Ichiro Hikage
President

To our shareholders, we would like to express our heartfelt gratitude for your continued support and encouragement. As we present the report for the 105th fiscal period of our group, we extend our greetings to you.

During the consolidated fiscal year, the global economy experienced varied conditions. While the U.S. economy remained robust, the protracted Ukraine crisis led to rising raw material and energy costs as well as global inflation, causing stagnation, particularly in Europe. Meanwhile, China's economic recovery was sluggish, hampered by weak growth in consumer spending and a downturn in the real estate market.

The Japanese economy showed signs of recovery in consumer spending and inbound demand; however, rising raw material and energy costs, along with significant foreign exchange rate fluctuations, created an ongoing atmosphere of uncertainty.

Under these challenging business conditions, our group remained focused on increasing corporate value by developing products that meet customer needs and possess strong brand appeal. Specifically, we concentrated on priority areas such as energy-efficient products, environmentally friendly products, disaster prevention-related products, lifestyle-related products, and infrastructure-related products. We also actively pursued global business expansion while continuously working on cost reduction, energy conservation, and waste reduction initiatives.

As a result, our consolidated fiscal year's performance was as follows:

• Net sales: 79,093 million yen (an increase of 0.6% compared to the previous fiscal year)
• Operating loss: 436 million yen (compared to an operating loss of 958 million yen in the previous fiscal year)
• Ordinary loss: 220 million yen (compared to an ordinary loss of 171 million yen in the previous fiscal year)
• Net profit attributable to shareholders of the parent company: 427 million yen (compared to a net loss of 8,210 million yen in the previous fiscal year).

The business environment surrounding our group has remained challenging in recent years due to factors such as the impact of the COVID-19 pandemic, rising and persistently high raw material and energy costs caused by the Ukraine crisis, and decreased market demand.

To address the deterioration in profitability in our current performance, we have been working to improve productivity (cost reductions), implement price revisions, and create new value. These efforts have led to gradual improvements in our performance; however, transforming into a company capable of consistently generating high profits remains a critical challenge.

In light of these circumstances, our group has established the long-term goal of becoming a "Global Solution Provider" that delivers surprises, joy, and inspiration to the world while enriching people's lives. To achieve this vision, we have formulated the "Medium -Term Business Strategy FY25–FY27," which sets forth a three-year strategic direction.

Our goal is to contribute to society through solutions that integrate diverse technologies, while valuing the curiosity, unique ideas, creativity, and diverse capabilities of each employee. Under the three company-wide strategies—(1) thorough selection and concentration, (2) creation of new value, and (3) promotion of global strategies—we will focus on enhancing our business foundations, including human resource development, productivity, and technological capabilities. Additionally, we will promote sustainability-focused management and work to rebuild and strengthen our profitability.

We kindly ask our shareholders for your continued and increased support.

June 2025