Artience Co.ltd TSE:4634
Artience : Presentation Question & Answer session summary First Half of FY2025 Results Briefing
Source: MarketScreener
Financial Results Briefing for the First Half of Fiscal Year Ended December 31, 2025 Questions & Answers
Date/time: Aug. 19, 2025, 10:00am - 11:00am (Japan time)
Presenters:
Satoru Takashima: President and Representative Director, and Group CEO
Hiroyuki Hamada, Director Vice President, General Management, Corporate Division Takeshi Arimura, Operating Officer in charge of IR and GM of Finance & Accounting Department Masaki Nagatsubo, Executive Director of TOYOCOLOR CO., LTD.
Presentation Material:
https://ssl4.eir-parts.net/doc/4634/tdnet/2678145/00.pdf
TRANSLATION:
This is a transcript of Financial Results Briefing for the First Half of the Fiscal Year Ended December 2025, held on Aug.19, 2025, Questions & Answers session. This is an English translation of the Japanese original, prepared only for the convenience of non-Japanese native shareholders. The original Japanese version will prevail should there be any difference in the meaning between the English version and the Japanese version.
DISCLAIMER:
The forecast or projections in this material are based on the assumptions and beliefs of our management in light of the information available as of Aug.19,2025. Changes in global, economic and business conditions could cause actual results to differ materially from these forecasts.
The content of this transcript have been edited or revised by the company.
It also states that optimization studies of production processes will be conducted. I believe that President Takashima mentioned earlier that you will be focusing on this area in the future, so I was wondering if you could comment on any further improvements in production efficiency.
A.1(Nagatsubo): First, we have mentioned that there is a local Chinese competitor called Cnano, but there is also Cabot and a publicly listed company called Qingdao that are rising to prominence. Other small companies are also emerging. Improvements to the production process are aimed at increasing efficiency to compete with these local Chinese manufacturers. We started by reviewing our raw materials, and by shortening the preparation time, for example, and by increasing the flow rate of pumps, which had previously been stopped at a certain level, we were able to increase the amount that can be produced at one time, thereby significantly improving production efficiency. Q.2: In terms of comparing with such Chinese competitors, I believe you have said in the past that, for example, in the case of dispersion products, you can differentiate yourself to a certain extent by using technology to control the dispersion. Is it correct to say that they are quite technically close to your company in this matter? As for LFTs, has your company already entered the market? Is it correct to say that it has already been adopted? A.2(Nagatsubo): In terms of conductivity, I believe our products still maintain an advantage. For example, we are currently developing and providing cost-reduced products for Chinese battery companies, but there are also products from local Chinese competitors that are perfectly suitable for this purpose. We are currently in the development stage and are sending samples to various battery manufacturers in China, Korea and other countries to advance development. Q.3: Another point is the US. You said that one of the companies that ordered your products is reassessing its position due to the worsening market conditions for battery production, but the only company that has issued a release is probably the Japanese company P in Kansas, so I think that is probably the Company in question. Is that correct? A.3(Nagatsubo): I am sorry, but I cannot mention a specific customer. However, I think there have been other companies that have made announcements as well. A.3(Takashima): Let me just add one point about the first CNT dispersion competition. One of our competitive advantages is variety differentiation, which is backed by patents, or IP. We are working with a specialized Chinese law firm on how to utilize them.
Q.4: Let me ask about UV inks. Since this was originally a growth business, I thought there was a lot of hope for it going forward, but this time it has been sluggish both domestically and internationally. In the materials as of April this year (*), I believe you showed a graph that showed a slight increase in domestic UV ink sales and growth of around 5% per year overseas. Has this view not changed at present? Also, you wrote that at present, domestic and overseas sales, especially overseas users, are not doing so well. In your earlier explanation, you mentioned that SG&A expenses are also increasing, so I was wondering if you could comment on the current status and future outlook of UV inks, including that point. Do you feel that 5% annual growth is quite difficult to achieve under the current circumstances?
（＊Presentation data of FY2024 Results Briefing, Page10, held on Feb.21th, 2025. See below.）
A.4(Hamada): We believe that we are correct in our view that domestic sales have increased slightly and that we have secured a reasonable level of profit. As for overseas markets, the biggest factor is that demand has not increased. In particular, paper prices have risen sharply, and as UV inks are also used in paper packaging, demand in this area has fallen considerably, and to be honest, there has not been much growth. It has not even reached 5%. There has certainly been an offensive of low-cost products, and there are customers who are more concerned with price than quality, so we have been partially taken over by them, and competition has intensified. We have already responded to this by introducing cost-cutting products, and we will strive to make a comeback. However, as a whole, the overseas market is unfortunately not growing. For example, the U.S. had quite a bit of special demand last year, but there is no special demand at the moment, and growth has stopped at a certain level. I think it will be quite difficult for the full year, but we expect a certain amount of growth in H2. Q.5: I think you mentioned earlier that the demand is not good to begin with in the UV business, and that the competition is lowering their prices a bit. One question is whether unlisted companies in Europe have taken advantage of this, and whether the same trend exists for LED inks. Also I would like to know about the situation in Asia, and if you could tell me about this with general inks, not UV inks. From what I have heard, Chinese converters are expanding into Asia, and as a result, Chinese ink manufacturers are following suit. Is this something that your company seeing? I understand that this is particularly true in Southeast Asia, and looking at your company's profits, I think you're seeing some impact, but not a large amount. Could you please explain this? Have you heard much about the Chinese products that seem to be entering the gravure inks and flexographic inks market?
A.5(Hamada): For some areas of Europe, there is a certain degree of such an offensive by listed companies. We have heard about Chinese manufacturers entering Southeast Asia and other regions, including India, for old-fashioned offset inks, but we have not heard of a full-scale, low-cost offensive for UV inks. That and gravure are performing well, so we are okay there for now. Q.6: I would like to know about your company's approach to shareholder returns. Looking at your company's materials, I understand that your company has a total payout ratio of 50% or more, and that basically, if there is a one-time cash inflow, it will be returned as a share buyback, and if there is a continuous cash inflow, dividends will be increased accordingly. Looking at your company's operating profit, I see that from 2021 to 2023, it was around JPY13 billion, which was pretty much the same level, but last year it was JPY20.4 billion, and this year, even if you expect a decrease in profit, it is JPY19 billion, which I feel is a step up in the level of operating profit. I believe that structural changes to your company have improved your fundamental cash generation capabilities, but I think there is a slight difference between these changes and your company's approach to dividends. Could you please explain to me more about your company's approach to dividends?
A.6(Takashima): Our approach to overall cash allocation has not changed since we first announced this medium-term management plan, and our primary policy is to place the highest priority on investments for growth. Nevertheless, as you have just pointed out, our earning power and ability to generate cash is also improving. However, our dividend policy, or rather our return policy, remains unchanged: to maintain stable dividends while maintaining a total return ratio of 50% or more.
In the past two or three years, we have bought back our own shares twice, and we would like to continue to do so in addition to dividends, with a total return ratio of more than 50%.
Q.7: I would like to ask about packaging materials and printing and information segments.Looking at the trends of the other two major ink companies, the outlook for this year in Asia, particularly for what your company calls liquid ink, is not necessarily very good. I've also heard that things are not going well in countries that export to the US, and that the influx of raw materials from China is also making things less good. I wonder if you could tell us if there are any factors that make your company seem rather optimistic in its outlook for the current fiscal year, especially in the outlook for the packaging segment.
A.7(Hamada): I am not yet aware of how other companies are looking at this, but for our liquid inksbusiness, volume zones in India and Thailand are very large markets for us in terms of packaging. In particular, India has continued to perform well and is expected to continue to do so in the future. Thailand has lost some sales, or gained some sales, but there has not been a significant decline. Other major markets include Indonesia and Vietnam, where we are currently doing well and we believe that Malaysia, Indonesia and Vietnam will continue to perform well in the future.
Q.8: In Indonesia and Vietnam, there is production of general merchandise for export to the US, and I heard some people say that there was quite a bit of tariff impact in Q2. Was this not a factor that affected your company? A.8(Hamada): There are some cases like that, and we have heard that Chinese products came in and our customers were taken away once, but then they came back to us again due to issues with quality and supply stability, and we have heard of such movements, but there has not been much change in our overall sales growth trajectory. Furthermore, Japanese companies are also making inroads into Thailand, for example, and we intend to take advantage of the relationships we have built in Japan to work on transferring operations to other parts of Asia. Q.9: I would like to know the contribution of India. At the moment, for example, in the packaging segment, what percentage of your sales are in India, roughly? A.9(Hamada): In terms of the packaging materials, it is less than 10%. Including Japan, it is less than 10%. A.9(Takashima): As I mentioned earlier, we spoke yesterday with our overseas manager who is the section chiefs and is working on the front lines of sales to find out the reasons for India's success.He mentioned two strengths we have. One is that the state of emergency in India due to COVID-19 was very strict. However, even at that time, we visited each and every household, and conversely, our employees' representatives visited the homes of our employees, asking them to come out because it is okay, and this was one of the major reasons why we were able to continue supplying our products, and this activity is still appreciated by our customers. Second, I think one of the advantages of our packaging inks are the technical service. When something happens, we immediately go there to fix it, and I believe this is our second strength, which is very strong in India.
Q.10: In the polymer and coating segment, there is a delay in the development of Color filter (CF) materials in China and stagnation in Taiwan, even for the same display applications, while I heard that adhesives are doing well enough to consider the next expansion of the business. Is this because, unlike CF materials, adhesives have not yet seen much competition in China? I think the two Japanese companies are essentially splitting the business, but how much? A.10(Takashima): That is something I am keeping a close eye on. With regard to adhesives, particularly those used to secure or protect polarizing plates, there has been a lot of business transfer from South Korea, but we have been able to take advantage of the strengths of our local manufacturing, and as well as our superior quality, as you may know, we believe that we have a very high market share together with Japanese companies. The concern is whether something similar will come from a local Chinese manufacturer, and at this point, we are constantly watching for that, but it has not yet appeared. I cannot tell the market share.[END]