Artience : Presentation Question & Answer session summary of FY2025 Results Briefing

Published February 25, 2026 at 7:36 a.m. UTC

Source: MarketScreener

Financial Results Briefing for the Fiscal Year Ended December 31, 2025 Questions & Answers

Date/time: Feb. 20, 2026, 10:00am - 11:00am (Japan time)
Presenters:
Satoru Takashima: President and Representative Director, and Group CEO
Hiroyuki Hamada, Director Vice President, General Management, Corporate Division Takeshi Arimura, Operating Officer in charge of IR and GM of Finance & Accounting Department
Presentation Material:

https://ssl4.eir-parts.net/doc/4634/tdnet/2765525/00.pdf

TRANSLATION:

This is a transcript of Financial Results Briefing for the Fiscal Year Ended December 2025, held on Feb.20, 2026, Questions & Answers session. This is an English translation of the Japanese original, prepared only for the convenience of non-Japanese native shareholders. The original Japanese version will prevail should there be any difference in the meaning between the English version and the Japanese version.

DISCLAIMER:

The forecast or projections in this material are based on the assumptions and beliefs of our management in light of the information available as of Feb.20,2026. Changes in global, economic and business conditions could cause actual results to differ materially from these forecasts.

The content of this transcript have been edited or revised by the company.

Q.1:

The first question is on the financial statements, and I am looking at page 17 of the document. I am particularly concerned about sales expansion and cost reductions in your analysis of changes in operating profit. You discussed that the increase in sales is mainly due to an increase in package-related sales in Asia. What can you tell us about sustainability?

Also, I would like you to describe the extent to which the enhancement of the adhesives business in India will contribute. I also think it's great that cost reductions generated JPY1.8 billion last year, which is a significant boost. This year, there will be another JPY1.5 billion added to the positive impact. You mentioned procurement, re-evaluation of raw materials, integration of products, production efficiency, and many others. Could you please tell me how each of these components contributed and the accuracy of those contributions?

Analysis of YoY Changes in Operating Profit (Forecast)

+1.3

Exchange rate

fluctuation

+0.0

FY26

FY25

+1.5

+3.3

+0.4

-4.3

(Billion yen)

FY2025 Results Briefing

In Japan, prices of products such as offset inks, UV curable inks and

functional films and tapes will be revised.

In India, work to expand facilities for pressure sensitive adhesives will be completed.

In Southeast Asia and the surrounding regions, sales expansion of packaging-related materials including ink products is expected.

Labor costs, logistics costs and other expenses are expected to rise. Depreciation are expected to be mostly unchanged year on year despite the start of operation of new facilities.

Price revision

Increasing sales

Increasing cos

23.0

20.8

Naphtha prices are expected to be lower than last year. In Japan, the ratio of raw materials procured overseas will rise.

Raw material prices

We will strengthen procurement

activities across the Group and streamline production.

Cost reductions

A.1(Hamada): As for sales expansion, the figures shown here focus on product categories with relatively high visibility. As I mentioned earlier, the market is expected to continue growing in the current business environment, and the positive effect of our sales capabilities and technical services are becoming increasingly evident. Therefore, we believe we will be able to secure growth that exceeds the overall market growth rate this year, as we did last year.

As for the adhesives business in India, we operate in adhesives, packaging inks, and general inks. In terms of scale, packaging and general inks are currently larger than adhesives, so growth in those businesses is expected to have a greater overall impact. However, adhesives, which have been relatively small until now, are expected to expand, and we estimate their profit contribution at several hundred million yen.

Regarding cost reduction, until now, our profits have tended to be impacted by the rise and fall of raw material prices. We had individual procurement channels: for example, the Japanese market has its own way to source materials, while other overseas markets have their own. There are ways to enhance procurement at each location, but we chose to focus on the group-wide procurement activities. We have been working continuously for a long time to make joint purchases and to pursue the most efficient commercial distribution options, and we see that as a major part of our efforts.

In terms of production efficiency, we manage a large number of product varieties, and in some areas, this has limited our ability to improve efficiency. However, we will work to enhance efficiency by integrating product varieties as much as possible, including by improving the operational flexibility of our facilities. This is an exceptionally large area for manufacturers, and we believe this will have a tremendous effect, so we would like to focus our efforts on this area.

Q.2: I would like to ask about the progress of the medium-term management plan.

I am looking at the document, page 29 and page 30. This time, with CNT dispersion, while the foundation remains unchanged, only the US was changed significantly. Is this something that we can continue to expect in the next medium-term management plan, in addition to the current medium-term management plan? Is it a little too early to comment? From a medium- to long-term perspective, will you change your strategy and aim for growth by focusing on displays and advanced electronics, another strategically important business? Could you please discuss these points?

Basic policy (2) Creation of strategic, high priority business groups

: Mk ( ) M

Basic policy (2) Creation of strategic, high priority business groups

Mobility & Battery Related Businesses: CNT dispersions for LiB

Overview and Outlook by Site : Due to the slowdown in the promising EV market in North America, we are also focusing non-automotive applications.
- Two customers. Although volume and sales exceeded last year's levels, the market slowed more than initially expected.
- We completed facility expansion work in 2025 and began local production for the second customer by Q2 of 2026.
- One customer*. Both volume and sales exceeded last year's levels.
- The market slowdown caused customers to postpone plans and cancel projects. As a result, the number of customers with informal decisions fell from four to two.
- We reviewed plans for operations at the plant in Kentucky and recorded an impairment loss.
- One customer. The switchover at the customer was delayed and full-scale shipments of our products was pushed back to Q2 of 2026.
- The scope of end targeted vehicle models was expanded to include non-European vehicles. We aim to start mass production of materials for anodes by the end of the year.
- One customer*. Demand from customer with an informal decision dried up due to the market slowdown. Companies we were targeting for sales expansion appeared to postpone their plans.
- Shipments of CNT dispersions for HEVs remain strong. Progress is also being made on the development of products for all-solid-state

batteries.

*for SKon(USA), TOYOTA battery (Japan)

Sales, forecasts, and Target (billion yen)

Revised target in Feb. 0 6

20.0

FY2025

12.5

15.0

22.0

3.2

5.2

3.6

6.5

10.0

2022

2023

2024

2026

(plan)

2027

(target)

2028

(target)

FY2025 Results Briefing

2025

1.1

1.2

1.1

0.7

4.1

Japan

(Fuji)

China

(Zhuhai)

USA

(GA,KY)

Europe

(Hungary)

Display and Advanced Electronics Related Businesses

- Expanding earnings by tapping into market changes and also making progress in products for semiconductors -

Expanding earnings from products for displays, and expecting growth in products for advanced electronics.

materials

Sensors (optical

semiconductors

Display

The recovery of small and midsize panels is slow.
We established a joint venture with a Chinese company and commenced production of resist inks from the end of 2025. We will aim for market share expansion and expansion of sales channels for small and medium-sized midsize panels in China.
Advanced electronics
We steadily produced results in relation to materials for sensors for optical semiconductors in 2025.
- Significantly contributed to earnings growth in 2025.
  Optical pressure sensitive adhesives

We responded to the market's shift to China.
We rolled out high heat-resistance, value-added products for automotive applications.
We expanded biomass pressure sensitive adhesives that cater to demand for environmental consideration.
Changes in the operating profit of Display &
Advanced Electronics Related Businesses
6.0
4.5
- We enhanced materials for next-generation
  Semiconductor- sensing devices.
  3.4 3.7
  related
  materials
- Low dielectric resins used in data centers, etc. and functional films with excellent insulation and flexibility (LIOTELAN) produced results as encapsulation materials for semiconductors.

2023 2024 2025 2026

(Target)

(billion yen)

FY2025 Results Briefing

A.2(Takashima): Regarding the CNT dispersion business for LiB applications, as I mentioned earlier, we do not intend to make any major strategic shifts and will continue to position this as an important business, as we have done to date. However, the United States is currently experiencing the most significant environmental changes following the change in administration, and we will need to adjust the substance of our business operations there accordingly. We will carefully monitor developments and consider our approach going forward. In Europe, China, and Japan, our stance remains unchanged. For example, we are confident that new applications for all-solid-state batteries, such as physical AI, will continue to expand. Therefore, we will continue to develop these batteries and cultivate their markets. Accordingly, we have no intention of existing or deprioritizing our mobility-

related businesses, including CNT dispersion for LiB applications. That said, in terms of capital allocation, the investment amount related to CNT dispersion will decline significantly. As a result, we plan to allocate a greater portion of our management resources to display and advanced electronics businesses.

Q.3:

First, could you explain your thoughts behind the projected increase in profits for the next fiscal year? It appears that profits are expected to grow in the color materials, functional materials, and polymers & coatings segments. From a product perspective, which categories do you expect to contribute most to profit growth? In the color and functional materials segment, I assume there will be some impact from the impairment related to CNT dispersion. Even so, a considerable volume of CF materials is planned. Could you clarify whether this is for large display applications or for production-related uses? In the polymers and coatings segment, an increase in the volume of adhesives for large-sized TVs, for example, can be expected. On the other hand, there are some components for smartphones, and I have the impression that these factors are a bit of a risk due to the rise in DRAM prices, so I would appreciate it if you could also tell me what conditions your company assumes regarding the quantity of components for smartphones. Thank you.

FY2026 Segment Outlook

Colorants and Functional Materials: Color filter materials are expected to benefit from growth in the panel market driven by sports events and sensor-related materials are expected to perform solidly. For CNT dispersions, deficit will be reduced, and expected to turn profitable in FY2027. We will aim for increased profit from plastic colorants through sales expansion of functional material products and cost reductions, and we will aim for increased profit from inkjet inks through sales expansion of products for soft packaging and electronics.
Polymers and Coatings: Functional films are expected to perform on a par with the previous year through the implementation of price revisions, despite concerns over decreased shipments of terminals due to semiconductor shortages. Overseas, adhesives and coatings are likely to continue performing strongly. We will aim to expand production capacity, optimize SCM, and achieve alliance-driven sales expansion.
Packaging Materials: Overseas, performance is expected to remain strong, mainly in Southeast Asia and India, and we will get our new factory in Turkey and our reorganized China sites on track. In Japan, we will streamline production and promote stable quality, aiming for profit growth.
Printing and Information: Overseas, we will formulate a strategy for each market centered around highly sensitive UV-curable ink and pursue sales expansion. Especially in China, we will expand sales in the East China region as a priority. In Japan, we will continue structural reforms and price revisions in line with the contraction of the information-oriented printing markets. We will steadily tap into growth areas such as products for various types of cards.

FY2025 Results (Billion yen)			FY2026 Plan(Billion yen)	Increase/(Decrease) (%)
	Net sales Operating profit		Net sales Operating profit	Net sales Operating profit
Colorants and Functional Materials	84.3	2.3	85.0 3.5	0.8 55.3
Polymers and Coatings	90.3	8.3	95.0 9.0	5.2 8.5
Packaging Materials	92.5	5.5	96.0 6.0	3.8 9.8
Printing and Information	81.0	4.5	82.0 5.0	1.2 10.4
Others and Adjustments	1.9	0.2	2.0 -0.5	- -
Total (Consolidated)	350.0	20.8	360.0 23.0	2.9 10.8

FY2025 Results Briefing

A.3(Hamada): As for which products contribute the most, overall, they are generally shifting favorably. We expect these categories to achieve favorable growth through organic sales growth and an increase in their market shares. We are proud of our competitiveness, especially in packaging. We think it will grow steadily in the overseas markets.

In addition, we have already taken steps to reduce the deficit in the CNT business and to improve the profitability of CF materials, which have fallen once, and we have also taken steps to change the business scheme centered on joint ventures. I think that the earnings of the color and functional materials segment will be improved by adding to the existing positive earnings, as mentioned earlier, and I think it is quite significant.

Per our internal analysis, we assume that functional films will see a certain volume increase. This is like the current part plus some new additions. Also, the price of silver was 2 to 2.5 times last year's price, which affected our earnings considerably. So, we are now proceeding with the price revision, and I think we have received a certain level of understanding. I think will have quite a positive effect.

Q.4: I assume you have a joint venture business related to CF material paste. Can you update us on the current situation, when shipments are likely to increase significantly, customer acceptance, and so on? A.4(Takashima): The replacement of products exported from Taiwan is now progressing at such a pace that we had originally planned to start around the end of the Chinese New Year, but we are now moving ahead of schedule. At the same time, we are also making progress in developing new partners to produce and sell our products through joint ventures.

In addition, regarding the sales of the paste supplied from Japan, which we position as an intermediate product, shipments have already begun to materialize. However, we expect volumes to increase from the second quarter onward.

Q.5:

I would appreciate it if I could hear about your approach to shareholders' returns. The dividend is expected to increase by JPY20 this fiscal year under the guidance. Your company has so far made significant investments, such as share buybacks, without changing dividends significantly. On the other hand, I think that from this time on, the policy is probably to increase the dividend.

While the total return ratio was previously 50%, buybacks and other items accounted for a fairly high proportion of the total return. On the other hand, you changed the dividend quite a bit this time around. I would appreciate your explanation to address what drives these differences.

Also, as of December 2026, the dividend payout ratio is about 27%. Is this a standard for a certain level of dividend, or is it unrelated? I would appreciate it if you could provide this information. That's all from me.

Basic policy (3) Money/cash flow management/capital efficiency improvement

Mid -term management plan artience2027 Shareholder Return Policy

In 2026, we plan to increase dividends backed by profit growth.

In the event of securing a profit, allocate the surplus cash to strategic investments and increased shareholder returns

including treasury share acquisition while retaining the basic policy of paying stable dividends.

Set the total payout ratio target at 50% or more.

Total dividends( billion yen) Treasury share acquisition Total payout ratio(%)

Total payout ratio ç% ˇ

87.3%

105.3%

114.5%

(billion yen) 147.8%

68.4%

Announced shareholder return

(40.0 billion~ for 3 years)

49.0%

7.5 10.4

5.0 5.7 2.1

5.3 5.0 4.8 4.8

5.2

4.8

5.7

0 00 10 0 3

0 4 0 5

0 6

Annual

dividend per

share(yen)

100

(

100

Forecast

120

Profit attributable to owners of parent (billion yen)

6.0

9.5

9.3

9.7

18.5

10.3

21.0

)

34 Upper limit of 4,500,000 shares or 10.0 billion yen(Acquisition period: August 13, 2024 ~/ May 12, 2025~ within a year period)

FY2025 Results Briefing

A.5(Takashima): We have not changed our primary policy of paying stable dividends, and our total return ratio should be 50% or more. The reason behind the dividend increase is that the Company has gained confidence in its ability to earn a stable operating profit. We are now in a position to earn the resources effectively to pay stable dividends.

Another point is that while we have conducted share buybacks over the past two to three years, the total amount available for dividends does not increase significantly even if the dividend per share is raised. Taking this into account, we decided to increase the dividend. With regard to the total payout ratio for FY2026, even combining ¥5.7 billion and ¥2.1 billion, it remains below 50%. It also falls short of our shareholder return policy of more than ¥40 billion over three years. Therefore, we intend to

disclose further measures, including additional share buybacks as soon as they are formally resolved.

Q.6:

Display adhesives appear to be performing quite well. While I understand there are competitors in this space, my impression is that their market share has recently declined, while your company's share has increased. Is it correct to understand the situation in that way? If so, could you explain the factors behind the increase in your market share, including any impact related to competitors' production bases in China? In addition, according to slide 30, operating profit in the display and advanced electronics segment is expected to increase by ¥1.5 billion this fiscal year. Is it fair to assume that display adhesives are making a significant contribution to this increase?

Basic policy (2) Creation of strategic, high priority business groups

Display and Advanced Electronics Related Businesses

- Expanding earnings by tapping into market changes and also making progress in products for semiconductors -

Expanding earnings from products for displays, and expecting growth in products for advanced electronics.

materials

Sensors (optical

semiconductors

Display

The recovery of small and midsize panels is slow.
We established a joint venture with a Chinese company and commenced production of resist inks from the end of 2025. We will aim for market share expansion and expansion of sales channels for small and medium-sized midsize panels in China.
Advanced electronics
We steadily produced results in relation to materials for sensors for optical semiconductors in 2025.
- Significantly contributed to earnings growth in 2025.
  Optical pressure sensitive adhesives

We responded to the market's shift to China.
We rolled out high heat-resistance, value-added products for automotive applications.
We expanded biomass pressure sensitive adhesives that cater to demand for environmental consideration.
Changes in the operating profit of Display &
Advanced Electronics Related Businesses
6.0
4.5
- We enhanced materials for next-generation
  Semiconductor- sensing devices.
  3.4 3.7
  related
  materials
- Low dielectric resins used in data centers, etc. and functional films with excellent insulation and flexibility (LIOTELAN) produced results as encapsulation materials for semiconductors.

2023 2024 2025 2026

(Target)

(billion yen)

FY2025 Results Briefing

A.6(Takashima): Naturally, we operate with Japanese competitors in mind. Based on the information available to us, we believe we have been expanding our market share. The primary factor behind this is our strong collaboration across Japan, China, and South Korea. In addition to our locally based technical development and sales development managers in Japan and China, we have recently transferred display protective adhesives from South Korea. By integrating operations across Japan, China, and South Korea - including those previously serving Korean customers - we have established an effective regional collaboration framework. As a result, quality, technical services, and product development have progressed steadily. We expect display adhesives to make a significant contribution to operating profit again this fiscal year.

[END]

Note: Portions of this Q&A transcript have been edited by the Company.