Notice on Special Losses for Suspension of Business Activities at Hungarian Consolidated Subsidiary

Background of the suspension and its impact

Nippon Pulp & Paper Co., Ltd. has decided to discontinue the business activities of NPCE, its Hungarian consolidated subsidiary. The lithium-ion battery anode/cathode material (CMC) for EVs manufacturing and sales is not expected to remain profitable due to changes in external environments and intensified competition. In line with the basic strategy of the mid-term Plan 2030, production will be stopped locally and consolidated into the domestic Kōetsu Plant, and a special loss of about 5 billion yen is anticipated to be recorded in the fiscal year ending March 2027. The impact on future results is being examined, and further disclosures will be made as necessary.

Outlook and actions going forward

The suspension of NPCE’s operations is scheduled for December 31, 2026, and local sales and profits are expected to be limited. Nippon Pulp & Paper will continue its structural reforms and profitability improvement initiatives outlined in the mid-term Management Plan 2030 to enhance overall group corporate value. The number of local employees is 24 (as of the end of August 2026), and measures to minimize impact on related parties are being considered.