Fiscal Year Ending March 2026 Q3 Financial Results Presentation

Business Overview

For the cumulative third quarter of the fiscal year ending March 2026, net sales reached ¥1,521,996 million (2.0% increase Year-over-Year), with core components, particularly semiconductor-related parts business, showing increased sales. Operating income was ¥70,621 million (475.3% increase Year-over-Year), ordinary income was ¥122,030 million (141.8% increase Year-over-Year), and net income attributable to owners of parent for the quarter was ¥97,951 million (434.3% increase Year-over-Year), achieving significant profit growth. Foreign exchange effects led to an approximately ¥12 billion decrease in net sales and approximately ¥2 billion increase in ordinary income.

Segment Performance

The Core Components segment recorded net sales of ¥477,170 million (7.9% increase Year-over-Year), with industrial and automotive components up 2.0% and semiconductor-related parts increasing 13.3%. Electronic Components posted net sales of ¥267,196 million (essentially flat Year-over-Year), and Solutions recorded net sales of ¥791,266 million (0.8% decrease Year-over-Year). Operating income by segment was ¥7,938 million for Core Components (significant increase Year-over-Year), ¥1,900 million for Electronic Components (increase Year-over-Year), and ¥5,800 million for Solutions (increase Year-over-Year).

Progress in Management Reform and Capital Policy

The semiconductor parts organic materials business (Core Components) achieved profitability of approximately ¥15 billion compared to the previous year for the cumulative third quarter of the fiscal year ending March 2026 through cost structure transformation. The KAVX Group (Electronic Components) also realized profitability of approximately ¥8 billion through enhanced collaboration. Share Buyback is planned at approximately ¥120 billion (approximately 59 million shares) by December 31, 2025, with a cumulative total of approximately ¥200 billion expected by the end of March 2026 (in accordance with the resolution from May 2025).

Business Review and Transfers

The chemical business (Core Components) will be transferred by absorption-type company split to a new company and then transferred to Sumitomo Bakelite Co., Ltd. (planned to be completed by the end of October 2026). The silicon diode and power semiconductor business (Electronic Components) has been transferred to Shin-Etsu Handotai Co., Ltd. The pneumatic and electric tools business (Solutions) has been transferred to TL Sapphire Holdings, Inc. in the U.S., expected to have a positive operating income impact of approximately ¥15 billion.