Thank you very much for joining us today despite your busy schedule. On behalf of Toray Group, I'd like to take this opportunity to extend my gratitude towards your continued understanding and your interest in our management and business activities. Now, I'd like to report Toray's business results for the fiscal year ending March 2025 and business forecasts for the fiscal year ending March 2026. Now, I'd like to follow the table of contents shown on page one. This is a summary of the business performance and forecast. Operating income of FY2024 increased in all segments to JPY 142.8 billion. It was a significant increase compared with the previous fiscal year. Operating income of FY2025 is forecasted to increase year on year to JPY 150 billion despite the impact of downturn caused by the U.S. tariff measures and other factors.
In terms of annual dividend for the fiscal year ending March 2026, the company anticipates paying JPY 20 per share of common stock, a JPY 2 increase compared with the previous fiscal year. Furthermore, the company is proceeding with share buybacks in line with the resolution at the Board of Directors meeting held on November 2024. As of the end of April 2025, the total repurchase price of shares has reached JPY 54.7 billion, equivalent to 56 million shares. I'll explain the details starting from the next page. I'd like to begin with an overview of business results for the fiscal year ending March 2025. Please turn to page four. Revenue for the fiscal year ending March 2025 increased 4% to JPY 2,563.3 billion compared with the previous fiscal year, and the operating income increased 39.1% to JPY 142.8 billion. Net income increased 255.8% to JPY 77.9 billion. ROIC was 4.4%, while ROE was 4.5%.
Page five is about special items. Special items for the period improved by JPY 29.7 billion compared with the previous fiscal year to JPY 50.3 billion. Page six about assets, liabilities, equity, and free cash flow. As of the end of March 2025, total assets stood at JPY 3,292.6 billion, down JPY 173.9 billion from the end of the previous fiscal year due to decreases in trade and other receivables and financial assets. Total liabilities decreased JPY 148.1 billion from the end of the previous fiscal year to JPY 1,472 billion, owing mainly to decreases in bonds and borrowings. Total equity decreased by JPY 25.8 billion compared with the end of the previous fiscal year to JPY 1,820.6 billion. Owner's equity was JPY 1,709 billion. Interest-bearing liabilities was JPY 842.7 billion, and the D/E ratio was 0.49. Free cash flow was positive at JPY 191.8 billion.
The table on page seven shows revenue and cooperating income and the fact analysis of JPY 40.1 billion increase in cooperating income for the fiscal year ending March 2025 on a year-to-year comparison. In the fibers and textiles, performance chemicals, and carbon fiber composite materials segments, both production and sales volume has expanded, capturing demand increase and recovery. As for the net change in price, strategic pricing has proceeded at a pace exceeding the plan and contributed to the increase in cooperating income. Cooperating income increased 39.1% year on year, and the cooperating income margin rose 1.4 percentage points as a result of capturing the strong demand and promotion of structural reform. Using page eight and after, I'd like to explain the results of each segment. First, fibers and textiles. Revenue of this segment exceeded JPY 1 trillion for the first time.
The revenue increased 3.7% to JPY 1 trillion, JPY 11.1 billion compared with the previous fiscal year, and the cooperating income rose 17.3% to JPY 64.2 billion. Offering applications were robust overall, as sales momentum of the fall winter clothing in Japan and shipments of overseas trading subsidiaries were strong. In the industrial applications, the automobile applications were affected by production decline in some automobile manufacturers in Japan and weak market conditions in Europe. Page nine is the performance chemicals segment. Revenue increased 6.6% to JPY 944.9 billion compared with the previous fiscal year. Cooperating income rose 63.6% to JPY 60 billion, as demand recovery and improvement in the utilization rate in the famous business have contributed to improvement in profit. I would like to explain the conditions of each business on the next page.
The resins and chemicals business were affected by the production decline in some Japanese automobile manufacturers, but demand recovered in non-automobile applications for China and ASEAN. In the films business, profit improved due to the demand recovery in electronic parts-related applications, owing to rebound from inventory adjustment in the supply chain, as well as improvement in the utilization rate. In the electronic and information material business, demand for OLED-related materials and circuit materials saw some recovery. Breakdown of increase in cooperating income by subsegment is shown in the graph on the right. In addition to the demand recovery in the resins and films business, effects of the profitability improvement project, Darwin Project or DPRO, implemented at overseas subsidiaries contributed to the increase in cooperating income. Page 11 is the carbon fiber composite materials segment.
Revenue increased 3.3% to JPY 300 billion compared with the previous fiscal year, and cooperating income rose 70.7% to JPY 22.5 billion. In addition to the steady recovery in the aerospace applications, decreases in utility costs from lower electricity and natural gas prices in Europe contributed to the increase in cooperating income. I'd like to explain the status of each application on the next page. In the aerospace applications, demand has steadily recovered. In the sports applications, inventory adjustment continued in the general-purpose products for outdoor leisure, but sales of high-end products were strong. In the industrial applications, gradual recovery continued in the wind turbine blade applications, but the other applications entered an adjustment phase. Page 13 in the environment and engineering segment, revenue decreased 3.1% to JPY 236.5 billion compared with the previous fiscal year, and cooperating income rose 11.6% to JPY 25.9 billion.
In the water treatment business, demand increased steadily, and shipment for a major project in the Middle East contributed to the business performance. In addition, sales of an engineering subsidiary in Japan were generally strong. Page 14 is the life science segment. Revenue increased 1.8% to JPY 53.2 billion compared with the previous fiscal year, while operating income was negative JPY 0.8 billion. JPY 0.6 billion increased compared with the previous fiscal year. The pharmaceutical business was impacted by the penetration of generic versions of drugs and the NHA drug price revision. In addition, sales volume was stagnant overseas. In the medical devices business, shipments of dialyzers for hemodial filtration were steady in Japan and overseas, but affected by the soaring prices of raw materials. Page 15 shows the business results of major subsidiaries and regions. At Toray International, sales of performance chemicals business were strong.
At the subsidiaries in Southeast Asia, in the fibers and textile business, industrial applications, especially in the automobile applications, were strong. The performance chemicals business, demand for ABS resins in China and ASEAN was on a recovery trend. At the subsidiaries in China, in the fibers and textiles business, the apparel applications and the automobile applications in the industrial applications were strong. In the performance chemicals business, sales of resins were strong, but the chemical business was affected by the periodic maintenance of facilities. As for our subsidiaries in the Republic of Korea, in the fibers and textiles business, supply and demand balance of non-woven fabric worsened, however, the spread of filaments and staple fibers improved. Meanwhile, in the performance chemicals business, sales of films and electronic and information materials were strong. Next, I'd like to explain the consolidated business forecast for the fiscal year ending March 2026.
Please turn to page 17. The global economy, which was in a gradual recovery phase, is facing a growing risk of entering a downturn phase triggered by the imposition of reciprocal tariffs by the U.S. under the Trump administration. There are also concerns of an economic slowdown in the Japanese economy caused by a decline in exports and intensifying competition with China. Furthermore, instabilities in the stock and foreign exchange markets triggered by the imposition of the tariffs also pose concerns. The direction of the fiscal and trade policies of the U.S., as well as its negotiations with various countries, will likely affect the prevailing economic trends, which in the medium to long term may significantly alter supply chains and trade structure.
For the fiscal year ending March 2026, Toray expects revenue of JPY 2,670 billion, cooperating income of JPY 150 billion, and profit attributable to owners or parents of JPY 82 billion, given the business expansion in the gross business fields preceding the improvements in profitability, as well as the risk of stagnation in the global economy caused by the U.S. tariff measures. Page 18 shows the consolidated business forecast for the fiscal year ending March 2026 by segment. Toray expects increase in revenue and cooperating income through capture of demand recovery in the fibers and textiles and performance chemicals segments, and the expansion of the aircraft applications in the carbon fiber composite materials segment. At the same time, the company expects positive effects from strategic pricing and profitability improvement projects.
As for the impact from the U.S. tariff measures, given the macroeconomic factors such as effects on the global economy and business conditions, effects from the demand decrease were mainly estimated and included in this forecast. The company factored in decreases of JPY 40 billion in revenue and JPY 15 billion in cooperating income as an impact from the U.S. tariff measures. Page 19 shows the comparison of cooperating income between the actual results for the fiscal year ending March 2025 and the forecast for the fiscal year ending March 2026, with breakdowns into segments. Page twenty describes the trends in capital expenditures, depreciation, and amortization, and R&D expenditures. Capital expenditures for the fiscal year ending March 2026 are expected to be JPY 180 billion, depreciation and amortization JPY 135 billion, and R&D expenditures JPY 84 billion. Page 21 explains about the shareholders' return.
Under APG 2025, while maintaining stable continuous dividends, Toray will aim to increase dividends based on earning growth. The target for dividend payout ratio is 30% or more. In terms of annual dividend in FY 2025, the company anticipates paying JPY 20 per share of common stock, an increase of JPY 2 compared with the previous fiscal year, with a payout ratio of 38%. On page 22, I'll explain about the progress on reduction of cross-share holdings and share buybacks. Toray has sold JPY 109.8 billion of cross-share holdings in FY 2024, and the ratio of the cross-share holdings to the total equity decreased to 5.4% as of the end of FY 2024. The company has achieved the target two years ahead of schedule. The company plans additional sales of cross-share holdings in FY 2025.
As for share buybacks, in line with the resolution at the shareholder meeting in November 2024, the total repurchase price of shares has reached JPY 54.7 billion, equivalent to JPY 56 million of shares as of the end of April 2025. The proceeds exceeding JPY 100 billion from the sales of the cross-share holdings will be used for share buybacks. Going forward, the company will consider the cancellation of repurchased shares. Now, I'd like to explain about the progress of the medium-term management program, Project APG 2025. In one of the basic strategies of APG 2025, sustainable growth based on Toray Group's sustainability vision. The company has positioned the sustainability innovation, or SI business, and the digital innovation, or DI business, as growth business fields for Toray Group, where the company can leverage its strengths and expand revenue growth.
In FY 2024, although demand recovery in large-scale carbon fiber for the wind turbine blade applications was slower than expected, revenue from the SI business increased 4.4% to JPY 1 trillion, JPY 368.9 billion compared with the previous fiscal year, as revenue increased in carbon fiber for the aircraft applications, films made from recycled materials, and resins for automobiles, etc. Meanwhile, revenue from DI business in FY 2024 increased 16.9% to JPY 211.9 billion compared with the previous fiscal year, due to recovery in demand for the electronic parts-related applications such as MLCC, OLED-related materials, and circuit materials. Page 26 describes cost competitiveness. In APG 2025, promoting cross-organizational cost reduction that leverages the collective strengths of the organization, and by sharing the information and implementing the cost reduction activities globally, the company will work on raising the level of cost competitiveness of the Toray Group as a whole.
As for the two-year results from FY 2023 to 2024, the company achieved cost reduction of JPY 146.1 billion. Toray is promoting each activity, aiming for JPY 200 billion of cost reduction in three years through self-efforts. On page 27, I'd like to explain about the business structure reform based on the four categories of growth potential and profitability as a measure to improve each business field. The figure in the bottom right is the four categories of growth potential and profitability. The left half of the figure indicates low profitability businesses. For the specific businesses and companies with large invested capital that fall under the category, the company is implementing DPRO, the projects to improve profits of specified businesses and companies. Page 28 summarizes the initiatives in DPRO and effects.
In FY 2024, Toray achieved JPY 20 billion of improvement year on year by restoring profitability through cost reduction of fixed costs and utility costs, optimization of production between global production sites, and other initiatives in ZOLTEX large-scale carbon fiber business, the film business in the U.S. and Europe, TPM, as well as the polyester staple fiber business. In FY 2025, JPY 10 billion of profitability improvement is expected compared with the previous fiscal year by restoring profitability through developing and expanding sales of differentiated products in the PP spun bond business and the films business in Europe, in addition to strengthening profitability in the businesses that have already become profitable through sales and sales volume expansion. Please look at page 29.
The company expects a JPY 30 billion shortfall from the APG 2025 target as the pace of the world economic recovery from the COVID-19 pandemic was slower than expected, and uncertainty rose due to the U.S. tariff measures. The fibers and textiles and environment and engineering segments are expected to exceed the target. However, the films, electronic and information materials, and carbon fiber composite materials businesses are expected to fall short of the targets due mainly to the delay in demand recovery. Page 30 shows the fact analysis of cooperating income in APG 2025 and the next medium-term management program. The pace of recovery is slower than expected due to the emergence of geopolitical risks and the rise of uncertainties caused by the U.S. tariff measures. However, the company expects continuous increases in cooperating income for three consecutive years, as positive effects of the business structure reform and strategic pricing are seen.
Toray will revise specific measures to promote as needed, including strategies for each business, in response to changes in the business environment and strengthening of procurement functions. In the next medium-term management program, the company will aim for the expansion of growth business fields and, at the same time, sound sustainable growth. Page 31 summarizes the financial targets. Page 32 shows the sustainability targets. In addition to our financial targets, we are committed to achieving these targets in terms of sustainability. This concludes my presentation. Thank you very much.