Financial Results 3Q （October 1, 2025 - December 31, 2025）

February 10, 2026

Company name: FUJI OIL CO., LTD. Listing: Tokyo Stock Exchange

Securities code: 2607

URL: https://www.fujioil.co.jp/en/ Representative: Tatsuji Omori, President and CEO

Inquiries: Masaaki Nakanishi, Deputy General Manager, Finance and Accounting Headquarters Telephone: +81-(0)3-4477-5416

Scheduled date to commence dividend payments: －

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes (for institutional investors and analysts)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the nine months ended December 31, 2025 (April 1, 2025 - December 31, 2025)
   1. Consolidated operating results (cumulative)

      (Percentages indicate year-on-year changes.)

      	Net sales		Business profit		Operating profit		Profit before tax		Profit
      Nine months ended	Millions of yen	%	Millions of yen	%	Millions of yen	% - -	Millions of yen	% - -	Millions of yen	% - -
      December 31, 2025	582,783	18.5	28,805	700.7	27,536		22,802		16,596
      December 31, 2024	491,884	-	3,597	-	2,328		△291		△387

      	Profit attributable to owners of parent		Total comprehensive income		Basic earnings per share	Diluted earnings per share
      Nine months ended	Millions of yen	% - -	Millions of yen	%	Yen	Yen
      December 31, 2025	16,376		36,355	651.8	190.47	-
      December 31, 2024	△1,639		4,835	-	△19.07	-

      (Note) Business Profit is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses due to non-recurring factors.

   2. Consolidated financial position

      	Total assets	Total equity	Equity attributable to owners of parent	Ratio of equity attributable to owners of parent to total assets
      As of	Millions of yen	Millions of yen	Millions of yen	%
      December 31, 2025	679,691	243,170	239,033	35.2
      March 31, 2025	597,076	210,926	206,923	34.7

2. Cash dividends

   	Annual dividends per share
   	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
   Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026	Yen - -	Yen 26.00 26.00	Yen - -	Yen 26.00	Yen 52.00
   Fiscal year ending March 31, 2026 (Forecast)				26.00	52.00

   (Note) Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated forecasts for the fiscal year ending March 31, 2026 (April 1, 2025 - March 31, 2026)

(Percentages indicate year-on-year changes.)

(Note) Revisions to the consolidated forecast most recently announced: Yes

Please refer to the "Notice of Revision to the Full-Year Earnings Forecast" released today for further details.

1. Significant changes in the scope of consolidation during the period: Yes New company: 2 companies (PROVENCE HUILES S.A.S, etc.)

   Excluded company: 2 companies (The former FUJI OIL CO., LTD. etc.)

2. Changes in accounting policies, changes in accounting estimates, and restatement

   1. Changes in accounting policies required by IFRS: None

   2. Changes in accounting policies due to other reasons: None

   3. Changes in accounting estimates: None

3. Number of issued shares (common shares)

   1. Total number of issued shares at the end of the period (including treasury shares)

      As of December 31, 2025	87,569,383 shares
      As of March 31, 2025	87,569,383 shares

   2. Number of treasury shares at the end of the period

      As of December 31, 2025	1,586,816 shares
      As of March 31, 2025	1,595,432 shares

   3. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

• Quarterly financial results reports are exempt from review conducted by certified public accountants or an audit firm.

• Explanations and other special notes concerning the appropriate use of business results forecasts

  The forward-looking statements included in this document are based on the information available at the time of this announcement. The actual results may differ from the forecasts in this report due to various factors.

  The Group has voluntarily adopted International Financial Reporting Standards (IFRS) from the first quarter of the fiscal year ending March 31, 2026, and figures for the previous fiscal year have been reclassified to IFRS basis. Please refer to "2. Quarterly Consolidated Financial Statements (First-Time Adoption of IFRS) (Accompanying Materials)" for the differences of the consolidated financial figures between Japanese Generally Accepted Accounting Principles (hereinafter, "Japanese GAAP") and IFRS.

• How to access supplementary material on financial results

  Supplementary material on financial results is disclosed in Investor Relation on our company's website on the same day.

  Accompanying Materials - Contents

  1. Qualitative Information on Results for the Nine Months Ended December 31, 2025 2

     1. Details of Operating Results 2

     2. Details of Financial Position 3

     3. Information on the Future Outlook, Including Consolidated Business Results Forecasts 4

  2. Quarterly Consolidated Financial Statements ……………………………………………………………………………… 5

     1. Quarterly Consolidated Statements of Financial Position ……………………………………………………………… 5

     2. Quarterly Consolidated Statements of Income and Comprehensive Income …………………………………………… 7

        Quarterly Consolidated Statements of Income ………………………………………………………………………… 7

        Quarterly Consolidated Statements of Comprehensive Income ……………………………………………………… 8

     3. Quarterly Consolidated Statements of Changes in Equity ……………………………………………………………… 9

     4. Quarterly Consolidated Statements of Cash flows 10

     5. Notes to Quarterly Consolidated Financial Statements ………………………………………………………………… 12

(Notes Relating to Assumptions for the Going Concern) 12

(Segment Information) 12

(First-Time Adoption of IFRS) 14

1. Qualitative Information on Results for the Nine Months Ended December 31, 2025
   1. Details of Operating Results

      Operating results for the first nine months of the current consolidated fiscal year were as follows.

      	Net sales	Business profit	Profit before tax	Profit attributable to owners of parent
      Nine months ended December 31, 2025 December 31, 2024	Millions of yen 582,783 491,884	Millions of yen 28,805 3,597	Millions of yen 22,802 △291	Millions of yen 16,376 △1,639
      Change	+90,899	+25,208	+23,093	+18,015
      	+18.5%	+700.7%	-	-

      Net sales increased due to higher sales prices to reflect rising key raw material price such as cocoa beans. Business profit increased due to steady sales of vegetable fats for chocolate in the Vegetable Oils and Fats segment and a decline in cocoa beans related costs at Blommer Chocolate Company, LLC (USA, hereinafter "Blommer"). Profit attributable to owners of parent increased due to an increase in business profit despite an increase in interest expenses.

      The business combination with PROVENCE HUILES S.A.S and other that occurred in 28,April 2025 had been accounted for on a provisional basis in both the first quarter consolidated cumulative period and the interim consolidated accounting period, We finalized from our provisional accounting during the third-quarter consolidated cumulative period.

      From the current fiscal year, the Company has allocated corporate expenses which were not allocated to each reported segment and were included in "Adjustment". Therefore, the segment information for the previous fiscal year has been analyzed comparatively by allocating corporate expenses to each reported segment.

      The operating results by reported segment are shown below.

      	Net sales			Business profit
      		Year-on-year change			Year-on-year change
      	Millions of yen	Millions of yen	%	Millions of yen	Millions of yen	%
      Vegetable Oils and Fats	201,714	+49,958	+32.9%	26,645	+8,043	+43.2%
      Industrial Chocolate	282,646	+40,625	+16.8%	1,357	+17,901	-
      Emulsified and Fermented Ingredients	73,389	+2,171	+3.0%	1,361	△556	△29.0%
      Soy-based Ingredients	25,033	△1,856	△6.9%	△234	△97	-
      Adjustment	-	-	-	△324	△82	-
      Total	582,783	+90,899	+18.5%	28,805	+25,208	+700.7%

      (Vegetable Oils and Fats)

      Net sales increased due to higher sales prices to reflect rising raw material prices and expansion of demand, in addition to new consolidation during the current first quarter consolidated cumulative period. Business profit increased mainly due to steady sales of vegetable fats for chocolate.

      (Industrial Chocolate)

      Net sales increased due to higher sales prices to reflect rising raw material prices. Business profit increased due to a decline in cocoa beans related costs at Blommer despite a decrease in sales volume at Blommer.

      (Emulsified and Fermented Ingredients)

      Net sales increased due to higher sales prices to reflect rising raw material prices. Business profit decreased due to a decline in profitability resulting from higher procurement prices and a decrease in sales volume in Asia.

      (Soy-based Ingredients)

      Net sales and business profit decreased mainly due to a decrease in sales volume of functional ingredients.

   2. Details of Financial Position

      1. Details of Consolidated Financial Position

         The consolidated financial position at the end of the nine months of the fiscal year is as follows.

         (Millions of yen)

         		As of March 31, 2025	As of December 31, 2025	Change
         	Current assets Non-current assets	363,997 233,079	400,331 279,359	+36,334 +46,280
         Assets		597,076	679,691	+82,614
         	Interest-bearing debt Other	283,721 102,428	323,251 113,269	+39,529 +10,841
         Liabilities		386,150	436,521	+50,370
         Equity		210,926	243,170	+32,244

         (Assets)

         Current assets increased due to an increase in trade receivables and inventories attributable to a newly consolidated company despite a decrease in cash and cash equivalents. Non-current assets increased due to an increase in goodwill resulting from the acquisition of shares of a newly consolidated company and purchase of property, plant and equipment. As a result, assets increased by 82,614 million yen from the end of the previous consolidated fiscal year to 679,691 million yen.

         (Liabilities)

         Liabilities increased due to an increase in trade payables which are included in other, as well as an increase in interest-bearing debt from the acquisition of shares of a newly consolidated company and an increase in working capital. As a result, liabilities increased by 50,370 million yen from the end of the previous consolidated fiscal year to 436,521 million yen.

         (Equity)

         Equity increased by 32,244 million yen from the end of the previous year to 243,170 million yen mainly due to an increase in other components of equity resulting from growth in retained earnings and the yen depreciation against US dollar and euro.

      2. Details of Consolidated Cash Flows

         The cash flows for the first nine months of the consolidated fiscal year are as follows.

         (Millions of yen)

         	Nine months ended December 31, 2024	Nine months ended December 31, 2025	Change
         Cash flows from operating activities	△48,358	△8,958	+39,399
         Cash flows from investing activities	△13,162	△41,163	△28,001
         Free Cash flows	△61,521	△50,122	+11,398
         Cash flows from financing activities	70,993	19,764	△51,229
         Cash and cash equivalents at end of period	38,847	43,800	+4,952

         (Cash flows from operating activities)

         Cash flows from operating activities for the first nine months of the current consolidated fiscal year resulted in expenditures of 8,958 million yen. Expenditures decreased by 39,399 million yen compared to the first nine months of the previous consolidated fiscal year mainly due to an improvement in working capital requirements.

         (Cash flows from investing activities)

         Cash flows from investing activities for the first nine months of the current consolidated fiscal year resulted in expenditures of 41,163 million yen. Expenditures increased by 28,001 million yen compared to the first nine months of the previous consolidated fiscal year mainly due to the acquisition of shares of a newly consolidated company and purchase of property, plant and equipment.

         (Cash flows from financing activities)

         Cash flows from financing activities for the first nine months of the current consolidated fiscal year resulted in income of 19,764 million yen. Income decreased by 51,229 million yen compared to the first nine months of the previous consolidated fiscal year mainly due to the rebound of the previous year and using of funds in hand.

   3. Information on the Future Outlook, Including Consolidated Business Results Forecasts

      The consolidated business results forecast for the full year has been revised from the previous forecast announced on May 12, 2025. Please refer to the "Notice of Revision to the Full-Year Earnings Forecast" released today for further details.

2. Quarterly Consolidated Financial Statements
   1. Quarterly Consolidated Statements of Financial Position

      (Millions of yen)

      	Transition Date (As of April 1, 2024)	As of March 31, 2025	As of December 31, 2025
      Assets
      Current assets
      Cash and cash equivalents	28,499	70,840	43,800
      Trade receivables	92,399	112,298	137,324
      Inventories	109,349	160,718	192,899
      Other financial assets	2,888	1,304	2,673
      Other current assets	13,427	10,197	23,633
      Assets held for sale	-	8,637	-
      Total current assets	246,565	363,997	400,331
      Non-current assets
      Property, plant and equipment	141,344	138,081	161,837
      Right-of-use assets	10,048	9,257	11,705
      Intangible assets	33,605	32,572	40,647
      Goodwill	21,907	20,763	30,229
      Investments accounted for using equity method	11,134	13,426	15,327
      Retirement benefit asset	39	39	-
      Deferred tax assets	2,496	10,218	10,659
      Other financial assets	9,426	8,400	8,705
      Other non-current assets	624	319	247
      Total non-current assets	230,628	233,079	279,359
      Total assets	477,193	597,076	679,691

      (Millions of yen)

      	Transition Date (As of April 1, 2024)	As of March 31, 2025	As of December 31, 2025
      Liabilities
      Current liabilities
      Trade payables	41,013	46,538	59,775
      Borrowings	64,373	195,284	213,604
      Current portion of bonds payable	34,989	-	-
      Lease liabilities	2,410	2,062	2,462
      Income taxes payable	4,316	7,566	6,235
      Other financial liabilities	6,148	10,093	6,407
      Other current liabilities	15,589	14,063	13,817
      Liabilities directly associated with assets held for sale	-	259	-
      Total current liabilities	168,842	275,867	302,303
      Non-current liabilities
      Bonds payable	5,978	30,811	30,847
      Long-term borrowings	43,496	57,625	78,798
      Lease liabilities	7,168	6,668	8,883
      Deferred tax liabilities	14,627	10,777	10,904
      Retirement benefit liability	1,985	1,784	1,990
      Other non-current liabilities	2,526	2,613	2,791
      Total non-current liabilities	75,781	110,282	134,217
      Total liabilities	244,624	386,150	436,521
      Equity
      Share capital	13,208	13,208	13,208
      Capital surplus	15,323	8,443	8,676
      Retained earnings	151,046	150,944	162,981
      Treasury shares	△1,947	△1,919	△2,154
      Other components of equity	42,846	36,245	56,320
      Equity attributable to owners of parent	220,477	206,923	239,033
      Non-controlling interests	12,091	4,003	4,137
      Total equity	232,569	210,926	243,170
      Total liabilities and equity	477,193	597,076	679,691

   2. Quarterly Consolidated Statements of Income and Comprehensive Income

      Quarterly Consolidated Statements of Income (First nine months period)

      (Millions of yen)

      	Nine months ended December 31, 2024	Nine months ended December 31, 2025
      Net sales	491,884	582,783
      Cost of sales	437,270	498,043
      Gross profit	54,613	84,740
      Selling, general and administrative expenses	53,261	57,539
      Other income	1,419	1,495
      Other expenses	442	1,159
      Operating profit	2,328	27,536
      Finance income	1,342	1,200
      Finance costs	5,284	6,221
      Share of profit (loss) of investments accounted for using equity method	1,322	287
      Profit (loss) before tax	△291	22,802
      Income tax expense	96	6,205
      Profit (loss)	△387	16,596
      Profit (loss) attributable to
      Owners of parent	△1,639	16,376
      Non-controlling interests	1,251	220
      Earnings (loss) per share Basic earnings (loss) per share (yen) Diluted earnings (loss) per share (yen)	△19.07 -	190.47 -

      Quarterly Consolidated Statements of Comprehensive Income (First nine months period)

      (Millions of yen)

      	Nine months ended December 31, 2024	Nine months ended December 31, 2025
      Profit (Loss)	△387	16,596
      Other comprehensive income Items that will not be reclassified to profit or loss Net change in fair value of equity instruments measured through other comprehensive income Remeasurements of defined benefit plans	277 △9	455 △57
      Total of items that will not be reclassified to profit or loss	267	397
      Items that may be reclassified to profit or loss
      Cash flow hedges	2,477	1,070
      Exchange differences on translation of foreign operations	1,793	18,746
      Share of other comprehensive income of investments accounted for using equity method	685	△456
      Total of items that may be reclassified to profit or loss	4,955	19,361
      Total other comprehensive income	5,223	19,758
      Comprehensive income	4,835	36,355
      Comprehensive income attributable to
      Owners of parent	3,175	35,999
      Non-controlling interests	1,660	355

   3. Quarterly Consolidated Statements of Changes in Equity

      	Share capital	Capital surplus	Retained earnings	Treasury shares	Other components of equity	Equity attributable to owners of parent	Non-controlling interests	Total equity
      Balance at beginning of period	13,208	15,323	151,046	△1,947	42,846	220,477	12,091	232,569
      Profit (loss)	-	-	△1,639	-	-	△1,639	1,251	△387
      Other comprehensive income	-	-	-	-	4,814	4,814	408	5,223
      Comprehensive income	-	-	△1,639	-	4,814	3,175	1,660	4,835
      Dividends of surplus	-	-	△4,475	-	-	△4,475	△2,698	△7,174
      Purchase of treasury shares	-	-	-	△0	-	△0	-	△0
      Disposal of treasury shares	-	-	-	28	-	28	-	28
      Transfer from other components of equity to retained earnings	-	-	78	-	△78	-	-	-
      Share-based payment transactions	-	△22	-	-	-	△22	-	△22
      Other	-	-	-	-	△1,770	△1,770	-	△1,770
      Total transactions with owners	-	△22	△4,397	28	△1,848	△6,239	△2,698	△8,938
      Balance at end of period	13,208	15,300	145,010	△1,919	45,812	217,413	11,052	228,466

      For the nine months ended December 31, 2024

      For the nine months ended December 31, 2025

      (Millions of yen)

      (Millions of yen)

      	Share capital	Capital surplus	Retained earnings	Treasury shares	Other components of equity	Equity attributable to owners of parent	Non-controlling interests	Total equity
      Balance at beginning of period	13,208	8,443	150,944	△1,919	36,245	206,923	4,003	210,926
      Profit (loss)t	-	-	16,376	-	-	16,376	220	16,596
      Other comprehensive income	-	-	-	-	19,623	19,623	135	19,758
      Comprehensive income	-	-	16,376	-	19,623	35,999	355	36,355
      Dividends of surplus	-	-	△4,479	-	-	△4,479	△324	△4,804
      Purchase of treasury shares	-	-	-	△421	-	△421	-	△421
      Disposal of treasury shares	-	259	-	186	-	446	-	446
      Transfer from other components of equity to retained earnings	-	-	140	-	△140	-	-	-
      Share-based payment transactions	-	△26	-	-	-	△26	-	△26
      Other	-	-	-	-	591	591	103	694
      Total transactions with owners	-	233	△4,339	△234	450	△3,889	△221	△4,111
      Balance at end of period	13,208	8,676	162,981	△2,154	56,320	239,033	4,137	243,170

   4. Quarterly Consolidated Statements of Cash flows (First nine months period)

      (Millions of yen)

      	Nine months ended December 31, 2024	Nine months ended December 31, 2025
      Cash flows from operating activities
      Profit (loss) before tax	△291	22,802
      Depreciation and amortization	14,540	15,787
      Decrease (increase) in retirement benefit asset	0	39
      Increase (decrease) in retirement benefit liability	38	△9
      Interest and dividend income	△849	△804
      Interest expenses	4,941	5,804
      Impairment losses	113	686
      Share of loss (profit) of investments accounted for using equity method	△1,322	△287
      Loss (gain) on disposal of non-current assets	124	256
      Loss (gain) on sale of shares of subsidiaries and associates	△291	-
      Decrease (increase) in trade receivables	△32,654	△15,605
      Decrease (increase) in inventories	△31,693	△17,098
      Increase (decrease) in trade payables	13,289	7,087
      Decrease (increase) in advance payments to suppliers	2,497	△9,764
      Other	△5,379	△1,211
      Subtotal	△36,936	7,683
      Interest and dividends received	1,285	804
      Interest paid	△4,683	△6,125
      Income taxes refund (paid)	△8,023	△11,330
      Proceeds from insurance income	-	8
      Net cash provided by (used in) operating activities	△48,358	△8,958
      Cash flows from investing activities
      Purchase of property, plant and equipment	△12,869	△21,044
      Proceeds from sale of property, plant and equipment	306	173
      Purchase of intangible assets	△2,127	△2,278
      Payments for acquisition of subsidiaries	-	△16,726
      Proceeds from sale of shares of subsidiaries	1,819	-
      Purchase of shares of associates	△325	△1,461
      Payments for investments in capital	△73	△26
      Other	107	199
      Net cash provided by (used in) investing activities	△13,162	△41,163

      (Millions of yen)

      	Nine months ended December 31, 2024	Nine months ended December 31, 2025
      Cash flows from financing activities
      Net increase (decrease) in short-term borrowings	66,784	△29,503
      Net increase (decrease) in commercial papers	10,000	-
      Proceeds from long-term borrowings	17,628	59,921
      Repayments of long-term borrowings	△3,666	△3,607
      Proceeds from issuance of bonds	25,000	-
      Redemption of bonds	△35,000	-
      Dividends paid	△4,475	△4,479
      Dividends paid to non-controlling interests	△2,698	△324
      Other	△2,578	△2,241
      Net cash provided by (used in) financing activities	70,993	19,764
      Effect of exchange rate changes on cash and cash equivalents	875	3,318
      Net increase (decrease) in cash and cash equivalents	10,348	△27,039
      Cash and cash equivalents at beginning of period	28,499	70,840
      Increase or decrease in cash and cash equivalents resulting from transferring to assets held for sale	△0	-
      Cash and cash equivalents at end of period	38,847	43,800

   5. Notes to Quarterly Consolidated Financial Statements (Notes Relating to Assumptions for the Going Concern) Not applicable.

From the current fiscal year, the Company has allocated corporate expenses which were not allocated to each reported segment and were included in "Adjustment". The segment information for the first nine months period of the previous fiscal year has been presented in accordance with the changed allocation method.

First nine months period of the previous fiscal year (April 1, 2024 - December 31, 2024)

(Millions of yen)

(Note) 1. Adjustment of business profit (loss) △241 million yen includes the elimination of intersegment transactions.

2. Business profit (loss) is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses arising from non-recurring factors.

First nine months period of the current fiscal year (April 1, 2025 - December 31, 2025)

(Millions of yen)

(Note) 1. Adjustment of business profit (loss) △324 million yen includes the elimination of intersegment transactions.

2. Business profit (loss) is calculated by adding share of profit (loss) of investments accounted for using equity method to operating profit and excluding gains and losses arising from non-recurring factors.

The adjustment from business profit to profit (loss) before tax is as follows:

Nine months ended December 31, 2024

(Millions of yen)

Nine months ended December 31, 2025

Business profit 3,597 28,805

Gain on sale of fixed assets 46 45

Loss on disposal of fixed assets △170 △302

Gain on sale of shares of associates 291 －

Impairment losses △113 △686

Share of profit (loss) of investments accounted for using equity method

1,322 287

Profit (loss) before tax △291 22,802

The Group prepared its consolidated financial statements in compliance with IFRS from the current fiscal year. The most recent consolidated financial statements prepared in accordance with Japanese GAAP are those for the fiscal year ended March 31, 2025, and the transition date to IFRS is April 1, 2024.

1. Exemptions and mandatory exceptions under IFRS 1

   In principle, IFRS requires that companies adopting IFRS for the first time (hereinafter, "First-time Adopter") apply the standards required under IFRS retrospectively. However, for some of the standards required under IFRS, IFRS 1 First-Time Adoption of International Financial Reporting Standards (hereinafter, "IFRS 1") specifies standards for which the exemption is applied mandatorily and those for which the exemption is applied voluntarily. The impact based on the application of these exemptions is adjusted in retained earnings and other components of equity at the transition date.

   The exemptions that the Group applies in connection with the transition from Japanese GAAP to IFRS are as follows:

   ・Business combinations

   IFRS 1 permits a First-time Adopter to elect not to apply IFRS 3 Business Combinations (hereinafter,"IFRS 3") retrospectively to business combinations that occurred before the transition date to IFRS. If any business combination is restated upon retrospective application, all later business combinations shall be restated to comply with IFRS 3.

   The Group has elected not to apply IFRS 3 retrospectively to business combinations that occurred before the transition date. Accordingly, goodwill and equivalent to goodwill in equity method affiliates arising from business combinations that occurred before the transition date were recorded at the carrying amount under Japanese GAAP at the transition date.

   However, goodwill was tested for impairment as of the transition date irrespective of whether there was any indication of impairment.

   ・Use of deemed cost

   Under IFRS 1, the fair value of property, plant and equipment at the transition date can be used as deemed cost. The Group uses the fair value at the transition date as the deemed cost for certain items of property, plant and equipment.

   ・Designation of financial instruments recognized before the transition date

   IFRS 1 permits First-time Adopter to designate financial assets in accordance with IFRS 9 Financial Instruments (hereinafter,"IFRS 9") on the basis of the facts and circumstances that exist as at the transition date. The Group has designated equity instruments that were held as at the transition date as financial instruments measured at fair value through other comprehensive income (equity instruments) on the basis of the circumstances that existed as at the transition date.

   ・Leases (as lessee)

   IFRS 1 permits First-time Adopter to determine whether or not an arrangement contains a lease on the basis of facts and circumstances existing at the transition date. When First-time Adopter that is a lessee recognizes lease liabilities and right-of-use assets, it may measure lease liabilities and right-of-use assets for all of its leases at the transition date. The Group measured lease liabilities at the transition date at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the transition date. The Group measured right-of-use assets at the transition date at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to the leases recognized in the statement of financial position immediately before the transition date.

   ・Share-based payments

   IFRS 1 permits First-time Adopter to elect not to apply IFRS 2 Share-based Payment (hereinafter, "IFRS 2") to share-based payments vested before the transition date. The Group elected not to apply IFRS 2 to share-based payments vested before the transition date.

2. Mandatory exceptions to retrospective application under IFRS 1

   IFRS 1 prohibits the retrospective application of IFRS for certain items including "estimates," "derecognition of financial assets and financial liabilities," "hedge accounting," "non-controlling interests," and "classification and measurement of financial assets." The Group has applied IFRS to these items prospectively from the transition date.

3. Reconciliations

The reconciliations required to be disclosed under IFRS 1 are as follows. "Change in FYE" includes reconciliations that reflect the alignment of subsidiaries' fiscal year ending with the Group's as part of the transition to IFRS. "Reclassification" includes reconciliations that do not affect retained earnings and comprehensive income. "Difference in recognition and measurement" includes reconciliations that affect retained earnings and comprehensive income.

Reconciliation of equity as of April 1, 2024 (The transition date)

(Millions of yen)

(Millions of yen)

Reconciliations of equity as of December 31, 2024 (First nine months period of the previous fiscal year)

(Millions of yen)

(Millions of yen)

Reconciliations of equity as of March 31, 2025 (The previous fiscal year consolidated financial statements)

(Millions of yen)

(Millions of yen)

Reconciliations of profit or loss and comprehensive income for the first nine months period of the previous fiscal year (April 1, 2024 - December 31, 2024)

(Millions of yen)

Reconciliation of profit or loss and comprehensive income for the previous fiscal year (From April 1, 2024 to March 31, 2025)

(Millions of yen)

Notes on reconciliations

1. Reclassification

   1. Inventories

      Merchandise, finished goods, raw materials, and supplies, which were separately presented under Japanese GAAP are reclassified to "Inventories" under IFRS.

   2. Other financial assets (current assets)

      Foreign exchange forward contracts, etc., included in other (current assets) under Japanese GAAP are reclassified to "Other financial assets" (current assets) under IFRS.

   3. Other current assets

      Advance payment, suspense paid income tax and income taxes receivable, etc., which were included in other (current assets) under Japanese GAAP are reclassified to "Other current assets" under IFRS.

   4. Assets held for sale, Liabilities directly associated with assets held for sale

      Assets or asset group held for sale are reclassified to "Assets held for sale" and "Liabilities directly associated with assets held for sale" under IFRS.

   5. Property, plant and equipment

      Buildings and structures, machinery equipment and vehicles, and land, etc., which were separately presented under Japanese GAAP are reclassified to "Property, plant and equipment" under IFRS.

   6. Intangible assets

      Customer-related intangible assets which were separately presented under Japanese GAAP and right of trademark and software, etc., included in other (intangible assets) under Japanese GAAP are reclassified to "Intangible assets" under IFRS.

   7. Investments accounted for using equity method

      Investments accounted for using equity method included in investment securities under Japanese GAAP, are reclassified to "Investments accounted for using equity method" under IFRS.

   8. Other financial assets (non-current assets)

      Listed shares and unlisted shares included in investment securities under Japanese GAAP, and guarantee deposits and investment in capital, etc., included in other (investments and other assets) under Japanese GAAP, are reclassified to "Other financial assets" (non-current assets) under IFRS.

   9. Other non-current assets

      Long-term prepaid expenses, etc., included in other (investments and other assets) under Japanese GAAP, are reclassified to "Other non-current assets" under IFRS.

   10. Lease liabilities

       Lease liabilities included in other (current liabilities) under Japanese GAAP are reclassified to "Lease liabilities (current liabilities)" under IFRS.

   11. Borrowings

       Commercial paper separately presented under Japanese GAAP are reclassified to "Borrowings" under IFRS.

   12. Other financial liabilities (current liabilities)

       Construction accounts payable and accounts payable, etc., included in other (current liabilities) under Japanese GAAP are reclassified to "Other financial liabilities" (current liabilities) under IFRS.

   13. Other current liabilities

       Provision for bonuses which were separately presented under Japanese GAAP and accrued expenses, etc., included in other (current liabilities) under Japanese GAAP are reclassified to "Other current liabilities" under IFRS.

   14. Other non-current liabilities

       Deposits Received - Long Term, etc., included in other (non-current liabilities) under Japanese GAAP are reclassified to "Other non-current liabilities" under IFRS.

   15. Other components of equity

       Foreign currency translation adjustment, remeasurements of defined benefit plans, valuation difference on available-for-sale securities, and deferred gains or losses on hedges, which were separately presented under Japanese GAAP are reclassified to "Other components of equity" under IFRS.

   16. Non-operating income (losses), Extraordinary income (losses)

       Income and expenses, which were presented as non-operating income, non-operating expenses, extraordinary income, and extraordinary losses under Japanese GAAP, are included in "Finance income" and "Finance costs" for finance-related items, "Cost of sales" for impairment losses, etc., and "Other operating income", "Other operating expenses" and "Share of profit (loss) of investments accounted for using equity method" for the other items under IFRS.

   17. Income tax expense

       Income taxes - current and income taxes - deferred, which were separately presented under Japanese GAAP are reclassified in total as "Income tax expense" under IFRS.

2. Differences in recognition and measurement

1. Non-marketable equity instruments

   Under Japanese GAAP, non-marketable equity instruments were carried at cost. Under IFRS, they are designated as equity instruments measured at fair value through other comprehensive income in accordance with IFRS 9, and accordingly, equity instruments are measured at fair value, regardless of whether they are marketable or not, with the changes in fair value recognized through other comprehensive income.

2. Goodwill

   Under Japanese GAAP, goodwill was amortized on a straight-line basis over a reasonably estimated period during which its effect is expected to continue. Under IFRS, goodwill arising from business combinations is not amortized but tested for impairment each fiscal year.

3. Deferred tax assets and liabilities

   Under Japanese GAAP, deferred tax assets on unrealized profits from intercompany inventories transactions were measured using the seller's effective tax rate. Under IFRS, they are measured using the buyer's effective tax rate. As a result of the transition to IFRS, adjustments were made to deferred tax assets and liabilities due to temporary differences and the reassessment of the recoverability of deferred tax assets.

4. Employee benefits

   Under Japanese GAAP, service cost, interest expense, and expected return on plan assets for retirement benefits under defined benefit plans were recognized in profit or loss. Actuarial gains and losses and past service cost arising from the plans were also recognized in profit or loss in the fiscal year in which they were incurred.

   Under IFRS, on the other hand, current service cost and past service cost for retirement benefits under defined benefit plans are recognized in profit or loss, and interest expense is recognized in profit or loss at an amount calculated by multiplying the net defined benefit liability (asset) by the discount rate. Remeasurement of the net defined benefit liability (asset) is recognized in other comprehensive income, and directly reclassified to retained earnings from other components of equity when incurred without being recognized through profit or loss. Remeasurement consists of actuarial gains and losses on defined benefit obligations and return on plan assets (excluding interest income on plan assets).

   In addition, if defined benefit assets exceed obligation, the asset ceiling is determined as the present value of the future economic benefits available in the form of refunds from the plan or reductions in future contributions.

5. Deemed cost

   In applying IFRS, the Group elected to use the deemed cost exemption under IFRS 1 and measured certain items of property, plant and equipment at fair value as of the transition date.

6. Lease liabilities and right-of-use assets

   Under Japanese GAAP, leases as a lessee were classified as either finance leases or operating leases, and operating leases were accounted for in a similar manner to ordinary rental transactions. Under IFRS, leases as a lessee are not classified as finance leases or operating leases, and right-of-use assets and lease liabilities are recognized for lease transactions.

7. Provision for paid absence

   Unused paid absences, which were not required to be recognized under Japanese GAAP, are recognized as a provision under IFRS.

8. Levies

   Under Japanese GAAP, levies such as fixed asset taxes were expensed over the fiscal year in which the payment obligation arose. Under IFRS, the full amount is expensed when the obligating event occurs.

9. Inventories

   Under Japanese GAAP, some subsidiaries included transportation costs to deliver products to customers in the cost of inventories. Under IFRS, all costs except for those incurred in bringing the inventories to their present location or condition are recognized as "Selling, general and administrative expenses" when they are incurred.

10. Financial instruments (Foreign exchange forward contracts)

    Under Japanese GAAP, some subsidiaries designated allocation method for foreign exchange forward contracts. Under IFRS, these transactions are subject to cash flow hedge accounting.

11. Change in Scope of Consolidation

    Under Japanese GAAP, subsidiaries and affiliates of insignificant materiality were accounted for using the cost method. Under IFRS, such entities are included in the scope of consolidation as subsidiaries or equity-method associates.

12. Reconciliation of retained earnings

The impact of the reconciliations on retained earnings is as follows (figures in parentheses represent loss).

(Millions of yen)

Reconciliation of cash flows for the nine months ended December 31, 2024 (from 4/1/2024 to 12/31/2024) and the fiscal year ended March 31, 2025 (from 4/1/2024 to 3/31/2025)

There are no significant differences between the consolidated cash flows statements based on Japanese GAAP and the consolidated cash flows statements based on IFRS.