Interim report
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DISCLAIMER : This document has been translated from a part of the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . Company name : Listing : Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( J - GAAP ) Musashi Seimitsu Industry Co. , Ltd. August 5 , 2026 Securities code : URL : Representative : Contact person : Telephone : Scheduled date to commence dividend payments : Preparation of supplementary material on financial results : Holding financial results briefing : Tokyo Stock Exchange / Nagoya Stock Exchange 7220 https://www.musashi.co.jp Hiroshi Otsuka , President & Representative Director Hiroki Matsuda , Deputy CFO + 81-532-25-8111 Yes Yes ( for institutional investors and analysts ) ( Amounts are rounded to the nearest million yen . ) 1. Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated Operating Results ( Percentages indicate year - on - year changes . ) Net Sales Operating Profit Ordinary Profit Profit Attributable to Owners of Parent Three months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % June 30 , 2026 89,157 7.3 4,878 28.1 4,923 47.4 1,849 11.0 June 30 , 2025 83,076 ( 6.6 ) 3,808 ( 4.4 ) 3,339 ( 22.7 ) 1,666 ( 43.3 ) Note : Comprehensive income For the three months ended June 30 , 2026 : For the three months ended June 30 , 2025 : ¥ 4,319 million [ - % ] \ ( 86 ) million [ - % ] Basic Earnings per Share Diluted Earnings per Share Three months ended Yen Yen June 30 , 2026 June 30 , 2025 28.22 25.43 ( 2 ) Consolidated Financial Position As of June 30 , 2026 March 31 , 2026 Total Assets Net Assets Equity - to - Asset Ratio Millions of yen Millions of yen 315,167 134,403 301,614 131,252 Reference : Equity As of June 30 , 2026 : ¥ 125,084 million As of March 31 , 2026 : ¥ 122,029 million 2. Cash Dividends Fiscal year ended March 31 , 2026 Fiscal year ending March 31 , 2027 Fiscal year ending March 31 , 2027 ( Forecast ) Annual Dividends per Share % 39.7 40.5 Net Assets per Share Yen 1,908.57 1,861.88 First Quarter - End Second Quarter - End Third Quarter - End Fiscal Year - End Total Yen Yen Yen Yen Yen 25.00 15.00 40.00 20.00 Note : Revisions to the forecast of cash dividends most recently announced : None 20.00 40.00
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3. Forecast of consolidated financial results for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Net Sales Operating Profit Ordinary Profit Profit Attributable to Owners of Parent Basic Earnings per Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Fiscal year ending March 31, 2027 335,000 (3.5) 18,500 (9.9) 16,000 (20.9) 6,500 414.2 99.18 Note: Revisions to the earnings forecasts most recently announced: None *Notes (1) Significant changes in the Scope of Consolidation during the Period: None (2) Adoption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements: Yes Note: For details, please refer to “(3) Notes to Quarterly Consolidated Financial Statements (Application of Specific Accounting Treatments in Preparing Quarterly Consolidated Financial Statements)” of “2. Quarterly Consolidated Financial Statements and Main Notes” on page 8 of the attached documents. (3) Changes in Accounting Policies, Changes in Accounting Estimates, and Restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement of changes: None (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 65,581,861 shares As of March 31, 2026 65,581,861 shares (ii) Number of treasury shares at the end of the period As of June 30, 2026 43,634 shares As of March 31, 2026 40,990 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Three months ended June 30, 2026 65,539,084 shares Three months ended June 30, 2025 65,519,967 shares *Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None *Explanation on proper use of earnings forecasts, and other special matters The forward-looking statements, including forecasts of financial results, contained in these documents are based on information currently available to the Company and on certain assumptions deemed to be reasonable. However, the Company makes no guarantee that these forecasts will be achieved. Actual financial results, etc. may differ substantially due to various factors. Please refer to “(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements” of “1. Qualitative Information on Quarterly Financial Results” on page 3 of the attached materials or the conditions that form the assumptions for the earnings forecasts and cautions concerning the use thereof.
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1 Table of Contents 1. Qualitative Information on Quarterly Financial Results .......................................................................................... 2 (1) Explanation of Operating Results .............................................................................................................................. 2 (2) Explanation of Financial Position ............................................................................................................................... 3 (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements ............... 3 2. Quarterly Consolidated Financial Statements and Main Notes ....................................................................... 4 (1) Quarterly Consolidated Balance Sheet .................................................................................................................. 4 (2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income……………………………………………………………………………………………………………….. 6 (Quarterly Consolidated Income Statement) ....................................................................................................... 6 (Quarterly Consolidated Statements of Comprehensive Income)................................................................ 7 (3) Notes to Quarterly Consolidated Financial Statements .................................................................................. 8 (Notes on Going Concern Assumptions) ............................................................................................................... 8 (Notes on Significant Changes in the Amount of Shareholders' Equity) .................................................. 8 (Application of Specific Accounting Treatments in Preparing Quarterly Consolidated Financial Statements) …………………………………………………………………………………………………………………………………. 8 (Accounting Standards Not Yet Applied etc.) ..................................................................................................... 8 (Consolidated Income Statement Related Matters)…………………………………………………………………….. 8 (Notes on Quarterly Consolidated Statements of Cash Flows) .................................................................... 9 (Notes on Segment Information, etc.) ................................................................................................................... 9 (Revenue Recognition) ................................................................................................................................................ 10 (Significant Subsequent Events) .............................................................................................................................. 11
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2 1. Qualitative Information on Quarterly Financial Results (1) Explanation of Operating Results During the first quarter of the fiscal year ending March 31, 2027, (April 1, 2026 to June 30, 2026), the global economy remained on a moderate recovery trend. However, the outlook continued to be uncertain due to concerns over U.S. tariff policies, particularly their impact on the automotive industry, and fluctuations in crude oil prices caused by rising geopolitical tensions in the Middle East. By region, the U.S. economy remained firm, supported by a strong labor market. In Europe, weakness in the manufacturing sector persisted, while in China, economic conditions continued to be affected by adjustments in the real estate market. As a result, economic trends varied across regions. In the automotive industry, the review of global EV strategies continued. Against the backdrop of revisions to subsidy programs and regulations in major markets, growth in demand for battery electric vehicles (BEVs) slowed, while demand for hybrid electric vehicles (HEVs) remained strong globally. In response to these market trends, automakers continued to pursue diversified powertrain portfolio strategies encompassing BEVs, HEVs, and plug-in hybrid electric vehicles (PHEVs). Furthermore, in markets such as the United States, where the effects of tariff policies persisted, automakers took measures to optimize their production and supply chain structures. To respond to these changes in the business environment, the Group has been promoting initiatives to strengthen its management foundation and transform its business portfolio. In the four-wheel business of the Mobility segment, orders for components used in BEVs and HEVs, including differential gears, a product in which the Group holds the world's largest market share, remain strong. As customers restructure their production and supply chain networks, demand for localized production has increased, resulting in a growing number of business opportunities for the Group. In China, orders from local automakers are expanding, while in Europe the Group has been steadily implementing structural reforms centered on production capacity optimization and site reorganization. In the two-wheel business, sales of components for internal combustion engine (ICE) vehicles remain strong, particularly in India and Southeast Asia. In the electrification field, efforts to expand external sales of the Group's e-Axle (EV drive unit) are also progressing steadily. In the Energy Solution business, the Company has been strengthening its production and supply capabilities for Hybrid Super Capacitors (HSCs), for which demand has expanded rapidly, particularly from AI data centers driven by the widespread adoption of generative AI. In North America, the Group has also accelerated business development through its Austin R&D Center, which was established in the previous fiscal year. Under these circumstances, consolidated net sales for the first quarter cumulative period increased to 89,157 million yen (up 7.3% year on year). In terms of profitability, consolidated operating profit increased to 4,878 million yen (up 28.1% year on year), consolidated ordinary profit was 4,923 million yen (up 47.4% year on year), and quarterly net profit attributable to owners of the parent was 1,849 million yen (up 11.0% year on year). The business performance by segment is as follows: (Japan) Driven by strong demand, net sales totaled 11,163 million yen (up 17.3% year on year), and segment profit amounted to 938 million yen (up 175.3% year on year). (Americas) Sales remained strong, continuing the favorable trend from the previous fiscal year, and were positively affected by foreign exchange movements. As a result, net sales totaled 30,694 million yen (up 12.7% year on year), while segment profit amounted to 2,165 million yen (up 55.8% year on year). (Asia) Reflecting solid sales of motorcycle-related products and favorable foreign exchange effects, net sales totaled 20,134 million yen (up 10.4% year on year), and segment profit amounted to 2,311 million yen (up 33.6% year on year). (China) Although orders from local automakers continued to expand, sales to Japanese automobile manufacturers remained sluggish. As a result, net sales totaled 5,433 million yen (down 16.6% year on year), and the segment recorded a loss of 77 million yen (compared with a segment profit of 32 million yen in the same period of the previous year). (Europe) In Europe, the Group continued to promote improvement measures, including cost management initiatives. However, despite favorable foreign exchange effects, lower sales resulted in net sales of 21,731 million yen, up 0.7% year on year, and a segment loss of 495 million yen (compared with a segment profit of 295 million yen in the same period of the previous fiscal year).
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3 (2) Explanation of Financial Position Total assets increased by 13,552 million yen from the end of the previous fiscal year to 315,167 million yen. Current assets increased by 4,243 million yen to 154,296 million yen, mainly due to an increase in cash and deposits. Fixed assets increased by 9,309 million yen to 160,871 million yen, primarily due to an increase in construction in progress. Liabilities increased by 10,401 million yen to 180,763 million yen, mainly due to increases in short-term borrowings and long-term borrowings. Net assets, including non-controlling interests, increased by 3,150 million yen from the end of the previous fiscal year to 134,403 million yen. (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements There are no changes to the consolidated earnings forecasts announced on May 12, 2026.
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4 2. Quarterly Consolidated Financial Statements and Main Notes (1) Quarterly Consolidated Balance Sheet (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 32,651 38,075 Notes and accounts receivable - trade 50,204 44,593 Merchandise and finished goods 13,066 12,945 Work in process 12,543 13,009 Raw materials and supplies 31,931 32,172 Other 11,162 14,941 Allowance for doubtful accounts (1,506) (1,441) Total current assets 150,052 154,296 Non-current assets Property, plant and equipment Buildings and structures 68,441 69,197 Accumulated depreciation (39,390) (40,225) Accumulated impairment (5) - Buildings and structures, net 29,046 28,972 Machinery, equipment and vehicles 334,012 336,241 Accumulated depreciation (272,856) (276,865) Accumulated impairment (404) (945) Machinery, equipment and vehicles, net 60,751 58,430 Tools, furniture and fixtures 19,805 20,035 Accumulated depreciation (15,601) (15,993) Accumulated impairment - (1) Tools, furniture and fixtures, net 4,204 4,041 Land 10,234 10,269 Construction in progress 24,710 35,390 Total property, plant and equipment 128,947 137,103 Intangible assets Goodwill 586 529 Customer-related intangible assets 1,189 1,061 Software 761 722 Software in progress 15 15 Other 435 406 Total intangible assets 2,988 2,736 Investments and other assets Investment securities 9,798 10,926 Investments in capital 1,648 1,679 Long-term loans receivable 124 98 Deferred tax assets 5,192 5,239 Other 2,863 3,087 Total investments and other assets 19,626 21,031 Total non-current assets 151,561 160,871
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5 (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 20,892 20,571 Short-term borrowings 45,206 48,517 Current portion of long-term borrowings 16,734 16,787 Accounts payable - other 6,339 9,592 Accrued expenses 10,307 11,612 Income taxes payable 2,511 1,477 Provision for bonuses 3,565 2,582 Provision for bonuses for directors (and other officers) 51 67 Provision for product warranties 22 22 Provision for loss on guarantees 200 200 Provision for loss on litigation 662 603 Provision for business restructuring 6,108 5,901 Other 5,252 6,534 Total current liabilities 117,857 124,471 Non-current liabilities Long-term borrowings 36,796 40,377 Deferred tax liabilities 3,929 4,142 Retirement benefit liability 8,451 8,507 Other 3,327 3,264 Total non-current liabilities 52,504 56,292 Total liabilities 170,361 180,763 Net assets Shareholders' equity Share capital 5,675 5,675 Capital surplus 73 73 Retained earnings 91,156 92,023 Treasury shares (8) (8) Total shareholders' equity 96,897 97,763 Accumulated other comprehensive income Valuation difference on available-for-sale securities 3,017 3,706 Foreign currency translation adjustment 21,644 23,077 Remeasurements of defined benefit plans 470 537 Total accumulated other comprehensive income 25,132 27,321 Non-controlling interests 9,223 9,319 Total net assets 131,252 134,403 Total liabilities and net assets 301,614 315,167
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6 (2) Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income (Quarterly Consolidated Income Statement) (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Net sales 83,076 89,157 Cost of sales 70,905 75,130 Gross profit 12,170 14,026 Selling, general and administrative expenses 8,361 9,147 Operating profit 3,808 4,878 Non-operating income Interest income 133 176 Dividend income 199 199 Foreign exchange gains - 252 Compensation income 0 108 Other 101 155 Total non-operating income 434 894 Non-operating expenses Interest expenses 512 579 Loss on valuation of investment securities 3 24 Share of loss of entities accounted for using equity method 26 23 Provision of allowance for doubtful accounts 230 - Foreign exchange losses 12 - Other 118 222 Total non-operating expenses 903 849 Ordinary profit 3,339 4,923 Extraordinary income Gain on sale of non-current assets 12 20 Gain on sale of investment securities - 12 Gain on termination of retirement benefit plan 25 - Total extraordinary income 37 33 Extraordinary losses Loss on sale of non-current assets 3 0 Loss on retirement of non-current assets 6 22 Provision for loss on litigation 165 - Business restructuring costs - 143 Impairment losses - *1 871 Production process change cost - *2 436 Total extraordinary losses 175 1,475 Profit before income taxes 3,201 3,481 Income taxes 1,316 1,334 Profit 1,885 2,146 Profit attributable to non-controlling interests 219 297 Profit attributable to owners of parent 1,666 1,849
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7 (Quarterly Consolidated Statement of Comprehensive Income) (Millions of yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit 1,885 2,146 Other comprehensive income Valuation difference on available-for-sale securities 89 760 Foreign currency translation adjustment (1,569) 1,427 Remeasurements of defined benefit plans, net of tax (490) 0 Share of other comprehensive income of entities accounted for using equity method (2) (15) Total other comprehensive income (1,972) 2,172 Comprehensive income (86) 4,319 Comprehensive income attributable to Comprehensive income attributable to owners of parent (281) 4,038 Comprehensive income attributable to non-controlling interests 194 281
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8 (3) Notes to Quarterly Consolidated Financial Statements (Notes on Going Concern Assumptions) None. (Notes on Significant Changes in the Amount of Shareholders' Equity) None. (Application of Specific Accounting Treatments in Preparing Quarterly Consolidated Financial Statements) With respect to income taxes, the Company and its domestic consolidated subsidiaries calculate tax expense by reasonably estimating the effective tax rate after the application of tax effect accounting to income before income taxes for the current consolidated fiscal year and multiplying quarterly income before income taxes by the estimated effective tax rate. However, when the calculation of tax expense using the estimated effective tax rate would result in a significantly unreasonable outcome, the statutory effective tax rate is applied. (Accounting Standards Not Yet Applied) • Accounting Standard for Leases (Accounting Standards Board of Japan Statement No. 34, issued on September 13, 2024, by the Accounting Standards Board of Japan) • Guidance on Accounting Standard for Leases (Accounting Standards Board of Japan Guidance No. 33, issued on September 13, 2024, by the Accounting Standards Board of Japan), etc. (1) Overview As part of efforts by the Accounting Standards Board of Japan (ASBJ) to align Japanese standards with international norms, a lease accounting standard has been developed that requires lessees to recognize assets and liabilities for all leases. This development was based on international accounting standards, and while the basic policy adopts the single accounting model of IFRS 16, it does not incorporate all provisions of IFRS 16. Instead, only the key provisions are adopted to ensure simplicity and usability, with the aim that applying IFRS 16 to individual financial statements would generally not require adjustments. Under the lessee's accounting treatment, the method of allocating lease expenses follows a single accounting model, similar to IFRS 16. Regardless of whether the lease is classified as a finance lease or an operating lease, all leases are accounted for by recognizing depreciation of the right-of-use asset and interest on the lease liability. (2) Scheduled Date of Application The standard will be applied from the beginning of the fiscal year ending March 31, 2028. (3) Effect of the Adoption of the Accounting Standard The impact of applying the “Accounting Standard for Leases”, etc., on the consolidated financial statements is currently under evaluation. (Consolidated Income Statement Related Matters) *1 Impairment losses During the first quarter consolidated cumulative period, the Group recorded impairment losses on the following assets. Location Use Type Amount Japan Business assets Machinery, equipment and vehicles 536 million yen Japan Business assets Tools, furniture and fixtures 1 million yen Japan Business assets Construction in progress 334 million yen For the purpose of assessing impairment, the Group generally groups assets on a company-by-company basis, except for operations in Europe. However, idle assets are grouped on an individual asset basis. During the three-month period ended June 30, 2026, as a result of a decision to change production process, the above idle assets were written down to their recoverable amount, and the resulting reduction was recognized as an impairment loss. The recoverable amount is measured based on the net selling price calculated using the estimated selling price and other factors.
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9 *2 Production process change cost During the three-month period ended June 30, 2026, due to changes in production process, certain production equipment that had been scheduled for use under the original plan was no longer expected to be utilized for its intended purpose. Accordingly, the Group recognized, as extraordinary losses, the amount expected to be borne by the Group in relation to such unaccepted production equipment as expenses related to changes in production preparation. (Notes on Quarterly Consolidated Statement of Cash Flows) The quarterly consolidated statement of cash flows for the first quarter cumulative period has not been prepared. However, depreciation expenses for the first quarter cumulative period (including amortization of intangible fixed assets excluding goodwill) and amortization of goodwill are as follows: Previous First Quarter (From April 1, 2025 To June 30, 2025) First Quarter Consolidated Cumulative Period (From April 1, 2026 To June 30, 2026) Depreciation 4,282 million yen 4,800 million yen Amortization of goodwill 57 57 (Notes on Segment Information, etc.) Segment Information I. The three months of the previous fiscal year (April 1, 2025 to June 30, 2025) 1. Information on the amounts of net sales and profit for each reportable segment (Millions of yen) Japan Americas Asia China Europe Total Adjustment amount (Note) 1 Quarterly consolidated income statement amounts (Note)2 Net sales Sales to external customers 9,515 27,228 18,236 6,516 21,578 83,076 - 83,076 Internal sales or transfers between segments 7,527 11 1,509 886 351 10,287 (10,287) - Total 17,043 27,239 19,745 7,403 21,930 93,363 (10,287) 83,076 Segment profit 341 1,390 1,730 32 295 3,790 17 3,808 Note: 1. The adjustment amount of ¥17 million for segment profit or loss represents elimination of intersegment transactions. 2. Segment profit or loss is reconciled with operating profit in the quarterly consolidated income statement. 2. Information on impairment losses on fixed assets and goodwill by reportable segment None.
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10 II. The three months of the current fiscal year (April 1, 2026 to June 30, 2026) 1. Information on the amounts of net sales and profit or loss for each reportable segment (Millions of yen) Japan Americas Asia China Europe Total Adjustment amount (Note) 1 Quarterly consolidated income statement amounts (Note) 2 Net sales Sales to external customers 11,163 30,694 20,134 5,433 21,731 89,157 - 89,157 Internal sales or transfers between segments 5,617 33 1,480 1,159 202 8,494 (8,494) - Total 16,781 30,727 21,615 6,592 21,934 97,651 (8,494) 89,157 Segment profit or loss (loss) 938 2,165 2,311 (77) (495) 4,843 35 4,878 Note: 1. The adjustment amount of ¥35 million for segment profit or loss (loss) represents elimination of intersegment transactions. 2. Segment profit or loss (loss) is reconciled with operating profit in the quarterly consolidated income statement. 2. Information on impairment losses on fixed assets and goodwill by reportable segment In the Japan segment, an impairment loss of JPY 871 million was recognized on fixed assets. (Revenue Recognition) Breakdown of revenue arising from contracts with customers (From April 1, 2025 to June 30, 2025) (Millions of yen) Japan Americas Asia China Europe Total Honda Motor Co., Ltd. and its affiliates 5,205 21,574 12,869 2,082 - 41,732 Other global customers 4,310 5,653 5,367 4,434 21,578 41,343 Revenue from contracts with customers 9,515 27,228 18,236 6,516 21,578 83,076 Other income - - - - - - Sales to external customers 9,515 27,228 18,236 6,516 21,578 83,076 (From April 1, 2026 to June 30, 2026) (Millions of yen) Japan Americas Asia China Europe Total Honda Motor Co., Ltd. and its affiliates 6,271 24,456 13,989 1,250 - 45,968 Other global customers 4,892 6,195 6,145 4,182 21,731 43,147 Revenue from contracts with customers 11,163 30,652 20,134 5,433 21,731 89,116 Other income - 41 - - - 41 Sales to external customers 11,163 30,694 20,134 5,433 21,731 89,157
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11 Note: Other income consists of lease income recognized in accordance with Accounting Standard No. 13, "Accounting Standard for Lease Transactions." (Significant Subsequent Events) None.