ARE : Presentations of Financial Results for First Half FY2024.3

About this update from Are Holdings, Inc.

ARE Holdings, Inc. Financial Results for Q2 for fiscal year ending March, 2024 (FY 2023) October 26, 2023 These forecast performance figures are based on information currently available to the company's management and certain assumptions judged rationally. Accordingly, there might be cases in which actual results materially differ from forecasts of this report. Copyright © ARE Holdings, Inc. All rights reserved. Financial Results for Q2 FY2023 (April 1, 2023 ～ September 30, 2023) Appendix Copyright © ARE Holdings, Inc. All rights reserved. 01 Key Points of Q2 Financial Results Overview Sales revenue ¥151.9bn （ YoY+¥19.2bn ） Operating profit ¥7bn （ YoY (¥4.5bn)) • Compared to Q1, rhodium price in 2Q seems more stable, but its price fell more than 70% Impact of rhodium from the end of last September, and YoY is ¥2.6 billion which is the negative impact. • Forward contract and alternative hedging to mitigate the risk of rhodium price fluctuation are right on the track. • Paradigm price fell 40% from the end of last September. • Inventory adjustment of clients in electronics and catalyst sector takes longer than our Other factors estimate. • The change in accounting due to the spin off • North American refining business is steady and smooth. Revision to financial Made a revision to full year financial forecast because of the gold sales volume and selling price forecast are higher than our initial assumption. Japan Waste Reached a basic agreement on a share exchange with Renatus who has excellent companies in industrial waste management business under its umbrella. Copyright © ARE Holdings, Inc. All rights reserved. 02 Business Overview of Q2 （ YoY ） Precious Metals Business (Asahi Pretec Corp., ASAHI METALFINE, Inc., Asahi Refining) The jewelry sector was strong on the back of the elevated gold price. The catalyst sector is struggling because of the price fall of paradigm. For North American refining business, trading and advance trading went well, but product processing and sales decreased. Business field Dentistry Jewelry Catalyst Electronic North American refining Business environment Maintained the same volume of collection as the last year even though the spread of alternative products continued by increasing the number of patient and our strong sales efforts. Collection rose due to the increasing demands for jewelry recycling because of the higher gold price. Collection fell in Japan due to the falling PGM price; overseas, collection from catalyst manufactures was reduced. Even though AI and EV related product demands pushed the market, collection decreased due to sluggish Chinese market. Refining ,Trading and advance trading were steady, but product processing and sales decreased. Environmental Preservation Business (Japan Waste Corporation) Handling volume of liquid waste increased YoY due to the large one time business, for medical waste, made up the loss of COVID19 related wastes with alternative medial wastes, wood waste fell significantly due to the impact of the business conversion of the Yokohama Plant. Items Liquid waste Waste reagents Medical waste Waste plastics Other Business environment Even though some of the industries are on the recovery trend, electronic and electrical equipment related products, printed circuit board related products and others are still short of the full recovery. Even though there is no major change in waste reagents from educational institutions, our handling volume rose YoY thanks to the withdrawal from business of some of our competitors. Besides last year's special demand from COVID19-related wastes, handling volume of medical waste is growing. Our handling volume of waste plastics shows a little decline due to the low emission of waste plastic and strong demand from cement related and RFP handlers. Handling volume of sludge and wood waste fell significantly due to the impact of the business conversion of the Yokohama Plant . Copyright © ARE Holdings, Inc. All rights reserved. 03 Consolidated Results Q2 FY2022 Q2 FY2023 Unit ： billion yen FY2023 Results Revenue 132.7 Operating profit 11.5 Ratio 8.7% Profit before tax 10.2 Profit ※ 1 7.3 Results 151.9 7.0 4.6% 7.2 5.3 YoY Change 19.2 (4.5) (4.1%) (3.0) (2.0) Revised Forcasst 290.0 19.0 6.6% 18.5 13.2 YoY Change (2.4) (0.3) (0.1%) 2.4 2.3 Capex 2.1 Depreciation 1.6 ※ 1 Profit attributable to owners of parent 2.9 0.9 1.8 0.2 12.4 7.5 3.1 (0.2) Copyright © ARE Holdings, Inc. All rights reserved. 04 Precious Metals Business Precious metals recycling business (Japan and Asia) Q2 FY2023 Results As collection amount from jewelry sector increased, gold sales volume and its price also increased. On the other hand, price decline of rhodium and paradigm and inventory adjustment of our partner clients of electric and catalyst, caused a decrease of the collection amount. Increase in revenue and decrease in profit North American refining business Q2 FY2023 Results Refining,trading and advance trading fee increased. Increase in revenue and profit Precious Q2 FY2022 Metals Results* Revenue 123.9 Operating Profit 10.5 Ratio 8.5% [Unit: billion yen] Q2 FY2023 FY2023 Results YoY Change Forecast YoY Change 143.9 20.0 272.0 (2.2) 6.1 (4.4) 16.7 (3.1) 4.2% (4.3%) 6.1% (1.1%) * The actual achievement in FY2022 was processed retroactively due to the changes in Segment Accounting Standard which became effective since FY 2023 Copyright © ARE Holdings, Inc. All rights reserved. 05 Impact of Gold Collection Gold share in revenue is increasing on YoY because both collection amount and selling price increased. Breakdown of revenues Breakdown of Au collected Sales of Au Unit: : billion yen Sales of Others 96.9 Jewelry sector Unit ： kg Other sectors 12,986 13,354 7,573 151.9 Copyright © ARE Holdings, Inc. All rights reserved. 06 Ref: Volume of Precious Metals Collected Collection amount of gold is on a positive trend, but collection amount of palladium and platinum is declining mainly from catalyst. Au Pd Pt Unit ： kg Copyright © ARE Holdings, Inc. All rights reserved. 07 Rhodium Trend Rhodium price was relatively stable but it still remained low in Q2 after its price plummeted in 1Q. The negative impact of the price decline was about 2.6 billion yen (YoY). Expect to be able to lower the impact of rhodium price fluctuation with actual hedging in forward contract and alternative hedging which we have started since July this year. Rhodium Prices FY2022 FY2023 2022/9/30 13,500 2023/9/29 3,850 ※ Ref ： Metals Week NY Dealer Prices Copyright © ARE Holdings, Inc. All rights reserved. 08 Environmental Preservation Business Environmental Preservation Business Q2 FY2023 Results Although operational rate of the facility keeps high level, could not avoid getting the negative impact from the fall of unit price of medical waste due to a decrease in COVID19 related waste, and business conversion for the purpose of constructing a new incinerator at the Yokohama plant. Decrease in revenue and profit Environmental Preservation Revenue Operating Profit Ratio Q2 FY2022 Results* 8.8 1.7 19.5% [Unit: billion yen] Q2 FY2023 FY2023 Results YoY Change Forecast YoY Change 8.0 (0.8) 18.0 (0.2) 1.1 (0.6) 2.3 (1.5) 13.7% (5.8%) 12.8% (8.3%) The actual achievement in FY2022 was processed retroactively due to the changes in Segment Accounting Standard which became effective since FY2023. Copyright © ARE Holdings, Inc. All rights reserved.

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