Interim report
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Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( JPGAAP ) Accounting andards Fo FASF Name of listed company : Nissan Chemical Corporation Code number : 4021 Representative : YAGI Shinsuke , President Inquiry to : NOMURA Hiroshi , Head of Finance and Accounting Department Scheduled dividend payment date : ― Supplemental information : Yes Financial results meeting : Yes ( For institutional investors and analysts ) August 7 , 2026 Stock Exchange : Tokyo URL : https://www.nissanchem.co.jp/ Tel . +81 3 4463 8401 ( Amounts rounded down to the nearest million yen ) 1. Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( From April 01 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated Operating Results ( % indicates the rate of increase / decrease against the same period of the previous year ) Net income attributable to Net sales Operating income Ordinary income owners of parent Million yen % 78,792 69,871 12.8 19.1 Million yen 21,907 % Million yen % Million yen % 18,097 21.1 25.4 23,644 30.3 16,844 21.2 18,139 13.2 13,892 19.9 Three months ended June 30 , 2026 Three months ended June 30 , 2025 ( Note ) Comprehensive income : Three months ended June 30 , 2026 Three months ended June 30 , 2025 Basic earnings per share Three months ended June 30 , 2026 Three months ended June 30 , 2025 ( 2 ) Consolidated Financial Position 17,998 million yen , 9.1 % : 16,500 million yen , 25.1 % Diluted net income per share Yen Yen 125.74 102.20 Equity ratio Total assets Net assets As of June 30 , 2026 As of March 31 , 2026 Million yen 359,948 355,078 Million yen 255,168 259,051 ( Reference ) Shareholders ' equity : As of June 30 , 2026 As of March 31 , 2026 : 251,218 million yen 255,264 million yen 2. Cash Dividends Cash dividends per share First quarter Second quarter Third quarter Year - end Annual Yen Yen Yen Yen Year ended March 31 , 2026 70.00 132.00 Yen 202.00 Year ending March 31 , 2027 Year ending March 31 , 2027 ( Outlook ) 70.00 ( Note ) Revision of the latest released dividend outlook : None 142.00 212.00 % 69.8 71.9 3. Outlook of Consolidated Financial Results for the Fiscal Year Ending March 31 , 2027 ( From April 01 , 2026 to March 31 , 2027 ) ( % indicates the rate of increase / decrease against the same period of the previous year ) Net sales Operating income Ordinary income Net income attributable Basic earnings to owners of parent per share Million yen % Million yen % Million yen % Million yen % Yen Six months 131,500 1.1 28,700 ( 3.0 ) 29,600 ( 0.6 ) 22,400 ( 1.9 ) 168.52 ending September 30 , 2026 Year ending March 31 , 2027 289,700 3.6 66,800 5.1 68,800 4.4 51,500 3.6 387.11 ( Note ) Revision of the latest released outlook of financial results : None
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44444..... NNNNNooooottttteeeeesssss (1) Changes in significant consolidated subsidiaries (Changes in specified subsidiaries involving changes in scope of consolidation) : Yes Newly Included: 1 company (Company name:Nissan Chemical Materials Research (Suzhou) Co., Ltd.) (2) Application of special accounting treatment to preparation of quarterly financial statements : None (3) Changes of accounting policies and accounting estimates, and restatement 1. Changes of accounting policies due to revisions of accounting standards : Yes 2. Changes of accounting policies other than the above : None 3. Changes in accounting estimates : None 4. Restatements : None (Note) Please see [2. Consolidated Financial Statements (4) Notes to Consolidated Financial Statements, (Changes in Accounting Policies)] on page 10 for further details. (4) Number of shares outstanding (common shares) 1. Number of shares outstanding (including treasury shares) As of June 30, 2026 : 134,800,000 shares As of March 31, 2026 : 134,800,000 shares 2. Number of treasury shares As of June 30, 2026 : 1,310,767 shares As of March 31, 2026 : 691,415 shares 3. Average number of shares outstanding As of June 30, 2026 : 133,958,968 shares As of June 30, 2025 : 135,927,758 shares (Note) The Company has introduced “Board Benefit Trust (BBT)” based on the resolution of Board of Directors' meeting held on July 30, 2019. The shares held by the Trust are included in the number of treasury shares at the end of the period, and they are included in the number of treasury shares deducted in calculating the average number of shares outstanding over the period. The number of shares held by the Trust (included in treasury shares) at the end of the period was 126,500 shares. In addition, the average number of shares held by the Trust during the period was 127,617 shares. This is not included in the average number of shares outstanding. * Review of quarterly consolidated financial statements by certified public accountants or auditing corporation: None * Explanations regarding appropriate use of business outlook and other special notes The business outlook contained in this report is based on information available at the time of disclosure. Actual operating results may differ materially from the outlook due to various factors. For supplemental information, please refer to our website. The transcript of financial results briefing will be released on our website as well.
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1 Table of Contents for Attached Materials 1. Qualitative Information on Quarterly Results ................................................................................................................. 2 (1) Business Performance ............................................................................................................................................. 2 (2) Financial Position ..................................................................................................................................................... 3 (3) Outlook of Consolidated Financial Results and Other Forward-looking Information ................................................ 4 (4) Basic Policy on Distribution of Earnings ................................................................................................................... 4 2. Consolidated Financial Statements ............................................................................................................................... 5 (1) Consolidated Balance Sheets ................................................................................................................................... 5 (2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income ................................... 7 (3) Consolidated Statements of Cash Flows .................................................................................................................. 9 (4) Notes to Consolidated Financial Statements ............................................................................................................ 10 (Notes on Assumption of Going Concern) ........................................................................................................... 10 (Notes on Significant Changes in Shareholders' Equity) ..................................................................................... 10 (Changes in Accounting Policies) ..................................................................................................................................... 10 (Segment Information) ........................................................................................................................................ 11 (Significant Subsequent Events) ...................................................................................................................... 12
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2 11111..... QQQQQuuuuuaaaaallllliiiiitttttaaaaatttttiiiiivvvvveeeee IIIIInnnnnfffffooooorrrrrmmmmmaaaaatttttiiiiiooooonnnnn ooooonnnnn QQQQQuuuuuaaaaarrrrrttttteeeeerrrrrlllllyyyyy RRRRReeeeesssssuuuuullllltttttsssss (1) Business Performance During the first quarter of the current fiscal year (April 01, 2026 to June 30, 2026), the global economy was supported by global demand driven by the technology cycle associated with the advancement and widespread adoption of artificial intelligence (AI). However, due to uncertainty surrounding the situation in the Middle East and supply chain disruptions, downside risks remained. Under these circumstances, in the Performance Materials Segment, sales increased significantly, mainly due to strong sales of Semiconductor Materials. In the Agricultural Chemicals Segment, sales were almost flat compared to the previous fiscal year. In the Chemicals Segment, sales of both Basic Chemicals and Fine Chemicals increased. In the Healthcare Segment, sales increased. As a result, both sales and each income exceeded the same period of previous fiscal year and the outlook announced in May. (Million yen, amount rounded down to the nearest million yen) 1Q FY2025 (Actual) 1Q FY2026 (Actual) Year-on-year Change 1Q FY2026 (Outlook) (Note) Change from Outlook Sales 69,871 78,792 +8,921 69,100 +9,692 Operating income 18,097 21,907 +3,809 16,800 +5,107 Ordinary income 18,139 23,644 +5,504 18,200 +5,444 Net income attributable to owners of parent 13,892 16,844 +2,951 13,800 +3,044 (Note) The outlook is described on page 10 of the FY2025 Presentation Materials (announced on May 15, 2026). Explanations by segments are as below. TTTTThhhhheeeee PPPPPeeeeerrrrrfffffooooorrrrrmmmmmaaaaannnnnccccceeeee MMMMMaaaaattttteeeeerrrrriiiiiaaaaalllllsssss SSSSSeeeeegggggmmmmmeeeeennnnnttttt In Semiconductor Materials, sales of anti-reflective coating for semiconductors (ARC®*) and multi-layer process materials (OptiStack®*) increased significantly due to high customer utilization. In Display Materials, sales of "SUNEVER" (LCD alignment coating) decreased. In Inorganic Materials, sales of "SNOWTEX" (for polishing electronic materials and hard coating) and Organo / Monomer sol (various coatings and resin additives) increased. As a result, sales of this segment were 32,597 million yen (an increase of 6,739 million yen from the same period of the previous fiscal year) and operating income was 10,688 million yen (an increase of 2,487 million yen). Compared to the outlook (Note), sales were above 3.0 billion yen and operating income was above 2.4 billion yen. * ARC® and OptiStack® are registered trademarks of Brewer Science, Inc. (Note) The outlook is described on page 40 of the FY2025 Presentation Materials (announced on May 15, 2026). TTTTThhhhheeeee AAAAAgggggrrrrriiiiicccccuuuuullllltttttuuuuurrrrraaaaalllll CCCCChhhhheeeeemmmmmiiiiicccccaaaaalllllsssss SSSSSeeeeegggggmmmmmeeeeennnnnttttt Sales of Fluralaner (active ingredients for veterinary pharmaceuticals) decreased. In the Japanese domestic market, sales of "ROUNDUP" (non-selective foliar application herbicide) and "GRACIA" (insecticide) were firm. In the overseas market, sales of "LEIMAY" (fungicide) decreased. As a result, sales of this segment were 26,598 million yen (an increase of 9 million yen) and operating income was 8,841 million yen (an increase of 193 million yen). Compared to the outlook (Note), sales were above 3.3 billion yen and operating income was above 1.6 billion yen. (Note) The outlook is described on page 40 of the FY2025 Presentation Materials (announced on May 15, 2026).
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3 TTTTThhhhheeeee CCCCChhhhheeeeemmmmmiiiiicccccaaaaalllllsssss SSSSSeeeeegggggmmmmmeeeeennnnnttttt In Basic Chemicals, sales of high purity sulfuric acid (agent used for cleaning semiconductor), nitric acid products (metal dissolution and surface treatment, etc.), and urea and AdBlue®* (solution of urea in demineralised water for diesel vehicles) increased. In Fine Chemicals, sales of "TEPIC" (powder coating agent for paint, sealants, etc.) and environmental related products (sterilizing and disinfecting agents for pools and septic tanks, etc.) increased. As a result, sales of this segment were 10,528 million yen (an increase of 1,189 million yen) and operating income was 871 million yen (an increase of 161 million yen). Compared to the outlook (Note), sales were above 0.6 billion yen and operating income was below 0.1 billion yen. * AdBlue® is a registered trademark of the Verband der Automobilindustrie (VDA). (Note) The outlook is described on page 40 of the FY2025 Presentation Materials (announced on May 15, 2026). TTTTThhhhheeeee HHHHHeeeeeaaaaalllllttttthhhhhcccccaaaaarrrrreeeee SSSSSeeeeegggggmmmmmeeeeennnnnttttt Sales of "LIVALO" (anti-cholesterol drug) active ingredient increased in both the domestic and overseas markets. Sales of "Custom Chemicals" (solution proposal business and joint development business) increased. As a result, sales of this segment were 1,862 million yen (an increase of 286 million yen) and operating income was 742 million yen (an increase of 248 million yen). Compared to the outlook (Note), sales were above 0.1 billion yen and operating income was in line with the target. (Note) The outlook is described on page 40 of the FY2025 Presentation Materials (announced on May 15, 2026). TTTTTrrrrraaaaadddddiiiiinnnnnggggg Sales of this segment were 38,347 million yen (an increase of 8,365 million yen) and operating income was 1,399 million yen (an increase of 312 million yen). Compared to the outlook (Note), sales were above 5.9 billion yen and operating income was above 0.6 billion yen. (Note) The outlook is described on page 56 and 57 of the FY2025 Presentation Materials (announced on May 15, 2026). OOOOOttttthhhhheeeeerrrrrsssss Sales of this segment were 8,942 million yen (an increase of 1,038 million yen) and operating income was 542 million yen (an increase of 55 million yen). (2) Financial Position (Position of Assets, Liabilities and Net Assets) Total assets as of June 30, 2026 was 359,948 million yen (an increase of 4,870 million yen from March 31, 2026). It is mainly due to increase of notes and accounts receivable - trade and investment securities. Also, total liabilities as of June 30, 2026 was 104,780 million yen (an increase of 8,753 million yen). It is mainly due to the increase of bonds payable. Net assets as of June 30, 2026 was 255,168 million yen (a decrease of 3,883 million yen). As a result of these factors, equity ratio was 69.8% (a decrease of 2.1% from March 31, 2026). (Position of Cash Flows) Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation and gain and loss on working capital, net cash provided by operating activities for the three months ended June 30, 2026 was 21,220 million yen (16,335 million yen for the same period of the previous year). Due to the investment on plant and equipment, net cash used in investing activities for the three months ended June 30, 2026 was 6,145 million yen (3,313 million yen for the same period of the previous year). Due to payment for dividends, net cash used in financing activities for the three months ended June 30, 2026 was 16,725 million yen (7,669 million yen for the same period of the previous year). Cash and cash equivalents at the end of this period decreased 1,469 million yen from March 31, 2026 after adjusting for the 181 million yen effect of exchange rate. Moreover, after adding the 920 million yen increase in cash and cash equivalents from newly consolidated subsidiary, the balance stood at 35,180 million yen (33,545 million yen for the same
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4 period of the previous year). (3) Outlook of Consolidated Financial Results and Other Forward-looking Information There is no change in the outlook of consolidated business results for the first half and full year ending March 31, 2027 from the statement announced on May 15, 2026. (4) Basic Policy on Distribution of Earnings The Company’s basic policy of profit allocation is returning to shareholders by improving company value through increasing revenue in the medium and long terms. In medium-term business plan "Vista2027" Stage Ⅱ launched from April 2025, the company aims to realize dividend payout ratio to be 55% or more and total payout ratio to be 75% or more after FY2025.
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5 22222..... CCCCCooooonnnnnsssssooooollllliiiiidddddaaaaattttteeeeeddddd FFFFFiiiiinnnnnaaaaannnnnccccciiiiiaaaaalllll SSSSStttttaaaaattttteeeeemmmmmeeeeennnnntttttsssss (1) Consolidated Balance Sheets (Million yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 35,729 35,180 Notes and accounts receivable - trade, and contract assets 97,167 100,221 Merchandise and finished goods 56,991 57,047 Work in process 14 196 Raw materials and supplies 19,634 21,059 Accounts receivable - other 2,643 1,849 Short-term loans receivable 445 729 Other 9,399 7,229 Allowance for doubtful accounts (73) (73) Total current assets 221,951 223,440 Non-current assets Property, plant and equipment Buildings and structures 92,180 93,446 Accumulated depreciation and impairment loss (57,502) (58,041) Buildings and structures, net 34,677 35,405 Machinery, equipment and vehicles 182,744 185,561 Accumulated depreciation and impairment loss (161,658) (164,890) Machinery, equipment and vehicles, net 21,086 20,671 Tools, furniture and fixtures 49,801 50,139 Accumulated depreciation and impairment loss (43,510) (44,099) Tools, furniture and fixtures, net 6,290 6,039 Land 8,827 8,836 Leased assets 149 147 Accumulated depreciation (25) (29) Leased assets, net 124 118 Construction in progress 5,961 7,766 Total property, plant and equipment 76,968 78,837 Intangible assets Software 3,544 3,410 Other 9,225 8,700 Total intangible assets 12,770 12,111 Investments and other assets Investment securities 32,477 35,355 Long-term loans receivable 117 114 Deferred tax assets 554 557 Net defined benefit asset 5,750 5,803 Other 4,540 3,781 Allowance for doubtful accounts (52) (52) Total investments and other assets 43,387 45,559 Total non-current assets 133,126 136,508 Total assets 355,078 359,948
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6 (Million yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 22,555 23,755 Short-term loans payable 19,682 16,551 Commercial papers 7,993 6,993 Current portion of long-term loans payable 382 382 Income taxes payable 7,899 5,695 Provision for bonuses 2,785 883 Other 16,980 21,235 Total current liabilities 78,279 75,497 Non-current liabilities Bonds payable 10,000 20,000 Long-term loans payable 388 388 Deferred tax liabilities 3,712 5,111 Provision for share-based remuneration for directors (and other officers) 276 328 Net defined benefit liability 642 728 Other 2,727 2,726 Total non-current liabilities 17,747 29,283 Total liabilities 96,026 104,780 Net assets Shareholders' equity Capital stock 18,942 18,942 Capital surplus 13,613 13,613 Retained earnings 209,641 209,112 Treasury shares (3,424) (8,104) Total shareholders' equity 238,772 233,564 Accumulated other comprehensive income Valuation difference on available-for-sale securities 11,451 12,328 Foreign currency translation adjustment 3,097 3,447 Remeasurements of defined benefit plans 1,943 1,878 Total accumulated other comprehensive income 16,492 17,654 Non-controlling interests 3,786 3,949 Total net assets 259,051 255,168 Total liabilities and net assets 355,078 359,948
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7 (2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income - Consolidated Statements of Income (Million yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Net sales 69,871 78,792 Cost of sales 35,773 38,960 Gross profit 34,097 39,832 Selling, general and administrative expenses 16,000 17,925 Operating income 18,097 21,907 Non-operating income Interest income 38 47 Dividend income 604 949 Equity in earnings of affiliates 226 397 Foreign exchange gains － 428 Other 227 296 Total non-operating income 1,098 2,119 Non-operating expenses Interest expenses 138 132 Loss on valuation of investment securities － 78 Loss on disposal of non-current assets 127 96 Bond issuance costs 0 51 Foreign exchange losses 671 － Other 118 24 Total non-operating expenses 1,056 382 Ordinary income 18,139 23,644 Extraordinary income － － Extraordinary losses － － Income before income taxes and non-controlling interests 18,139 23,644 Income taxes - current 2,621 5,465 Income taxes - deferred 1,306 1,026 Total income taxes 3,928 6,491 Net income 14,211 17,152 Net income attributable to non-controlling interests 319 308 Net income attributable to owners of parent 13,892 16,844
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8 - Consolidated Statements of Comprehensive Income (Million yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Net income 14,211 17,152 Other comprehensive income Valuation difference on available-for-sale securities 1,033 871 Foreign currency translation adjustment 1,307 69 Remeasurements of defined benefit plans, net of tax (52) (65) Share of other comprehensive income of entities accounted for using equity method 0 (29) Total other comprehensive income 2,288 846 Comprehensive income 16,500 17,998 (Comprehensive income attributable to) Owners of parent 15,928 17,677 Non-controlling interests 572 321
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9 (3) Consolidated Statements of Cash Flows (Million yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Cash flows from operating activities Income before income taxes and non-controlling interests 18,139 23,644 Depreciation 3,297 3,604 Loss (gain) on valuation of investment securities － 78 Amortization of goodwill 42 16 Interest and dividend income (643) (996) Interest expenses 138 132 Loss (gain) on disposal of non-current assets 127 96 Decrease (increase) in notes and accounts receivable - trade (997) (2,863) Decrease (increase) in inventories 2,055 (1,544) Increase (decrease) in notes and accounts payable - trade (599) 1,111 Other 2,625 3,814 Subtotal 24,186 27,093 Interest and dividend income received 1,224 1,678 Interest expenses paid (153) (141) Income taxes paid (8,920) (7,410) Net cash provided by (used in) operating activities 16,335 21,220 Cash flows from investing activities Purchase of investment securities (15) (1,190) Purchase of shares of subsidiaries and associates － (190) Purchase of property, plant and equipment (4,435) (4,161) Payments for retirement of property, plant and equipment (100) (80) Purchase of intangible assets (270) (207) Net decrease (increase) in short-term loans receivable 1,546 (279) Purchase of long-term prepaid expenses (6) (20) Other (30) (15) Net cash provided by (used in) investing activities (3,313) (6,145) Cash flows from financing activities Net increase (decrease) in short-term loans payable 6,689 (3,131) Net increase (decrease) in commercial papers 2,999 (999) Repayments of long-term loans payable (207) － Proceeds from issuance of bonds － 10,000 Cash dividends paid (14,187) (17,719) Dividends paid to non-controlling interests (105) (158) Share repurchase (2,851) (4,707) Other (5) (8) Net cash provided by (used in) financing activities (7,669) (16,725) Effect of exchange rate change on cash and cash equivalents 738 181 Net increase (decrease) in cash and cash equivalents 6,090 (1,469) Cash and cash equivalents at beginning of period 27,454 35,729 Increase in cash and cash equivalents from newly consolidated subsidiary － 920 Cash and cash equivalents at end of period 33,545 35,180
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10 (4) Notes to Consolidated Financial Statements (Notes on Assumption of Going Concern) Not applicable. (Notes on Significant Changes in Shareholders' Equity) The Company made a stock payment of 5,700 shares to the eligible party on April 24, 2026 and May 25, 2026 based on the trust agreement of the Board Benefit Trust (BBT) resolved by the Board of Director's meeting on July 30, 2019. As a result, treasury shares decreased by 27 million yen during the first quarter of current consolidated fiscal year. In addition, the Company repurchased 625,000 treasury shares based on the resolution of Board of Directors' meeting held on May 15, 2026. As a result, treasury shares increased by 4,707 million yen during the first quarter of current consolidated fiscal year. (Changes in Accounting Policies) (Application of the Practical Guidelines on Accounting for Financial Instruments) The Practical Guidelines on Accounting for Financial Instruments (Revised Transferred Guidance No. 9, March 11, 2025) have been applied from the beginning of the first quarter of the current fiscal year. Thus, unlisted shares that comprise the assets of partnerships and similar entities corresponding to venture capital funds are measured at fair value, and the Company's share of the resulting valuation differences is recorded in net assets. In accordance with the transitional provisions of the Practical Guidelines, retrospective application was not made. The cumulative effect of this change in accounting policy has been reflected in the carrying amount of net assets at the beginning of the first quarter of the current fiscal year. As a result, the beginning balance of valuation difference on available-for-sale securities increased by 5 million yen.
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11 (Segment Information) 1. Information Regarding Sales, Income (Loss) of Reportable Segments 1) For the Three Months Ended June 30, 2025 (From April 01, 2025 to June 30, 2025) (Million yen) Performance Materials Agricultural Chemicals Chemicals Healthcare Trading Others Total Adjustment (Note 2) Consolidated Total Net Sales Sales to outside customers (Note 1) 18,838 23,384 6,070 1,561 22,417 3,839 76,112 (6,241) 69,871 Intersegment Sales 7,019 3,204 3,267 13 7,564 4,064 25,134 (25,134) － Total Sales 25,858 26,589 9,338 1,575 29,982 7,904 101,247 (31,376) 69,871 Segment Income or Loss (Operating Income or Loss) 8,201 8,648 709 494 1,087 487 19,628 (1,531) 18,097 Notes: 1. Sales to outside customers in reportable segments are calculated on a gross basis, including sales that are agent transactions. A reconciliation of gross sales to net sales as agent transactions is made in the Adjustment section. 2. Adjustments are as follows. (1) (6,241) million yen adjustment in sales to outside customers includes (6,274) million yen in the elimination of agent transactions, and 32 million yen sales not attributable to any reporting segment. (2) (1,531) million yen adjustment in segment income includes (69) million yen in intersegment eliminations, 32 million yen sales not attributable to any reporting segment, and (1,494) million yen corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses which do not belong to any segment. 2) For the Three Months Ended June 30, 2026 (From April 01, 2026 to June 30, 2026) (Million yen) Performance Materials Agricultural Chemicals Chemicals Healthcare Trading Others Total Adjustment (Note 2) Consolidated Total Net Sales Sales to outside customers (Note 1) 20,654 23,629 7,049 1,858 28,742 3,752 85,686 (6,893) 78,792 Intersegment Sales 11,942 2,968 3,478 4 9,605 5,189 33,189 (33,189) － Total Sales 32,597 26,598 10,528 1,862 38,347 8,942 118,875 (40,082) 78,792 Segment Income or Loss (Operating Income or Loss) 10,688 8,841 871 742 1,399 542 23,086 (1,179) 21,907 Notes: 1. Sales to outside customers in reportable segments are calculated on a gross basis, including sales that are agent transactions. A reconciliation of gross sales to net sales as agent transactions is made in the Adjustment section. 2. Adjustments are as follows. (1) (6,893) million yen adjustment in sales to outside customers includes (6,911) million yen in the elimination of agent transactions, and 17 million yen sales not attributable to any reporting segment. (2) (1,179) million yen adjustment in segment income includes 240 million yen in intersegment eliminations, 17 million yen sales not attributable to any reporting segment, and (1,438) million yen corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses which do not belong to any segment.
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12 (Significant Subsequent Events) The Company has resolved, at the meeting of its Board of Directors held on August 7, 2026, to dispose of its treasury shares ("Disposal of Treasury Shares") in connection with an additional contribution to the performance-linked stock compensation plan called "Board Benefit Trust (BBT)" ("Plan"). (1) Outline of disposal For details of the Disposal of Treasury Shares, please refer to the "Notice Concerning Disposal of Treasury Shares in Connection with Additional Contribution to Performance-linked Stock Compensation Plan" released today. Note: Custody Bank of Japan, Ltd. (Trust Account E), the scheduled disposal recipient, is a trust account established by executing a trust agreement between the Company, as the Trustor, and Mizuho Trust & Banking Co., Ltd., as the Trustee (Custody Bank of Japan, Ltd., as the Re-trustee) ("Trust Agreement", and the trust established under the Trust Agreement is referred to as "Trust".) The Disposal of Treasury Shares is intended to make deliveries of the Company shares to the Company’s directors (excluding outside directors), executive officers, and associate executive officers (collectively referred to as "Directors, etc.") under the Plan, and it is practically same as an allocation of the Company shares to Directors, etc., as the consideration for their provision of services to the Company. (2) Purpose and reason for disposal The Company has introduced the Plan under resolutions at the 149th Ordinary General Meeting of Shareholders held on June 26, 2019, the 151st Ordinary General Meeting of Shareholders held on June 25, 2021, and the 156th Ordinary General Meeting of Shareholders held on June 25, 2026. (For the overview of the Plan, please refer to "Notice Concerning Partial Amendments to Performance-linked Stock Compensation Plan" dated April 28, 2026.) The Company has now decided to make an additional contribution of moneys to the Trust ("Additional Trust") so that the Trust can acquire the Company shares that are expected to be necessary for future deliveries of the shares for continuing the Plan, and to dispose of its treasury shares to Custody Bank of Japan, Ltd. (Trust Account E), the Re-trustee who are re-entrusted from the Trustee for the Trust (the Disposal of Treasury Shares), to hold and dispose of the Company shares for operating the Plan.