Interim report
Page 3
1 [Index of the Attachment] 1. Summary of Operating Results for First Quarter Fiscal Year 2026 ……………………………….………... 2 (1) Operating Results……………………………………………………………………………………………………………. 2 (2) Consolidated Financial Position………………………………………………………………………………………. 4 (3) Consolidated Forecasts and Other Forward-Looking Information………………………………….. 4 2. Condensed Quarterly Consolidated Financial Statements and Major Notes………………………….. 5 (1) Condensed Quarterly Consolidated Statements of Financial Position…………………….….…... 5 (2) Condensed Quarterly Consolidated Statements of Income and Comprehensive Income……………………………………………………………………………………………. 7 (3) Condensed Quarterly Consolidated Statements of Changes in Equity……………………………. 9 (4) Condensed Quarterly Consolidated Statements of Cash Flows……………………………………... 10 (5) Notes to Condensed Quarterly Consolidated Financial Statements………………………………. 11 Going Concern Assumption………………………………………………………………………………………………… 11 Significant accounting policies……………………………………………………………………………………………. 11 Changes in presentation methods………………………………………………………………………………………. 11 Segment Information………………………………………………………………………………………………………….. 11
Page 4
2 1. Summary of Operating Results for First Quarter Fiscal Year 2026 (1) Operating Results Our group's Revenue increased by 22.6% year over year (all percentages below are calculated based on this figure) to ¥95,211 million, driven by factors such as an increase in sales volume primarily due to growing demand for semiconductors, the optimization of sales prices, and the depreciation of the yen compared to Q1 FY2025. Business profit increased by 51.2% to ¥13,625 million, driven by improved profitability resulting from increased sales volume and the optimization of sales prices, despite a surge in raw material prices due to the situation in the Middle East. Operating profit increased by 65.4% to ¥14,218 million. Profit attributable to owners of parent increased by 46.8% to ¥10,933 million. The financial results by business segment for Q1 FY2026 are as follows: 1. Semiconductor materials [Revenue ¥34,210 million (up 40.0% year over year), Business profit ¥8,014 million (up 66.3% year over year)] In the Semiconductor materials segment, Revenue increased significantly, driven by demand related to AI data centers, with particularly strong growth in power device applications. Business profit also increased substantially. By product category, in Epoxy resin molding compounds for encapsulation of semiconductor devices, demand remained strong not only in power device applications but also in high-end smartphones, telecommunications, and automotive semiconductors. In the Chinese market, demand is expanding against the backdrop of policies promoting the domestic production of semiconductors. In the mobility sector, demand for magnet-fixing applications for HEV (hybrid electric vehicles) increased. In Photosensitive materials for semiconductor devices, growing demand for memory applications contributed to the results. In Bonding pastes for semiconductor devices, demand increased particularly for power device applications, including power management ICs. In addition, high-reliability pastes for automotive applications sustained strong performance. In the “LαZ®” series of Semiconductor substrate materials, Revenue grew for embedded component substrates used in power device applications.
Page 5
3 2. High-performance plastics [Revenue ¥31,931 million (up 22.7% year over year), Business profit ¥3,194 million (up 83.8% year over year)] In the High-performance plastics segment, Revenue increased greatly, driven by an increase in sales volume and sales prices improved as we appropriately passed on the cost of rising raw material prices. Furthermore, the impact of depreciation of the yen against the U.S. dollar and the euro also helped boost sales. As a result, Business profit also increased substantially. By product category, in Resins for industrial use, sales increased mainly in the domestic market for semiconductor devices, building materials, and abrasive applications, while sales for tire applications grew against the backdrop of rising demand in the ASEAN region. In Molding compounds, shipment volumes for electrical component applications increased in China and other parts of Asia. Demand from the North American automotive industry is also on a recovery trend. In Laminates, Revenue increased due to the optimization of sales prices for copper-clad laminates and higher shipment volumes of heat-dissipating insulating sheets for automotive applications. In Aerospace components, Revenue increased, driven not only by increased demand from European and North American customers but also by the growing contribution of expanded sales to the repair parts market. 3. Quality of life products [Revenue ¥28,870 million (up 6.7% year over year), Business profit ¥3,794 million (up 2.9% year over year)] In the Quality of life products segment, Revenue increased. Business profit also increased. By product category, in Medical devices and pharmaceuticals, sales grew in Asia for blood container bags, as well as for steering microcatheters for endovascular repair in Japan and overseas, and for gastrointestinal stents in the domestic market. On the other hand, Revenue declined due to the impact of discontinuing the domestic hemodialysis blood circuit business, which was unprofitable. In In vitro diagnostics and Biotechnology-related products, sales of biomaterials for regenerative medicine and custom-made biomaterials for corporate clients remained strong. In Films and sheets, sales volume increased significantly across the Pharmaceutical packaging, P-Plus, Food packaging, and Electrical and Electronic Equipment packaging sectors, driven by rising demand resulting from increased production and inventory buildup by customers. Contributing factors included an increase in market share for generic drugs through sales expansion efforts, as well as the development of new market segments such as Skin packaging and top sealing film of P-Plus. In Industrial functional materials, sales of Sheet material for architectural and interior decoration for stores grew significantly due to customers’ efforts to secure inventory, and sales of Hollow polycarbonate, which was acquired through a business transfer, also contributed. Sales of Optical sheet & film products and Flame retardant film & sheet for electrical insulation expanded in the automotive sector. In Waterproof business, Revenue for rooftop waterproofing of buildings increased while prioritizing the stable supply of materials. Demand for residential renovations also remained strong.
Page 6
4 (2) Consolidated Financial Position (2.1) Assets, Liabilities and Equity 1. Assets Total assets increased by ¥19,312 million from the end of the previous fiscal year to ¥503,479 million. The main increases were due to Trade and other receivables, as well as Cash and cash equivalents. 2. Liabilities Total liabilities increased by ¥7,162 million from the end of the previous fiscal year to ¥140,683 million. The main increases were due to Trade and other payables, as well as Borrowings. 3. Equity Total equity increased by ¥12,150 million from the end of the previous fiscal year to ¥362,796 million. The main increase was due to Profit and decrease was due to Dividends paid. (2.2) Cash Flows Cash and cash equivalents (hereinafter referred to as Cash) at the end of the first quarter of the current fiscal period increased by ¥5,538 million from the end of the previous fiscal year to ¥130,290 million. 1. Cash flows from operating activities Cash provided by operating activities was ¥5,300 million. This was mainly result of income from Profit before tax and Depreciation and amortization, offset by expenditures from an increase in Trade and other receivables and Income taxes paid. Compared with Q1 FY2025, income decreased by ¥702 million. 2. Cash flows from investing activities Cash provided by investing activities was ¥1,356 million. This was mainly result of income from Proceeds from sale of investment securities, offset by expenditure from Purchase of property, plant and equipment. 3. Cash flows from financing activities Cash used in financing activities was ¥3,025 million. This was mainly result of income from issuance of commercial paper, offset by Dividends paid. (3) Consolidated Forecasts and Other Forward-Looking Information There is no change from the consolidated financial forecasts announced on May 11, 2026.
Page 11
(3) Condensed Quarterly Consolidated Statements of Changes in Equity For the three months ended June 30, 2025 (From April 1, 2025 to June 30, 2025) (Millions of yen) For the three months ended June 30, 2026 (From April 1, 2026 to June 30, 2026) (Millions of yen) - 0 0 - - - - - - 0 ( 276) ( 200) - ( 75) ( 5,340) Purchase of treasury shares - ( 1) Dividends from surplus - - - ( 5,264) - - - - ( 1) - - ( 2,546) ( 351) ( 5,541) Balance at end of current period 37,143 35,212 ( 1,765) 196,352 24,914 - 67,611 92,525 3,328 362,796 Total transactions with owners ( 2,546) - - - - Acquisition of non- controlling interests - 76 - - - - - - - - - 2,546 ( 2,546) - - - 76 ( 1) ( 2,719) ( 2,546) - - - - Transfer from other components of equity to retained earnings - - - - 6,538 64 6,601 Comprehensive income - - - 10,933 1,877 - 4,660 6,538 220 17,691 Other comprehensive income - - - - 1,877 - 4,660 88,533 3,459 350,646 Profit - - - 10,933 - - - - 157 11,089 Balance at beginning of current period 37,143 35,137 ( 1,764) 188,138 25,582 - 62,951 Total equity attributable to owners of parent Non- controlling interests Total equity Other components of equity Share capital Capital surplus Treasury shares Retained earnings Financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Exchange differences on translation of foreign operations Total Balance at beginning of current period 37,143 35,178 ( 21,002) 179,404 16,926 - Other components of equity Share capital Capital surplus Treasury shares Retained earnings Financial assets measured at fair value through other comprehensive income Exchange differences on translation of foreign operations Total 2,896 293,568 Remeasurements of defined benefit plans Total equity attributable to owners of parent Non- controlling interests Total equity 43,022 59,948 ( 117)- - - - 1,462 - - 69 7,517- - - - - ( 1,797) ( 336) 287 ( 1,797) ( 336) 218 Profit - - ( 57) ( 4,438)- - - ( 4,382) - Other comprehensive income Comprehensive income Dividends from surplus - - 7,400- - - 7,448 1,462 -7,448 - - - ( 1)- - ( 1) - - 31 ( 57) ( 4,439)- 0 ( 1) ( 4,413) 31 - 31 - -- - - ( 31) 31 - Purchase of treasury shares Transfer from other components of equity to retained earnings Total transactions with owners - - - - Acquisition of non- controlling interests - - - - - - Disposal of treasury shares 41,224 59,643 3,127 296,529Balance at end of current period 37,143 35,178 ( 21,002) 182,440 18,419 Disposal of treasury shares - - - - - - - - - - 9