SMC Corporation
Financial Results Briefing for the 1st Quarter Fiscal Year Ending March 2026 August 8, 2025
Event Summary [Company Name] SMC Corporation [Company ID] 6273-QCODE [Event Language] JPN [Event Type] Earnings Announcement [Event Name] Financial Results Briefing for the 1st Quarter Fiscal Year Ending March 2026 [Fiscal Period] FY2025 Q1 [Date] August 8, 2025 [Number of Pages] 23 [Time] 15:30 - 16:34(Total: 64 minutes, Presentation: 14 minutes, Q&A: 50 minutes)
Masahiro Ota Director and Executive Officer, General Manager of Finance and Accounting Division
[Analyst Names]*Kentaro Maekawa Nomura Securities
Kenjin Hotta BofA Securities
Yuichiro Isayama Goldman Sachs
Yoshinao Ibara Morgan Stanley MUFG Securities
Hirosuke Tai Daiwa Securities
Mayumi Kuze Nikkei Inc.
*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.
Presentation Moderator: Hello everyone. We will now begin the presentation of SMC Corporation's financial results for Q1 of the fiscal year ending March 31, 2026. Thank you very much for taking time out of your busy schedule to join us.Today, Masahiro Ota, Director, Executive Officer, and General Manager of Finance and Accounting Division, will begin with an overview of the quarterly financial results. The materials are available on TSE TDnet and our IR website.
After that, we will have a Q&A session with all of you. However, as time is limited, we will select about five participants from among those who have indicated in advance that they wish to speak. We appreciate your understanding.
Today's scheduled closing time is 4:30 PM. Now, Director Ota, please begin.
Ota: My name is Ota from SMC. Thank you for joining us today.
I will start from the second page of the financial results presentation.
Net sales for Q1 were JPY200.1 billion, and all subsequent profit items, including operating profit and ordinary profit, also posted YoY declines in both revenue and profit.
As you can see on the right, QoQ also shows a decrease in revenue and profit.
Since this is not very clear, we will explain the factors for increase/decrease in sales and operating profit by factor on page three.
First of all, in YoY, net sales were minus JPY2.6 billion, but volume increased, with an increase of JPY6.8 billion. There was negative JPY0.2 billion in sales price and negative JPY10.6 billion in exchange rate fluctuations. In addition, starting this fiscal year, we are consolidating 27 subsidiaries that had not been consolidated before. The total was JPY1.4 billion, for a total of minus JPY2.6 billion.
Next is operating profit. Operating profit is minus JPY7.8 billion. The increase in volume had a positive impact of JPY3 billion, while sales prices had a negative impact of JPY0.2 billion. Foreign exchange fluctuations had a negative impact of JPY0.6 billion, inventory valuation losses a negative impact of JPY1.4 billion, manufacturing costs such as operating rates and material costs a negative impact of JPY7.7 billion, and SG&A expenses a negative impact of JPY0.3 billion. In addition, the impact of US tariffs would normally be included under manufacturing costs such as operating rates, material costs, and others. However, we have separated this out to show, as a standalone item, the amount of tariffs paid in the US in Q1 of the previous fiscal year and in Q1 of the current fiscal year. This is JPY0.8 billion. In addition, the expansion of the scope of consolidation resulted in a JPY0.2 billion increase in operating profit, bringing the total to negative JPY7.8 billion.