NIKKON : Business Report (Fiscal Year Ended March 31,2025)

Business Report for the 84th Fiscal Year

April 1, 2024 March 31, 2025

CONTENTS

01 Message to Shareholders 03 Segment Information

04 Enhancing Shareholder Returns and Corporate Value

05 Initiatives under the Thirteenth Medium-Term Management Plan

1. ESG Initiatives

2. Group Network

3. Financial Data

10 Stock Information/Company Profile

NIKKON Holdings Co., Ltd.

Security: 9072

Greetings

I would like to extend my heartfelt gratitude to our shareholders for their ongoing support.

Here I will report on our business results for the fiscal year ended March 31, 2025 as well as our initiatives for future growth.

June 2025

President and

Representative Director

Masakatsu Kuroiwa

The third and final fiscal year of the Thirteenth Medium-Term Management Plan has started.

To achieve this plan, we will expand full capacity utilization and aggressive sales activities, and join forces with new Group companies to marshall the strengths of the entire Group.

Please tell us about the consolidated financial results for the fiscal year ended March 31, 2025.

Net sales increased, reflecting an increase in the volume of business and the contribution of acquired companies to financial results. Operating profit increased, bolstered by higher sales and the effects of the addition of new warehouses, despite a relentless surge in expenses driven by rising personnel expenses and fuel prices.

During the fiscal year ended March 31, 2025, the Japanese economy staged a gradual recovery, against a backdrop of strong corporate earnings and also under the impact of firm demand from inbound tourists. However, the economic outlook remained uncertain, with mounting geo-political uncertainty surrounding the conflicts in Ukraine and the Middle East, and weak personal consumption due to the

failure of wage growth to keep pace with inflation fueled by rising resource prices. In the logistics industry, the business environment has remained challenging, given the tightening of environmental measures and legislation, in addition to labor shortages including a lack of truck drivers, soaring labor and fuel costs, and surging construction costs for capital investments. Operating under these conditions, the NIKKON Group established new warehouses in Utsunomiya, Tochigi Prefecture, Tokai, Aichi Prefecture, Ota, Gunma Prefecture, and Kanegasaki-cho, Iwate Prefecture, as well in Thailand and Indonesia overseas, expanding business operations and stepping up sales activities. As a result, the Group's consolidated net sales for the fiscal year ended March 31, 2025 were 247,890 million yen, up 11.5% from the previous fiscal year, due to an increase in the volume of business and the effects of M&A. Operating profit was 23,155 million yen, up 9.0% from the previous fiscal year, thanks in part to the

Message to Shareholders

increase in sales, which more than offset one-time expenses related to M&A. Ordinary profit was 23,969 million yen, up 0.4% from the previous fiscal year, despite the occurrence of foreign exchange losses. Profit attributable to owners of parent was 16,550 million yen, down 0.4% from the previous fiscal year; however profit from core business operations was strong as planned.

Consolidated Financial Results for the Fiscal Year Ended March 31, 2025

Net sales

247,890 million yen

Up 11.5% YoY

Ordinary profit

23,969 million yen

Up 0.4% YoY

Operating profit

23,155 million yen

Up 9.0% YoY

Profit attributable to owners of parent 16,550 million yen

Down 0.4% YoY

What is the consolidated results forecast for the fiscal year ending March 31, 2026 and what actions will you be taking?

We will operate new and existing facilities at full capacity and continue aggressive sales activities, so as to achieve our targets for the third and final fiscal year of the Thirteenth Medium-Term Management Plan.

Looking ahead, while the Japanese economy is on a moderate recovery path, the environment surrounding the logistics industry is expected to grow more severe, given Japan's "2025 problem" in relation to workforce decline and the restructuring of the logistics industry, in addition to rising oil prices and chronic labor shortages. These are the conditions we are experiencing now in the fiscal year ending March 31, 2026, which is the final fiscal year of the Thirteenth Medium-term Management Plan. Under our consolidated earnings plan for the fiscal year, our target net sales are 280,000 million yen and target operating profit is 28,000

million yen. To achieve this plan, we will acquire new operations, pursue greater depth in our existing operations, and implement M&A, with CHUOH PACK INDUSTRY CO., LTD. also joining the Group this March. We are making steady progress towards achieving our plans.

Regarding ESG initiatives, we are addressing environmental issues by working to completely abolish mercury lamps this fiscal year and continually expanding our use of on-site PPA models for self-consumption solar power generation. In addition, we will also shorten the working hours of drivers by utilizing our expertise and network for consolidated logistics and long-distance relay transportation and we will promote the shift to low-carbon services through greater use of double articulated trucks.

On the diversity front, we have introduced a maternity leave and childcare leave system and shorter working hours and made improvements to the workplace environment to increase the retention rate of female employees, with the aim of becoming a company where all employees can flourish regardless of gender.

We also began offering endowed lectures in the Kingdom of Thailand, and promoted involvement in forestry environmental preservation activities in Sayama, Saitama Prefecture.

Do you have a message for shareholders?

We will continue our efforts to ensure stable dividends and return profits to shareholders.

We recognize that enhancing corporate value over the medium to long term while ensuing the stable return of profits to shareholders is one of our key management issues. In October last year, we carried out a 2-for-1 stock split with the objective of boosting the liquidity of the Company's stock and expanding investors. We also announced the adoption of a target dividend on equity ratio (DOE) of 4% or more in place of our previous target of a dividend payout ratio of 40%, as well as share buybacks of around 40,000 million yen by the fiscal year ending March 31, 2029. We will remain proactive in striving to deliver shareholder returns while considering the balance with investments necessary for growth. We look forward to your continued support.

Net sales composition by segment

47.6 %

Develops vehicles that match cargo characteristics and volume and provides services using the optimal trans-

Net sales

150,000

(Millions of yen)

Operating profit

8,000

(Millions of yen)

portation method

Results summary

Net sales increased 17.5% year on year to

117,963

6,000 5,585

100,398

100,000

6,314

117,963 million yen, due mainly to recovery in volume of cargo handled and the contribution of M&A. Operating profit was up 13.1% year on year to 6,314 million yen, thanks to higher sales

25-meter full trailer

50,000

FY2024/3

FY2025/3

4,000

FY2024/3

FY2025/3

and improved transportation efficiency, despite soaring fuel prices and increases in other costs.

Warehousing

Net sales composition by segment

16.5 %

Offers a wide range of product storage services through our warehouse and warehousing management systems

Net sales

(Millions of yen)

Operating profit

F

(Millions of yen)

F

Results summary

Net sales surged 5.2% year on year to 40,881 million yen, due to an increase in cargo stored after the continued addition of warehouses in Japan and overseas. Operating profit rose 2.8% year on year to 8,558 million yen, despite increases in personnel expenses and depreciation.

WALRE Utsunomiya

Provides logistics services such as ex-

Net sales composition by segment

23.1 %

port packaging, distribution processing, and development of packaging materials

Net sales

60,000

(Millions of yen)

55,000

53,809

57,364

Operating profit

(Millions of yen)

Results summary

Net sales climbed 6.6% year on year, to 57,364 million yen, due to growth in automotive business in North America and increased handling volume of industrial machinery in Japan. Operating profit also increased 28.0% year on year to 4,248 million yen, following the rise of net sales.

5,000

4,248

3,320

50,000 FY2024/3

FY2025/3

0 FY2024/3

FY2025/3

Testing

Net sales composition by segment

9.7%

Supports R&D and quality assurance for automobiles, motorcycles, and general purpose products based on the strengths of our testing analysis and

Net sales

26,000

(Millions of yen)

24,000

22,881

24,152

Operating profit

(Millions of yen)

technology capabilities

Results summary

Net sales increased 5.6% year on year, to 24,152 million yen, attributable to an increase in business volume related to autonomous driving and electric vehicles. Operating profit rose 19.8% year on year, to 3,989 million yen, due to the effect of

4,000

3,989

3,500

3,329

22,000

FY2024/3

FY2025/3

3,000

FY2024/3

FY2025/3

higher sales.

Enhancing Shareholder Returns and Corporate Value

Business Plan

JPY 120

JPY 100

JPY 80

JPY 60

JPY 40

JPY 20

JPY 0

Shareholder Returns

Payout ratio 44.7%

¥27

30.3%

29.9%

30.3%

30.7%

¥55

JPY 27 after JPY 37 after

the 2-fo5r4-1円split the 2-for-1 split

¥51

¥27

Forecast

¥38

¥35

¥34

¥35

Annual JPY 74

Interim JPY 37

¥54

¥48

¥50

¥38

¥32

¥33

¥34

Changes in dividend per share and payout ratio (values before the stock split)

2019/3 2020/3 2021/3 2022/3 2023/3 2024/3 2025/3 2026/3

Interim dividend Year-end dividend Consolidated payout ratio

50 %

45 %

40 %

35 %

30 %

25 %

20 %

15 %

10 %

5%

0%

Purchase of treasury shares

1. Number of shares acquired: 1,632,800 shares Amount of purchase: 3.0 billion yen

2. Number of shares acquired: 3,615,700 shares Amount of purchase: 7.0 billion yen

*The number of shares acquired is the number after the stock split.

Stock split

1. Effective date: October 1, 2024

2. Split method: Split at a ratio of two shares for each share of common stock

   Revision of shareholder return policy announced on April 4, 2025
   
   

   *The revised policy came into effect in fiscal year ending March 31, 2026.

   Payout ratio at 40% Introduction of dividend on equity ratio (DOE) at 4% or higher

   
   
   

3. Purpose of the split: Making share trading units more affordable and increasing liquidity

   Enhancement of Corporate Value
   
   

   A new initiative to enhance corporate value -- Establishment of a special committee --

   1. Purpose of establishing the committee

   The purpose of the committee is to discuss and review measures to enhance corporate value, including the Company's ownership, management and operation of properties, from the viewpoint of seeking to enhance the Group's corporate value in the medium and long term, while ensuring objectivity

   2. Main roles of the committee

   • Reviewing the status of ownership, operation policy, and other matters related to properties held by the Group from the perspectives of assets and capital efficiency

   • Making recommendations to the Board of Directors about necessary revisions to policies

   • Considering and recommending measures that will help enhance corporate value

   • The status of consideration is reported to the Board of Directors on an ongoing basis, and the results are planned to be disclosed by the end of 2025

     3. Composition of the committee

   • To consist of four members who are Independent Outside Directors (excluding Directors who are Audit & Supervisory Committee Members), namely, Ms. Aiko Koma, Mr. Ryutaro Ozeki, Mr. Kazunari Kanda, and Mr. Clark Graninger

   • The opinions of external advisors will be applied as necessary