Fiscal 2025 was another year of strong performance, with revenue topping one trillion yen and operating profit and operating margin reaching record highs. These outstanding results are, I believe, attributable to business administration based on the Niche Top Strategy and a series of initiatives aimed at enhancing profitability.
Meanwhile, our ROE was below the target level, leaving us with the challenge of how to leverage the fruits of growth to further enhance corporate value. I do not view this as merely a matter of numerical targets; rather, it signals the need for Nitto’s management to move to the next stage in the way we make growth investments, allocate capital, and improve the quality of the business portfolio.
Looking back on our business by segment, we steadily boosted profit in the Industrial Tape and Optronics Businesses as a result of prioritizing resource allocation to domains with high growth prospects. Meanwhile, the Human Life Business again reported an operating loss in fiscal 2025, but in the oligonucleotide contract manufacturing business—one of its mainstay businesses—the operating loss narrowed significantly from the previous fiscal year, as we began receiving orders for projects related to commercial drugs.
Achieving profitability in the Human Life Business and subsequently expanding its earnings is an important challenge for us as we work to build a well-balanced business portfolio. We will continue to position this business as one of the priority businesses in our growth strategy. With respect to future investment decisions, we will assess them carefully, taking into account the anticipated progress of business growth, the time required to achieve profitability, and capital efficiency.
Our new medium-term management plan, Nitto RISE 2028, kicked off in fiscal 2026. Building on the previous medium-term management plan, this plan marks the second step in our effort to achieve our Target State 2030 of becoming an “Essential ESG Niche Top Company.” Its overriding objective is to advance our ongoing initiative of simultaneously solving social issues and creating economic value, thereby helping to increase the Nitto Group’s corporate value.
One of the initiatives we are prioritizing is the realization of new growth through Double Recognition. Through this unique approach, we aim to create both social and economic value simultaneously. Under Nitto RISE 2028, we are targeting an increase in the ratio of revenue generated from double recognized products and services to 40% by fiscal 2028, with a longer-term goal of 50% or higher by fiscal 2030. By increasing the proportion of businesses that generate both social and economic value, we aim to realize our vision of becoming an Essential ESG Niche Top Company.
What we mean by “enhancing the prospects for growth” in the current management plan is not only strengthening the profitability of our existing businesses, but also creating new growth businesses and establishing and maintaining leading shares in target domains, whether niche or otherwise. The Nitto Group will keep generating a steady stream of new Niche Top products by identifying social issues and customer needs and linking the latest insights from the front lines with our core technologies, intellectual property, sales networks, and supply chain. By sustaining this cycle, we believe we can maximize our presence among customers and build strong relationships in which the Nitto Group is always the first to receive their call when new business opportunities arise.
For our existing businesses, we will concentrate management resources in domains where the Nitto Group can demonstrate its competitive strengths, pursuing both higher profitability and greater growth potential. In new growth businesses, we will drive future growth by connecting technologies both within and outside the company with customer needs in domains such as digitalization, next-generation telecommunications, semiconductors, environmental solutions, renewable energy, and life science.
Since its founding in 1918, the Nitto Group has faced numerous crises and changes in the operating environment. Whenever such challenges arose, we devoted all the Group’s strengths to every product in order to better serve our customers, thereby laying the foundation for the next phase of growth.
Since then, the business environment has changed dramatically, and we now find ourselves operating in an entirely different competitive landscape, where individual markets and product categories are changing and the industrial structure itself stands at a crossroads. Stricter environmental regulations driven by the push toward decarbonization, together with regulatory and systemic changes across various countries, are reshaping the way customers design their products as well as the performance requirements they demand. As customers increasingly seek lighter weight, higher durability, and greater reliability, the value the Nitto Group should deliver is evolving even within conventional applications and existing markets.
To turn these changes into growth opportunities, we must act swiftly to detect latent needs that emerge from the front lines through close dialogue with customers and players in the supply chain. For my part, I make it a point to leave the office to engage directly with customers and business partners, and I place great value on the insights gained through such face-to-face dialogue. By flexibly combining this feedback with its proprietary technologies, as well as external expertise and technologies, the Nitto Group has created new value and established itself as a leading Niche Top company.
Making prompt decisions and acting with greater agility are critical to building sustainable competitive advantages. Speaking from my own experience, I once proposed a strategic shift in the optical film business, in which we had gained the lion’s share of the market, knowing that it could temporarily reduce that share. I nevertheless believed the decision was necessary to ensure the business’s medium- to long-term profitability. That experience taught me that making the decisions you genuinely believe are best for Nitto without delay ultimately ensures the sustainability of the business.
Under Nitto RISE 2028, we will further promote such frontline-driven decision-making across the Group in order to stimulate the growth of the Human Life Business, while sustaining the continued growth of the Industrial Tape and Optronics Businesses, thereby building a more well-balanced business portfolio.
For us to leverage the Double Recognition scheme as a driver of renewed growth, we must establish an unshakable management foundation. Since I assumed the position of President and COO in April 2026, I have become keenly aware that robust governance over safety, quality, and compliance is a fundamental prerequisite for sound management. Once this is lost, the trust of society and our customers can be lost overnight.
Through my experience in manufacturing, I have learned that many problems, whether occupational accidents, misconduct, or quality issues, do not arise from extraordinary circumstances but rather from routine decisions and organizational cultures that people have come to accept as normal. In other words, I believe the single biggest risk facing any company is an unwillingness to confront inconvenient facts directly, or a workplace culture that leads employees to choose not to speak up.
The Nitto Group has long embraced the “open, fair, and best” approach as a core value in the form of The Nitto Way. This means fostering a corporate culture in which everyone is encouraged to share both good news and bad news openly, engage in fair and equal discussions, and give their very best once decisions have been made. By ensuring that leaders at every workplace continue to demonstrate this commitment, we aim to cultivate a healthy workplace environment and solidify the foundation that underpins sustainable value creation.
Building on this management foundation, human resources are the Nitto Group’s most important asset in achieving sustainable growth. In an era marked by accelerating change and increasing uncertainty about the future, the driving force behind continuously creating new value lies in each and every employee who is not afraid of failure, thinks independently, and dares to take on new challenges.
In the growth stage of a business, providing opportunities to take on challenges is critically important. Speaking from my own experience, when I was a young employee at Nitto, I was selected to manage an important customer account, and through repeated challenges and failures, I was able to grow professionally. That experience taught me that people grow through challenges and that organizations become more resilient as a result. While developing human resources capable of advancing the Niche Top Strategy with diverse perspectives and high levels of expertise, the Nitto Group is also working to create a work environment where every employee feels rewarding and satisfied with what they are doing. I believe these initiatives are part of a company’s fundamental responsibilities and represent important investments directly linked to the medium- to long-term enhancement of corporate value.
At the Global Conference held in March 2026, senior executives from across the Nitto Group gathered to discuss the current state of psychological safety within the Group and the challenges surrounding it.
Through these initiatives, I am determined to build an organization in which employees think independently and keep growing as they constantly take on new challenges. We will continuously monitor our future-financial indicators, including employee engagement scores and the challenge ratio, in order to further advance the Nitto Group’s human capital management.
Addressing climate change is a key management challenge that is inseparable from business strategy. Inadequate responses could result in the loss of competitive advantages and business opportunities. On the other hand, if we can accurately identify the decarbonization needs of society and our customers, those needs will present opportunities to create new value through the application of the Nitto Group’s technologies. As Nitto’s top executive, I intend to make all management decisions based on this recognition.
The Nitto Group plays a fundamental role in supporting the core performance and energy efficiency of end products through the provision of a wide range of components. Given this role, our management team is constantly mindful of its responsibility to reduce GHG emissions from our own business activities, while continually asking what value the Nitto Group’s products can offer in contributing to the decarbonization of society as a whole.
In line with this view, we are focusing on the creation and expansion of PlanetFlags™ (products and services contributing to the environment), making all-out efforts to conserve energy, utilize renewable energy sources, and innovate our manufacturing processes. Furthermore, through collaboration with partner suppliers of raw materials and customers who use our products, we are committed to reducing environmental impact across the entire supply chain.
These initiatives may increase costs in the short term. But I regard them as important investments that will strengthen our competitive advantages and business foundation over the medium- to long-term, while enhancing our resilience to transition risks, such as fluctuations in energy prices and increasingly stringent regulations.
Recognizing the uncertainty associated with climate change, we assess risks and opportunities based on multiple scenarios that anticipate changes in our future business environment, and reflect the results of these assessments in our business strategies and investment decisions. Through this process, we continuously monitor the potential impact of climate change on our business in order to increase management resilience.
Amid the rapid evolution of AI and other digital technologies, we are entering an era in which a company’s competitiveness is determined by how effectively it can use such technologies. The Nitto Group is no exception. For us, the use of digital technologies is not merely a means of improving efficiency, but a key driver that enhances growth prospects.
To quickly identify changes in the market and evolving customer needs, and to translate them into prompt decision-making and action, it is crucial to use data and AI technologies to transform both management and frontline operations. By using digital technologies to augment the human resources and expertise cultivated in the field, we will increase the number of projects for Niche Top products and Sanshin Activities while maximizing their growth prospects and speed of execution.
At the same time, to generate resources for future growth, we must eliminate nonessential operations and reallocate management resources more effectively. By accelerating the evolution of our manufacturing, building a more resilient supply chain, and streamlining operations through the effective use of AI technologies, we will create additional capacity in terms of time, human resources, and investment capital for the next stage of growth.
To steadily advance these initiatives, it is essential to establish a solid foundation by developing data infrastructure, instituting robust data governance, and strengthening information security. More importantly, the use of digital technologies should not be confined to a limited number of specialized divisions. Rather, by fostering an organizational culture in which every employee is encouraged to incorporate such technologies into their daily operations and autonomously drive improvements and take on new challenges, we will ensure that the use of data leads to sustainable value creation.
The three-year period covered by Nitto RISE 2028 is a critical phase for the Nitto Group, during which we must enhance the prospects for growth and demonstrate how we can evolve into an Essential ESG Niche Top Company envisioned in Target State 2030.
I myself fully recognize my responsibilities as the chief officer of this company, which include driving business growth through the solution of social issues, leveraging the resulting outcomes to increase capital efficiency, and returning value to stakeholders. Under Nitto RISE 2028, we will perpetuate this virtuous cycle of value creation.
All the more in these rapidly changing times, it is important not to rest on past successes, but to confront reality and continuously identify emerging needs amid such change. If we can turn these needs to our advantage and create double recognized products and services, we can contribute to the sustainable growth of the Nitto Group.
Driving this momentum are the challenges taken on by each employee and a healthy organizational culture that supports them. I will remain committed to engaging in dialogue with our stakeholders, so that their feedback can be reflected in our management, ultimately earning the trust of society and long-term support from investors.
I will ensure that these challenges are taken on in order to enhance corporate value in a sustainable manner, and, in my capacity as President, I will take the lead in making this a reality.
