Takashima : PresentationMaterials(script)

Contents

Takahiro Suzuki: My name is Suzuki, Director and Managing Executive Officer. I will now present Takashima's financial results for the third quarter of the fiscal year ending March 31, 2024.

The presentation will include an overview of financial results for the third quarter of the fiscal year ending March 31, 2024, consolidated earnings forecast for the fiscal year ending March 31, 2024, shareholder returns, progress on the plan to meet continued-listing criteria for prime market of TSE (a plan to meet the criteria), and actions to achieve management with an awareness of cost of capital and stock price.

Introduction - Our Current Situation

At the beginning of this presentation, I would like to explain our current situation: the fiscal year ending March 31, 2024 is the third year of the plan to meet the criteria that we submitted in accordance with the TSE market reorganization. This is the first year of our medium-term management plan, Sustainability V (Value), which was formulated to realize the various initiatives committed to in the plan to meet the criteria.

To summarize the current situation, market capitalization has increased, and performance has been strong as a result of steady progress in various initiatives.

Executive Summary

This is an executive summary of the financial results for the third quarter of the fiscal year ending March 31, 2024.

In the third quarter, the Electronics & Devices segment recorded declines in both sales and profit, while the Construction Supply and Industrial Materials segments recorded increases in both sales and profit, resulting in a consolidated financial result of higher sales and profit.

The full-year forecasts have not been revised from those announced on December 14, as shown.

The year-end dividend forecast has been increased to 40 yen, consisting of an ordinary dividend of 25 yen and a special dividend of 15 yen. The special dividend is due to the gain on sales of fixed assets resulting from the transfer of fixed assets.

Consolidated Performance P/L

I will explain the consolidated statement of profit. Net sales increased 10.3% year on year to 66,416 million yen, as the Electronics & Devices segment recorded lower sales and profits, but the Construction Supply and Industrial Materials segments performed well.

Operating profit increased 72.0% to 1,692 million yen and ordinary profit increased 70.8% to 1,876 million yen.

Net profit attributable to owners of the parent company increased 54.8% to 1,237 million yen.

Consolidated Performance B/S

This is the balance sheet. Compared to the end of the previous period, total assets increased by 9,713 million yen. The main reason for this increase was the acquisition of Gansui Corporation. The equity ratio decreased by 4.1 percentage points to 32.4%.

Consolidated Performance B/S

First, in terms of assets, the main factors compared to the end of the previous period are as shown below.

Current assets increased 7.5% to 44,552 million yen at the end of the third quarter. This was mainly due to an increase in notes and accounts receivable-trade and contract assets, while cash and deposits decreased.

Fixed assets increased 56.8% to 18,221 million yen. This was mainly due to increases in property, plant and equipment and goodwill associated with the acquisition of Gansui Corporation, respectively.

Consolidated Performance B/S

The following table shows the main factors of liabilities and net assets compared to the end of the previous fiscal year.

Current liabilities increased 28.7 % to 35,496 million yen. The main factors were increases in short-term loans payable and notes and accounts payable-trade.

Non-current liabilities increased 13.5 % to 6,738 million yen. The main factor was an increase in long-term debt.

Net assets increased 5.1 % to 20,538 million yen. The main factors were increases in retained earnings and foreign currency translation adjustments, respectively.

Net sales configuration by segment

The following is an explanation of results by segment. In the third quarter, the Construction Supply segment accounted for 64.1 % of net sales, the Industrial Materials segment for 18.8 %, and the Electronics Devices segment for 16.9 %.

The main business activities of each segment are shown on the slide.

Briefing by Segment: Construction Supply

The main factors in the Construction Supply segment. In the construction materials field, sales increased due to the steady completion of construction orders for logistics facilities and factories.

In the renewable energy materials field, sales increased due to growing demand for both industrial and residential applications toward a zero-carbon society and the expansion of equipment installation for self- consumption.

In the insulation materials field, in addition to sales of materials, the acquisition of construction projects contributed to increased sales.

In the housing materials field, sales declined due to a decline in detached housing starts, but the segment was able to contribute to earnings in terms of profit.

In addition, both sales and profit increased due to the consolidation of New Energy Distribution System Corporation and Gansui Corporation.

As a result, overall sales in the Construction Supply segment increased 24.4 % to 42,589 million yen, and segment income rose 1,253.9 % to 985 million yen.

Briefing by Segment: Industrial Materials

The following is an explanation of the main factors behind the Industrial Materials segment. In the plastic- related field, sales and profits increased due to a recovery in logistics materials and other products, as well as an increase in orders for molded and processed products for medical-related products, a target area for the company.

In the textile-related sector, sales of sewn and processed products for industrial textiles remained steady, but sales of apparel-related products declined due to sluggish demand. Meanwhile, both sales and profit increased as a result of the consolidation of Shinbo Edix Co.

As a result, overall net sales in the Industrial Materials segment increased 2.5 % year on year to 12,454 million yen, with segment profit up 105.0 % to 343 million yen.