Interim report
Page 1
Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( Under IFRS ) August 6 , 2026 Company name : Toray Industries , Inc. Listing : Securities code : 3402 URL : Representative : Inquiries : Telephone : Tokyo Stock Exchange www.toray.com Mitsuo Ohya , President and CEO Takanori Ito , General Manager , Corporate PR Department + 81-3-3245-5178 Scheduled date to commence dividend payments : Preparation of supplementary material on financial results : Holding of financial results briefing : Yes Yes ( for Securities Analysts / Institutional Investors ) ( Yen amounts are rounded to the nearest million . ) 1. Consolidated financial results for the three months ended June 30 , 2026 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated financial performance ( Percentages indicate year - on - year changes . ) Revenue Core operating income Operating income Profit before tax Three months ended June 30 , 2026 June 30 , 2025 Millions of yen 678,967 595,829 % Millions of yen % 14.0 ( 6.6 ) 48,432 66.6 29,073 ( 20.9 ) Millions of yen 47,330 72.1 27,506 ( 27.8 ) % Millions of yen % 49,069 28,238 73.8 ( 32.4 ) Profit Profit attributable to owners of parent Basic earnings Diluted earnings per share per share Three months Millions of yen % Millions of yen % Yen Yen ended June 30 , 2026 June 30 , 2025 33,981 18,606 82.6 31,262 82.3 21.47 21.44 ( 37.6 ) 17,151 Notes : 1 . 2 . 11.14 Comprehensive income for the three months ended June 30 , 2026 and 2025 were ¥ 35,792 million ( 149.9 % ) and ¥ 14,320 million ( ( 87.7 ) % ) , respectively . Core operating income is calculated by excluding income and expenses due to non - recurring factors from operating income . ( 36.1 ) 11.16 ( 2 ) Consolidated financial position As of June 30 , 2026 March 31 , 2026 Total assets Total equity Millions of yen Millions of yen Equity attributable to owners of parent Millions of yen Equity ratio % 3,492,091 3,476,976 1,947,937 1,817,139 52.0 1,927,836 1,800,058 51.8
Page 2
2. Cash dividends Annual dividends per share First quarter-end Second quarter- end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Year ended March 31, 2026 － 10.00 － 10.00 20.00 Year ending March 31, 2027 － Year ending March 31, 2027 (Forecast) 13.00 － 13.00 26.00 Notes: 1. Revisions to the forecast of cash dividends most recently announced: None 2. Breakdown of the Second quarter-end dividend forecast for the fiscal year ending March 31, 2027: Ordinary dividend: 10.00 yen per share Commemorative dividend: 3.00 yen per share 3. Consolidated financial forecasts for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Revenue Core operating income Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Yen Six months ending September 30, 2026 1,390,000 12.6 87,000 28.2 45,000 21.8 30.90 Year ending March 31, 2027 2,830,000 9.5 160,000 12.7 90,000 13.2 61.80 Note: Revisions to the consolidated financial forecasts most recently announced: Yes
Page 3
* Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies and changes in accounting estimates (i) Changes in accounting policies required by IFRS: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (3) Number of issued shares (ordinary shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 1,504,481,403 shares As of March 31, 2026 1,504,481,403 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 47,819,230 shares As of March 31, 2026 48,344,096 shares (iii) Average number of shares outstanding during the period Three months ended June 30, 2026 1,456,336,917 shares Three months ended June 30, 2025 1,537,324,791 shares * Review of the Japanese-language originals of the attached condensed consolidated financial statements by certified public accountants or an audit firm: None * Proper use of earnings forecasts, and other special matters Earnings forecasts given herein have been prepared based on assumptions such as economic environment outlook available as of the publication of this report and these forecasts are not guarantees of future performance. Actual results may differ significantly from forecasts due to various factors. For the assumptions underlying the forecasts herein, please refer to “1. Overview of Operating Results (2) Forecast for the Fiscal Year Ending March 31, 2027” of the accompanying materials.
Page 4
- 1 - Contents of Attachments 1. Overview of Operating Results ・・・ 2 (1) Overview of the Three Months Ended June 30, 2026 and Analysis of Financial Position ・・・ 2 (2) Forecast for the Fiscal Year Ending March 31, 2027 ・・・ 5 2. Condensed Consolidated Financial Statements ・・・ 7 (1) Condensed Consolidated Statements of Financial Position ・・・ 7 (2) Condensed Consolidated Statements of Profit or Loss and Condensed Consolidated Statements of Comprehensive Income ・・・ 9 (3) Condensed Consolidated Statements of Changes in Equity ・・・ 11 (4) Condensed Consolidated Statements of Cash Flows ・・・ 13 (5) Notes to the Condensed Consolidated Financial Statements ・・・ 14
Page 5
- 2 - 1. Overview of Operating Results (1) Overview of the Three Months Ended June 30, 202 6 and Analysis of Financial Position Overview of the Three Months Ended June 30, 2026 Three months ended June 30,2026 Year-on-year change Billions of yen % Revenue 679.0 14.0 Core operating income 48.4 66.6 Operating income 47.3 72.1 Profit attributable to owners of parent 31.3 82.3 During the period under review (from April 1, 2026 to June 30, 2026) , the outlook for the global economy became increasingly uncertain given the concerns over the supply stability and rising prices of energy and petrochemical raw materials stemming from conflicts in the Middle East. Nevertheless, investment related to AI and semiconductors provided underlying support for economic activity. The U.S. economy, driven by AI investments and rising stock prices, saw gradual expansion. The European economy showed some signs of a moderate recovery, but the recovery remained sluggish. The Chinese economy continued to decelerate gradually due mainly to stagnant domestic demand. The Japanese economy continued to recover moderately on the back of steady consumer spending. Under such circumstances, Toray Group launched its Medium-Term Management Program “IGNITION 2028” in fiscal 2026, with the goal of becoming a highly profitable company that contributes to society. Under IGNITION 2028, Toray Group has established three basic policies on “Enhancing Economic Value”, “Enhancing Social Value”, and “Strengthening Management Foundation”. Based on these policies, the Group is promoting growth strategies and structural reforms, with ROIC positioned as a key management indicator to improve profitability and capital efficiency. As a result, consolidated revenue for the three months ended June 30, 2026, compared with the same period of the previous fiscal year, increased 14.0 % to ¥ 679.0 billion, and core operating income (Note) rose 66.6% to ¥48.4 billion. Operating income increased 72.1% to ¥47.3 billion and profit attributable to owners of parent surged 82.3% to ¥31.3 billion. Financial performance by segment is as described below. Fibers & Textiles Three months ended June 30, 2026 Year-on-year change Billions of yen % Revenue 259.9 8.3 Core operating income 18.0 18.3
Page 6
- 3 - In the apparel applications, the Group focused on capturing the demand, although operations were affected by intensified competition from overseas products. The industrial applications showed a gradual recovery in demand primarily in automo tive applications. While both applications were affected by rising raw material prices resulting from the worsening situation in the Middle East, the Group worked to mitigate these impacts through emergency measures, including price pass-through and cost reduction initiatives. As a result, revenue of the overall Fibers & Textiles segment, compared with the same period of the previous fiscal year, increased 8.3% to ¥259.9 billion, and core operating income rose 18.3% to ¥18.0 billion. Performance Chemicals Three months ended June 30, 2026 Year-on-year change Billions of yen % Revenue 251.1 14.1 Core operating income 23.1 69.4 The resins and chemicals businesses were affected by rising raw material prices r esulting from the worsening situation in the Middle East, but efforts were made to achieve price pass- through, and sales remained firm. In t he films business , sales for electronic component applications, including MLCCs, and optical applications remained strong. In the electronic & information materials business, sales of products for power inductor application expanded, while OLED -related materials and circuit materials were affected by the slow demand for display panels and intensified competition in China. As a result, revenue of the overall Performance Chemicals segment, compared with the same period of the previous fiscal year, grew 14.1% to ¥251.1 billion, and core operating income rose 69.4% to ¥23.1 billion. Carbon Fiber Composite Materials Three months ended June 30, 2026 Year-on-year change Billions of yen % Revenue 89.7 34.1 Core operating income 7.9 71.3 The Aircraft, Space & Defense applications saw steady expansion , while the sports and industrial applications also showed a recovery trend.
Page 7
- 4 - As a result, revenue of the overall Carbon Fiber Composite Materials segment , compared with the same period of the previous fiscal year, increased 34.1% to ¥89.7 billion, and core operating income rose 71.3% to ¥7.9 billion. Water Treatment & Healthcare Three months ended June 30, 2026 Year-on-year change Billions of yen % Revenue 40.7 13.8 Core operating income 3.1 126.6 In the water treatment business, while the Chinese market remained stagnant, shipments of reverse osmosis (RO) membranes for large-scale projects in the Middle East , and sales in the Americas, one of its key markets, remained firm. In the pharmaceutical and medical products businesses, sales of pharmaceuticals stagnated but the Group made efforts to shift towards higher value-added hemodialysis dialyzers and to reduce costs. As a result, revenue o f the overall Water Treatment & Healthcare segment, compared with the same period of the previous fiscal year, increased 13.8 % to ¥ 40.7 billion, while core operating income expanded 126.6% to ¥3.1 billion. Note: Core operating income is calculated by excluding income and expenses due to non-recurring factors from operating income.
Page 8
- 5 - Analysis of Financial Position As of June 30, 2026, both assets and liabilities of Toray Group were affected by the increase in translated yen amounts of overseas subsidiaries caused by the depreciation of the yen. Total assets stood at ¥3,492.1 billion, an increase of ¥15.1 billion compared with the end of the previous fiscal year, due primarily to increases in inventories while trade and other receivables and retirement benefit asset decreased. Total liabilities came to ¥1,544.2 billion, a decrease of ¥5.0 billion compared with the end of the previous fiscal year, owing mainly to decreases in borrowings and deferred tax liabilities. Total equity stood at ¥1,947.9 billion, an increase of ¥20.1 billion compared with the end of the previous fiscal year, mainly owing to an increase in other components of equity . Equity attributable to owners of parent stood at ¥1, 817.1 billion. Equity ratio as of June 30, 2026 came to 52.0%, a 0.3 percentage-point increase compared with the level at the end of the previous fiscal year. (2) Forecast for the Fiscal Year Ending March 31, 2027 The global economy is expected to continue with the gradual recovery phase. The Japanese economy is also expected to continue with its gradual recovery. However, downside risks remain, including escalating tensions in the Middle East and the resulting rise in raw material prices and supply constraints, as well as prolonged impacts that may weigh on the global economy. Further, the current economic conditions will be affected by the direction of the U.S. trade and foreign policies, together with responses from other countries, trends in AI -related demand, and slowdown in the Chinese economy. These factors may significant ly affect supply chains and trade structures in the medium- to long-term. Under such circumstances, Toray Group will promote the basic strategies under the Medium- Term Management Program “IGNITION 2028,” carrying out its business operations in preparation for uncertainties. For the fiscal year ending March 31, 2027, Toray Group revised its consolidated forecast for the first six months ending September 30, 2026, taking into consideration its business performance for the first three months and the business environment. The Group expects revenue of ¥1,390.0 billion, core operating income of ¥87.0 billion, and profit attributable to owners of parent of ¥45.0 billion, and plans to review the full -year forecast as necessary at the time of the announcement of the results for the first six months by considering the trends in the external environment. The calculation of consolidated earnings forecasts for the period from July to September 2026 is based on an assumed foreign currency exchange rate of ¥155.0 to the U.S. dollar.
Page 9
- 6 - Revisions to consolidated financial forecasts for the six months ending September 30, 2026 (from April 1, 2026 to September 30, 2026) Revenue Core operating income Profit attributable to owners of parent Basic earnings per share Previous forecasts (A) Billions of yen 1,370.0 Billions of yen 73.0 Billions of yen 40.0 Yen 27.48 Revised forecasts (B) 1,390.0 87.0 45.0 30.90 Change (B - A) 20.0 14.0 5.0 Change (%) 1.5 19.2 12.5 (Reference) Actual consolidated results for the six months ended September 30, 2025 1,234.3 67.9 36.9 24.23
Page 10
(Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and cash equivalents 265,295 259,626 Trade and other receivables 642,708 620,771 Inventories 538,586 576,065 Other financial assets 10,817 10,460 Other current assets 71,100 84,731 Assets held for sale 453 36,597 Total current assets 1,528,959 1,588,250 Non-current assets Property, plant and equipment 1,175,896 1,167,075 Right-of-use assets 53,133 50,257 Goodwill 100,809 102,231 Intangible assets 105,544 106,624 Investments accounted for using equity method 186,985 191,597 Other financial assets 169,095 156,155 Deferred tax assets 25,340 25,006 Retirement benefit asset 114,474 90,098 Other non-current assets 16,741 14,798 Total non-current assets 1,948,017 1,903,841 Total assets 3,476,976 3,492,091 2. Condensed Consolidated Financial Statements (1) Condensed Consolidated Statement of Financial Position - 7 -
Page 11
(Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities and Equity Current liabilities Trade and other payables 317,156 316,075 Bonds and borrowings 380,968 366,627 Lease liabilities 11,662 11,711 Other financial liabilities 11,726 12,727 Income taxes payable 14,035 10,408 Other current liabilities 122,440 125,442 Liabilities directly associated with assets held for sale - 7,665 Total current liabilities 857,987 850,655 Non-current liabilities Bonds and borrowings 483,014 494,947 Lease liabilities 29,915 27,835 Other financial liabilities 4,114 4,062 Deferred tax liabilities 56,534 50,501 Retirement benefit liability 75,839 73,956 Other non-current liabilities 41,737 42,198 Total non-current liabilities 691,153 693,499 Total liabilities 1,549,140 1,544,154 Equity Equity attributable to owners of parent Share capital 147,873 147,873 Capital surplus 119,528 119,041 Retained earnings 1,161,871 1,163,177 Treasury shares (52,485) (51,911) Other components of equity 423,271 438,959 Total equity attributable to owners of parent 1,800,058 1,817,139 Non-controlling interests 127,778 130,798 Total equity 1,927,836 1,947,937 Total liabilities and equity 3,476,976 3,492,091 - 8 -
Page 12
(Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Revenue 595,829 678,967 Cost of sales (475,079) (531,715) Gross profit 120,750 147,252 Selling, general and administrative expenses (91,853) (100,658) Other income 1,102 3,705 Other expenses (2,493) (2,969) Operating income 27,506 47,330 Finance income 2,973 2,748 Finance costs (5,300) (5,116) Share of profit (loss) of investments accounted for using equity method 3,059 4,107 Profit before tax 28,238 49,069 Income tax expense (9,632) (15,088) Profit 18,606 33,981 Profit attributable to: Owners of parent 17,151 31,262 Non-controlling interests 1,455 2,719 Profit 18,606 33,981 Earnings per share: Basic (Yen) 11.16 21.47 Diluted (Yen) 11.14 21.44 (2) Condensed Consolidated Statement of Profit or Loss and Condensed Consolidated Statement of Comprehensive Income Condensed Consolidated Statement of Profit or Loss - 9 -
Page 13
(Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit 18,606 33,981 Other comprehensive income Items that will not be reclassified to profit or loss Investments in equity instruments 3,368 (4,395) Remeasurements of defined benefit plans 1,922 (15,453) Share of other comprehensive income of investments accounted for using equity method 196 166 5,486 (19,682) Items that may be reclassified to profit or loss Cash flow hedges (273) 444 Deferred costs of hedging 18 132 Exchange differences on translation (9,520) 20,928 Share of other comprehensive income of investments accounted for using equity method 3 (11) (9,772) 21,493 Total other comprehensive income (4,286) 1,811 Comprehensive income 14,320 35,792 Comprehensive income attributable to: Owners of parent 12,799 31,724 Non-controlling interests 1,521 4,068 Comprehensive income 14,320 35,792 Condensed Consolidated Statement of Comprehensive Income - 10 -
Page 14
(Millions of yen) Equity attributable to owners of parent Share capital Capital surplus Retained earnings Treasury shares At April 1, 2025 147,873 120,562 1,170,508 (57,240) Profit - - 17,151 - Other comprehensive income - - - - Comprehensive income - - 17,151 - Exercise of share acquisition rights - (854) - 855 Share-based payment transactions - 73 - - Purchase of treasury shares - (24) - (33,411) Dividends - - (14,081) - Changes in ownership interest in subsidiaries - - - - Transfer from other components of equity to retained earnings - - 1,879 - Other changes - - - - Total transactions with owners and other - (805) (12,202) (32,556) At June 30, 2025 147,873 119,757 1,175,457 (89,796) (Millions of yen) Equity attributable to owners of parent Non- controlling interests Total equity Other components of equity Total equity attributable to owners of parent Investments in equity instruments Cash flow hedges Deferred costs of hedging Exchange differences on translation Remeasure- ments of defined benefit plans Total other components of equity At April 1, 2025 59,200 119 78 267,884 - 327,281 1,708,984 111,588 1,820,572 Profit - - - - - - 17,151 1,455 18,606 Other comprehensive income 3,404 (270) 18 (9,384) 1,880 (4,352) (4,352) 66 (4,286) Comprehensive income 3,404 (270) 18 (9,384) 1,880 (4,352) 12,799 1,521 14,320 Exercise of share acquisition rights - - - - - - 1 - 1 Share-based payment transactions - - - - - - 73 - 73 Purchase of treasury shares - - - - - - (33,435) - (33,435) Dividends - - - - - - (14,081) (2,354) (16,435) Changes in ownership interest in subsidiaries - - - - - - - 12 12 Transfer from other components of equity to retained earnings 1 - - - (1,880) (1,879) - - - Other changes - 121 - - - 121 121 4,230 4,351 Total transactions with owners and other 1 121 - - (1,880) (1,758) (47,321) 1,888 (45,433) At June 30, 2025 62,605 (30) 96 258,500 - 321,171 1,674,462 114,997 1,789,459 (3) Condensed Consolidated Statement of Changes in Equity Three months ended June 30, 2025 - 11 -
Page 15
(Millions of yen) Equity attributable to owners of parent Share capital Capital surplus Retained earnings Treasury shares At April 1, 2026 147,873 119,528 1,161,871 (52,485) Profit - - 31,262 - Other comprehensive income - - - - Comprehensive income - - 31,262 - Exercise of share acquisition rights - (573) - 574 Dividends - - (14,570) - Changes in ownership interest in subsidiaries - 86 - - Transfer from other components of equity to retained earnings - - (15,386) - Other changes - - - (0) Total transactions with owners and other - (487) (29,956) 574 At June 30, 2026 147,873 119,041 1,163,177 (51,911) (Millions of yen) Equity attributable to owners of parent Non- controlling interests Total equity Other components of equity Total equity attributable to owners of parent Investments in equity instruments Cash flow hedges Deferred costs of hedging Exchange differences on translation Remeasure- ments of defined benefit plans Total other components of equity At April 1, 2026 70,521 1,597 (7) 351,160 - 423,271 1,800,058 127,778 1,927,836 Profit - - - - - - 31,262 2,719 33,981 Other comprehensive income (4,477) 433 132 19,720 (15,346) 462 462 1,349 1,811 Comprehensive income (4,477) 433 132 19,720 (15,346) 462 31,724 4,068 35,792 Exercise of share acquisition rights - - - - - - 1 - 1 Dividends - - - - - - (14,570) (2,098) (16,668) Changes in ownership interest in subsidiaries - - - - - - 86 970 1,056 Transfer from other components of equity to retained earnings 40 - - - 15,346 15,386 - - - Other changes - (160) - - - (160) (160) 80 (80) Total transactions with owners and other 40 (160) - - 15,346 15,226 (14,643) (1,048) (15,691) At June 30, 2026 66,084 1,870 125 370,880 - 438,959 1,817,139 130,798 1,947,937 Three months ended June 30, 2026 - 12 -
Page 16
(Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Cash flows from operating activities Profit before tax 28,238 49,069 Depreciation and amortization 31,945 34,069 Impairment losses (reversal of impairment losses) 508 309 Share of loss (profit) of investments accounted for using equity method (3,059) (4,107) Finance income and finance costs 2,524 1,419 Decrease (increase) in trade and other receivables 33,011 21,502 Decrease (increase) in inventories (16,356) (37,913) Increase (decrease) in trade and other payables (7,563) 12,080 Changes in retirement benefit asset and liability (741) (1,142) Other adjustments 19,416 (3,484) Subtotal 87,923 71,802 Interest received 828 830 Dividends received 3,708 3,004 Interest paid (3,813) (4,813) Income taxes refund (paid) (38,790) (16,692) Net cash provided by operating activities 49,856 54,131 Cash flows from investing activities Purchase of property, plant and equipment, and intangible assets (50,230) (32,746) Proceeds from sale of property, plant and equipment, and intangible assets 170 266 Purchase of investments (348) (953) Proceeds from sale and redemption of investments 199 1,133 Other inflows (outflows) of cash (398) (886) Net cash used in investing activities (50,607) (33,186) Cash flows from financing activities Net increase (decrease) in short-term borrowings 53,931 589 Proceeds from issuance of bonds and long-term borrowings 11,603 18,539 Redemption of bonds and repayments of long-term borrowings (17,852) (25,762) Repayments of lease liabilities (3,222) (3,182) Purchase of treasury shares (33,435) (0) Dividends paid to owners of parent (13,615) (14,145) Dividends paid to non-controlling interests (2,355) (2,098) Other inflows (outflows) of cash (8) 1,054 Net cash provided by (used in) financing activities (4,953) (25,005) Effect of exchange rate changes on cash and cash equivalents (2,983) 2,694 Net increase (decrease) in cash and cash equivalents (8,687) (1,366) Cash and cash equivalents at beginning of period 237,295 265,295 Cash and cash equivalents at end of period 228,608 263,929 (4) Condensed Consolidated Statement of Cash Flows - 13 -
Page 17
(5) Notes to the Condensed Consolidated Financial Statements (Applicable Financial Reporting Framework) Toray Group's condensed consolidated financial statements have been prepared in accordance with Article 5, Paragraph 2 of the Standards for the Preparation of Quarterly Financial Statements (the "Standards") of Tokyo Stock Exchange Inc. Applying the provisions for reduced disclosures set forth in Article 5, Paragraph 5 of the Standards, certain disclosures and notes required under IAS 34 “Interim Financial Reporting” have been omitted. Reportable segment Main products Fibers & Textiles Filament yarns, staple fibers, spun yarns, woven and knitted fabrics of nylon, polyester, acrylic and others; non-woven fabrics; ultra-microfiber non- woven fabric with suede texture; apparel products. Performance Chemicals Nylon, ABS, PBT, PPS and other resins and molded products; polyolefin foam; polyester, polyethylene, polypropylene and other films and processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials and graphic materials. Carbon Fiber Composite Materials Carbon fibers, carbon fiber composite materials and their molded products. Water Treatment & Healthcare Water treatment membranes and related equipment; pharmaceuticals; medical devices. (Segment Information) 1. Overview of reportable segments The reportable segments of Toray Group are the components of the Group for which discrete financial information is available and which are subject to periodic review by the Board of Directors and other relevant bodies to determine the allocation of management resources and evaluate business performance. Toray Group identifies four reportable segments based on the product’s nature and market similarity: “Fibers & Textiles,” “Performance Chemicals,” “Carbon Fiber Composite Materials,” and “Water Treatment & Healthcare.” The main products belonging to each reportable segment are as follows: 2. Changes in reportable segments Under its medium-term management program, “IGNITION 2028,” Toray Group positioned the water treatment business and the pharmaceutical and medical products business as businesses that share the common value proposition of supporting people's health and quality of life. Accordingly, these businesses have been integrated into the “Water Treatment & Healthcare” segment. As a result, beginning with the first quarter of the current fiscal year, Toray Group changed its reportable segments from the previous five segments— “Fibers & Textiles,” “Performance Chemicals,” “Carbon Fiber Composite Materials,” “Environment & Engineering,” and “Life Science”— to the following four segments: “Fibers & Textiles,” “Performance Chemicals,” “Carbon Fiber Composite Materials,” and “Water Treatment & Healthcare.” Segment information for the first quarter of the previous fiscal year has been restated to conform to the revised reportable segment. - 14 -
Page 18
(Millions of yen) Reportable segments Other *1 Total Reconcilia- tions *2 Consolidated totalFibers & Textiles Performance Chemicals Carbon Fiber Composite Materials Water Treatment & Healthcare Revenue Revenue from external customers 239,897 220,069 66,869 35,802 33,192 595,829 - 595,829 Intersegment revenue 350 2,939 219 133 21,268 24,909 (24,909) - Total 240,247 223,008 67,088 35,935 54,460 620,738 (24,909) 595,829 Core operating income 15,192 13,608 4,627 1,384 763 35,574 (6,501) 29,073 *1 “Other” represents comprehensive engineering; industrial equipment and machinery; materials for housing, building and civil engineering applications; analysis and physical evaluation services, etc. *2 “Reconciliations” of core operating income of ¥(6,501) million include intersegment eliminations of ¥225 million and corporate expenses of ¥(6,726) million. The corporate expenses consist of the headquarters’ research expenses that are not allocated to each reportable segment. (Millions of yen) Reportable segments Other *1 Total Reconcilia- tions *2 Consolidated totalFibers & Textiles Performance Chemicals Carbon Fiber Composite Materials Water Treatment & Healthcare Revenue Revenue from external customers 259,898 251,092 89,663 40,740 37,574 678,967 - 678,967 Intersegment revenue 334 4,067 198 84 20,484 25,167 (25,167) - Total 260,232 255,159 89,861 40,824 58,058 704,134 (25,167) 678,967 Core operating income 17,972 23,054 7,927 3,136 2,439 54,528 (6,096) 48,432 *1 “Other” represents comprehensive engineering; industrial equipment and machinery; materials for housing, building and civil engineering applications; analysis and physical evaluation services, etc. *2 “Reconciliations” of core operating income of ¥(6,096) million include intersegment eliminations of ¥(115) million and corporate expenses of ¥(5,981) million. The corporate expenses consist of the headquarters’ research expenses that are not allocated to each reportable segment. 3. Information by reportable segment Three months ended June 30, 2025 Three months ended June 30, 2026 - 15 -
Page 19
(Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Core operating income 29,073 48,432 Gain on sale or disposal of fixed assets 51 1,035 Loss on sale or disposal of fixed assets (1,110) (1,828) Impairment losses (508) (309) Operating income 27,506 47,330 * Reconciliation of operating income to profit before tax is presented in the condensed consolidated statement of profit or loss. Core operating income is calculated by excluding income and expenses due to non-recurring factors from operating income. Reconciliation of core operating income to operating income is as follows: (Millions of yen) As of March 31, 2026 As of June 30, 2026 Cash on hand and demand deposits 224,491 225,348 Time deposits and other short-term investments 40,804 34,278 Cash and cash equivalents as presented in the condensed consolidated statement of financial position 265,295 259,626 Cash and cash equivalents included in assets held for sale - 4,303 Cash and cash equivalents as presented in the condensed consolidated statement of cash flows 265,295 263,929 (Cash and Cash Equivalents) The breakdown of cash and cash equivalents is as follows: (Assets Held for Sale) On May 29, 2026, Toray Industries, Inc. entered into a share transfer agreement to sell its entire 66% interest in Soda Aromatic Co., Ltd., a subsidiary in the Performance Chemicals segment, to Samyang Corporation Japan, Inc., a subsidiary established by Samyang Corporation of the Republic of Korea, together with Mitsui & Co., Ltd., which holds the remaining 34% interest. Accordingly, as of June 30, 2026, assets of ¥27,303 million and liabilities of ¥7,665 million of Soda Aromatic Co., Ltd. have been classified as assets held for sale and liabilities directly associated with assets held for sale. The transaction was completed on July 1, 2026, and Toray Group expects to recognize a gain on the sale of approximately ¥8.0 billion (net of tax) for the six months ending September 30, 2026. (Going Concern Assumption) Not Applicable. - 16 -