TSUBAKI NAKASHIMA CO., LTD.

Business Details

Manufactures and sells Precision Balls (Steel Balls, Ceramic Balls, Carbide Balls, Glass Balls, Plastic Balls), Precision Rollers (Tapered, Cylindrical, Spherical), and Retainers and Sheet Metal Parts. Major customers include leading bearing manufacturers such as AB SKF and SCHAEFFLER. The company operates global manufacturing sites in Japan, the United States, Europe, and Asia, with a key strength in supplying over 20,000 varieties of high-quality precision balls on short lead times.

Recent Overview

Recording of gain on sale of fixed assets drove quarterly segment profit to a sharp recovery, up 289% year on year

Revenue in Q1 FY2026 (ending December 2026) remained subdued at ¥17,437 million, down 3.1% year on year, due to the continued severe downturn in the European automotive industry. On the other hand, segment profit increased significantly, up 289.0% year on year to ¥1,116 million, mainly due to the recording of a ¥1,041 million gain on sale of fixed assets following the transfer of a portion of fixed assets owned by TN GEORGIA, INC. in February 2026. Cost pressures from rising labor costs, fuel, and other expenses continued.

Key Products

Growth Drivers

• Profitability improvement through new product launches in the ceramics business and development of new markets (EVs, semiconductor manufacturing equipment, wind power generation)
• Recovery of competitiveness through structural reform and strategic transformation of European operations
• Promotion of procurement and production cost reduction measures based on the medium-term management plan (2025-2029)
• Optimization of inventory and improvement of cash flow through inventory review and management system revision
• Reduction of fixed costs and improved capital efficiency through optimization of the global footprint (including the sale of TN GEORGIA fixed assets)

Risks

• Continued risk of market share decline due to the prolonged downturn in the European automotive industry
• Pressure on ceramics business profitability due to intensifying price competition with Chinese ball manufacturers and others
• Potential downside in ceramic ball demand due to slowing pace of EV market expansion
• Risk of breaching financial covenants under syndicated loan agreements (waivers have been obtained for all loan agreements, but refinancing risk remains)
• Risk of additional impairment and deferred tax asset write-offs associated with business plan revisions in the U.S. and Europe
• Impact of foreign exchange fluctuations (USD, EUR, CNY) on yen-translated results
• Risk of increased manufacturing costs due to rising energy prices and logistics disruptions associated with heightened tensions in the Middle East