Interim report
Page 1
ENGLISH TRANSLATION OF JAPANESE - LANGUAGE DOCUMENT This is a translation of the original Japanese - language document and is provided for convenience only . In all cases , the Japanese - language original shall take precedence . d ! c Color & Comfort Consolidated Financial Results for the Six Months Ended June 30 , 2026 ( Japan GAAP ) ( The fiscal year ending December 31 , 2026 ) Company Name : DIC Corporation Listing Code Number : 4631 URL : https://www.dic-global.com/en/ Representative : Takashi Ikeda , Representative Director , President and Group CEO Contact Person : Ippei Ouchi , General Manager , Accounting Department Preparation of Supplemental Explanatory Materials : Yes Accounting Financial Acco Standards FASF as Foundation MEMBERSHIP August 10 , 2026 Stock Exchange : Tokyo Head Office : Tokyo Tel : +81 ( 3 ) 6733-3000 Scheduled Filing Date of Semiannual Securities Report : August 10 , 2026 Dividend Payment : September 1 , 2026 Holding of Financial Results Meeting : Yes ( for security analysts and institutional investors ) for per share information ) ( Yen amounts are rounded to the nearest million , except 1. Consolidated Financial Results for the Six Months Ended June 30 , 2026 ( January 1 , 2026 - June 30 , 2026 ) ( 1 ) Consolidated operating results ( Percentages indicate year - on - year changes ) Net income attributable to owners of the parent Net sales Six months ended June 30 , 2026 Six months ended June 30 , 2025 JPY ( million ) 592,983 523,244 % 13.3 -2.9 Operating income JPY ( million ) 51,850 26,979 Ordinary income % 92.2 22.9 Note : Comprehensive income ( JPY million ) : Six months ended June 30 , 2026 Six months ended June 30 , 2025 JPY ( million ) 52,308 157.7 20,295 1.3 54,222 ( - % ) % JPY ( million ) % 37,187 184.1 13,091 104.0 ( 404 ) ( - % ) Six months ended June 30 , 2026 Six months ended June 30 , 2025 ( 2 ) Consolidated financial position Earnings per share ( basic ) Earnings per share ( diluted ) JPY 392.69 138.27 JPY Shareholders ' equity ratio Total assets Net assets to total assets As of June 30 , 2026 JPY ( million ) 1,330,726 JPY ( million ) % 529,817 As of December 31 , 2025 1,274,091 490,844 38.3 37.0 Reference : Shareholders ' equity ( JPY million ) : As of June 30 , 2026 510,034 As of December 31 , 2025 470,881 2. Cash Dividends ( Record date ) End of 1st quarter JPY FY2025 FY2026 End of 2nd quarter JPY 50.00 Cash dividends per share End of 3rd quarter Year - end Annual JPY JPY 150.00 JPY 200.00 70.00 80.00 FY2026 ( Plan ) Note : Revision of the latest forecasts for the dividends payment : Yes 150.00 For details , please refer to " Notice Regarding Revision ( Increase ) of the Year - End Dividend Forecast for Fiscal Year 2026 " released on August 10 , 2026 .
Page 2
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Percentages indicate year-on-year changes) Net sales Operating income Ordinary income Net income attributable to owners of the parent Earnings per share (basic) JPY (million) % JPY (million) % JPY (million) % JPY (million) % JPY FY2026 1,140,000 8.3 78,000 49.4 73,000 65.0 48,000 48.4 507.99 1) Changes in accounting policies arising from revision of accounting standards: None 2) Changes in accounting policies other than 1): None 3) Changes in accounting estimates: None 4) Restatements: None As of June 30, 2026 95,156,904 shares, As of December 31, 2025 95,156,904 shares As of June 30, 2026 443,861 shares, As of December 31, 2025 476,859 shares For the six months ended June 30, 2026 94,697,239 shares, For the six months ended June 30, 2025 94,681,416 shares 3. Forecasts for Consolidated Operating Results for the Fiscal Year Ending December 31, 2026 (January 1, 2026 - December 31, 2026) Notes 1. : Revision of the latest forecasts for the consolidated operating results: Yes For details, please refer to "1. Analysis of Results of Operations (3) Operating Results Forecasts for Fiscal Year 2026" on page 5. Notes 2. : The Company resolved matters related to the acquisition of treasury shares at a meeting of its Board of Directors held on August 10, 2026, “Earnings per share (basic)” in the forecast for consolidated operating results takes into account the effect of the total numbers of shares to be acquired. For details, please refer to “Notice Regarding Determination of Matters Related to the Acquisition of Treasury Shares” released on August 10, 2026. Notes (1) Significant changes in the scope of consolidation during the six months ended June 30, 2026: None Newly included: － (Company name) － Excluded: － (Company name) － (2) Adoption of accounting methods which are exceptional for interim consolidated financial statements: Yes For details, please refer to page 13, “3. Interim Consolidated Financial Statements, (4) Notes to Interim Consolidated Financial Statements, (Notes on Accounting Methods Which Are Exceptional for Interim Consolidated Financial Statements). (3) Changes in accounting policies and accounting estimates, and restatements (4) Number of shares issued (common stock) 1) Number of shares issued at the end of the period, including treasury shares 2) Number of treasury shares at the end of the period 3) Average number of shares issued during the period, excluding treasury shares * The Company has introduced the Board Benefit Trust (BBT), and the shares held by the trust are included in the number of treasury shares. Note: Interim consolidated financial results in this report are not subject to interim review procedures conducted by certified public accountants or audit firms. Note: Explanation of the appropriate use of performance forecasts, and other special items Caution concerning forward-looking statements The above forecasts of future performance are based on information available to the Company at the present time and are subject to potential risks and uncertainty. Accordingly, the users should be aware that actual results may differ from any expressed future performance herein due to various factors. For information regarding the assumptions used to prepare the forecasts, please refer to page 5.
Page 3
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. 1. Analysis of Results of Operations……………………………………………………………………………………………….. 2 (1) Overview of Operating Results ……………………………………………………………………………………………... 2 (2) Segment Results …………………………………………………………………………………………………………….. 3 (3) Operating Results Forecasts for Fiscal Year 2026 ...……………………………....………………………………………... 5 2. Analysis of Financial Position …………………………………………………………………………………….……….…… 6 3. Interim Consolidated Financial Statements …………………………………………………………………………………...... 7 (1) Interim Consolidated Balance Sheet ………………………………………………………………………………………... 7 (2) Interim Consolidated Statement of Income and Interim Consolidated Statement of Comprehensive Income …………....... 9 Interim Consolidated Statement of Income ……………………………………………………………………………........ 9 Interim Consolidated Statement of Comprehensive Income ……………………………………………………………...... 10 (3) Interim Consolidated Statement of Cash Flows …………………………………………………………………………...... 11 (4) Notes to Interim Consolidated Financial Statements ……………………………………………………………………...... 13 (Notes on Going Concern Assumption) .……………………………………………………………………………………... 13 (Notes on Significant Changes in Shareholder’s Equity) …………………………………………………………………..... 13 (Notes on Accounting Methods Which Are Exceptional for Interim Consolidated Financial Statements) ……………......... 13 (Additional Information) ……………………………………………………………………………………………………... 13 (Notes on Segment Information, etc) ………………………………………………………………………………………… 17 Table of Contents for Attached Materials - 1 -
Page 4
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Net sales 523.2 593.0 13.3% 5.8% Operating income 27.0 51.8 92.2% 79.8% Ordinary income 20.3 52.3 157.7% － Net income attributable to owners of the parent 13.1 37.2 184.1% － EBITDA * 49.1 80.9 64.8% － ¥/US$1.00 (Average rate) 148.58 158.32 6.6% － ¥/EUR1.00 (Average rate) 162.72 184.54 13.4% － 1. Analysis of Results of Operations (1) Overview of Operating Results (Billions of yen) * EBITDA: Net income attributable to owners of the parent + Total income taxes + (Interest expenses - Interest income) + Depreciation and amortization + Amortization of goodwill In the six months ended June 30, 2026, consolidated net sales rose 13.3%, to ¥593.0 billion. • Key global economies continue to be impacted by logistics and supply chain disruptions arising from the escalating tensions in the Middle East, leading to soaring crude oil prices and energy costs, as well as to apprehension regarding supplies of naphtha-derived petrochemicals. Although the situation is gradually easing, an uncertain outlook lingers for both corporate entities and consumers. • In this environment, operating conditions in customer industries identified as key growth areas diverged. In digital materials, used principally in electrical and electronics equipment, the semiconductor market remained on an upswing, propelled mainly by brisk demand for AI semiconductors, while the display market benefited from an increase in the operating rates of display manufacturers accompanying a surge in demand for flat-screen televisions spurred by the 2026 FIFA World Cup quadrennial international men’s soccer championship, which took place in summer 2026. In industrial materials,* used primarily in mobility solutions, sales remained firm overall despite changes in the demand structure of the automobile market, as sales of EVs were up sharply in European countries, surpassing those of gasoline-powered vehicles on a half-year basis for the first time. • Against this backdrop, results varied for different products. Shipments of epoxy resins, industrial-use adhesive tapes, ultraviolet (UV)-curable resins and other high-value-added products for digital applications were robust. In the Color & Display segment, shipments of pigments for color filters used in displays also advanced. For certain printing inks and coating resins, customers, particularly in overseas markets, moved to boost inventories amid expectations of a prolonged Middle East crisis. Operating income climbed 92.2%, to ¥51.8 billion, a new first-half record. In addition to increased shipments of high-value-added products, particularly digital materials, this reflected relentless efforts to promptly revise sales prices and implement rigorous cost management in all three segments to counter higher raw materials prices. Another contributing factor was the positive impact of a weaker yen on operating income in overseas markets. Ordinary income, at ¥52.3 billion, was up 157.7%. This was due to a decline in foreign exchange losses associated with the application of hyperinflationary accounting in emerging economies. Net income attributable to owners of the parent soared 184.1%, to ¥37.2 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 64.8%, to ¥80.9 billion. *DIC uses the term “industrial materials” to describe products for use in mobility solutions, namely, automobiles, railroads and shipping, and for general industrial applications such as construction equipment and industrial machinery. - 2 -
Page 5
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. Net sales Operating income (loss) Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Packaging & Graphic 268.8 307.2 14.3% 6.5% 13.4 21.7 62.6% 52.7% Color & Display 131.3 142.5 8.6% 0.1% 5.7 12.0 2.1 times 2.0 times Functional Products 143.0 161.6 13.0% 7.6% 10.9 21.3 96.4% 86.8% Others, Corporate and eliminations (19.8) (18.3) ― ― (2.9) (3.2) ― ― Total 523.2 593.0 13.3% 5.8% 27.0 51.8 92.2% 79.8% Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Net sales ¥268.8 billion ¥307.2 billion 14.3% 6.5% Operating income ¥13.4 billion ¥21.7 billion 62.6% 52.7% (2) Segment Results (Billions of yen) Note: In Phase 2 of the Company’s long-term management plan, “DIC Vision 2030”―the first year of which is fiscal year 2026—the Company has identified “Maximizing cash generation by improving capital efficiency” as a priority theme. As one of the metrics to measure its progress toward this goal, the Company has set return on invested capital (ROIC) targets for fiscal year 2030 for each reportable segment and is working to achieve high asset and capital efficiency that exceeds the cost of capital. Accordingly, beginning from the six months ended June 30, 2026, the Company has changed the way it measures segment information to more accurately reflect each reportable segment’s assets and capital efficiency. Segment information for the six months ended June 30, 2025, has been prepared and disclosed based on the revised measurement method. Packaging & Graphic Segment sales increased 14.3%, to ¥307.2 billion. In the area of packaging inks, used chiefly on packaging for food products, shipments in Japan were sluggish, as elevated consumer prices led to a decrease in consumption, but sales expanded thanks to efforts to adjust sales prices in response to rising raw materials prices. Sales of these products also rose in the Americas and Europe, thanks to robust shipments in North America, as well as to sales price revisions. In Asia and elsewhere, sales of packaging inks were boosted by a recovery in market conditions since the beginning of the year, as well as by an inventory buildup by customers in multiple countries in anticipation of a prolonged Middle East crisis, which pushed up shipments. Notwithstanding a downward trend in shipments in Japan, as well as in the Americas and Europe, owing to ongoing structural declines in publishing-related demand worldwide, overall sales of publication inks, which center on inks for commercial printing and news inks, were bolstered by efforts to revise sales prices to counter higher raw materials prices. In Asia and elsewhere, shipments of these products rose as customers stockpiled inventories in anticipation of a protracted Middle East conflict. Sales of jet inks, used in digital printing, advanced, as the impact of one-time customer inventory adjustments subsided and shipments remained firm. Sales of polystyrene, applications for which include food trays, were up, thanks to efforts to modify sales prices in response to raw materials price increases. Segment operating income rose 62.6%, to ¥21.7 billion. While customers around the world stockpiled inventories of a broad range of products, concerned over the situation in the Middle East, steps taken to expand sales of high-value-added products and implement prompt sales price revisions underpinned gains in all geographic operating regions. - 3 -
Page 6
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Net sales ¥131.3 billion ¥142.5 billion 8.6% 0.1% Operating income ¥5.7 billion ¥12.0 billion 2.1 times 2.0 times Six months ended June 30, 2025 Six months ended June 30, 2026 Change (%) Change (%) 〔Local currency basis〕 Net sales ¥143.0 billion ¥161.6 billion 13.0% 7.6% Operating income ¥10.9 billion ¥21.3 billion 96.4% 86.8% Color & Display Segment sales increased 8.6%, to ¥142.5 billion. Shipments of pigments for coatings, which account for a significant share of sales, rose, particularly in Europe—the principal market for these products—for architectural and industrial applications. Shipments of pigments for plastics rose steadily in Europe, as well as in North America and Asia. Among high-value-added products, shipments of pigments for color filters used in displays advanced as display manufacturers increased operating rates accompanying a surge in demand for flat-screen televisions spurred by the 2026 FIFA World Cup, which took place in the summer. Sales of pigments for cosmetics were down, owing to the strategic decision to discontinue sales of certain products with low added value. In pigments for specialty applications, shipments of products for agricultural use were up, but sales decreased, with causes including product mix. Higher segment sales also reflected the positive impact of a weaker yen on sales in overseas markets after translation. Segment operating income soared 2.1 times, to ¥12.0 billion, bolstered by the increase in sales, as well as by efforts to reduce costs, primarily through structural reforms. Another contributing factor was a one-time gain in the first quarter stemming from the determination, based on the judgment of a third-party organization, that the recording of a liability for repairs at a pigments production facility in Germany, which had been legally required, was no longer necessary, resulting in a ¥5.9 billion reversal of the liability. Functional Products Segment sales rose 13.0%, to ¥161.6 billion. In the area of digital materials, sales of epoxy resins, the foremost application for which is semiconductor packaging substrates and encapsulants, increased, backed by firm demand for AI semiconductors, which led to brisk shipments of active ester curing agents used in insulating materials. Despite concerns over the impact of memory shortages on market conditions, sales of industrial-use adhesive tapes—used mainly in smartphones and other mobile devices—were bolstered by broader adoption, primarily for high-end models, and steady efforts to lock in demand. Sales of industrial materials were also up, underpinned by robust shipments of mainstay polyphenylene sulfide (PPS) compounds for both mobility solutions and architectural interior materials. Shipments of certain coating resins advanced as customers, particularly in overseas markets, moved to boost inventories amid expectations of a prolonged Middle East crisis. Segment operating income climbed 96.4%, to ¥21.3 billion. Factors behind this included robust shipments overall, as well as expanded sales of high-value-added products, notably digital materials. This steep gain was also due to efforts to adjust sales prices in response to rising raw materials prices, a consequence of the situation in the Middle East. - 4 -
Page 7
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. FY2025 FY2026 Change (%) Net sales 1,052.2 1,140.0 [1,100.0] 8.3% Operating income 52.2 78.0 [56.0] 49.4% Ordinary income 44.2 73.0 [48.0] 65.0% Net income attributable to owners of the parent 32.4 48.0 [33.0] 48.4% EBITDA 109.3 130.0 [111.0] 19.0% ¥/US$1.00 (Average rate) 150.08 150.00 -0.1% ¥/EUR1.00 (Average rate) 169.58 175.00 3.2% (3) Operating Results Forecasts for Fiscal Year 2026 DIC has revised its operating results forecasts, published on May 15, 2026, as indicated below. (Billions of yen) Note: Forecasts in squared parentheses are those published on May 15, 2026. Reasons for Revision of Operating Results Forecasts Although there is currently no prospect of resolution to the crisis in the Middle East, crude oil and naphtha prices have stabilized after a period of sharp increases, while concerns regarding stockpiling and raw materials supplies resulting from supply chain disruptions are subsiding. Nonetheless, downside risks are anticipated in the second half of fiscal year 2026, including a decline in demand for certain products caused by a reversal of the trend toward inventory stockpiling by customers and the impact of higher raw materials prices on costs. In light of a recalculation of full-term expectations based on results in the six months ended June 30, 2026, and on business risks expected in the second half, operating results forecasts for fiscal year 2026 have been revised upward, with net sales, operating income, ordinary income and net income attributable to owners of the parent now expected to reach record-high levels. Additionally, at a meeting of the Board of Directors held today, a resolution was approved to raise the forecast for the fiscal year 2026 year-end dividend to ¥80.00, from the initial forecast of ¥70.00. (For more information, please see the timely disclosure issued today titled “Notice Regarding Revision (Increase) of the Year-End Dividend Forecast for Fiscal Year 2026.”) Disclaimer Regarding Forward-Looking Statements Statements herein, other than those of historical fact, are forward-looking statements that reflect management’s projections based on information available as of the publication date. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from such statements. These risks and uncertainties include, but are not limited to, economic conditions in Japan and overseas, market trends, raw materials prices, interest rate trends, currency exchange rates, conflicts, litigations, disasters and accidents, as well as the possibility the Company will incur special losses related to, among others, the restructuring of its operations. - 5 -
Page 8
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. 2. Analysis of Financial Position (Analysis of assets, liabilities and net assets) Total assets increased ¥56.6 billion from the end of the previous consolidated fiscal year, to ¥1,330.7 billion, due to an increase in trade receivables and inventories, as well as the effect of an increase in yen equivalent caused by exchange rate fluctuations. Total liabilities increased ¥17.7 billion from the end of the previous consolidated fiscal year, to ¥800.9 billion, due to an increase in trade payables. In addition, net assets increased ¥39.0 billion from the end of the previous consolidated fiscal year, to ¥529.8 billion, due to an increase in retained earnings from recording interim net income attributable to owners of the parent, as well as an increase in foreign currency translation adjustments accompanying the exchange rate fluctuations. (Analysis of cash flow) [Net cash provided by (used in) operating activities] Six months ended June 30, 2026, ¥42.1 billion (¥21.5 billion for the six months ended June 30, 2025) In the six months ended June 30, 2026, income before income taxes was ¥52.1 billion and depreciation was ¥27.7 billion. Income tax of ¥7.2 billion was paid and ¥18.5 billion was used in working capital. As a result, net cash provided by operating activities amounted to ¥42.1 billion. [Net cash provided by (used in) investing activities] Six months ended June 30, 2026, ¥(17.9) billion (¥(15.5) billion for the six months ended June 30, 2025) In the six months ended June 30, 2026, while ¥5.5 billion was provided by proceeds from the sales of works of art, ¥22.9 billion was used for the purchase of property, plant and equipment and intangible assets. As a result, net cash used in investing activities was ¥17.9 billion. [Net cash provided by (used in) financing activities] Six months ended June 30, 2026, ¥(27.5) billion (¥(3.8) billion for the six months ended June 30, 2025) In the six months ended June 30, 2026, ¥14.2 billion dividend payments from surplus were made, and ¥8.6 billion was used for repayment of borrowings. As a result, net cash used in financing activities amounted to ¥27.5 billion. - 6 -
Page 9
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Previous Fiscal Year as of December 31, 2025 First Half of Current Fiscal Year as of June 30, 2026 Assets Current assets Cash and deposits 68,909 70,687 Notes and accounts receivable - trade 231,445 266,284 Merchandise and finished goods 189,295 194,399 Work in process 11,275 11,969 Raw materials and supplies 96,996 108,035 Other 34,521 32,894 Allowance for doubtful accounts (4,890) (5,232) Total current assets 627,550 679,035 Non-current assets Property, plant and equipment Buildings and structures, net 138,898 144,445 Machinery, equipment and vehicles, net 140,317 138,567 Tools, furniture and fixtures, net 14,057 12,982 Land 57,151 57,507 Construction in progress 20,671 21,324 Total property, plant and equipment 371,094 374,826 Intangible assets Goodwill 17,140 17,110 Software 11,108 10,779 Customer-related assets 10,735 10,561 Other 23,157 22,813 Total intangible assets 62,140 61,262 Investments and other assets Investment securities 63,320 67,693 Net defined benefit asset 116,409 117,238 Other 33,642 30,884 Allowance for doubtful accounts (64) (212) Total investments and other assets 213,307 215,602 Total non-current assets 646,541 651,690 Total assets 1,274,091 1,330,726 3. Interim Consolidated Financial Statements (1) Interim Consolidated Balance Sheet - 7 -
Page 10
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Previous Fiscal Year as of December 31, 2025 First Half of Current Fiscal Year as of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 127,763 152,513 Short-term loans payable 126,247 95,181 Commercial papers 15,000 13,000 Current portion of bonds payable 5,000 25,000 Income taxes payable 4,384 8,378 Provision for bonuses 6,232 6,136 Other 101,919 93,107 Total current liabilities 386,545 393,314 Non-current liabilities Bonds payable 95,000 75,000 Long-term loans payable 198,909 225,632 Net defined benefit liability 31,624 30,531 Asset retirement obligations 10,518 10,712 Other 60,650 65,719 Total non-current liabilities 396,702 407,595 Total liabilities 783,247 800,909 Net assets Shareholders' equity Capital stock 96,557 96,557 Capital surplus 94,234 94,234 Retained earnings 209,865 232,808 Treasury shares (1,505) (1,400) Total shareholders’ equity 399,151 422,199 Accumulated other comprehensive income Valuation difference on available-for-sale securities 3,886 4,406 Deferred gains or losses on hedges 334 219 Foreign currency translation adjustment 64,151 81,809 Remeasurements of defined benefit plans 3,358 1,402 Total accumulated other comprehensive income 71,729 87,835 Non-controlling interests 19,963 19,782 Total net assets 490,844 529,817 Total liabilities and net assets 1,274,091 1,330,726 - 8 -
Page 11
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 Net sales 523,244 592,983 Cost of sales 406,446 447,754 Gross profit 116,798 145,228 Selling, general and administrative expenses Employees' salaries and allowances 34,254 38,101 Provision of allowance for doubtful accounts 298 288 Provision for bonuses 2,232 2,523 Retirement benefit expenses 129 (399) Other 52,906 52,866 Total selling, general and administrative expenses 89,820 93,379 Operating income 26,979 51,850 Non-operating income Interest income 1,390 1,463 Dividends income 206 222 Equity in earnings of affiliates 871 3,491 Other 776 713 Total non-operating income 3,243 5,888 Non-operating expenses Interest expenses 3,181 2,897 Foreign exchange losses 4,813 163 Other 1,933 2,370 Total non-operating expenses 9,927 5,430 Ordinary income 20,295 52,308 Extraordinary income Gain on sales of works of art － 2,759 Subsidy income － 419 Gain on sales of shares and investments in capital of subsidiaries and affiliates 1,725 － Gain on sales of non-current assets 651 － Total extraordinary income 2,377 3,178 Extraordinary losses Severance costs 384 950 Loss on liquidation of subsidiaries and associates － 901 Loss on disposal of non-current assets 757 848 Loss on withdrawal from business － 366 Loss on valuation of investment securities － 328 Loss on sales of shares and investments in capital of subsidiaries and affiliates 506 － Impairment losses 225 － Total extraordinary losses 1,872 3,393 Income before income taxes 20,799 52,093 Income taxes 7,444 14,049 Net income 13,355 38,044 Net income attributable to non-controlling interests 264 857 Net income attributable to owners of the parent 13,091 37,187 (2) Interim Consolidated Statement of Income and Interim Consolidated Statement of Comprehensive Income Interim Consolidated Statement of Income - 9 -
Page 12
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 Net income 13,355 38,044 Other comprehensive income Valuation difference on available-for-sale securities (207) 96 Deferred gains or losses on hedges (21) (116) Foreign currency translation adjustment (15,068) 17,650 Remeasurements of defined benefit plans 470 (1,951) Share of other comprehensive income of affiliates accounted for using equity method 1,067 498 Total other comprehensive income (13,759) 16,178 Comprehensive income (404) 54,222 Comprehensive income attributable to Comprehensive income attributable to owners of the parent (538) 53,293 Comprehensive income attributable to non-controlling interests 134 930 Interim Consolidated Statement of Comprehensive Income - 10 -
Page 13
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 Net cash provided by (used in) operating activities Income before income taxes 20,799 52,093 Depreciation and amortization 26,173 27,692 Amortization of goodwill 572 521 Increase (decrease) in allowance for doubtful accounts (183) 451 Increase (decrease) in provision for bonuses (64) (96) Interest and dividends income (1,596) (1,685) Equity in (earnings) losses of affiliates (871) (3,491) Interest expenses 3,181 2,897 Gain on sales of works of art － (2,759) Loss (gain) on sales and retirement of non-current assets 106 848 Impairment losses 225 － Loss (gain) on sales of shares and investments in capital of subsidiaries and affiliates (1,219) － Decrease (increase) in notes and accounts receivable - trade (415) (31,285) Decrease (increase) in inventories (17,823) (11,726) Increase (decrease) in notes and accounts payable - trade (720) 24,521 Other, net 231 (7,858) Subtotal 28,395 50,123 Interest and dividends income received 3,541 1,975 Interest expenses paid (2,983) (2,820) Income taxes paid (7,411) (7,207) Net cash provided by (used in) operating activities 21,542 42,071 Net cash provided by (used in) investing activities Payments into time deposits (237) (982) Proceeds from withdrawal of time deposits 238 171 Purchase of property, plant and equipment (20,220) (21,625) Proceeds from sales of property, plant and equipment 1,579 77 Purchase of intangible assets (280) (1,282) Proceeds from sales of shares and investments in capital of subsidiaries resulting in change in scope of consolidation 3,349 － Proceeds from sales of shares and investments in capital of subsidiaries and affiliates 56 81 Purchase of investment securities (160) (2) Proceeds from sales and redemption of investment securities 150 128 Proceeds from sales of businesses － 12 Proceeds from sales of works of art － 5,515 Other, net 13 (25) Net cash provided by (used in) investing activities (15,511) (17,932) (3) Interim Consolidated Statement of Cash Flows - 11 -
Page 14
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 Net cash provided by (used in) financing activities Net increase (decrease) in short-term loans payable (15,281) (2,824) Net increase (decrease) in commercial papers 10,000 (2,000) Proceeds from long-term loans payable 30,732 4,142 Repayment of long-term loans payable (21,542) (7,917) Cash dividends paid (4,748) (14,244) Cash dividends paid to non-controlling interests (371) (1,190) Net decrease (increase) in treasury shares (3) 105 Repayments of lease liabilities (2,600) (3,143) Other, net (0) (431) Net cash provided by (used in) financing activities (3,813) (27,502) Effect of exchange rate change on cash and cash equivalents (6,732) 4,287 Net increase (decrease) in cash and cash equivalents (4,513) 924 Cash and cash equivalents at beginning of the period 60,940 67,310 Cash and cash equivalents at end of the period 56,427 68,233 - 12 -
Page 15
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (4) Notes to Interim Consolidated Financial Statements (Notes on Going Concern Assumption) Not applicable (Notes on Significant Changes in Shareholder’s Equity) Not applicable (Notes on Accounting Methods Which Are Exceptional for Interim Consolidated Financial Statements) Calculation of Tax Expenses Regarding tax expenses for some consolidated subsidiaries, the tax expenses are calculated by reasonably estimating the effective tax rate after the application of tax effect accounting to income before income taxes for the fiscal year including the six months ended June 30, 2026, and multiplying income before income taxes by this estimated effective tax rate. (Additional Information) Board Benefit Trust (BBT) With regard to the compensation for executive officers, as well as directors who concurrently serve as executive officers (the “Target Officers”), the Company introduced a new performance-based stock compensation plan called Board Benefit Trust (BBT) (the “Plan”) from the fiscal year ended December 31, 2017. The purpose of the Plan is to further clarify the linkage between the compensation of the Target Officers, and corporate performance and value of the Company’s shares. The intended result is strengthening the Executive Officers’ awareness of the importance of contributing to the medium- to long- term improvement of operating results, as well as to the enhancement of corporate value, and of sharing the same objectives as shareholders. Accounting treatment related to the trust agreement is in accordance with “Practical Solution on Transactions of Delivering the Company’s Own Stock to Employees, etc., through Trusts” (Practical Issue Task Force (“PITF”) No. 30, March 26, 2015). (1) Outline of the transactions The trust established under the Plan acquires the Company’s shares by cash contributed by the Company. The trust provides shares of the Company and the cash equivalent to the market price of the shares of the Company (the “Company’s Shares and Cash Benefits”) to the Target Officers, in accordance with the Rules of Officer Share Benefit established by the Company. The Target Officers shall in principle receive the Company’s Shares and Cash Benefits upon their retirement. (2) The Company’s shares remaining in the trust The shares remaining in the trust are recorded under net assets as treasury shares at the book value in the trust (excluding incidental costs). The book value and number of such treasury shares are ¥829 million and 277 thousand as of December 31, 2025, respectively, and ¥721 million and 244 thousand as of June 30, 2026, respectively. - 13 -
Page 16
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. Conclusion of the Agreements Regarding Shares of Affiliate and Planned Transfer of Equity-Method Affiliate DIC Corporation (“DIC” or the “Company”) on March 31, 2026, entered into a basic agreement (the “Basic Agreement”) with KJ005 Co., Ltd.(the “Tender Offeror”), which was established on February 12, 2026 with the primary business of acquisition and possession of TAIYO HOLDINGS CO., LTD. (the “Target Company”; Hitoshi Saito, President, CEO), and which is a wholly owned subsidiary of KJ005HD Co., Ltd., the outstanding shares of which are held in full by KJ005 Investment L.P., a limited partnership established on January 30, 2026, pursuant to the laws of Ontario Province, Canada, that is indirectly operated by Kohlberg Kravis Roberts & Co. L.P. (including affiliates and related funds, “KKR”). Pursuant to the Basic Agreement regarding a series of transactions (the “Transactions”) with the purpose of making Tender Offeror the sole shareholder of the Target Company and delisting the Target Company’s shares: (i) the Tender Offeror will conduct a tender offer (the “Tender Offer”) for the common shares of the Target Company, which is an equity-method affiliate of DIC; (ii) DIC will not tender the shares of the Target Company that it holds (the “DIC-Owned Company Shares”) in the Tender Offer (the “Non-Tender”); (iii) if the Tender Offer is consummated but the Tender Offeror is unable to acquire all of the Target Company’s shares in the Tender Offer (excluding the treasury shares held by the Target Company, the shares of the Target Company held by Kowa Co., Ltd. (“Kowa”) (the “Kowa-Owned Company Shares”), and the DIC-Owned Company Shares), the Target Company will conduct a consolidation of its common shares (the “Share Consolidation”); (iv) the Tender Offeror will provide funding to the Target Company and will reduce the Target Company’s stated capital and capital reserves (the “Capital Changes”); and (v) the Target Company will acquire all of the Kowa-Owned Company Shares and the DIC-Owned Company Shares through share buyback (the “Share Buyback”), and the Tender Offeror will delist the Target Company’s shares. The Tender Offer will be conducted by the Tender Offeror as part of the Transactions for the purpose of making Tender Offeror the sole shareholder of the Target Company and delisting the Target Company’s shares. Upon consummation of the Transactions, the Target Company is expected to cease to be an equity-method affiliate of DIC. Further, as announced in its January 25, 2017 press release titled “Notice Concerning a Capital and Business Alliance with TAIYO HOLDINGS CO., LTD., which would Become an Equity-Method Affiliate,” DIC entered into a capital and business alliance agreement with the Target Company (the “Capital and Business Alliance Agreement”) and has maintained a capital and business alliance (the “Capital and Business Alliance”), as a result of which the Target Company became an equity-method affiliate of DIC. Upon consummation of the Transactions, the Capital and Business Alliance Agreement will terminate, resulting in the termination of the Capital and Business Alliance, as outlined below. 1. Reasons for entering into the Basic Agreement and for termination of the Capital and Business Alliance The Target Company and DIC entered into the Capital and Business Alliance Agreement with the aim of generating synergies in the area of electronics and have built a collaborative relationship as our equity-method affiliate of DIC. However, as announced in its June 3, 2025 press release titled “Notice Regarding the Planned Exercise of Voting Rights on the Proposal for the Election of Board Directors (Proposal 2) at the 79th Ordinary General Shareholders’ Meeting of TAIYO HOLDINGS,” owing to changes in the operating environment in the electronics sector, as well as changes in the Target Company’s business portfolio, including the expansion of its medical and pharmaceuticals business, DIC has determined that further business expansion through synergies with the Target Company is limited. Further, given the policy DIC has outlined in its priority business area of Smart living to concentrate management resources on businesses expected to generate profits swiftly and reliably, the Company has reached the conclusion that continued investment of capital in the Target Company will not necessarily contribute to the improvement of its own corporate value over the medium to long term. Against this backdrop, DIC has engaged in careful discussions with KKR regarding the Transactions and has reached the conclusion that the Transactions would contribute to the improvement of the Target Company’s corporate value, and that it would provide an economic rationale for DIC and deliver benefit to DIC and its shareholders. Accordingly, the Company has decided to enter into the Basic Agreement. - 14 -
Page 17
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (1) Company name TAIYO HOLDINGS CO., LTD. (2) Principal business Development of TAIYO Group management strategies, management guidance to its subsidiaries, research and development, etc. (3) Relationship with DIC Capital relationships DIC holds 20.19% (Note) of the Target Company’s outstanding common shares (excluding treasury shares). Personal relationships None Business relationships DIC supplies raw materials for solder resist to the Target Company. Related party status The Target Company is an equity-method affiliate of DIC and falls under the category of a related party. (1) Number of shares held before the Transactions 22,469,200 shares (Number of voting rights: 224,692) (20.19% of voting rights) (Note 1) (2) Number of shares to be transferred in the Transactions 22,469,200 shares (Note 2) (Number of voting rights: 224,692) (20.19% of voting rights) (Note 1) (3) Expected price of transfer Approximately 82.6 billion yen (4) Number of shares held after the Transactions 0 shares (Number of voting rights: 0) (0.00% of voting rights) Following consummation of the Transactions, the Target Company will cease to be an equity-method affiliate of DIC, and the Capital and Business Alliance Agreement will terminate, resulting in the termination of the Capital and Business Alliance. Notwithstanding the foregoing, the Target Company and DIC intend to continue their stable business relationship as before the Transactions. 2. Details of the Transactions The Transactions consist of (i) the Tender Offer, (ii) the Non-Tender, (iii) the Share Consolidation, (iv) the Capital Changes, and (v) the Share Buyback. 3. Profile of the counterparty to the Capital and Business Alliance to be terminated and the equity-method affiliate to be transferred (Note) The ownership percentage is calculated by dividing the number of shares held by DIC by the total number of shares outstanding as of March 31, 2026 (116,839,616 shares), as reported in the Annual Securities Report for the fiscal year ended March 31, 2026 (the 80th fiscal year) published by the Target Company on June 16, 2026, less treasury shares as of that date (5,562,934 shares), i.e., 111,276,682 shares (the “Adjusted Total Number of Issued and Outstanding Company Shares”). Please note that figures are rounded to two decimal places. 4. Number of shares to be transferred in the Transactions, price of transfer and number of shares held before and after the Transactions (Notes) 1. The percentage of voting rights held is calculated by dividing the number of voting rights held by DIC by the number of voting rights concerning the Adjusted Total Number of Issued and Outstanding Company Shares (1,112,766). 2. The number of shares before the Share Consolidation is stated. The actual number of shares to be transferred in the Share Buyback will be calculated by subtracting the number of fractional shares that will be purchased by the Tender Offeror or the Target Company as a result of the Share Consolidation from the number of shares the Company intends to sell. - 15 -
Page 18
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (1) Conclusion of the Basic Agreement March 31, 2026 (2) Tender Offer The Tender Offeror aims to commence the Tender Offer around early October 2026, taking into account consultations with local counsel regarding the procedures and clearances required under applicable domestic and foreign competition laws and investment control laws (the “Clearances”). However, as it is difficult to precisely predict the time required for the procedures before the domestic and foreign authorities responsible for the Clearances, the Tender Offeror will promptly announce the detailed schedule for the Tender Offer as soon as it is determined. The tender offer period for the Tender Offer is expected to be 21 business days. (3) Share Consolidation Mid-November 2026 to late January 2027 (scheduled) (4) Share Buyback Early February 2027 to early March 2027 (scheduled) (5) Termination of the Capital and Business Alliance After the consummation of the Share Buyback (scheduled) 5. Schedule of the Transactions - 16 -
Page 19
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Reportable segments Others TotalPackaging & Graphic Color & Display Functional Products Total Net sales: Sales to external customers 268,764 113,260 140,908 522,931 313 523,244 Intersegment sales and transfers － 18,050 2,049 20,100 － 20,100 Total 268,764 131,310 142,957 543,031 313 543,344 Segment profit 13,366 5,665 10,868 29,899 100 29,999 Profit Amount Total reportable segments 29,899 Profit in “Others” 100 Corporate expenses (3,021) Operating income reported in the interim consolidated statement of income 26,979 (Notes on Segment Information, etc.) [Segment Information] I. Six months ended June 30, 2025 (From January 1, 2025 to June 30, 2025) (1) Information about sales and profit (loss) for each reportable segment (2) Differences between total profit (loss) for reportable segments and operating income reported in the interim consolidated statement of income, and the breakdown of the main factors underlying these differences (note on adjusting for differences) (Millions of yen) (Note) Corporate expenses substantially consist of expenses incurred by new businesses and the DIC Central Research Laboratories, which are not included in any reportable segment. (3) Information about impairment losses on non-current assets and goodwill by reportable segment (Material impairment losses on non-current assets) In the six months ended June 30, 2025, the Company recorded impairment losses of ¥157 million in the “Others” segment and ¥68 million in the “Corporate” segment respectively. - 17 -
Page 20
ENGLISH TRANSLATION OF JAPANESE-LANGUAGE DOCUMENT This is a translation of the original Japanese-language document and is provided for convenience only. In all cases, the Japanese-language original shall take precedence. (Millions of yen) Reportable segments Others TotalPackaging & Graphic Color & Display Functional Products Total Net sales: Sales to external customers 307,159 126,176 159,376 592,711 272 592,983 Intersegment sales and transfers － 16,371 2,183 18,553 － 18,553 Total 307,159 142,546 161,559 611,264 272 611,536 Segment profit 21,730 12,009 21,349 55,088 123 55,211 Profit Amount Total reportable segments 55,088 Profit in “Others” 123 Corporate expenses (3,361) Operating income reported in the interim consolidated statement of income 51,850 II. Six months ended June 30, 2026 (From January 1, 2026 to June 30, 2026) (1) Information about sales and profit (loss) for each reportable segment (2) Differences between total profit (loss) for reportable segments and operating income reported in the interim consolidated statement of income, and the breakdown of the main factors underlying these differences (note on adjusting for differences) (Millions of yen) (Note) Corporate expenses substantially consist of expenses incurred by new businesses and the DIC Central Research Laboratories, which are not included in any reportable segment. (3) Matters Related to Changes, etc. in Reportable Segments In Phase 2 of the Company’s long-term management plan, “DIC Vision 2030”—the first year of which is fiscal year 2026—the Company has identified “Maximizing cash generation by improving capital efficiency” as a priority theme. As one of the metrics to measure its progress toward this goal, the Company has set return on invested capital (ROIC) targets for fiscal year 2030 for each reportable segment and is working to achieve high asset and capital efficiency that exceeds the cost of capital. Accordingly, beginning from the six months ended June 30, 2026, the Company has changed the way it measures segment information to more accurately reflect each reportable segment’s assets and capital efficiency. Segment information for the six months ended June 30, 2025, has been prepared and disclosed based on the revised measurement method. - 18 -