FY2025 First Quarter Financial Results Supplementary Briefing Materials

Consolidated net sales increased 4.7% year on year, driven by the Americas and Europe. Consolidated operating profits increased significantly, up 34.0% year on year, due to further improvements in profitability in the three regions other than Japan, resulting in a consolidated operating profit margin of 10.9% at the end of the first quarter. Although the operating profits progress ratio at the end of the first quarter was 31.0%, we will closely monitor the second quarter and beyond, considering the tendency for results to be concentrated in the first half of the fiscal year. The overview by region is as follows.

Region

Year-on-year

Sales

Operating profits

Japan

Decreased in sales and profits

• Shrink label(SSL) sales increased mainly due to price revisions implemented last year.

• PS label(PSL) experienced a decrease in revenue within expectations due to strategic product replacement through portfolio management and the impact of customers' promotional activity restraint.

• Spouted pouch(Pouch) increased sales due to strong demand for beverages and daily necessities.

• Although new orders for machinery increased, sales decreased due to the completion of

the changeover projects.

• SSL increased due to the impact of price revisions and the continued implementation of productivity improvement measures.

• PSL decreased in profit due to the impact of reduced top-line.

• Pouch increased in profits due to growth in top-line and the effects of production allocation adjustments.

• Machinery decreased in profits due to a decrease in after-service and changeover work.

• Squeeze earnings due to base-up wage increases are a key challenge to be addressed.

Americas

Increased in

sales and profits*

• SSL increased sales due to advance orders from customers anticipating the impact of US tariff policies.

• Pouch division started production and shipment of "Inverted pouches".

• Machinery increased sales due to orders for environmentally friendly shrink tunnels and the advance completion of inspections.

• At the North Carolina factory, the equipment installed as part of the Day 1 investment for SSL is now in full operation. This established SSL's three-factory system and solidified its profitability. The Day 2 investment is scheduled to begin operation around September 2025.

• Machinery sales increased due to strong sales of shrink labelers, parts, and services.

• Across the Americas, the impact of US tariff policies on performance is as expected and minimal.

Europe

Increased in sales and profits*

• SSL has seen strong order growth from both global and local customers, leading to increased sales.

• PSL increased due to a recovery in demand for multilayer labels.

• In the Machinery biz, orders for PSL labelers (for the pharmaceutical market) manufactured at the Italian factory, where investment expansion is underway, were strong. Shrink labelers also performed well, resulting in increased sales.

• In addition to top-line growth across all three businesses(SSL, PSL, Machinery), significant profit growth was achieved through cost-cutting measures targeting fixed costs, which had been a challenge in Europe.

• Machinery saw increased profits due to strong sales of high-profit PSL labelers for the pharmaceutical market and strong service sales.

ASEAN

Decreased in

sales, increased in profits*

• SSL slightly decreased in sales due to stagnant demand for beverages in Thailand.

• Pouch decreased in sales due to a decline in order volumes of daily necessities.

• Continued cost reductions in manufacturing, including raw material and fixed costs, led to increased profits.

• The generated profits will be used to promote investment in priority areas and aim for top-line growth.

(Millions of yen)

FY2024

1st quarter

FY2025

1st quarter

Increase/Decrease

FY2025 Full

Vs. Forecast

(Amount)

(%)

Year Forecast

Progress rate

Net sales

52,484

54,943

+2,458

+4.7%

216,000

25.4%

Operating profits (Operating Profit

4,483

6,005

+1,522

+34.0%

19,400

31.0%

Margin)

(8.5%)

(10.9%)

(+2.4pt)

(9.0%)

(+1.9pt)

Ordinary profits (Ordinary Profit

5,188

5,635

+446

+8.6%

19,700

28.6%

Margin)

(9.9%)

(10.3%)

(+0.4pt)

(9.1%)

(+1.2pt)

Net profits

3,657

4,334

+677

+18.5%

17,300

25.1%

(Net Profit Margin)

(7.0%)

(7.9%)

(+0.9pt)

(8.0%)

(△0.1pt)

Foreign Currency Translation

Rate (average)

USD

148.63

152.55

+2.6%

145.00 +5.2%

EUR

161.33

160.55

△0.5%

155.00 +3.6%

(Millions of yen)

FY2024

1st quarter

FY2025

1st quarter

Year-on-year change

Change

Rate of change

Excluding forex impact Rate of change

Japan

26,477

26,436

△40

△0.2%

-

Shrink label

13,147

13,696

549

+4.2%

-

PS label

2,325

1,929

△395

△17.0%

-

Spouted pouch

5,878

6,059

180

+3.1%

-

Machinery

1,275

1,186

△88

△6.9%

-

Others

3,850

3,564

△286

△7.4%

-

Americas

15,107

16,481

1,374

+9.1%

+6.3%

Shrink label

13,132

14,029

896

+6.8%

+4.1%

PS label

652

662

9

+1.5%

△1.1%

Spouted pouch

7

46

38

+493.3%

+478.0%

Machinery

1,315

1,743

428

+32.6%

+29.2%

Europe

8,617

9,852

1,235

+14.3%

+14.9%

Shrink label

4,513

4,948

434

+9.6%

+10.2%

PS label

1,547

1,906

358

+23.2%

+23.8%

Machinery

2,555

2,997

442

+17.3%

+17.9%

ASEAN

5,074

4,608

△465

△9.2%

△11.5%

Shrink label

2,517

2,539

22

+0.9%

△1.7%

PS label

37

8

△29

△77.7%

△78.3%

Spouted pouch

2,300

1,960

△339

△14.8%

△16.9%

Machinery

205

83

△122

△59.4%

△60.5%

Others

13

16

2

+20.3%

+17.2%

Eliminations

△2,792

△2,436

355

Consolidated net

52,484

54,943

2,458

+4.7%