SHOFU INC.

Business Details

The flagship segment of the SHOFU Group, providing manufacturing, sales, and repair services for dental-related materials and equipment. Main products include Artificial Teeth, Abrasives, Metals, Chemical Products, Cements, and Machinery & Instruments, deployed globally through domestic and overseas consolidated subsidiaries. Customers are dental clinics and dental laboratories; domestically the segment focuses on CAD/CAM materials, filling and restorative materials, and preventive care products, while overseas it centers on Chemical Products and CAD/CAM-related products, with sales deployed across all regions.

Recent Overview

Net sales reached a record high, but operating income declined year-on-year due to increased SG&A expenses. Capital expenditure expanded significantly.

In FY2026 (ending March 2026), net sales in the Dental-related Business reached ¥37,669 million, up ¥1,313 million (3.6%) year-on-year, marking a new record high. Domestically, CAD/CAM-related products (SHOFU Block PEEK, SHOFU Block HC Super Hard, SHOFU Disk ZR Lucent Supra) contributed to sales. Overseas, while Europe was affected by the situation in the Middle East, filling and restorative materials in North America, Central and South America, and China, as well as CAD/CAM-related products in Europe, performed solidly, and positive foreign exchange effects also contributed to increased sales. On the other hand, operating income declined to ¥5,334 million, down ¥104 million (1.9%) year-on-year, due to increased selling, general and administrative expenses. Following the completion of the first phase building of the new headquarters plant and the commencement of construction of a new plant at a domestic manufacturing subsidiary, the increase in tangible and intangible fixed assets expanded to ¥4,380 million, approximately three times the prior year level.

Key Products

Growth Drivers

• Increased sales driven by aggressive market introduction of domestic CAD/CAM-related products (SHOFU Disk ZR Lucent Supra, SHOFU Block PEEK, SHOFU Block HC Super Hard)
• Sales growth of overseas Filling and Restorative Materials (Chemical Products) in North America, Central and South America, and China
• Solid sales trend of CAD/CAM-related products in Europe
• Positive impact of foreign exchange fluctuations (increase in yen-converted value of overseas sales)
• Strengthening of medium- to long-term supply capacity through completion of the first phase building of the new headquarters plant and commencement of construction of a new plant at a domestic manufacturing subsidiary
• Enhancement of sales structure and overseas business expansion tailored to regional characteristics based on the Fifth Medium-Term Management Plan
• Promotion of growth strategy aimed at entering the global top 10 in digital dentistry and oral care fields based on the long-term vision "Vision10" for 2040

Risks

• Pressure on operating margin due to increased selling, general and administrative expenses (operating income declined 1.9% year-on-year in FY2026, ending March 2026)
• Risk of impact on overseas sales and costs from U.S. trade policy (tariffs)
• Intensifying competition across the entire dental industry (particularly in the digital dentistry and CAD/CAM-related products market)
• Foreign exchange fluctuation risk (yen appreciation reduces the yen-converted value of overseas sales)
• Impact on the European market from geopolitical risks such as the deterioration of the situation in the Middle East
• Risk of increased depreciation expenses and fixed cost burden associated with large-scale capital investment (construction of new plant)
• Risk of demand slowdown in the Asia region due to concerns over China's economic slowdown