Slides
Page 1
Financial Results Presentation Materials: Fiscal Year Ended December 202６ Second Quarter (Interim) August 6, 2026 Nisshinbo Holdings Inc.
Page 2
Today’s Update 2 Financial Performance Although sales decreased year on year in the Real Estate business, revenue and profit increased, driven by strong performance in Solutions, Defense, and Marine systems within the Wireless and Communications business. Year-on-year Earnings Outlook Although the first-half results exceeded expectations, particularly in the Wireless and Communications Business, we are still halfway through our efforts to implement structural reforms and strengthening our business foundation to build sustainable earning power. We don’t revise our earnings forecast at this time. We continue completing structural reforms and increasing expenses in R&D and human resources to drive future growth.
Page 3
3 The benefits of profit margin improvements, resulting from structural reforms within Japan Radio Group’s Wireless and Communications business, becomes visible since the first quarter. As part of business reformation, the early retirement program in the MicroDevices Business was implemented as planned. We expect the benefits of this measure to be realized in the second-half results. As the first step of the Materials Business reformation, we are promoting portfolio transformation. In the Precision Instruments Segment, we decided to carve out the molded products business. We reinforce the function of the Future Innovation Division in order to make R＆D results directly connect to actual business growth expansion by strengthening collaboration among R&D, business divisions, and customer-facing operations, and by leveraging data and insights more effectively. Today’s Update Blueprint for Transformation: Progress
Page 4
4 Redesign Approach Logically redesign and implement measures to achieve a 10% operating profit margin (target) Concept Specifica -tion Details Design Parts Drawings Assembly Operation Creation of new business model Materials Business Micro D evices Business Wireless and C ommunications Business Progress to Date Next Steps Implemented an early retirement program at Japan Radio Group, reduced fixed costs by approximately 3 billion yen Reorganization of Japan Radio Group’s manufacturing subsidiaries Implemented an early retirement program, reduced fixed costs by 4 billion yen (Approximately 2 billion yen in the current fiscal year) Decided to carve out the molded products business Reinforced the function of the Future Innovation Division in order to make R＆D results directly connect to actual business growth expansion Launch synergy initiatives between the Japan Radio Group and the KOKUSAI DENKI Electric Group to accelerate growth Fundamentally review the business and the structure from clean slate Continue portfolio transformation Promote business development plan for chemical materials at the electronics field Focus R&D and business development on three key areas at the Future Innovation Division Today’s Update Blueprint for Transformation: Progress
Page 5
5 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026 2. Outlook for FY2026 and business direction 3. Future Innovation Division : Explanation of New Policy
Page 6
1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026 6 FY2025 2Q FY2026 2Q Year-on-year FY2026 Initial ForecastRate Net Sales 254,721 272,462 17,740 7.0％ 511,000 Operating income 18,417 30,274 11,856 64.4％ 21,000 Ordinary income 19,019 32,520 13,501 71.0％ 21,500 Interim/ Net Income attributable to Owners of Parent 11,498 21,590 10,091 87.8％ 10,000 Net sales increased due to strong performance in Solutions, Defense, and Marine systems within the Wireless and Communications business. Operating income, ordinary income, and interim net income attributable to owners of the parent company increased significantly due to earnings growth in the Wireless and Communications businesses and the favorable foreign exchange rates (yen depreciation). (Millions of yen) Financial Highlights
Page 7
7 Segment Sub-segment FY2025/12 2Q FY2026/12 2Q (Current Period) YoY Sales Operating income Sales Operating income Sales Operating income Wireless and Communications Solutions & Defense Total 74,376 10,246 87,712 17,797 13,336 7,550 Marine Systems 28,031 2,554 32,886 4,537 4,854 1,982 Connected Systems and other 24,160 △2,426 25,301 △391 1,141 2,035 Eliminations, etc. △393 △32 △749 34 △355 66 Total 126,174 10,341 145,151 21,977 18,977 11,635 MicroDevices 29,825 △4,257 32,893 △415 3,068 3,842 Material Brakes 28,275 1,787 29,885 1,899 1,610 111 Precision Instruments 27,138 1,250 27,484 1,950 346 700 Chemicals 4,740 △173 4,887 339 146 513 Textiles 16,593 46 15,396 △794 △1,196 △841 Real estate 15,863 11,811 9,083 7,675 △6,779 △4,135 Other Businesses,Corporate costs 6,110 △2,388 7,678 △2,358 1,568 30 Total 254,721 18,417 272,462 30,274 17,740 11,856 (Millions of yen)Segment Results Starting with the second quarter of the fiscal year ended December 2026, we have revised the classification of subsegments within the Wireless and Communications Business. We have also restated the prior period figures using the revised classification. 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026
Page 8
8 Segment Sub-segment FY25/12 2Q FY2026/12 2Q (Current Period) YoY Sales Operating income Sales Operating income Sales Operating income Solutions & Defense Total 74,376 10,246 87,712 17,797 13,336 7,550 Marine Systems 28,031 2,554 32,886 4,537 4,854 1,982 Connected systems and others 24,160 △2,426 25,301 △391 1,141 2,035 Eliminations, etc. △393 △32 △749 34 △355 66 Total 126,174 10,341 145,151 21,977 18,977 11,635 Solutions & Defense Total Revenue and profits increased due to strong order intake for the prefectural disaster prevention system project, an increase in orders for radio systems and other equipment for the Defense Equipment Agency, and cost-saving effects resulting from structural reforms. Marine Systems Revenue and profits increased as orders for new merchant ships and related equipment, as well as orders for aftermarket services such as maintenance, remained strong due to growing demand in the new shipbuilding market. Mobility and Others Revenue increased and losses narrowed due to a rise in orders in the railway radio systems sector, combined with cost-cutting measures resulting from structural reforms. (Millions of yen) Wireless and Communications Business Wireless and Communications Business Starting with the second quarter of the fiscal year ended December 2026, we have revised the classification of subsegments within the Wireless and Communications Business. We have also restated the prior period figures using the revised classification. 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026
Page 9
9 Segment FY25/12 2Q FY2026/12 2Q (Current Period) YoY Sales Operating income Sales Operating income Sales Operating income 29,825 △4,257 32,893 △415 3,068 3,842 Electronic Devices Business Industrial Machinery With customer inventory adjustments now largely complete, orders for products used in semiconductor manufacturing equipment and factory automation (FA) equipment are on the rise Consumer Smartphone-related products are performing well Automotive Increased Orders for Products for Hybrid Electric Vehicles (HEVs), Diesel-Engine Vehicles, and Other Applications Microwave Business Revenue declined due to stagnant orders for satellite communications-related products, but profits increased due to changes in the product mix (Millions of yen) MicroDevices Business MicroDevices Business 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026
Page 10
10 Segment FY25/12 2Q FY2026/12 2Q (Current Period) YoY Sales Operating income Sales Operating income Sales Operating income Brakes 28,275 1,787 29,885 1,899 1,610 111 Precision Instruments 27,138 1,250 27,484 1,950 346 700 Chemicals 4,740 △173 4,887 339 146 513 Textiles 16,593 46 15,396 △794 △1,196 △841 Real estate 15,863 11,811 9,083 7,675 △6,779 △4,135 Other Businesses, Corporate costs 6,110 △2,388 7,678 △2,358 1,568 30 Consolidated Total 254,721 18,417 272,462 30,274 17,740 11,856 Brakes Japan : Increased revenue and profit North America : Increased revenue, decreased profit Korea : Increased revenue, improved profitability Precision Instruments Revenue and profits increased due to a rise in overseas orders for automotive EBS components Chemicals Revenue and profits for thermal insulation products rose due to increased orders; functional chemicals remained on par with the same period last year Textiles Revenue decline and worsening profitability due to factors such as a drop in shirt orders (Millions of yen) Real estate Revenue and profits declined as the scale of residential sales decreased compared to the previous period Materials Business Materials Business Real estate 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026
Page 11
11 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026 2. Outlook for FY2026 and business direction 3. Future Innovation Division : Explanation of New Policy
Page 12
12 FY202６ Initial Forecast FY2026 Forecast YoY FY2５/12 Actualrate Net Sales 511,000 511,000 502,339 Operating income 21,000 21,000 26,401 Ordinary income 21,500 21,500 29,327 Net income attributable to Owners of Parent 10,000 10,000 13,920 There are no changes to the full-year consolidated earnings forecast for the fiscal year ending December 2026, as announced on May 12, 2026. (Millions of yen) 2. Outlook for FY2026 and business direction Outlook for FY2026 No change in outlook
Page 13
13 1. Summary of Financial Results for the Second Quarter of the Fiscal Year Ended December 2026 2. Outlook for FY2026 and business direction 3. Future Innovation Division : Explanation of New Policy
Page 14
R&D as a Driving Force for Business Growth ― The New Strategy of the Future Innovation Division (FI Division) August 6, 2026 Naoto Matsunami Deputy General Manager, Future Innovation Division Nisshinbo Holdings Inc.
Page 15
Today's Key Message Management Transformation Story Establish Technological Strategy and Research Foundations Solve Real-World Challenges Drive Business Growth and Scale Value Management Transformation to Turn R&D into Business Growth FI Division was established in April 2025 as a business R&D organization dedicated to turning technology into business value. Phase 1: Establishing the research foundation and defining the technological strategy. Phase 2: Turning R&D into business growth (through 2030). Today's presentation focuses on how we are transforming R&D into a driver of business growth, rather than introducing individual research projects. This presentation explains what we are changing, how we will execute, and where we will focus. Phase 1: Organizational Integration Phase 2: Business Growth Advance R&D Capabilities Today's presentation focuses on our management framework. Quantitative targets will be disclosed in line with the Group's disclosure policy. 15
Page 16
FI Division Drives New Business Creation through Two Pillars: Business-Oriented R&D and Systems R&D The Role of FI and the Significance of the Organizational Changes FI Division now reports directly to the President and promotes business-oriented R&D focused on future growth opportunities in the wireless communications business. FI Division is shifting toward Systems R&D by integrating wireless communications and information technologies. Connecting Research with Business and Accelerating New Business Creation through the Convergence of Wireless and Information Technologies Reporting Directly to the President FI Division Japan Radio Co., Ltd. KOKUSAI DENKI Electric Inc. Other Group Companies Systems R&D Creating New Solutions, Services, and Business Opportunities through the Convergence of Wireless and Information Technologies Business-Oriented R&D Connecting Research with Business through Field Implementation Data Leveraging our research platform to accelerate the translation of R&D outcomes into business value. 16
Page 17
Turning R&D Outcomes into Business Value Requires Cross-Functional Leadership The Role of the Executive Leader Phase 2—turning R&D outcomes into business value—requires an understanding of the perspectives of R&D, business units, and frontline operations, as well as decision-making from an enterprise-wide perspective. The FI Division is managed by leveraging extensive cross-functional experience in the ICT industry. Creating Business Value by Connecting the Strengths of R&D, Business Units, and Frontline Operations Turning technological potential into business value through real-world implementation R&D Customer Co-Creation Business Management DX FI Division Career Journey Cross-Functional ICT Experience Strengthens the FI Division's Execution Hitachi / KOKUSAI DENKI Electric / Nisshinbo Holdings 1 2 3 4 5 17
Page 18
1. Purpose — Research Themes Start with Societal Challenges New R&D Management: Research Theme Selection Logic Concentrate our R&D themes and resources on three strategic domains: (1) Manufacturing Operations, (2) Marine and Shipbuilding, and (3) Disaster Prevention Solve societal challenges by combining three core technologies with a shared business platform: Wireless Communications × Sensing × AI, supported by the Hi-MA (Hierarchical – Monozukuri Architecture) Platform Selecting Research Themes from Societal Challenges Aligned with Our Purpose Addressing Autonomous N avigation and GHG* E missions R eduction Marine and Shipbuilding Supporting Frontline Workers through DX Contributing to a Safe and Secure Society through Wireless Communication Technologies Manufacturing Operations Addressing L abor Shortages Caused by A Declining Workforce Responding to Increasingly Severe Natural Disasters Disaster Prevention Purpose Wireless Communications Sensing AI× × Total Engineering Company for Wireless Communications Societal Challenges Core Technologies *GHG: Greenhouse Gas Building DX solutions on the Hi-MA Platform powered by 18
Page 19
2. Integrated Three-Party Framework — Aligned around Our Purpose and Long-Term Technology Plan New R&D Management: R&D Operating Model Integrated Three-Party Framework Aligns R&D, Business Units, and Frontline Operations to Create Business Value Our new R&D operating model integrates R&D, business units, and frontline operations into a collaborative framework for value creation. Guided by our Purpose and Long-Term Technology Plan, R&D, business units, and frontline operations are aligned around common objectives and make joint decisions from the earliest stages of research planning. Purpose R&D Business units Frontline operations Institutionalizing Cross-Functional Alignment Integrated Three-Party Framework • Integrating FI Division and R&D organizations across multiple Group companies • Bringing together R&D, business units, and frontline operations Long-Term Technology Plan FI Division Japan Radio Co., Ltd. KOKUSAI DENKI Electric Inc. ….. 19
Page 20
Future Vision Backcasting Long-Term Technology Plan Identifying current gaps A phased approach to closing the gapsMore than an aspiration 3. Long-Term Technology Plan — The Foundation of the Integrated Three-Party Framework New R&D Management: Cross-Functional Alignment Mechanism The Core of Our New R&D Management: Bringing R&D, Business Units, and Frontline Operations Together Under Shared Objectives We backcast from our vision for the next five to ten years and develop a technology roadmap to close the identified gaps. The roadmap serves as a cross-functional alignment mechanism through which R&D, business units, and frontline operations share a single set of objectives. Business models and strategic alliances are also reviewed, with the roadmap updated annually to reflect market changes. The Long-Term Technology Plan aligns R&D, business units, and frontline operations around shared objectives—forming the foundation for cross-functional decision-making. 20
Page 21
Enabling a Continuous Value Creation Cycle through the Hi-MA Platform Execution Framework: Value Creation Cycle and the Hi-MA Platform Maximizing Value Creation through a Continuous Innovation Cycle and a Shared Business Platform Our Purpose is at the center of collaboration among R&D, business units, and frontline operations, creating a continuous cycle of value creation. R&D outcomes are accumulated as shared assets—including data and knowledge—and leveraged across multiple businesses. R&D Business units Frontline operations TechnologyFeedback Purpose Implementation Hi-MA Platform: A Shared Business Platform for the Group 1) Consolidate Technologies Applications Data Knowledge Libraries 2) Share Across the Group FI Division Japan Radio Co., Ltd. KOKUSAI DENKI Electric Inc. 3) Deliver to Customers Scale Proven Technologies Across Businesses and Customers Expand an existing shared platform for use across the entire group. ….. 21
Page 22
Concentrating R&D Resources on Three Strategic Growth Domains Execution Focus: Concentrating R&D Resources on High-Growth Domains Well-Defined Markets × Core Technologies × Real-World Implementation = Research Themes for Future Growth Our common criteria are markets with meaningful societal challenges, clear customer demand, real-world implementation opportunities, and strong alignment with Nisshinbo's core technologies. We concentrate our R&D resources on domains where the integration of wireless communications, sensing, AI, and field systems delivers a competitive advantage. Theme 1 Smart Factory Customer Zero “Our Own Factories” EDMS & Manufacturing DX Solutions Theme 2 Smart Ship Advancing the Marine Business Customer One “Customer Co-Creation Frontline Sites” Autonomous Navigation Services Theme 3 Disaster Information Platform Customer One “Customer Co-Creation Frontline Sites” Disaster Information Platform Services Well-Defined Markets × Core Technologies × Real-World Implementation = Growth Businesses Physical AI Wireless Communications × Sensing × AI + Mechatronics Data Science Wireless Communications × Sensing × AI Disaster DX Wireless Communications × Sensing × AI Starting Point (Field) Core Technologies New Business Expanding Our Public-Sector BusinessGrowth Engine for the Private-Sector Business 22
Page 23
Physical AI: Bringing Factory-Proven Technologies to Customers Execution Focus: Physical AI Physical AI Comes to Life Only When Four Core Technologies Work Together Physical AI requires the seamless integration of four core technologies: wireless communications, sensing, AI, and mechatronics. Nisshinbo's unique strength lies in possessing all four technologies in-house and validating them in our own factories as Customer Zero before commercial deployment. Connect the Field Seamless on-site wireless communications × See the Field Vision Analytics × Make Decisions in the Field In-house Development + External Collaboration ＋ Take Action in the Field Robotics Physical AI: AI That Sees, Decides, and Acts in the Real World Hi-MA Platform: A Shared Platform for AI Technologies, Robotics Software, Operational Data, and Domain Knowledge Win-Win (1) Strengthen Our Own Factories Improve Quality and Productivity → Enhance the Competitiveness of the EDMS Business (2) Commercialize Proven Technologies* Validated through Customer Zero → Manufacturing DX Solutions *In-house validation reduces implementation risk for customers. Wireless Communications Sensing (Vision) AI Mechatronics 23
Page 24
Summary We drive business growth as a business-oriented R&D organization by integrating wireless communications, sensing, and AI. Research themes are selected based on societal challenges and our Purpose. The Integrated Three-Party Framework brings together R&D, business units, and frontline operations around shared objectives defined in the Long-Term Technology Plan, accelerating Systems R&D and commercialization. Real-world implementation and the Hi-MA Platform drive growth in three strategic domains: Smart Factory, Smart Ship, and Disaster Information Platform. The FI Division Is Transforming into a Business-Oriented R&D Organization That Connects R&D Outcomes to Business Growth Societal Challenges Select Research Themes Based on Our Purpose Integrated Three-Party Framework Shared Objectives Defined in the Long-Term Technology Plan Real-World Implementation Validate and Improve through Customer Zero/One Commercialization Deliver Customer Value - Decision-Making Structure Special Research Projects: Monthly Management Meeting, Steering Committee (Quarterly). - Project Termination Criteria Projects missing milestones in two consecutive review cycles are terminated and resources are reallocated. - Risk Management Technology risks are mitigated through external partnerships, while market risks are validated early through Customer Zero/One. Governance 1H 2026 Research Themes Defined 2H 2026 Launch of the Integrated Three-Party Framework, Initial Long-Term Technology Plan Completed 2027 Field Validation Begins 2028 Initial Commercial Launch 2030 Scale into Growth Businesses 24
Page 25
The earnings forecasts contained in this document are based on the Company's judgment using information currently available and do not constitute a promise of their achievement.