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Q2 FY2026 Earnings Presentation 2026/8/6 TOKAI CARBON CO . , LTD .
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Table of Contents Ⅰ Q2 FY2026 Financial Summary P 3-13 Ⅱ FY2026 Earnings Forecast P 14-16 Reference material P 17-20
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Ⅰ Q2 FY2026 Financial Summary
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4 Results / Financials / KPIs Billion JPY Topics EBITDA JPY 33.3 bn +16.1% Net Sales JPY 173.7 bn +9.9% Contribution of the consolidation of Bridgestone Corporation’s CB subsidiary in Thailand, significant increase in sales volume of SiC products for memory semiconductors Production adjustment of CB tire customers, divestment of the German Graphite Electrode subsidiary Operating Profit JPY 15.1 bn +10.5% Recording of license revenue at S&L, increased revenue at IF, and positive impact of restructuring at GE Higher depreciation expenses following the launch of the new CB plant in Thailand EBITDA margin 19.2 % +1.0pt FCF JPY3.6 bn JPY +7.2 bn Peak-out of Major CAPEX Adj. Net D/E Ratio 0.24x Credit Ratings JCR A+(outlook stable) R&I A (outlook stable) FY2026 Business Topics (January -June 2026) ※ The figures for FY2025 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc. Strong Performance of Memory Semiconductor and MLCC Markets, • Sales Volume Increase: Due to the strong performance of the memory semiconductor market, sales volume of Solid SiC focus rings significantly increased and is expected to reach a record high for the current fiscal year. • Sharp Increase in Orders: With the strong performance of the MLCC market, orders of consumable materials for industrial furnaces, ceramic heaters, etc. sharply increased. Surging Demand for Aluminum Electrolysis Cathodes for the Middle East, Turnaround Momentum in U.S. Graphite Electrode Market • Surge in Demand: Demand for cathodes surged for the slated restart of aluminum smelters in the Middle East. • Full Production: A full production setup for cathodes was established in the second quarter for shipment from the second half of FY2026. • GE Turnaround: Countervailing duties (from mid-August) and anti-dumping duties (from September) is expected to be preliminarily imposed on graphite electrodes imported from India and China. Needle cokes price increase and price increases by major graphite electrode suppliers is leading to a heightened turnaround momentum in the market. Next Steps after Resolving PBR below 1x • Stock Price Improvement: After bottoming out in line with increases in semiconductor-related stock prices, the Company’s stock price saw a further increase as a result of the May 13th announcement: the increased dividend forecasts, the enhancement of shareholder returns and optimization of capital efficiency through reduction of cross-shareholdings and share repurchase. • Next Steps after Resolving PBR below 1x: Sustainable enhancement of corporate value and achievement of Vision 2030. ※ FCF: Free Cash Flow CB: Carbon Black FC: Fine Carbon S&L: Smelting and Lining GE: Graphite Electrode IF: Industrial Furnaces & Related Products
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5 Jan. to Jun. Average exchange rates: ◼ ◼ Jan-Jun 2025 Jan-Jun 2026 YoY Change %Change Net sales 158,076 173,728 +15,651 +9.9% Operating income 13,670 15,102 +1,431 +10.5% Ordinary income 13,587 14,845 +1,258 +9.3% Net income attributable to owners of the parent company 8,415 7,235 (1,179) (14.0)% EBITDA 28,720 33,353 +4,633 +16.1% EBITDA margin 18.2 19.2 +1.0pt Summary of Consolidated Results Millions of yen ※ The figures for FY2025 have been retrospectively adjusted following the finalization of the provisional accounting for the business combinations with KBR, Inc. and MWI, Inc. ※ EBITDA = Operating income + Depreciation and Amortization including Goodwill
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6 Net sales Operating income EBITDA Jan-Jun 2025 Jan-Jun 2026 YoY Change Jan-Jun 2025 Jan-Jun 2026 YoY Change Jan-Jun 2025 Jan-Jun 2026 YoY Change Carbon Black 75,571 83,480 +7,908 8,148 7,239 (908) 13,071 14,345 +1,274 Fine Carbon 27,713 33,016 +5,302 4,410 4,716 +305 9,393 9,885 +491 Smelting and Lining 27,155 30,649 +3,493 304 2,020 +1,716 2,210 4,328 +2,117 Graphite Electrodes 18,451 16,878 (1,572) 494 792 +298 2,985 3,359 +374 Industrial Furnaces and Related Products 4,204 5,409 +1,205 885 1,213 +328 1,057 1,525 +467 Others Friction Materials 4,000 4,138 +137 Anode Materials, etc. 978 154 (823) Total 4,979 4,293 (685) 286 64 (222) 513 385 (127) Corporate & Other (859) (944) (85) (511) (476) +35 Total 158,076 173,728 +15,651 13,670 15,102 +1,431 28,720 33,353 +4,633 Return on sales 8.6% 8.7% +0.1pt 18.2% 19.2% +1.0pt Net Sales, Operating Income and EBITDA by Segment Millions of yen ◼ Operating income increased in the Smelting and Lining business due to license revenue, in the Graphite Electrodes business due to the effect of structural reforms, and in the Industrial Furnaces & Related Products business due to strong performance of products for MLCC. ◼ Operating income decreased in the Carbon Black business as margins deteriorated due to higher depreciation expenses following the launch of the new plant in Thailand. ※ The figures for FY2025 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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7 Operating Income Difference Volume +27 Margin (175) FX +345 Others (1,105) Jan-Jun 2025 Jan-Jun 2026 YoY Change % Change Net sales 75,571 83,480 +7,908 +10.5% Operating income 8,148 7,239 (908) (11.1)% ROS 10.8% 8.7% Net Sales Difference Volume +5,290 Sales Price (1,461) FX +4,079 Jan-Jun 2025 75,571 Jan-Jun 2026 83,480 Jan-Jun 2026 7,239 Jan-Jun 2025 8,148 Carbon Black Millions of yen ◼ While sales volume decreased due to the production adjustment among tire manufacturers, net sales increased YoY as a result of the contribution of Bridgestone Corporation’s subsidiary in Thailand, which was newly consolidated in the second half of FY2025, and the efforts to develop new customers and acquire spot orders. ◼ Operating income decreased YoY due to the impact of the increased depreciation associated with the commencement of operations at the new plant in Thailand.
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8 Operating Income Difference Jan-Jun 2025 Jan-Jun 2026 YoY Change % Change Net sales 27,713 33,016 +5,302 +19.1% Operating income 4,410 4,716 +305 +6.9% ROS 15.9% 14.3% Net Sales Difference Volume +4,387 Sales Price (330) FX +1,245 Jan-Jun 2025 27,713 Jan-Jun 2026 33,016 Jan-Jun 2025 4,410 Jan-Jun 2026 4,716 Volume +1,155 Margin (336) FX +439 Others (953) Fine Carbon Millions of yen ◼ Driven by strong performance of the memory semiconductor market, sales volumes of Solid SiC focus rings, a core product line, rose significantly. ◼ Both net sales and operating income increased YoY,as the underperformance of products for SiC power semiconductors was offset by the growth of Solid SiC focus rings. ※ The figures for FY2025 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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9 Jan-Jun 2025 Jan-Jun 2026 YoY Change % Change Net sales 27,155 30,649 +3,493 +12.9% Operating income 304 2,020 +1,716 +563.9% ROS 1.1% 6.6% Net Sales Difference Volume (1,424) Sales Price +1,201 FX +3,717 Operating Income Difference Jan-Jun 2026 30,649 Jan-Jun 2025 304 Volume (574) Margin +2,316 FX +223 Others (249) Jan-Jun 2026 2,020 Jan-Jun 2025 27,155 Smelting and Lining Millions of yen ◼ Although shipment volumes declined due to logistics disruption caused by the situation in the Middle East and other factors, both net sales and operating income increased YoY, driven by license revenue related to RuC© (Ready-to-Use Cathode), next-generation environmentally friendly cathode. ◼ Full production is underway to meet the surge in demand for cathodes stemming from the situation in the Middle East.
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10 Jan-Jun 2025 Jan-Jun 2026 YoY Change % Change Net sales 18,451 16,878 (1,572) (8.5)% Operating income 494 792 +298 +60.3% ROS 2.7% 4.7% Net Sales Difference Jan-Jun 2025 18,451 Jan-Jun 2026 16,878 Operating Income Difference Volume (382) Margin +46 FX +29 Others +604 Jan-Jun 2025 494 Jan-Jun 2026 792 Volume +578 Sales Price (291) FX +735 Graphite Electrodes Millions of yen ◼ Production of electric-arc furnace steel remained firm in the U.S. and decreased only slightly in Japan. However, net sales decreased YoY due to the impact of the divestment of the German subsidiary (excluded from the scope of consolidation from the second quarter of FY2025). ◼ Operating income increased YoY as a result of the structural reforms including the divestment of the unprofitable German subsidiary which had been weighing on the consolidated results. Others (2,594)
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11 Operating Income Difference Jan-Jun 2025 Jan-Jun 2026 YoY Change % Change Net sales 4,204 5,409 +1,205 +28.7% Operating income 885 1,213 +328 +37.0% ROS 21.1% 22.4% Net Sales Difference Jan-Jun 2025 4,204 Jan-Jun 2026 5,409 Jan-Jun 2025 885 Jan-Jun 2026 1,213 Volume +474 Sales Price +492 FX +239 Volume +273 Margin +71 FX +45 Others (61) Industrial Furnaces and Related Products Millions of yen ◼ Among the core markets for industrial furnaces and heating elements, demand for multi-layer ceramic capacitors (MLCCs), driven mainly by AI data centers, increased, while LiB-related CAPEX in the energy-related sector remained continuously sluggish. ◼ Sales of resistors used mainly for power infrastructure remained strong against the backdrop of the progress in the development of global power transmission and distribution networks, contributing to YoY increases in both net sales and operating income.
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12 Major Cash Flow items Jan-Jun 2025 Jan-Jun 2026 Summary Cash flows from operating activities 19,856 19,070 Working capital: JPY(9.3) billion (Jan-Jun 2025 JPY-3.1 billion) Net income (loss) before income taxes 14,560 15,686 Depreciation and amortization 12,918 16,014 Amortization on goodwill 2,131 2,237 Decrease (increase) in trade receivables 113 (3,474) Decrease (increase) in inventories (1,280) (7,298) Increase (decrease) in trade payables (1,937) 1,444 Income tax paid (6,649) (5,540) Cash flows from investing activities (23,461) (15,434) Free cash flow: JPY+3.6 billion (Jan-Jun 2025 JPY-3.6 billion) Including JPY 1,642 million in proceeds from the sale of cross-shareholdingsPurchase of fixed assets (23,239) (14,428) Cash flows from financing activities (8,027) (10,143) Jan-Jun 2025: Acquisition of treasury shares by Tokai Carbon Korea (Ratio of voting rights held as of June 30, 2026: 52.6%) Net increase (decrease) in short-term Loans payable (including CP) (359) (4,758) Corporate bond issuance and redemption 14,787 Payment of dividends (3,202) (3,202) Purchase of treasury shares (0) (15,002) Purchase of treasury shares of subsidiaries (2,835) Cash and cash equivalents at end of period 50,765 59,044 Millions of yen ※ Working capital = Trade receivables + Inventories – Trade payables Cash Flow ※ The figures for FY2025 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, 2025 June 30, 2026 Summary Total assets 664,033 683,300 Cash/monthly sales: 3.0 times (End of FY2025: 3.3 times) Inventory: (JPY+8.1 billion from End of FY2025) Tangible fixed assets: (JPY-0.7 billion from End of FY2025) Intangible fixed assets: (JPY-4.0 billion from End of FY2025) Current assets 258,828 267,457 Cash and cash equivalents 90,156 86,404 Notes and accounts receivable 66,781 70,807 Inventory 93,297 101,399 Fixed assets 405,204 415,843 Tangible fixed assets 290,429 289,701 Intangible fixed assets 61,520 57,512 Investments and other assets 53,255 68,629 Total liabilities 311,187 327,093 Net interest bearing debt: JPY121.9 billion (JPY+13.9 billion from End of FY2025) Interest bearing debt: JPY208.3 billion (JPY+10.2 billion from End of FY2025) Direct funding ratio: 63.6% (End of FY2025: 61.6%), Long term debt ratio: 71.0% (End of FY2025: 65.6%) Short term credit line: JPY84.0 billion (JPY+0.0 billion from End of FY2025): JPY6.0 billion executed (JPY+0.0 billion from End of FY2025) CP issuance limit JPY60.0 billion (JPY+0.0 billion from End of FY2025): JPY42.5 billion executed (JPY-4.5 billion from End of FY2025) Current liabilities 126,726 119,072 Long-term liabilities 184,460 208,020 Total net assets 352,846 356,207 Capital to asset ratio: 47.0% (End of FY2025: 47.9%) Adjusted Capital to asset ratio*: 52.2% (End of FY2025: 53.2%) Net D/E ratio: 0.38 times (End of FY2025: 0.34 times) Adjusted Net D/E ratio*:0.24 times (End of FY2025:0.21 times) Shareholders’ equity 183,111 172,180 Accumulated other Comprehensive income 135,246 149,293 Non-controlling interests 34,488 34,733 Total liabilities and net assets 664,033 683,300 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
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Ⅱ Earnings Forecast FY2026
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15 Consolidated Earnings Forecast FY2026 Millions of yen ◼ Full-year forecasts announced in May were further revised upward (net sales: +19.5% YoY, operating income: +35.4% YoY). This reflects the bottoming-out of operations in the tire and automotive sectors alongside price adjustments to pass through cost increase caused by Middle East disruptions in Carbon Black, increased sales volume of SiC and specialty graphite products driven by semiconductor market expansion in Fine Carbon, and a recovering trend of the graphite electrode market mainly in the U.S. ◼ Driven by an extraordinary gain on the sale of cross-shareholdings, net income attributable to owners of the parent company is expected to reach ¥22.0 billion (+9.6% YoY), an increase of ¥10.0 billion from the previous forecast. 1H Average exchange rates: ◼ USD1= JPY 158.18 , EUR1= JPY 184.52 Previous Forecast May 13 Updated Forecast for FY 2026 Change from Previous Forecast YoY Change 1H 2H Full Year 1H 2H Full Year Amount % Amount % Net sales 170,400 199,600 370,000 173,728 212,271 386,000 +16,000 +4.3 +63,039 +19.5 Operating income 10,300 17,700 28,000 15,102 19,897 35,000 +7,000 +25.0 +9,149 +35.4 Ordinary income 9,500 16,500 26,000 14,845 19,454 34,300 +8,300 +31.9 +7,987 +30.4 Net income attributable to owners of the parent company 5,000 7,000 12,000 7,235 14,764 22,000 +10,000 +83.3 +1,921 +9.6 EBITDA 29,100 36,600 65,700 33,353 39,046 72,400 +6,700 +10.2% +13,956 +23.9% EBITDA margin 17.1% 18.3% 17.8% 19.2% 18.4% 18.8% +1.0pt +0.7pt Whole year average exchange rates: ◼ USD1= JPY 159.25 , EUR1= JPY 183.86
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16 Previous Forecast (May 13) Updated Forecast for FY 2026 YoY Change % Change 1H 2H Full year 1H 2H Full year Net Sales 170,400 199,600 370,000 173,728 212,271 386,000 +16,000 +4.3 Carbon Black 81,300 94,400 175,700 83,480 97,519 181,000 +5,300 +3.0 Fine Carbon 31,500 33,800 65,300 33,016 37,683 70,700 +5,400 +8.3 Smelting and Lining 32,000 42,300 74,300 30,649 44,350 75,000 +700 +0.9 Graphite Electrodes 15,900 16,300 32,200 16,878 19,121 36,000 +3,800 +11.8 Industrial Furnaces and Related Products 5,500 8,500 14,000 5,409 9,290 14,700 +700 +5.0 Others Friction Materials 4,100 4,200 8,300 4,138 4,261 8,400 +100 +1.2 Anode Materials, etc. 100 100 200 154 45 200 Total 4,200 4,300 8,500 4,293 4,306 8,600 +100 +1.2 Operating Income 10,300 17,700 28,000 15,102 19,897 35,000 +7,000 +25.0 Carbon Black 4,300 9,000 13,300 7,239 8,760 16,000 +2,700 +20.3 Fine Carbon 4,100 4,300 8,400 4,716 6,083 10,800 +2,400 +28.6 Smelting and Lining 1,300 3,200 4,500 2,020 2,579 4,600 +100 +2.2 Graphite Electrodes 600 400 1,000 792 2,107 2,900 +1,900 +190.0 Industrial Furnaces and Related Products 1,000 1,800 2,800 1,213 1,786 3,000 +200 +7.1 Other Operations 100 100 200 64 135 200 Corporate & Other (1,100) (1,100) (2,200) (944) (1,555) (2,500) (300) Consolidated Earnings Forecast FY2026 by Segment Millions of yen
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Reference Material
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18 Net sales Operating income ROS EBITDA EBITDA margin Net income Attributable to Owners of the Parent Company ROE Adjusted ROIC Capital Investment Depreciation and Amortization R&D Expenses Interest bearing liabilities Net D/E ratio Adjusted Net D/E ratio Number of Employees Exchange Rate (JPY/USD) Key Indicators Millions of yen f=forecast ※ Adjusted ROIC = Operating Profit after Tax adjusted for Goodwill amortization Invested Capital (Working Capital + Fixed Assets adjusted for Goodwill) ※ EBITDA = Operating income + Depreciation and Amortization including Goodwill
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19 Quarterly Results by Segment 2025 2026 Q1 Q2 Q3 Q4 Full year Q1 Q2 H2f Full year Net sales 80,346 77,730 79,260 85,623 322,960 81,720 92,007 212,271 386,000 Carbon Black 38,920 36,650 35,353 36,168 147,093 38,730 44,750 97,519 181,000 Fine Carbon 14,442 13,271 14,362 13,892 55,969 16,401 16,614 37,683 70,700 Smelting and Lining 12,932 14,222 14,440 20,154 61,751 14,166 16,482 44,350 75,000 Graphite Electrodes 9,383 9,068 9,699 9,422 37,573 7,845 9,033 19,121 36,000 Industrial Furnaces and Related Products 2,125 2,079 2,940 3,583 10,728 2,361 3,048 9,290 14,700 Others Friction Materials 1,960 2,040 1,955 2,028 7,984 2,172 1,966 4,261 8,400 Anode Materials, etc. 581 396 507 373 1,859 42 112 45 200 Total 2,542 2,437 2,462 2,401 9,843 2,215 2,078 4,306 8,600 Operating income 6,967 6,702 7,162 5,017 25,850 6,345 8,756 19,897 35,000 Carbon Black 4,521 3,626 3,530 1,457 13,135 3,235 4,004 8,760 16,000 Fine Carbon 2,825 1,585 1,886 1,406 7,704 2,264 2,451 6,083 10,800 Smelting and Lining 160 144 434 764 1,503 658 1,362 2,579 4,600 Graphite Electrodes (725) 1,219 1,149 745 2,389 251 540 2,107 2,900 Industrial Furnaces and Related Products 470 414 431 951 2,268 327 886 1,786 3,000 Other Operations 125 160 158 172 617 126 (62) 135 200 Corporate & Other (409) (449) (428) (481) (1,769) (518) (426) (1,555) (2,500) Millions of yen ※ The figures for FY2025 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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◼ 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, 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