Nagase : Fiscal Results (nagase2025 IR Full)

About this update from Nagase & Co., Ltd.

Nagase & Co., Ltd. Integrated Report 2025 ztkNAGASE Nagase & Co., Ltd. Osaka Head Office: 1-1-17, Shinmachi, Nishi-ku, Osaka City, Osaka 550-8668, Japan Tel: (81) 6-6535-2114 Tokyo Head Office: Tokiwabashi Tower, 2-6-4 Otemachi, Chiyoda-ku, Tokyo 100-8142, Japan Tel: (81) 3-3665-3021 Nagoya Branch Office: 3-28-12, Meieki, Nakamura-ku, Nagoya City, Aichi, 450-6430, Japan Tel: (81) 52-963-5615 https://www.nagase.co.jp/english/ Integrated Report 2025 ANAGASE Delivering next. P. 82 NAGASE Cup, an inclusive track and field tournament P. 82 Sponsorship of the Formula E World Championship P. 39 Establishment of Nagase Diagnostics P. 82 Exhibition at Kumamoto SDGs Mirai Park NAGASE Integrated Report 2025 01 P. 60 Co-creation Research Institute with Tohoku University NAGASE 2024-2025 P. 36 Launch of a developer recycling business P. 41 CVC investments P. 59 Biofertilizer technology to support the future of Brazilian agriculture 02 NAGASE Integrated Report 2025 P. 64 1st One NAGASE Europe Sustainability Summit | About NAGASE | Table of Contents | Integrated Report 2025 Table of Contents On the issuance of NAGASE Integrated Report 2025 The NAGASE Group has created this integrated report to About NAGASE 01 NAGASE 2024-2025 03 Table of Contents 04 Purpose/Values 05 Where We Are 07 NAGASE's History 09 Strengths and Developed Capital Our Approach to Value Creation 13 CEO Message 19 CFO Message 23 Medium-Term Management Plan 27 Materiality Implementing Value Creation ―Reform of Our Profit Structure- 31 Message from the Directors in Charge of Sales 33 Initiatives in the Four Areas of Foundation, Focus, Development, and Improvement 43 List of Segments 45 NAGASE's Unique Functions 46 Trading Function―Messages from General Managers 53 Manufacturing Function 55 R&D Function 57 From the Front Lines of Combining Functions to a Sustainable Society Implementing Value Creation ―Transforming Our Corporate Culture / Functions Supporting Reforms- 63 Roundtable on Sustainability Strengthening Global Collaboration Carbon Neutrality Engagement Supply Chain Management and Respect for Human Rights NAGASE Integrated Report 2025 03 69 Roundtable Discussion on the Corporate Culture and Corporate Reform 73 Human Resource Strategy 75 People/Environment/Culture 81 Communication with Stakeholders Governance 85 Management Structure 87 Interview with the Outside Directors 90 Corporate Governance 93 Sustainability Management 94 Risk Management and Compliance Data Section 97 11-Year Financial Highlights 99 Financial Section 139 Non-Financial Highlights 140 Corporate Information help shareholders, investors, and other stakeholders better understand the Group's wide-ranging business activities and growth-oriented management approach. In preparing this fiscal year's report, we focused on explaining the transformative changes and focused business investments we have made, as well as how we combine the Group's resources to build upon these efforts and further accelerate growth. By verbalizing the spirits and strengths NAGASE has cultivated over 190 years, as well as the unique value these strengths allow NAGASE to create, and clearly conveying these ideas to stakeholders, we will improve our communication efforts in the hope it leads to the further enhancement of our corporate value. We would greatly appreciate your opinions and other feedback. Referenced Guidelines: ・The International Integrated Reporting Framework developed by the International Integrated Reporting Council (IIRC) • Ministry of Economy, Trade and Industry's Guidance for Collaborative Value Creation Period Covered: April 2024-March 2025 (FY2024) Some information after March 2025 is also included. Organizations Covered: Nagase & Co., Ltd. and the NAGASE Group About the Front Cover Integrated Report 2025 NAGASE Integrated Report 2025 We used our fiscal 2025 corporate advertisement as the front cover. NAGASE believes that the Earth is borrowed from future generations. For this reason, we see sustainability as "returning the Earth to future generations in better condition than we received it." We chose the catchphrase "the Earth is borrowed from future generations" to convey our desire to contribute to society by conducting business not only with a focus on the present, but also with an eye toward the future. We continue to use the artwork of Ilya Kuvshinov for our corporate advertisements, having first adopted his work in fiscal 2019. | About NAGASE | Purpose/Values | 04 NAGASE Group's Management Philosophy Maintaining the highest standards of integrity We recognize our responsibility to society and offer beneficial products and services while maintaining the highest standards of integrity. Through our growth, we will contribute to society and enrich the lives of our employees. Over a period of more than 190 years, NAGASE has constantly maintained the highest standards of integrity, delivering the products and services that are needed by our customers, and by society as a whole. What we have built up over that time is the trust that our partners and society place in us. Going forward, besides working to solve the problems of "today," the NAGASE Group will be delivering "next" by addressing the new problems affecting society and the whole of humanity through the provision of new materials. "The Earth is borrowed from future generations." To help realize a sustainable future society, NAGASE will continue working together with partners throughout the world to build a future where people can live with peace of mind. NAGASE in Numbers (As of end of March 2025) NAGASE's Business and Functions Consolidated net sales 944.9 billion yen Overseas gross profit ratio 54.1 % Five business segments We are developing our business broadly from upstream to downstream on supply chains in various industries. ▶ List of Segments P. 43 Functional Materials Advanced Materials & Processing Operating margin by industry Electronics & Energy Mobility Life & Healthcare Founded 1832 ▶ NAGASE's History P. 7 Manufacturing 21 % ▶ CFO Message P. 19 ▶ 11-Year Financial Highlights P. 97 Trading 79 % Number of bases 101 companies in 25 countries and regions Added value born from the three functions We are creating added value through masterful use of manufacturing and R&D functions in light of the needs of customers and society grasped through the information and networks gained through our trading function. NAGASE Integrated Report 2025 05 Providing materials and solutions that make full use of NAGASE's unique functions 06 Number of partner corporations 18,000 Customer and societal issues Trading function Manufacturing function NAGASE Integrated Report 2025 Approx. companies Employees (consolidated) 7,484 ▶ NAGASE's Human Resource Strategy P. 73- and needs Achieving a sustainable society R&D function Solving problems through development of new materials and uses Solving problems through NAGASE's original materials ・Innovative materials and Technologies ・Manufacturing and quality Management ・Materials customization Working with our partners to solve problems ・Ability to extract perceptive insights from information ・Exploring issues and identifying matching opportunities ・Global network Our Expansion and Growth 1832- Founding In 1832, founder Denbei Nagase established Urokogataya, a wholesale business that handled safflower, funori seaweed, and starches in Nishijin, Kyoto. This is the beginning of the NAGASE Group's long history, which continues to this day. Later on, we established a foothold in the chemical industry by starting to handle synthetic dyes in addition to natural dyes. Safflower: founding symbol 1950 Expanding from natural dyes to synthetic dyes Commencing business with major overseas manufacturers Chemical 1901 Established branch office in Lyon, France Forging ties with Ciba and UCC Synthetic dyes not available in Japan were imported from Ciba in Switzerland along with the methods and techniques for their use. In 1930, through transactions with Union Carbide Corporation, we expanded our handling of raw materials for paints. Expanding manufacturing, processing and R&D functions Becoming a group of experts with insight and experience in the chemical industry, domestically and overseas 2001 Creation of Nagase ChemteX through the merger of four companies 1970 The merger of Teikoku Kagaku Sangyo, Nagase Kasei Kogyo, Nagase Seikagaku Kogyo, and Nagase Ciba resulted in the birth of a core chemical manufacturer. Five business Segments Functional Materials ➡See pp. 46-47 for details Toward our Strengthening Group functions through M&A and other means 200 th year Founder Denbei Nagase Commencement of epoxy resin imports from Ciba Began importing epoxy resin, which was not widely distributed in Japan at the time, from Ciba Inc., supporting the long-term, high-level economic growth of Japan with its diverse uses. 1923 Commencement of movie film imports from Eastman Kodak in America To bring entertainment to a Japan left reeling by the Great Kanto Earthquake, we signed an exclusive agency agreement and began importing movie film. Established Nagase Ciba as a joint venture with Ciba Inc. Commencement of epoxy resin production. Import and sale of photoresist from Eastman Kodak in America Introduced Japan to photoresists, which were used in the photolithography process in film development technology. Aiming to develop the domestic semiconductor industry, we began the NAGASE Microelectronics Seminar in 1974. Acquisition of PacTech as a wholly owned subsidiary 2015 Establishment of electronic parts and semiconductor manufacturing technologies that support development of every industry 1982 Commencement of production of developer and stripping agent Established a photoresist refining plant in former Nagase Chemicals. Also, began production of developer and release agent. Electronics & Energy ➡See pp. 49-50 for details June 2025 Acquired the Asian high-purity chemical business of SACHEM, Inc. (P. 36) 1917- Establishment of Nagase Shoten NAGASE Integrated Report 2025 07 Becoming a full-fledged chemical trading company As we entered the 1900s, we were spurred by the idea that "if only something like this existed, it would help customers and society" to venture overseas and find them, establishing branch offices in Lyon, France and New York, USA. When we were sure of the value of a technology or product we found, we would negotiate tenaciously to bring it back to Japan, where we would study the technology in order to develop and manufacture it ourselves. Our ability to leverage such discernment, the know-how we accumulated, and the networks we built to expand our business across disparate fields is what led to our current broad range of business domains. Innovating by using enzymes to soften dyed fabric 1968 Exclusive agency agreement with GE (General Electric Company) We began trading engineering plastics with GE. Biotechnology Expansion into biotechnology Began import of industrial use enzymes from Europe for use in glue removal or de-gluing for textile products. 1971 Established Engineering-Plastics Corporation (EPL) as a joint venture with GE. Commencement of engineering plastics production and sales. 1939 Manufacturing enzymes Put effort into domestic production of enzymes, succeeding in 1939 in production of a high-quality glue remover (enzyme) for staining which exceeded products from overseas. Expanded into manufacture of enzymes for industrial use and for food use. Food Establishment of the 2007 Nagase Application Workshop 2020 Acquisition of Interfacial Consultants as a subsidiary 2014 Acquisition of Totaku Industries (now Nagase RooTAC Industries) as a wholly-owned subsidiary 1980s and beyond-Exporting to Asia, increasing our Asian market share 1990 Established a biotechnology-related research and development center (Presently Nagase Bio-Innovation Center) 2012 Formed subsidiary Nagase Viita (formerly Hayashibara) Enhancement of biotechnology functions. 2019 Made Prinova a subsidiary Advanced Materials & Processing ➡See p. 48 for details Mobility NAGASE Integrated Report 2025 08 ➡See p. 51 for details July 2025 Acquired the diagnostics business of Asahi Kasei Pharma Corporation (P. 39) (Establishment of Nagase Diagnostics) Life & Healthcare ➡See p. 52 for details April 2025 Acquisition of the trading company Aplinova (Brazil) by Prinova (P. 38) Our Strengths NAGASE has built its identity with the trust it has earned by maintaining the highest standards of integrity and maintaining a network that can reach technologies and businesses around the world. NAGASE's people 09 Financial assets Non-financial assets Network and information NAGASE has solutions As times have changed, we have created high value-added services by addressing society and customer problems with solutions that only NAGASE can provide. Honing our foresight and discernment skills and cultivating on-site prowess allows us to be involved in a wide range of upstream and downstream areas in the supply chain, having built the trust required by society and customers and a network that provides reach to businesses and technologies around the world. Our customer comments of "NAGASE has solutions!" are testament to our progress. Manufacturing NAGASE's ability to create is also what makes us unique Beginning with the establishment of the joint venture Nagase-CIBA Ltd. (now Nagase ChemteX Corporation) in 1970, we have continuously expanded and deepened our manufacturing functions. Having manufacturing functions within the Group enables us to speedily propose materials tailored to the specific challenges and needs of each customer. These accumulated skills have cemented our position as a sought-after partner for management strategy not only for present but also looking to the future. NAGASE is both a trading company and a manufacturer. Number of partner corporations: Approx. 18,000 companies Number of bases globally: 101 companies in 25 countries and regions Number of manufacturing bases: 40 companies in 15 countries and regions Main manufacturing functions: P. 53 10 R&D NAGASE Integrated Report 2025 NAGASE Integrated Report 2025 Enhancing and connecting the value of materials A strong financial structure Stability, growth, and efficiency With a high shareholders' equity ratio, we have a strong financial foundation that can withstand changes in the external environment. We also consistently generate operating cash flow, achieving both financial stability and growth. We promote management that emphasizes capital efficiency indicators such as ROE and ROIC, and strive to sustainably increase corporate value through asset portfolio optimization. Shareholders' equity ratio: 49.4 % Total return ratio: 1 00 % (Fiscal year ended March 31, 2025) Rating: Rating and Investment Information, Inc. (R&I) Long-term A Short-term a-1 Since our early days of importing chemical dyes, we have maintained an innovative company culture, including establishing an in-house laboratory for application-specific R&D in the 1930s. We have research bases both inside and outside Japan and are committed to creating new businesses that leverage our high level of expertise and knowledge in areas such as fundamental research, material application development, and technical evaluation. Our researchers also frequently interact with researchers from different research fields, attending each other's research presentations. Most recently, we have been focusing on collaboration with external parties, such as launching joint research projects with Tohoku University. Number of patent applications by the Group over the past 20 years (domestic applications in Japan) Some 1,500 Number of industry-government-academia joint application partners over the past 20 years More than 200 Main R&D function: P. 55 Our people are the main players that create value and assets Our people have grown through interactions with society and customers while maintaining the highest standards of integrity. Today, our company is built on the drive to be a pioneer across oceans, the ability to overcome numerous changes in the environment in the face of challenges such as a world-encompassing war and economic crises, and the ability to always keep our radar up for unique ideas. To achieve further growth based on individual people, which is NAGASE's greatest strength, we are working to visualize tacit knowledge, develop cross-organizational linkages, and build initiatives that develop people. NAGASE's management philosophy and origins Maintaining the highest standards of integrity Employees (consolidated) 7,484 Our Approach to Value Creation Towards 2032, Our 200th Year While continually asking ourselves "Who is NAGASE?", we will strive to engage in growth-oriented reforms and the maximization of management resources. 11 12 NAGASE Integrated Report 2025 NAGASE Integrated Report 2025 CONTENTS 13 CEO Message 19 CFO Message 23 Medium-Term Management Plan 27 Materiality Combining individual strengths and Group resources for renewed growth as One NAGASE Laying the groundwork for change, and transitioning to a lean organization We have made significant strides in strengthening our organization over the three years I have served as president. In the first year, fiscal 2023, we advanced the core measures of medium-term management plan, ACE 2.0 . That year, we launched the QUICK WINS initiative to build a strong foundation resilient to changing business conditions by maximizing and optimizing the use of our core management resources of people, things, money, and time while refining our business and financial portfolios, enhancing management governance, and restructuring our human resources portfolio. We introduced wide-ranging changes, including reorganizing the business departments and group companies, business planning processes, committee structures, and management policies. The next year, we used that foundation to steadily shift to a lean management structure by paring down inefficiencies, advancing ROIC management to improve capital efficiency, and eliminating underperforming businesses. We also began developing a Return on Time approach, assessing how much value can be generated through the most efficient use of limited time, and set fiscal 2025 as the year we would put the policy into action. In fiscal 2024, we ultimately posted record-high gross profit and raised gross profit margins in every business segment. We also achieved record-high operating income despite higher selling, general and administrative expenses caused by rising logistics costs, which pushed up selling and labor costs. I believe we are well positioned to attain the key goal indicators (KGIs) for fiscal 2025, the final year of our ACE 2.0 plan. We are in this favorable position because of the hard work of employees at all of our business sites. The QUICK WINS initiative is progressing essentially as we planned, as can be seen in the graph below showing NAGASE Integrated Report 2025 13 QUICK WINS status in fiscal 2024 Develop our business and financial portfolios Strengthen workplace capabilities Growth strategies Eliminate unprofitable businesses Implemented in fiscal 2023 ■ Implemented in fiscal 2024 Strengthen workplace capabilities and improve capital efficiency ROIC management Use digital technologies Enhance governance of management processes Restructure the organization Delegation of authority Speed up management decision-making Improve management efficiency and speed up decision-making Establish decision-making procedures Eliminate unnecessary processes Cross-functional integration Rebuild our human resources portfolio Conduct succession planning Develop human resources D&I Maximize human capital and improve engagement Promote engagement Use an extended workforce NAGASE Integrated Report 2025 14 | Our Approach to Value Creation | CEO Message | Hiroyuki Ueshima Representative Director, President and CEO Nagase & Co., Ltd. where we stood at the end of fiscal 2024. We are on track to attain levels 4 or 5 for nearly all of the indicator categories in the first half of fiscal 2025. Since becoming president, I've continued working on the same issues I addressed as an executive officer while helping develop the ACE-2020 medium-term management plan launched in 2016. While much has improved over the past decade, fundamental challenges persist, and new issues have emerged amid changes in the external environment. As president, I am now taking the lead in driving reforms to tackle these challenges. Combining individual strengths and Group resources to enhance resilience Reforms that drastically change the organization and how we approach and do things naturally can make employees feel confused and want to resist change. I've felt that resistance when I've tried to share and spread our ideas in the Company. NAGASE has always been about the "power of the individual." That approach has been so successful throughout our long history that it is easy to fall into the trap of following precedent. Breaking through that mindset may be our biggest challenge. However, what was successful in the past is not enough to survive the changing external environment. The world is undergoing a massive sea change, and the NAGASE Group must come together to transform into a lean organization. While preserving our free-spirited culture and fearless drive to take on challenges, we must NAGASE Integrated Report 2025 15 become a company where strong individuals move in the same direction and unite their strengths. That is why I always think about People and Frameworks together. I believe my most important role is to nurture people and strengthen the NAGASE foundation with frameworks that foster the creation of sustainable businesses. Creating frameworks allows tacit knowledge-often unspoken or taken for granted within specific jobs-to be articulated and shared. Systems for developing human resources must also exercise the delegation of authority because that is how employees gain experience and build skills. This assumes that, at any level, those delegating and receiving authority share the same values. Because an organization can be weakened if authority is used inefficiently, our method of delegating authority includes thorough dialogue to ensure the values are in full alignment. We take a careful, methodical approach to introducing new policies because they will not gain traction if they seem to be something the president suddenly created. The first step is communicating the major policies until they become a natural topic of discussion among employees. We then create an environment where employees constantly see and hear the policy and its description, so it becomes very familiar even if not yet fully understood. This process ultimately encourages employees to reflect on the policies, recognize the relevance to their own work, take ownership, and deepen their understanding. We always follow a three-year timeline for introducing new policies, and the current steps are aimed at implementation starting in 2026. People are the life and soul of NAGASE We must also consider how best to nurture and utilize our people. I dislike the term "human capital," now in common use, because people are neither objects nor money. At NAGASE, we view each person as having the potential to envision future scenarios and identify what is needed to make them reality. In this way, our people are the primary source of our value creation. People are at the very center of NAGASE, and I tell employees, "people are our life and soul." Cultivating our people and continually developing new processes is what will ensure our sustainability. The Group has an exceptional abundance of highly talented individuals. Everyone has diligently learned their role and provides high value-added services and products that are perfectly attuned to client needs. The growth the Group has achieved is due to its talented people, each acting with vitality and demonstrating their strengths. Employees are like professional musicians who are masters of their instruments while I, as president, am the conductor leading the orchestra. My role is to keep executives and employees fully aware of the changing environment so each person can perform in harmony at their full potential. From the podium, I must face our players, discern each person's talent and character, and allocate resources to enable the Group's best performance. NAGASE seeks people with the market insight, creativity, exemplary leadership, and organizational skills to create value. We want individuals who can discover a business gem, refine it with the Group's insight, and fully leverage our resources to deliver unprecedented performance to our clients and develop it for new markets. Enhancing these abilities in our employees will make NAGASE even stronger, and we aim to be an organization where such talent inspires their colleagues so we all advance together with our strengths united under the mindset of One NAGASE. In developing our people, I also want NAGASE to be a place where many aspire to become president. Working with past presidents gave me valuable insight into their perspective and management approach, making me aware of the vast gap between their thinking and mine, and the challenge it would be to bridge that gap. Now, as president, I created CEO Accompaniment Program for younger employees to experience and learn by joining me on business trips overseas. Participants, often meeting for the first time during preparations, live and dine together during the trip, freely asking questions and sharing their thoughts on management. In the end, I encourage everyone to aim to become CEO. Interest in the program has grown as past participants have shared their experiences. Activities like this require little extra effort yet are powerful in creating motivated human resources. It's a perfect example of a process that triggers natural employee growth. Fulfilling our natural responsibility through sustainability management that reflects added value In fiscal 2024, we reflected deeply on the meaning of sustainability for our Group. ACE 2.0 defines our materiality (key issues) as improving employee engagement, helping realize a decarbonized society, and providing highly transparent corporate governance-responsibilities we see as fundamental. Recognizing that social and environmental value are now prerequisites for economic value, and that we Materiality NAGASE Integrated Report 2025 Changes in the external environment having a major impact The NAGASE Group's materiality Related SDGs Diversity of human resources Demographic changes Climate change and resource shortages Food and water scarcity Globalization Depletion of natural resources Geopolitical risk Growing awareness of human rights Employee engagement improvement Realize a decarbonization Extend a healthy life expectancy Driving a circular economy Achieve a sustainable supply chain Transparency in corporate governance 16 live in an era of trade-on, I realized NAGASE can offer unique solutions through our three functions of a trading company with a global information network, an R&D company that gives shape to that information, and a manufacturer that commercializes and mass-produces products. I saw that our materiality needed to reflect the distinct added-value these functions create. We therefore created a project team mainly of younger employees to review our materiality. The result was the addition in September 2024 of three items closely intertwined with our business: extending healthy life expectancy, driving a circular economy, and building supply chain sustainability. These key issues are now embedded in Group company business strategies, ensuring that solving social issues becomes integral to our economic success. Polishing Rough Gems of Uniqueness to outshine all others We will fully apply NAGASE's functions to address the key issues linked to our businesses and contribute to addressing issues. Some of our business addressing social issues are the development of adult disposable diapers using the bio-derived superabsorbent polymers (SAP), and the collection and recycling of high-purity developer solutions used in semiconductor manufacturing. These products and services start with the thoughts and ideas of employees at our business sites. I believe that both in areas close to our current business and in NAGASE Integrated Report 2025 17 markets where others already compete, NAGASE can refine products and services to an unprecedented level of uniqueness, turning them into core revenue drivers. Since becoming president, I have often used the term "uniqueness," and many employees have asked me to explain exactly what I mean. In the process system I described earlier, this uniqueness is the final step where employees take ownership and express their opinions. We have also introduced a system using cloud-based MA and CRM tools to collect and digitize the gems discovered by employees with a sharp eye for opportunity. New employees are equally eager to share information they find interesting. I receive a notification when new information is submitted and, if it is intriguing, I personally contact the employee to find out more. Knowing their submissions are sent to me seems to have increased the volume and enthusiasm of submissions. The corporate division organizes the submissions and develops projects to commercialize promising ideas. One of the ideas currently in development could become a pillar of our business by our 200th anniversary in 2032. Rather than a business that grows gradually, it has the potential to be a true game changer. We are carefully incubating it within the Group and with support from external experts. The next medium-term management plan and beyond, moving forward as One NAGASE I already have a clear vision of what the NAGASE Group will look like in 2032 when we celebrate our 200th anniversary, and that vision drives the next medium-term management plan, which we will announce next fiscal year. We expect to achieve the targets of ACE 2.0 , now in the final fiscal year, and to reach our key goal indicator (KGI) for the first time. I often say that making a plan is not the goal, and that excessive analysis and deliberation is unnecessary. Even if a plan scores Establish decision-making processes Increase engagement Reorganize Speed up management Delegate authority FY2023 Lay the foundation Thorough ROIC management (ratio management) Eliminate unprofitable businesses Invest in M&A (acquisition of missing parts) Business integration (bio, chemical) FY2024 Transition to a lean management structure Achieve ACE 2.0 KGI (8% ROE, ¥35 billion operating income) Discover Rough Gems of Uniqueness Expand to the Global South Execute growth strategies FY2025 Decisions and execution up your mind and do it Words and Action FY2021- Medium-Term Management Plan ACE 2.0 2032 200th anniversary FY2026- Next Medium-Term Management Plan Creating new values through One NAGASE only a 60 out of 100, it must be executed. In the PDCA process, doing outweighs planning, and while checking is important, taking action is essential. We will shift from a PdCa approach to pDcA, executing our strategies with animal spirits that embody the plan's essence and driving until the plan is completed. The next plan's theme will be "Creating new values through One NAGASE." We will not significantly change the growth strategy we have pursued so far. I plan to provide an overview of the plan's content and currently ongoing strategies. We will actively invest in our growth strategies and fill any gaps through M&A and other actions. That is how NAGASE walks the talk. Having laid the groundwork in fiscal 2023 and transformed our corporate culture in fiscal 2024, we are now ready to take even stronger and resonating action in fiscal 2025. We revised the executive compensation system in May 2025 with the intent of increasing motivation to steadily and sustainably enhance corporate value by linking remuneration to shareholder value, pursuit of both short- and medium- to long-term profits and efficiency, and a balance of economic and social value. We also plan to develop management strategies geared to both capital stock and stock price considerations. We welcome your continued support as we move forward. NAGASE's mission is to use our materials to deliver solutions that benefit clients, people, and the planet. 18 NAGASE Integrated Report 2025 Acting as One NAGASE, we will keep enhancing frontline execution capabilities and driving fresh growth. September 2025 Hiroyuki Ueshima Representative Director, President and CEO Nagase & Co., Ltd. | Our Approach to Value Creation | CFO Message | My responsibility is to improve capital efficiency during our transformational period Flexibly and strategically supporting management with administrative and overseas business knowledge It is my pleasure to introduce myself to you following my appointment in June 2025 as Director in charge of Corporate Administration. Since joining the company in 1987, I have worked across a broad range of management functions, originally in finance and then in information systems, business management, and risk management, where I was deeply involved in all aspects from frontline operations to departmental manager. I have broad experience in core administrative functions, which has given me hands-on experience with the various inner workings that form the foundation of management. I learned about global management and governance during 14 years in Hong Kong and Taiwan, where I managed local subsidiaries and helped establish regional headquarters. I will combine my on-site experience and broad management perspective to detect early signs of changes and provide flexible, strategic support to management. I see my role as CFO as extending beyond sound financial oversight to also contributing to improving overall management quality and continuously enhancing corporate value. NAGASE Integrated Report 2025 19 During my daily activities, I place high importance on communications. I make a point of conversing with employees, as facial expressions, tone of voice, and casual remarks can reveal underlying issues or shifts within the organization. Hearing different perspectives and fostering a sense of organizational unity is essential to positive change. rapid, efficient management reform by developing our business and financial portfolios, enhancing governance of management processes, and rebuilding our human resources portfolio. The clear priorities and swift execution of ACE 2.0 and QUICK WINS have unified the company mindset and significantly improved decision-making and management execution. As CFO, a key focus of mine is embedding return on invested capital ( ROIC) management into our business and financial portfolio development. By using ROIC not just as a financial indicator but as a company-wide approach to "ratio management," we are incorporating capital efficiency into all levels of decision-making, even daily operations at our business sites. These sites, in fact, are where initiatives tied to quantitative results, such as exiting unprofitable operations, revising processes to improve margins, and reformulating supply chains to reduce costs, are producing the greatest benefits. The cumulative result is clear in our FY2024 performance. Gross profit and all profit categories increased from last fiscal year, with all but net income reaching record highs. This indicates not just a temporary earnings boost, but a fundamental shift toward higher margins and rising structural profitability. Focus on growth strategies and aggressive investments We use a four-quadrant matrix of foundation, focus, development, and improvement to evaluate and classify businesses based on profitability, growth potential, and capital efficiency and ensure the most effective allocation of resources. In the improvement quadrant, we take strict and swift action on unprofitable businesses. For high-risk projects, investment management now conducts monthly progress reviews instead of quarterly or annually checks. In the focus quadrant, we are advancing our growth strategy through carefully targeted investments in semiconductors, food, and life sciences. In June 2025, we acquired the Asia high-purity chemistry operations of SACHEM, Inc., of the United States. The acquisition will give us the ability to recover high-purity solutions for reuse-the first such technology in Japan-and further enhance the environmental performance of our activities in the semiconductor industry. Additionally, Nagase ChemteX's liquid encapsulant materials command strong market share in the advanced semiconductor segment. We are expanding production capacity and accelerating technology development in anticipation of rapid adoption of generative AI. 4.5 Net sales Gross profit Gross profit ratio (%) (%) 50 19.1 20 6 21.9 25.2 24.1 30 (%) 10 8 Operating income ratio (%) 39.0 35.2 33.3 30.6 Operating income (Billions of yen) 40 (Billions of yen) 1,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 (FY) ACE-2020 ACE 2.0 15.0 4.1 4 3.1 3.1 3.5 3.7 3.4 10 2.1 2.4 2 0 0 0 19.2 20 17.0 18.3 250 12.7 13.1 13.1 13.1 155.4 164.7 181.2 10 91.5 102.6 105.4 104.9 114.6 139.4 0 912.8 2016 2017 2018 2019 2020 2021 2022 2023 2024 (FY) ACE-2020 ACE 2.0 17.9 18.3 500 30 625.2 722.3 40 780.5 807.7 799.5 783.9 750 944.9 900.1 Net sales and gross profit Operating income 20 Yoshihisa Shimizu Director and Executive Officer Nagase & Co., Ltd. NAGASE Integrated Report 2025 Ratio-driven management to transform the corporate culture Medium-Term Management Plan ACE 2.0 launched amid the highly uncertain business environment during the unprecedented challenges of the COVID-19 pandemic. With the appointment of our current president in FY2023, we advanced the ACE 2.0 basic policies and introduce the QUICK WINS initiative to drive In the food field, we are directing the Prinova Group's operating income back onto a growth trajectory to boost its profit contribution. To regain profitability in the nutrition business, which conducts contract manufacturing of sports nutrition products, we are expanding the lineup focus from professional athletes to also target amateurs. We are also entering new regions and strengthening our sales infrastructure in the Global South through the acquisition of food ingredient contract manufacturer and marketer Aplinova. In the life sciences field, in July 2025, we acquired Asahi Kasei Pharma Corporation's operations related to the manufacture, development, and sales of diagnostic reagents and enzymes. This addition will not only boost diagnostics business earnings, it also has promising compatibility with the enzyme business of Nagase Viita Co., Ltd. and the expanded enzyme library it gives us will be a powerful asset promising many synergies. We are also advancing our bio-derived superabsorbent polymer (SAP) technologies through a joint project to develop environmentally friendly SAP products, including biodegradable adult diapers and marine biodegradable water retention materials for greening and agriculture. We are increasing investment and developing technology to overcome the key challenge of building a mass production structure for SAP materials. 21 NAGASE Integrated Report 2025 The development quadrant is key to our future growth. We are reorganizing the R&D structure and allocating corporate venture capital to foster startups with the aim of gaining knowledge and creating new businesses in areas beyond our current scope, such as ultrasonic motors, robots, and generative AI technologies. Investing in future leaders and establishing a resilient back office The foundation of the NAGASE Group's sustainable growth is our people, and our corporate value stems from their development. We seek individuals who lead change in uncertain times, create new value through innovation, and bring a global perspective across diverse environments. People with these three competencies will define the future of NAGASE. I believe the core of our commitment to our human resources is investing in high-quality training to help each person realize their full potential. Our training system provides both selective and voluntary courses with programs designed to help employees further their careers and advance to higher professional levels. The NAGASE Technical Vitality Program is designed to foster internal entrepreneurship and provide opportunities to develop business in areas outside the Company's current domain. Each year, proposals for new business are solicited and developed through a stage-gate process including screening, pitch selection, and viability testing, with promising ideas then going on to actual business development. Not only does the program boost engagement of younger employee engagement and add vitality to our organization, it has also produced several business success stories. We develop global human resources through two-way exchanges by sending employees overseas and training staff from foreign subsidiaries in Japan, and by creating a system for exchanges among overseas subsidiaries. Experiencing foreign cultures, both as visitors and hosts, strengthens our ability to understand and integrate diverse perspectives. In April 2025, we launched the Management Department Visualization Project to reform administrative operations. The project reviews existing operations to improve efficiency, eliminate excess, deficiencies, and overlap, and raise overall operating quality. The reforms will improve all aspects of the management functions, including sustainability, while enabling tighter control over rising indirect costs, such as from the head office reconstruction and internal system development. The project also involves reorganizing and visualizing business and administrative department of duties and positions and optimizing human resource allocation. Additionally, the project accelerates the IT integration and digital transformation, improves operating efficiency, and advances the shift to high value-added operations. The result will update work methods, improve productivity, and create a resilient back office providing a solid foundation for frontline employees to implement growth strategies. Growth and capital strategies aimed at 8% ROE The ACE 2.0 medium-term management plan has measures to improve capital efficiency and sets 8.0% ROE as a key goal indicator (KGI) to reach by FY2025, the plan's final year. Reaching this target is vital, and we are implementing both a business growth strategy and a capital strategy to ensure success. The growth strategy focuses on securing returns from current investment projects and carrying out structural reforms, including exiting unprofitable businesses, to streamline and strengthen our business portfolio. The capital strategy focuses on optimizing the capital structure rather than simply reducing capital assets. With the specific aim of achieving 8% ROE, the strategy targets a 100% total return ratio in FY2025 and will control capital expansion by increasing shareholder returns. With our low net debt-to-equity ratio, using interest-bearing debt-which has lower financing costs than equity-will reduce our weighted average cost of capital (WACC), and we plan to use it effectively for financial leverage. Another way we are improving capital efficiency is by systematically divesting strategic cross-shareholding. ACE 2.0 targets total divestment of 30 billion yen over the five years started in FY2021. The divestment of 3.2 billion yen worth in FY2024 brought the total sale amount to 25.6 billion, and we expect to meet the target in FY2025. We expect these business growth and a capital strategies to raise ROE to 8.1% in FY2025. However, that is not our final goal. We will continue scrutinizing our cross-shareholdings and shareholder returns with the aim of continuing to improve capital returns and setting a higher ROE target in the next medium-term management plan. Turning constructive dialogue with capital markets into management strength Constructive dialogue with the capital market is more important than ever. We are fully aware that the Company's price-to-book ratio (PBR) being below 1x is a critical issue and are committed to addressing it directly. While focusing on raising ROE and reducing the cost of capital, we understand that timely and frank communication with shareholders and investors is essential. In FY2024, in addition to quarterly results briefings, we held 266 one-on-one and small meetings, which was a marked increase from the previous fiscal year. Feedback from these sessions is shared at Board of Directors meetings and integrated into management decisions. We also host seminars on topics of interest to shareholders and investors, focusing on promising growth fields. Business managers present seminars on trends in the semiconductor, food, and life sciences fields, sharing insights to actual market conditions and the Company's strategies. With major investments under way for growth, we look forward to offering more opportunities to engage with shareholders and investors on our progress and plans. We are also expanding disclosure on non-financial 22 NAGASE Integrated Report 2025 areas, and are especially focusing on improving the quality and availability information related to sustainability. We understand that providing detailed quantitative and qualitative data is important to showing that the NAGASE Group is growing and evolving with society. After establishing a solid foundation for change over the past two years, the Company is now at a pivotal moment. While I feel a strong sense of mission and responsibility, I also share great excitement for our future. I am fully committed to maximizing the corporate value of the NAGASE Group. Financial targets To realize the Pursuit of Quality that is a goal of the Medium-Term Management Plan ACE 2.0 . To reach this objective, have set financial and non-financial objectives, and we are working to achieve progress in relation to these objectives. As regards financial objectives, we have set Key Goal Indicators (KGIs) and also Key Performance Indicators (KPIs) in regard to reform of our profit structure, reform of our corporate culture and reform of our corporate culture. ➊ ROE (%) KGIs (Key Goal Indicators) for the Pursuit of Quality Measures Indicators FY2020 FY2025* Improvement in capital efficiency ➊ ROE 5.9% 8.0% or more Increase Profitability ❷ Operating Income 21.9 billion yen 35.0 billion yen * FY2025 assumptions: 1 USD = 108.7 yen, 1 RMB = 15.6 yen ❷ Operating Income (Millions of yen) 6.4 5.9 5.9 6.6 8 7.7 6 4 40,000 39,078 2 0 2020 2021 2022 2023 2024 (FY) 20,000 10,000 0 30,000 35,263 33,371 30,618 21,916 2020 2021 2022 2023 2024 (FY) FY2020 FY2021 FY2022 FY2023 Change FY2024 FY2025 Forecast ROE 5.9% 7.7% 6.6% 5.9% +0.5 6.4% 8.1% ROIC 4.2% 5.3% 4.4% 4.0% +0.4 4.4% 5.2% WACC 5.7% 5.5% 5.7% 5.9% ±0 5.9% 5.5% Net DE ratio 0.23 times 0.33 times 0.38 times 0.27 times ±0 0.27 times 0.45 times Total assets (billions of yen) 338.4 355.0 378.3 401.3 +5.1 406.4 392 Interest-bearing debt (billions of yen) 118.9 166.5 179.6 166.9 +8.4 175.3 231.3 Cumulative sales amount for medium-term management plan period (billions of yen) 7.8 15.2 22.4 +3.2 25.6 30 Percentage to net assets 24.1% 17.8% 15.0% 15.4% −1.5 13.9% 13.3% Efficiency indicators Strategic cross-shareholdings NAGASE Integrated Report 2025 NAGASE Integrated Report 2025 24 Shareholder returns •For fiscal 2025, an interim dividend per share of 45 yen and a year-end dividend of 50 yen is planned, for a total of 95 yen (16th consecutive fiscal year of dividend increases) •As with fiscal 2024, the policy of a 100% total return ratio remains unchanged for fiscal 2025 Status of shareholder returns 100 90 80 70 60 50 40 30 20 10 0 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Total return ratio 105.4 100.0 76.5 31,500 26,889 48.3 58.9 17,148 8,001 17,000 12,000 +α 12,520 6,006 6,514 13,907 5,662 8,245 9,147 9,888 9,614 (Millions of yen) (%) Dividends per share/Payout ratio (consolidated) 90 80 70 60 50 40 30 20 10 0 90 80 70 60 50 40 30 20 10 0 90 95 80 70 54 46 30.3 34.9 40.8 35.2 25.1 30.5 (¥) (%) 40,000 Total dividends Repurchase of treasury stock 110 100 Dividends per share Payout ratio 100 Dividends per share (¥) FY2021 54 FY2022 FY2023 FY2024 FY2025 (forecast) 70 80 90 95 03 / 21 03 / 22 03 / 23 03 / 24 03 / 25 03 / 26 (plan) | Our Approach to Value Creation | Medium-Term Management Plan | Medium-Term Management Plan The "Reform Period" from fiscal 2016 to fiscal 2020 was the first stage toward the "Ideal NAGASE" in 2032. During this time, we optimized our portfolio by steadily strengthening focus areas and planting seeds in development areas. However, reforms in profit structure that were dependent on external factors stagnated, leaving some issues unresolved. Medium-Term Management Plan ACE 2.0 is the second stage of our campaign for achieving an "Ideal NAGASE," and we have dedicated the five-year period it covers-from fiscal 2021 to fiscal 2025-to the pursuit of quality. To us, pursuit of quality means giving concrete form (in our business, our systems, and our corporate culture) to the consideration that our stakeholders expect from us. We are aiming to achieve this, all while maintaining an ACE (Accountability, Commitment, and Efficiency) approach, in order to facilitate the NAGASE Group's sustainable growth. Medium-Term Management Plan ACE 2.0 Stage 2 Stage 3 Stage 1 Medium-Term Management Plan ACE 2.0 Basic Policies 23 Launch of QUICK WINS (April 2023 onwards) Next medium-term management plan 2026- Creating new values through One NAGASE Become a true "Business Designer" ACE 2.0 - Pursuit of Quality With an ACE (Accountability, Commitment, and Efficiency) mindset and in order to facilitate the NAGASE Group' s sustainable growth, we are giving concrete form (in our business, our systems, and our corporate culture) to the consideration that our stakeholders expect from us Quality Pursuit Reform of our profit structure Reform of our corporate culture Corporate functions that support reform 1. Accelerating digital transformation further 2. Promoting sustainability 3. Strengthening corporate functions Mindset toward the "Ideal NAGASE" Pursuing economic and social value •Cultivating sustainability-related mindsets and thoroughly monitoring financial and non-financial data Pursuing efficiency •Deepen awareness of capital efficiency •Improve productivity of core operations Strengthening human resources to drive reform Create a profit base toward the "Ideal NAGASE" 1. Pursuing profitability and efficiency Company-wide businesses replacement and reallocation of resources Strengthening existing businesses •Expand our business opportunities through globalization •Improve productivity of manufacturing and expand value added through technical innovation Create sustainable businesses Reform 2016-2020 ACE-2020 Reform of our profit structure Reform of our corporate culture Growth Pursuit of Quality 2021-2025 ACE 2.0 Medium-Term Management Plan Non-Financial Targets (KPIs) The NAGASE Group's materiality The Group partially revised its materiality in September 2024. In addition to our existing priorities of "employee engagement improvement," "realize a decarbonization," and "transparency in corporate governance," the Group added "extend a healthy life expectancy," "achieve sustainable supply chains," and "driving a circular economy" as key issues to which NAGASE will contribute through its business activities (See page 27 for details on materiality). In particular, we have set non-financial targets (KPIs) for "employee engagement improvement" and "realize a decarbonization (carbon neutrality)," and are working to address these issues. Changes in the external environment having a major impact The NAGASE Group's materiality •Diversity of human resources •Demographic changes •Climate change and resource •Food and water scarcity shortages •Depletion of natural resources •Globalization •Growing awareness of human •Geopolitical risk rights •Improve employee engagement •Realize a decarbonization •Extend a healthy life expectancy •Achieve sustainable •Driving a circular economy supply chains •Transparency in corporate governance Improve employee engagement NAGASE Group believes engagement means the company (organization) and its employees have mutual understanding and are looking in the same direction as equal partners, and is promoting initiatives to enhance this. In fiscal 2024, we saw increases in both the survey implementation rate and the engagement score, which are non-financial targets. Improving engagement is considered the responsibility of the top management for each organization, and each organization is implementing improvement measures. The Corporate Sustainability Office serves as a cross-functional hub that facilitates the sharing of best practices and supports improvement activities. ➡ See page 67 for details. Carbon Neutrality We have made the NAGASE Group Carbon Neutral Declaration and, based on that declaration, have also set non-financial targets for carbon neutrality in ACE 2.0 . We are promoting efforts to reduce Scope 1 and 2 emissions across the Group on a consolidated basis by at least 37% compared to fiscal 2013, reduce CO 2 emissions by 35,000 tons in total through the generation and purchase of renewable energy within the Group, and achieve Scope 2 zero emissions for Nagase & Co., Ltd. on a standalone basis. ACE 2.0 non-financial targets (KPIs) (Consolidated): Reduction in Scope 1, 2 emissions 37% or more (compared to fiscal 2013) (Consolidated): Reduction from renewable energy generation/purchases 35.000 tons or more (cumulative) Nagase & Co., Ltd. (non-consolidated): Scope 2 Zero emissions Strategies Overall measures: Participate in external initiatives, Promotion environment-friendly investment, Consideration of in-house carbon tax Visualization: Visualization of emissions volumes in the supply chain, LCA calculation for strategic products Reduction: Provision of low-carbon products and reduction solutions, introduction of environment-friendly equipment Improvement of production processes, utilization of renewable energy (purchased and private power generation) Measures Carbon Neutral Declaration, commitment to obtaining SBT certification, obtaining third-party Carbon Footprint (CFP) verification for Nagase Viita, propose GX solutions, etc. (See page 66 for details) Items for disclosure •Greenhouse gas emissions (Scopes 1, 2, 3) •Breakdown of greenhouse gas Scope 1 emissions by type •Energy consumption, electricity consumption, energy intensity during production (t-CO 2 /t of production) Besides its trading function, the NAGASE Group also has a manufacturing and processing function, so we are working to achieve our goals in relation to carbon neutrality in line with a classification of our activities in terms of two axes and four quadrants (trading, manufacturing, visualization, and reduction). In fiscal 2024, we made progress in using virtual PPA* 1 and non-fossil fuel certificates. We also raised awareness within the Group (via proactive energy-saving activities, etc.) from the Group's commitment to obtaining SBT certification* 2 in 2024. As a result, Scope 1 and 2 emissions were reduced by 43% (compared to fiscal 2013), exceeding the ACE 2.0 target. *1: Virtual Power Purchase Agreement (PPA) is renewable energy procurement method in which the power buyer (Nagase & Co., Ltd.) procures the environmental value of renewable electricity generated at a dedicated offsite renewable energy power plant. *2: SBT certification: Science Based targets (SBTs) are science-based targets for reducing GHG emissions. These targets are consistent with the Paris Agreement, a global agreement on GHG reduction targets adopted by the United Nations in 2015. NAGASE Integrated Report 2025 ACE 2.0 non-financial targets (KPIs) (Group companies) Employee engagement survey completion rate: 100% (Nagase & Co., Ltd. only (non-consolidated)) Engagement survey total score of over 60 Related policies Talent management, health management, work style innovation, DE&I, HR policy Measures Conducts engagement surveys, work style innovation (launch of PROJECT BRIDGE, see page 78), and initiatives led by business departments (CHRO,* town hall meetings, etc.) *CHRO: Chief Human Resources Officer within each business department who implements business strategies while maintaining a human resources perspective Related items for disclosure Employees (non-consolidated) Number (percentage) of male and female employees, number (percentage) of non-regular employees, employment rate of persons with disabilities, number of mid-career hires (M/F), percentage of female managers Work style (non-consolidated) Retention rate for new graduates after 3 years, voluntary turnover rate, average years of service, annual average salary, annual total working hours, paid leave utilization rate, number of employees taking maternity/childcare leave, number of participants in HR development training Occupational health and safety (Nagase & Co., Ltd. + domestic manufacturing companies) Number of work-related injuries, number of fatal accidents, frequency rate, work accident frequency, number of participants in occupational safety and health training 25 ▶For details on related disclosure items, please see the Sustainability Data Sheet on our website. https://www.nagase.co.jp/english/sustainability/data/ Item FY2021 Result FY2022 Result FY2023 Result FY2024 Result FY2025 Target (Group companies) Employee engagement survey completion rate * 1 41% 81% 86% 100% 100% (Nagase & Co., Ltd. (non-consolidated)) Engagement survey total score * 2 52.4 56.5 56.0 58.3 60 over *1: For consolidated subsidiaries under legal accounting standards. Companies that became consolidated subsidiaries during the Medium-Term Management Plan ACE 2.0 are not included. *2: The engagement survey total score of 60 represents a standard deviation calculated by Link and Motivation Inc. (based on data for over 10,000 companies) with an organizational state defined as "mutual trust and affinity." In order to achieve a state of mutual trust and affinity at NAGASE in which the company (organization) and its employees have a mutual understanding and are looking in the same direction as an equal partners, we have set a total survey score of 60 as the target for our Medium-Term Management Plan ACE 2.0. * Non-financial targets apply to Nagase & Co., Ltd., Nagase ChemteX Corporation, and Nagase Viita Co., Ltd. ▶For details on disclosed items, please see the Sustainability Data Sheet on our website. https://www.nagase.co.jp/english/sustainability/data/ Scope 1, 2 43% 2025 Target 46% 86,197t 2013 (Base Year) 2021 Result 2022 Result 2023 Result 2024 Result 46,546t 2030 Target Virtually Zero Carbon Neutrality 2050 (FY) Target Medium-Term Management Plan ACE 2.0 Non-financial Targets Scope 3 As a trading company with a network of some 18,000 customers, we believe it important to reduce greenhouse gas emissions across the entire supply chain. To this end, NAGASE Group has set a target of reducing Scope 3 emissions by 12.3% (compared to fiscal 2020) by 2030 under our NAGASE Group Carbon Neutral Declaration. ➡ For an introduction to specific initiatives, see page 66. 48,980t 54,997t 56,710t 60,189t NAGASE Integrated Report 2025 26 Materiality Background to revisions We reviewed our some of materiality (key issues) in September 2024. We have traditionally identified materiality themes for various stakeholders and worked on them accordingly. However, due to factors such as changes in the external environment, in fiscal 2023 we began discussing a review of our materiality. We believe that our materiality should address societal challenges that can be solved with the added value that NAGASE provides, so we added key issues that more closely align with our business operations and organized them in a clear and simplified format for both internal and external use. Identification process The Sustainability Committee led the project for identifying materiality. A project team primarily composed of young employees was formed within the committee to review materiality, and carried out the necessary information analyses and explored different directions. Specifically, we analyzed the external environment and the NAGASE identity to identify the societal issues that the Group should address as materiality. Spreading the word internally After establishing each materiality, an animation video was created in nine languages to promote and spread NAGASE Integrated Report 2025 27 understanding within the Group. The video is featured on the Group intranet and on digital signage at each location. Identification process Analysis of the external environment Understanding changes in the external environment since the Medium-Term Management Plan was formulated •Organizing through global risk reports, etc. •Using the two axes of "importance to stakeholders" and "importance to NAGASE" for mapping risk, we considered materiality based on the most important themes for both parties Interviews with internal parties (general managers, Group companies, etc.) and external parties (experts) Identifying perceived external environments Analysis of NAGASE's Identity Interpreting the company's history (reaffirming our DNA) •A spirit of taking on new challenges •Creating value through our trading, manufacturing, and R&D functions Interviews with employees Identifying materiality Identifying the societal issues that NAGASE Group should address as materiality NAGASE Group materiality explanatory video Materiality Eemployee engagement imoprovement We recognize that improving employee engagement is paramount to achieving sustainable growth, and we strive to foster a relationship where the company (organization) and its employees have a mutual understanding and are looking in the same direction as equal partners. To this end, we conduct ongoing engagement surveys and implement various initiatives based on the results. ➡ See page 67 for details. Realize a decarbonization Since NAGASE Group operates globally, addressing climate change is a key challenge. Because we also have a manufacturing and processing function in addition to our trading function, we categorize our business activities into four quadrants in terms of two axes (trading/manufacturing, visualization/reduction) with the aim of achieving carbon neutrality by reducing GHG emissions to net zero by 2050. ➡ See page 66 for details. Transparency in corporate governance Under our management philosophy, we aim to "contribute to a sustainable world where people live with peace of mind," so we are committed to enhancing our corporate value over the medium to long term. We are also working to strengthen our corporate governance because we believe that rapid decision-making/execution and ensuring transparency are essential for us to accomplish these objectives. ➡ See page 90 for details. Extend a healthy life expectancy As a company that wishes to contribute to the well-being of people and the planet, extending a healthy life expectancy is a very important theme. NAGASE Group handles food ingredients and food additives for the food industry, as well as pharmaceutical raw materials and medical devices for the pharmaceutical and medical industries. In addition to proposing materials as a trading company, we also aim to contribute to healthy and fulfilling lives with manufacturing/processing and application proposals that leverage our manufacturing and R&D functions, and through contributions in the bio-based R&D and agriculture fields. Examples of Initiatives •Expansion of the sports nutrition sales market (P. 37) Acquisition of diagnostic drug business (P. 39) Development of ergothioneine, a rare amino acid (P. 41) R&D for biotechnology (P. 56) Use of trehalose in agricultural fertilizer (P. 59) Achieve sustainable supply chains As a trading company with a network of some 18,000 business partners, NAGASE believes that its mission is to contribute to societal problem-solving across the entire supply chain. In particular, given geopolitical risks and growing awareness of human rights, it is necessary to have a proper understanding of issues in the supply chain and engage in dialogue for improvement. NAGASE has in place a Supply Chain Management Policy and is working to address supply chain issues to maintain stable procurement and supply. Leveraging our chemicals knowledge and networks to improve transport efficiency, we also proactively work to resolve various supply chain issues through partnerships. Examples of Initiatives •Providing a Chemicals AI Cooperative Logistics Matching Service (P. 34) Contributing to National Resilience Plan (P. 54) Developing and offering Mixing Concierge™ (P. 59) Promoting supply chain management with consideration for human rights and environmental risks (P. 68) Driving a circular economy With the emergence of new laws and regulations in Europe and other regions for a circular economy aiming to achieve both economic growth and reduced environmental impact, NAGASE also faces an important task of contributing to a resource-circulating society as it provides materials across the entire supply chain. In particular, recycling and environmentally friendly materials can be addressed through NAGASE's business by contributing solutions that combine our three functions of trading, manufacturing, and R&D. Examples of Initiatives •Recycling of high-purity film developer fluids in semiconductor manufacturing (P. 36) Offering wastewater solutions (P. 47) Disposable diaper recycling business using bio-based super-absorbent polymers (SAPs) (P. 57) Appropriate use of water resources https://www.nagase.co.jp/english/sustainability/environment/water/ Added in September 2024 following a review 28 NAGASE Integrated Report 2025 Identifying the societal issues that NAGASE Group should address as materiality External environment NAGASE Identity Diversity of human resources Demographic changes Climate change and resource shortages Food and water scarcity Globalization Depletion of natural resources Geopolitical risk Growing awareness of human rights Trading function Transparency in corporate governance Driving a circular economy Extend a healthy life expectancy Achieve sustainable supply chains Eemployee engagement imoprovement Realize a decarbonization The NAGASE Group's materiality Manufacturing function R&D function A spirit of taking on new challenges A highly customer-centric approach Implementing Value Creation -Reform of Our Profit Structure- By combining NAGASE's core functions of Trading, Manufacturing, and R&D, we will refine our businesses and deliver new value to society and our customers. 29 30 NAGASE Integrated Report 2025 CONTENTS 31 Message from the Directors in Charge of Sales 33 Initiatives in the Four Areas of Foundation, Focus, Development, and Improvement 43 List of Segments 45 NAGASE's Unique Functions NAGASE Integrated Report 2025 46 Trading Function ―Messages from General Managers 53 Manufacturing Function 55 R&D Function 57 From the Front Lines of Combining Functions to a Sustainable Society | Implementing Value Creation -Reform of Our Profit Structure- | Message from the Directors in Charge of Sales | Combining frontline capability and DX Masatoshi Kamada Director and Managing Executive Officer On-site value creation- Improving margins by finding the real value 31 NAGASE Integrated Report 2025 In recent years, my primary focus has been on profit margins. The idea of ratio management is more than just tracking numbers. A low margin often signals that a business model lacks differentiation. By paying close attention to client needs and critically examining how NAGASE can address them, we can uncover the true value of our business and help the market better understand that value. Client-facing teams often default to maintaining the status quo, but the push to improve margins is a chance to challenge that mindset. I believe it is the responsibility of our business leaders and frontline employees to uncover and deliver the true and lasting value in our services. Sales representatives must have tacit knowledge of how to communicate and build trust with clients, and that ability is only gained through experience. I want each person in charge to take ownership of that opportunity, which is why I often visit sites to offer encouragement and support. The job of sales representative is deeply rewarding, and depends more on emotional intelligence than intellect. Even in the age of generative AI, I believe NAGASE's strength lies in the trust we have built with our in-person, on-site presence. Change brings opportunity Partnering in client management strategies The changing environment conditions are creating opportunities for NAGASE due to our diverse portfolio of chemical products and services and the extensive network of our trading company operation. Our comprehensive knowledge of the industry, from upstream to downstream, enables us to respond to evolving client needs and collaborate on future-oriented management strategies. One of the main ways I have been doing this is account planning, which involves analyzing the client's business plan, formulating potential scenarios, and coordinating cross-divisional efforts to apply the Group's full power to propose solutions. Digital transformation (DX) will play a fundamental role in our future. We are introducing cloud-based marketing automation and customer relationship management tools to integrate information across the organization. I believe that connecting ideas and data horizontally across business departments will not only enhance the quality of our marketing but also further differentiate NAGASE. How we leverage digital tools to achieve this will be a key theme in the next medium-term management plan. Corporate value maximized with integrity Over the past few years, discussions at Board of Directors meetings have increasingly focused on the quality of management. As an executive officer overseeing sales operations and a director responsible for corporate governance, I am committed to meeting expectations not only for business performance but also for driving long-term corporate value. Upholding the highest standards of integrity is a core principle of NAGASE's deeply rooted management philosophy. I intend to fully adhere to this principle and continue to earn the trust of all our stakeholders. Advancing the QUICK WINS initiative Since the launch of the QUICK WINS initiative in June 2023, our ability to respond swiftly to drastic changes in the external environment has enabled us to achieve better-than-expected quantitative results. I also believe we are generally on the right track in terms of qualitative outcomes. In the food, life science, and biotechnology businesses under my oversight, the acquisition of Asahi Kasei Pharma's diagnostic reagent business and other operations in FY2024 was a major achievement. Under the next medium-term management plan, our focus will be on steadily translating this success into sustained business growth. Strengthening the functional integration Advancing R&D into the next stage Tamotsu Isobe Director and Executive Officer Integrating functions and steadily implementing growth strategies We have made progress in establishing a framework for close collaboration between our R&D and manufacturing functions, which had been an issue. The bio-based superabsorbent polymer (SAP) and the rare amino acid ergothioneine, both of which are being prepared for market launch, exemplify NAGASE's unique approach of combining these two functions with the network of our trading company to enter new markets. Accelerating the new product and technology development cycle is essential to growing our business. As a first step, we are considering introducing the Scorecard system used by the U.S. company Interfacial Consultants, which became a subsidiary in 2020 and specializes in product and technology development and manufacturing process solutions for resins and related materials. Scorecard prioritizes R&D projects based on customer needs, marketability, profitability, and materiality for our company. While assessing profitability at the R&D stage remains challenging, we plan to apply the system to our biotechnology business to better align our initiatives with specific client needs. Another key to our growth will be expanding our R&D functions beyond Japan, where they are currently concentrated, to a more global scale. This may require organizational changes to accelerate collaboration between human resources and technology. We aim to further evolve NAGASE's distinctive approach to R&D by actively pursuing collaboration and investment not only within the Group, but also with external partners. Long-term approach to enhancing the 32 NAGASE Integrated Report 2025 power of our people and organization I've started to hear people outside the Company say that "NAGASE has changed." I believe this perception stems not only from changes in top management, but also from our employees, who do not just follow directives, but are proactive about bringing about change. Our people have the resilience to overcome even the toughest challenges because we embrace change-and that, I believe, is our greatest strength. To remain a company that society needs for the next 100 years, we will build a structure that maximizes the potential of our people and links it directly to organizational growth. By uniting all employees under a shared vision, we will continue driving the creation of new value and achieve sustainable growth. Foundation Improvement Focus Development Trading Function Source of Customer Contacts and High Value-Added Information Roles and strengths of NAGASE's trading businesses Of all the functions NAGASE possesses, our trading function in particular is positioned as our Foundation, and is the source of cash, connections with customers, and information. We dig up new business opportunities by providing materials and services in the following five segments while gathering customer feedback and needs: Functional Materials, Advanced Materials & Processing, Electronics & Energy, Mobility, and Life & Healthcare. NAGASE's on-site prowess comes from its dedication Provision of raw materials Foundation Focus NAGASE Integrated Report 2025 Initiatives leveraging our strengths as a trading company Development Improvement Nagase & Co., Ltd. is contributing to solving industrial challenges by leveraging the network it has built as a dedicated chemicals trading company, its expertise in chemicals, and its solutions for the safe transportation of dangerous substances. We were selected by Rapidus Corporation, who aims for domestic production of cutting-edge semiconductors, as one of the service coordinators organizing the transportation of the semiconductor materials to its semiconductor plant in Chitose City, Hokkaido. In this capacity, it consolidates the materials delivered by suppliers at terminal hubs and supports their mass transportation from Honshu to Hokkaido. In addition, it provides the chemical industry with the Chemicals AI Cooperative Logistics Matching Service, an application that matches hazardous chemicals with appropriate transportation services. In this way, it to this process over the decades. Achieving contacts with society and customers through our trading function allows us to acquire high value-added information. Based on this information, we are able to maximize the strengths of each of our functions and therefore create new value. Suggestions Requests Suggestions Requests Purchases Sales Purchases Suggestions Requests Sales Suppliers Domestic & overseas manufacturers Purchases Manufacturing/processing function NAGASE Group (sales) Trading function Source of customer contacts and information R&D function R&D Suggestions on applications Customers Domestic, overseas users At the same time, functions including credit and inventory management, as well as support for meeting regulatory requirements for chemical products, allow us to provide a steady supply of materials, thereby contributing to maintaining the supply chain even as our business partners' production systems become increasingly diverse. 34 contributes to solving issues at manufacturing sites caused NAGASE Integrated Report 2025 by labor shortages in logistics by, among other things, improving efficiency and reducing CO 2 emissions. Issues of our foundational businesses Optimization of working capital through proper inventory management Need for BCP assuming supply chain disruption due to tariffs disputes and other geopolitical risks Assuring the supply chain is ready for the reorganization of the domestic petrochemical industry Expanded sales of Nagase Viita products using Prinova's food industry networks Increasing marketing reach and operational efficiency activities through digitalization Further collaboration beyond industry and business boundaries | Implementing Value Creation -Reform of Our Profit Structure- | Initiatives in the Four Areas of Foundation, Focus, Development, and Improvement | Reform of Our Profit Structure The key to profit structure reform is to secure and redeploy management resources to maximize efficiency. Specifically, from the standpoint of efficiency and growth potential, we have classified businesses into four quadrants: Improvement, Foundation, Development, and Focus, and are executing strategies according to each area. Reorganizing each of our business domains along the lines of our trading, manufacturing, and R&D functions Foundation Development Focus R&D (biotechnologies) Focus New businesses (new products, etc.) Food Semiconductors New regions (Global South) Life sciences Development Improvement Foundation Unprofitable businesses Businesses at risk of impairment losses Semiconductors Electrical appliances Food Mobility Chemical Life industry sciences List of topics in the "Integrated Report 2025" Area Topic examples Page Trading function Source of customer touchpoints and high-value-added information Manufacturing function (Semiconductors) Contributing to the industry through synergy of semiconductors, the environment, and technology P. 35-36 33 Manufacturing function (Food) Prinova Group (Nutrition business profitability recovery, growth strategy) P. 37-38 Manufacturing function (Life sciences) Nagase Diagnostics diagnostic reagent business P. 39 Global South Initiatives in India, Indonesia, Mexico, and Brazil Establishment of joint ventures and expansion of the resin and plastics sales business in India P. 40 Establishing new businesses Corporate venture capital (CVC) initiative to discover new businesses P. 41 R&D (Bio) Healthspan-extending ergothioneine P. 41 Recent results Page Initiatives to improve profitability Reduce operating subsidiaries' operating losses, equity losses, impairment losses, and unprofitable business arrangements Improvement Advance through new challenges in this area of future revenue sources Elevate overall profitability by leveraging our unique products and technologies Generate the cash flow and high value-added information that will allow us to strengthen our focus and development areas P. 42 P. 34 Future revenue sources Trading function Manufacturing function in specific areas Manufacturing function in specific areas Future revenue sources Trading function Foundation Improvement Focus Development Manufacturing Function Semiconductors Special Feature Contributing to Industry through the Synergy of Semiconductors, the Environment, and Technology Our growth alongside the domestic semiconductor industry The semiconductor industry in Japan began when NAGASE Group established a joint venture company as a sole agent for America's Eastman Kodak Company (currently Kodak) and started importing video film that would later be used for semiconductor photolithography technology. Since 1974, NAGASE has held the NAGASE Microelectronics Seminar, a cross-industry workshop for domestic semiconductor-related companies aimed at improving semiconductor technology. Connections with the full value chain As a manufacturer and supplier of both materials and equipment, NAGASE expands globally while connected to the full value chain in the semiconductor industry and has carved its unique position. It is because the Company has manufacturing functionality within the Group, that we can solve critical problems at key processes and respond quickly to changing customer needs or technology trends. Moving toward our customers' next goals we improve the surrounding processes and involve relevant parties when offering suggestions. Number of business partners as a chemical trading company Approx. 18,000 companies Number of semiconductor-related business partners Approx. 300 companies Announcement of the acquisition of SACHEM's Asian business In preparation for the full-scale launch of our recycling business for high-purity developer (TMAH: tetramethyl ammonium hydroxide), a chemical solution essential to the semiconductor manufacturing process, we acquired the semiconductor-grade high-purity chemicals business of US-based SACHEM, Inc. (hereinafter, SACHEM) in the Asia region in June 2025. SN Tech Corporation (hereinafter, SN Tech), a joint venture between NAGASE, Nagase ChemteX, and SACHEM, which has advanced technological capabilities and expertise in the area of high-purity chemicals, has been working on the recycling of developer for LCD panels since 2008. Based on the know-how we have accumulated, we will launch a business that recovers and recycles developer for advanced semiconductors, leading to the expansion of our semiconductor manufacturing business. Semiconductor gross profit (100 million yen) Contributing to the industry's environmental efforts through developer recycling Until now, used developer has been treated as chemical waste, posing environmental and financial challenges for the semiconductor manufacturing industry. In this business, we will use advanced electrolysis and refining technologies to recover and recycle these materials and deliver them back to semiconductor manufacturers. This cutting-edge initiative is the first of its kind in Japan, and one of only just a handful in the world. The new plant is equipped with electrolysis and refining facilities for the manufacture and purification of TMAH. In addition to reducing the environmental impact of TMAH, this initiative will also reduce the costs associated with procuring a stable supply of the material, as well as its disposal as industrial waste, thereby contributing to improved profitability. NAGASE's value provided Semiconductors (digital industry) Ability to make suggestions to the electronics industry Rebuilding each supply chain × Environment (greenification) Materials / processing / low-consumption electrical products × Technology Customization / sheeting technology / recycling technology Issues in the semiconductor industry Growing importance of semiconductors (growth of IoT, advancement in communication technology, etc.) Economic security (geopolitical risks local production and consumption needs, rebuilding the supply chain) Technology trends, such as Chiplets Environmental regulations, recycling (changes in products handled) 600 185 175 159 334 175 300 200 100 0 300 200 500 Foundation Focus Approx. 4 billion yen from SACHEM, 540 400 Inc.'s Asian business 360 FY2024 Actual FY2025 Forecast FY2030 Concept of figure New TMAH recovery/recycling plant in HigashiOsaka City (opened March 2025) Advantage NAGASE offers to customers and society Reuse of TMAH and water • Reduction in industrial waste treatment Energy reduction • Response to environmental issues TMAH: Tetramethyl ammonium hydroxide Strengths (resources) and strategies behind the value offered by NAGASE To improve the NAGASE model, we will provide with more comprehensive strategic measures that can be used to tackle clients' concerns Involving the peripheral materials and device manufacturers with our internal products, we secure our position as the de facto standard, and continue to expand our business range as a trading company First, we produce results with industry-leading customers, and strive to become the de facto standard The Company uses its proprietary technology to develop products not yet found, and avoids imitating what other companies may have achieved 35 36 Green Mobius *1 DDS = Developer Dilution System *2 TMAH is a material used in all devices critical for environment and materials NAGASE Integrated Report 2025 Solving the challenges of advanced semiconductor packaging with liquid molding compounds (LMC) We began manufacturing epoxy resins in 1970, and introduced the technology for processing it into liquid molding compounds to Japan in the 1980s. Since then, the technology has evolved to become applicable to a wide variety of purposes and shapes. Nagase ChemteX's liquid molding compounds have become the de facto standard for applications involving advanced semiconductor packaging, which are essential for technologies such as generative AI. As the semiconductor encapsulation process grows increasingly complex, with semiconductors stacking ever more layers, we respond to customers' needs with our advanced formulation technology and highly reliable molding compounds. In 2000, we succeeded in developing sheet molding compounds, benefiting customers through improved processes and reduced cost. NAGASE Integrated Report 2025 Complexity of semiconductor package configuration Functions required for a semiconductor molding compound Reliability Fillability Warpage control × × Positive Warpage Zero Warpage Negative Warpage Foundation Improvement Focus Development Manufacturing Function Prinova A key driving force in food, one of our focus areas Realizing rapid and sustainable growth The US-based Prinova Group, which joined the NAGASE Group in 2019, operates a business in the food and nutrition field with a vertically integrated value chain that handles everything from material supply to product development and final product manufacturing. It is one of the world's biggest players in the field of food ingredients, including vitamins, amino acids, minerals, sweeteners, and caffeine. Doing business primarily in Europe and the Americas, Prinova has particularly extensive experience in the sports nutrition market, where it Carried products has a wide network. Prinova is still actively investing in expanding its business, and continuing its work to strengthen its manufacturing capabilities and expand into new business areas. Investments to strengthen/expand businesses Objective Examples of investments and their generated value Acquire high value-added services Acquisition of sweetener distributor TIH in 2021 Expansion into the sweeteners market Increase capacity/ efficiency Acquisition of powder milling and micronation service provider Lakeshore in 2021 Expansion of powder processing function Advance Prinova's regional strategy Acquisition of essential oil distiller Flavor Tec in 2023 Expansion of essential oils manufacturing function Building of new plant in Utah (USA) in 2022 Expansion of contract manufacturing Acquisition of food ingredient trading company Aplinova in 2025 Expansion into the South American market *TIH: The Ingredient House, LLC *Lakeshore: Lakeshore Technologies, LLC *Flavor Tec: Flavor Tec - Aromas De Frutas Ltda Message from the Prinova Group President & CEO A partner who continuously provides value by evolving and adapting to the Global market Prinova has leveraged its strength as a global trading company with one of the world's largest distribution networks for food and nutritional ingredients to expand its contract manufacturing business for premixes, flavors, and other products. In doing so, our business model has evolved into a hybrid combination of trading and manufacturing. Since becoming part of the NAGASE Group in 2019, we have further expanded the scale of sales of the 23 Prinova group companies, which are located primarily in the US and Europe. We have also steadily strengthened our manufacturing capabilities and broadened our market access. Our growth extends beyond mere expansion of scale. By integrating the scale of our trading function with innovation in manufacturing technology, we have been able to create new value across the entire supply chain. Moving forward, we will continue to develop our hybrid business model, aiming to become a trusted partner in the global nutrition industry. Masaya Ikemoto Chairman, President & CEO, Prinova Group LLC * Starting from fiscal year 2025, the Prinova Group partially changed the classification of manufacturing costs and selling, general and administrative expenses. The figures, including those for prior years, represent approximate amounts after reclassification reflecting this change. Nutrition business profit recovery (million USD) Outlook for efficiency improvements Improving topline performance Prinova is working to improve its project management and revitalize its sales organizations. It is identifying the priorities and necessary resources for each customer segment, while also expanding its focus to include the life and wellness market in order to capture market growth. The Company is also offering convenient packaging such as stick packs. Cost reductions through efficiency improvements By getting automated equipment introduced in fiscal 2024 operating at full capacity, and implementing advanced process controls, the Company will increase productivity and improve the efficiency of each process. This will enable it to curb fixed and variable costs, eliminate waste, and improve profitability, allowing the business to return to profitability in the future. The state of the nutrition business The launch of the Utah Plant in the United States is not proceeding as planned, resulting in targets for the overall nutrition business not being met. Prinova is investing resources into achieving profitability as soon as possible, which is the company's top priority. Currently, it is working to reduce costs through efficiency improvements and improve its topline. Restoring profitability in the nutrition business 2024 2025 2026 2027 2028 2029 (FY) 0 50 0 10 64% 67% 71% 76% 81% 100% 100 (million kg) 20 Production volume Direct labor costs/kg (compared to 2024 numbers) (%) 150 40 30 20 10 0 -10 -20 -30 Gross Profit Operating Profit Two initiatives for a rapid return to profitability Allowance for doubtful accounts: Approx. 8 million USD 2022 2023 2024 2025 2026 2027 (FY) × Network of 1,000+ customer companies Product lineup Concrete Growth Measures Strengthening supply chain initiatives (Expansion into South America through acquisition of Aplinova) As the major global players it supplies expand into the South American market, the Prinova Group launched its full-scale expansion into the Global South by acquiring Brazil-based food ingredient trading company Aplinova in April 2025. With Aplinova serving as Prinova's local point of contact, adoptions of products carried by Prinova in the region have expanded, and the Group has increased its presence in Brazil. Moving forward, Prinova will leverage its customer base of more than 1,000 companies with an aim to achieve gross profit of approximately 2 billion yen by 2030. Expanding the product portfolio In addition to strengthening its supply chain, Prinova also invests in the research and development of unique products that leverage its manufacturing technology. Such expansion of the product lineup contributes to its trading business in terms of both volume growth and market expansion. By deepen cooperation between its bases, it will accelerate the creation of unique and innovative products. Collaboration within the NAGASE Group Collaboration within the NAGASE Group, such as the global distribution of Nagase Viita's enzyme products via Prinova, is generating a variety of synergies including the expansion of sales channels. Moving forward, we will accelerate our global expansion into food through further collaborations of this nature. Finding a "missing part" Achieving approx. 20% CAGR growth in South America Aiming for approx. 15 million USD gross profit by around 2030 NAGASE Integrated Report 2025 NAGASE Integrated Report 2025 37 38 Manufacturing Function Life Sciences New Regions Global South Foundation Improvement Focus Development Launch of Nagase Diagnostics Co., Ltd. In July 2025, the NAGASE Group incorporated Nagase Diagnostics Co., Ltd. (NDX), which took over the diagnostics business of Asahi Kasei Pharma Corporation, in order to strengthen its manufacturing capabilities and functions in the life sciences field. NDX develops, manufactures, and sells diagnostic reagents, enzymes, and other life science-related materials. Diagnostics business Diagnostic reagents are used to analyze body fluids (blood, urine, etc.) as part of routine health checkups and to monitor the effectiveness of disease diagnosis and treatment. They are widely used by medical and research institutions. Diagnostic enzymes are the raw materials used to manufacture diagnostic reagents. By reacting with specific substances (chemical components, proteins, metabolites) contained in blood and other body fluids, they generate and/or amplify optical signals, enabling precise measurement of the concentration of the target substance. Building a foundation for synergy through human and technical exchanges The NAGASE Group believes that in order to achieve the true purpose of Nagase Diagnostics' incorporation into the Group, which is to generate synergy, it is essential to understand the new company's business and get to know its people. On the first day of the incorporation, Foundation Improvement Focus Development a kickoff ceremony was held in the Ohito District of Shizuoka Prefecture's Izunokuni City, where the company's manufacturing and development base is located, with approximately 200 employees in attendance. At a later Group employee exchange event held at NAGASE'S Tokyo Head Office in July, NDX Representative Director Hironao Makise introduced the company's business and its employees, helping to deepen its ties with the Group. We are working to strengthen the next base by accelerating our investment into human and other resources in India, Indonesia, Mexico, and Brazil (the Global South), positioned as new regions expected to see continued growth moving forward. Latest initiatives in the Global South India Expanding the market for mobility, life & healthcare products, semiconductors, smartphones, etc. Indonesia Pioneering markets in the area of food (food materials) as population grows Mexico Strengthening local manufacturing function in the area of mobility China → Creating new businesses through talent exchanges between overseas locations in Mexico and other countries Brazil Expanding our agricultural products Become a reliable partner for seizing opportunities in rapidly growing India CEO, Nagase India Pvt. Ltd. Eiroku Oki With the Indian market growing rapidly in recent years due to population growth and the international situation, Japanese companies in the automotive, food, and many other industries have been expanding their presence in the country. There are also expectations for a future revitalization of the semiconductor sector. Nagase India, which celebrated its 60th anniversary this year, aims to become a reliable partner for companies taking on the challenge of doing business in a different cultural and business environment. We will do this by further leveraging strengths including the know-how and networks we have built in India, as well as our excellent Indian staff with many years of experience, and by providing support such as back-office development. We will also expand our businesses that utilize India's highly competitive materials. Establishing a joint venture to expand the connector business NAGASE established a joint venture with Japan Aviation Electronics Industry, Ltd. (JAE) in March 2025 with an aim of expanding sales of automotive and motorcycle USB chargers and connectors in the Indian market. Already one of the world's leading markets, the Indian market for these products is expected to grow even further as government policies accelerate the country's transition to electric vehicles. Building on its know-how on doing business in India, as well as its local networks, NAGASE will grow this business alongside JAE, which is a global supplier of automotive connectors and harnesses. We aim to strengthen our customer support, establish production capabilities through collaboration with local partners, and reinforce the supply chain. Expansion of our high-value-added plastic and resin business While our plastic and resin business has long led the ASEAN and Chinese market, we established a joint venture company in June 2025 with the aim of expanding it into the Indian market. The new company, NAGASE WAHLEE INDIA PRIVATE LIMITED (NWI), is a partnership between Taiwan-based Nagase Wahlee Plastics Corp. (NWP), our main distributor of plastics in Greater China, and Nagase India (NIN). NWI will combine NWP's expertise in the needs and business practices of Chinese and Taiwanese customers with NIN's insights on the Indian legal and regulatory system. In this way, it will carefully identify new business needs in India, thereby maximizing business opportunities. Uniqueness of Nagase Diagnostics NAGASE Integrated Report 2025 39 In vitro diagnostic (IVD) assay kit using a unique enzymatic method Utilizing a unique enzymatic method, NDX developed the Lucica™ GA-L assay kit for measuring glycated albumin (GA), an indicator of blood sugar management, and has been manufacturing and selling it since 2004. In 2022, it launched Lucica™ GA-L2, an assay kit compatible with a standard reference material for GA assays, allowing for higher reliability in medical and laboratory settings. It also manufactures and sells Lucica™ MI, an assay kit for measuring myo-inositol in urine samples, helping to screen for impaired glucose tolerance, which cannot be determined by fasting plasma glucose testing alone. Strengthening the diagnostics business and contributing to long-term Group growth NDX develops, manufactures, and sells various diagnostic reagent enzymes used in a wide range of applications, including the analysis of blood glucose and lipids, kidney function, and liver function. Its 40 NAGASE Integrated Report 2025 strength lies in the manufacture of a wide variety of enzymes using its unique microbial culture technology, among other capabilities. The NAGASE Group has long engaged in the research, development, manufacture, and sale of industrial enzymes and enzymatic reaction products, primarily through our core manufacturing company in the biotechnology business, Nagase Viita, providing products to a wide range of industries. Moving forward, the NAGASE Group will combine NDX's diagnostic enzyme manufacture technology and application know-how with its existing businesses to create technological synergy. At the same time, we will leverage NAGASE's global network to accelerate our expansion into the medical and healthcare markets in India and Southeast Asia, which we expect to grow in the future. Developing Next Generation Businesses Corporate Venture Capital Initiatives to Improve Profitability Entering new business areas and acquiring new technologies ...

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