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Financial Results Presentation7013IHI CorporationMachinery

FY2025 (fiscal year ended March 2026) Results Briefing: “Medium- to Long-Term Direction” and “Business Overview (Roadmap to the Medium to Long Term)”

IHI presented a phased growth roadmap under which it will pursue upfront investment and strengthen its financial base from FY2026, leading to growth in operating profit and operating cash flow from FY2029 onward and in free cash flow from FY2032 onward. Toward 2040, IHI plans to accelerate investment and business expansion in growth areas including commercial engines, defense and space, nuclear power and fuel ammonia, and infrastructure.

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Contents of this document

Medium-Term Management Plan PresentationFY2025 (fiscal year ending March 2026)8 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥1.64 trillion
Operating profit marginFY2025 actual: 10.1%; year-on-year: Not disclosed
What the company explained in this material
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Growth in global passenger demandCAGR 3.1%（2024-2050）
  • Increase in global power generation capacityCAGR 3.0% (current-2040)
  • Increase in domestic nuclear power generation2.6x (current-2040)
  • Domestic fuel ammonia adoption target3 million tonnes in 2030, 30 million tonnes in 2050
  • Space market size target¥4 trillion in 2020 to ¥8 trillion in the early 2030s
  • Defense spending as a percentage of GDPFrom 1% to 2%
New initiatives
  • Expand production capacity for commercial engines and nuclear reactors
  • Innovate production processes and reorganize production sites, including the construction of new production facilities
  • Expand engine maintenance and parts-repair capacity
  • Strengthen the supply chain by expanding production capacity for forgings and castings
  • Secure nuclear power engineers and pass on engine development technologies
  • Invest in digital transformation and develop digital talent and data management infrastructure
  • Strengthen alliances, including international joint development and value-chain development
  • Develop fuel ammonia supply systems, utilization technologies, and fuel synthesis technologies
  • Expand global supply of equipment for next-generation advanced reactors
  • Build new value chains centered on infrastructure maintenance and management
Key KPIsA metric the company considers important as a management benchmark.
  • Revenue CAGR (FY2025-FY2035)5%+
  • ROIC (FY2025 actual)9.5%
  • Revenue growth rate (Phase 3)5%+annual average growth rate
  • Operating profit margin (Phase 3)15%+
  • Cumulative operating cash flow over 3 years (Phase 3)¥1 trillion+
Medium-term management plan targets
  • Target fiscal yearFY2026-FY2028 (Phase 1)
    Target valueOperating profit margin of 10-13%, cumulative operating cash flow of ¥350 billion, and cumulative investment of ¥650 billion
  • Target fiscal yearFY2029-FY2031 (Phase 2)
    Target valueOperating profit margin of 13%+, cumulative operating cash flow of ¥700 billion+
  • Target fiscal yearFY2032-FY2034 (Phase 3)
    Target valueOperating profit margin of 15%+, cumulative operating cash flow of ¥1 trillion+, revenue growth rate of 5%+, and ROIC of 13%+
  • Target fiscal year2040
    Target valueSupport the safety and security of people around the world and prosperous living at its foundation
Financial targets
FY2025 actual ROIC was 9.5% (excluding gains on real estate sales), compared with a Phase 3 ROIC target of 13%+. The operating profit margin was 10.1% in FY2025, compared with a Phase 3 target of 15%+. Other financial targets: Not disclosed
Market Size / Share
  • Global passenger demandCAGR3.1%（2024-2050）
  • Defense spendingFrom 1% to 2% of GDP
  • Space market size¥4 trillion in 2020 to ¥8 trillion in the early 2030s
  • Global power generation capacityCAGR 3.0% (current-2040)
  • Domestic nuclear power generation2.6x (current-2040)
Capital expenditures
Cumulative investment of ¥650 billion (FY2026-FY2028)
Annual Dividend
In Phase 1, the basic policy is to maintain stable dividends and steadily increase the dividend per share. Specific amounts and details: Not disclosed
Contents of this document
ItemDetails
Document typeMedium-Term Management Plan Presentation
Fiscal Period CoveredFY2025 (fiscal year ending March 2026)
Net Sales¥1.64 trillion
Operating profit marginFY2025 actual: 10.1%; year-on-year: Not disclosed
Key KPIsIndicator name Revenue CAGR (FY2025-FY2035) / Value 5%+, Indicator name ROIC (FY2025 actual) / Value 9.5%, Indicator name Revenue growth rate (Phase 3) / Value 5%+, Indicator name Operating profit margin (Phase 3) / Value 15%+, Indicator name Cumulative operating cash flow over 3 years (Phase 3) / Value ¥1 trillion+
Assumptions Underlying the Business OutlookItem Growth in global passenger demand / Value CAGR 3.1%（2024-2050）, Item Increase in global power generation capacity / Value CAGR 3.0% (current-2040), Item Increase in domestic nuclear power generation / Value 2.6x (current-2040), Item Domestic fuel ammonia adoption target / Value 3 million tonnes in 2030, 30 million tonnes in 2050, Item Space market size target / Value ¥4 trillion in 2020 to ¥8 trillion in the early 2030s, Item Defense spending as a percentage of GDP / Value From 1% to 2%
Medium-term management plan targetsTarget fiscal year FY2026-FY2028 (Phase 1) / Target value Operating profit margin of 10-13%, cumulative operating cash flow of ¥350 billion, and cumulative investment of ¥650 billion, Target fiscal year FY2029-FY2031 (Phase 2) / Target value Operating profit margin of 13%+, cumulative operating cash flow of ¥700 billion+, Target fiscal year FY2032-FY2034 (Phase 3) / Target value Operating profit margin of 15%+, cumulative operating cash flow of ¥1 trillion+, revenue growth rate of 5%+, and ROIC of 13%+, Target fiscal year 2040 / Target value Support the safety and security of people around the world and prosperous living at its foundation
Financial targetsFY2025 actual ROIC was 9.5% (excluding gains on real estate sales), compared with a Phase 3 ROIC target of 13%+. The operating profit margin was 10.1% in FY2025, compared with a Phase 3 target of 15%+. Other financial targets: Not disclosed
Annual DividendIn Phase 1, the basic policy is to maintain stable dividends and steadily increase the dividend per share. Specific amounts and details: Not disclosed
Capital expendituresCumulative investment of ¥650 billion (FY2026-FY2028)
Market Size / ShareItem Global passenger demand / Value CAGR3.1%（2024-2050）, Item Defense spending / Value From 1% to 2% of GDP, Item Space market size / Value ¥4 trillion in 2020 to ¥8 trillion in the early 2030s, Item Global power generation capacity / Value CAGR 3.0% (current-2040), Item Domestic nuclear power generation / Value 2.6x (current-2040)
New initiativesExpand production capacity for commercial engines and nuclear reactors, Innovate production processes and reorganize production sites, including the construction of new production facilities, Expand engine maintenance and parts-repair capacity, Strengthen the supply chain by expanding production capacity for forgings and castings, Secure nuclear power engineers and pass on engine development technologies, Invest in digital transformation and develop digital talent and data management infrastructure, Strengthen alliances, including international joint development and value-chain development, Develop fuel ammonia supply systems, utilization technologies, and fuel synthesis technologies, Expand global supply of equipment for next-generation advanced reactors, Build new value chains centered on infrastructure maintenance and management
Items this document does not state (19)
Operating profitOrdinary incomeNet incomeGross Profit MarginSelling, general and administrative expensesResults for the three months of the current quarterFull-year earnings forecastProgress against full-year forecastSelf-assessment against the planSegment resultsBreakdown of Factors Affecting the ChangeUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookPayout ratioAcquisition of treasury sharesOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

To respond to changes in the business environment following the COVID-19 shock, steadily improve profitability and cash-generation capacity while investing without missing growth opportunities. IHI also cited expanding business opportunities in areas including air passenger demand, national security, space development, electricity demand, and social infrastructure maintenance.

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FY2025 (fiscal year ended March 2026) Results Briefing: “Medium- to Long-Term Direction” and “Business Overview (Roadmap to the Medium to Long Term)” | IHI Corporation (7013) timely disclosure | Komori