Interim report
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-1- Summary of Consolidated Financial Results For the Six-Month Period from January 1 to June 30, 2026 Presented August 4, 2026 Company name Sumitomo Heavy Industries, Ltd. Listed exchanges Tokyo Stock Exchange Stock code 6302 URL https://www.shi.co.jp/english/index.html Representative (Job title) Representative Director and President (Name) Toshiro Watanabe Inquiries (Job title) General Manager, Corporate Communications Dept. (Name) Atsushi Nakanishi (TEL) 03-6737-2332 Scheduled date for submitting semi-annual report August 7, 2026 Scheduled date of payment of cash dividends September 1, 2026 Availability of supplementary explanatory materials for financial statement : Yes Holding of meeting to explain financial statement : Yes ( for institutional investors, analysts, and the media ) (Rounded to the nearest million yen) 1. FY2026 Second Quarter (Interim) Consolidated Results (January 1, 2026 to June 30, 2026) (1) Business Results (Percentages indicate changes from the first half of the previous fiscal year) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % 1st half of fiscal year ending December 31, 2026 554,176 12.0 37,449 72.9 34,122 80.6 22,040 77.8 1st half of fiscal year ended December 31, 2025 494,627 (4.9) 21,655 (35.0) 18,892 - 12,400 (47.3) Note 1: Comprehensive income: 1st half of fiscal year ending December 31, 2026 35,525 million yen, ( - %) 1st half of fiscal year ended December 31, 2025 (7,856) million yen, ( - %) Earnings per share (yen) Diluted earnings per share (yen) Yen Yen 1st half of fiscal year ending December 31, 2026 184.40 - 1st half of fiscal year ended December 31, 2025 103.17 - Note 2: The presentation method has been changed since the first half of the fiscal year ending December 31, 2026. Accordingly, ordinary profit for the first half of the fiscal year ended December 31, 2025 is presented using restated figures reflecting this change. As a result, percent changes from the first half of the previous fiscal year are not described in this document. For details, please refer to “4. Items of Special Note Concerning the Interim Consolidated Financial Statements (Notes on Changes in Presentation Methods ) in II. Interim Consolidated Financial Statements and Key Explanatory Notes.” (2) Financial Position Total assets Total net assets Equity ratio (%) Millions of yen Millions of yen % 1st half of fiscal year ending December 31, 2026 1,347,089 707,036 52.1 End of previous full year December 31, 2025 1,320,527 686,223 51.6 Reference: Equity 1st half of fiscal year ending December 31, 2026 702,429 million yen Fiscal year ended December 31, 2025 681,666 million yen 2. Dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Year-end Total Yen Yen Yen Yen Yen Fiscal Year Ended December 31, 2025 - 60.00 - 65.00 125.00 Fiscal Year Ending December 31, 2026 - 70.00 Fiscal Year Ending December 31, 2026 (forecast) - 75.00 145.00 Note: Changes from the most recent dividend forecast : No All financial information has been prepared in accordance with generally accepted accounting principles in Japan. This document has been translated from the Japanese original as a guide to non- Japanese investors, and contains forward -looking statements that are based on management’s estimates, assumptions, and projections at the time of publication. A number of factors could cause actual results to differ materially from expectations. Amounts shown in this financial statement have been rounded to the neares t million yen.
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-2- 3. FY2026 Consolidated Forecasts (January 1, 2026 to December 31, 2026) (Percentages indicate year-on-year changes) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Earnings per share (yen) Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full Year 1,120,000 5.0 68,000 32.1 62,000 35.0 35,000 13.1 294.45 Note 1: Changes from the most recent earnings forecast : Yes Note 2: The presentation method has been changed since the first half of the fiscal year ending December 31, 2026. Accordingly, year-on-year percentage changes in ordinary profit have been calculated using restated figures reflecting this change. Additional Notes (1) Significant changes in the scope of consolidation during the first half under review : None Newly consolidated: — Excluded from consolidation: — (2) Application of accounting procedures specific to preparation of interim consolidated financial statements : Yes (3) Changes to accounting policies, changes to accounting estimates, and retrospective restatements (i) Changes to accounting policies due to revisions to accounting standards : None (ii) Changes to accounting policies not otherwise stated in (i) : None (iii) Changes to accounting estimates : None (iv) Retrospective restatements : None (4) Number of issued shares (common share) (i) Number of issued shares at end of fiscal period (including treasury shares): First half of fiscal year ending December 31, 2026 122,905,481 shares Fiscal year ended December 31, 2025 122,905,481 shares (ii) Number of treasury shares at end of fiscal period: First half of fiscal year ending December 31, 2026 4,040,725 shares Fiscal year ended December 31, 2025 2,724,082 shares (iii) Average number of outstanding shares for the term (interim): First half of fiscal year ending December 31, 2026 119,525,846 shares First half of fiscal year ended December 31, 2025 120,183,654 shares * Treasury stock that is deducted to calculate the amount of term -end treasury stock and the average number of outstanding shares for the term includes shares of the Company held in the trust account related to the share delivery trust established for the stock compensation plan for directors and others. * Summary of Financial Results for the Second Quarter (Interim) is not subject to review by a Certified Public Accountant or an Independent Auditor. * Explanation on the proper use of earnings forecasts, and other special remarks Earnings and outlooks concerning future financial results are believed to be reasonable based on information available at the time of publication. Actual financial results may vary from the above forecast and outlook due to a variety of factors. For information on the assumptions that form the basis of the earnings forecast and items to note concerning the use of earnings forecasts, please refer to the Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates in the Supplementary Materials section beginning on page 4.
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-3- Supplementary Materials – Table of Contents I. Summary of Operating Performance .................................................................................................................. 4 1. Summary of Operating Performance during the First Half under Review ....................................................... 4 2. Summary of Financial Condition for the First Half under Review ................................................................... 5 3. Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates ......................... 6 II. Interim Consolidated Financial Statements and Key Explanatory Notes ........................................................... 7 1. Interim Consolidated Balance Sheets .............................................................................................................. 7 2. Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive Income .......................................................................... 9 Interim Consolidated Statements of Income ..................................................................................................... 9 Interim Consolidated Statements of Comprehensive Income ....................................................................... 10 3. Interim Consolidated Statements of Cash Flows .......................................................................................... 11 4. Items of Special Note Concerning the Interim Consolidated Financial Statements ...................................... 12 (Significant Events or Conditions that Question the Premise of a Going Concern) ........................................ 12 (Application of Accounting Procedures Specific to Preparation of Interim Consolidated Financial Statements) ................................................................................................... 12 (Notes on Changes in Presentation Methods) ................................................................................................ 12 (Notes regarding Significant Fluctuations to Shareholders’ Equity) ................................................................ 12 (Notes on Segment Information, etc.) ............................................................................................................. 12 (Notes on Significant Subsequent Events) ..................................................................................................... 13 III. Supplemental Information ............................................................................................................................... 14
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-4- I. Summary of Operating Performance 1. Summary of Operating Performance during the First Half under Review During the first half under review, the economic environment surrounding the Group remained uncertain due to the worsening situation in the Middle East and rising oil prices. In Japan, however, capital investment and exports have remained firm. Turning to overseas regions, the U.S. economy remained strong, and Europe experienced a gradual recovery. Meanwhile, demand in China remained sluggish. In this business environment, according to the “Medium-Term Management Plan 2026,” the Group aimed to increase corporate value in a sustainable manner by solving social issues through products and services. Also, we moved forward with measures, such as expanding contribution to SDGs and strengthening initiatives for reducing negative environmental impacts, as well as improving our earning capacity and capital efficiency and strengthening our efforts to explore new businesses in order to develop a robust entity. As a result, the Group’s orders came to JPY607.1 billion (up 13% year on year), while net sales amounted to JPY554.2 billion (up 12% year on year). In terms of profitability, the Group posted operating profit of JPY37.4 billion (up 73% year on year), ordinary profit of JPY34.1 billion (up 81% year on year) and interim profit attributable to owners of parent of JPY22.0 billion (up 78% year on year). The situation by segment is described below. (i) Mechatronics Orders increased for gear reducers due to strong demand in Japan and abroad. Motor and inverters orders also rose on the back of increasing demand from customers in Europe. In addition, cryocoolers experienced an increase in orders, fueled by a surge in semiconductor -related demand in the United States and China. Sales and operating profit also increased due to a rise in orders. As a result, in year-on-year terms, orders increased by 21% to JPY160.1 billion, sales grew by 15% to JPY148.5 billion, and operating profit rose by 58% to JPY13.6 billion. (ii) Industrial Machinery While orders for semiconductor manufacturing equipment increased, orders for advanced medical devices and other items were limited. As a result, overall orders decreased. Sales increased mainly in semiconductor manufacturing equipment due to a large order backlog. Operating profit also rose, supported by higher sales and improved profitability in plastics machinery. As a result, in year-on-year terms, orders decreased by 6% to JPY107.9 billion, sales increased by 4% to JPY101.7 billion, and operating profit came to JPY2.2 billion. (iii) Logistics & Construction Overall orders increased, supported by stronger demand for hydraulic excavators in North America and Europe and robust demand for mobile cranes in North America, although orders for material handling systems declined, reflecting the solid level of orders s ecured in the previous year. Sales and operating profit also increased due to a rise in orders. As a result, in year-on-year terms, orders increased by 10% to JPY213.6 billion, sales grew by 19% to JPY208.2 billion, and operating profit rose by 57% to JPY12.5 billion. (iv) Energy & Lifeline Orders increased due to the acquisition of large orders for water treatment equipment and marine structures. Sales and operating profit also increased due to a larger number of water treatment equipment contributing to sales during the period under review. As a result, in year -on-year terms, orders increased by 34% to JPY122.0 billion, sales grew by 5% to JPY92.6 billion, and operating profit rose by 17% to JPY8.2 billion.
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-5- (v) Others Orders increased by 5% to JPY3.6 billion, sales decreased by 6% to JPY3.2 billion, and operating profit declined by 12% to JPY1.0 billion. 2. Summary of Financial Condition for the First Half under Review (i) Condition of Assets, Liabilities, and Net Assets Total assets at the end of the first half of the current consolidated fiscal year (ended June 30, 2026) amounted to JPY1,347.1 billion, an increase of JPY26.6 billion as compared to the end of the previous consolidated fiscal year. This was mainly due to an increase of JPY22.0 billion in cash and deposits and an increase of JPY11.4 billion in inventory assets, while notes and accounts receivable - trade and contract assets decreased by JPY11.2 billion as compared to the end of the previous consolidated fiscal year. Total liabilities came to JPY640.1 billion, an increase of JPY5.7 billion as compared to the end of the previous consolidated fiscal year. This was partly because interest-bearing liabilities increased by JPY18.9 billion and contract liabilities rose by JPY8.9 billion, while notes and accounts payable - trade decreased by JPY22.0 billion. Net assets amounted to JPY707.0 billion, an increase of JPY20.8 billion as compared to the end of the previous consolidated fiscal year. This was mainly due to an increase of retained earnings of JPY14.3 billion and an increase of JPY12.8 billion in foreign currency translation adjustments. As a result of the above, the equity ratio rose by 0.5 percentage points from the end of the previous consolidated fiscal year to 52.1%. (ii) Cash Flow Condition Cash and cash equivalents at the end of the first half of the current consolidated fiscal year came to JPY130.8 billion, an increase of JPY 23.1 billion from the end of the previous consolidated fiscal year. Cash flows for the consolidated first half under review and the factors contributing to increases or decreases in cash flows are as follows. (Cash Flow from Operating Activities) In the consolidated first half under review, cash flow from operating activities resulted in a JPY36.6 billion increase in cash. This represented a JPY10.0 billion year -on-year decrease in inflow. This was mainly due to a narrower decrease in notes and accounts receivable – trade and contract assets and a decrease in notes and accounts payable, despite an increase in profit before income taxes for the first half under review. (Cash Flow from Investing Activities) In the consolidated first half under review, cash flow from investing activities resulted in a JPY17.3 billion decrease in cash. This represented a JPY13.6 billion year -on-year decrease in outflow. This was due to decreased spending on property, plant and equipment and intangible assets, as well as spending on the acquisition of shares in subsidiaries, which resulted in a change in the scope of consolidation, during the previous fiscal year. (Cash Flow from Financing Activities) In the consolidated first half under review, cash flow from financing activities resulted in a JPY0.4 billion increase in cash. This represented a JPY7.1 billion year -on-year increase in inflow. This was mainly due to an increase in interest-bearing debts, despite an increase in expenses for the acquisition of treasury shares.
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-6- 3. Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates As indicated below, we have revised the consolidated earnings forecast for the fiscal year ending December 31, 2026 that was announced in the financial report dated February 10, 2026. (Full fiscal year ending December 31, 2026) Net sales (Millions of yen) Operating profit (Millions of yen) Ordinary profit (Millions of yen) Profit attributable to owners of parent (Millions of yen) Earnings per share (Yen) Previous forecast (A) 1,090,000 60,000 55,000 34,000 282.91 Revised forecast (B) 1,120,000 68,000 62,000 35,000 294.45 Difference (B-A) 30,000 8,000 7,000 1,000 - % Change 2.8 13.3 12.7 2.9 - (Reference) Results for previous fiscal year 1,066,881 51,482 45,932 30,937 257.42 Taking into account our revised exchange-rate assumptions and the general improvement in the order environment, mainly in the Mechatronics and Logistics & Construction segments, we have decided to revise upward our previous forecasts for net sales, operating profit, ordinary profit, and profit attributable to owners of parent. For main exchange rates for the consolidated first half under review and onwards, we assume that 1 dollar = 155 yen and 1 euro = 180 yen. The presentation method has been changed since the first half of the fiscal year ending December 31, 2026. Accordingly, ordinary profit for the previous fiscal year has been restated to reflect this change.
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-7- II. Interim Consolidated Financial Statements and Key Explanatory Notes 1. Interim Consolidated Balance Sheets (Unit: millions of yen) End of Full Year As of December 31, 2025 End of Present First Half As of June 30, 2026 Assets Current assets Cash and deposits 111,072 133,104 Notes and accounts receivable - trade and contract assets 313,661 302,415 Inventories 328,776 340,215 Others 35,462 33,642 Allowance for doubtful accounts (2,188) (2,362) Total current assets 786,782 807,013 Non-current assets Property, plant and equipment Land 112,606 113,116 Other (net) 260,631 265,504 Total property, plant and equipment 373,237 378,620 Intangible assets Goodwill 11,045 8,823 Others 22,037 24,263 Total intangible assets 33,083 33,086 Investments and other assets Others 132,661 134,182 Allowance for doubtful accounts (5,236) (5,812) Total investments and other assets 127,425 128,371 Total non-current assets 533,745 540,076 Total assets 1,320,527 1,347,089 Liabilities Current liabilities Notes and accounts payable - trade 146,422 124,382 Short-term loans payable 88,882 90,040 Current portion of long-term loans payable 8,457 10,828 Commercial Paper 23,000 40,000 Income taxes payable 7,833 9,856 Provision for bonuses 9,135 7,925 Provision for construction warranties 12,583 12,890 Other provision amount 2,252 1,516 Others 110,952 118,122 Total current liabilities 409,516 415,561 Non-current liabilities Bonds payable 60,000 60,000 Long-term loans payable 72,364 70,771 Defined benefit liability 34,709 35,121 Deferred tax liabilities for land revaluation 20,854 20,854 Other provision amount 51 53 Others 36,811 37,694 Total non-current liabilities 224,788 224,492 Total liabilities 634,304 640,053
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-8- (Unit: millions of yen) End of Full Year As of December 31, 2025 End of Present First Half As of June 30, 2026 Net Assets Shareholders' equity Capital stock 30,872 30,872 Capital surplus 24,060 24,060 Retained earnings 444,590 458,931 Treasury shares (11,146) (18,054) Total shareholders' equity 488,376 495,809 Accumulated other comprehensive income Valuation difference on available-for-sale securities 9,011 10,920 Deferred gains or losses on hedges (591) (117) Revaluation reserve for land 39,392 39,392 Foreign currency translation adjustments 104,338 117,120 Remeasurements of defined benefit plans 41,139 39,305 Total accumulated other comprehensive income 193,290 206,621 Non-controlling interests 4,557 4,607 Total net assets 686,223 707,036 Total liabilities and net assets 1,320,527 1,347,089
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-9- 2. Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive Income Interim Consolidated Statements of Income (Unit: millions of yen) Previous First Half January 1, 2025 to June 30, 2025 Present First Half January 1, 2026 to June 30, 2026 Net sales 494,627 554,176 Cost of sales 372,565 409,639 Gross profit 122,062 144,537 Selling, general and administrative expenses 100,407 107,088 Operating profit 21,655 37,449 Non-operating income Interest income 928 833 Dividend income 970 359 Others 1,926 2,635 Total non-operating income 3,824 3,827 Non-operating expenses Interest expenses 1,753 2,241 Foreign exchange loss 1,713 1,741 Patent-related expenses 652 759 Others 2,469 2,414 Total non-operating expenses 6,587 7,154 Ordinary profit 18,892 34,122 Extraordinary income Gain on sale of investment securities 1,345 2,240 Total extraordinary income 1,345 2,240 Extraordinary losses Business restructuring expenses 422 2,337 Impairment loss 466 428 Total extraordinary losses 887 2,765 Profit before income taxes 19,350 33,597 Income taxes 6,745 11,547 Profit 12,605 22,050 Profit attributable to non-controlling interests 205 10 Profit attributable to owners of parent 12,400 22,040
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-10- Interim Consolidated Statements of Comprehensive Income (Unit: millions of yen) Previous First Half January 1, 2025 to June 30, 2025 Present First Half January 1, 2026 to June 30, 2026 Profit 12,605 22,050 Other comprehensive income Valuation difference on available-for-sale securities (1,160) 1,910 Deferred gains or losses on hedges 779 474 Revaluation reserve for land (596) - Foreign currency translation adjustments (18,185) 12,924 Adjustment to retirement benefits (1,297) (1,823) Share of other comprehensive income of entities accounted for using equity method (2) (10) Total other comprehensive income (20,461) 13,475 Comprehensive income (7,856) 35,525 (Breakdown) Interim comprehensive income attributable to owners of parent (7,914) 35,371 Interim comprehensive income attributable to non-controlling interests 58 154
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-11- 3. Interim Consolidated Statements of Cash Flows (Unit: millions of yen) Previous First Half January 1, 2025 to June 30, 2025 Present First Half January 1, 2026 to June 30, 2026 Cash flows from operating activities Profit before income taxes 19,350 33,597 Depreciation 18,592 20,657 Impairment loss 466 428 Business restructuring expenses 422 2,337 Gain on sale of investment securities (1,345) (2,240) Interest and dividend income (1,898) (1,192) Interest expenses 1,753 2,241 Increase (decrease) in reserve amount (1,185) (1,241) (Increase) decrease in notes and accounts receivable and contract assets 37,756 24,258 (Increase) decrease in inventories (14,836) (5,754) Increase (decrease) in notes and accounts payable 59 (24,492) Others (6,120) (5,315) Subtotal 53,013 43,283 Interest and dividends received 1,727 1,226 Interest expenses (1,608) (2,267) Payments for income taxes (6,500) (5,630) Cash flows from operating activities 46,633 36,611 Cash flows from investing activities Cash outflow due to the acquisition of property, plant and equipment and intangible assets (30,830) (21,796) Cash flow from the sale of property, plant and equipment and intangible assets 1,179 357 Cash outflow due to the acquisition of shares in subsidiaries that results in change in scope of consolidation (3,047) - Purchase of investment securities (12) (454) Proceeds from the sale of investment securities 1,724 2,520 (Increase) decrease in short-term loans (26) (134) Payments of loans receivable (5,272) (4,839) Cash flow from loan recoveries 5,150 5,966 Others 270 1,116 Cash flows from investing activities (30,865) (17,265) Cash flows from financing activities Net increase (decrease) in short-term loans payable (6,957) (568) Net increase (decrease) in commercial paper (12,000) 17,000 Proceeds from long-term loans payable 4,336 2,300 Repayments of long-term loans payable (2,580) (1,764) Proceeds from issuance of bonds 20,000 - Cash dividends paid (7,799) (7,806) Dividends paid to non-controlling interests (97) (104) Acquisition of treasury shares (7) (7,019) Others (1,575) (1,663) Cash flows from financing activities (6,679) 376 Effect of exchange rate change on cash and cash equivalents (3,730) 2,807 Net increase (decrease) in cash and cash equivalents 5,359 22,530 Cash and cash equivalents at the beginning of the period 107,542 107,622 Increase in cash and cash equivalents due to merger with non-consolidated subsidiaries - 605 Increase in cash and cash equivalents due to newly consolidated subsidiaries 243 - Decrease in cash and cash equivalents due to deconsolidation (135) - Cash and cash equivalents at the end of the first half 113,009 130,757
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-12- 4. Items of Special Note Concerning the Interim Consolidated Financial Statements (Significant Events or Conditions that Question the Premise of a Going Concern) There are no applicable items. (Application of Accounting Procedures Specific to Preparation of Interim Consolidated Financial Statements) (Calculation of tax expenses) The effective tax rate, after application of tax effect accounting, applicable to profit before income taxes for the consolidated fiscal year in which the first half under review is included was estimated based on reasonable assumptions, and tax expenses w ere calculated by multiplying profit before income taxes for the first half by the estimated effective tax rate. (Notes on Changes in Presentation Methods) (Related to Consolidated Statements of Income) “Gain on sale of investment securities,” which was included in “Non-operating income” in the first half of the previous consolidated fiscal year, is presented in “extraordinary income” starting from the consolidated first half under review, taking into account the increased monetary impact of such gain to the financial statements. To reflect this change in presentation, consolidated financial statements for the first half of the previous consolidated fiscal year have been restated. As a result, JPY1,345 million of “Gain on sale of investment securities,” which was stated in “Non-operating income” in the Consolidated Statements of Income for the first half of the previous consolidated fiscal year, is restated as an entry of JPY1,345 m illion of “Gain on sale of investment securities” under “Extraordinary income.” Consequently, “Ordinary profit” and “Extraordinary income” came to JPY18,892 million and JPY1,345 million, respectively. (Notes regarding Significant Fluctuations to Shareholders’ Equity) (Acquisition of Treasury Shares) According to a resolution adopted at the Board of Directors meeting held on February 10, 2026, the Company acquired 1,347,700 treasury shares. As a result, the value of treasury shares rose by JPY6,908 million during the consolidated first half under review, reaching JPY18,054 million at the first half's end. This increase also accounts for factors such as changes in value due to the acquisition of fractional shares. The number of treasury shares at the end of the first half of the current consolidated fiscal year includes shares of the Company held by a trust account under the board benefit trust established for a share-based compensation system for Directors, etc. (Notes on Segment Information, etc.) (Segment Information) 1. Summary of Reporting Segments The Group’s reporting segments are based on those units within the Group where separate financial information is available and where the Group’s Board of Directors periodically deliberates over such matters as the distribution of management resources and the financial performance of such segments. The Group formulates a comprehensive international and domestic strategy for individual products and services for the head office and for each consolidated subsidiary, and executes such strategies at the operating level. Consequently, the Group comprises s egments that are split by categories of products and services offered by the head office and consolidated subsidiaries. More specifically, the four reporting segments of the Group are “Mechatronics”, “Industrial Machinery”, “Logistics & Construction”, and “Energy & Lifeline”. Businesses Main Products Mechatronics Gear reducers, motors, inverters, cryocoolers, precision positioning equipment Industrial Machinery Plastics machinery, film forming machines, precision forgings, semiconductor manufacturing equipment, accelerators, medical machines and equipment, forging presses, air-conditioning equipment, defense equipment Logistics & Construction Hydraulic excavators, mobile cranes, road machinery, material handling systems, logistics systems, automated parking systems Energy & Lifeline Power generation equipment (such as boilers), air pollution control equipment, water and sewage treatment systems, turbines, pumps, mixing vessels, food processing machinery, ships, marine structures
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-13- 2. Information on Sales, Profit, and Loss Amounts by Reporting Segment The first half of the previous consolidated fiscal year (January 1, 2025 to June 30, 2025) (Unit: millions of yen) Reporting Segment Other (Note 1) Total Adjustments (Note 2) Carrying Amount on the Interim Consolidated Statements of Income (Note 3) Mechatronics Industrial Machinery Logistics & Construction Energy & Lifeline Subtotal Net sales Sales to external customers 129,350 98,176 175,424 88,263 491,213 3,414 494,627 - 494,627 Internal sales between segments or exchanges 1,123 573 304 1,376 3,376 1,724 5,100 (5,100) - Subtotal 130,473 98,749 175,728 89,638 494,589 5,138 499,727 (5,100) 494,627 Segment profit (loss) 8,607 (3,033) 7,928 7,039 20,542 1,117 21,659 (3) 21,655 Notes: 1. “Other” represents businesses that are not included in the reporting segments. This includes the Group’s real - estate businesses, software-related business, and other businesses. 2. The segment profit (loss) adjustment of minus JPY3 million is due to the deletion of intersegment transactions. 3. Segment profits (losses) have been adjusted as compared to the operating profit recorded in the Interim Consolidated Statements of Income. The first half of the current consolidated fiscal year (January 1, 2026 to June 30, 2026) (Unit: millions of yen) Reporting Segment Other (Note 1) Total Adjustments (Note 2) Carrying Amount on the Interim Consolidated Statements of Income (Note 3) Mechatronics Industrial Machinery Logistics & Construction Energy & Lifeline Subtotal Net sales Sales to external customers 148,469 101,734 208,158 92,594 550,954 3,222 554,176 - 554,176 Internal sales between segments or exchanges 1,392 763 105 492 2,752 1,688 4,440 (4,440) - Subtotal 149,861 102,496 208,262 93,086 553,706 4,910 558,616 (4,440) 554,176 Segment profit 13,608 2,160 12,482 8,224 36,474 979 37,453 (4) 37,449 Notes: 1. “Other” represents businesses that are not included in the reporting segments. This includes the Group’s real - estate businesses, software-related business, and other businesses. 2. The segment profit (loss) adjustment of minus JPY4 million is due to the deletion of intersegment transactions. 3. Segment profits have been adjusted as compared to the operating profit recorded in the Interim Consolidated Statements of Income. (Notes on Significant Subsequent Events) Pursuant to a share transfer agreement entered into with Torishima Pump Mfg. Co., Ltd. on February 10, 2026 concerning Shin Nippon Machinery Co., Ltd., a consolidated subsidiary of the Company, the Company completed the transfer of all shares in Shin Nippon Machinery Co., Ltd. on July 1, 2026. As a result of this share transfer, a loss of approximately JPY 4 billion on the sale of shares of subsidiaries and associates is expected to be recorded in the third-quarter financial results for the fiscal year ending December 31, 2026.
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-14- III. Supplemental Information (Orders Received, Sales, and Balance of Orders Received, by Segment) (1) Orders Received (Unit: millions of yen) Segment Previous First Half January 1, 2025 to June 30, 2025 Present First Half January 1, 2026 to June 30, 2026 Y/Y Change Amount Amount Amount % Mechatronics 132,833 160,079 27,246 20.5 Industrial Machinery 114,609 107,903 (6,706) (5.9) Logistics & Construction 193,593 213,565 19,972 10.3 Energy & Lifeline 91,107 122,005 30,898 33.9 Others 3,383 3,567 185 5.5 Total 535,524 607,119 71,595 13.4 (2) Sales (Unit: millions of yen) Segment Previous First Half January 1, 2025 to June 30, 2025 Present First Half January 1, 2026 to June 30, 2026 Y/Y Change Amount Amount Amount % Mechatronics 129,350 148,469 19,119 14.8 Industrial Machinery 98,176 101,734 3,557 3.6 Logistics & Construction 175,424 208,158 32,734 18.7 Energy & Lifeline 88,263 92,594 4,331 4.9 Others 3,414 3,222 (192) (5.6) Total 494,627 554,176 59,549 12.0 (3) Balance of Orders Received (Unit: millions of yen) Segment End of Full Year As of December 31, 2025 End of Present First Half As of June 30, 2026 Y/Y Change Amount Amount Amount % Mechatronics 102,009 113,619 11,610 11.4 Industrial Machinery 149,410 155,579 6,170 4.1 Logistics & Construction 217,476 222,884 5,408 2.5 Energy & Lifeline 267,615 297,026 29,411 11.0 Others 1,677 2,022 345 20.6 Total 738,187 791,131 52,943 7.2