Overview for the 84th fiscal year

During the consolidated fiscal year under review, although the global economy maintained a gradual recovery, the outlook remained uncertain due to factors such as concerns over the impact of the United States' trade policy.

Looking at the business environment surrounding the Group, in electronics applications, while demand was strong for some applications such as cutting-edge products for generative AI, the overall market correction for semiconductors continued, and demand for silicon semiconductor and SiC semiconductor applications was low. While firmness was evident in automotive industry operations and corporate capital investment, demand in mobility applications and general industries was only moderate amid a sense of stagnation due to global economic uncertainty.

In this environment, the Group worked to capture demand by responding to changes in the external environment, while controlling the balance of its product portfolio and applications. In addition, the Group enhanced and developed high-value-added products capable of keeping pace with technological innovation and worked to improve cost competitiveness through increased productivity, thereby providing high-value-added solutions through the integrated efforts of manufacturing, sales, and development. Furthermore, during the fourth quarter, the Group implemented workforce restructuring aimed at optimizing the production system in the carbon brush business of its consolidated Chinese subsidiary, thereby strengthening its business structure.

As a result, in the consolidated fiscal year under review, net sales were 46,189 million yen (down 13.0% year on year). In terms of profits, operating profit was 6,759 million yen (down 44.8% year on year), ordinary profit was 8,091 million yen (down 40.0% year on year), and profit attributable to owners of parent of 5,464 million yen (down 45.1% year on year).

Future outlook

The global economy is expected to maintain a moderate recovery overall, but uncertainties remain, such as policy trends in the United States and an economic slowdown in China. In the business environment surrounding the Group, steady demand is expected in electronics and energy applications. Demand for mobility and general industrial applications is also expected to remain firm. Although the market correction for SiC semiconductor applications will continue, demand for silicon semiconductor applications is expected to gradually recover, and the Group forecasts steady demand for metallurgical and other applications. Against this backdrop, the Group aims to create high value-added products, achieve medium- and long-term business growth, and enhance corporate value by sincerely addressing customer needs and providing innovative solutions through the forward-looking development of products and technologies, based on its 2030 Management Vision: "Creating products with unprecedented potential--becoming a leading company through earth-friendly products and technologies." In addition, the Group is accelerating its sustainability initiatives, including efforts to reduce greenhouse gas emissions through its business activities.

Based on the above, we expect net sales of 49,000 million yen (a 6.1% year-on-year increase), while operating profit is expected to be 6,200 million yen (a 8.3% year-on-year decrease) due mainly to the impact of foreign exchange rates and an increase in depreciation and other fixed costs. We anticipate 6,000 million yen in ordinary profit (a 25.8% year-on-year decrease), and 5,000 million yen in profit attributable to owners of parent (a 8.5% year-on-year decrease) in the fiscal year ending December 31, 2026.

We thank you, our shareholders, for your continued support.

March, 2026