Shareholder Communication: Mar 31, 2025

Shareholder
Communication

2024

ー

2025

Top Message
Financial Highlights
Long-term Vision & Medium-term Business Plan Interview
Topics

Top Message

I would like to express my warmest regards to all shareholders.
Below, you will find the FYE March 31, 2025 performance report and forecast for the FYE March 31, 2026 period.

Sales and profit continue to increase year-on-year, and net sales exceeded the plan for the final year of the Medium-term Business Plan.

For the Semiconductor-related Business, demand for the Group’s products remains strong backed by the growing demand for advanced semiconductors used in generative AI and the increase in ongoing CAPEX in various countries, resulting in significantly higher net sales and profit compared to the previous year. In particular, in terms of profit, we were able to achieve an increase in profit despite the increase in research and development expenses incurred as growth investment. In the Medical and Healthcare Equipment Business, although demand was weak in Japan and the U.S., by maintaining and expanding our share of the European market, we were overall able to increase sales year-on-year. In the Measuring and Weighing Equipment Business, there was an increase in sales due to the recovery in demand for weighing equipment in Japan during Q4 and the strong demand for DSP equipment. Furthermore, in addition to the effect of this increased sales, ongoing initiatives to improve the profit margin in Japan were successful, which resulted in a significant increase in profit year-on-year. The above resulted in net sales of 67,083 million yen (up 8.3% year on year), an operating profit of 8,813 million yen (up 10.8% year on year), an ordinary profit of 8,954 million yen (up 8.7% year on year), and net profit attributable to shareholders of parent company of 6,468 million yen (up 22.1% year on year) for FYE March 31, 2025.

Under our Long-term Vision and new Medium-term Business Plan, net sales and operating profit are expected to be 70.0 billion yen and 9.5 billion yen, respectively, for FYE March 31, 2026.

While the global economy continues to maintain steady growth, uncertainty about the future is increasing due to factors such as the impact on exports due to U.S. tariff policies and exchange rate fluctuations, in addition to geopolitical risks in Ukraine, the Middle East, and other areas. Similar uncertainty continues for the environment surrounding the Group. However, with the aim of creating sustainable growth unaffected by the external environment, we have formulated a Long-term Vision, "Sensing the Future: Mastering Measurement, Supporting the World" to cover the period up to FYE March 31, 2035 as well as a new Medium-term Business Plan (FYE March 31, 2026 to FYE March 31, 2028).
For FYE March 31, 2026, under the new Medium-term Business Plan based on the theme of "Redefining business value and rebuilding foundations," the Group aims to achieve the plan’s targets by promoting measures to strengthen the strategies of each business and Group functions.
We will continue to work hard on initiatives to ensure the Group continues to grow. Therefore, we sincerely hope that all of our shareholders can continue to support us as we work on this task.

Financial Highlights

FYE March 31, 2025

Net sales

67.08 billion yen

YoY

8.3 % UP
Operating profit

8.81 billion yen

YoY

10.8 % UP
Net profit attributable
to shareholders
of parent company

6.47 billion yen

YoY

22.1 % UP

Performance Trends

(Unit: Billions of yen)

Net sales
Operating profit
Net profit attributable to shareholders of parent company

FYE March 31, 2025 financial statements

Long-term Vision & Medium-term Business Plan Interview

Aiming to be a top global niche company with net sales of 150.0 billion yen and operating profit of 30.0 billion yen
Long-term Vision 2034 "Sensing the Future: Mastering Measurement, Supporting the World"
A new 10-year period in which we can contribute globally to create an abundant and sustainable society

In May 2025, A&D HOLON Holdings formulated a Long-term Vision that focuses on the next 10 years until 2034. This vision emphasizes goals that include mastering "measurement" technologies developed since the Group was first founded, promoting expansion in global markets from a market perspective, and developing personnel who will be responsible for these tasks. The Long-term Vision is composed of three steps. STEP 1 of these three steps was formulated alongside the FY2025-FY2027 Medium-term Business Plan. Yasunobu Morishima, the Group’s Representative Director, provides an explanation about the vision of A&D HOLON Holdings and our medium to long-term strategies.

Mastering "measurement" technologies, which are the foundation of society, and becoming a company that supports the needs for “measurement” amid newly emerging social issues

We have formulated a Long-term Vision with the aim of creating further growth for "measurement" technologies that we have been committed to developing since the Group was first founded, based on new strategies that include the perspectives of a market-in approach and addressing social issues.
This vision was given the title "Sensing the Future: Mastering Measurement, Supporting the World" and was derived by backcasting from the "desired situation" 10 years in the future that we want to achieve in terms of transformative measures so that we can make great leaps ahead.
We have grown as a business that develops and produces various technologies to "measure" variables such as mass (weight), length, pressure and temperature. "Measurement" has a small target market and its technical elements are very niche. However, technologies and machines that perform measurement are used across all industries, and measurement is an important foundation that supports the growth of society, so much so that it is said that "something cannot be made if it cannot be measured."
In the mobility domain of the industrial segment defined in the Long-term Vision, measuring characteristics such as the frame, suspension, body, engine, motor, transmission and tires leads to improved performance and safety and support for environmental regulations. While in the healthcare segment, measuring and using vital data leads to maintained health and medical care development.
In the future, "measurement" needs will become more sophisticated in terms of precision and speed, and new needs will also arise, such as the ability to measure something that was not previously possible. We aim to be a corporate group that contributes to the creation of a prosperous and sustainable society on a global scale by providing society with "measurement" technologies.

Three-step challenge focusing on making the leap to a company with net sales and operating profit of 150.0 billion yen and 30.0 billion yen, respectively

The Long-term Vision has been divided into three steps during the 10-year period from 2025 to 2034.
STEP1 (FY2025 to FY2027) has been set as a period in which we will review the existing business under the theme of "Redefining business value and rebuilding foundations" and strengthen the management foundation. The idea is to sow and nurture the seeds for future growth by such as developing personnel who will grow our global presence and take on many challenges, which will lead up to the next step.
STEP2 (FY2028 to FY2030) is based on redefined business domains from the perspective of a market-in approach and addressing social issues under the theme of "Growing to become a 100.0 billion yen company," and has been set with the goal of completing the transition to a divisional structure. By increasing the market share in each business, we are aiming to achieve net sales of 100.0 billion yen.
STEP3 (FY2031 to FY2034), the final stage, will create and establish new business domains that will become the pillars for the next-generation under the theme of "Starting new businesses and make further progress"
We will steadily implement measures to achieve the Long-term Vision to leap forward into becoming a company with net sales and operating profit of 150.0 billion yen and 30.0 billion yen, respectively, in 2034.

A hybrid market-in and product-out approach to reach the top of the global niche in "measurement"

We have specified five basic strategies as measures to achieve the Long-term Vision.
The first strategy is transforming our business portfolio to address social issues.
To ensure that we can respond to the changes in society and the market, we will redefine business domains by market from segment structures based on conventional technical elements and products with the aim of reaching the top global niche in each further segmented market. Furthermore, we will make every effort to create new business as domains that will serve to drive new growth.
The second strategy is shifting to a business model with a market-in approach that can provide value to customers.
Until now, we have created diverse "measurement" equipment based mainly on a product-out approach. However, in the future, we will incorporate a market-in approach to emphasize the creation of technologies and products from the perspective of customers that aligns with market needs, and will transform to a hybrid business model that uses both a product-out and market-in approach.
The third strategy is building new development and production capabilities to achieve "Sensing the Future: Mastering Measurement, Supporting the World."
More specifically, we are thinking of strengthening R&D capabilities by sharing our core technologies across business departments. In the process, we are also considering increasing the number of R&D sites in countries other than Japan and the U.S. We will also centralize the management of customer and sales office information using a data platform to promote the creation of a global supply chain and digital transformation in production.
The fourth strategy is advancing portfolio management.
We will optimize investment and restructure the business using management that uses both quantitative and qualitative evaluation of factors that include the growth, efficiency, and technological synergy of each business segment to improve corporate value in a sustainable manner.
The fifth strategy is promoting sustainability management.
We will also contribute towards developing the environment, society, and stakeholder interests while transforming into a sustainable company that focuses on balancing social and economic value, strengthening cooperation with local communities and stakeholders, strengthening human capital management, and building a strong corporate foundation as materiality.

The new Medium-term Business Plan as a steady step formulated to achieve the Long-term Vision

For the period of STEP1 (FY2025 to FY2027) to achieve the Long-term Vision, we have formulated the new Medium-term Business Plan focusing on the theme of "Redefining business value and rebuilding foundations."
"Redefining business value" contains the basic strategy of building global marketing capabilities for future growth, accelerating global development, achieving growth with awareness of our business portfolio, and strengthening R&D and production capabilities that support business growth.
"Rebuilding business value" contains the basic strategy of working on initiatives to apply business portfolio management and implement sustainability management that adapts to environmental changes.

New growth strategies based on strengthening both new technology and product development, and globalization

In the Medium-term Business Plan, we have formed growth strategies for each of the three business, which are the Semiconductor-related Business, the Measuring and Weighing Equipment Business, and the Medical and Healthcare Equipment Business.
First, in the Semiconductor-related Business, we recognize that proceeding with global support is an important issue because the development of supply chains overseas is expected to accelerate primarily in Asia. Furthermore, we predict that there will be a demand for products that are more sophisticated and consume less power due to the widespread use of AI, and that there will be advances in technological innovation for 3D products due to miniaturization and multi-layered structures.
With this in mind, we have decided to aim to expand our global share and increase our presence in Asia, which is a primary target market for us. We will promote the development of new products and technology enhancements for this development because the Group is easily affected by market trends if we have a small product lineup.
For the Measuring and Weighing Equipment Business, we believe that there will be revitalized demand and investment in the future because of the increasing need for unmanned, automated and remote operation using AI or similar technology due to the sharp rise in and constantly high personnel expenses against the backdrop of inflation. We also predict that strengthened regulations will lead to greater importance placed on quality control and acquiring certification. In addition, we can also expect business to grow in the mobility domain due to factors such as investment in environmental regulation compliance, as the trend towards achieving carbon neutrality gains momentum.
Against the backdrop of these developments, we will aim to strengthen sales in North America and China to increase our global share while making progress with developing new products for the laboratory market and factory automation market. We are also working hard to expand our engineering services for EV and other vehicles, develop tire testing machines to respond to regulations, and develop thermal management systems as environmentally friendly products.
In the Medical and Healthcare Equipment Business, medical activities will become more optimized using AI and big data analysis, and there is an increasing trend for investment in healthcare digital transformation, such as digital health and health tech. We believe that medical care using these type of technologies will become more personalized.
Last year, we already released products based on the demand in each country, such as selling the home blood pressure monitor equipped with a cellular module in North America market. We will continue to focus on expanding our global sales of home blood pressure monitors in the future. We will also continue to expand solution products for digital transformation in the field of medicine and promote activities to develop innovative products through industry-academia collaboration as an approach to creating advanced technology.

Strengthening strategic investments and shareholder returns for sustainable growth

In STEP1, we have also set a new cash allocation. We will promote investment and shareholder returns with the total operating cash flow between FY2025 to FY2027 set to approximately 50.0 billion yen.
We are expecting to invest a total of around 15.0 billion yen as growth and strategic investments to promote digital transformation in all services and in mergers and acquisitions, in addition to investments in R&D centers and creating smart factories.
For research and development investments, we are expecting to invest a total of 22.0 billion yen as ongoing investment for innovation to develop new products and build and promote a global development system.
We are also expecting to invest a total of 7.8 billion yen as business foundation investment with the goal of maintaining and replacing existing equipment, developing IT infrastructure, and other similar projects.
We are considering dividends totaling 5.2 billion yen for shareholder returns during the period of the Medium-term Business Plan. This is a policy with a payout ratio of 30% for FY2027 (FYE March 31, 2028).
With awareness of communicating our initiatives in greater detail, we plan to strengthen our IR activities. We will continue to make every effort to hold IR meetings with everyone, increase information disclosure based on your feedback, and conduct facility tours, in addition to other relevant tasks.

Social changes also present new opportunities based on the theme of "Redefining business value and rebuilding foundations"

The future of the stock market and global economy remains uncertain due to factors such as the U.S. tariff policies and geopolitical risks. However, slightly changing how we look at things allows us to see that social changes bring new business opportunities.
Under such circumstances, we will continue to prepare for all anticipated changes so that we can first aim to achieve the Medium-term Business Plan and then seize the opportunity to take the next leap forward.

Briefing materials and view an explanatory video of the Long-term Vision and Medium-term Business Plan.

* Video available in Japanese only

Topics

Introducing the A&D HOLON Eco-Products Certification System

In November 2024, we introduced the A&D HOLON Eco-Products Certification System to certify our own environmentally friendly products.
All products created within the Group are eligible for certification as eco-products if they meet certification criteria designed around the concept of environmental contribution.
By encouraging the development and sales of environmentally friendly products, we will work to reduce environmental impact and preserve the global environment.

By encouraging the development and sales of environmentally friendly products, we will work to reduce environmental impact and preserve the global environment.

Certification criteria and contribution factors

Contribution #1

Environmental contribution by end products
Contribution #2

Environmental contribution at production sites
Contribution #3

Environmental contribution by the spread of end products

Using our eco-products in the customer’s development department and production department.

Developed and produced products contributing to reducing the environmental impact

Ex: Developing motor batteries for EVs
Manufacturing auxiliary batteries for EVs

Contributing to saving energy and improving yield at the production site

Ex: Semi-conductor manufacturing, food production

Contribution #4

Environmental contribution by Group products

Product eligibility criteria

Products that are expected to provide 20% or more improvements or benefits for any of the factors a to e shown below when compared to our existing products or competitor products

a. Power saving
b. Weight saving/miniaturization
c. Resource saving/recycling
d. High performance (processing speed, inspection accuracy, long life, etc.)
e. Manufacturing man-hours

Examples of certified products

Measuring and Weighing Equipment Business

AD-4212C Series: High-precision weighing sensors for integration into production lines
- Contribution #1
- Contribution #4
Versus conventional products, these are 27% smaller, 68% lower in power consumption, and 1.8 times faster in response time. These are used to check electrolyte fill volume on rechargeable battery production lines for electric vehicles, contributing to precise and safe rechargeable battery production.
Battery HILS (Simulator for battery development)
- Contribution #3
MBD* using this product eliminates problems associated with the use of actual batteries, such as reproduction of battery degradation, long recharging time, and safety. These improvements for testing such important components of electric vehicles contributes to more efficient control development.
- *MBD: Model Based Development

Medical and Healthcare Equipment Business

UA-1100NFC: Upper arm hose-less blood pressure monitor
- Contribution #4
These products reduce rubber material used by eliminating the hose connecting the blood pressure monitor body to the cuff, and the compact design reduces the master carton volume to one-third, contributing to reduction in environmental impact.

Semiconductor-related Business

ZX/LEXa-20: Dimensional measurement and defect review equipment for photomasks
- Contribution #1
- Contribution #2
- Contribution #4
These products achieve greater power savings and performance than conventional products, resulting in a 1.5-fold increase in productivity. Dimensional measurement and defect review for photomasks, which are essential for semiconductor manufacturing, contributes to lower power consumption and higher yields of semiconductor chips.

Medium-term goal for products certified as eco-products

"We will increase the percentage of eco-products with respect to net sales of Group products from 16% in FY2024 to 20% or higher in FY2027."

For details, please refer to the materials concerning the Group’s sustainability initiatives.

Sustainability Initiatives