Financial Report 2025

KOMORI CORPORATION

Financial Report 2025

Fiscal year ended March 31, 2025

Six-Year Summary of Consolidated Financial Data

Komori Corporation and Consolidated Subsidiaries

Years ended March 31

Net sales Cost of sales

Selling, general and administrative expenses

Operating profit (loss)

Profit (loss) before income taxes

Profit (loss) attributable to owners of parent

Capital expenditure Depreciation and amortization R&D expenses

Total assets Total net assets

Interest-bearing debt

Per share:

Net income (loss)-primary Net assets

Cash dividends

Financial indicators:

Return on sales (Note 2) Equity ratio

Return on total assets (Note 3) Return on equity (Note 4)

Payout ratio (Consolidated basis)

Millions of yen

Yen

%

Number of employees at fiscal year-end

Number of shares outstanding at fiscal year-end (Note 6)

Debt-to-equity ratio (Note 5)

Times

Thousands of

U.S. dollars

(Note 1)

2025

U.S. dollars

(Note 1)

Notes: 1. U.S. dollar amounts are converted from Japanese yen for convenience only at the rate of ¥149.52 = US$1.00.

1. Return on sales = Operating profit/Net sales X 100

2. Return on total assets = Profit attributable to owners of parent/Average total assets X 100

3. Return on equity = Profit attributable to owners of parent/Average net assets X 100

4. Debt-to-equity ratio = Interest-bearing debt/Equity

5. Number of shares outstanding at fiscal year-end does not include treasury shares.

Financial Review

SCOPE OF CONSOLIDATION

The Komori Group consists of Komori Corporation and 25 subsidiaries. As of March 31, 2025, the consolidated financial statements included the accounts of the parent company and 24 majority-owned subsidiaries.

BUSINESS ENVIRONMENT

During the fiscal year ended March 31, 2025, the global economy benefitted from a gradual recovery trend. However, the outlook remained unclear due to the prolongation of the geopolitical risks in the Ukraine and the Middle East, in addition to uncertainties that began to loom over the economy following the U.S. presidential election.

REVENUES AND EARNINGS

In fiscal 2025, consolidated net sales increased 6.5% compared with the previous fiscal year to

¥111,050 million. Overseas sales increased 10.7% year on year to ¥77,128 million. This represented 69.5% of total net sales, an increase of 2.7 percentage points from the previous fiscal year.

The cost of sales represented 64.4% of total net sales, an improvement of 2.4 percentage points year on year, primarily due to the changing sales mix.

Selling, general and administrative (SG&A) expenses increased 9.0% year on year to ¥32,373 million, reflecting such factors as growth in corporate spending on advertising due to the Company's participation in an international exhibition held in May 2024, higher sales commissions in step with higher net sales, and costs associated with business combinations. The ratio of SG&A

Domestic Sales and Overseas Sales

(Billions of yen)

120

104.3

97.9

90

87.6

71.8

60

30

0

29.7

24.0

65.6

32.3

69.7

34.6

77.1

33.9

111.1

42.1

63.6

expenses to net sales increased 0.7 of a percentage point to 29.2%.

As a result, Komori posted operating profit totaling ¥7,118 million, an increase of 45.3% compared with the previous fiscal year.

Ordinary profit was ¥7,617 million, an increase of 12.1% compared with the previous fiscal year.

As a result of these and other factors, profit before income taxes amounted to ¥9,163 million, an increase of 57.8% compared with the previous fiscal year. This was due mainly to the recording of gain on sales of investment securities in the fiscal year under review.

Profit attributable to owners of the parent totaled ¥7,248 million, an increase of 56.2% compared with the previous fiscal year.

21 22 23 24

Domestic sales

Overseas sales

Ratio of Operating Profit

25 (FY)

Net income per share amounted to ¥136.62, compared with net income per share of ¥86.79 in the previous fiscal year.

DIVIDENDS

While considering the level of retained earnings required to prudently secure a robust operating platform and ensure future business growth from a long-term perspective, Komori positions maintaining the robust and stable return of profits to its shareholders as a key management priority. Moreover, Komori has stipulated in its Articles of Incorporation that it may carry out the payment of interim dividends in accordance with Article 454, Paragraph 5 of the Japanese Corporate Code. Accordingly, the Company maintains a basic policy of paying both an interim and a fiscal year-end dividend as

a vehicle for the distribution of surplus. The interim dividend is determined by the Board of Directors, while the fiscal year-end dividend is determined at Komori's Annual General Meeting of Shareholders.

Giving comprehensive consideration to the Company's most recent operating results, Komori paid a full-year dividend of ¥68 per share for the fiscal year under review made up of the interim dividend of ¥20 per share and the fiscal year-end dividend of ¥48 per share.

FINANCIAL POSITION

Total assets as of March 31, 2025 stood at ¥172,915 million, an increase of ¥5,327 million, or 3.2%, compared with March 31, 2024.

Key positive factors leading to the increase in total assets included an ¥8,358 million increase in cash and deposits; a ¥1,125 million increase in leased assets; a ¥1,050 million increase in machinery, equipment and vehicles; a ¥949 million increase in net defined benefit asset; and an

¥811 million increase in goodwill. Key negative factors affecting total assets included a ¥3,966 million decrease in investment securities, and a ¥3,923 million decrease in notes and accounts receivable-trade, and contract assets.

Total liabilities were ¥57,416 million, an increase of ¥4,294 million, or 8.1%, compared with March 31, 2024.

The primary factors that increased total liabilities included a ¥4,152 million increase in contract liabilities, a ¥1,288 million increase in income taxes payable, and a ¥1,077 million increase in noncurrent liabilities-other. The primary factors that decreased total liabilities included a ¥1,776 million decrease in deferred tax liabilities.

As of March 31, 2025, total net assets amounted to ¥115,499 million, an increase of ¥1,032 million, or 0.9% year on year.

Key positive factors affecting net assets included the cancelation of treasury stock totaling

¥1,947 million, an ¥1,873 million increase in retained earnings, and a ¥988 million increase in remeasurements of defined benefit plans. Key negative factors affecting net assets included a ¥3,480 million decrease in valuation difference on available-for-sale securities.

to Net Sales, and Ratio of Profit Attributable to Owners of Parent to Net Sales

(%)

7.0

5.8

6.5

6.4

5.8

4.7

4.5

2.6

(2.9)

(3.2)

8

4

0

-4

21 22 23 24 25 (FY)

Ratio of operating profit to net sales Ratio of profit attributable to owners of

parent to net sales

Return on Equity and Return on Total Assets

(%)

8

6.1

6.3

5.4

4.3

4

4.1

4.2

3.5

2.8

0

(1.5)

(2.1)

-4

21 22 23 24 25 (FY)

Return on equity

Return on total assets

Total Net Assets and Equity Ratio

(Billions of yen) (%)

Taking these factors into account, the equity ratio stood at 66.8%, down 1.5 percentage points from 68.3% as of March 31, 2024. Net assets per share rose ¥19.47 to ¥2,176.81 from ¥2,157.34 at March 31, 2024.

RESEARCH AND DEVELOPMENT EXPENSES

In the Komori Group's R&D activities, efforts are prioritized in accordance with its business strategies and, therefore, focused on the following subjects due to their higher importance:

(1) Developing technologies to increase the productivity and quality of offset printing; (2) Developing technologies related to security printing presses; (3) Developing a digital printing system (DPS) boasting high productivity; (4) Developing an innovative printed electronics (PE) technology; and (5) Developing environmentally friendly elemental technologies. The Group has made remarkable accomplishments in each subject.

The principal R&D activities conducted during the fiscal year under review are set out below.

1. Developing technologies to increase the productivity and quality of offset printing

   Komori and SCREEN Graphic Solutions Co., Ltd. (hereinafter, "SCREEN GA") have entered into an agreement to step up their partnership based on the KP-Connect alliance program. This move led us to launch automated workflow. The printing industry is now being called upon to promote optimal staff allocation and reduce burden placed on operators. This is in conjunction with counter-measures against chronic labor shortages across the entire manufacturing sector, which prompted printing companies to tackle the imminent need to push ahead with digital transformation (DX).

   With this in mind, Komori has been promoting automated, labor-saving pre-press solutions via the coordinated use of its "KP-Connect Pro" and "EQUIOS," a workflow-compatible Raster Image Processer developed by its partner SCREEN GA, which is tasked with delivering pre-press process facilities. These solutions will greatly contribute to the overall optimization of printing operations and productivity enhancement.

   The Company renovated the Komori Graphic Technology Center (KGC) in the Tsukuba Plant. As a result, the KGC made a fresh start as a virtual "smart printing factory" (hereinafter the "KGC Smart Factory"). The printing industry is currently facing issues arising from the diversification of printing needs, including those involving small-lot printing with short turnarounds, as well as surging costs for printing supplies and energy, even as it struggles to secure human resources.

   Against this backdrop, the Komori Group not only endeavors to improve the productivity of its printing machinery itself but also aims to help customers enhance the overall productivity of their printing factories via transition to a "smart factory." The KGC Smart Factory is equipped with a

   150

   80

   50

   100

   114.5 115.5

   103.4 107.1

   97.7

   70

   66.8

   60

   0

   50

   8

   65.

   67.6

   68.3

   64.6

   21 22 23 24 25 (FY)

   central control room enabling operators to conduct centralized monitoring of overall factory status and remotely issue orders to control facilities. With "KP-Connect Pro" used as core software, the KGC Smart Factory makes it possible to automatically coordinate all printing workflows, which start with scheduling and range from pre-press, press, and post-press processes, to color management, quality inspections and on-premise logistics.

   Komori developed "LITHRONE GLX29 advance," a 29-inch sheet-fed offset printing press. This model boasts stable sheet feeding and output performance and is capable of high-speed printing, even when printing on thick paper. Thus, "LITHRONE GLX29 advance" is expected to help users reduce makeready times, cut back on the number of sheets wasted, and realize a world-leading level of ROI. In addition, the layout of the model's information display installed at its operation stand has been updated to offer even more robust support to operators and otherwise enhance their operational efficiency. Furthermore, this model adopts environmentally friendly technologies to curb energy consumption, paper waste and greenhouse gas (GHG) emissions. As such, "LITHRONE GLX29 advance" is an eco-friendly offset printing press.

2. Developing technologies related to security printing presses

   Komori was chosen to receive the Best New Housenote Award under the High Security Printing EMEA program. The award-winning piece was a housenote (a special printing sample) the

   Total net assets

   Equity ratio
   
   

   Company has created to commemorate the centennial of its founding via the use of the same security printing technologies as those used in the production of genuine banknotes. The design utilizes all of the security printing technologies Komori has amassed over the years and was printed using its "CURRENCY LC" offset printing press, the "CURRENCY IC" intaglio press, and the "Impremia IS29s" digital printing press. In addition, printed images on the housenote were created through the integration of such cutting-edge technologies as digital printing and authentication using smartphone apps with proven anti-counterfeiting technology. Thus, Komori demonstrated the future potential of its anti-counterfeiting technology.

3. Developing a digital printing system (DPS) boasting high productivity

   Komori's "J-throne 29" is now ready to meet market expectations as it is capable of empowering users to realize a world-leading level of ROI. Komori developed this B2-size sheet-fed UV inkjet digital printing press in the previous fiscal year, unveiling it at drupa2024. In the fiscal year under review, Komori conducted final adjustments of this model to ensure its smooth release to the market. In addition to achieving a printing speed of 6,000 sheets per hour (single-sided printing), J-throne 29 was created by integrating conventional imaging technologies with unique image forming functions developed by the Company. Moreover, this model employs newly developed

   specialized UV inks compatible with an extensive range of media while boasting high productivity. In May 2025, Komori exhibited this model at China Print 2025 held in Beijing.

4. Developing an innovative printed electronics (PE) technology

   The Company signed a comprehensive partnership agreement with Yamagata University, updating the previous agreement to expand the scope of partnership to include fundamental academic research, commercialization, human resource exchange and interaction, and the joint use of facilities. To date, Yamagata University and Komori have worked in partnership to take on such R&D subjects as electrode printing for organic ELs and conducive wiring printing for flexible hybrid electronics (FHE). Looking ahead, the Company intends to promote joint R&D of thin-film coating technology, a new technological field, in addition to continuing to work together with this university to develop ultrafine-line circuit printing technologies. Specifically, Yamagata University and the Komori Group are expected to take on the development of materials used for printing and printing equipment, respectively, with their plans calling for jointly designing printing processes and producing prototypes in order to create next-generation solar cells and secondary batteries.

5. Developing environmentally friendly elemental technologies.

Komori is proactively engaged in R&D centered on countering climate change.

The Company has endeavored to create offset presses capable of achieving both higher printing quality and lower energy consumption by identifying the optimal order of ink rollers, developing highly efficient air systems for blowers and commercializing humidification systems for sheet suppliers. With the installation of these functions, Komori's offset presses achieved reductions in GHG emissions, in step with decreased energy consumption, even while maintaining high printing quality and robust productivity.

Total R&D expenses in the fiscal year under review amounted to ¥4,043 million, an increase of 8.3% year on year. This was equivalent to 3.6% of total net sales.

CAPITAL EXPENDITURE, DEPRECIATION AND AMORTIZATION

Total capital expenditure in fiscal 2025 was ¥2,600 million, an increase of ¥603 million compared with the previous fiscal year. Komori conducted capital expenditure aimed mainly at developing new businesses. Depreciation and amortization increased ¥330 million to ¥2,297 million.

Looking ahead, Komori plans to engage in capital expenditure totaling ¥2,900 million in fiscal 2026.

CASH FLOWS

Net cash provided by operating activities in the fiscal year under review amounted to ¥17,018 million, a turnaround of ¥25,069 million from net cash used in operating activities of ¥8,051 million in the previous fiscal year. Principal cash inflows included the posting of profit before income taxes totaling ¥9,163 million, as well as an ¥8,590 million decrease in trade receivables, and a ¥2,297 million adjustment for depreciation and amortization. Major cash outflows were a ¥1,764 million gain on sales of investment securities, and income taxes paid of ¥1,358 million.

Net cash used in investing activities was ¥4,781 million, a negative turnaround of ¥5,265 million from

¥483 million provided by investing activities in the previous fiscal year. Main cash outflows included

¥2,569 million in payment for acquisition of businesses ¥2,276 million in purchase of property, plant and equipment and intangible assets, ¥2,138 million in payments into time deposits, and ¥1,066 million in purchase of investment securities. Principal cash inflows included ¥1,878 million proceeds from sale of investment securities, ¥968 million in proceeds from withdrawal of time deposits, and ¥443 million in proceeds from sale of property, plant and equipment and intangible assets.

Net cash used in financing activities totaled ¥4,310 million, compared with ¥4,874 million used in

Capital Expenditure, Depreciation and Amortization

(Billions of yen)

3.0

1.0

0.5

0

1.5

2.5

2.4

2.3

2.3

2.0

2.0 2.0

1.9 1.9

1.6

1.4

2.6

21 22 23 24 25 (FY)

Capital expenditure

Depreciation and amortization

Cash Flows

(Billions of yen)

20

(5)

15

10

8.2

9.3 9.3

5

4.5

0

0.5

(2.2)

(1.4)

(0.5)

(4.1)

(2.9)

(4.9) (4.8)

(4.3)

17.0

financing activities in the previous fiscal year. With the pace of the increase in net cash used slowed somewhat, the volume of the year-on-year increase recorded in the fiscal year under review was

¥564 million smaller than the volume of year-on-year increase recorded in the year earlier. The

(10)

(8.1)

21 22 23 24 25 (FY)

principal components of cash outflows were ¥3,461 million in the payment of cash dividends, a ¥407 million net decrease in short-term loans payable, and ¥353 million in repayments of lease obligations.

As a result of the aforementioned activities, cash and cash equivalents at March 31, 2025 stood at ¥57,400 million, an increase of ¥7,736 million, or 15.6%, compared with March 31, 2024.

BUSINESS AND OTHER RISKS

In analyzing matters associated with its operational and financial status, Komori's management has identified primary risks that could materially impact the Company's financial position, business performance and cash flows. These risks are discussed below. In addition, forward-looking statements included in the following descriptions are compiled based on the Komori Group's judgment as of the end of the fiscal year under review.

1. Risks related to the business environment

(1) Shrinkage of the offset printing market

To date, the Komori Group's business operations have been largely focused on the manufacture and marketing of offset printing presses for publishing and other commercial printing. However, the printing industry has long seen a decline in demand for these printing services especially in Europe, the United States and Japan, reflecting the widespread use of the Internet and e-books. Because of this, sales of offset printing presses for commercial printing have been on a downtrend. Looking

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities