Slides
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FY2025 Earnings Presentation 2026/2/13
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Table of Contents Ⅰ FY2025 Financial Summary P 3-13 Ⅱ FY2026 Earnings Forecast P 14-16 Reference Material P 17-20
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Ⅰ FY2025 Financial Summary
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4 FY2025 Business Topics ⚫ Regarding net sales during FY2025, while the Fine Carbon business saw a YoY increase due to factors such as the consolidation of U.S.-based subsidiaries and a recovery in demand for memory semiconductors, consolidated net sales decreased YoY mainly due to the divestment of the German site of the Graphite Electrodes business and declined sales prices / sales volumes in the Carbon Black business. ⚫ Operating income increased YoY, driven by the significant turnaround to profitability in both the Graphite Electrodes and the Smelting and Lining businesses. This was primarily due to the structural reform in the Graphite Electrodes business and the prior- year impairment loss recorded in the Smelting and Lining business, in addition to ongoing contributions from improved production efficiency and cost reduction measures, despite non-recurring losses recorded in the Carbon Black business in the fourth quarter. ⚫ While EBITDA decreased YoY,EBITDA margin improved, securing the upper 10% range. ⚫ Net income attributable to owners of the parent company significantly increased and turned positive mainly due to the prior-year costs of structural reform and impairment losses have run their course, in addition to the gain on sale of investment securities aimed at improving capital efficiency. ⚫ Net sales, operating income, ordinary income, and net income significantly exceeded the full-year earnings forecast announced on November 6, 2025, amid external environments changing significantly beyond initial anticipations, including U.S. tariff policies and global trade frictions. ⚫ Strategic investments and capital investments necessary for future growth, exemplified by the consolidation of Bridgestone Corporation’s carbon black manufacturing and sales subsidiary in Thailand, were carefully selected and continued. While interest- bearing debts increased slightly, an optimal capital structure was maintained through appropriate leverage and financial soundness and liquidity were maintained at a high level. The credit ratings have been maintained, with JCR: A+ (outlook stable) and R&I: A (outlook stable). ⚫ The year-end dividend of JPY15 (no changes), the annual dividend of JPY30 (payout ratio of 31.9%)
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5 Jan. to Dec. Average exchange rates: ◼ ◼ Jan-Dec 2024 Jan-Dec 2025 YoY Change %Change Net sales 350,114 322,960 (27,153) (7.8)% Operating income 19,386 25,850 +6,463 +33.3% Ordinary income 22,579 26,312 +3,733 +16.5% Net income attributable to owners of the parent company (56,485) 20,078 +76,564 % EBITDA 61,120 58,443 (2,677) (4.4)% EBITDA margin 17.5 18.1 +0.6pt Summary of Consolidated Results Millions of yen ※EBITDA =Operating income + Depreciation + Amortization ◼ Consolidated results saw YoY decreases in net sales, and increase in operating income ◼ Net sales JPY322.9 b (-7.8%), operating income JPY25.8 b (+33.3%), ROS 8.0% (+2.5points) ◼ EBITDA JPY58.4 b (-4.4%), EBITDA margin 18.1% (+0.6points) ◼ Net income significantly increased from a loss of JPY56.4 b in the prior fiscal year to JPY20.0 b, including the gain on sale of investment securities of JPY 4.1 b. ※The figures for FY2024 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc.
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6 ◼ Operating income significantly increased YoY for the Smelting and Lining and the Graphite Electrodes businesses, accompanied by an EBITDA increase, due to factors including the non-recurring impairment losses recorded in the prior fiscal year and the effect of cost reduction measures. ◼ Meanwhile, the Carbon Black and Fine Carbon businesses, our core businesses, that drove growth in the prior fiscal year faced challenges. Net sales Operating income EBITDA Jan-Dec 2024 Jan-Dec 2025 YoY Change Jan-Dec 2024 Jan-Dec 2025 YoY Change Jan-Dec 2024 Jan-Dec 2025 YoY Change Carbon Black 156,793 147,093 (9,699) 21,706 13,135 (8,571) 31,962 24,646 (7,315) Fine Carbon 53,890 55,969 +2,078 12,437 7,704 (4,732) 20,253 17,951 (2,302) Smelting and Lining 64,512 61,751 (2,761) (13,701) 1,503 +15,204 2,449 5,582 +3,133 Graphite Electrodes 48,818 37,573 (11,245) (3,529) 2,389 +5,918 2,562 7,403 +4,840 Industrial Furnaces and Related Products 16,291 10,728 (5,562) 3,304 2,268 (1,036) 3,661 2,723 (938) Others Friction materials 7,974 7,984 +10 Anode materials, etc. 1,833 1,859 +25 Total 9,807 9,843 +35 403 617 +213 883 1,102 +218 Corporate & Other (1,235) (1,769) (533) (651) (966) (314) Total 350,114 322,960 (27,153) 19,386 25,850 +6,463 61,120 58,443 (2,677) Return on sales 5.5% 8.0% +2.5pt 17.5% 18.1% +0.6pt Net Sales, Operating Income and EBITDA by Segment Millions of yen
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7 Operating Income Difference Volume (1,701) Margin (3,948) FX +54 Others (2,976) Jan-Dec 2024 Jan-Dec 2025 YoY Change % Change Net sales 156,793 147,093 (9,699) (6.2)% Operating income 21,706 13,135 (8,571) (39.5)% ROS 13.8% 8.9% Net Sales Difference Volume (3,043) Sales Price (6,719) FX +63 Jan-Dec 2024 156,793 Jan-Dec 2025 147,093 Jan-Dec 2025 13,135 Jan-Dec 2024 21,706 Carbon Black Millions of yen ◼ Net sales decreased YoY due to declined sales volumes resulting from production adjustments among tire manufacturers, and declined sales prices. ◼ Operating income decreased YoY primarily due to declining margins and non-recurring losses resulting from the consolidation of Bridgestone Corporation’s carbon black manufacturing and sales subsidiary in Thailand (consolidated from the fourth quarter of FY2025).
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8 Operating Income Difference Jan-Dec 2024 Jan-Dec 2025 YoY Change % Change Net sales 53,890 55,969 +2,078 +3.9% Operating income 12,437 7,704 (4,732) (38.1)% ROS 23.1% 13.8% Net Sales Difference Volume +5,085 Sales Price (1,304) FX (1,703) Jan-Dec 2024 53,890 Jan-Dec 2025 55,969 Jan-Dec 2024 12,437 Jan-Dec 2025 7,704 Volume (669) Margin (690) FX (276) Others (3,097) Fine Carbon Millions of yen ◼ Increased sales volume of Solid SiC focus rings, our core product, in line with the recovery of demand for memory semiconductors, and the consolidation of U.S.-based subsidiaries, contributed to YoY increase in net sales. ◼ Operating income decreased YoY due to factors such as the decelerated growth of the SiC power semiconductor market (driven by the global slowdown in EV growth), intensified competition in the Chinese market, etc.
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9 Jan-Dec 2024 Jan-Dec 2025 YoY Change % Change Net sales 64,512 61,751 (2,761) (4.3)% Operating income (13,701) 1,503 +15,204 ROS (21.2)% 2.4% Net Sales Difference Volume (2,534) Sales Price (2,072) FX +1,845 Operating Income Difference Jan-Dec 2025 61,751 Jan-Dec 2024 (13,701) Volume (811) Margin +3,696 FX +31 Others +12,287 Jan-Dec 2025 1,503 Jan-Dec 2024 64,512 Smelting and Lining Millions of yen ◼ Net sales decreased YoY due to a delay in the recovery of demand for relining of aluminum smelting furnaces and intensified competition with industry peers. ◼ Operating income significantly improved and turned positive due to cost reductions and decreased depreciation and amortization resulting from impairment losses on goodwill, etc. recorded in the prior fiscal year. ◼ Excluding the effect of decreased depreciation and amortization on goodwill, etc., the profit level stood at JPY+2.8 b YoY,indicating improved profitability.
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10 Jan-Dec 2024 Jan-Dec 2025 YoY Change % Change Net sales 48,818 37,573 (11,245) (23.0)% Operating income (3,529) 2,389 +5,918 ROS (7.2)% 6.4% Net Sales Difference Others (9,311) Jan-Dec 2024 48,818 Jan-Dec 2025 37,573 Operating Income Difference Volume +195 Margin +1,075 FX (35) Others +4,683 Jan-Dec 2024 (3,529) Jan-Dec 2025 2,389 Volume +1,845 Sales Price (3,453) FX (325) Graphite Electrodes Millions of yen ◼ Net sales decreased YoY due to sluggish electrode market conditions resulting from the stagnant steel market and excessive exports of steel products from China, in addition to the divestment of the German subsidiary (excluded from the scope of consolidation from the second quarter of FY2025). ◼ Operating income turned positive due to reduced production costs resulting from decline in raw material prices and the effects of structural reforms, including the accelerated realization of production consolidation effects in Japan and the divestment of the German subsidiary.
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11 ◼ Demand for CAPEX in the electronic device industries, the core markets for industrial furnaces and heating elements, remained sluggish due to the globally decelerated growth of the LiB market and a delay in the recovery of the MLCC market. ◼ Both net sales and operating income decreased YoY due mainly to declined sales volumes, influenced by factors such as delivery delays stemming from customer circumstances. Operating Income Difference Jan-Dec 2024 Jan-Dec 2025 YoY Change % Change Net sales 16,291 10,728 (5,562) (34.1)% Operating income 3,304 2,268 (1,036) (31.4)% ROS 20.3% 21.1% Net Sales Difference Jan-Dec 2024 16,291 Jan-Dec 2025 10,728 Jan-Dec 2024 3,304 Jan-Dec 2025 2,268 Volume (6,172) Sales Price +636 FX (26) Volume (1,323) Margin (651) FX (5) Others +944 Industrial Furnaces and Related Products Millions of yen
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12 Jan-Dec 2024 Jan-Dec 2025 Summary Cash flows from operating activities 64,471 55,872 Working capital: JPY+5.3 billion (Jan-Dec 2024 JPY+9.5 billion) Net income (loss) before income taxes (47,395) 30,918 Depreciation and amortization 33,028 27,700 Amortization on goodwill 8,705 4,892 Decrease (increase) in trade receivables (337) 2,744 Decrease (increase) in inventories 14,210 6,321 Increase (decrease) in trade payables (4,310) (3,725) Income tax paid etc. 60,570 (12,979) Cash flows from investing activities (70,777) (51,052) Free cash flow: JPY+4.8 billion (Jan-Dec 2024 JPY-6.3 billion)Purchase of fixed assets (55,111) (42,907) Acquisition of shares of subsidiaries accompanying changes in the scope of consolidation (15,418) (8,529) Prior fiscal year: KBR/MWI, fiscal year under review: Thai Tokai Carbon Product Rojana and KBR/MWI adjustments Cash flows from financing activities 9,410 (7,689) Additional acquisition of shares of Tokai Carbon Korea (Ratio of voting rights held: 47.4% → 50.4%) Acquisition of treasury shares by Tokai Carbon Korea (Ratio of voting rights held: 50.4% → 52.6%) Net increase (decrease) in short-term Loans payable 14,558 (3,335) Corporate bond issuance and redemption 9,744 9,953 Acquisition of share of subsidiaries (5,886) Purchase of treasury shares of subsidiaries (5,269) Payment of dividends (7,036) (6,404) Cash and cash equivalents at end of period 65,135 64,327 Millions of yen ※Working capital = Trade receivables + Inventories – Trade payables Cash Flow Major Cash Flow items ※The figures for FY2024 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc.
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13 Major Balance Sheet Items December 31, 2024 December 31, 2025 Summary Total assets 643,517 664,033 Cash/monthly sales: 3.3 times (End of FY2024: 3.2 times) Inventory: JPY-7.6 billion from End of FY2024) Tangible fixed assets: JPY+24.3 billion from End of FY2024) Intangible fixed assets: JPY-5.8 billion from End of FY2024) Current assets 270,566 258,828 Cash and cash equivalents 92,207 90,156 Notes and accounts receivable 69,175 66,781 Inventory 100,943 93,297 Fixed assets 372,951 405,204 Tangible fixed assets 266,070 290,429 Intangible fixed assets 67,414 61,520 Investments and other assets 39,466 53,255 Total liabilities 318,777 311,187 Net interest-bearing debt: JPY107.9 billion (JPY+8.9 billion from End of FY2024) Interest-bearing debt: JPY198.1 billion (JPY+6.8 billion from End of FY2024) Direct funding ratio: 61.6% (End of FY2024: 65.1%), Long-term debt ratio: 65.6% (End of FY2024: 61.3%) Short term credit line: JPY84.0 billion (JPY+18.0 billion from End of FY2024): JPY6.0 billion executed (JPY+0.0 billion from End of FY2024) CP issuance limit JPY60.0 billion (JPY+0.0 billion from End of FY2024): JPY47.0 billion executed (JPY-12.5 billion from End of FY2024) Current liabilities 148,138 126,726 Long term liabilities 170,639 184,460 Total net assets 324,740 352,846 Capital to asset ratio: 47.9% (End of FY2024: 44.9%) Adjusted Capital to asset ratio*: 53.2% (End of FY2024: 50.4%) Net D/E ratio: 0.34 times (End of FY2024: 0.34 times) Adjusted Net D/E ratio*:0.21 times (End of FY2024: 0.20 times) Shareholders’ equity 170,719 183,111 Accumulated other Comprehensive income 118,420 135,246 Non-controlling interests 35,600 34,488 Total liabilities and net assets 643,517 664,033 Millions of yen ※The adjusted capital to asset ratio and adjusted net D/E ratio are the capital ratio and net D/E ratio that take into accountthe capital nature of hybrid finance recognized by rating agencies. Balance Sheet ※The figures for FY2024 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc.
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Ⅱ Earnings Forecast FY2026
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15 Consolidated Earnings Forecast FY2026 FY2025 Results FY2026 Forecast YoY Change % Change1H 2H Full year 1H 2H Full year Net sales 158,076 164,883 322,960 168,300 178,400 346,700 +23,739 +7.4 Operating income 13,956 11,893 25,850 11,900 14,100 26,000 +149 +0.6 Ordinary income 13,874 12,438 26,312 11,100 12,900 24,000 (2,312) (8.8)% Net income attributable to owners of the parent company 8,538 11,539 20,078 4,700 5,900 10,600 (9,478) (47.2)% EBITDA 28,815 29,627 58,443 30,700 33,000 63,700 +5,256 +9.0 EBITDA margin 18.2 18.0 18.1 18.2 18.5 18.4 - - ROS 8.8 7.2 8.0 7.1 7.9 7.5 - - ROE - - 6.6 - - 3.2 - - Earnings Forecast FY2026 Average exchange rates: (Full year) USD1=¥153 , EUR1=¥181 Millions of yen ◼ Net sales are projected to increase, except for the Graphite Electrodes business. Consolidated net sales are projected to increase by 7.4%. ◼ Operating income is projected to decline in the Carbon Black business due to an increase in depreciation associated with the commencement of full-scale operations at the new site in Thailand, and in the Fine Carbon business in anticipation of the decelerated growth of the power semiconductor market, while increases are expected in the Smelting and Lining and the Industrial Furnaces and Related Products businesses. Consolidated operating income is projected to remain almost flat, reflecting heightened global uncertainty. ◼ Dividend forecast: year-end dividend of JPY15, annual dividend of JPY30 For convenience, the retrospective adjustments to the figures for FY2025, following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc., have been collectively reflected in the second half of FY2025.
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16 Consolidated Earnings Forecast FY2026 by Segment FY2025 Results FY2026 Forecast YoY Change % Change 1H 2H Full year 1H 2H Full year Net Sales 158,076 164,883 322,960 168,300 178,400 346,700 +23,739 +7.4 Carbon Black 75,571 71,522 147,093 78,300 81,200 159,500 +12,406 +8.4 Fine Carbon 27,713 28,255 55,969 28,400 33,800 62,200 +6,230 +11.1 Smelting and Lining 27,155 34,595 61,751 33,000 33,200 66,200 +4,448 +7.2 Graphite Electrodes 18,451 19,121 37,573 17,600 19,100 36,700 (873) (2.3)% Industrial Furnaces and Related Products 4,204 6,524 10,728 6,700 6,800 13,500 +2,771 +25.8 Others Friction Materials 4,000 3,983 7,984 4,200 4,200 8,400 +415 +5.2 Anode Materials, etc. 978 880 1,859 100 100 200 (1,659) (89.2)% Total 4,979 4,864 9,843 4,300 4,300 8,600 (1,243) (12.6)% Operating Income 13,956 11,893 25,850 11,900 14,100 26,000 +149 +0.6 Carbon Black 8,148 4,987 13,135 6,100 6,200 12,300 (835) (6.4)% Fine Carbon 4,697 3,006 7,704 3,000 4,300 7,300 (404) (5.3)% Smelting and Lining 304 1,199 1,503 1,500 1,400 2,900 +1,396 +92.9 Graphite Electrodes 494 1,895 2,389 800 1,600 2,400 +10 +0.4 Industrial Furnaces and Related Products 885 1,382 2,268 1,300 1,500 2,800 +531 +23.4 Other Operations 286 331 617 200 100 300 (317) (51.4)% Corporate & Other (859) (910) (1,769) (1,000) (1,000) (2,000) (230) - Millions of yen For convenience, the retrospective adjustments to the figures for FY2025, following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc., have been collectively reflected in the second half of FY2025.
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Reference Material
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18 2022 2023 2024 2025 2026f Net sales 340,371 363,946 350,114 322,960 346,700 Operating income 40,588 38,728 19,386 25,850 26,000 ROS 11.9% 10.6% 5.5% 8.0% 7.5% EBITDA 75,572 75,949 61,120 58,443 63,700 EBITDA margin 22.2% 20.9% 17.5% 18.1% 18.4% Net income Attributable to Owners of the Parent Company 22,418 25,468 (56,736) 20,078 10,600 ROE 9.0% 8.6% 6.6% 3.2% Adjusted ROIC 14.3% 11.5% 6.8% 5.8% 5.4% Capital Investment 48,150 53,316 56,715 36,854 43,100 Depreciation and Amortization 27,460 29,065 33,028 27,700 33,300 R&D Expenses 3,171 3,605 4,284 4,319 5,200 Interest bearing liabilities 171,452 166,642 191,241 198,111 - Net D/E ratio 0.37 0.27 0.34 0.34 0.34 Adjusted Net D/E ratio 0.22 0.15 0.20 0.21 0.21 Number of Employees 4,378 4,427 4,625 4,436 - Exchange Rate (JPY/USD) 131.43 140.56 151.58 149.71 153.00 Key Indicators Millions of yen f=forecast ※EBITDA = Operating income+ Depreciation + Amortization ※Adjusted ROIC = Operating Profit after Tax with adjustment for Goodwill amortization Invested Capital (Working Capital + Fixed Assets with adjustment for Goodwill) ※The figures for FY2024 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc.
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19 2024 2025 Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full Year Net sales 82,161 88,760 87,736 91,455 350,114 80,346 77,730 79,260 85,623 322,960 Carbon Black 39,602 39,983 39,793 37,414 156,793 38,920 36,650 35,353 36,168 147,093 Fine Carbon 12,537 13,922 14,131 13,299 53,890 14,442 13,271 14,362 13,892 55,969 Smelting and Lining 14,030 16,000 16,102 18,378 64,512 12,932 14,222 14,440 20,154 61,751 Graphite Electrodes 10,874 13,518 12,504 11,921 48,818 9,383 9,068 9,699 9,422 37,573 Industrial Furnaces and Related Products 2,485 2,640 3,037 8,128 16,291 2,125 2,079 2,940 3,583 10,728 Others Friction Materials 2,064 2,086 1,818 2,005 7,974 1,960 2,040 1,955 2,028 7,984 Anode Materials, etc. 568 610 347 306 1,833 581 396 507 373 1,859 Total 2,632 2,696 2,165 2,312 9,807 2,542 2,437 2,462 2,401 9,843 Operating income 3,489 4,934 6,786 4,175 19,386 7,136 6,820 7,344 4,548 25,850 Carbon Black 5,696 5,190 5,484 5,335 21,706 4,521 3,626 3,530 1,457 13,135 Fine Carbon 3,078 3,523 3,815 2,019 12,437 2,994 1,703 2,068 938 7,704 Smelting and Lining (3,546) (4,009) (2,795) (3,349) (13,701) 160 144 434 764 1,503 Graphite Electrodes (2,175) (248) 86 (1,192) (3,529) (725) 1,219 1,149 745 2,389 Industrial Furnaces and Related Products 511 613 669 1,510 3,304 470 414 431 951 2,268 Other Operations 224 215 95 (131) 403 125 160 158 172 617 Corporate & Other (300) (349) (569) (16) (1,235) (409) (449) (428) (481) (1,769) Quarterly Results by Segment Millions of yen ※For convenience, the retrospective adjustments to the figures for FY2025, following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc., have been collectively reflected in the Q4 of FY2025.
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◼ Forward-looking statements in this document are based on information obtainable at the time this document was published and assumptions as of the date of publication concerning elements of uncertainty that could affect future earnings. ◼ Actual results may differ substantially, depending on various future factors. Factors that affect business performance include, but are not limited to, economic conditions, raw material prices, trends in product demand and market prices, and fluctuation in exchange rates. ◼ The quantitative goals, reference values, investment amounts, and other numerical goals in this document only express the medium-term strategy and vision of the company; they are not performance forecasts. The company is not obligated to update such information. ◼ Please see the disclosures in the Consolidated Financial Results for the official earnings forecast, based on the rules of Tokyo Stock Exchange, Inc. Disclaimer Regarding Forward -looking Statements IR contact: Corporate Planning Department TC-IR.new@tokaicarbon.co.jp