TOPPAN : Transcript of Fiscal 2025 Third Quarter Results Briefing

Fiscal 2025 Third Quarter Earnings Call Presentation February 13, 2026

[Company Name] TOPPAN Holdings Inc.

[Event Type] Earnings Announcement

[Event Name] Fiscal 2025 Third Quarter Earnings Call Presentation

[Fiscal Period] FY2025 Q3

[Date] February 13, 2026

Satoshi Oya Representative Director, Senior Managing Executive Officer & COO

Takashi Kurobe Director, Senior Managing Executive Officer & CFO

Tetsuro Ueki Senior Managing Executive Officer, Electronics Division, TOPPAN Inc.

Moderator: Hello everyone. Thank you very much for joining us today at our FY2025 Q3 earnings call presentation.

Today's presentation will be given by Satoshi Oya, Representative Director, Senior Managing Executive Officer & COO, TOPPAN Holdings, Inc.; Takashi Kurobe, Director, Senior Managing Executive Officer & CFO; and Tetsuro Ueki, Senior Managing Executive Officer, Electronics Division, TOPPAN Inc. These three members are present.

Today, CFO Mr. Kurobe will provide an overview of the financial results for Q3 of the fiscal year ending March 31, 2026. A question-and-answer session will follow the explanation. The entire meeting will last approximately 40 minutes. The presentation materials are available on the TOPPAN Holdings website under Materials for Results Briefings in the Investors section.

Before we begin, I would like to make an announcement to everyone. In the following discussion, we may make forward-looking statements based on our current expectations, all of which are subject to risks and uncertainties. We would like to remind everyone that actual results may differ from the forecast. Now, Mr. Kurobe will give an overview of the financial results.

Kurobe: I am Kurobe, CFO. Thank you very much for taking time out of your busy schedule to attend our financial results briefing for Q3 of the fiscal year ending March 2026.

Now, I will explain the financial results for Q3 of the fiscal year.

Please refer to page two. For the Q3 YTD period, our consolidated net sales increased 5.2% YoY to JPY1,322.8 billion, and non-GAAP operating profit, which excludes impacts such as acquisition-related expenses increased 7.9% to JPY65.6 billion. Consolidated operating profit was generally in line with the plan for both the Company as a whole and for each segment. Non-GAAP net profit, which excludes the impact of extraordinary gains and losses such as gains on sales of securities, increased 37.9% to JPY52.5 billion.

The key points of the financial results are listed on the right. Both GAAP and non-GAAP results showed increased revenue and profit for the Information segment and the Living segment. In the Electronics segment, both sales and profits declined due to the exclusion of Tekscend Photomask Inc. from consolidation, but the profit margin of FC-BGAs continued to improve. Next, I will explain the overview of results by segment.

Please refer to page three. Since Tekscend Photomask Inc. became an equity-method associate in Q3, we will provide a supplementary explanation of the profit impact of this change.

Due to the transition to equity-method accounting, the Company-wide operating profit for Q3 (shown in light blue on the graph) decreased by 15% on a GAAP basis. On the other hand, equity in earnings of affiliates increased approximately 3.7 times compared to the same period last year. Additionally, while profit attributable to non-controlling interests was deducted through Q2, when Tekscend was included in consolidated accounting, the transition to an equity-method associate starting in Q3 resulted in a significant YoY decrease in the gray-shaded profit attributable to non-controlling interests. Net of these items, profits on an actual business basis remained at the same level as in the previous year, as shown by the line.

Please refer to page four. The graph shows the YoY change in non-GAAP operating profit.

Operating profit in the previous year was JPY53.1 billion, if the JPY7.7 billion impact from the transition of Tekscend to an equity-method affiliate is deducted from JPY60.8 billion. Foreign exchange effects and infrastructure development costs each reduced profit by JPY1 billion and JPY1.8 billion, respectively. In growth businesses, Erhoeht-X and domestic SX / overseas Living businesses added JPY3.2 billion and JPY12.4 billion, respectively, while semiconductor-related businesses declined JPY6.2 billion. Cyclical business were down JPY1 billion, while existing businesses were up JPY6.9 billion due to the effect of structural reforms implemented in the previous fiscal year. As a result of the above factors, non-GAAP operating profit was JPY65.6 billion.

Next, I will explain the overview of results by segment. Please refer to page five.

Sales in the Information & Communication segment increased 2% to JPY663.8 billion and non-GAAP operating profit increased 23.3% to JPY30.7 billion. Overall, all sub-segments have moved into profit growth in the three months of Q3.

In the sub-segment of digital business, sales increased due to the new consolidation of HID and dzcard in overseas security business and contributions from the government ID business, as well as growth in marketing DX and domestic security. As for profits, the increase in profits was driven by the increase in sales of marketing DX and domestic security business. Non-GAAP profit also increased.

BPO saw revenue growth in the financial sector, but overall revenue and profits declined due to lingering effects from large-scale projects in the public and private sectors the previous year. In BPO, orders for continuous projects centered on the targeted area of BPR are steadily increasing, and profits have turned to increase from Q3.

In secure media, sales turned around to increase due to strong sales of smart cards and DPS. Profits increased significantly due to higher profits from increased revenues, improved profitability of DPS, and contributions from overseas financial printing.

Communication media saw a decline in revenue due to the continued contraction of the publishing and commercial printing markets and the cyclical impact of textbooks. However, this was offset by the effects of structural reforms, allowing profit margins to remain at the previous year's level.

Page six is a reference summary of Erhoeht-X results.

As for the Q3 results, overall sales increased due to growth in the marketing DX and security businesses. Profits were also up overall due to steady progress in scaling. Profits increased in all categories on a non-GAAP basis.

Next is results in the Living & Industry segment. Please refer to page seven.

Sales in the Living & Industry segment increased 27.1% YoY to JPY525.5 billion, while non-GAAP operating profit rose 41.1% to JPY39.8 billion. Overall, non-GAAP operating profit increased significantly. Furthermore, profitability has improved on a GAAP basis as well, resulting in a slight increase in earnings.

The packaging business saw increased revenue, driven by strong performance in overseas operations, including the SONOCO TFP business, the new consolidation of Irplast, and robust performance in the Asian region. Profit decreased due to lower demand in the US food market, a delay in the full-scale adoption of SX packaging by European customers for barrier film, and one-time M&A expenses. As for Japan, both sales and income increased due to steady expansion of SX packaging.

The décor materials business saw steady sales of decorative sheets in Europe and South America, although the market recovery overseas is still in progress. Profits increased due to higher revenues, cost reductions, and the effects of structural reforms. Domestically, we have secured increased profits through growth in our decorative sheet market share and the expansion of our spatial design business.

Please refer to page eight. This is the total sales of the packaging business as a whole and SX packaging by region.

In the overall packaging business on the left, the overseas ratio rose from about 35% to over 50% due to the new consolidation of the SONOCO TFP business in the Americas and the new consolidation of Irplast in Italy and the expansion of the barrier film business in Europe. In SX packaging on the right, both domestic and overseas sales are expanding, driving overall earnings.

Next is the Electronics segment. Please refer to page nine.

Sales in the Electronics segment decreased 28.7% YoY to JPY150.7 billion, while non-GAAP operating profit decreased 36.1% to JPY26.9 billion, resulting in lower sales and profits. This includes approximately JPY1.3 billion in foreign exchange effects as a factor in the decrease in profit.

In the sub-segments, semiconductor-related sales and profits declined overall due to the effect of the deconsolidation of Tekscend Photomask Corp. from Q3. Although FC-BGA saw lower sales and profits, the profit margin continued to improve as the composition of high unit price products such as those for network switches and server CPUs further increased during the three months of Q3. On the other hand, changes in product mix have led to increasingly sophisticated manufacturing processes, and we are currently responding by reducing the takt time, including on existing lines.

In addition, the new line in Niigata has been in operation since January, and we expect the new line to be in full operation from Q3 of FY2026, while raising the takt time for the new line in stages. The acquisition of qualification for new products is progressing as planned. Some of these products should contribute to results from Q4, and we will further increase the composition of high unit price products in the next fiscal year to expand sales and profits.

In the display-related business, overall sales declined and profits remained flat. Sales and earnings of anti-reflective films decreased due to inventory adjustments in H1, but the profit margin continued to improve. Profit increased for display solutions, mainly color filters and TFT LCDs.

Please refer to page 10. This shows the performance trend for the Electronics segment, excluding Tekscend Photomask Corp., which is the photomask business.

Across the entire Electronics segment, on the left side, the bar graph showing sales and the line graph showing profits have recently declined. This is due to factors such as the significant proportion of sales and operating profit contributed by Tekscend within the Electronics segment, coupled with a decrease in sales this period resulting from structural reforms in the TFT LCD business. On the other hand, looking at the quarterly trends on the right side, sales and operating profit have been improving steadily since the beginning of this fiscal year, mainly in FC-BGA, with the bottom in Q1.

That concludes the performance status for each segment.

Please refer to page 11. The following is an explanation of the main points of the income statement for Q3.

Gross profit remained flat YoY at 23.5%, despite the impact of Tekscend Photomask Corp.'s exclusion from consolidation, as improvements progressed across all business segments. The SG&A-to-sales ratio increased

0.8 percentage points. This was mainly due to M&A-related expenses from new consolidations and an increase in amortization of goodwill and intangible assets. Regarding non-operating income and expenses, equity in earnings of affiliates increased to JPY4.2 billion as a result of Tekscend becoming an equity-method associate. On the other hand, profit attributable to non-controlling interests decreased by JPY4.4 billion.

Please refer to page 12. These are the figures for the full-year plan, but there is no change from what was announced during the half-year results presentation.

For the Information segment, results are as previously announced. For the Living segment, while the downturn in the overseas packaging market is weaker than anticipated in Europe and North America, we expect to offset this with décor materials and packaging in Japan. Regarding the Electronics-business, operating levels have been more cautious than anticipated, particularly for the Niigata new line. However, we expect additional gains from other businesses, including the display-related business.

Although there are uncertainties in our business segments from Q2, we will work to achieve the Company-wide announced figure of JPY70 billion in operating profit, including cost reductions in the adjusted segments.

Please refer to page 13. Here is the disclosure schedule going forward.

The new medium-term plan will be announced at the May 14 financial results briefing. In addition, an IR-Day will be held on June 12 in conjunction with the new medium-term plan to explain in detail the growth strategies of each segment/new business as well as our financial strategy. We look forward to your participation.

That concludes my presentation. Thank you.

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