Integrated Report 2025 released

Integrated Report 2025

Year Ended March 31, 2025

Value Creation Story of Advanex

Special Feature

The wellspring of the value creation of Advanex is our core technologies of taking advantage of the functions and characteristics of metal to supply complex-shaped, high-performance parts at low cost, along with our advanced proposal and development abilities for helping customers solve problems. Our unparalleled craftsmanship and the ability to supply products of uniform quality throughout the global market have heightened our market advantage. Together with the ability to propose new value, our aim is for sustainable growth by expanding global markets and actively engaging in mergers and acquisitions to boost profit margins and ROE. Through businesses that use the exclusive core technologies of Advanex, we will help to create a safe, comfortable, and more affluent society.

Asset Sources

Value Creation Process

Value Created

Financial Assets

• Cash on hand

• Cash-generating ability

• Fundraising ability

  Manufacturing Assets

• Manufacturing bases

• Operating rate of manufacturing capacity and assets and infrastructure

  Social Issues

  Management Strategy

  Safety and security

  Products and Strategies

  Relations with Stakeholders

  Human health

  In recent years, the conventional wisdom has been that sustainability and ESG (Environment · Society · Governance) should be addressed by companies. We see this as not simply a change in social expectations, but as an opportunity to finds ways to fulfill these demands, make the most of our inherent strength, and use these efforts to contribute to our growth and development and ultimately to the continuation of society. Since the founding of the company, we have helped to improve people's lives through springs. We reviewed the values and principles of action that we have accomplished and discussed what we should value even in the midst of a changing world. We have defined these as the three management principles of "Global," "Change," and "Innovation."

  Intellectual Assets

• Core technologies and intellectual property rights

  Human Assets

• Number of employees

• Highly motivated employees

• Degree of vision sharing

  Social and Related Assets

• Strengthened relations with stakeholders

  Natural Assets

• Environmental activities

• Contributions to a recycling-oriented society

Core technologies

Business Locations

Business Activities

Products and services

Advanex Value and Purpose

Corporate Governance

Japan Americas Europe Asia

R&D Production Sales Products and services

Customers' growth

Foundation Supporting Growth

Environmental conservation

Financial Information

Employee happiness

A sustainable company

with fair and impartial governance

Corporate Information

CONTENTS

Editorial Policy

Intention to Publish this Report

Starting in 2017, Advanex has published the Annual Integrated Report detailing financial and nonfinancial information concerning our efforts to increase corporate value. We believe that it is important for all stakeholders to have a good understanding of company activities. For that reason, we are proactive in providing information on our corporate strategy and performance, CSR policies, corporate governance, and environmental protection activities, and this Annual Integrated Report is an important vehicle for that purpose.

Scope of the Report

This report covers Advanex and its Group companies in Japan and overseas. However, some data concerns Advanex only.

Period of the Report

As a rule, the information in this report is for FY 2025 (April 2024 to March 2025); however, the report also includes information from outside that period.

Future Considerations

The information in this report is an estimate of future performance, plans, forecasts, and strategies, and as such are subject to risk and uncertainty factors. Depending on a variety of different factors, the actual performance may differ substantially from the estimates.

Guidelines for Reference

• ISO 26000 (International guidance on organizational governance and social responsibility)

• IIRC (International Integrated Reporting Council) as the International Integrated Reporting Framework

02 Special Feature

Figures for Advanex 02

Society Envisioned by Advanex 03

CEO Message 04

06 Products and Strategies

Main Products 06

Automotive Market 08

Medical Market 09

Aviation Market 10

OA and Home Appliance 11

Midterm Business Plan 12

14 Relations with Stakeholders

CSR Policy and Stakeholder Stance 14

Initiatives for Sustainable Development Goals (SDGs) 15

Initiatives for Carbon Neutral 16

Environmental Initiatives / Relationship with Customers 18

Relationship with Supplier / Relationship with Shareholders and Investors 19

20 Foundation Supporting Growth

Human Capital and Personnel System 20

Corporate Governance

Introduction to Directors and Messages from Outside Directors 24

Corporate Governance, Compliance, and Internal Control System 25

26 Financial Information

Financial and Non-Financial Highlights 26

Consolidated Financial Statements 28

30 Corporate Information

Global Network 30

Stock Information 32

Corporate Profile 33

ADVANEX

Integrated Report 2025 01

Special Feature 1 Society Aimed at by Advanex/Advanex in Numbers

Special Feature

Pharmaceuticals

The efforts to benefit society began with scale springs that remain consistent regardless of changing seasons and temperatures.

(consolidated subsidiaries)

The number of countries where manufacturing bases have expanded is the largest among spring manufacturers.

Special Feature

Over two-thirds of sales are in overseas markets, and the focus is on growth markets.

(vs. FY 2017)

Despite the impact of the COVID-19, sales have continued to rise thanks to aggressive investments.

Other

Sales increased by 60% (compared with the fiscal year ended March 2017), while the number of employees has not increased because of improvements in productivity.

Automotive

EBITDA*, which is regarded as an indicator of earning power, is at a high level.

*EBITDA = Operating income + depreciation and

amortization

Automotive and aviation

Advanex develops and supplies products the weight of automobiles and aircraft, improve fuel efficiency, and improve safety.

Springs

Contribute to the persistence and development of society as a whole, starting with springs and precision metal processing.

Infrastructure

develops and supplies a wide variety of products to prevent the loosening of bolts and nuts and to withstand earthquakes.

7%

Aviation

6%

OA and home appliance

17%

Medical

19%

By market

Automotive

51%

Increased offers of new products for CASE, the four reforms for

next-generation vehicles.

Medical

This segment has grown with springs for dry powder inhalers, and an auto-injector has been added.

OA and home appliances

Capture demand generated by the transfer of customer production bases from China to Vietnam, Thailand, and Japan.

Aviation

The majority of coil threads are for aviation.

Approximately 0.1 million to 0.3 million are used per aircraft for passengers and will continue to expand.

Sharing technologies and customers worldwide

Asia

37%

Europe

12%

By region

Japan

32%

Americas

19%

Japan 10

Number of bases

Americas 3

Europe 3

Asia 15

Advanex products are in use to improve safety and security in mobility, infrastructure, and housing equipment.

Environmental (Reducing CO2)

CO2 emissions are reduced not only by the amount generated in the manufacturing process but also by

People's health and quality of life

Safety and security

Contributing to the promotion of people's health and improvements in the recovery rate by improving the simplicity of medication (making it easier for doctors to fulfill their medication instructions).

*All figures are based on the fiscal year ended March 2025.

contributing to a reduction in mobility and fuel consumption through the products.

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diversifying needs of society.

Advanex will work to meet the

CEO Message

Special Feature

Special Feature

Special Feature 2 CEO Message

CEO, Chairman, and President

Eitaro Asada

Springs have been useful in our daily lives for a long time.

Human beings have used springs for a very long time. Trap

entries made from strong tree branches to catch creatures were the oldest springs of mankind and were in use for more than 0.1 million years. In addition, bows are based on the principle of springs, which have existed for tens of thousands of years. In the Middle Ages, tablets and presents were invented, and even after the Industrial Revolution, they have been used in a variety of fields, ranging from those that contribute to improvements in lifestyles, such as engines and watches, to weapons, such as guns, as the main machinery element.

High economic growth period

Since the high economic growth period after World War II, Japan has led the world in the manufacture of automobiles, precision equipment, and home appliances. Because many springs were used in such precision equipment products as watches and cameras with accurate mechanical mechanisms, the demand for springs as a force under the edge that supports these industries has expanded, and the number of spring manufacturers has increased. Among the several thousand spring manufacturers, Advanex has expanded its business scope through global expansion and the listing of shares since early in its history.

Wave of digitization

Meanwhile, the mechanical components in watches, cameras, audio equipment, and home appliances consisted of a series of springs, gears, cams, and shafts that have been replaced by IC components due to digitalization such that the use of mechanical components has declined.

Everyone has the impression that products have become touchscreen panels and keys from levers and dials, reducing the number of mechanism elements. At one time, we had a majority share of the global market for the springs and mechanical components in the devices for floppy discs, videotapes, and cassette tapes. On the other hand, because storage devices have been replaced by cloud services that do not require recording media, disc drives, cassette decks, and video decks for playback have become smartphones and Internet TV, which means the demand for mechanical components in consumer and other electronics fields and consequently for springs has declined. Therefore, many think that the spring industry will decline.

Springs Continue to Live

Nevertheless, the presence of springs, which have developed in tandem with humankind for some time, has not weakened even in today's world where digitization is progressing. The market for springs and the scope of the spring business is expanding, given the opportunities for the new needs of security and safety, sustainability and the environment, quality of life and medical care, and product to cost. In today's world, where lifestyles are becoming increasingly more reliant on convenient services and societies are becoming increasingly more complex and diverse, springs are increasing their presence. I have lived with the spring industry for more than half a century, and during that time, I have repeatedly observed the disappearance of a variety of products and needs after their emergence and growth; however, in a changing world, the elements of springs continue to live within products and have evolved without being known.

We have overcome difficulties and are now in a golden age.

Precision springs, our specialty at present, are about to

enter a golden age. Only companies in an industry exposed to significant changes of the times and who have succeeded in overcoming these challenges can achieve sustainable growth. The so-called polarization phenomenon will occur on a global scale in the spring industry, and oligopolization will progress. We began our global expansion at an early stage, which initially led to a period of stagnation. However, we are now overcoming those challenges, turning that setback into a valuable learning experience, and recognizing that it is opening up significant new opportunities for us.

Employees will all be valued.

Nevertheless, we still have issues to address. One of the major issues is the increasingly difficult challenge of securing human resources because of such factors as the declining birthrate and the aging population. For example, the previous approach was to hire a large number of new graduates on the assumption that some of them would retire in the middle of their careers, so we would focus on developing only the remaining competent employees who did not resign. Today, we have renewed our approach to personnel systems. In short, the system aims to make Advanex a company where each employee can achieve their potential while valuing individuality. Regardless of whether we hire new graduates or mid-career recruits, we value every employee who joins the company, and by providing education and training, we will develop all employees as essential personnel.

Digital Transformation (DX)

At the same time, we promote automation and DX to improve productivity and company performance without relying solely on labor. We recently recruited specialists from the IT sector and launched a department specializing in DX. At first, some friction existed because the initiative brought about rapid change, but I feel that we are getting a good response to the reform, partly because I directly supported this initiative. This DX flow will be expanded to 20 manufacturing sites and 11 offices in 11 countries worldwide, including Japan.

Role of the Annual Integrated Report

In this report, our stakeholders include how springs are helpful to the ever-evolving society of humankind, what kind of presence we have discarded and how we will grow, and our efforts for sustainability, including the SDGs of their future possibilities.

I would like to introduce them to you.

Eitaro Asada CEO, Chairman, and President

04 ADVANEX Integrated Report 2025 05

Products and Strategies

Main product overview

Reliable Advanex products supported by advanced technology

Products and Strategies

Since its founding, Advanex developed innovative products with its own technological and development capabilities through creative efforts as a specialist in precision springs. We will introduce a number of Advanex products that combine technological capabilities and innovative ideas, such as wire springs of high quality that can be used with peace of mind, flat springs, highly reliable insert molding that saves space, and revolutionary CoilThreads

that reinforce screw threads. Advanex provides support from the design stage and proposes ideas and solutions to meet customer needs.

For the Medical Sector

Products and Strategies

The medical field, which is directly relevant to human life, requires extremely high quality.

For the Office Automation Equipment Section

Copiers and other OA equipment consist of many mechanical components, and our equipment is in wide use.

For the Automotive Section

Automobiles today are lighter and filled with electronics, stimulating demand for Advanex products.

Standardized Products

Demand for our standardized products has been growing recently, especially in the infrastructure and aviation markets.

06 ADVANEX Integrated Report 2025 07