Bridge Report:（6914）OPTEX GROUP The first quarter of Fiscal Year Ending December 2025

Tatsuya Nakajima President/CEO	OPTEX GROUP CO., LTD. (6914)

Company Information 

Stock Information 

*The share price is the closing price on May 9. The number of shares outstanding, DPS, and EPS were taken from the brief report on financial results in the first quarter of the fiscal year ending December 2025. ROE and BPS were the results in the previous fiscal year.

Earnings Trend 

Net profit is net profit attributed to parent shareholders. The same applies hereafter. 

This Bridge Report presents OPTEX GROUP’s earnings results for the first quarter of the fiscal year ending December 2025 and so on. 

Table of Contents 

Key Points
1. Company Overview
2. 1Q of Fiscal Year Ending December 2025 Earnings Results
3. Fiscal Year Ending December 2025 Earnings Forecasts
4. Conclusion
<Reference 1: Three-year (2025-2027) Management Plan>
<Reference 2: Regarding Corporate Governance>

Key Points

• In the first quarter of the fiscal year ending December 2025, sales dropped 2.5% year on year to 15 billion yen. The performance of the SS business was healthy. In the IA business, the sales of FA related products, which are core products, and inspection lighting (former MVL) increased, but the sales of automation equipment (former MECT) decreased. The change in exchange rates increased sales by 100 million yen mainly in the SS business. Operating profit rose 6.7% year on year to 1.8 billion yen. Despite the drop in sales, gross profit grew 5.7% year on year and gross profit margin improved 4.2 points, as the ratio of sales of the SS business, whose profit margin is high, increased and the ratios of sales of the IA business and automated equipment-related products, whose profit margins are low, decreased. They offset the augmentation of SGA. Ordinary profit declined 17.7% year on year to 1.6 billion yen, as an exchange loss of 200 million yen was posted as a non-operating expense. Net profit increased 36.6% year on year to 1.7 billion yen. They posted a gain on sale of investment securities of 900 million yen as an extraordinary gain.

   

• The earnings forecast was left unchanged. In the fiscal year ending December 2025, sales are expected to grow 4.3% year on year to 66 billion yen and operating profit is projected to rise 3.9% year on year to 7.4 billion yen. The U.S. tariff policy may affect the performance of security and automatic door sensors in the SS business and lightings for image inspection in the IA business, but the sales in the U.S. in the fiscal year ending December 2025 are expected to account for over 10% of consolidated sales. They are striving to reduce the impact on business performance by continuing activities for rationalizing selling prices and optimizing the supply chain. They will keep an eye on the progress of additional tariffs and strive to reduce risks. In the medium/long term, while the Sensing Business has grown stably, the needs for automation and labor saving have increased in the medium/long term, and inspection processes have become complex, they aim to enhance the sale of profitable products, such as FA sensors and inspection lighting in the Industrial Automation Business. The company plans to pay a dividend of 45.00 yen/share, up 5.00 yen/share from the previous fiscal year. The expected payout ratio is 27.2%.

   

• Due to the end of inventory adjustment among major clients in Europe and the bottoming-out of demand for capital investment in China, the sales of the FA business declined quarter on quarter, but rose 9% year on year, showing a sign of recovery after bottoming out in the first quarter of the fiscal year ended December 2024. On the other hand, in the SS business, the quarterly sales of both security and automatic door sensor products hit a record high. As there is an increase of orders due to the rush demand before the price hike, we would like to pay attention to the trend of their business, including the impact of the U.S. tariff policy.

   

   

   

   

１.Company Overview

OPTEX GROUP Co., Ltd. is a holding company centered around OPTEX Co., Ltd. that manufactures and sells outdoor sensors (top share of 40% in the global market), automatic door sensors (30% share of the global market and 50% share of the domestic market) and environment-related products. OPTEX GROUP holds subsidiaries including OPTEX FA CO., LTD., which deals with FA related sensing business; CCS Inc., which holds the global top share in the business of inspection lighting; Sanritz Automation Co., Ltd., which has a wealth of results in the development, manufacturing and sales of industrial computers, MITSUTEC CO., LTD., which plans, develops, manufactures, and sells image processing, inspection, and measuring equipment and automated machinery and equipment, contributing to the improvement in quality of manufacturing with its advanced technologies, THREE ACE CO., LTD., which specializes in the development of various systems, applications, and digital content; OPTEX MFG Co., Ltd., which is responsible for manufacturing Group products, FIBER SENSYS INC. (US), which deals with optical fiber intrusion detection systems, and RAYTEC LIMITED (UK), which has attained the largest global share (about 50 %) for supplemental lights for CCTV. As of December 31, 2024, the company operates in 95 locations worldwide, including 28 overseas companies. 

1-1 Corporate History 

In May 1979, Mr. Toru Kobayashi, who was developing security sensors in a manufacturer of anti-crime devices in Kyoto, established OPTEX Co., Ltd. with the spirit of the endeavor to “make their products recognized in the world as much as possible.”
In November 1979, the company developed “the world’s first far-infrared sensor for automatic doors.” Around that time, pressure-sensitive rubber mats were used for automatic doors, and an automatic door sensor that utilizes far-infrared light was epoch-making. OPTEX was unrivaled in maintenance and installation services and seized the largest share in the market of automatic door sensors in the third year after inauguration (currently occupying about 50% of the Japanese market).
Since then, the company has developed a wide array of products for security, automatic doors, and industrial equipment with its unique ideas and technologies that embodies them.

In the 1980s, the company entered overseas markets. While it had been considered impossible to set a far-infrared sensor outdoors because external factors, such as light, would cause errors, the company developed the outdoor far-infrared sensor “VX-40” with its original technology, and that sensor was highly evaluated mainly in the European market, and occupied the largest share in the global market of outdoor intrusion detection sensors. 
Through business expansion, the company became an over-the-counter company (equivalent to being listed in the JASDAQ market) in 1991. Then, it was listed in the second section of Tokyo Stock Exchange (TSE) in 2001, and in the first section of TSE in 2003. In April 2022, the company was listed on the Prime Market following the restructuring of the Tokyo Stock Exchange.
 
Recently, the company has been strengthening solutions based on image processing technologies and high-end security systems. In 2008, it reorganized ZENIC INC., which undertakes the development of ICs and LSI for image processing, etc., into a subsidiary. In 2010, it acquired FIBER SENSYS INC. (US), which has plenty of experience handling high-end security systems (optical fiber intrusion detection systems) for important facilities in Europe and the U.S., as a subsidiary. In 2012, it acquired RAYTEC LIMITED (UK), which handles supplemental lighting for cameras of high-end security systems for important large-scale facilities, as a subsidiary.
In May 2016, it acquired CCS Inc., which has the world’s largest share in the market of inspection lighting, as a subsidiary, and transformed it into a 100% subsidiary in July 2018.
With the aim of adopting next-generation business administration and pursuing group synergy, it shifted to the holding company system on January 1, 2017.

In December 2020, the company acquired Sanritz Automation Co., Ltd., which has an abundance of experience in developing, manufacturing, and selling industrial computer systems, as a subsidiary. Furthermore, the company made MITSUTEC CO., LTD. into a subsidiary in November 2021. MITSUTEC CO., LTD. is a company that plans, develops, manufactures, and sells image processing inspection / measuring equipment and automated machinery and equipment. According to the Three-year (2025-2027) Management Plan, they plan to accelerate the shift to solution proposing business and strive to improve profitability.

1-2 Business Description 

The Company’s business is composed of its main SS business (security sensor segment and automatic door sensor segment), sensors for industrial machinery, inspection lighting, the “IA Business” which works towards the automation, labor saving, and optimization of the production line using industrial computers, “EMS business,” which was included in the SS business up until the previous term and provides contract manufacturing services for electronic equipment in China, and “Other business”, which operates programs for outdoor activities and experiencing and learning of the environment and develops apps and digital content.

＊SS：Sensing Solution、IA：Industrial Automation、FA：Factory Automation、EMS：Electronics Manufacturing Service。

(From the company release)

1-3 Advantages: Diversified Technologies/Expertise on Sensing and Unique Sensing Algorithm 

To produce stable and reliable sensors, it is essential to build on a number of elemental technologies and expertise, as well as “algorithms” to control physical changes. The company takes advantage of its technologies/expertise suitable for intended applications and its unique sensing algorithm to secure the largest share in the global market. 

1-4 ROE analysis

The ROE for the fiscal year ended December 2024 was 12.2%, indicating that the company recorded a double-digit ROE for the fourth consecutive year. The company will promote cost efficiencies and "shift to solution proposing business" with the aim of reliably improving its ROE and maintaining it to at least 10%.

1-5 Efforts on Sustainability

The company believes that building a relationship of trust with a wide range of stakeholders is essential for improving corporate value and has posted “sustainability information”（https://www.optexgroup.co.jp/esg/）on its website to further enhance sustainability information disclosure. In addition, Published the ESG Bridge Report through Investment Bridge Inc. 
The company identify the materiality for sustainable growth for the first time and mention the challenges and initiatives for the future in the report. 
Posted on October 15, 2024. 
https://www.bridge-salon.jp/report_bridge/archives/2024/10/241015_6914.html

1-6 Regarding the “achievement of business administration conscious of capital cost and share price”

In February 2025, they announced the results of the analysis of the current status and their initiatives to be taken as mentioned below in order to achieve “business administration conscious of capital cost and share price” as requested by Tokyo Stock Exchange.

(1) Analysis of the current status
① Capital cost
They estimated the cost of shareholders’ equity in the CAPM to be 8-9%.

② PBR
PBR has been stably over 1.0.

③ ROE
During the COVID-19 pandemic, ROE dropped to the level of 4%, but it has been on a recovery track, exceeding 10% and cost of shareholders’ equity in the past 4 fiscal years.

④ PER
While the weighted-average PER in the manufacturing companies listed on the Prime Market of Tokyo Stock Exchange is 18 as of the end of January 2025, the PER of OPTEX GROUP is around 11, falling below the average.

(From the company release)

(2) Measures for improving corporate value continuously
In order to increase PBR (= ROE × PER) and improve corporate value in the medium/long term, they plan to implement the following measures.

(From the company release)

◎ Promotion of business administration based on a well-balanced business portfolio
In particular, the key initiative is “the promotion of business administration based on a well-balanced business portfolio.”
They will analyze the portfolio of the current seven business segments from the viewpoints of growth potential and operating profit margin, and enhance the management based on a well-balanced business portfolio with the aim of optimizing the business operations of the entire group.

In the segments of “security sensors in the Sensing Solution Business,” “inspection lighting (former MVL),” “factory automation (FA),” and “social & environmental products in the Sensing Solution Business,” they will conduct further investment in business domains that drive growth.
In the segment of “automatic door sensors in the Sensing Solution Business,” which occupy a 50% share in the Japanese market, they will further strengthen profitability in order to generate stable cash flow.
In the segments of “industrial PC (former IPC)” and “automation equipment (former MECT),” that are expected to grow at a high rate, they will enrich the lineup of products with high added value in order to improve profitability.

(From the company release)

◎ Capital allocation
In the three-year plan for the period from the fiscal year ending December 2025 to the fiscal year ending December 2027, they aim to achieve “a consolidated operating profit of 10 billion yen in the fiscal year ending December 2027.” Through the capital allocation described below, they will conduct investment and return of profit to shareholders.

(From the company release)

For growth, they will invest 28-30 billion yen in the above-mentioned promotion of business administration based on a well-balanced business portfolio, M&A, and alliance.
Regarding shareholder return, they set the lower limit of DOE at 3% while continuously aiming to achieve a payout ratio of 30% as the dividend policy.
They also plan to acquire treasury shares swiftly.
They plan to procure funds directly or indirectly in a variety of ways flexibly when necessary.

2. 1Q of Fiscal Year Ending December 2025 Earnings Results

2-1 Business Results

　*Unit: million yen. The net profit is the profit attributable to owners of the parent company. The same shall apply hereinafter.

Sales dropped, operating profit rose, and ordinary profit declined
Sales dropped 2.5% year on year to 15 billion yen. The performance of the SS business was healthy. In the IA business, the sales of FA related products, which are core products, and inspection lighting (former MVL) increased, but the sales of automation equipment (former MECT) decreased. The change in exchange rates increased sales by 100 million yen mainly in the SS business.
Operating profit rose 6.7% year on year to 1.8 billion yen. Despite the drop in sales, gross profit grew 5.7% year on year and gross profit margin improved 4.2 points, as the ratio of sales of the SS business, whose profit margin is high, increased and the ratios of sales of the IA business and automation equipment (former MECT) products, whose profit margins are low, decreased. They offset the augmentation of SGA.
Ordinary profit declined 17.7% year on year to 1.6 billion yen, as an exchange loss of 200 million yen was posted as a non-operating expense.
Net profit increased 36.6% year on year to 1.7 billion yen. They posted a gain on sale of investment securities of 900 million yen as an extraordinary gain.

◎ Trends in each quarter 

In the first quarter (January to March), sales and profit decreased quarter on quarter.

2-2 Regional trends 

*Unit: million yen.

Domestic sales dropped, due to the decline in sales of automation equipment (former MECT). The sales in the Americas grew by double digits, thanks to the healthy performance of security and automatic door sensor products and inspection lighting (former MVL).

◎ Average exchange rate

2-3 Earnings by Segment 

① Sales and profit trends in each segment 

*Unit: million yen. Composition ratio of operating profit refers to sales profit margin. As all of shares of THREE ACE CO., LTD. were transferred to OPTEX CO., LTD. on January 1, 2025, the business of THREE ACE, which had been included in “Others,” has been included in “SS Business” from the first quarter of the fiscal year ending December 2025. The information of each segment in the first quarter of the fiscal year ended December 2024 is based on the new classification.

② Trends in each segment and region 

*Unit: million yen. As all of shares of THREE ACE CO., LTD. were transferred to OPTEX CO., LTD. on January 1, 2025, the business of THREE ACE, which had been included in “Others,” has been included in “SS Business” from the first quarter of the fiscal year ending December 2025. The information of each segment in the first quarter of the fiscal year ended December 2024 is based on the new classification.

◎ SS Business
(Security sensor segment)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

(Automatic door sensor segment)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

(Social & Environment)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

◎ IA Business 
(FA segment)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

(Inspection lighting)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

(Industrial PC)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

(Automation equipment)
<Highlights of full-year performance in 1Q of FY 12/25>

(From the company release)

2-4 Financial Conditions and Cash Flow

◎ Main BSs

*Unit: million yen

Total assets decreased 1.2 billion yen from the end of the previous fiscal year to 71.6 billion yen, due to the decreases in cash and receivables. Total liabilities decreased 1.6 billion yen to 21.1 billion yen, due to the drop in accrued income taxes, etc. Net assets increased 0.4 billion yen from the end of the previous fiscal year to 50.5 billion yen due to an increase in retained earnings.
Equity ratio increased 1.8 points from the end of the previous fiscal year to 70.0%.

3. Fiscal Year Ending December 2025 Earnings Forecasts

3-1 Earnings forecast

*Unit: million yen. Progress rate 1 means the rate of progress toward the forecast for the first half, while Progress rate 2 means the rate of progress toward the full-year forecast.

The earnings forecast was left unchanged, and it is projected that sales and operating profit will grow.
The earnings forecast was left unchanged. Sales are expected to grow 4.3% year on year to 66 billion yen and operating profit is projected to rise 3.9% year on year to 7.4 billion yen.
The U.S. tariff policy may affect the performance of security and automatic door sensors in the SS business and lightings for image inspection in the IA business, but the sales in the U.S. in the fiscal year ending December 2025 are expected to account for over 10% of consolidated sales. They are striving to reduce the impact on business performance by continuing activities for rationalizing selling prices and optimizing the supply chain. They will keep an eye on the progress of additional tariffs and strive to reduce risks.
In the medium/long term, while the Sensing Business has grown stably, the needs for automation and labor saving have increased in the medium/long term, and inspection processes have become complex, they aim to enhance the sale of profitable products, such as FA sensors and inspection lighting in the IA Business.
The company plans to pay a dividend of 45.00 yen/share, up 5.00 yen/share from the previous fiscal year. The expected payout ratio is 27.2%.

◎ Regional trends

*Unit: million yen. Colored boxes for company-wide revenue growth rate of +4.3% or more. Progress rate 1 means the rate of progress toward the forecast for the first half, while Progress rate 2 means the rate of progress toward the full-year forecast.

◎ Forecasted exchange rate

The company estimated that if the yen get stronger by 1 yen/US dollar, sales will decline by about 200 million yen and operating profit will decrease by about 80 million yen.

3-2 Trends in each segment

① Sales of each segment

*Unit: million yen. Colored boxes for company-wide revenue growth rate of +4.3% or more. Progress rate 1 means the rate of progress toward the forecast for the first half, while Progress rate 2 means the rate of progress toward the full-year forecast. As all of shares of THREE ACE CO., LTD. were transferred to OPTEX CO., LTD. on January 1, 2025, the business of THREE ACE, which had been included in “Others,” has been included in “SS Business” from the first quarter of the fiscal year ending December 2025. The information of each segment in the first quarter of the fiscal year ended December 2024 is based on the new classification.

The recognized environment surrounding each business is as follows: (The previous report has been reposted. The impact of the U.S. tariff policy is not mentioned.)

◎ SS Business
* Security sensor segment
As there are an increasing number of capital investment plans for AI, data centers, infrastructure, and defense facilities inside and outside Japan, they will promote the sale of solutions for important large-scale facilities to meet demand continuously.

* Automatic door sensor segment
Their business performance is expected to remain healthy, thanks to the growth of demand for security products and environmentally friendly products mainly in the European and U.S. markets. The performance in the Japanese market, too, is projected to remain healthy as they enriched the lineup of products and systems for meeting the needs for remote management.

*Social & environmental segment
As they have established a position as a pioneering enterprise in the field of vehicle detection sensors for parking lots, their business performance is expected to remain favorable inside and outside Japan.

◎ IA Business
* FA sensor segment
It is assumed that while inventory adjustment will recover slightly due to the curtailment of capital investment in Europe, the Chinese market will remain sluggish. A gentle recovery is expected due to the demand for automation and labor saving in the fields of semiconductors and automobiles in Japan.

* Inspection lighting (former MVL)
The demand for capital investment is growing, due to the miniaturization of semiconductors, electronic components, etc. and the sophistication of inspection processes. By holding private shows, etc., they will meet such demand, and the sales of solutions are expected to grow inside and outside Japan.

* Industrial PC (former IPC)
The number of orders for products for semiconductor manufacturing equipment declined temporarily due to the excessive inventory, but it is expected to recover from the second half of the fiscal year. They plan to enhance the sale of products developed in collaboration with the section of the SS business (security sensor segment).

* Automation equipment (former MECT)
They are expected to keep recording sales from the delivery of equipment for manufacturing secondary batteries for EVs.

② Trends in each segment and region

*Unit: million yen. Colored boxes for company-wide revenue growth rate of +4.3% or more. Progress rate 1 means the rate of progress toward the forecast for the first half, while Progress rate 2 means the rate of progress toward the full-year forecast. As all of shares of THREE ACE CO., LTD. were transferred to OPTEX CO., LTD. on January 1, 2025, the business of THREE ACE, which had been included in “Others,” has been included in “SS Business” from the first quarter of the fiscal year ending December 2025. The information of each segment in the first quarter of the fiscal year ended December 2024 is based on the new classification.

4. Conclusion

Due to the end of inventory adjustment among major clients in Europe and the bottoming-out of demand for capital investment in China, the sales of the FA business declined quarter on quarter, but rose 9% year on year, showing a sign of recovery after bottoming out in the first quarter of the fiscal year ended December 2024. On the other hand, in the SS business, the quarterly sales of both security and automatic door sensor products hit a record high. As there is an increase of orders due to the rush demand before the price hike, we would like to pay attention to the trend of their business, including the impact of the U.S. tariff policy.

<Reference 1: Three-year (2025-2027) Management Plan>

1 Overview and Targets

In the fiscal year ended December 2024, sales and profit grew, exceeding the forecasts, the demand for capital investment recovered gently, but there remain uncertainties over the sale of FA-related products in the IA business to Europe and Asia and the sale of inspection lighting (former MVL) products for semiconductors, electric parts, and electronic components, so they revised the previous forecast downwardly.
While positioning the “business model transformation” as the core of growth strategies, they will accelerate the shift to solution proposing business to improve operating profit margin in each business while expecting recovery from 2026.

(From the company release)

2 Regarding the solution proposing business

The solution proposing business they concentrate on is not the business of selling products from the “viewpoint of a seller,” but the one of offering systems, data, and services as well as products while focusing on the true needs of customers, improving added value and the customer satisfaction level and improving profitability.
They plan to raise the ratio of sales of the solution proposing business to consolidated sales to 30% in fiscal year 2027.

(From the company release)

The company will take the following concrete measures in each business. The company will offer high value-added products and systems and further enhance sales promotion while utilizing their strengths.

① SS Business: Security sensor segment
In the security sensor business, the company will offer all-in-one solutions, including monitoring systems, installation, maintenance, and other system integration functions, while selling devices, mainly outdoor sensors, which have a large market share.

② IA Business: FA segment
The company is focusing on providing solutions centered on the "IO-Link master, " which is a communication technology that enables the two-way exchange of various data between sensors and higher-level control systems.

③ IA Business: Inspection lighting segment (former MVL)
In addition to the provision of products, including procurement from cooperative makers, the company will establish a testing room, an AI lab, and a robotics room, to offer solutions for “visualizing” and “enabling” things.

<Reference 2: Regarding Corporate Governance>

◎ Organization type, and the composition of directors and auditors

◎ Corporate Governance Report
The latest revision date: March 28, 2025

<Fundamental concept>
As the Group, we recognize that it is our greatest mission to continuously improve corporate value while earning the trust of our shareholders, investors, customers, and society. To practice it, we consider enhancement of the corporate governance as one of important management tasks and aim to improve the transparency of management, maintain management systems accompanying fair and prompt decision making and strengthen management monitoring function.

<Reasons for Non-compliance with the Principles of the Corporate Governance Code>
The company implements all of the principles of the Corporate Governance Code.

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>
[Principle 1-4. Cross-shareholdings]
The Company acquires and possesses cross-shareholdings upon deliberations and a resolution by the Board of Directors only when it is determined that it will contribute to strengthening business relationships and increasing corporate value in the Group’s business strategy. In addition, the Board of Directors verifies the significance of the shares we held every year. If it determines that the reasonable value sought is poor, we will strive to sell and reduce that holding in consideration of market trends and other factors.

Cross-shareholdings held by the Company at present: 47 million yen in one company (Amount on the balance sheet for December 31, 2024)

The Company makes a comprehensive judgement to determine the advisability of exercising the voting rights for the shares we hold. We individually examine this based on whether doing so will contribute to the sustainable growth and improvement of mid- to long-term corporate value improvement of that company and whether doing so will significantly harm shareholder value.

[Supplementary Principle 2-4-1. Ensuring Diversity in the Promotion of Core Personnel]
The concept of our corporate group since the business start-up has been "a desire to be a company in which self-actualization is possible for employees with the company serving as the stage for that." Under this desire, we have focused on creating an environment so that employees themselves can make the stages of their lives full of changes and inspiration without discriminating between men and women, nationalities, and between new employees fresh out of college and mid-career hires.
The status of employees of our domestic group companies (12 companies including our company) is as follows.

- Male / female rati Male: Female = 78%: 22%
- Ratio of mid-career hires: 60%
- Ratio of foreign employees: 1%
- Male-female ratio of managers: Male: Female = 96%: 4%
- Ratio of mid-career hires among managers: 69%

As mentioned above, due to the characteristics of the Group's business areas and business content, there are potentially few female and foreign employees, and their percentage among managers is not high at present.
On the other hand, 69% of mid-career hires have been promoted to managerial positions showing that we recognize that diverse human resources with various experiences and skills shall occupy the core of management.
In addition, our corporate group has consolidated subsidiaries worldwide. Thus, we believe that we have sufficiently ensured the diversity of our corporate group as a whole, including these subsidiaries.
We will consider the features of each operating company in each business area and continue to actively promote and review the environment to fully demonstrate the capabilities of each employee to secure more diversity of employees.

[Supplementary Principle 3-1-3. Sustainability Initiatives]
・To strengthen relationships with all stakeholders and contribute to the sustainable growth of society.
・To aim to achieve recycling-oriented business management through the supply of environmentally friendly products.
・To aim for sustainable growth and development of group companies through improved employee engagement.
These are the Group’s basic policies for sustainability. Since its founding, the OPTEX GROUP has developed its business, intending to contribute to “a safe, worry-free and convenient” society and industry by making full use of its expertise in sensing technology, aiming to become the “No. 1 Global Niche” sensor manufacturer under the key concept of engaging in the task of eliminating the “un” from unease, the “in” from inconvenient, and the “dis” from dissatisfying that exist in the world (the Futoru (eliminating negatives) Business).
The company will continue to promote this “FUTORU business” to contribute to solving environmental and social problems, and at the same time, is confident that it will lead to the expansion of each of its businesses and increase its corporate value. The company aims to contribute to the sustainable development of society and increase its corporate value.
The Group's initiatives are posted on the company's website at the following addresses.
・Sustainability →　https://www.optexgroup.co.jp/esg/
The website shown above provides information about our governance and our initiatives regarding relationships with society. The following websites provide more detailed information on our environmental and human resource initiatives.
・Basic Sustainability Policy　→　https://www.optexgroup.co.jp/esg/policy.html
・Reduction of Environmental Impacts →　https://www.optexgroup.co.jp/esg/environment-impact.html
・Initiatives for TCFD recommendations　→　https://www.optexgroup.co.jp/esg/tcfd.html
* In January 2023, the Group announced its support for the TCFD and set the Group's CO2 reduction target as “30% reduction by 2030 (compared to 2019: Scopes 1 and 2)".
We will keep focusing on the improvement of the quality and quantity of information disclosure concerning our corporate group’s initiatives for sustainability.
・ESG Report →　https://www.optexgroup.co.jp/shareholder/library/index.html#esgreport
・Strategies, indicators, and targets related to human resources →　https://www.optexgroup.co.jp/esg/human-resources.html

[Principle 5-1. Policy on Constructive Dialogue with Shareholders]
The Company has established an public relations・IR Department. The IR Department strives to provide easy-to-understand explanations about our management policies and business conditions to engage in positive and constructive dialogue with our shareholders. In addition, the President, the responsible officer, and IR personnel give briefings for institutional investors and briefings for private investors on a planned basis. We respond to requests for meetings with institutional investors as the occasion calls.
We establish a venue to allow the attendance of diverse shareholders at our ordinary general meeting of shareholders. We then hold a shareholder briefing to obtain understanding for our future policies after the end of that meeting.

[Action to Implement Management that is Conscious of Cost of Capital and Share Price] [Disclosed] [Disclosed in English]
Our company recognizes that cost of shareholders’ equity is 8-9%, and our management goal is to keep return on equity (ROE) 10% or over, as one of indicators for evaluating profitability and capital management efficiency.
In the fiscal year ended December 2024, the ROE of our company was 12.2%, exceeding the above cost of shareholders’ equity. We will make continuous efforts to further improve profitability and foster expectations for growth, in order to keep improving corporate value from the medium/long-term perspective. Concrete measures are described in the material for briefing financial results in the fiscal year ended December 2024.
・Material for briefing financial results in the fiscal year ended December 2024
(Japanese)
https://contents.xj-storage.jp/xcontents/AS70197/aee83978/e76b/4d00/b6c3/453d25eea6a7/140120250214576376.pdf
(English)
https://contents.xj-storage.jp/xcontents/AS70197/d4ad34f9/99fa/45c5/8110/d351f39065f7/140120250214576421.pdf

The back number of Bridge Reports (OPTEX GROUP CO., LTD.: 6914) and contents of Bridge Salon (IR seminars) can be seen at www.bridge-salon.jp/