sales of Industrial Computer products in the domestic market progressed favorably, and orders received increased significantly to ¥6,203 million (up 53.1% year-on-year), while sales to external customers increased to ¥5,725 million (up 19.3% year-on-year). Segment profit was ¥302 million (up 17.0% year-on-year), with improved domestic profitability contributing to the increase in profit.

Key Products

Growth Drivers

• Expanding demand for and strong sales of Industrial Computer products in the domestic market
• Improvement in segment profit margin through improved domestic profitability
• Increase in internal demand for electronic equipment accompanying the Daifuku Group's expanding automation and labor-saving investments
• Stable demand for systems in the medical and social infrastructure sectors

Risks

• Risk that performance is affected by Daifuku's order trends due to a high dependence on internal group sales (intersegment transactions)
• Intensifying price competition with Chinese and emerging companies in the industrial electronics equipment market
• Risk of regulatory changes or investment restraint by customers in the medical and social infrastructure sectors
• Impact on earnings from foreign exchange fluctuations (U.S. dollar) in the North American medical sector

Business Details

Daifuku North America, Inc. and its consolidated companies manufacture, sell, and provide After-Sales Service for Material Handling Systems and equipment, primarily in North America. Their main customers span General Manufacturing & Distribution Industries, automotive production lines, airports, and semiconductor production lines. In the first quarter of FY2026, ending March 2026, orders increased significantly, mainly for Airport Systems, and sales remained at a level similar to the prior-year period, based on the order backlog at the end of the previous period.

Recent Overview

While orders for airport systems increased sharply, profit declined by 34.8% year-on-year due to the reversal effect of high-margin projects

In the first quarter of FY2026, ending March 2026, orders received increased significantly to ¥64,042 million (up 71.1% year-on-year), with Airport Systems being the main driver. Sales were ¥40,256 million (up 0.8% year-on-year), maintaining a level similar to the prior-year period, but segment profit decreased significantly to ¥2,557 million (down 34.8% year-on-year). The main cause was the reversal effect of the recognition of sales from high-margin projects for General Manufacturing & Distribution Industries systems recorded in the prior-year period. The average U.S. dollar exchange rate was ¥156.47 (compared to ¥151.18 in the prior-year period), reflecting a weaker yen, which had a positive foreign exchange effect on sales and orders.

Key Products

Growth Drivers

• Expectations for future sales expansion against a backdrop of a surge in orders for Airport Systems (orders received in 1Q FY2026, ending March 2026, increased 71.1% year-on-year)
• Continued automation investment demand mainly in North America in response to increasing air passenger numbers
• Steady demand for labor-saving and automation investment against a backdrop of labor shortages and rising labor costs in General Manufacturing & Distribution Industries
• Delays in investment decisions by automotive industry customers caused by U.S. trade policy are gradually being resolved
• Production capacity expanded to approximately double the previous level through the operation of a new plant completed in October 2025, establishing a foundation for order and sales growth
• Expansion of global development functions and promotion of a 'local production for local consumption' strategy, positioning the U.S. as a growth market

Risks

• Risk of fluctuations in profit levels due to the reversal effect of high-margin projects in the prior-year period (segment profit decreased 34.8% in 1Q FY2026, ending March 2026)
• Impact of U.S. trade policy (reciprocal tariffs) on investment plans (country, amount, timing) of automotive and semiconductor industry customers
• Risk of demand fluctuations in specific fields within orders for automotive production line and semiconductor production line systems
• Risk of profit pressure due to increased tax burden, etc.
• U.S. dollar exchange rate fluctuation risk (deviation between the assumed rate of ¥150 to the U.S. dollar for FY2026, ending March 2026, and the actual rate of ¥156.47)
• Risk of delayed customer capital investment plans due to uncertainty in the global economy against a backdrop of geopolitical risks such as the situation in the Middle East

Business Details

Clean Factomation, Inc. (CFI) is a reporting segment that manufactures, sells, and provides after-sales service for Cleanroom Transport Systems (OHT, etc.), primarily to Korean semiconductor manufacturers. Against a backdrop of expanding investment in advanced semiconductors for generative AI, the company is capturing automation demand for semiconductor manufacturing lines in South Korea. In the first quarter of FY2026, ending March 2026, both sales and profit increased significantly based on the abundant order backlog at the end of the previous period, making it one of the segments with the highest growth rate within the group.

Recent Overview

Sales, orders, and profit all increased significantly due to a sharp expansion in advanced semiconductor investment for generative AI

In the first quarter of FY2026, ending March 2026 (January to March 2026), CFI's orders received surged to ¥33,137 million (up 214.9% year-on-year) due to expanding demand for advanced semiconductor investment for generative AI. Sales were ¥20,211 million (up 139.0% year-on-year) and segment profit was ¥3,348 million (up 444.3% year-on-year), achieving significant increases in both sales and profit based on the abundant order backlog at the end of the previous period. This segment recorded the highest rate of sales and profit growth among all group segments.

Key Products

Growth Drivers

• Continued aggressive capital investment by Korean semiconductor manufacturers due to a sharp increase in demand for advanced semiconductors for generative AI
• Expansion of automation solutions for back-end semiconductor manufacturing processes (wafer stacking, direct bonding, etc.)
• Countries promoting the securing of domestic semiconductor production bases from the perspective of economic security
• Stable sales recognition based on the abundant order backlog accumulated at the end of the previous period
• Cost reduction and improved profitability through production efficiency improvements and strengthened project management

Risks

• Risk of reduced sales and profit in yen terms due to the depreciation of the Korean won
• Risk of sales concentration on specific customers (major Korean semiconductor manufacturers)
• Possibility that U.S. trade policy (reciprocal tariffs) affects investment plans (country, amount, timing) in the semiconductor industry
• Risk of a sharp decline in orders due to fluctuations in the investment cycle for semiconductors for generative AI
• Intensifying competition due to low-price offensives and improved technological capabilities of competitors in China, Taiwan, and elsewhere

Business Details

Daifuku Automated Conveying Equipment (Suzhou) Co., Ltd. (DSA) is a reporting segment that provides manufacturing, sales, and after-sales service of Cleanroom Transport Systems, primarily to Chinese semiconductor manufacturers. It has robust order demand against a backdrop of the strengthening and promotion of semiconductor domestic production within China. In the first quarter of FY2026, ending March 2026, while orders progressed favorably, both sales and segment profit fell below the prior-year period due to factors such as the timing of sales recognition associated with construction progress.

Recent Overview

While orders progressed favorably, sales and profit declined year-on-year due to the impact of construction progress timing

In the first quarter of FY2026, ending March 2026 (January to March 2026), orders received progressed favorably to ¥11,171 million (up 8.0% year-on-year), against a backdrop of continued semiconductor domestic production investment within China. On the other hand, sales were ¥7,582 million (down 27.9% year-on-year) and segment profit was ¥1,868 million (down 33.1% year-on-year), significantly below the prior-year period due to factors such as the timing of sales recognition associated with construction progress. Sales by industry show that electronics accounted for ¥7,582 million, or the entirety of sales.

Key Products

Growth Drivers

• Continued capital investment demand accompanying the strengthening and promotion of semiconductor domestic production policy within China
• Expansion of Chinese domestic semiconductor manufacturing sites due to increased demand for advanced semiconductors for generative AI
• Policy support for China's promotion of securing domestic semiconductor production bases from the perspective of economic security
• Contribution to future sales recognition based on the abundant order backlog

Risks

• Risk of quarter-to-quarter performance fluctuations due to the impact of sales recognition timing associated with construction progress
• Risk of performance fluctuations due to the time lag between order receipt and sales recognition
• Risk of changes in customer investment plans due to the economic slowdown in China and the impact of U.S.-China trade friction and trade policy
• Risk of intensifying competition due to the rise of domestic Chinese competitors (Chinese companies with a strength in low prices)
• Chinese yuan exchange rate fluctuation risk (average rate for 1Q FY2026, ending March 2026: 1 yuan = ¥22.65, compared to ¥20.75 in the same period of the prior year)
• Uncertainty in the business environment due to changes in Chinese regulations and policies and geopolitical risks

Business Details

The 'Others' segment consists of 61 consolidated subsidiaries other than Daifuku itself, Contec, DNA, CFI, and DSA. Domestically, Daifuku Plusmore Co., Ltd. handles car wash system sales, etc., while overseas, the segment has production sites in China, Taiwan, South Korea, Thailand, and India, supporting an Optimal-Location Production & Procurement system for Material Handling Systems and car wash machines. Sales, construction, and service subsidiaries are widely deployed across North and Central America, Asia, Europe, and Oceania, complementing the group's global expansion.

Recent Overview

Driven by systems for semiconductor production lines, both sales and profit increased significantly

In the first quarter of FY2026, ending March 2026 (January to March 2026), the 'Others' segment achieved significant increases in both sales and profit, with sales to external customers of ¥41,183 million (up 45.5% year-on-year) and segment profit of ¥5,644 million (up 182.4% year-on-year). Orders received were also at a high level of ¥42,216 million (up 49.5% year-on-year). The main cause was favorable construction progress based on the order backlog at the end of the previous period, mainly for systems for semiconductor production lines.

Key Products

Growth Drivers

• Continued robust demand for systems for semiconductor production lines (expansion of advanced semiconductor investment for generative AI)
• Expansion of sales to Taiwan and South Korea (increased orders and sales at Asian sites accompanying advanced semiconductor investment)
• Acceleration of construction progress based on the abundant order backlog at the end of the previous period
• Continued global automation investment demand (General Manufacturing & Distribution Industries, airports)
• Expanded room for order and sales growth following the completion of production capacity expansion in India and the U.S.

Risks

• Risk of changes to customer investment plans due to U.S. trade policy (reciprocal tariffs)
• Risk of decreased sales to China due to the economic slowdown in China
• Foreign exchange fluctuation risk (multi-currency exposure including the U.S. dollar, Taiwan dollar, Korean won, Chinese yuan, etc.)
• Risk of increased management costs and quality control challenges accompanying the diversity of global sites
• Risk of disruption to international logistics and increased raw material costs due to geopolitical risks such as the situation in the Middle East