Tamron Co., Ltd. Full-Year Earnings Flash
Revenue-growth businesses offset lower OEM shipments in photography-related products and a stronger yen headwind; FY12/26 plan calls for revenue of JPY 91B and operating income of JPY 18.5B
Key Positives From The Results
Even amid a challenging external environment for photography-related products, we view it positively that growth areas including automotive and medical functioned as an earnings backstop, keeping Operating Income Margin at a high 19.6%. Mobility & Healthcare and Other expanded to revenue of JPY 12,336M (+8.9% YoY) and operating income of JPY 2,699M (+9.0% YoY), confirming continued progress in business portfolio diversification.
- Mobility & Healthcare And Other Delivered Higher Revenue And Profit: Revenue of JPY 12,336M (+8.9% YoY) and operating income of JPY 2,699M (+9.0% YoY) remained solid
- Surveillance & FA Profitability Improved: Despite revenue of JPY 12,091M (-1.8% YoY), operating income rose to JPY 1,675M (+7.0% YoY)
- Maintained High Profitability: Even with revenue down to JPY 85,071M (-3.8% YoY), the company delivered Operating Income Margin of 19.6% (-2.1pt YoY)
- Continued Balance Sheet Headroom: Equity ratio remained high at 81.0% (+0.4pt YoY) and interest coverage ratio at 199.0x
- Continued Shareholder Returns And Capital Policy: Despite weaker earnings, dividends were paid as initially planned with a 50% payout ratio; share buybacks were executed at ~2x the prior-year scale, lifting total payout ratio to 80%+
Key Concerns From The Results
Despite ongoing cost-down efforts, operating income declined to JPY 16,638M (-13.4% YoY) as lower revenue, higher raw materials and utilities costs, higher labor costs, and increased R&D expenses weighed on profitability. Lower OEM shipments in the photography-related business and FX (JPY appreciation vs. USD) constrained growth in the core business.
- Photography-Related Business Revenue/Profit Declined: Revenue of JPY 60,643M (-6.5% YoY) and operating income of JPY 15,630M (-13.7% YoY) was the primary driver of the consolidated profit decline
- Decline In Consolidated Profit: Operating income JPY 16,638M (-13.4% YoY), recurring profit JPY 16,699M (-13.5% YoY), net income attributable to owners of parent company JPY 11,761M (-19.0% YoY)
- Continued Increases In R&D And SG&A: Technical R&D expense rose to JPY 7,313M (+3.1% YoY) and total SG&A increased to JPY 20,779M (+2.9% YoY)
- Expanded FX Losses: FX losses widened to JPY 439M (+JPY 281M YoY), pressuring non-operating items
- Lower Cash Generation And Higher Capital Policy Burden: Operating CF JPY 15,096M (-14.4% YoY), financing CF JPY -11,129M (outflows increased YoY), ending cash and cash equivalents JPY 35,371M (-JPY 3,012M YoY)
Focus Areas / Items To Monitor Going Forward
- Assess whether photography-related OEM demand can recover, and the extent to which higher new product launches under the in-house brand can drive volume and mix improvement
- Timing of demand recovery in Surveillance & FA after inventory adjustments unwind, and progress in catching up on delayed launches of new camera module models
- Verify whether pipeline build in automotive (ADAS) and medical (ultra-small diameter and thin-film technologies) can translate into sustained growth even after surpassing revenue milestones of JPY 10B / JPY 1B
- Breakdown of the drivers behind the photography-related OEM revenue decline (weak sell-through of ordered models, inventory, customer-specific factors) and assumptions embedded in FY12/26
- Recalibration of marketing and channel strategy by region given the in-house brand trend (Japan/US/India up, Europe/China soft)
- Priority areas for higher R&D spend (technical R&D expense of JPY 7.3B) and the expected timeline to revenue contribution
- Drivers of gross margin improvement in Surveillance & FA (product mix, cost reductions, price revisions) and sustainability
- Management’s view on when FA/machine vision inventory adjustment will normalize, and leading indicators for order recovery
- Root causes of camera module development delays, and management’s assessment of customer specification requirements and resource allocation issues
- Breakdown of growth drivers after reaching the “first JPY 10B” in automotive lenses (number of adopted items, units installed, ASP)
- Key end-uses and customer mix behind the “first JPY 1B” in medical lenses, and plans to expand mass-production capacity
- Sensitivity and hedging policy versus FX assumptions (FY12/26: USD 1 = JPY 148, EUR 1 = JPY 175)
- Policy on share repurchases and cancellations (pace, target level) and balancing shareholder returns with growth investment
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 85,071M | -3.8% |
| Gross Profit | JPY 37,417M | -5.0% |
| Gross Profit Margin | 44.0% | -0.5pt |
| SG&A | JPY 20,779M | +2.9% |
| Operating Income | JPY 16,638M | -13.4% |
| Operating Income Margin | 19.6% | -2.1pt |
| Recurring Profit | JPY 16,699M | -13.5% |
| Net Income Attributable to Owners of Parent Company | JPY 11,761M | -19.0% |
| EPS | JPY 72.79 | -17.2% |
| Comprehensive Income | JPY 13,339M | -25.5% |
| Total Assets | JPY 106,046M | +3.8% |
| Net Assets | JPY 85,911M | +4.3% |
| Equity Ratio | 81.0% | +0.4pt |
| Ending Cash and Cash Equivalents | JPY 35,371M | -7.8% |
| Operating CF | JPY 15,096M | -14.4% |
| Investing CF | JPY -7,339M | Outflows Increased |
| Financing CF | JPY -11,129M | Outflows Increased |
Performance By Business Segment
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Photography-Related Business | JPY 60,643M | -6.5% | JPY 15,630M | -13.7% | 25.8% |
| Surveillance & FA-Related Business | JPY 12,091M | -1.8% | JPY 1,675M | +7.0% | 13.9% |
| Mobility & Healthcare And Other | JPY 12,336M | +8.9% | JPY 2,699M | +9.0% | 21.9% |
| Adjustments | - | - | JPY -3,367M | - | - |
| Consolidated Total | JPY 85,071M | -3.8% | JPY 16,638M | -13.4% | 19.6% |
- Mobility & Healthcare And Other: Revenue +8.9% YoY; automotive revenue rose on expanded sensing applications driven by ADAS penetration, and medical revenue grew ~1.5x QoQ to reach a first JPY 1B
- Surveillance & FA-Related Business (Profit): Despite revenue -1.8% YoY, operating income +7.0% YoY, driven by improved gross margin and SG&A restraint
- Photography-Related Business: Revenue -6.5% YoY, weighed down by lower OEM shipments and stagnation in certain markets
- Surveillance & FA-Related Business (Revenue): FA/machine vision declined due to customer inventory adjustments, and camera modules declined due to delays in new model development
Changes To Guidance
The company disclosed only its FY12/26 plan (revenue JPY 91B, operating income JPY 18.5B, recurring profit JPY 18.5B, net income attributable to owners of parent company JPY 13.69B). FX assumptions are USD 1 = JPY 148 and EUR 1 = JPY 175.
Commentary On Shareholder Returns
FY12/26 dividend guidance is JPY 37.00 per share annually (interim JPY 10.50, year-end JPY 26.50). For FY12/25, on an adjusted basis reflecting the impact of the stock split, the annual dividend was equivalent to JPY 36.25 (interim JPY 10.00, year-end JPY 26.25), positioning the FY12/26 plan as maintaining to slightly increasing the dividend level.
Financial Position
The company maintained a high equity ratio of 81.0%, sustaining an effectively low-leverage balance sheet. Capital allocation remains in a phase of building investment securities and advancing capex while simultaneously executing dividends and share repurchases.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 35,371M | -7.8% vs. prior FY |
| Total Assets | JPY 106,046M | +3.8% vs. prior FY |
| Net Assets | JPY 85,911M | +4.3% vs. prior FY |
| Shareholders' Equity | JPY 85,911M | +4.3% vs. prior FY |
| Interest-Bearing Debt | JPY 1,045M | Short-term borrowings 798 + long-term borrowings 247 |
| └ Short-term Borrowings | JPY 798M | -56.9% vs. prior FY |
| └ Long-term Borrowings | JPY 247M | -33.1% vs. prior FY |
| Investment Securities | JPY 8,997M | +34.3% vs. prior FY |
| Tangible Fixed Assets | JPY 20,335M | +6.2% vs. prior FY |
| EBITDA | JPY 20,161M | Operating income 16,638 + depreciation and amortization 3,523 (our estimate) |
News Released Alongside The Earnings Announcement
- None
Major Announcements During The Quarter
- 2025/12/04Announced a firmware (Ver. 4) update for “150-500mm F5-6.7 (Model A057)” (Notice Regarding the “150-500mm F5-6.7 (Model A057)” Firmware (Ver. 4) Update) (https://www.tamron.com/jp/consumer/news/2025/) tamron.com
- 2025/10/21Announced the high-magnification zoom “25-200mm F/2.8-5.6 Di III VXD G2 (Model A075)” to launch on 11/20, highlighting the 25mm wide end and AF performance (Starting at 25mm F2.8 on the wide end. Enhanced optics and AF performance high-magnification zoom lens. 25-200mm F2.8-5.6 G2 (Model A075) for Sony E-mount to be released on November 20, 2025) (https://www.tamron.com/jp/consumer/news/detail/a075_20251021.html) tamron.com
- 2025/10/07Announced the release of “70-180mm F2.8 G2 (Model A065)” for Nikon Z mount, highlighting built-in image stabilization and a compact/lightweight design (Notice of Release of the Class’s Smallest and Lightest* 70-180mm F2.8 G2 (Model A065) for Nikon Z Mount Featuring an Image Stabilization Mechanism) (https://www.tamron.com/jp/consumer/news/detail/a065z_20251007.html) tamron.com
Large-Shareholding Filings / Material Proposals Over The Past Year
- Effissimo Capital Management: 13.06%→14.12% (effective date 2025/12/03, filed 2025/12/10) - increased ownership ratio due to additional purchases (position added)
- Effissimo Capital Management: 12.04%→13.06% (effective date 2025/10/16, filed 2025/10/23) - increased ownership ratio due to additional purchases
- Resona Asset Management: change report above 5% (effective date 2025/06/13, filed 2025/06/20) - change in ownership ratio (position adjustment)
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