Financial Results of 3dr Quarter （SCRIPT）

We sincerely appreciate your continued understanding of Sanden's business activities.

We will now explain the results for the third quarter of the fiscal year ending December 2025.

The presentation will proceed in the following order:

1. Key Highlights and Consolidated Financial Summary

2. Revenue by Segment (by Region and Product)

3. EBITDA Analysis

4. Consolidated Balance Sheet

5. Cash Flow

6. Business Highlights

   1. ‌Key Highlights

      November 20, 2025 Sanden Corporation

      
      
      

      1/８

      Revenue

Implemented structural reforms across all group companies to prepare for the impact of U.S. tariffs and potential economic downturn

© 2025 SANDEN CORPORATION

First, let me explain the key points of the financial results.

Sales revenue for the third quarter increased despite a decline caused by foreign exchange effects, supported by higher EV demand driven by government policies in China and growth among local OEMs in India.

Operating profit rose thanks to productivity improvements in China and the Americas, as well as reductions in quality-related costs in Japan and the Americas.

Ordinary profit showed a slight increase, partly due to foreign exchange valuation losses on foreign currency-denominated bonds.

On the strategic front, we organized a special task force to address U.S. tariff policies and implemented measures such as changing supply routes and negotiating price pass-through with customers.

In addition, we carried out structural reforms across all group companies, including a voluntary retirement program, to strengthen our corporate structure.

1. Key Highlights and Consolidated Financial Summary

November 20, 2025 Sanden Corporation

2/８

※ Equity Gains of Affiliated Companies: This mainly relates to Sanden Huayu Automotive Air Conditioning Co., Ltd., an equity-method affiliate of our company.

（Some of our products are sold through joint ventures in markets such as China, and revenue from these joint ventures is recorded as non-operating revenue in our financial statements.）

Actual figures are rounded off to the nearest ¥10 million. *Exchange rate: Market average rate

© 2025 SANDEN CORPORATION

Next, let me explain the overview of the consolidated financial results. Consolidated sales revenue was ¥138.5 billion, an increase of ¥0.7 billion compared to the same period last year.

Operating profit was negative ¥2.3 billion, representing an improvement of

¥2.0 billion year on year. EBITDA came to ¥6.7 billion, up ¥1.3 billion from

the previous year.

Net income attributable to owners of the parent was negative ¥3.2 billion, a decrease of ¥3.3 billion compared to the same period last year.

This was due to productivity improvements and reductions in quality-related costs in the Americas and China, which helped offset some of the impact;

however, foreign exchange effects remained significant at negative ¥1.9 billion, and valuation losses on foreign currency-denominated bonds also had an impact.

‌100

198

100 100 100

150 (-7.7%)

103 -8

150

150

150

200

200

200

193 +5

200

200

300

250

© 2025 SANDEN CORPORATION

95

100

50

50

50

50

0

0

0

0

2024 2025 2024

Jan-Sep Jan-Sep Jan-Sep

2025

Jan-Sep

0

2024 2025

Jan-Sep Jan-Sep

2024 2025

Jan-Sep Jan-Sep

2024 2025

Jan-Sep Jan-Sep

496

２. Sales Revenues by Segment: By Region

Revenue: ¥137.7 billion YoY: ¥1.1 billion （＋0.7％） Regional

Composition

November 20, 2025 Sanden Corporation

3/８

Japan (7%)

（Incl. Foreign Exchange Impact ▲¥1.9 billion)

※Automotive Components segment only. Excluding other businesses.

Ratio

Americas (14%)

EU (35%)

Revenue by Region: YoY

[Unit: ¥100M] （ ） YoY Percentage Change

YoY Change in Amount

Asia (22%)

YoY Exchange Rate Impact

China(22%)

Production adjustment due to market changes

Increase in EV product deliveries

Increase in product deliveries to Indian OEMs

Increase in EV product and Decrease in volumes for AFM product deliveries Japanese OEMs and

construction equipment

500

250

(-3.8%) 477

-19

350

300

307(＋1.1%)310

+3

350

350

350

300

(+11.3%)297

267 +30

300

300

400

(+2.6%)

250

250

This shows sales revenue by segment, excluding other businesses and focusing on the Automotive Components segment.

Sales revenue for the third quarter was ¥137.7 billion, an increase of ¥1.1

billion or 0.7% compared to the same period last year.

Excluding the negative foreign exchange impact of ¥1.9 billion, the actual increase was ¥3.0 billion.

By region:

Europe recorded a decrease of ¥1.9 billion, down 3.8% year on year, due to market changes, although foreign exchange had a positive impact of ¥0.3 billion.

China posted an increase of ¥0.3 billion, up 1.1%, with steady local sales

despite a negative foreign exchange impact of ¥0.7 billion.

Asia saw an increase of ¥3.0 billion, up 11.3%, driven by growth in the

Indian market and higher sales to local OEMs.

The Americas recorded an increase of ¥0.5 billion, up 2.6%, supported by

EV-related product deliveries and strong aftermarket performance. Japan posted a decrease of ¥0.8 billion, down 7.7%, mainly due to lower sales to Japanese OEMs and for construction equipment.

Overall, the declines in Europe and Japan were offset by growth in Asia and the Americas, allowing us to maintain positive growth.

‌200

(+21.3%)

+62

400

228

300

259

300

-42

301

290

2024 2025 2024 2025 2024 2025 2024 2025

Jan-Sep Jan-Sep Jan-Sep Jan-Sep Jan-Sep Jan-Sep Jan-Sep Jan-Sep

© 2025 SANDEN CORPORATION

200

200 (-13.7%)

147 -18

129

200

100

100

100

0

0

0

0

Solid demand in China

２． Revenue by Segment: By Product

Revenue: ¥137.7 billion YoY: ¥1.1 billion （＋0.7％）

（Incl. Foreign Exchange Impact ▲¥1.9 billion)

※Automotive Components segment only. Excluding other businesses.

November 20, 2025 Sanden Corporation

4/８

Product Composition Ratio

ITMS (9%) Integrated Thermal

Management System

EC (19%)

Electric Compressor

Revenue by Product: YoY

[Unit: ¥100M] （ ） YoY Percentage Change

YoY Change in Amount

MC (51%)

Mechanical Compressor

HVAC (21%)

A/C System

Stronger demand in Asia /

L s

ower sales to European OEM

(+1.3%)

300

Sales decline in China and Europe, accompanied by production adjustments

Declining demand in China

800

689 +９

699

400

400

400

(-16.3%)

600

By product category:

MC: Revenue increased by ¥0.9 billion year-on-year (+1.3%).

While sales of compressors to European OEMs declined, demand in Asia strengthened.

HVAC: Revenue surged by ¥6.2 billion year-on-year (+21.3%).

Sales in the Chinese market remained solid, driven by growing demand for electric vehicles.

EC: Revenue decreased by ¥4.2 billion year-on-year (−16.3%). Demand for electric compressors fell due to lower vehicle sales by our customers in China and Europe.

ITMS: Revenue decreased by ¥1.8 billion year-on-year (−13.7%). This was mainly attributable to weaker demand from our customers in China.

While strong growth in HVAC supported overall performance, declines in EC and ITMS remain a challenge.

Going forward, we will focus on strengthening competitiveness in electrification-related products and enhancing our system proposal capabilities.

‌+2.6

▲2.9

▲2.8

▲1.6

2024 Foreign Others Jan-Sep Exchange

Price

Volume Equity Logistics Cost Growth

SG&A Productivity

2025

Actual Impact

Mix Method Cost Reduction Investment Cost Improvement Jan-Sep

Actual

© 2025 SANDEN CORPORATION

+1.9

▲23

+4.7

+4.8

+14.5

54

67

+14.5

Positive Factors

Negative Factors Actual Results

[Unit: ¥100M]

November 20, 2025 Sanden Corporation

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３． Year-on-Year Variance Analysis - EBITDA

• Reduction in selling and administrative expenses through structural reforms

• Despite adverse impacts from exchange rates, tariffs, and annual price reductions, losses significantly decreased on a real-term basis

• Progress in productivity improvements in China and the Americas

EBITDA: +¥1.3 billion

EBITDA is an indicator of core operating profitability, excluding depreciation and amortization.

EBITDA for the third quarter was ¥6.7 billion, an improvement of ¥1.3 billion compared to ¥5.4 billion in the same period last year.

Positive factors:

• Productivity improvements in China and the Americas

• Reduction of quality-related costs in Japan and the Americas

• Continued efficiency gains in selling and administrative expenses through structural reforms

• Promotion of cost-reduction initiatives

  Negative factors:

• Foreign exchange valuation losses on foreign currency-denominated receivables and payables

• Impact of tariffs and annual price reductions requested by customers

  Maintaining the cost improvement effects from structural reforms remains a key challenge.

  We will continue initiatives aimed at improving profitability going forward.

  ‌Cash and 132 Deposits Account 342 Receivable （70 days）
  Inventories	356 （89 days）
  Others	125
  Fixed Assets	705

  ４． Consolidated Balance Sheet

  November 20, 2025 Sanden Corporation

  6/８

  Borrowings increased by approximately ¥8.1 billion compared to the previous fiscal year-end, and the debt ratio deteriorated to 88.4%.

  [Unit: ¥100M]

  [Unit: ¥100M]

  1,659

  1,754

  179

  1,758

  177

  1,659

  1,754

  1,758

  355

  (76 days)

  400

  （74 days）

  Account Payable

  378

  （91 days）

  95

  341

  （91 days）

  86

  Net Debt

  Others

  748

  754

  Net Assets

  （11.6％）

  Sep 2024

  USD: 143

  EUR: 159

  Dec 2024

  USD:154 EUR:161

  Sep 2025

  USD:149 EUR:174

  Sep 2024

  Dec 2024

  Sep 2025

  （Equity Capital: 197）（Equity Capital: 226）（Equity Capital: 194）

  （11.9％）

  （12.9％）

  （11.0％）

  *Individual line items are rounded; therefore, totals may not match.

  *Accounts receivable are presented net of allowance for doubtful accounts related to Iranian receivables.

  © 2025 SANDEN CORPORATION

  204

  （13.4％）

  236

  (12.4% )

  206

  387

  443

  452

  648

  (516)

  780

  (603)

  698

  (520)

  353

  (89 days)

  387

  (87 days)

  377

  (88 days)

  Liabilities and Equity

Next, let's move on to the consolidated balance sheet.

As of the end of September 2025, total assets stood at ¥175.8 billion, an increase of ¥0.4 billion compared to the end of the previous fiscal year.

Assets:

• Accounts receivable increased by ¥4.5 billion to ¥40.0 billion, driven by higher

  sales in China and the Americas.

• Inventories decreased by ¥3.7 billion to ¥34.1 billion, reflecting progress in

  inventory reduction.

• Fixed assets rose by ¥0.6 billion to ¥75.4 billion, mainly due to an increase in

  equity-method investments.

  Liabilities:

• Interest-bearing debt increased by ¥8.2 billion to ¥78.0 billion, primarily due to

  restructuring costs, working capital needs, and capital expenditures.

  Net assets:

• Decreased by ¥3.2 billion to ¥20.4 billion, resulting in a decline in the equity ratio

to 11.0%.

The debt-to-equity ratio worsened to 88.4%, and to improve this, we will implement cash pooling, promote asset liquidation, and strengthen receivables and inventory management.

５．Cash Flow

November 20, 2025 Sanden Corporation

7/８

[Unit: ¥100M]

[Unit: ¥100M]

[Unit: ¥100M]

65

79

63

39

▲14

▲51

Working capital: +70 Prepaid taxes and other adjustments: ▲32 Depreciation and Amortization: ＋7

Restructuring provisions: ＋23

Withdrawal of time deposits: ＋24

Short-term borrowing: ＋17

© 2025 SANDEN CORPORATION

Next, I will explain the cash flows.

Operating cash flow was negative ¥1.4 billion, a significant improvement from negative ¥8.8 billion in the same period last year, but further improvement is still required.

The main factor behind the improvement was working capital.

Investing cash flow was negative ¥5.1 billion, narrowing from negative ¥7.7 billion in the same period last year.

We are continuing capital investments based on our medium-term plan.

Financing cash flow was positive ¥7.9 billion, up from positive ¥6.3 billion in

the same period last year.

Financing was carried out primarily to support capital investments.

Going forward, we will focus on inventory reduction activities to further improve the efficiency of working capital, while also working to enhance profitability.

‌© 2025 SANDEN CORPORATION

First-Year Certification under the Ministry of the Environment's "Nature Symbiosis Site" Program, Legalized in FY2025

Recognized for the objectivity of biodiversity value, management framework, and the feasibility of planning and execution.

Joined Gunma Nature Positive Promotion Platform

Aiming to prevent biodiversity loss and achieve

recovery through initiatives aligned with the "Nature Positive" concept.

Japan Acquired new business for EC HVAC, new refrigerant condensers, and compressors for gas heat pumps

Acquired ECH business for global

China

OEMs

Participation in the SCHUFA Conference by the European Sustainability Lead

Agreed on the importance of collaboration between companies and financial institutions to build an efficient and standardized ESG data model.

Acquired new business for EC systems from new customers; secured large MC business

Continued carry-over orders for major EC and MC business

Major Nominations

Americas

EU

2025

Jan-Sep Actual

2024

Jan-Sep Actual

Received Quality Excellence Award from Caterpillar for the third consecutive year Recognized comprehensively for strict requirements such as

quality, stable supply, and continuous improvement activities.

STC: Received the Highest Evaluation from Honda APC

Demonstrated excellence in quality, cost, and delivery, and received the Best Supplier Award for the first time.

Received Top Supplier Rating from Nissan

Achieved the highest level for 24 consecutive months and received the Quality Award for two consecutive years.

YoY

+８％

1,826

1,978

[Unit: ¥100M]

November 20, 2025 Sanden Corporation

8/８

6. Business Highlights (Jul-Sep)

Finally, I will explain the business topics.

The status of new business acquisition for January-September 2025 was

¥197.8 billion, an 8% increase year-on-year.

North America: Acquired new business for EC systems from new customers and secured large MC business.

Europe: Continued carry-over orders for major EC and MC business. China: Acquired ECH business for global OEMs.

Japan: Acquired new business for EC, HVAC, new refrigerant-compatible condensers, and compressors for gas heat pumps (non-automotive applications).

In terms of quality, received Top Supplier Rating from Nissan Motor for two consecutive years, and Quality Excellence Award from Caterpillar for the third consecutive year.

Additionally, received the Best Supplier Award from Honda APC for the first time, demonstrating excellence in quality, cost, and delivery.

For sustainability initiatives: Achieved first-year certification under the

Ministry of the Environment's "Nature Symbiosis Site" Program, which was

legalized in FY2025, and promoted activities globally.

This concludes the presentation of financial results for the third quarter of the fiscal year ending December 2025.

We will continue to steadily pursue profitability improvement and optimization of our business structure, aiming for sustainable growth.