Fiscal Year Ending March 2026 (FY2025) Script of Financial Results Online Briefing by SCRIPTS Asia

Financial Results Briefing for the Fiscal Year Ended March 2026 May 14, 2026

(Total: 51 minutes, Presentation: 28 minutes, Q&A: 23 minutes)

Eiji Hosoi Representative Director, President/Chief Executive Officer

Yasuo Miyokawa Director, Senior Executive Officer, CFO

Naoko Hashimoto Stakeholder Relations Unit (PR&IR)

*Analysts that SCRIPTS Asia was able to identify from the audio who spoke during Q&A or whose questions were read by moderator/company representatives.

Let me introduce today's speakers: Eiji Hosoi, Representative Director, President and CEO; and Yasuo Miyokawa, Director, Senior Executive Officer and CFO. I am Hashimoto from the Stakeholder Relations Unit (PR & IR) and will serve as moderator.

Today's session will begin with an overview of our financial results and business updates by President Hosoi, followed by a Q&A session. Questions can be submitted via audio or chat. We will answer as many as time permits. Please note that we cannot respond to anonymous questions.

Now, I would like to turn the floor over to President Hosoi.

Today, I would like to focus on four key messages, which are summarized on this one slide.

First, FY ended March 31, 2026, resulted in a net loss, mainly due to losses related to the Brazil project, as we explained at our Q3 briefing in February. That said, orders received totaled ¥420 billion, and we are strengthening profitability based on lessons learned through tighter project governance, including pre-award risk screening, stricter project selection, and expanding projects where we have clear competitive advantages.

Second, for FY ending March 31, 2027, we plan to return to profitability, with net sales of ¥190 billion and net income of ¥6 billion. We expect a gross profit margin of 14.7%, and we will continue the transition toward a more consistently profitable earnings structure.

Third, I will review the progress of our previous Medium-Term Management Plan (FY2021-FY2025), including the strengthening of global execution capability, productivity improvements through DXoT and EPC enhancements, commercialization of new technologies and businesses, and the establishment of a more comprehensive risk management framework.

Fourth, I will outline our new five-year Medium-Term Management Plan starting this fiscal year. In brief, there are three points:

1. We position the next five years as a foundation-building period toward the" Project-based X Recurring" dual revenue model under TOYO VISION 2040.

2. We will strengthen EPC quality and expand recurring earnings, targeting ¥10 billion in net income by FY2030.

3. We will accelerate the build-out of a stable, long-term earnings base across five priority areas: O&M, next-generation geothermal, critical minerals, pharmaceuticals, and advanced materials.

   With that, let me follow today's agenda: 1) FY2026 results and FY2027 outlook, 2) major projects and key topics, 3) review of the prior mid-term plan, and 4) the framework of the new mid-term plan.

   
   
   

   Our full-year results were in line with the forecast we announced at the time of the Q3 results in February.

   • Net sales: ¥182.9 billion
   • Gross profit: ¥6.4 billion
   • Gross profit margin: 3.5%
   • Net income attributable to owners of the parent: -¥14.9 billion

     The primary drivers of the loss were:

   • increased collectability risk in the Brazil gas-fired power project due to customer-related factors; and

   • additional costs arising from schedule delays.

As for the status of the Brazil project, it is in its final stage, with a slight delay due to unforeseen equipment issues. We are working closely with the customer and partners to complete commissioning and construction as quickly as possible, and we currently expect completion by the end of next month.

Orders received, including equity-method affiliates, totaled ¥420.4 billion, exceeding our full-year target. Key contributors included high-performance chemicals projects in Japan, a petrochemical project in India, a petrochemical refurbishment project in Turkmenistan, and two FPSO projects by OFS, our equity-method affiliate.

These figures are summarized in the table on the slide. Column (A) reflects the full-year forecast announced at our Q3 results briefing in February, while the blue-shaded section shows the actual results for the FY just