Summary

HORIBA, Ltd. is a leading company in analytical and measurement instruments, founded in 1949, and operates mainly across five segments: automotive engine, environment, medical, semiconductor, and scientific fields. In particular, its automotive exhaust gas measurement systems command an approximately 80% market share, and the company is known for its flexible product development tailored to customer needs. For the fiscal year ended December 2024, consolidated net sales reached ¥317.3 billion, an increase of ¥26.8 billion year on year. Although operating profit rose from ¥47.2 billion to ¥48.3 billion, the operating profit margin declined to 15.2%. Under the mid- to long-term management plan “MLMAP2028,” the company aims to achieve net sales of ¥450.0 billion and operating profit of ¥80.0 billion, pursuing growth in three key areas: Energy & Environment, Bio & Healthcare, and Advanced Materials & Semiconductors. In particular, addressing environmental issues and innovation in the medical device business are emphasized, and new services utilizing AI and IoT technologies are being developed. While HORIBA is strengthening its competitiveness through international expansion and acquisitions of companies in France and the United States, its performance remains susceptible to changes in the external environment and market competition. The company is especially required to respond to new environmental regulations associated with the advancement of electrification and autonomous driving technologies, while the medical device segment faces increasing pricing pressure. Although HORIBA maintains a sound financial position with a high equity ratio and a solid shareholder return policy, further strengthening of risk management and swift responses to customer needs are essential for future growth. Through technological innovation and product development aligned with market needs, HORIBA is expected to continue to be an attractive company for investors while pursuing sustainable growth.

1. Overview of Cumulative Performance for the Fiscal Year Ended December 2024

In the fiscal year ended December 2024, HORIBA achieved consolidated net sales of ¥317.3 billion, an increase of ¥26.8 billion year on year. This growth was mainly driven by expanding demand in the automotive, semiconductor, environmental, and medical fields. In particular, the automotive segment generated sales of ¥93.4 billion, reflecting increased demand related to electrified vehicles. Operating profit increased from ¥47.2 billion in the previous year to ¥48.3 billion; however, the operating profit margin declined slightly to 15.2%. This was attributable to rising costs and foreign exchange effects. Net income attributable to owners of the parent totaled ¥33.5 billion, representing a 16.7% year-on-year decrease. This decline was mainly due to the absence of extraordinary gains recorded in the previous year and impairment losses at Horiba FuelCon. While the company continues to maintain solid performance, improving the quality of earnings has become an important issue, and appropriate cost control and efficiency measures by management will be key challenges going forward. Net sales for 2024 are expected to reach ¥318.0 billion, with growth primarily driven by new vehicle development in the automotive segment and increased demand related to hybrid and electric vehicles. Cost of sales is projected at ¥451.7 billion, reflecting higher raw material prices and technological investments, while gross profit is expected to reach ¥40.0 billion. Operating profit is forecast at ¥47.5 billion, and the operating margin is expected to remain at a high level. To achieve growth while maintaining high profitability, HORIBA is required to enhance productivity and strengthen cost management, thereby securing long-term profit growth and reinforcing the foundation for shareholder returns.

2. Performance Outlook for the Fiscal Year Ended December 2024

The outlook for the fiscal year ended December 2024 anticipates consolidated net sales of ¥318.0 billion and operating profit of ¥47.5 billion, along with an increase in ordinary profit. In the automotive segment, demand associated with new vehicle development, hybrid vehicles, and electric vehicles is expected to support sales growth. In addition, demand for gas analyzers is increasing due to heightened environmental awareness, which is expected to contribute positively to performance. Cost of sales is projected at ¥451.7 billion, reflecting the impact of rising raw material prices and technological investments, with gross profit expected to reach ¥40.0 billion. Selling, general and administrative expenses are expected to total ¥46.2 billion, resulting in operating profit of ¥47.5 billion, and the operating profit margin is expected to remain at a high level. Improvements in non-operating income and reduced interest burdens are also expected to contribute to higher ordinary profit. Overall, to achieve growth while maintaining high profitability, further enhancements in productivity and cost management will be required. Operating cash flow for fiscal 2024 is projected at ¥166.5 billion, an increase from the previous year. Cash flow from investing activities is expected to reach ¥200.0 billion, with investments in fixed assets and research and development forming the foundation for future growth. Financial soundness is also expected to improve, with the equity ratio remaining at a high level, ensuring sufficient capacity for future investments. HORIBA aims to achieve stable performance by strengthening product development and service offerings tailored to customer needs while pursuing sustainable growth.

3. Mid- to Long-Term Growth Strategy

HORIBA has formulated the mid- to long-term management plan “MLMAP2028,” aiming for sustainable growth toward 2030. Under this plan, the company has set clear numerical targets of consolidated net sales of ¥450.0 billion, operating profit of ¥80.0 billion, and ROE of 12% or higher, emphasizing the sharing of a unified corporate vision and alignment of employee awareness. The slogan “MAXIMIZE VALUE” reflects the company’s commitment to providing maximum value to employees, customers, and society as a whole, while enhancing corporate value through products and services that contribute to the realization of a sustainable society. As key initiatives, HORIBA is focusing on growth in three areas: Energy & Environment, Bio & Healthcare, and Advanced Materials & Semiconductors. In the Energy & Environment field, the company aims to provide solutions that support carbon neutrality, targeting net sales of ¥158.0 billion and operating profit of ¥15.8 billion by 2030. In the Bio & Healthcare field, HORIBA is concentrating on solving clinical challenges through POCT and supporting the development of biopharmaceuticals, with targets of ¥57.0 billion in net sales and ¥5.7 billion in operating profit by 2028. In the Advanced Materials & Semiconductors field, the company aims to achieve net sales of ¥235.0 billion and operating profit of ¥58.5 billion by 2028, promoting technological innovation and optimization of manufacturing processes. Through these initiatives, HORIBA seeks to build a foundation for sustainable growth by responding swiftly to customer needs. Strengthening risk management and agile responsiveness to customer demands are also expected to enhance corporate value, and the company is required to remain prepared for new challenges in light of changes in the global market environment. Overall, HORIBA is committed to pursuing sustainable growth and aims to remain an attractive company for investors.

* In the fiscal year ended December 2024, consolidated net sales reached ¥317.3 billion, with growth driven mainly by expanding demand in the automotive segment. However, net income attributable to owners of the parent declined by 16.7% year on year, making improvement in earnings quality a key future challenge.

* For the fiscal year ended December 2024, consolidated net sales of ¥318.0 billion and operating profit of ¥47.5 billion are projected. Increased demand in the automotive segment and growing demand for gas analyzers driven by environmental considerations are expected to contribute to improved performance, while enhanced productivity and cost management are required.

* Based on the mid- to long-term management plan “MLMAP2028,” HORIBA places emphasis on achieving consolidated net sales of ¥450.0 billion, operating profit of ¥80.0 billion, and ROE of 12% or higher toward 2030, while pursuing growth in the three key areas of Energy & Environment, Bio & Healthcare, and Advanced Materials & Semiconductors.

Business Overview

1. Overview of the Business Model

HORIBA, Ltd., founded in 1949, is a leading company in analytical and measurement instruments. Its business model focuses on providing products and services that address a wide range of market needs. At the core of its business are analytical and measurement technologies, which underpin the company’s offerings, including automotive exhaust gas measurement systems, environmental monitoring instruments, medical diagnostic devices, and semiconductor-related equipment. In particular, automotive exhaust gas measurement systems are HORIBA’s flagship products, commanding an overwhelming market share of approximately 80%.

A key feature of this business model is the company’s ability to respond flexibly and rapidly to customer needs. New product development is driven by feedback obtained through close communication with customers, enabling HORIBA to achieve sustainable growth. In addition, the company customizes its products to reflect regional characteristics, thereby enhancing competitiveness in each market.

Furthermore, HORIBA is advancing initiatives to add higher value to its products and to provide new services through the use of AI and IoT technologies. Through these efforts, the company proposes solutions aligned with customer expectations and demonstrates its commitment to contributing to the realization of a sustainable society.

2. Major Business Segments

HORIBA primarily operates across five specialized segments: Automotive Engine, Environment & Process, Medical, Semiconductor, and Scientific. Each segment provides products tailored to distinct market needs and requirements, resulting in diversity in revenue composition and growth rates.

* **Automotive Engine Segment**

  Provides exhaust gas measurement systems and driveline test systems for automobile manufacturers. Demand is expanding due to the tightening of environmental regulations, with particular attention focused on fuel cell test systems and on-board emissions measurement systems.

* **Environment & Process Segment**

  Offers products such as flue gas analyzers and water quality measurement instruments. As environmental regulations become more stringent, demand is increasing for products that contribute to solving environmental issues, with technologies for water and air quality measurement playing a particularly important role.

* **Medical Segment**

  Supplies hematology analyzers, immunoassay systems, and other diagnostic equipment to meet the needs of clinical settings. The segment is currently providing solutions aimed at transforming the healthcare journey, with product development focused on medical needs in an aging society.

* **Semiconductor Segment**

  Manufactures mass flow controllers and liquid chemical concentration monitors, contributing to the advancement of semiconductor manufacturing processes. In this highly competitive market, continuous technological innovation is essential.

* **Scientific Segment**

  Produces particle measurement instruments and spectroscopic analyzers, supplying universities and research institutions. This segment supports advanced research, with broad applications expected in areas such as new material development and environmental analysis.

Across all segments, HORIBA pursues sustainable growth by focusing on product improvements and the introduction of new products based on customer needs.

3. Market Position and Competitive Advantages

HORIBA maintains overwhelming competitive advantages in specific markets, including an approximately 80% market share in automotive exhaust gas measurement systems. Its market positioning is built on advanced technology, a diverse product lineup, and the cultivation of long-term relationships with customers. In particular, a product development process that emphasizes customer feedback underpins the company’s strengths.

These competitive advantages are further reinforced by the high accuracy and user-friendliness of its products, as well as a robust customer support system. HORIBA also operates a global sales network, enabling agile and responsive customer service. The ability to customize products to meet customer needs and regional characteristics supports product development tailored to different markets, ensuring strong international competitiveness.

A strong commitment to technological innovation is another key strength of HORIBA. By leveraging new technologies such as AI and IoT in product development, the company continues to explore opportunities in new markets, thereby building a foundation for sustained growth and the maintenance of its competitive edge.

4. Market Background

Globally, the worsening of environmental issues and the strengthening of regulations have led to the advancement of exhaust gas regulations in many countries. This trend has had a significant impact on the automotive-related market and has enhanced HORIBA’s growth potential. In particular, growing interest in reducing CO₂ emissions has increased the need for technological innovation by HORIBA.

As environmental regulations become stricter, requirements related to waste reduction and water pollution are also intensifying, driving increased demand for environmental measurement instruments. This presents favorable opportunities for HORIBA to expand its market presence.

In addition, rising health awareness and the progression of an aging society are contributing to increased demand for medical care. HORIBA is responding to these trends through proprietary product development and service offerings.

In the semiconductor market, advances in AI and IoT technologies are expected to drive further growth, and HORIBA is required to provide products that meet emerging customer needs. Against this backdrop, while HORIBA has strong prospects for sustainable growth, it also faces the important challenge of responding sensitively to changes in the external environment and strengthening risk management.

5. Management Strategy and Future Outlook

HORIBA’s mid- to long-term management plan, “MLMAP2028,” sets targets of ¥450.0 billion in net sales and ¥80.0 billion in operating profit, outlining the next steps toward achieving these goals. A key strategy under this plan is to drive growth in three areas: Energy & Environment, Bio & Healthcare, and Advanced Materials & Semiconductors.

To build a sustainable energy environment, the company emphasizes projects aligned with carbon neutrality and is expected to focus on technological development related to renewable energy. Innovation in the medical device business is also a priority, particularly in strengthening market competitiveness through healthcare-related product development.

In the semiconductor market, maintaining competitiveness through technological innovation and the development of new products and services is a core component of the strategy. In addition, strengthening the global management foundation and expanding into emerging markets are important strategic initiatives. By enhancing the provision of products and services in each region, HORIBA aims to achieve sustainable growth.

Based on these management strategies and its market positioning, HORIBA is required to steadily build a foothold for future growth. In particular, strengthening risk management and responding swiftly to customer needs are expected to contribute to enhanced corporate value.

By preparing for new challenges in anticipation of changes in the international market environment and continuing to provide high-quality products to customers, HORIBA is well positioned to achieve ongoing success. With a clear vision for the future and a solid foundation, HORIBA is expected to remain a company of continued interest.

Business Overview

1. Overview of Recent Performance

For the fiscal year ended December 2024, HORIBA, Ltd. achieved consolidated net sales of ¥317.3 billion, representing a year-on-year increase of ¥26.8 billion. This growth was mainly driven by expanding demand in the automotive, semiconductor, environmental, and medical fields. In particular, the automotive segment generated sales of ¥93.4 billion, reflecting increased demand related to electrified vehicles. Operating profit increased from ¥47.2 billion in the previous year to ¥48.3 billion; however, the operating profit margin declined slightly to 15.2%, due to rising costs and foreign exchange effects. Net income attributable to owners of the parent amounted to ¥33.5 billion, down 16.7% year on year. This decline was largely attributable to a decrease in extraordinary gains recorded in the prior year and impairment losses at HORIBA FuelCon.

While the company continues to maintain solid performance, improving the quality of earnings has become an important challenge. To sustain growth, appropriate cost control and efficiency initiatives by management will be essential going forward. For investors, evaluating these management challenges alongside the company’s growth potential is key to assessing its future prospects.

2. Income Statement Analysis

HORIBA’s net sales for 2024 are projected to reach ¥318.0 billion, an increase of ¥26.8 billion from ¥290.5 billion in 2023. This growth is mainly attributable to new vehicle development in the automotive segment and increased demand associated with hybrid and electric vehicles. In particular, demand for gas analysis instruments has shown strong growth amid rising environmental awareness.

Cost of sales is expected to total ¥451.7 billion, reflecting an increase year on year due to higher raw material prices and increased technological investment. Gross profit is projected to reach ¥40.0 billion. Selling, general and administrative expenses are expected to amount to ¥46.2 billion, resulting in forecast operating profit of ¥47.5 billion. The operating profit margin is expected to remain at a relatively high level. Improvements in non-operating income and reduced interest burdens are also expected to contribute to higher ordinary profit.

As a result, to continue growing while maintaining high profitability, HORIBA is required to further enhance productivity and strengthen cost management. These efforts are necessary to secure long-term profit growth and reinforce the foundation for shareholder returns.

3. Balance Sheet Analysis

In the balance sheet for the fiscal year ended December 2024, total assets are projected to reach ¥449.0 billion. Current assets are expected to increase to ¥318.5 billion year on year, with a notable rise in cash and cash equivalents. This strengthening of liquidity is driven by improved operating cash flow and provides greater stability for future business operations.

Both trade receivables and inventories are expected to increase, reaching ¥71.5 billion and ¥97.5 billion, respectively. While this reflects expanding business activity, it also highlights the importance of initiatives aimed at improving working capital efficiency.

Fixed assets are projected to reach ¥130.0 billion, mainly as a result of new capital investments. Total liabilities are expected to decline to ¥165.0 billion, indicating improved financial soundness. In particular, interest-bearing debt is forecast to decrease to ¥61.3 billion, while the equity ratio is expected to remain at a high level. This financial position provides ample capacity for investment to support future growth and represents a key element underpinning the company’s growth strategy.

4. Cash Flow Statement Analysis

Analysis of HORIBA’s cash flow statement indicates that operating cash flow (CFO) for fiscal 2024 is projected at ¥166.5 billion, representing an increase from the previous year. Improved operating profit is expected to contribute positively to overall cash flow, supported by increased interest and dividend income.

Cash flow from investing activities (CFI) is projected to reach ¥200.0 billion, including investments in fixed assets and research and development. These investments form the foundation for the company’s future growth. Meanwhile, cash flow from financing activities is expected to show a negative ¥1.2 billion, mainly due to dividend payments. However, given ongoing share repurchases, the overall financial situation remains stable.

Free cash flow is forecast at ¥84.0 billion, indicating sufficient capacity to allocate funds effectively toward capital activities. This is expected to enable HORIBA to continue initiatives aimed at developing new markets and products, thereby contributing to future profit growth.

5. Analysis of Performance Indicators

HORIBA’s return on equity (ROE) for fiscal 2024 is projected at 13.9%, indicating a stable and solid level. This metric reflects the efficiency with which the company generates returns for shareholders and is an important indicator of competitiveness. Return on assets (ROA) is estimated at approximately 6.4%, demonstrating efficient asset utilization supported by a strong business model.

EBITDA is expected to increase year on year to ¥66.5 billion, reflecting robust demand, particularly in the automotive and semiconductor segments. While a slight decline in the operating profit margin is anticipated, this is mainly attributable to rising costs, highlighting the need for further countermeasures.

Overall, HORIBA demonstrates strong competitiveness. To sustain this position, further improvements in management efficiency through strategic investment and cost reduction measures are essential. Enhancing shareholder returns will also be important in supporting expectations for sustainable growth.

In summary, HORIBA’s performance trends remain generally solid and are expected to play an important role in its future growth plans. Maintaining stable performance will require the ability to respond swiftly to changes in the external environment and to continue advancing technological innovation. From an investor’s perspective, close attention to these factors will be critical when evaluating the company’s future performance.

Mid-Term Management Plan / Growth Strategy

1. Overview of the Mid-Term Management Plan

HORIBA, Ltd. formulated its mid- to long-term management plan, “MLMAP2028,” in February 2024, with an eye toward sustainable growth looking ahead to 2030. The plan sets specific targets of consolidated net sales of ¥450.0 billion, operating profit of ¥80.0 billion, and ROE of 12% or higher. These clear numerical targets play an important role in clarifying the company’s overall vision and aligning awareness across the entire organization.

The slogan “MAXIMIZE VALUE” expresses the company’s aim to deliver maximum value to “Horibarians” (employees), customers, and society as a whole, while actively creating value both inside and outside the organization. This stance—enhancing corporate value through product development and service offerings that emphasize social sustainability—also provides reassurance to investors.

The plan is built on five business divisions and four geographic regions, aiming to integrate customer needs with core technologies. Accordingly, localization strategies that leverage the characteristics of each region in product and service offerings are essential. Looking ahead, as awareness of the need for a sustainable society increases, the company must also respond flexibly to external factors such as pandemics and geopolitical instability.

2. Investment Plans and Key Initiatives

Based on “MLMAP2028,” HORIBA has formulated a large-scale investment plan focused primarily on capital expenditures and research and development to strengthen the foundation supporting corporate growth. Specifically, the company plans to introduce state-of-the-art facilities to improve production efficiency and reduce environmental impact. Particular emphasis is placed on development and production lines for semiconductor-related products, where optimization of facilities and processes is required to respond to rapidly changing customer needs.

In terms of R&D, development of new technologies leveraging AI and IoT is being accelerated. Especially in the Energy & Environment and Bio & Healthcare fields, investments are being made to develop next-generation technologies and solutions, while collaboration with external partners is being strengthened. Through these efforts, HORIBA is expected to enhance its competitiveness by incorporating a broader range of knowledge and expertise.

Strengthening the company’s global management infrastructure is also a key initiative. By optimizing each business function and providing products and services tailored to regional characteristics, HORIBA aims to establish a structure capable of responding swiftly to customer needs worldwide.

3. Key Initiatives: Energy & Environment Field

One of HORIBA’s key initiatives is the development of sustainable products in the Energy & Environment field. In this area, the company is deploying solutions aimed at achieving carbon neutrality and is targeting net sales of ¥158.0 billion and operating profit of ¥15.8 billion by 2028. In particular, research and development are being advanced in anticipation of the electrification of the automotive industry and progress in autonomous driving technologies, with an emphasis on proposals tailored to customer needs.

Because a strong commitment to sustainability is required in this field, deepening partnerships with customers is as important as technological innovation. Efforts to address environmental issues are increasingly valued in today’s markets, and a corporate stance focused on solving social challenges is expected to contribute to long-term growth.

Going forward, the company will also need to demonstrate its growth potential to investors through concrete examples. In particular, the development of new products in the Energy & Environment field is expected to play an important role in the company’s reinvestment strategy.

4. Key Initiatives: Bio & Healthcare Field

The Bio & Healthcare field occupies an important position in HORIBA’s growth strategy. With the mission of innovating the “healthcare journey,” the company aims to achieve net sales of ¥57.0 billion and operating profit of ¥5.7 billion by 2028. Planned initiatives in this field include addressing challenges in clinical settings through the use of POCT (Point of Care Testing) and supporting the development of biopharmaceuticals.

Growth in this area will be driven by the provision of new products and services that reflect changing customer needs. Demand for medical devices and diagnostic instruments continues to rise, and the development of fast, reliable measurement equipment will be a key source of competitiveness. Accordingly, investment in product line diversification and technological innovation is indispensable.

Furthermore, business development that leverages the company’s expertise in the Bio & Healthcare field is expected to support sustainable growth. By building strong relationships with customers, HORIBA can achieve long-term business expansion and position itself as a highly attractive investment opportunity.

5. Key Initiatives: Advanced Materials & Semiconductors Field

Advanced Materials and Semiconductors represent another key pillar of HORIBA’s growth strategy. In this field, the company aims to achieve net sales of ¥235.0 billion and operating profit of ¥58.5 billion by 2028. Technological innovation in the semiconductor market and optimization of manufacturing processes are critical, and HORIBA seeks to establish a competitive advantage by supporting customer operations.

Given expectations for rapid growth in the semiconductor market, companies must accelerate technology adoption and shorten development cycles. In response to growing demand in China and other Asian markets, HORIBA plans to strengthen competitiveness by expanding production lines and focusing on the development of new materials.

In addition, demand-driven product development and the digitalization of manufacturing processes are being promoted in the Advanced Materials & Semiconductors field. The ability to rapidly deploy products that meet customer needs will undoubtedly translate into a strong competitive advantage. For investors, this growth area is particularly noteworthy and represents a key asset underpinning the company’s future growth potential.

6. Approach to Risk Factors

To achieve mid-term growth, HORIBA must appropriately address a wide range of risk factors. Changes in the external environment—particularly unpredictable events such as geopolitical instability and pandemics—are recognized as significant risks to business operations. Accordingly, the company must strengthen its risk management framework and establish systems that enable swift responses.

In particular, supply chain stability and changes in international trade conditions may have a direct impact on performance. To mitigate these risks, expansion into diverse regional markets and alliances with local partners are important strategies. Through such measures, HORIBA is expected to maintain stable growth and secure a solid earnings base for the future.

For the company, risk management is not merely a defensive strategy but a prerequisite for growth. Properly identifying risks and strategically mitigating them is essential to maintaining competitiveness and building investor confidence.

7. Execution Framework

To smoothly execute the mid-term management plan “MLMAP2028,” a company-wide execution framework is essential. This requires a balance between top-down decision-making and a flat organizational culture that respects the autonomy of each division. In particular, systems must be in place to continuously monitor progress toward targets and to flexibly revise strategies based on feedback.

In addition, talent development and respect for diversity are considered critical elements of the execution framework. By creating an environment in which each employee can fully leverage their expertise toward short-term and long-term goals, HORIBA can enhance innovation and productivity. This approach is a key driver of sustainable growth and also increases the company’s attractiveness to investors.

Overall, HORIBA’s mid-term management plan “MLMAP2028” presents a long-term vision aimed at sustainable growth while remaining flexible in response to changes in the external environment. Through this plan, the company is expected to continue to be an attractive investment opportunity.

News & Topics

1. Formulation of the Mid- to Long-Term Management Plan “MLMAP2028”

On February 14, 2024, HORIBA, Ltd. announced the formulation of its mid- to long-term management plan, “MLMAP2028.” The plan sets targets of achieving net sales of ¥450.0 billion, operating profit of ¥80.0 billion, and ROE of 12% or higher by 2028, with the aim of accelerating overall corporate growth.

The background to this plan lies in changes in customer needs and the effective utilization of core technologies. In particular, responding to growing interest in environmental issues and health is regarded as a key driver of corporate growth. According to experts, the plan also serves as an opportunity to reaffirm the company’s sense of social responsibility, demonstrating its commitment to customers, employees, and local communities.

From an investor’s perspective, the establishment of clear numerical targets enhances corporate transparency and increases expectations for HORIBA’s future growth. Moreover, the company’s sincere approach to addressing social challenges and pursuing sustainable growth is likely to earn greater trust from investors.

2. Strategic Initiatives in the Energy & Environment Field

HORIBA has launched a series of strategic initiatives in the Energy & Environment field with the goal of achieving carbon neutrality. In particular, the company has announced plans to reduce CO₂ emissions by 42% by 2033 and to achieve carbon neutrality by 2050. In light of increasingly stringent environmental regulations and decarbonization policies, flexible and proactive corporate initiatives are seen as essential.

These efforts are intended to drive technological innovation toward the realization of a sustainable society. Experts position energy- and environment-related businesses as key areas supporting future growth, and note that taking early action in this market is essential for securing a competitive advantage.

From an investor standpoint, the development of environmentally friendly technologies and products enhances market competitiveness. Amid growing demand for investments in environmentally conscious companies, expectations for HORIBA are rising. Integrating sustainability into business strategy is also considered a critical factor for long-term growth.

3. Growth Strategy in the Bio & Healthcare Field

HORIBA’s initiatives in the Bio & Healthcare field are being advanced in response to rising health awareness and emerging medical needs. The company is strengthening its ability to overcome intensifying competition by focusing on new product development and accurately identifying market needs. In this field, rapid technological innovation related to medical devices is essential, and swift responses to market demands are required.

According to experts, expansion of the Bio & Healthcare field is indispensable for addressing the challenges of an aging society and emerging infectious diseases. HORIBA is expected to leverage its technological strengths to expand its presence in this market. In addition, the company has indicated a direction toward providing more effective solutions through the use of AI and IoT technologies.

From an investor perspective, growth in this segment is expected to have a positive impact on overall corporate performance and also serves as a hedge through business diversification. For example, the introduction of products that meet industry needs—such as testing equipment related to COVID-19 and pre-shipment inspection systems for new pharmaceuticals—has the potential to drive corporate growth.

4. Commitment to Technological Innovation and Strengthening Competitiveness

HORIBA has demonstrated a strong commitment to technological innovation and plans to increase investment in its own research and development. In particular, the company aims to enhance competitiveness through the development of new products in the semiconductor field and technological improvements in automotive exhaust gas measurement systems. These initiatives are expected to be key to adapting to future changes in market needs.

The approach to technological innovation also contributes to greater efficiency in manufacturing processes and improved productivity. Expert opinions suggest that the introduction of advanced technologies further strengthens corporate competitiveness, and that establishing a structure capable of rapid market response is essential for future success.

For investors, progress in technological innovation provides a basis for anticipating future growth, particularly through entry into new markets and expanded presence in existing ones. In this regard, HORIBA’s initiatives warrant close attention.

5. International Expansion and Strengthening Competitiveness

HORIBA is advancing its international expansion and strengthening its business foundation through strategic partnerships and acquisitions. For example, the acquisition of France-based Tethys Instruments SAS aims to enhance expertise in medical devices and analytical technologies, thereby increasing competitiveness. The acquisition of Process Instruments in the United States is also intended to expand the company’s presence in the industrial measurement equipment market and broaden its product lineup.

According to experts, strategic international expansion is essential for overcoming competition in existing markets and supporting sustainable growth. Strategies that take global competition into account are positioned as key elements in promoting corporate growth.

From an investor’s viewpoint, international business expansion not only increases growth opportunities but also serves as a means of risk diversification. By establishing a presence across diverse markets, HORIBA is expected to achieve increased future earnings.

End of Chapter

This chapter reviewed several news items and topics highlighting the latest developments at HORIBA, Ltd. By organizing information on the formulation of the mid- to long-term management plan “MLMAP2028,” initiatives in the Energy & Environment and Bio & Healthcare fields, the promotion of technological innovation, and international expansion, the chapter provided investors with a comprehensive overview. These developments suggest strong growth potential for the company and have raised expectations for HORIBA’s further advancement. In the next chapter, we will analyze how these developments are affecting actual business performance and corporate value, and consider the company’s future outlook.

Company Overview

1. Basic Information (Company Profile, Location, etc.)

HORIBA, Ltd. is a Japanese manufacturer of measurement and analytical instruments founded in 1949. The company offers a broad range of products across environmental analysis, automotive, medical, semiconductor, and scientific fields. In particular, HORIBA boasts an approximately 80% global market share in automotive engine exhaust gas measurement systems, and its high accuracy and reliability have earned widespread acceptance among automobile manufacturers worldwide. HORIBA is headquartered in Minami-ku, Kyoto City, Kyoto Prefecture. As of today, the company has 46 consolidated subsidiaries, one non-consolidated subsidiary, and one equity-method affiliate, reflecting its ongoing global expansion.

Since its establishment, HORIBA has emphasized a strong commitment to solving environmental issues with the aim of realizing a sustainable society. The company places particular focus on research and development leveraging AI and IoT technologies, enabling it to respond swiftly to emerging market needs. Masayuki Adachi serves as Representative Director and President, playing a key role in driving the company’s overall growth.

HORIBA’s corporate philosophy, encapsulated in its motto “Joy and Fun,” is closely tied to its corporate culture and the way employees work. The company aims to foster an environment in which employees can grow while enjoying their work. This distinctive culture represents one of HORIBA’s core strengths in maintaining long-term leadership in its fields.

2. History and Key Milestones

HORIBA’s history began with its founding in 1949. Initially established as Japan Ichi Products Co., Ltd., the company changed its name to HORIBA, Ltd. in 1970. In 1971, it was listed on the Osaka Securities Exchange and subsequently pursued steady growth and gradual international expansion. Specifically, HORIBA established subsidiaries in Germany in 1972 and in the United States in 1973, followed by expansion into France, China, and other regions.

A major milestone came in 2003 with the integration of HORIBA Jobin Yvon, significantly broadening the company’s product portfolio. In 2011, HORIBA established Beijing HORIBA Metron Co., Ltd., strengthening its presence in the Chinese market. In recent years, the company acquired medical-related businesses in 2021 to reinforce its healthcare segment, transitioned to the Prime Market of the Tokyo Stock Exchange in 2022, and acquired France-based Tethys Instruments SAS in 2023 to further enhance its technological capabilities.

These historical developments demonstrate HORIBA’s consistent response to technological innovation and market demands. Under its mid- to long-term management plan “MLMAP2028,” the company has set targets of ¥450 billion in net sales and ¥80 billion in operating profit by fiscal year 2028.

3. Organizational Structure and Key Management

HORIBA adopts a flat organizational structure centered around President Masayuki Adachi. The management team leverages individual areas of expertise to drive technological innovation and respond swiftly to market needs. Hiroshi Miyaji of the Corporate Planning Office plays a leadership role in formulating company-wide strategies and ensuring transparency in management.

The company brings together members with diverse backgrounds, and their collective expertise contributes significantly to business execution. Management also places strong emphasis on diversity, including the appointment of female executives, fostering value creation from a wide range of perspectives and encouraging the generation of new ideas.

HORIBA places particular importance on research and development, with each employee striving to pursue “genuine value.” This organizational structure serves as a key driver of corporate growth and continues to attract attention as the company evolves.

4. Geographic Expansion and Business Structure

HORIBA operates across Asia, Europe, and the Americas, implementing business strategies tailored to each regional market. By accurately identifying local market needs and adopting a matrix organizational structure, the company achieves a high degree of flexibility. In Asia, in particular, HORIBA is expanding its product offerings to meet the needs of the rapidly growing automotive industry, where the ability to identify new market opportunities is critical.

In contrast, European and U.S. markets demand strict compliance with environmental regulations and high levels of technological innovation, requiring region-specific strategies. HORIBA’s ability to accurately address regional characteristics through flexible management strategies contributes to improved profitability and represents one of the company’s key strengths.

5. Research and Development Framework and Innovation

HORIBA places strong emphasis on technological innovation, conducting research and development based on market trends and societal needs. The company is particularly focused on developing new products that leverage AI and IoT technologies, while also strengthening initiatives aimed at realizing a sustainable society. Through collaboration with research institutions and universities, HORIBA pursues innovative technologies and builds a foundation for sustainable corporate growth.

Moreover, HORIBA’s R&D process is characterized by a rapid cycle from prototype development to commercialization, enhancing its ability to respond to changes in the market. These efforts in technological innovation serve to strengthen competitiveness and maintain the company’s position in the marketplace.

6. ESG and Sustainability Initiatives

HORIBA is deeply committed to corporate sustainability and social responsibility, with a particularly strong focus on environmental issues. As ESG (Environmental, Social, and Governance) investing gains attention, the company is actively engaged in research and development related to carbon neutrality and energy efficiency technologies, aiming to contribute to the realization of a sustainable society. These initiatives seek not only to enhance corporate value but also to deliver meaningful contributions to society.

HORIBA’s approach is evident in its problem-solving-oriented product development, offering solutions that reduce environmental impact. At the same time, the company fosters an environment that promotes innovation by enhancing internal diversity, which is believed to contribute to long-term growth. Such ESG and sustainability initiatives are also important factors for investors and serve to enhance HORIBA’s overall corporate evaluation.

In summary, this chapter has outlined the key points of HORIBA, Ltd.’s company profile. The company’s historical credibility, flexible business development, technological innovation, and commitment to sustainability collectively provide compelling information for investors. Going forward, close attention to HORIBA’s growth potential and competitive strength in the market will remain essential.

Shareholder Returns

1. Overview and Significance of the Dividend Policy

HORIBA, Ltd. adopts a dividend policy that looks toward mid- to long-term growth when distributing profits to shareholders. Specifically, the company sets a target dividend payout ratio of approximately 30% of consolidated net income and, based on this guideline, flexibly implements special dividends and share repurchases. Through this approach, HORIBA aims to deliver shareholder returns grounded in sound management and to foster investor confidence.

Because this dividend policy is designed to fluctuate in line with the company’s financial condition and business performance, it demonstrates that shareholder returns are directly linked to sustainable corporate activities. From an investor’s perspective, it is important to monitor how these measures align with the company’s growth strategy. Transparency in dividend policy also plays a key role in facilitating smooth communication with shareholders and enhancing corporate credibility.

As a concrete example of dividend performance, the company planned a dividend of ¥290 per share for fiscal year 2023, which included a special dividend. This reflects the company’s strong commitment to returning value to shareholders. For investors, dividend stability and the company’s growth outlook are important criteria in making equity investment decisions.

2. Trends in Dividend Performance

HORIBA’s dividend track record over the past several years has been supported by steady growth in business performance. The dividend per share increased from ¥90 in fiscal year ended December 2020 to ¥150 in 2021, ¥245 in 2022, and reached ¥290 in 2023. This upward trend is closely linked to the company’s solid ordinary income performance.

For fiscal year 2024, a dividend of ¥270 is planned, consisting of an interim dividend of ¥80 and a year-end dividend of ¥190. This dividend trajectory demonstrates the company’s commitment to providing stable shareholder returns while signaling long-term growth. From an investor’s standpoint, the consecutive dividend increases over recent years highlight HORIBA’s earnings power and strong willingness to return value to shareholders.

The dividend payout ratio has also remained at a stable level, reaching approximately 53.93% in fiscal year 2023. This indicates that the dividend policy is being implemented on the basis of a sound financial foundation. Investors are likely to view this dividend stability as a positive factor when considering HORIBA as an investment candidate.

3. Implementation and Impact of Share Repurchase Policy

HORIBA’s share repurchase policy is positioned as an integral component of its shareholder return strategy. In fiscal year 2023, the company planned to repurchase approximately 334,500 shares, a move that has attracted attention as a measure to enhance corporate value. Share buybacks represent a direct form of shareholder return and also contribute to improving earnings per share (EPS).

By reducing the number of outstanding shares, share repurchases increase the ownership stake of remaining shareholders, thereby strengthening shareholder returns. In addition, buybacks can help stabilize share prices and enhance investor confidence in the market. HORIBA’s share repurchase initiatives are supported by a strong financial base and are viewed by investors as measures that underpin the company’s performance.

However, share repurchases also involve certain risks. Changes in market conditions or business outlooks may affect the company’s growth prospects, making careful judgment essential. The ability to implement share buybacks flexibly in response to circumstances will be a critical element of HORIBA’s future shareholder return strategy.

4. Total Payout Ratio and Financial Soundness

In executing shareholder return measures, HORIBA pays close attention to maintaining financial soundness. The company’s equity ratio exceeds 59.41%, enabling shareholder returns to be delivered while keeping debt levels under control. This financial strength provides the foundation for sustainably distributing value to shareholders.

The total payout ratio, which combines dividends and share repurchases, represents the total value returned to shareholders. HORIBA targets dividends equivalent to approximately 30% of consolidated net income, thereby aiming to strengthen returns to investors. Through this approach, the company seeks to meet shareholder expectations while linking returns to future growth.

Strengthening the financial base is a key element in implementing shareholder return policies, and HORIBA enhances shareholder value through the formulation of appropriate capital policies. Investors should carefully consider how such prudent financial strategies may influence the company’s future performance.

5. Mid- to Long-Term Shareholder Return Strategy

Shareholder returns must be aligned with a company’s long-term growth strategy. HORIBA sets its dividend and share repurchase policies by considering not only short-term profits but also mid- to long-term investment opportunities. This stance is essential to a corporate strategy aimed at sustainable growth.

As economic conditions and market environments continue to evolve, attention will focus on how HORIBA maintains its shareholder return policies. The company must respond flexibly to earnings conditions and investment opportunities while continuing strategies that anticipate future growth. Investors, in turn, need to observe how the company’s growth strategy is reflected in shareholder returns and are likely to value HORIBA as a trustworthy investment.

6. Importance of Communication with Investors

In implementing its shareholder return policies, HORIBA places strong emphasis on communication with investors. Ensuring transparency regarding dividend policies and share repurchases is essential for building trust with shareholders. Enhanced information sharing between the company and its shareholders helps align mutual expectations.

Receiving appropriate feedback on shareholder return policies and financial strategies provides an important information base that supports corporate growth. Investors are encouraged to actively gather information to deepen their understanding of the company’s performance and strategy. Through ongoing communication, HORIBA aims to meet investor expectations and enhance shareholder value.

Overall, HORIBA’s shareholder return policy is prudent and is supported by stable cash flows and consistent business growth, strengthening the relationship between the company and its shareholders. Investors should continue to pay close attention to the company’s future outlook and shareholder return trends, carefully evaluating their effectiveness and sustainability.

Shareholder Returns

1. Factors Affecting Business Performance

HORIBA, Ltd. is a company specializing in the manufacturing of analytical and measurement instruments and offers products across diverse fields. However, its business performance is highly susceptible to external factors. In the automotive sector, the rapid advancement of electrification and autonomous driving technologies, along with new environmental regulations, is reducing demand for instruments targeting conventional internal combustion engines. The development of new products that can respond to these changes will be essential, but failure to do so could result in a loss of market share.

In the medical device sector, competition is intense, and pricing pressure is increasing. Delays in developing new products may result in insufficient differentiation, threatening the company’s competitive advantage. Additionally, economic fluctuations in the semiconductor market can significantly impact business performance. During economic downturns, reduced customer investment can lead to lower orders, directly affecting HORIBA’s profitability.

From a market-dependence perspective, there is a risk of overreliance on specific regions or industries, making it essential to secure a diversified customer base. Developing emerging markets is expected to contribute to business stability. Overall, HORIBA is sensitive to market fluctuations, and a structure that can respond quickly to customer needs, along with a flexible management strategy, is required.

2. Industry-Specific Risks

The measurement instrument industry, to which HORIBA belongs, carries its own inherent risks. First, technological innovation is rapid, and new measurement technologies continually emerge. Companies that cannot respond quickly risk losing their market competitiveness. Sustained investment in technology development is essential, and delays can make maintaining competitiveness difficult.

Second, stricter environmental regulations are an industry-specific challenge. Regulations vary by country and region, and compliance often requires additional investment. The associated increase in costs can put pressure on corporate profits. Price competition is inevitable in a highly competitive market, and its effects cannot be ignored.

High customer concentration, particularly dependence on a few major clients, is also a risk factor. Changes in a client’s situation can directly affect business performance. Additionally, digitalization and market saturation due to oversupply create a need to explore new market opportunities. Vulnerabilities in the supply chain are another critical risk; international trade tensions or disruptions in the supply network can impact production and delivery.

3. Financial and Managerial Risks

HORIBA’s financial and managerial risks are closely related to the soundness of its management. As of December 2023, the company’s debt ratio was approximately 37%, but diversifying funding sources is necessary to support new investments and reinvestments in growth areas. Effective cash management to maintain short-term liquidity is indispensable.

Rising interest rates or market credit concerns could make financing difficult. Proper hedging strategies and maintaining a balanced approach to capital procurement are key to preserving financial soundness.

Strengthening corporate governance is also a critical risk factor. Compliance with domestic and international laws and ethical standards directly impacts corporate credibility. Strengthening internal control systems and enhancing transparency are necessary to avoid reputational or legal risks.

Human resource management also requires attention to ensure an appropriate working environment. Securing and nurturing talent directly affects competitiveness, and cultivating a culture that respects diversity is important. Continuous risk assessment and countermeasures are essential to support the company’s long-term growth.

4. Risks Related to Overseas Operations

Given its business model, HORIBA operates globally and is therefore susceptible to international political and economic instability. Geopolitical risks and changes in trade policies can directly affect supply chains and market demand. As competition intensifies in international markets, logistics costs and delivery schedules must also be carefully considered.

Currency risk is another factor that cannot be ignored. In international transactions, fluctuations in exchange rates can directly impact profits, particularly with respect to the U.S. dollar and the euro, making currency hedging necessary.

Strategic information gathering and improved analytical capabilities are essential to maintaining a competitive edge in global markets. Establishing a system that allows flexible responses to external changes is critical to the success of overseas operations.

5. ESG-Related Risks

In recent years, companies are expected to focus on environmental, social, and governance (ESG) management. HORIBA must pursue sustainable growth while fulfilling its social responsibilities. However, these initiatives incur costs and can place short-term pressure on the company’s finances.

Failure to meet customer or investor expectations may also pose a risk of brand value erosion. The company must be sensitive to changes in environmental regulations and consumer awareness, and allocate management resources appropriately to meet social demands such as the SDGs.

High transparency in communication is essential. Disclosure of risk information and proper reporting of performance are crucial to building trust, which in turn supports corporate value enhancement and long-term growth.

6. Natural Disaster and Geopolitical Risks

Natural disasters and geopolitical risks are also significant considerations. Globally, various natural disasters may impact business operations. Earthquakes, typhoons, and other disasters can directly disrupt supply chains, significantly affecting production and delivery schedules.

Geopolitical risks, including political instability or rising tensions, can also affect the international trade environment. Reviewing supply chain vulnerabilities and diversifying suppliers and production sites are necessary from a risk management perspective. This increases resilience to unexpected events and enables sustainable business operations.

For HORIBA, comprehensive management of these risks and the implementation of appropriate countermeasures will contribute to enhancing corporate value and supporting sustainable growth. Correctly understanding and managing business risks is therefore essential.

HORIBA’s business risks are diverse, and initiatives aimed at sustainable growth are key. Investors need to accurately assess these risks and prepare flexible countermeasures and strategies. Decisions should be made from a holistic perspective, considering economic conditions, industry trends, and corporate competitiveness, to enable sustainable investment.