FY25 Financial Results (Slide Presentation with transcript) & Summary of Q & A

Financial Results Briefing for the Fiscal Year Ended March 2026 May 14, 2026

(Total: 64 minutes, Presentation: 23 minutes, Q&A: 41 minutes)

Yoshihisa Shinya Representative Director and President Hidenuki Mayumi Corporate Strategy Division Deputy Division

Head

Ryota Washimori PR & IR Department General Manager

Hidemitsu Umebayashi Daiwa Securities Mikiya Yamada Mizuho Securities

Takato Watabe Morgan Stanley MUFG Securities

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.

First, let me introduce the attendees. Yoshihisa Shinya, Representative Director and President. Hidenuki Mayumi, Corporate Strategy Division Deputy Division Head. Ryota Washimori, PR & IR Department General Manager. These three are attending from the Company. The briefing is scheduled to end at 14:00.

For today's briefing, Mayumi will provide an overview of the financial results for the fiscal year ended March 31, 2026 and the outlook for the full year ending March 31, 2027, as well as an overview of the mid-term management plan updates. This will be followed by a question-and-answer session to which Shinya and Washimori will join. Mayumi will now explain.

I will explain the FY2025 full-year financial summary and FY26 annual forecast on the slides that follow. Next, please.

The first is the financial highlights. For the full year of FY2025, net sales were JPY113.8 billion and business profit was JPY39.3 billion, up from the same period last year. As an overview, while there was a large decline caused by phosphor film, which ended in the previous year, pre-cut anisotropic conductive films (ACF), and optical semiconductors increased, resulting in an overall increase in sales.

At the time of the 3Q results, we had reported that we expected a sharp rise in memory prices and the impact of intensified competition in the Chinese automobile market, and we were able to land almost in line with our revised forecast.

Business income was affected by a decrease in phosphor film sales and an increase in fixed costs due to growth investments in optical semiconductors, but this was offset by an increase in sales of high value-added products, resulting in an increase in income, including the effect of foreign exchange rates.

I will continue with the forecast for FY2026. Sales are expected to be JPY123 billion and business profit JPY40 billion. The exchange rate is set at JPY150 to the dollar. Although we expect a decrease in the number of smartphones due to soaring memory prices, we plan to recover the impact by expanding sales of high-end models.

We also assume that cost increases through H1 due to the situation in the Middle East will be negligible so far. The growth expansion of high value-added products and optical semiconductors is expected to offset the increase in fixed costs, resulting in higher sales and income.

As for shareholder returns, we plan to pay an interim cash dividend of JPY32 and a year-end cash dividend of JPY32, for a total annual dividend of JPY64. Next slide, please.

I will continue with a summary of the financial results. This page shows the market environment for the major applications in which our products are used and our sales trends.

Market trends were almost unchanged from the previous year in all markets except notebook PCs and optical semiconductors. Replacement demand continues for laptop PCs, and for optical semiconductors, demand for optical transceivers for data centers is expanding.

As for the trend of the Company, sales of laptop PCs declined due to the impact of the end of sales of phosphor film at the end of H1 of the previous year and a decrease in the volume of some models using anti-reflection film.

Smartphone sales increased due to the impact of expansion of pre-cut anisotropic conductive films (ACF) for high-end camera module applications. In the automotive sector, customer sales volume declined due to intensifying competition in the Chinese auto market, but sales increased slightly due to an expansion in the number of models using anti-reflection film.

In optical semiconductors, sales of high-speed response photodiodes to a major optical transceiver manufacturer expanded and were positive. Next slide, please.

This is a performance summary. As for major performance trends, I will explain sales and business profit on the slides that follow. Next slide, please.