NKK SWITCHES CO., LTD.

Business Details

This segment covers manufacturing and sales of Industrial Switches (Control Switches) by NKK Switches Co., Ltd. itself. In Japan, the company is working on strengthening sales to "specific markets" including the railway market and "establishing a solutions business." It serves as the core of the Group's overall manufacturing and supply base, and also supplies products to overseas subsidiaries. In FY2026 (ending March 2026), sales to external customers turned to a recovery trend, up 12.8% year on year.

Recent Overview

Sales to external customers recovered, up 12.8% year on year; segment loss narrowed significantly

In the Japan segment for FY2026 (ending March 2026), sales including intersegment transactions came to ¥6,391 million (up 6.9% year on year), and sales to external customers came to ¥3,337 million (up 12.8% year on year), showing a clear recovery trend. The segment loss narrowed significantly to ¥307 million from ¥724 million in the prior period. Strengthened sales to "specific markets" such as the railway market and the "establishment of a solutions business" contributed to this result. On the other hand, the increase in tangible and intangible fixed assets doubled to ¥1,080 million from ¥514 million in the prior period, reflecting continued active investment in construction in progress and software in progress.

Key Products

Growth Drivers

• Promotion of "deepening specific markets" under the new Medium-Term Management Plan II (from FY2025): strengthening relationships with leading companies in the broadcasting/audio equipment market, special-purpose vehicle market, and railway market
• Optimization of PSI (production, sales, inventory) and improved delivery competitiveness through "establishing an integrated production-sales supply base"
• Expectations for a full-fledged demand recovery as excess inventory adjustment in the electronic components market has largely run its course
• Improved earnings momentum driven by the 12.8% year-on-year increase in sales to external customers
• Strengthening of production and IT infrastructure through active investment (totaling ¥1,080 million) in construction in progress and software in progress

Risks

• Risk that a full-fledged demand recovery in the electronic components market will still take time
• Rising manufacturing costs due to higher raw material and energy prices, labor costs, and logistics costs
• Instability in the international situation due to US trade and tariff policy and heightened geopolitical risk
• Upward pressure on raw material and energy costs due to yen depreciation
• Risk of increased fixed costs and profit pressure from active capital expenditure and software investment (increase in fixed assets of ¥1,080 million)
• Continuing segment loss (-¥307 million), requiring further sales expansion to achieve profitability