Supplementary Explanation Material for the Third Quarter of Fiscal Year Ending March 2026

Summary of Performance

For the third quarter of the fiscal year ending March 2026, consolidated net sales reached 40.6 billion yen (Year-over-Year +4.0%), and consolidated operating income was 5.99 billion yen (Year-over-Year -12.1%). Amid strong demand driven by large-scale urban redevelopment, building air conditioning, industrial air conditioning for domestic manufacturing sites, and data center investments, orders at the facility construction management company remained at a high level. Conversely, the domestic construction market has seen prolonged adjustments and investment plan revisions due to workstyle reforms and soaring construction costs in construction and logistics industries, as well as impacts of international trade policies, requiring careful monitoring of future market trends. In the Japan segment, sales increased despite a decline in equipment sales due to strong facility construction and maintenance; however, profits declined despite efforts to revise prices. In the Asia segment, although the Chinese real estate market slowdown continued to affect sales, revenue increased and operating losses narrowed.

Revisions to Earnings Forecast and Shareholder Returns

Based on progress through the third quarter, the full-year consolidated earnings forecast was revised to net sales of 58.7 billion yen (Pre-revision +1.2%), operating income of 9.1 billion yen (Pre-revision -9.9%), and net income attributable to owners of parent of 6.5 billion yen (Pre-revision -12.2%). The annual dividend forecast remains unchanged at 50 yen per share, with the payout ratio expected to rise to 52.8%. The share buyback is underway as planned, with 4.05 billion yen out of the 4.58 billion yen planned amount acquired by the end of January 2026. Considering the shareholder return policy under the medium-term management plan, the total return ratio is expected to reach 123.3%.

Outlook and Growth Strategy

For the fiscal year ending March 2027, a continued decrease in sales and profits from domestic central air conditioning equipment sales is expected, but data center and air conditioning equipment construction and maintenance will progress steadily. To achieve the final goals of the medium-term management plan, securing volume and improving profitability through price pass-through of air conditioning equipment sales is the top priority, while continuing to expand growth areas. Through participation in HVAC&R JAPAN 2026, the company will promote value chain proposals leveraging new products and group strengths while enhancing customer development and sales proposals.