Toyo Tire : Financial Results for 1st Quarter of FY2025 (Script text)

May 13, 2025

TOYO TIRE Corporation Financial Results

for 1st Quarter of FY2025

(Presentation scripts)

Thank you for your continued support.

Allow me to explain our "Financial Results for 1st Quarter of FY2025," "Financial Forecast for FY2025," and then "Topics."

First, I will walk you through the highlights of our financial results for the first quarter of FY2025.

Net sales hit a record high for the first quarter.

Operating income decreased year-on-year due to higher costs but reached

22.4 billion yen, driven chiefly by strong sales of large-diameter tires in North America.

Ordinary income and profit attributable to owners of parent also recorded a year-on-year decrease, primarily due to the recording of foreign exchange losses under non-operating profit and loss from the yen's appreciation.

Meanwhile, we are closely monitoring how the U.S. proceeds with increasing tariffs.

We expect that an increase in costs can be absorbed by measures designed to address higher tariffs . Accordingly, earnings forecasts for FY2025, which we announced in February, remain unchanged.

Meanwhile, we maintain the annual dividend per share forecast for FY2025 at 125 yen, as previously forecasted, which marks a year-on-year increase.

Here you see our consolidated financial results for the first quarter of FY2025.

Net sales reached 135.5 billion yen, which marks a record high for the first quarter.

Operating income decreased due to an increase in raw materials and other costs, but reached 22.4 billion yen, primarily owing to our strategy to promote the sales of high-value-added priority products and strong sales of large-diameter light truck tires in North America. Operating margin came in at 16.5%.

Ordinary income amounted to 18.3 billion yen, recording a year-on-year decrease chiefly due to the recording of foreign exchange losses from the yen's appreciation. Profit attributable to owners of parent also decreased year-on-year to 13.5 billion yen.

Page4: Analysis of Operating Income for 1st Quarter of FY2025 (Jan-Mar) (vs 2024)

This graph analyzes the factors contributing to year-on-year changes in operating income for the first quarter of FY2025.

For the Tire Business, sales factors pushed up operating income by 2.3 billion yen. The sum breaks down into negative 0.2 billion yen for volume effects, positive 1.6 billion yen for improved product price/mix effects, and positive 1.0 billion yen for unrealized profit in inventory.

Production cost pushed down operating income by 2.5 billion yen, primarily attributable to a decline in production volume, while raw materials costs lowered operating income by 2.8 billion yen, chiefly due to rising prices of natural rubber.

While forex rate factors boosted operating income by 0.6 billion yen, ocean freight cost factors contributed to a decrease of 0.5 billion yen.

As a result, operating income decreased by 3.6 billion yen year-on-year.

Shown on this slide are net sales and operating income for the first quarter of FY2025 by business segment.

The Tire Business recorded a year-on-year increase in net sales due to greater sales quantity in North America, but a year-on-year decrease in operating income as raw materials and other costs increased.

The Automotive Parts Business posted a year-on-year increase both in net sales and operating income.

Here we have our net sales and operating income for the first quarter of FY2025 by geographic area segment.

The North America Segment achieved year-on-year sales and profit growth, chiefly driven by the increase in sales quantity mainly in large-diameter light truck tires.

The North America Segment operating income excluding royalty payments to the Japan Segment, which reflects the segment's real profitability, recorded negative year-on-year growth.

The Japan Segment posted an increase in net sales but a decrease in operating income due to higher costs.

Let me move on to talk about our consolidated financial forecasts for the second quarter of FY2025.

As I mentioned at the outset, financial forecasts announced in February remain unchanged.

For the first half of FY2025, we expect our net sales to be 277.0 billion yen and operating income to be 38.0 billion yen.

Next is our consolidated financial forecast for FY2025.

These numbers also remain unchanged from what we announced in February, that is, net sales of 585.0 billion yen and operating income of 85.0 billion yen.

For the second quarter and beyond, we haven't changed our forex assumption of 145 yen against the USD and 155 yen against the Euro, which we announced in February.

In addition to monitoring tariff trends, we will closely observe developments in business confidence, the sales environment, foreign exchange rates, and raw materials prices, discussing and implementing appropriate measures accordingly.

At this time, we believe that the cost increase from higher tariffs can be absorbed through measures designed to mitigate their impact.