Interim report
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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original document, the latter shall prevail. Date: August 4, 2026 Consolidated Financial Results for the Six months ended June 30, 2026 (Under IFRS) (All financial information has been prepared based on the original Japanese-language document, Summary of Consolidated Financial Statements for the First half announced on August 4, 2026) Company name: DMG MORI CO., LTD. Listing: Prime Section of Tokyo Stock Exchange Securities code: 6141 URL https://www.dmgmori.co.jp Representative: Masahiko Mori, President Inquiries: Keiichi Ota, Director, Chief Financial Officer Telephone: +81-(0)3-6758-5900 Scheduled date to file semi-annual securities report: August 7, 2026 Scheduled date to commence dividend payments: September 11, 2026 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (Note: All amounts less than one million are disregarded) (1) Consolidated operating results (cumulative) (% of change from same period in the previous year) Sales revenues Operating profit Profit before income taxes Profit Profit attributable to owners of the parent Comprehensive income million yen % million yen % million yen % million yen % million yen % million yen % Six months ended June 30, 2026 276,729 21.6 9,311 43.0 5,933 81.6 4,161 95.7 4,378 112.5 10,991 329.1 Six months ended June 30, 2025 227,487 (13.7) 6,509 (73.0) 3,268 (84.8) 2,126 - 2,060 - 2,561 (90.5) Basic earnings per share Diluted earnings per share Yen Yen Six months ended June 30, 2026 23.09 23.09 Six months ended June 30, 2025 7.94 7.94 Total assets Total equity Equity attributable to owners of the parent Ratio of equity attributable to owners of the parent Equity per share attributable to owners of the parent million yen million yen million yen % yen June 30, 2026 881,440 353,329 352,661 40.0 2,499.46 December 31, 2025 868,965 342,155 340,484 39.2 2,444.41 1. Consolidated financial results of the six months ended June 30, 2026 (January 1, 2026 to June 30, 2026) (Note) Earnings per share is calculated based on the profit which excludes profit attributable to owners of other equity instruments. (2) Consolidated financial position (Note) Ratio of equity attributable to owners of the parent and equity per share attributable to owners of the parent are based on the equity amount which includes amounts of other equity instruments.
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Record Date Dividends per share 1Q 2Q 3Q Year-end Annual yen yen yen yen yen Fiscal year ended December 31, 2025 - 50.00 - 55.00 105.00 Fiscal year ending December 31, 2026 - 50.00 Fiscal year ending December 31, 2026 (Forecast) - 55.00 105.00 (% of change from same period in the previous year) Sales revenues Operating profit Profit attributable to owners of the parent Basic earnings per share million yen % million yen % million yen % yen Full Year 2026 580,000 12.6 30,000 58.1 15,500 (35.5) 93.26 As of June 30, 2026 142,325,934 shares As of December 31, 2025 142,325,934 shares As of June 30, 2026 1,230,942 shares As of December 31, 2025 3,034,960 shares Six months ended June 30, 2026 139,548,556 shares Six months ended June 30, 2025 141,619,757 shares 2. Cash Dividends (Note) Revision of dividends forecast in the current quarter: None 3. Consolidated financial forecast for Fiscal Year 2026 (January 1, 2026 to December 31, 2026) (Note) Revision of consolidated financial forecast in the current quarter: Yes - Exchange rate used for consolidated financial forecast for fiscal year 2026: JPY 154.1 /USD 182.3 /EUR - We made a revision of consolidated financial forecast for the FY2026 from the previous announcement released on May 1, 2026, specifically for sales revenues, operating profit and profit attributable to owners of the parent. Regarding the detail of this forecast, please see “1. Overview of Operating Results, etc. (3) Explanation of forecasts and other projections” on page 4. * Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies and changes in accounting estimates 1. Changes in accounting policies required by IFRS: None 2. Changes in accounting policies due to other reasons: None 3. Changes in accounting estimates: None (3) Number of issued shares (ordinary shares) 1. Total number of issued shares 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 outstanding during the period (cumulative from the beginning of the fiscal year) * Semi-annual financial results reports are exempt from review conducted by certified public accountants or an audit firm. * Proper use of earnings forecasts, and other special matters (Precautions regarding future descriptions) The above forecast is based on information available as of the release of this report and assumptions of several uncertain factors which may affect the company’s results. Actual results might be different from the above estimates due to subsequent changes in the circumstances. Regarding Fiscal Year 2026 (Forecast), please see “1. Overview of Operating Results, etc. (3) Explanation of forecasts and other projections” on page 4. (How to obtain supplementary explanatory materials for quarterly financial results) The supplementary explanatory material for the quarterly financial results is scheduled to be posted on the Company’s website on August 4, 2026 (Tuesday).
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1. Overview of Operating Results, etc. ………………………………………………………………………………………. 2 (1) Overview of operating results ………………………………………………………………………………………… 2 (2) Overview of financial position ………………………………………………………………………………………… 3 (3) Explanation of forecasts and other projections …………………………………………………………………….. 4 2. Interim Consolidated Financial Statements ……………………………………………………………………………… 5 (1) Interim consolidated statement of financial position ……………………………………………………………….. 5 (2) Interim consolidated statement of profit or loss …………………………………………………………………….. 7 (3) Interim consolidated statement of comprehensive income ………………………………………………………... 8 (4) Interim consolidated statement of changes in equity ………………………………………………………………. 9 (5) Interim consolidated statement of cash flows ………………………………………………………………………. 11 (6) Notes to going concern assumption …………………………………………………………………………………. 13 (7) Notes to the interim consolidated financial statements ……………………………………………………………. 13 (Attached Documents) Index - 1 -
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1. Overview of Operating Results, etc. (1) Overview of operating results During the first half of the fiscal year 2026, global demand for capital investment remained resilient, driven primarily by growth sectors such as aerospace, defense, power generation, energy, shipbuilding, semiconductors, and medical technology. Our MX (Machining Transformation) strategy of achieving GX through process integration and automation while enhancing production processes through DX was highly valued across a broad range of industries. This was supported by expanding defense budgets in many countries and growing demand for machine tools driven by investments in AI-related semiconductors. In the first half, the sales revenues were JPY 276.7 bn. (EUR 1,500 mil.), EBITDA was JPY 27.8 bn. (EUR 151 mil.), the operating profit was JPY 9.3 bn. (EUR 50 mil.), the profit before income taxes was JPY 5.9 bn. (EUR 32 mil.), and the profit attributable to owners of the parent was JPY 4.4 bn. (EUR 24 mil.). (The EUR amount is converted from JPY at 184.5 yen, the average exchange rate between January and June 2026.) Driven by a very favorable market environment, consolidated orders for the first half reached JPY 335.2 bn. in a strong year-on-year increase of 34.8% compared with January to June 2025. On a quarterly basis, order growth accelerated from 28.8% year-on-year in the January-March period to 40.5% in the April-June period. In addition to robust demand for MX machines, including 5-axis machining centers and mill-turn machines, orders for BX (Basic) machines also increased significantly, resulting in a well-balanced order mix across both product categories. The average price per order rose from JPY 79.6 mil. (EUR 471,000) in FY2025 to JPY 81.8 mil. (EUR 443,000). Orders for MRO (Maintenance, Repair, Overhaul), spare parts, and engineering also grew strongly, reaching JPY 73.7 bn., up 23.3% year-on-year. Group companies continued to achieve substantial order growth driven by increased semiconductor demand, including Magnescale Co., Ltd., manufacturer of ultra-high-resolution laser scales for semiconductor manufacturing equipment, and Saki Corporation, which develops and sells automated inspection systems for electronic assembly boards. Their strong performance also contributed to the increase in consolidated orders. Order intake was strong across all regions. By industry, demand remained particularly robust in aerospace, defense, power generation, energy, shipbuilding, semiconductor-related, and medical sectors. Orders from these industries are expected to remain strong in the second half of the year. Accordingly, we have revised our full-year consolidated order forecast upward from JPY 580 bn. to JPY 630 bn., representing a year-on-year increase of 20.4%. The order backlog for machine tools increased from JPY 240.0 bn. at the end of December 2025 to JPY 303.0 bn. at the end of June 2026. This backlog is expected to support revenue growth in the second half of the fiscal year (July-December) and beyond. At DMG MORI, we have strengthened our medium- to long-term competitiveness by advancing MX with focus on expanding technology development and production sites for advanced industries, enhancing our products and solutions, and promoting sustainability initiatives. To expand technology development and production, we held the topping-out ceremony for our European headquarters and Technology Center in Munich, Germany, in May 2026. The facility will enhance customer engagement through demonstrations of advanced machine tools, automation, and digital technologies, while strengthening our brand presence in Europe. In June 2026, we expanded our Stipshausen site in Germany by enhancing the production, logistics, and R&D capabilities of our core hub for ultrasonic technology to accelerate the development of machining technologies for advanced industries, including semiconductors, optical equipment, medical devices, and aerospace. In addition, group company Magnescale opened its Nara Factory in April 2026 to meet growing demand for high-precision Laserscale linear encoders used in semiconductor manufacturing equipment. The new facility increases production capacity, strengthens BCP through a dual-site structure with its Isehara Factory, and enhances supply capabilities for the growing semiconductor market.In the product and technology domain, we introduced the 5-axis machining center ULTRASONIC 80 Precision. The machine uses ultrasonic technology for highly accurate and efficient processing of hard and brittle materials to meet the growing demand in the semiconductor industry and others. We also launched the WH-AMR 10 2nd Generation autonomous mobile robot to support transport automation, labor savings, and productivity improvements in manufacturing operations. In digital services, we enhanced CELOS Club with the AI-powered predictive maintenance function Condition Agent, enabling equipment condition monitoring and early anomaly detection through machine operating data. In addition, we were selected for the GENIAC program sponsored by METI and NEDO, under which we are advancing research and development of a manufacturing physical AI platform that utilizes production equipment data to optimize machining processes and expand AI applications on the shop floor. Through these initiatives, we are delivering lifecycle value, including MRO services, to support productivity gains for customers in aerospace, defense, semiconductor, and - 2 -
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Unit: 100 Million yen January to June, 2025 January to June, 2026 Difference <Forecast> January to December, 2026 Sales revenues 2,275 2,767 492 5,800 Sales revenues (Million EUR) 1,403 1,500 97 3,182 Operating profit 65 93 28 300 Operating profit (Million EUR) 40 50 10 165 Operating profit / Sales revenues 2.9% 3.4% 0.5%pts 5.2% Profit attributable to owners of the parent 21 44 23 155 Profit attributable to owners of the parent (Million EUR) 13 24 11 85 medical markets. We are receiving strong recognition from external stakeholders for our sustainability efforts. We earned a place on the A List for climate action in the CDP 2025 survey for the second consecutive year and an “A” rating for our proactive approach to identifying and managing water risks. We believe this reflects our efforts to develop energy-efficient products, improve resource efficiency through process integration and automation, and reduce environmental impact across the supply chain. Going forward, we will continue advancing MX to support a sustainable society while enhancing long-term corporate value. <Consolidated results> Consolidated results of the six months of the fiscal year ended June 30, 2026 is as follows: (Note) Euro amount is converted from yen at the average or forecasted exchange rate of each fiscal period; 162.2 yen/EUR for the figures of January to June, 2025, 184.5 yen/EUR for those of January to June, 2026, and 182.3 yen/EUR for the figures of January to December, 2026. (2) Overview of financial position Total assets at the end of the first half of fiscal year 2026 amounted to 881,440 million yen. Total equity is 353,329 million yen and ratio of equity attributable to owners of the parent is 40.0%. - 3 -
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Unit: 100 Million yen Released on May 1 January to December, 2026 Released on August 4 January to December, 2026 Difference <Reference> January to December, 2025 Sales revenues 5,650 5,800 150 5,150 Sales revenues (Million EUR) 3,099 3,182 82 3,047 Operating profit 280 300 20 190 Operating profit (Million EUR) 154 165 11 112 Operating profit / Sales revenues 5.0% 5.2% 0.2%pts 3.7% Profit attributable to owners of the parent 150 155 5 240 Profit attributable to owners of the parent (Million EUR) 82 85 3 142 (3) Explanation of forecasts and other projections We have strong order intake globally during the first half, as well as the continued depreciation of the yen against the euro which led us to revise our assumed exchange rate. Based on the above background, we made an upward revision of consolidated financial forecast for the FY2026 from the previous announcement released on May 1, 2026. Consolidated financial forecast (Note) ・Exchange rate used for consolidated financial forecast for fiscal year 2026: JPY 154.1 /USD, 182.3 /EUR. ・Euro amount is converted from yen at the average exchange rate of JPY 169.0 yen/EUR for fiscal year 2025. ・This forecast is based on information available as of the release of this report and assumptions of several uncertain factors which may affect the company’s results. Actual results might be different from the above estimates due to subsequent changes in the circumstances. - 4 -
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(Million Yen) December 31, 2025 June 30, 2026 Assets Current assets: Cash and cash equivalents 39,859 33,130 Trade and other receivables 80,729 76,830 Other financial assets 6,258 4,282 Inventories 201,821 216,781 Other current assets 19,176 20,119 Total current assets 347,844 351,144 Non-current assets: Property, plant and equipment 223,573 228,667 Right-of-use assets 30,774 30,398 Goodwill 100,100 100,752 Other intangible assets 117,179 117,311 Other financial assets 28,930 32,651 Investments in associates and joint ventures 7,612 7,911 Deferred tax assets 6,967 6,528 Other non-current assets 5,982 6,073 Total non-current assets 521,120 530,295 Total assets 868,965 881,440 2. Interim Consolidated Financial Statements (1) Interim consolidated statement of financial position - 5 -
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(Million Yen) December 31, 2025 June 30, 2026 Liabilities Current liabilities: Trade and other payables 78,083 76,324 Interest-bearing bonds and borrowings 65,676 62,965 Contract liabilities 90,795 103,440 Other financial liabilities 85,598 81,491 Income taxes payable 9,894 4,360 Provisions 41,988 42,127 Other current liabilities 11,086 5,130 Total current liabilities 383,124 375,841 Non-current liabilities: Interest-bearing bonds and borrowings 60,000 60,000 Other financial liabilities 56,278 64,756 Net employee defined benefit liabilities 5,726 4,960 Provisions 5,861 5,589 Deferred tax liabilities 11,437 12,685 Other non-current liabilities 4,381 4,276 Total non-current liabilities 143,684 152,269 Total liabilities 526,809 528,110 Equity Share capital 71,804 71,804 Capital surplus 18,348 16,535 Other equity instruments 110,777 120,672 Treasury shares (7,474) (5,783) Retained earnings 93,738 89,696 Other components of equity 53,291 59,735 Equity attributable to owners of the parent 340,484 352,661 Non-controlling interests 1,671 667 Total equity 342,155 353,329 Total liabilities and equity 868,965 881,440 - 6 -
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(Million Yen) Six months ended June 30, 2025 (January 1 to June 30, 2025) Six months ended June 30, 2026 (January 1 to June 30, 2026) Revenues: Sales revenues 227,487 276,729 Other operating revenues 4,123 4,158 Total revenue 231,611 280,887 Costs: Changes in merchandise, finished goods and work in progress for sale 1,989 (11,562) Costs of raw materials and consumables 78,710 112,188 Personnel costs 88,328 101,276 Depreciation and amortization 16,474 18,527 Other operating costs 39,598 51,145 Total costs 225,101 271,576 Operating profit 6,509 9,311 Financial income 379 277 Financial costs 3,729 4,071 Share of profits of associates and joint ventures accounted for using equity method 108 415 Profit before income taxes 3,268 5,933 Income taxes 1,141 1,772 Profit 2,126 4,161 Profit attributable to: Owners of the parent 2,060 4,378 Non-controlling interests 65 (217) Profit 2,126 4,161 Earnings per share Basic (yen) 7.94 23.09 Diluted (yen) 7.94 23.09 (2) Interim consolidated statement of profit or loss - 7 -
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(Million Yen) Six months ended June 30, 2025 (January 1 to June 30, 2025) Six months ended June 30, 2026 (January 1 to June 30, 2026) Profit 2,126 4,161 Other comprehensive income (OCI): Items that will not be reclassified subsequently to profit or loss: Remeasurements of defined benefit plans 292 385 Changes in fair value of financial assets designated at fair value through other comprehensive income 583 2,069 Subtotal 875 2,455 Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations (178) 3,471 Effective portion of changes in fair value of cash flow hedges (186) 800 Share of other comprehensive income of associates and joint ventures accounted for using equity method (76) 102 Subtotal (440) 4,374 Total other comprehensive income 435 6,830 Comprehensive income 2,561 10,991 Comprehensive income attributable to: Owners of the parent 2,495 11,208 Non-controlling interests 65 (217) Comprehensive income 2,561 10,991 (3) Interim consolidated statement of comprehensive income - 8 -
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(Million Yen) Equity attributable to owner of the parent Non- controlling interests Total equityShare capital Capital surplus Other equity instruments Treasury shares Retained earnings Other components of equity Subtotal As of January 1, 2025 71,230 18,496 110,822 (862) 85,866 28,969 314,522 1,957 316,480 Profit 2,060 2,060 65 2,126 Other comprehensive income (OCI) 435 435 - 435 Total comprehensive income - - - - 2,060 435 2,495 65 2,561 Issuance of other equity instruments 6,924 6,924 6,924 Distributions to owners of other equity instruments (907) (907) (907) Reclassification from other equity instruments to other financial liabilities (88) (6,911) (7,000) (7,000) Acquisition of treasury shares (0) (0) (0) Disposition of treasury shares 0 8 8 8 Dividends (7,078) (7,078) (7,078) Share-based payments 102 102 (31) 70 Change in equity due to acquisition of shares in consolidated subsidiaries (Note) 574 574 (21) 1,127 1,127 Transfer from other components of equity to retained earnings 293 (293) - - Total transactions with owners of the parent 574 588 13 (13) (7,692) (293) (6,823) (31) (6,855) Acquisition of non- controlling interests (252) (252) (489) (741) Total changes in ownership interests in subsidiaries and others - (252) - - - - (252) (489) (741) As of June 30, 2025 71,804 18,832 110,835 (876) 80,234 29,110 309,942 1,502 311,444 (4) Interim consolidated statement of changes in equity (Note) Including changes due to the stock exchange accompanying the acquisition of Miyawaki Machinery Plant Co., Ltd. as a wholly owned subsidiary. - 9 -
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(Million Yen) Equity attributable to owner of the parent Non- controlling interests Total equityShare capital Capital surplus Other equity instruments Treasury shares Retained earnings Other components of equity Subtotal As of January 1, 2026 71,804 18,348 110,777 (7,474) 93,738 53,291 340,484 1,671 342,155 Profit 4,378 4,378 (217) 4,161 Other comprehensive income (OCI) 6,830 6,830 - 6,830 Total comprehensive income - - - - 4,378 6,830 11,208 (217) 10,991 Issuance of other equity instruments 10,000 10,000 10,000 Other equity instruments issuance costs (104) (104) (104) Distributions to owners of other equity instruments (1,136) (1,136) (1,136) Acquisition of treasury shares (0) (0) (0) Disposition of treasury shares 0 8 8 8 Dividends (7,669) (7,669) (7,669) Share-based payments (Note 1) (591) 1,683 1,092 (786) 306 Transfer from other components of equity to retained earnings 385 (385) - - Other (Note 2) (1,221) (1,221) (1,221) Total transactions with owners of the parent - (1,812) 9,895 1,691 (8,420) (385) 968 (786) 181 Acquisition of non- controlling interests - - Total changes in ownership interests in subsidiaries and others - - - - - - - - - As of June 30, 2026 71,804 16,535 120,672 (5,783) 89,696 59,735 352,661 667 353,329 (Note 1) Changes in treasury shares, capital surplus and non-controlling interests related to share-based payment transactions include the effects of the change in the restricted stock compensation plan for the Company’s employees, whereby the shares granted were changed from ordinary shares of DMG MORI AG to ordinary shares of DMG MORI CO., LTD. (Note 2) Transaction costs arising from changes in ownership interests that do not result in a change in the scope of consolidation. - 10 -
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(Million Yen) Six months ended June 30, 2025 (January 1 to June 30, 2025) Six months ended June 30, 2026 (January 1 to June 30, 2026) Cash flows from operating activities: Profit before income taxes 3,268 5,933 Depreciation and amortization 16,474 18,527 Loss (gain) on sales or disposal of property, plant and equipment, and intangible assets 35 (27) Financial income and costs 3,350 3,793 Share of (profits) losses of associates and joint ventures accounted for using equity method (108) (415) Other non-cash transactions (2,478) (153) Inventories (1,350) (12,999) Trade and other receivables 6,785 3,121 Trade and other payables (10,415) (6,428) Contract liabilities 167 11,344 Provisions (6,521) (2,022) Other (2,543) (446) Subtotal 6,663 20,225 Interest received 368 268 Dividends received 6 2 Interest paid (3,580) (4,078) Income taxes paid (2,170) (4,057) Net cash flows from operating activities 1,288 12,361 Cash flows used in investing activities: Payments into time deposits - (0) Proceeds from withdrawal of time deposits 42 - Purchases of property, plant and equipment (5,306) (7,769) Proceeds from sales of property, plant and equipment 198 1,611 Purchases of intangible assets (6,521) (5,740) Proceeds from purchase of shares of subsidiaries resulting in change in scope of consolidation 602 - Purchase of investments in associates (8) - Purchases of investment securities (129) (79) Proceeds from sales of investment securities 2 - Other 80 (167) Net cash flows used in investing activities (11,039) (12,145) (5) Interim consolidated statement of cash flows - 11 -
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(Million Yen) Six months ended June 30, 2025 (January 1 to June 30, 2025) Six months ended June 30, 2026 (January 1 to June 30, 2026) Cash flows used in financing activities: Net increase (decrease) in short-term borrowings 5,626 (3,040) Repayments of long-term borrowings (1,653) - Proceeds from issuance of other equity instruments 6,924 9,895 Repayment of lease liabilities (3,531) (3,885) Dividends paid (7,073) (7,666) Dividends paid to non-controlling interests (0) (0) Payments for obligations for non-controlling interests (697) (332) Acquisition of treasury shares (0) (0) Distributions to owners of other equity instruments (872) (1,136) Purchase of shares of subsidiaries not resulting in change in scope of consolidation (719) - Other (1,280) (1,914) Net cash flows used in financing activities (3,277) (8,080) Effect of exchange rate changes on cash and cash equivalents (705) 1,135 Change in cash and cash equivalents (13,733) (6,728) Cash and cash equivalents at the beginning of period 41,747 39,859 Cash and cash equivalents at the end of period 28,014 33,130 - 12 -
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(6) Notes to going concern assumption Not applicable. (7) Notes to the interim consolidated financial statements 1. Reporting entity DMG MORI Co., Ltd. (the “Company”) is a company established under the Companies Act of Japan. The Company is domiciled in Japan and its registered office is located at 2-1 Sanjo-Honmachi, Nara City, Nara. The condensed interim consolidated financial statements of the Company as of June 30, 2026 comprise the Company, its subsidiaries, associates and joint ventures (collectively, the “Group”). The Group engages in businesses related to manufacturing and sales of machine tools (universal milling machines for five-axis machining, turn-mill complete machining centers, horizontal and vertical machining centers, turning centers, grinding centers, boring machines and additive manufacturing machines), software (user interface, technology cycles and embedded software), measuring devices and other peripheral equipment, and provides total solutions, including MRO (Maintenance, Repair, Overhaul), spare parts and engineering. 2. Basis of preparations (1) Accounting standards complied with The Company’s Condensed Interim Consolidated Financial Statements have been prepared in accordance with “Basis of Preparation of Quarterly Financial Statements” 5-2 (applying the omission of the description specified in Article 5-5 of the same standard) issued by Tokyo Stock Exchange, Inc. and omit parts of International Accounting Standards (IAS) 34 “Interim Financial Reporting” issued by the International Accounting Standards Board. As the Company meets the requirements of a “Specified Company applying Designated International Financial Reporting Standards”, pursuant to Article 1-2 of the Ordinance on Terminology, Forms and Preparation Methods of Interim Consolidated Financial Statements, it has applied the provisions of Article 312 of said Ordinance. (2) Basis of Measurement The condensed interim consolidated financial statements have been prepared on a historical cost basis, with the main exception of financial instruments, which are measured at fair value, and the application of hyperinflation accounting for the Company’s subsidiary in Turkey. (3) Functional and presentation currency The condensed interim consolidated financial statements are presented in Japanese yen, which is the Company’s functional currency. All financial information presented in Japanese yen has been rounded down to the nearest million, unless otherwise stated. (4) Material accounting policy The material accounting policies adopted for the condensed interim consolidated financial statements are the same as those for the consolidated financial statements for the fiscal year ended December 31, 2025. Income tax for the six months ended June 30, 2026 was calculated based on the estimated average annual effective tax rate. - 13 -
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(Million Yen) Reportable segments Adjustments (Note) ConsolidatedMachine Tools Industrial Services Total Corporate Services Elimination Sales revenues External customers 146,160 81,304 227,465 22 - 227,487 Inter-segment 115,241 26,505 141,747 928 (142,675) - Total 261,401 107,810 369,212 950 (142,675) 227,487 Segment income 2,277 12,649 14,927 (8,731) 422 6,618 Financial income - - - - - 379 Financial costs - - - - - (3,729) Profit before income taxes - - - - - 3,268 (Million Yen) Reportable segments Adjustments (Note) ConsolidatedMachine Tools Industrial Services Total Corporate Services Elimination Sales revenues External customers 180,786 95,917 276,703 26 - 276,729 Inter-segment 137,322 36,725 174,048 1,316 (175,365) - Total 318,109 132,642 450,752 1,342 (175,365) 276,729 Segment income 3,291 15,733 19,025 (10,077) 779 9,727 Financial income - - - - - 277 Financial costs - - - - - (4,071) Profit before income taxes - - - - - 5,933 3. Segment information (1) Outline of reportable segments The operating segments of the Group are based on its business areas for which discrete financial information is available, and they are regularly reviewed by the Board of Directors and corporate officers for the purpose of making decisions about resource allocation and performance assessment. The classification of the operating segments is based on the products and services and the associated internal reporting and management methods. As a result, the business activities of the Group are categorized into “Machine Tools” and “Industrial Services,” as its two reportable segments. The Group has not aggregated its operating segments. The “Machine Tools” segment generates its revenue through the production and sales of machine tools. The “Industrial Services” segment generates its revenue through the provision of services and solutions related to machine tools. (2) Calculation methods of sales revenues, income or loss by each reportable segment The accounting methods for the reportable segments are essentially the same as Condensed Interim Consolidated Financial Statements. The amount of segment income is based on operating profit and share of profits of associates and joint ventures accounted for using equity method. Inter-segment sales revenues are based on arm’s length prices. (3) Segment sales revenues and income The segment sales revenues, income or loss and other items by each reportable segment are summarized as follows: Six months ended June 30, 2025 (January 1 to June 30, 2025) (Note) “Adjustments to segment income” include elimination of inter-segment transactions and expenses related to corporate services. Six months ended June 30, 2026 (January 1 to June 30, 2026) (Note) “Adjustments to segment income” include elimination of inter-segment transactions and expenses related to corporate services. - 14 -
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(1) Name Sixth callable perpetual subordinated unsecured bonds with interest deferral options and optional redemption clause (with subordinated covenant) (2) Amount 10.0 billion yen (3) Underwriters Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd., and SMBC Nikko Securities Inc. (4) Execution Date June 4, 2026 (5) Redemption Date No redemption date is specified. Provided, however, that on June 4, 2031 and each of the following interest payment dates thereafter, optional redemption of all (not part of) the principal is possible. (6) Interest Rate From June 5, 2026 to June 4, 2031: Fixed interest rate From June 5, 2031 onward: Variable interest stepped up by 1.00% based on 1-year Japanese government bonds (7) Clauses relating to payment of interest The Company has the option to defer the interest payment and no obligation. (8) Subordination clause The subordinated creditors have right to claim for repayment only after the all claims by senior creditors are satisfied in case a liquidation event defined in the bond terms occurs. 4. Additional information Fundraising by Sixth Perpetual Subordinated Bonds (with Subordinated Covenant) At the board of directors meeting held on May 1, 2026, the Company resolved to raise a total of ¥10 billion through Sixth Perpetual Subordinated Bonds (with Subordinated Covenant) (hereinafter “the Sixth Subordinated Bonds”). The conditions were decided as follows on May 29, 2026, and the full payment was completed on June 4, 2026. The Company will apply the full amount to the part of redemption of Fourth Perpetual Subordinated Bonds (with Subordinated Covenant) (hereinafter “the Fourth Subordinated Bonds”). For overview of the Fourth Subordinated Bonds, please refer to “5. Subsequent event.” The Sixth Subordinated Bonds are deemed to be classified as equity instruments as the Company has the option to defer interest payments and has no obligation to make payments, except in case a liquidation event as defined in the subordination clause occurs. The proceeds from the Sixth Subordinated Bonds after deducting issue costs are recorded as “Other equity instruments” under “Equity” in the interim consolidated statement of financial position. Overview of the Sixth Subordinated Bonds - 15 -
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(1) Name Fourth step-up callable perpetual subordinated unsecured bonds with interest deferral options and optional redemption clause (With Subordinated Covenant) (2) Amount 30.0 billion yen (3) Execution Date August 31, 2021 (4) Redemption date No redemption date is specified (5) Interest rate From August 31, 2021 to August 31, 2026: Fixed interest rate From September 1, 2026 onward: Variable interest stepped up by 1.00% based on 1- year Japanese government bonds (6) Clauses relating to payment of interest The Company has the option to defer the interest payment and no obligation. (7) Subordination clause The subordinated creditors have right to claim for repayment only after the all claims by senior creditors are satisfied in case a liquidation event defined in the loan contract occurs. (8) Replacement restrictions The Company has the right to optional redemption or repurchase of the subordinated bonds, it is assumed that the subordinated bonds are being replaced with equivalent bonds or loans certified by a credit rating agency, that satisfy necessary conditions to be classified as equity instruments. However, if at any point following five years from the execution date, both of the following conditions are satisfied, it is possible not to refinance with equivalent financial instruments. (a) Consolidated shareholders’ equity after the adjustment is more than ¥151.2 billion. (b) The consolidated equity ratio after the adjustment is more than 26.8%. The values stated above shall be calculated according to the following method. Consolidated shareholders’ equity after the adjustment is equal to total equity attributable to owners of parent less other components of equity and other equity instruments. The consolidated equity ratio after the adjustment is equal to consolidated shareholders’ equity after the adjustment as calculated above divided by total assets. 5. Subsequent event Redemption of the Fourth Subordinated Bonds The Company has decided to make an optional redemption of ¥30,000 million of the Fourth Subordinated Bonds on August 31, 2026 and submitted an optional redemption notice to the lenders on July 14, 2026. As a result, ¥29,717 million recorded as other equity instruments in the Interim consolidated statement of financial position will be classified as liabilities as of July 14, 2026, the date of the optional redemption notice. These liabilities will be extinguished on the repayment date. Overview of the Fourth Subordinated Bonds - 16 -