Consolidated Financial Results for the Three Months Ended June 30, 2025

Company name: Sanyo Chemical Industries, Ltd.

Listing: Tokyo Stock Exchange

Securities code: 4471

URL: https://www.sanyo-chemical.co.jp/ Representative: Akinori Higuchi, President & CEO

August 1, 2025

Inquiries: Kenichi Nishimura, Director & Executive Officer, In charge of General Affairs TEL: +81-75-541-4312

Scheduled date to commence dividend payments: –Preparation of supplementary material on financial results: None Holding of financial results presentation meeting: None

(Figures are rounded down to the nearest million yen)

1. Consolidated financial results for the first three months of the fiscal year ending March 31, 2026 (from April 1, 2025 to June 30, 2025)

   1. Consolidated operating results (cumulative) (% indicates year-on-year changes)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      Three months ended June 30, 2025	Millions of yen 31,987 39,654	% (19.3)	Millions of yen 1,858 2,183	% (14.9)	Millions of yen 2,285 3,571	% (36.0)	Millions of yen 8,992 2,402	% 274.2
      June 30, 2024		1.9		209.8		25.7		(18.8)

      Note: Comprehensive income: Three months ended June 30, 2025 ¥10,537 million [146.3%]

      Three months ended June 30, 2024 ¥4,278 million [13.0%]

      	Basic earnings per share	Diluted earnings per share
      Three months ended	Yen	Yen
      June 30, 2025	406.51	–
      June 30, 2024	108.80	–

   2. Consolidated financial position

   	Total assets	Net assets	Equity ratio	Net assets per share
   As of	Millions of yen 181,206 176,366	Millions of yen 146,720 138,302	%	Yen
   June 30, 2025			79.4	6,501.27
   March 31, 2025			76.8	6,119.90

   Reference: Equity: As of June 30, 2025 ¥143,821 million

   As of March 31, 2025 ¥135,385 million

2. Cash dividends

   	Cash dividends per share
   	1Q (as of June 30)	2Q (as of Sept. 30)	3Q (as of Dec. 31)	4Q (as of Mar. 31)	Total
   Fiscal year ended March 31, 2025 Fiscal year ending March 31, 2026	Yen – –	Yen 85.00	Yen –	Yen 85.00	Yen 170.00
   Fiscal year ending March 31, 2026 (Forecast)		85.00	–	85.00	170.00

   Note: Revisions of the latest forecasts for cash dividends announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2026 (from April 1, 2025 to March 31, 2026)

(% indicates year-on-year changes)

Note: Revisions of the latest forecasts for earnings announced: Yes

* For revisions of earnings forecasts, please see the “Notice Regarding Recognition of Deferred Tax Assets and Revisions to Consolidated Earnings Forecast for the Second Quarter (Interim Period) and the Full Fiscal Year Ending March 31, 2026” released today (August 1, 2025).

1. Significant changes in the scope of consolidation during the period: Yes Excluded: 1 company (SDP Global Co., Ltd.)

   Note: See page 11, “2. Quarterly consolidated financial statements and significant notes thereto, (4) Notes to quarterly consolidated financial statements, Significant changes in the scope of consolidation during the period” for more information.

2. Application of special accounting methods for the preparation of quarterly consolidated financial statements: Yes

   Note: See page 11, “2. Quarterly consolidated financial statements and significant notes thereto, (4) Notes to quarterly consolidated financial statements, Application of special accounting methods for the preparation of quarterly consolidated financial statements” for more information.

3. Changes in accounting policies, accounting estimates, and restatements

   1. Changes in accounting policies associated with revised accounting standards, etc. : None

   2. Changes in accounting policies other than a. above : None

   3. Changes in accounting estimates : None

   4. Restatements : None

4. Number of shares issued (common stock)

   1. Number of shares issued at the end of the period (including treasury shares)

      As of June 30, 2025	23,534,752 shares
      As of March 31, 2025	23,534,752 shares

   2. Number of treasury shares at the end of the period

      As of June 30, 2025	1,412,712 shares
      As of March 31, 2025	1,412,596 shares

   3. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Note: Shares of Sanyo Chemical Industries, Ltd. (the “Company”) owned by the trust whose beneficiaries are directors, etc. of the Company are included in the treasury shares that are excluded in calculating the number of treasury shares at the end of the period and the average number of shares outstanding during the period.

• Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit corporation: None

• Appropriate use of earnings forecasts and other special items

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual earnings may differ significantly due to various factors. See page 5, “1. Qualitative information regarding financial results for the three months ended June 30, 2025, (3) Information concerning future forecast such as consolidated earnings forecasts” for more information regarding the circumstances behind the assumptions used in earnings forecasts and matters to be noted when relying on earnings forecasts.

Attached Material Index

1. Qualitative information regarding financial results for the three months ended June 30, 2025 2

   1. Financial position and operating results 2

   2. Cash flows 4

   3. Information concerning future forecast such as consolidated earnings forecasts 5

2. Quarterly consolidated financial statements and significant notes thereto 6

   1. Consolidated balance sheets 6

   2. Consolidated statements of income and consolidated statements of comprehensive income 8

      Consolidated statements of income (cumulative) 8

      Consolidated statements of comprehensive income (cumulative) 9

   3. Consolidated statements of cash flows 10

   4. Notes to quarterly consolidated financial statements 11

      Notes to going concern assumptions 11

      Significant changes in the scope of consolidation during the period 11

      Notes on significant changes in the amount of shareholders’ equity 11

      Application of special accounting methods for the preparation of quarterly consolidated financial statements 11

      Notes on segment information, etc. 12

      Business combinations, etc. 14

3. Supplementary information 15

1. Qualitative information regarding financial results for the three months ended June 30, 2025

   1. Financial position and operating results

      During the three months ended June 30, 2025, Japanese economy showed a gradual recovery despite a decline in consumer sentiment due to high prices against a backdrop of an improvement in the employment and income environment. Meanwhile, the situation has been unpredictable as the impact on certain manufacturing industries due to U.S. tariff policies is beginning to emerge, among others.

      The forex market shifted to a trend of yen appreciation due to a tightening of the gap between Japanese and U.S. interest rates, among other factors. Furthermore, oil prices dropped mainly due to concerns about a global economic slowdown and increased crude oil production policies by OPEC+, despite a wild fluctuation due to the conflict between Israel and Iran.

      In the global economy, the outlook remains uncertain, as it does in Japan, due to concerns over an economic slowdown caused by U.S. tariff policies surfacing in regions such as Europe, America, and Asia, in addition to factors such as the prolonged situation between Russia and Ukraine and the geopolitical risk over the Middle East, among others.

      In the chemical industry, the business environment is undergoing irreversible changes, such as intensifying price competition due to the continued influx of Chinese products into the Japanese and Asian markets as a result of sluggish Chinese domestic demand and oversupply, among others. In response to this change, the Company has been working to enhance profitability for its core businesses through the implementation of our business portfolio reform aimed at shifting to high-value-added businesses set out in the “New Medium-Term Management Plan 2025.” Additionally, it is also focusing on the continuous promotion of “Monozukuri Transformation” aimed at streamlining the entire supply chain and the promotion of “Production Restructuring” which works toward the divestiture, integration, and consolidation of production facilities, among others.

      Under these circumstances, net sales for the period under review decreased by 19.3% year on year to

      ¥31,987 million primarily due to the impact of withdrawal from the superabsorbent polymer business and intensified competition with low-cost products made in China. In term of profit, operating profit was

      ¥1,858 million (a decrease of 14.9% year on year), as the improvement in profitability due to the withdrawal from the superabsorbent polymer business was not enough to offset the negative impact of decreased revenue, etc. Ordinary profit was ¥2,285 million (a decrease of 36.0% year on year) mainly due to factors such as foreign exchange losses and a deterioration in the share of profit of entities accounted for using equity method. On the other hand, profit attributable to owners of parent was ¥8,992 million (an increase of 274.2% year on year) mainly due to a recording of taxes expenses (profit), which includes income taxes and income taxes - deferred, resulting from careful consideration of the recoverability of deferred tax assets for the tax loss carry forwards and deductible temporary differences and the like carried over from the Company’s consolidated subsidiary SDP Global Co., Ltd. in connection with the absorption-type merger of said company.

      1. Business performance

         (Millions of yen)

         	Three months ended June 30, 2024	Three months ended June 30, 2025	Change		FY2024
         			(Amount)	(Change) (19.3)% (14.9)% (36.0)% 274.2% 273.6% (2.0) percentage point 2.1 percentage point 5.9 percentage point
         Net sales	39,654	31,987	(7,666)		142,258
         Operating profit	2,183	1,858	(324)		8,439
         Ordinary profit	3,571	2,285	(1,286)		9,670
         Profit attributable to owners of parent	2,402	8,992	6,589		4,151
         Basic earnings per share	¥108.80	¥406.51	¥297.71		¥187.79
         ROA (Return on assets*)	7.1%	5.1%			5.1%
         ROE (Return on equity)	6.9%	9.0%			3.0%
         ROIC (Return on invested capital)	3.3%	9.2%			4.8%
         Currency exchange (US$, CNY)	US$=¥155.86 CNY=¥21.48	US$=¥144.60 CNY=¥19.99	¥(11.26) ¥(1.49)		US$=¥152.62 CNY=¥21.11
         Naphtha price in Japan	¥79,000/kl	¥65,600/kl	¥(13,400)/kl		¥75,700/kl

         *ROA (Return on assets) is calculated based on ordinary profit.

         Note: ROA, ROE and ROIC for the three months ended June 30, 2024 and 2025 are annualized.

      2. Business performance by segment

      (Millions of yen)

      	Three months ended June 30, 2024		Three months ended June 30, 2025		Change		FY2024
      	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
      Toiletries and Health Care	10,832	(32)	4,313	(64)	(6,519)	(32)	30,680	176
      Petroleum and Automotives	12,780	1,095	11,901	1,133	(879)	37	49,232	3,979
      Plastics and Textiles	6,990	680	6,668	563	(322)	(116)	26,839	2,867
      Information and Electrics/Electronics	5,427	668	5,916	640	489	(27)	20,911	2,532
      Environmental
      Protection, Construction	3,623	59	3,188	(98)	(434)	(158)	14,594	4
      and Others

      In the Toiletries segment, sales were sluggish as sales of superabsorbent polymer products for various industrial applications declined significantly as a result of the withdrawal from the superabsorbent polymer business.

      In the Health Care segment, sales also declined significantly as a result of the withdrawal from the superabsorbent polymer business.

      As a result, total net sales in this segment decreased by 60.2% year on year, to ¥4,313 million. Operating loss was ¥64 million (compared to operating loss of ¥32 million during the same period of the previous fiscal year).

      In the Petroleum segment, while demand for lubricant additives was strong, due to a temporary increase in demand in the same period of the previous fiscal year, sales were sluggish.

      In the Automotives segment, sales decreased as the business environment became more challenging due to the inflow of low-cost products from overseas, which adversely affected the market for raw materials for polyurethane foams used in automobile seats and other applications, leading to sluggish sales both in Japan and overseas.

      As a result, total net sales in this segment decreased by 6.9% year on year, to ¥11,901 million. Operating profit was ¥1,133 million (an increase of 3.4% year on year).

      In the Plastics segment, although sales remained strong due to a recovery in demand for permanent antistatic agents, sales decreased because sales of paint coating agents and additives were sluggish.

      In the Textiles segment, although sales of spin finish oil used in the manufacturing process of tire cord yarns remained strong following a recovery in demand in China, sales decreased because sales of chemicals for carbon fibers used in wind turbines for wind power generation and agents for synthetic leather were sluggish.

      As a result, total net sales in this segment decreased by 4.6% year on year, to ¥6,668 million. Operating profit was ¥563 million (a decrease of 17.1% year on year).

      In the Information segment, sales decreased, reflecting weak sales of polymerization toner-related materials, mainly due to the withdrawal from production operations in China, despite a recovery trend in demand for toner resins.

      In the Electrics/Electronics segment, sales of electrolyte for aluminum electrolytic capacitors remained sluggish due to the slow recovery of the EV market. However, net sales increased due to higher sales of related materials as the advanced semiconductor market remained strong.

      As a result, total net sales in this segment increased by 9.0% year on year, to ¥5,916 million. Operating profit was ¥640 million (a decrease of 4.1% year on year).

      In the Environmental Protection segment, sales were weak due to sluggish domestic market conditions for cationic monomers used in polymer flocculants, and also due to low demand for heavy metal immobilizers.

      In the Construction segment, sales decreased significantly as the business environment became more challenging due to the inflow of low-cost products from overseas, which adversely affected the market for raw materials for polyurethane foams used in furniture, insulation agents, and other applications.

      As a result, total net sales in this segment decreased by 12.0% year on year, to ¥3,188 million. Operating loss was ¥98 million (compared to operating profit of ¥59 million during the same period of the previous fiscal year).

      The Group’s financial position at the end of the period under review was as follows:

      Total assets increased by ¥4,840 million compared with the end of the previous fiscal year, amounting to

      ¥181,206 million.

      Net assets increased by ¥8,418 million from the end of the previous fiscal year, to ¥146,720 million. Equity ratio rose by 2.6 percentage points from the end of the previous fiscal year, to 79.4%.

   2. Cash flows

      Cash and cash equivalents (“cash”) as of the end of the period under review amounted to ¥22,852 million. This marked a decrease of ¥1,158 million compared with the end of the previous fiscal year (cash decreased by ¥6,030 million during the same period of the previous fiscal year).

      The cash flow movements during the period under review and the factors influencing them were as follows:

      Cash flows from operating activities

      Net cash provided by operating activities amounted to ¥2,935 million (compared to ¥1,947 million in net cash provided during the same period of the previous fiscal year). This result was mainly due to the cash inflow from profit before income taxes of ¥1,934 million and depreciation of ¥2,301 million, which outweighed the cash outflow mainly from income taxes paid of ¥944 million and payment for business restructuring of ¥854 million.

      Cash flows from investing activities

      Net cash used in investing activities amounted to ¥1,914 million (compared to ¥2,049 million in net cash used during the same period of the previous fiscal year). This result was mainly due to the cash outlay of

      ¥1,431 million for purchase of non-current assets.

      Cash flows from financing activities

      Net cash used in financing activities amounted to ¥2,114 million (compared to ¥6,451 million in net cash used during the same period of the previous fiscal year). This result was mainly due to the cash outflow from dividends paid of ¥1,861 million.

   3. Information concerning future forecast such as consolidated earnings forecasts

      The Company conducted an absorption-type merger with its consolidated subsidiary, SDP Global Co., Ltd., effective April 1, 2025. Accordingly, a variation has occurred in the figures of the consolidated earnings forecasts announced on May 8, 2025, mainly due to the recording of deferred tax assets and taxes expenses (profit), which includes income taxes and income taxes - deferred, during the first quarter of the fiscal year ending March 31, 2026 as a result of careful consideration of the recoverability of deferred tax assets for the tax loss carry forwards and deductible temporary differences and the like carried over from SDP Global Co., Ltd. As such, the Company has revised its consolidated earnings forecasts as follows.

      First six months of the fiscal year ending March 31, 2026 (from April 1, 2025 to September 30, 2025)

      	Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Basic earnings per share
      Previously announced forecast (May 8) (A) Revised forecast (B) Amount of change (B–A)	Millions of yen 62,000 62,000 –	Millions of yen 4,500 4,500 –	Millions of yen 5,000 5,000 –	Millions of yen 3,500 11,500 8,000	Yen 158.21 519.84
      Percentage change (%)	–	–	–	(228.6)
      Results for the first six months of the fiscal year ended March 31, 2025 (Six months ended September 30, 2024)	77,030	4,453	4,991	940	42.55

      Fiscal year ending March 31, 2026 (from April 1, 2025 to March 31, 2026)

      	Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Basic earnings per share
      Previously announced forecast (May 8) (A) Revised forecast (B) Amount of change (B–A)	Millions of yen 130,000 130,000 –	Millions of yen 10,000 10,000 –	Millions of yen 11,000 11,000 –	Millions of yen 8,000 16,000 8,000	Yen 361.63 723.26
      Percentage change (%)	–	–	–	(100.0)
      Results for the previous fiscal year (Fiscal year ended March 31, 2025)	142,258	8,439	9,670	4,151	187.79

      * These earnings forecasts were based on information available at the time of announcement. Actual earnings may differ due to various factors occurring in the future.

2. Quarterly consolidated financial statements and significant notes thereto

   1. Consolidated balance sheets

      (Millions of yen)

      As of March 31, 2025 As of June 30, 2025

      Assets

      Current assets
      Cash and deposits	24,532	23,392
      Notes and accounts receivable - trade	35,059	35,363
      Electronically recorded monetary claims - operating	146	128
      Merchandise and finished goods	12,965	11,993
      Semi-finished goods	5,118	5,246
      Work in process	257	208
      Raw materials and supplies	4,480	5,149
      Other	2,867	3,641
      Allowance for doubtful accounts	(485)	(472)
      Total current assets	84,942	84,652
      Non-current assets
      Property, plant and equipment
      Buildings and structures, net	14,729	14,576
      Machinery, equipment and vehicles, net	19,866	19,385
      Land	8,850	8,850
      Construction in progress	510	493
      Other, net	2,185	2,048
      Total property, plant and equipment	46,142	45,354
      Intangible assets
      Software	5,231	4,860
      Other	1,055	1,164
      Total intangible assets	6,286	6,024
      Investments and other assets
      Investment securities	30,713	31,891
      Long-term loans receivable	2,255	2,331
      Deferred tax assets	258	4,956
      Retirement benefit asset	4,588	4,609
      Other	1,204	1,410
      Allowance for doubtful accounts	(25)	(25)
      Total investments and other assets	38,994	45,174
      Total non-current assets	91,423	96,553
      Total assets	176,366	181,206

      (Millions of yen)

      As of March 31, 2025 As of June 30, 2025

      Liabilities

      Current liabilities

      Accounts payable - trade	16,881	17,014
      Electronically recorded obligations - operating	2,910	3,273
      Short-term borrowings	441	443
      Current portion of long-term borrowings	747	751
      Accounts payable - other	4,581	4,135
      Income taxes payable	669	322
      Provision for bonuses	1,829	1,011
      Provision for bonuses for directors (and other officers)	72	15
      Electronically recorded obligations - non-operating	567	856
      Other	1,629	2,617
      Total current liabilities	30,332	30,441
      Non-current liabilities
      Long-term borrowings	2,230	2,240
      Deferred tax liabilities	2,808	–
      Provision for share-based payments	366	394
      Retirement benefit liability	91	93
      Provision for business restructuring	1,664	765
      Other	571	549
      Total non-current liabilities	7,731	4,044
      Total liabilities	38,063	34,485
      Net assets
      Shareholders’ equity
      Share capital	13,051	13,051
      Capital surplus	13,289	13,289
      Retained earnings	99,868	106,967
      Treasury shares	(5,525)	(5,526)
      Total shareholders’ equity	120,683	127,782
      Accumulated other comprehensive income
      Valuation difference on available-for-sale securities	11,412	12,482
      Foreign currency translation adjustment	1,488	1,795
      Remeasurements of defined benefit plans	1,800	1,761
      Total accumulated other comprehensive income	14,702	16,039
      Non-controlling interests	2,917	2,899
      Total net assets	138,302	146,720
      Total liabilities and net assets	176,366	181,206

   2. Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income (cumulative)

      (Millions of yen)

      Three months ended June 30, 2024

      Three months ended June 30, 2025

      Net sales	39,654	31,987
      Cost of sales	31,381	24,347
      Gross profit	8,272	7,640
      Selling, general and administrative expenses	6,089	5,781
      Operating profit	2,183	1,858
      Non-operating income
      Interest income	63	36
      Dividend income	483	605
      Rental income from real estate	22	19
      Foreign exchange gains	569	–
      Share of profit of entities accounted for using equity method	317	–
      Other	54	60
      Total non-operating income	1,511	723
      Non-operating expenses
      Interest expenses	33	28
      Rental costs on real estate	16	12
      Foreign exchange losses	–	139
      Share of loss of entities accounted for using equity method	–	103
      Other	72	11
      Total non-operating expenses	123	296
      Ordinary profit	3,571	2,285
      Extraordinary income
      Other	110	–
      Total extraordinary income	110	–
      Extraordinary losses
      Loss on retirement of non-current assets	137	256
      Loss on valuation of investment securities	8	73
      Other	–	20
      Total extraordinary losses	146	350
      Profit before income taxes	3,535	1,934
      Income taxes	945	(7,262)
      Profit	2,590	9,197
      Profit attributable to non-controlling interests	187	204
      Profit attributable to owners of parent	2,402	8,992

      Consolidated statements of comprehensive income (cumulative)

      (Millions of yen)

      Three months ended June 30, 2024

      Three months ended June 30, 2025

      Profit	2,590	9,197
      Other comprehensive income
      Valuation difference on available-for-sale securities	513	1,069
      Foreign currency translation adjustment	1,199	309
      Remeasurements of defined benefit plans, net of tax	(25)	(39)
      Total other comprehensive income	1,688	1,339
      Comprehensive income	4,278	10,537
      Comprehensive income attributable to
      Comprehensive income attributable to owners of parent	4,073	10,329

      Comprehensive income attributable to non-controlling interests

      205 207

      (3) Consolidated statements of cash flows
      		(Millions of yen)
      	Three months ended June 30, 2024	Three months ended June 30, 2025
      Cash flows from operating activities
      Profit before income taxes	3,535	1,934
      Depreciation	2,534	2,301
      Loss on retirement of non-current assets	137	256
      Increase (decrease) in provision for bonuses	(1,075)	(816)

      Increase (decrease) in retirement benefit asset and liability

      (53) (77)

      Increase (decrease) in provision for bonuses for

      directors (and other officers)

      (13)

      (57)

      Increase (decrease) in provision for share-based

      Interest and dividend income (547) (642)

payments

(149) 28

Interest expenses 33 28

1. Notes to quarterly consolidated financial statements

   Notes to going concern assumptions

   None

   Significant changes in the scope of consolidation during the period

   During the first quarter of the fiscal year ending March 31, 2026, SDP Global Co., Ltd., which was a wholly owned subsidiary of the Company, was dissolved in an absorption merger with the Company as the surviving company, and it has therefore been excluded from the scope of consolidation in the first quarter of the fiscal year ending March 31, 2026.

   Notes on significant changes in the amount of shareholders’ equity

   None

   Application of special accounting methods for the preparation of quarterly consolidated financial statements After applying tax effect accounting to profit before income taxes for the fiscal year, which includes the first quarter under review, the Company makes a reasonable estimate of the effective tax rate and multiply the profit before income taxes by that estimated effective tax rate. However, if the calculation of tax using such estimated effective tax rate would significantly lack rationality, the statutory tax rate is used after adjusting for important items in profit before income taxes among items that are not categorized as temporary differences, etc.

   Furthermore, income tax adjustments are included in the presentation of income taxes.

   Notes on segment information, etc.

   [Segment information]

   1. Three months ended June 30, 2024 (April 1, 2024 to June 30, 2024)

      Information regarding net sales, profit or loss by reportable segment

      (Millions of yen)

      	Reportable Segment						Adjustment	Total
      	Toiletries and Health Care	Petroleum and Automotives	Plastics and Textiles	Information and Electrics/El ectronics	Environmental Protection, Construction and Others	Subtotal
      Net sales
      Sales to external customers	10,832	12,780	6,990	5,427	3,623	39,654	–	39,654
      Intersegment sales/transfers	–	–	–	–	32	32	(32)	–
      Total	10,832	12,780	6,990	5,427	3,656	39,687	(32)	39,654
      Segment profit (loss)	(32)	1,095	680	668	59	2,471	(288)	2,183

      Notes: 1. Company-wide expenses of ¥288 million not allocated to reportable segments are included in the adjustment to segment profit (loss).

      Company-wide expenses are research and development expenses for new businesses, etc. not belonging to reportable segments.

      1. Total amount of segment profit (loss) has been adjusted with operating profit in the quarterly consolidated statements of income.

   2. Three months ended June 30, 2025 (April 1, 2025 to June 30, 2025)

      Information regarding net sales, profit or loss by reportable segment

      (Millions of yen)

      	Reportable Segment						Adjustment	Total
      	Toiletries and Health Care	Petroleum and Automotives	Plastics and Textiles	Information and Electrics/El ectronics	Environmental Protection, Construction and Others	Subtotal
      Net sales
      Sales to external customers	4,313	11,901	6,668	5,916	3,188	31,987	–	31,987
      Intersegment sales/transfers	–	–	–	–	30	30	(30)	–
      Total	4,313	11,901	6,668	5,916	3,219	32,018	(30)	31,987
      Segment profit (loss)	(64)	1,133	563	640	(98)	2,174	(315)	1,858

      Notes: 1. Company-wide expenses of ¥315 million not allocated to reportable segments are included in the adjustment to segment profit (loss).

      Company-wide expenses are research and development expenses for new businesses, etc. not belonging to reportable segments.

      1. Total amount of segment profit (loss) has been adjusted with operating profit in the quarterly consolidated statements of income.

[Information by geographic segment]

Three months ended June 30, 2024 (April 1, 2024 to June 30, 2024)

(Millions of yen)

Three months ended June 30, 2025 (April 1, 2025 to June 30, 2025)

(Millions of yen)

[Overseas net sales]

Three months ended June 30, 2024 (April 1, 2024 to June 30, 2024)

(Millions of yen)

Three months ended June 30, 2025 (April 1, 2025 to June 30, 2025)

(Millions of yen)

Notes: 1. The term “overseas net sales” refers to net sales of the Company (non-consolidated) and its consolidated subsidiaries registered in countries and regions outside Japan.

1. Areas included in each country or region are determined based on their degree of proximity.

2. Main countries or regions included in each geographic segment outside Japan

   1. Asia: South Korea, China, Indonesia, India, Thailand, etc.

   2. Americas: USA, Mexico, Brazil, etc.

   3. Other: Australia, Europe, Russia, the Middle East, etc.

Business combinations, etc.

Absorption-type merger of consolidated subsidiary

Based on the merger agreement concluded on November 6, 2024, we conducted an absorption-type merger with SDP Global Co., Ltd. (“SDP”), a wholly owned subsidiary of the Company, effective April 1, 2025.

1. Purpose of the merger

   In the fiscal year ended March 31, 2024, as part of the structural reform under the “New Medium-Term Management Plan 2025,” we decided to withdraw from the superabsorbent polymer business and cease production of surfactants and urethane resin products, etc. in Nantong, Jiangsu Province, China. At the time of the decision, SDP, a wholly owned subsidiary of the Company engaged in the manufacture and sale of superabsorbent polymers, was scheduled to be dissolved at an undetermined date. However, in light of the suspension of production in the first half of FY2024, the Company decided to dissolve SDP through an absorption-type merger, taking into consideration the operational efficiency of the Group.

2. Overview of the merger

   1. Schedule of the merger

      Date of resolution by the Board of Directors November 6, 2024

      Date of conclusion of merger agreement November 6, 2024

      Effective date April 1, 2025

      Note: The merger is conducted without obtaining the approval of the general meeting of shareholders regarding the merger agreement at the Company and SDP, in accordance with the provisions of the simplified merger as stipulated in Article 796, Paragraph 2 of the Companies Act, and the abbreviated merger under Article 784, Paragraph 1 of the same Act.

   2. Method of merger

      SDP was dissolved through an absorption-type merger, with the Company as the surviving entity.

   3. Details of allocation related to merger

      This merger is an absorption-type merger with our wholly-owned subsidiary, so there will be no issuance of new shares or allocation of money or other assets as a result of this merger.

   4. Treatment of share acquisition rights and bonds with share acquisition rights of the dissolving company

      SDP has not issued any share acquisition rights or bonds with stock acquisition rights.

3. Post-merger status

   There are no changes to the Company’s trade name, location, representative titles and names, description of business, share capital, or fiscal year end as a result of this merger.

4. Overview of accounting treatment adopted

In accordance with the “Accounting Standard for Business Combinations” and the “Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures,” the Company has accounted for the business combination as a transaction under common control.

1. Supplementary information

Trend of quarterly consolidated earnings

Fiscal year ended March 31, 2025 (Millions of yen)

Fiscal year ending March 31, 2026 (Millions of yen)