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

Overview of Performance

In the consolidated results for the third quarter of the fiscal year ending March 2026, net sales amounted to 93.0 billion yen (1.4% YoY decrease), operating income was 6.1 billion yen (2.4% YoY increase), ordinary income reached 6.9 billion yen (6.8% YoY increase), and net income attributable to owners of parent was 6.6 billion yen (34.0% YoY decrease). Net sales declined due to weak sales of urethane resin despite a recovery in automotive compounds and colorants and increased sales of pigments for LCD displays. Operating income increased thanks to higher domestic sales volume and progress in revising selling prices, although overseas subsidiaries in China and the US performed sluggishly. Net income decreased compared to the previous year, despite recording 2.2 billion yen in gains on sales of investment securities.

Segment Performance and Future Outlook

By segment, the Color & Functional Products segment performed strongly with net sales of 51.4 billion yen (1.6% YoY increase) and operating income of 3.3 billion yen (22.1% YoY increase). The Polymer & Coating Materials segment saw declines with net sales of 18.2 billion yen (5.8% YoY decrease) and operating income of 2.0 billion yen (22.4% YoY decrease). The Graphic & Printing Materials segment reported net sales of 23.4 billion yen (4.0% YoY decrease) but operating income rose 21.4% YoY to 700 million yen. The full-year earnings guidance for the fiscal year ending March 2026 projects net sales of 123.0 billion yen, operating income of 7.6 billion yen, and net income of 7.5 billion yen, with achievement rates of 75.7%, 80.8%, and 89.3% respectively. A stock split (1 share to 4 shares) is scheduled for April 1, 2026, and dividend policy anticipates an increase.