Sato : Financial Result (Kessan Report) for 2nd Quarter of FY2025

November 12, 2025

Company name: SATO Corporation

Stock exchange listings: Tokyo Stock Exchange

Stock code: 6287

URL: https://www.sato-global.com

Representative: Hiroyuki Konuma, Representative Director, President and Group CEO

Contact: Osamu Masuko, Vice President and CFO

TEL: +81-3-6628-2423

Scheduled date for submission of interim report: November 13, 2025 Supplementary materials for financial summaries: Yes

Financial results briefing: Yes

(Amounts of less than one million yen are rounded down.)

1. Consolidated operating results (Cumulative) (Percentages indicate YoY changes)

   	Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   Six months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
   September 30, 2025	78,248	2.8	5,101	(11.7)	4,460	(8.7)	3,052	0.8
   September 30, 2024	76,090	9.0	5,778	25.1	4,883	13.4	3,028	52.0

   (Note) Comprehensive income For the six months ended September 30, 2025

   For the six months ended September 30, 2024

   	Basic earnings per share	Diluted earnings per share
   Six months ended	Yen	Yen
   September 30, 2025	94.02	94.00
   September 30, 2024	93.36	93.34

   (Reference) Owner's equity	As of September 30, 2025:	79,817 million yen
   2. Cash dividends	As of March 31, 2025:	76,540 million yen

2. Consolidated financial positions

4,653 million yen (82.5%)

2,549 million yen (-46.3%)

(Note) Presence or absence of revisions from the most recently announced dividend forecast: None

(Percentages indicate YoY changes)

(Note) Correction of financial forecast from the most recent financial forecast: Yes

For details, please refer to page 3 of the attached document, "1. Overview of Operating Results, etc. (3) Explanation regarding consolidated forecasts and other forward-looking information."

• Notes

  1. Significant changes in the scope of consolidation during the

     period:

  2. Application of accounting procedures specific to the preparation of interim consolidated financial statements:

     None

     None

  3. Changes in accounting policies, Changes in accounting estimates, Retrospective restatement

     1. Changes in accounting policies due to revisions of accounting standards: None

     2. Changes in accounting policies other than (i): None

     3. Changes in accounting estimates: None

     4. Retrospective restatement: None

  4. Number of shares issued (common stock)

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

        As of September 30, 2025	33,635,942 shares
        As of March 31, 2025	33,635,942 shares

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

        As of September 30, 2025	1,170,805 shares
        As of March 31, 2025	1,172,623 shares

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

     Six months ended September 30, 2025	32,464,449 shares
     Six months ended September 30, 2024	32,434,645 shares

• The second quarter (interim) financial results report is not subject to review by certified public accountants or audit corporations.

• Notes regarding the appropriate use of forecasts and other special items

Forward-looking statements such as performance forecasts contained in this document are based on information currently available to the Company and on certain assumptions that are deemed reasonable, and are not intended as a guarantee of their achievement. Actual results may differ significantly due to various factors. For the assumptions underlying the forecasts, please refer to the attached document, page 3, "1. Overview of Operating Results, etc. (3) Explanation regarding consolidated forecasts and other forward-looking information."

1. Overview of Operating Results, etc. 2

   1. Overview of Operating Results for the Six-Months Period 2

   2. Overview of Financial Positions for the Interim Period 3

   3. Explanation regarding forward-looking statements such as consolidated forecasts 4

2. Interim Consolidated Financial Statements and Main Notes 5

   1. Interim Consolidated Balance Sheet 5

   2. Consolidated Statement of Income

      and Consolidated Statement of Comprehensive Income for the Six-Months Period 7

      Interim Consolidated Statement of Income 7

      Interim Consolidated Statement of Comprehensive Income 8

   3. Interim Consolidated Statement of Cash Flows 9

   4. Notes to the interim consolidated financial statements 10

Notes regarding the assumption of a going concern 10

Notes in case of significant changes in the amount of shareholders' equity 10

Changes in accounting policies 10

Notes on Segment Information, etc. 10

Business combination 11

1. Overview of Operating Results, etc.
   1. Overview of operating results for the six-months period

      The SATO Group, with its vision to "be the customer's most trusted partner for mutual growth, and always essential in an ever-changing world," runs business based on management principles, growth strategies and business targets defined in its current Medium-term Management Plan (MTMP) for FY 2024 to 2028. Through this plan, we aim to take tagging to the next level and pursue "Perfect and Unique Tagging" to "give every 'thing' its own ID so it connects with the world."

      The first two years of the MTMP are designated to rebuild profitability, and the next three years set to restart growth investments. During the initial phase, we will strengthen our core business. In Japan, we will aim to get the business profiting at a higher level again, whereas overseas we will seek sustainable and efficient growth. In the subsequent phase, we will allocate profits generated from the recovered revenue base to advance solutions for Perfect and Unique Tagging, with the aims of accelerating growth and establishing a new profit base. Throughout the MTMP period, we will also focus on strengthening corporate management, improving capital efficiency, and applying sustainable business practices, to reinforce our fundamentals.

      Having returned to profitability ahead of schedule in FY 2024, the first year of the MTMP, we plan to resume growth investments from FY 2025 onward.

      In the first six months of this fiscal year, sales and operating income increased year on year in the Japan business, while both decreased in the overseas business.

      As a result, the SATO Group posted net sales of ¥78,248 million (up 2.8% compared with the same period of the previous fiscal year), operating income of ¥5,101 million (down 11.7%), ordinary income of ¥4,460 million (down 8.7%), and net income attributable to owners of parent of ¥3,052 million (up 0.8%).

      Performance by segment is as follows.

      Auto-ID solutions (Japan)

      Mechatronics sales increased, driven by large strategic projects in logistics market, demand arising from compliance with the amended logistics efficiency legislation, as well as investments aimed at improving efficiency in the manufacturing sector. Consumables sales also grew, supported by generally solid performance across all markets. Higher sales and a more favorable product mix led to an increase in operating income.

      Consequently, net sales increased 8.0% year on year to ¥40,565 million, and segment profit increased 98.2% to ¥1,901 million.

      For information on our sales performance by market, please refer to the financial results briefing materials available on our website.

      https://www.sato-global.com/ir/library/settlement/

      Auto-ID solutions (Overseas)

      Outside Japan, our base business remained stable across regions. However, revenue declined due to foreign exchange fluctuations. In addition, our companies specializing in primary labels recorded lower sales, reflecting normalization of the competitive environment and reduced demand in Russia following changes in tax policy. As a result, total overseas sales declined.

      Profits declined from the previous year's level, mainly due to higher costs at the company specializing in primary labels in Russia. As a result, net sales decreased 2.2% year on year to ¥37,682 million (down 0.8% excluding foreign exchange effects), and segment profit declined 33.4% to ¥3,255 million.

      For a detailed breakdown of financial performance by (i) base and primary labels businesses and (ii) region, please refer to the financial results briefing materials available on our website.

      https://www.sato-global.com/ir/library/settlement/

   2. Overview of Financial Positions for the Interim Period

      As for assets at the end of the interim consolidated accounting period, the balance of current assets was 90,823 million yen (compared to 91,558 million yen at the end of the previous consolidated fiscal year), a decrease of 734 million yen. This was mainly due to an increase in merchandise and finished goods (943 million yen), a decrease in notes and accounts receivable - trade, and contract assets (849 million yen), and a decrease in cash and deposits (670 million yen). The balance of non-current assets was 49,832 million yen (compared to 48,198 million yen at the end of the previous consolidated fiscal year), an increase of 1,633 million yen. This was mainly due to an increase in buildings and structures under property, plant and equipment (1,200 million yen), an increase in machinery, equipment and vehicles (453 million yen), an increase in software under intangible assets (1,246 million yen), a decrease in software in progress (301 million yen), and a decrease in investments and other assets (716 million yen).

      Regarding liabilities, the balance of current liabilities was 39,423 million yen (41,677 million yen at the end of the previous consolidated fiscal year), a decrease of 2,254 million yen. This was mainly due to an increase in contract liabilities (474 million yen), an increase in notes and accounts payable - trade (450 million yen), a decrease in accounts payable - other (1,358 million yen), a decrease in short-term borrowings (872 million yen), and a decrease in accrued consumption taxes included in others (646 million yen), among other factors. The balance of non-current liabilities was 17,576 million yen (17,842 million yen at the end of the previous consolidated fiscal year), a decrease of 265 million yen. This was mainly due to a decrease in deferred tax liabilities included in others (393 million yen), among other factors.

      As for net assets, the balance at the end of the six months ended September 30, 2025 was 83,656 million yen (compared to 80,237 million yen at the end of the previous fiscal year), an increase of 3,418 million yen. This was mainly due to an increase in retained earnings (1,813 million yen) and an increase in total accumulated other comprehensive income (1,459 million yen), among other factors.

      Cash flows

      Cash and cash equivalents at the end of the six months ended September 30, 2025 decreased by 594 million yen compared to the end of the previous fiscal year, amounting to 25,289 million yen.

      The cash flows for the six months ended September 30, 2024 and their factors are as follows.

      Cash flows from operating activities

      Cash flows from operating activities increased by 6,077 million yen.

      The main factors for the increase were income before income taxes of 4,399 million yen and depreciation of 2,908 million yen, while the main factor for the decrease was a decrease in accounts payable - other of 1,046 million yen.

      Cash flows from investing activities

      Cash flows from investing activities decreased by 4,112 million yen.

      The main factors for the decrease were the purchase of property, plant and equipment of 2,656 million yen and the purchase of intangible assets of 1,726 million yen, among others.

      Cash flows from financing activities

      Cash flows from financing activities decreased by 2,895 million yen.

      The main factors for the decrease were repayments of lease liabilities of 726 million yen, a decrease in short-term borrowings of 898 million yen, and dividends paid of 1,237 million yen, among others.

   3. Explanation regarding forward-looking statements such as consolidated forecasts

      Based on the consolidated results for the six months ended September 30, 2025, we reviewed our full-year consolidated earnings forecast for the fiscal year ending March 31, 2026. As a result, we expect the figures to fall below our previous projections and have revised the forecast as follows.

      Full-year consolidated earnings forecast for the fiscal year ending March 31, 2026

      Net sales: ¥161,000 million (no changes from previous forecast)

      Operating income: ¥11,000 million (previous forecast: ¥12,500 million)

      Ordinary income: ¥10,100 million (¥12,100 million) Net income attributable to owners of parent: ¥6,800 million (¥7,700 million)

      Assumed foreign currency exchange rates for this fiscal year are ¥147 to the U.S. dollar and ¥170 to the euro.

      The forward-looking statements contained in this document, including earnings forecasts, are based on information currently available and assumptions deemed reasonable by the Company. Actual results may differ materially from these forecasts due to various factors.

2. Interim Consolidated Financial Statements and Main Notes

1. Interim Consolidated Balance Sheet
   
   
   

   Assets

   
   
   

   (Unit: Million yen) As of March 31, 2025 As of September 30, 2025

   Current assets

   Cash and deposits 27,432 26,762

(Unit: Million yen) As of March 31, 2025 As of September 30, 2025

1. Interim Consolidated Statement of Income and Interim Consolidated Statement of Comprehensive Income (Interim Consolidated Statement of Income)

(Unit: Million yen)

Six months ended September 30, 2024

Six months ended September 30, 2025

(Unit: Million yen)

Six months ended September 30, 2024

Six months ended September 30, 2025

Comprehensive income attributable to

Comprehensive income attributable to owners of the

parent

2,363

4,511

Comprehensive income attributable to non-controlling interests

185 142

Other 30 (2)

Cash flows from investing activities (5,068) (4,112)

Cash flows from financing activities

1. Notes to the Interim Consolidated Financial Statements Notes regarding the assumption of a going concern

   There are no applicable matters.

   Notes on significant changes in the amount of shareholders' equity

   There are no applicable items.

   Changes in accounting policies

   There are no applicable items. Notes on segment information, etc. Segment Information

   1. For the six months ended September 30, 2024

      1. Information on net sales and profit or loss by reportable segment

         (Unit: Million yen)

         	Auto-ID solutions (Japan)	Auto-ID solutions (Overseas)	Total
         Net sales
         External customer sales	37,545	38,545	76,090
         Intersegment sales and transfer	4,977	6,765	11,743
         Total	42,522	45,310	87,833
         Segment profit (loss)	959	4,889	5,849

      2. Difference between the total amount of profit or loss of reportable segments and the amount recorded in the interim consolidated statement of income, and the main contents of such difference (Matters related to reconciliation of differences)

         (Unit: Million yen)

         Profit	Amount
         Total of reportable segments	5,849
         Intersegment eliminations	0
         Adjustment of inventories	(70)
         Operating income	5,778

      3. Matters related to changes in reportable segments There are no applicable items.

      4. Information on impairment losses of non-current assets, goodwill, etc. by reportable segment There are no applicable items.

   2. For the six months ended September 30, 2025

      1. Information on net sales and profit or loss by reportable segment

         (Unit: Million yen)

         	Auto-ID solutions (Japan)	Auto-ID solutions (Overseas)	Total
         Net sales
         External customer sales	40,565	37,682	78,248
         Intersegment sales and transfer	5,802	8,497	14,300
         Total	46,368	46,180	92,548
         Segment profit (loss)	1,901	3,255	5,157

      2. Difference between the total amount of profit or loss of reportable segments and the amount recorded in the interim consolidated statement of income, and the main contents of such difference (Matters related to reconciliation of differences)

         (Unit: Million yen)

         Profit	Amount
         Total of reportable segments	5,157
         Intersegment eliminations	0
         Adjustment of inventories	(56)
         Operating income for the six months ended September 30, 2024	5,101

      3. Matters related to changes in reportable segments There are no applicable items.

      4. Information on impairment losses of non-current assets or goodwill, etc. by reportable segment There are no applicable items.

         Business combination

         Absorption-type merger of wholly owned subsidiary

         At the Company's board of directors meeting held on April 9, 2024, the Company resolved to conduct an absorption-type merger, between the Company, as a surviving company and SATO Corporation, a wholly owned subsidiary of the Company, as the disappearing company. The merger was effectuated on April 1,2025.

         1. Outline of business combination

            1. Name and business description of the disappearing company in the absorption-type merger Name of disappearing company in the absorption-type merger: SATO Corporation Business description: Auto-ID solutions

            2. Date of business combination April 1, 2025

            3. Legal form of the business combination

               Form of absorption-type merger in which the Company is the surviving company and SATO Corporation is disappearing company

            4. Name of entity after business combination

               The Company has changed its trade name to SATO Corporation.

            5. Other items regarding overview of the transaction

            By integrating the head office functions with SATO Corporation, which performs the main functions of the Group's businesses, we will change the fragmented organization into a simpler structure. Our objective is to develop a system that facilitates expeditious decision-making and the selection and concentration of management resources by elucidating responsibilities and authorities.

         2. Overview of accounting treatment

In accordance with the "Accounting Standard for Business Combinations" (ASBJ Statement No. 21, January 16, 2019) and the "Implementation Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures" (ASBJ Guidance No. 10, January 16, 2019), we accounted for the business combination as a transaction under common control.