Business
Artience : Presentation Question & Answer session summary First Three Quarters of FY2025 Results Briefing
Artience : Presentation Question & Answer session summary First Three Quarters of FY2025 Results
About this update from Artience Co.ltd
Financial Results Briefing for the First Three Quarters Fiscal Year Ended December 31, 2025 Questions & Answers Date/time: Nov.25, 2025, 1:00pm - 2:00pm (Japan time) Presenters: Hiroyuki Hamada, Director Vice President, General Management, Corporate Division Takeshi Arimura, Operating Officer in charge of IR and GM of Finance & Accounting Department Kengo Kochiya, Senior GM, Corporate planning div. Masaki Nagatsubo, Executive Director of TOYOCOLOR CO., LTD. Presentation Material: https://ssl4.eir-parts.net/doc/4634/tdnet/2722985/00.pdf TRANSLATION: This is a transcript of Financial Results Briefing for the First Half of the Fiscal Year Ended December 2025, held on Nov.21,2025, 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 Nov.21,2025. Changes in global, economic, and business conditions could cause actual results to differ materially from these forecasts. The content of this transcript has been edited or revised by the company. Q.1: I have the impression that the situation with CNT dispersion is worse than it was three months ago. I would like to ask if my understanding is correct in this. As for Zhuhai in China, as I recall, you initially said they were planning to start full-scale shipments in Q2, but this time, they will start around December, so I wonder if this is also slightly delayed. Also, the new Kentucky plant is now scheduled for 2027 or later, and as I recall, at the beginning of this year it was scheduled to ship products in 2026, so I'm wondering if this is also a bit behind schedule. If, as you said earlier, achieving this year's target of JPY5 billion is not feasible, is it still safe to say that next year's target of JPY10 billion is a good idea? Could you talk a little bit about your business environment? A.1(Hamada): The business environment in general is a bit bad, I am concerned about the US in particular. Due to various circumstances at our major customers' automobile manufacturers, the shift to EVs has been delayed, and we are particularly concerned about this in the US. Therefore, in relation to the operation of the Kentucky plant mentioned earlier, the current capacity of the production base in Atlanta will be sufficient until about 2026, so the operation of the Kentucky plant has been postponed a little. As for Zhuhai, you are right. We have been working with the customer since around October to move forward with mass production, with the understanding that it would be at full capacity, but the customer wanted to make sure that the line on the actual equipment was running smoothly. That part hasn't been progressing smoothly and is running a bit behind schedule, so even at this stage, the verification process hasn't been completed. Therefore, I said that sales would not be so high even in Q4 compared to the full-capacity operation that was expected to start in October, and that sales of JPY5 billion would be a bit difficult to achieve. As to whether it will be okay from next year onward, to be honest, it is very difficult to predict the outlook for this at this time. There is also the positive expectation that if things go well in the situation in the US and in China, other areas may also see growth. Therefore, we will update and review the situation as much as possible, and at the next year-end financial results briefing, we will be able to say how much we expect to achieve. As for development, we have completed the development of CNT dispersion for anodes materials and LFPs, as well as conventional ternary LiB cathode materials, and we are now evaluating them at customers. If that goes well, I think it should start taking shape around next year, so we will cover that aspect. We have started development not only for automotive applications, but also for consumer and ESS applications, and we hope to expand our business as a whole. Q.2: I think that profitability will decrease a little if you do consumer and ESS, but do you still place importance on operating rates? A.2(Nagatsubo): As for your question, we have not done enough marketing for the consumer market, but in light of the situation in the automotive market, we are now marketing mainly for the consumer market. In terms of the price of CNT dispersion, it is much higher than that of on-vehicle CNT dispersion, and we believe that the profitability per unit will increase. Its quantity inevitably ends up being smaller compared to on-vehicle CNT dispersion. However, the number of batteries developed for consumer and ESS applications is increasing more than that for automotive applications, and we are currently working to capture this business area. Q.3: Let me ask you about polymers and coatings. The segment's operating margin increased, especially in Q2 and Q3. In the data, overseas earnings in particular were expanding, so please let me confirm what the driving force in this area is and whether this strong performance can be sustained in Q4. Particularly in the area of optical adhesive materials in China, but rather than having local manufacturers, for example, do you need to worry less about that? A.3(Hamada): The biggest contributor to overseas profit would be the optical adhesives for polarizing film. We have already been doing quite well here since around Q2, and I think we will continue to do well in Q4. We are working at full production capacity, so we are trying to increase that capacity through a variety of creative measures, and we expect to continue to do so in the next fiscal year and beyond. As for the local manufacturers, they have not yet to emerge at this point due to quality differences with Japanese manufacturers. We expect this quality difference to continue for some time. In the domestic market, there have been delays in passing on higher raw material prices, which had been sluggish in terms of volume, picked up this year, boosting overall profit. As for this area, laminating adhesives have been sluggish, but other products have been firm, so the profit margin is improving. Q.4: Next year is the final year of the management plan, which calls for net sales of JPY400 billion, an operating profit of JPY25 billion, and ROE of 7% or more. What is your current outlook for achieving them? In terms of shareholder returns, you have already acquired treasury stock, and you expect to pay out more than JPY40 billion in cash allocation over the next three years. Next year's dividends payout will be around JPY5 billion. If that is the case, you will probably need to repurchase about JPY5 billion of your own shares. May I confirm if you will continue to carry out these activities as well? A.4(Hamada): We are currently formulating a plan for the next fiscal year, but we will keep our promises and will present specific details at the year-end financial results briefing. We are also committed to fulfilling our shareholder return promises, although we do not know what the methodology will be. Q.5: I understand. If you aim for that, you will have to jump up quite a bit, since your profit is JPY19 billion for the current fiscal year. Are you planning to have something, for example, in addition to organic growth, something inorganic or something like that? A.5(Hamada): We will be working hard on those areas, including various measures. Q.6: I also have a question about CNT dispersions. I think it is difficult to predict how high the operating rates of the projects you have invested in so far, such as the Kentucky and Fuji plants, will be, but I would like to know how much you expect to achieve. In addition, I think you mentioned earlier about the consumer market, and I would like to ask you to give us a sense of the timeline for having firm sales in this market. A.6(Hamada): Regarding operating rates, we are almost at full capacity in Europe, and we are in the process of adding new lines. As for China, as I explained earlier, once a large-lot placement is made, it will be immediately fully operated. We are honestly very concerned about the US, but we expect to earn sales in China and Europe next year. As for the launch of the consumer use, Mr. Nagatsubo will explain. A.6(Nagatsubo): I have heard that the development period for consumer products is shorter than that for automotive products. However, since we have just started working on this project, we expect to have actual results by the end of 2027 at the earliest. Q.7: Although this might be a repeated question, but could you please give us a more detailed explanation again on the part about the cause of the delay for the major Chinese customer? A.7(Nagatsubo): We have been selling the product to battery makers for European cars, but we are also in the process of confirming the performance requirements of each OEM for adoption in Chinese cars. We believe that a certain level of physical properties is now known and is not a problem, but there is customer demand for more certainty in terms of long-term performance, and we are evaluating this. [END]