【Delayed】A financial results briefing session was held for investors（1Q of the Fiscal Year Ending May 31, 2025）

INTER ACTION Corporation

1Q 5/2025

Financial Results Presentation

11th October 2024

Code: 7725

Note: We kindly request that participants refrain from recording the audio or images in this financial results presentation

• This document is the script for the 1Q 5/2025 Financial Results Presentation held on the 11th October 2024.
• The information contained in this document includes forecasts of future business performance etc. These forecasts were determined by the Group based on information available at the time of publication, and contain a number of potential risks and uncertainties.
• Please be aware that actual results will be subject to future market trends and economic conditions, and could differ significantly from the forecasts in this presentation.
• We have made every effort to ensure that the information provided in this presentation is correct, but we do not guarantee its accuracy or completeness. Please also note that the contents may be changed or deleted without notice.
• It is prohibited to duplicate or repurpose the contents published in this presentation without prior consent.

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Summary of Financial Results

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• To begin, we will outline the Group’s 1Q results.

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1Q Results

KEY POINTS

• Consolidated 1Q sales and OP increased YoY, mainly due to strength in the IoT Related Business.
• IoT related business: Domestic sales of our new illuminator model and Pupil Lens Module® were strong.
• Environmental Energy related business: Sales of drying deodorizer equipment and maintenance for exhaust gas treatment systems were weak.
• Promotion of Industry 4.0 business: Precision vibration isolation system and gear testing equipment sales were weak.

• In the 1Q, we recorded ¥2.35bn sales, ¥814m OP, ¥779m RP, ¥529m NP, ¥48.62 EPS.
• Sales increased 35.3%YoY and OP increased 285.7%YoY.
• In the IoT related business, domestic sales of our new illuminator model and Pupil Lens Module® were strong.
• In the Environmental Energy related business, sales of drying deodorizer equipment and maintenance for exhaust gas treatment systems were weak.
• In the Promotion of Industry 4.0 business, precision vibration isolation system and gear testing equipment sales were weak.

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FY Forecast Progress

KEY POINTS

• We expect FY 5/25 sales to be skewed towards the 1H.
• 1Q results included some IoT related projects that were originally scheduled to be delivered in the 2Q.
• We raised our forecast due to the reversal of provisions for doubtful receivables in the 1Q 5/25, and ahead of plan deliveries in the IoT related business. However, it is only a slight revision in light of the significant YoY decline in orders and order backlog, particularly in the IoT related business.
• The decline in orders and backlog was assumed in the original forecast.

• Based on 1Q strength, we raised our FY 5/25 forecast.
• However, it is only a slight revision, in light of the significant YoY decline in orders and order backlog, particularly in the IoT related business.
• In our revised forecast, we are projecting ¥6.56bn sales, ¥987m OP, ¥965m RP, ¥652m NP, and ¥59.88 EPS.

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I o T R e l a t e d B u s i n e s s

IoT Related Business

• In the IoT related business (which primarily consists of image sensor inspection use illuminators and Pupil Lens Modules®), sales to our main domestic customer were strong.
• As a result, both sales and divisional profit increased YoY.
• However, there was a reactionary YoY decline in orders and order backlog.
• In the 1Q 5/24, illuminator sales were mainly for our existing low-margin models. In the 1Q 5/25, profitability improved as sales shifted to new models.
• Following strong domestic capex demand last year, we anticipate a slowdown, and expect visibility to remain limited regarding the capex situation at our main overseas customer.
• In response to this situation, we have reviewed our organizational structure and established the ‘VG Strategy Office’. Our goal is to create new value beyond our existing products and establish businesses that do not rely on customer capex trends.

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• In the Environmental Energy related business (which primarily consists of drying deodorizer equipment and exhaust gas treatment systems), both drying deodorizer equipment sales and high-marginmaintenance sales for exhaust gas treatment systems were weak, causing sales and OP to decline YoY.

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Sales decreased due to weak precision vibration isolation system and gear testing system sales.

However, OP increased due to sales mix improvement in precision vibration isolation systems.

• In the Promotion of Industry 4.0 business (which primarily consists of precision vibration isolation systems and gear testing systems, & a portion of the Laser business), sales declined YoY. This was due to weak precision vibration isolation system sales to domestic customers and particularly sluggish overseas gear testing system sales.
• However, for precision vibration isolation systems, the proportion of high-margin product sales improved YoY, resulting in Promotion of Industry 4.0 business OP increasing.
• We aim to add value to our existing precision vibration isolation system equipment, and have made proposals for our vibration monitoring app to Chinese & South Korean customers and installed demo equipment. Following positive feedback for the demo equipment, we have received dozens of additional inquiries.
• For gear testing systems, we have received orders for new gear roughness testing equipment and plan to participate in an exhibition this autumn.

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Progress Updates by Division

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• We will now explain how each of our businesses is progressing.

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※Chat GTPで作成

• Guided by our corporate slogans, 'Client First' and 'EXCELSIOR, LABORAMUS!' ('Let's work to reach new heights!'), we strive to be a creative and innovative company that consistently develops groundbreaking systems each year that transform society.

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