Performance highlights / Performance forecast

• Consolidated performance highlights
• Earnings forecast

Consolidated performance highlights

(FY12/2025)

Unit: million yen

In the current consolidated fiscal year, the global economy showed a gradual recovery trend in Japan and Southeast Asia, while the economy continued to expand in India, although some regions such as China were stagnant due to the impact of U.S. trade policy. In addition, in the battery-related business, which is positioned as a priority development area, the Group's strategy was also greatly affected by the slowdown in the expansion of the EV market worldwide.

In this environment, the Group has established the following three management policies and has been conducting management activities.

Regarding the first policy, "Transformation to a high-profit existing business group," in the overseas packaging-related field, which is positioned as a growth business, adhesives we have decided to increase the production capacity of liquid ink in India and reorganize our production bases in China. In Thailand, the can coatings remained strong due to maximizing synergies through business integration. Regarding the growth of inkjet inks in line with the growth of the digital printing market, although there was some stagnation due to inventory adjustments by customers, it remained the same as last year. While functional coating agents, which contributes to the elimination of plastics against the backdrop of environmental awareness, performed well, sales of energy-saving UV and LED inks deteriorated in the sales mix due to increased demand for low-cost products due to a downturn in the publishing market.
plastic colorants, which is positioned as a profit-based business, saw a decrease in overseas sales due to inventory adjustments for solar cell applications, while domestic companies promoted cost reductions and price revisions. In Japan, where costs such as raw material costs and transportation costs also increased, adhesives and liquid inks in Japan secured profits by promoting efficiency improvements, cost reductions, and restructuring of sales systems through product product integration, and decided to invest in production efficiency at its main Saitama Plant. As the information printing market in Japan continues to shrink, we have further promoted alliances in production and logistics to promote supply chain efficiency and improve profitability.

Regarding the second policy, "Creation of Strategic Priority Business Groups," as the shift of the liquid crystal display market to China is further accelerating in the display and advanced electronics-related business, we established a joint venture with a local partner in China to start supplying materials for color filter products locally, and also expanded sales of optical semiconductor materials such as CMOS image sensors. In addition, the expansion of sales of display pressure sensitive adhesives to the Chinese market has increased significantly, and we have begun to reorganize our supply system. In the semiconductor-related field, insulation protection sheets have been extended as encapsulation materials, and low-dielectric resin materials have been newly adopted.
In the Mobility and Battery-related business, shipments of automotive lithium-ion battery materials were stagnant at each site due to the slowdown in the global EV market. The new plant for automotive lithium-ion battery materials in Kentucky, which is the second plant in North America, has decided to postpone the start of operations, and in Hungary, we have completed the expansion of facilities for the second company's supply. In addition, we continued to develop new applications such as for anode materials and solid-state batteries, but we have reviewed the overall investment amount and timing, and decided to use the funds for strategic investments such as M&A.

Regarding the third policy, "Transformation of Management Infrastructure," we have worked to strengthen management resources based on ESG (environmental, social, and governance) perspectives, and have promoted the dissemination and penetration of new materialities created based on Sustainability Vision ASV2050/2030 both internally and externally, as well as the introduction of renewable energy-derived electricity and additional solar power generation facilities in Japan and overseas. We steadily promoted sustainability management.
In addition, in order to strengthen human capital, we conducted an engagement survey conducted for the first time last year, including all companies in Southeast Asia, and promoted dialogue with bases to solve issues, as well as implemented measures that emphasized the perspective of diversity, equity and inclusion (DE&I). In addition, we have introduced a new HR system called "artience HR CANVAS" that encourages each employee to take on challenges by maximizing their abilities through independent career autonomy and growth. In addition, regarding CI penetration activities in conjunction with the change of company name and the renewal of the philosophy system, the CEO continued to visit the site and hold meetings to exchange opinions with employees in a roundtable format. In addition, in order to promote the challenge and growth of our employees, foster a culture of challenge, and create innovation, we have opened Incubation CANVAS TOKYO, a global co-creation center specializing in the field of materials, within our headquarters.
Regarding the promotion of DX, including the use of AI, we have promoted the use of technology development and production innovation, and have set the "Generative AI Native 500" to promote human resource development to secure 500 digital core human resources by 2027. In addition, we have promoted the efficiency of various operations and the expansion of global procurement through the integrated core business system we have introduced, as well as countermeasures against risks such as cybersecurity.
With regard to efforts to improve capital efficiency and manage with an awareness of stock prices, we raised our ROE target to 8% by the end of fiscal 2026, introduced ROIC company-wide, reduced working capital through CCC improvements, reduced shareholdings, and acquired treasury shares. In addition, in order to strengthen governance, we increased the number of Independent Outside Director with management experience, continued dialogue with shareholders through IR and SR activities, and worked to reflect this in management measures.

As a result, net sales for the current consolidated fiscal year decreased to 349,979 million yen (down 0.3% year-on-year), but operating income increased to 20,765 million yen (up 1.7% year-on-year). Ordinary income was 20,888 million yen (down 0.6% year-on-year), and net income attributable to owners of the parent was 10,340 million yen (down 44.2% year-on-year) due to impairment losses.

During the consolidated fiscal year under review, the global economy faced the impacts of US trade policies. Although certain regions such as China showed signs of faltering, the Japanese and Southeast Asian economies improved moderately and India continued to achieve economic growth. In the battery related business, which the Group is focusing on developing, the Group's strategies were also significantly impacted by the global slowdown in growth momentum in the EV market.

Amid this business environment, the Group operated its business activities in line with the following three management policies.

The first policy is to shift to highly-profitable existing businesses. In the overseas packaging materials related business, which the Group identifies as a growing business, a new plant for liquid ink products and adhesives began operating in Turkey, and the Group also decided to expand production capacity for liquid ink products in India and reorganized its production network in China. In Thailand, can coatings remained strong due to the maximization of synergies through management integration. Driven by expansion in the digital printing market, growth of inkjet inks was mostly unchanged year on year, despite signs of stagnation in some areas due to customer inventory adjustments. As environmental awareness increases, functional coatings that help to reduce plastic usage performed strongly. However, sales of energy-saving UV and LED curable inks were affected by the deterioration in the sales mix caused by rising demand for affordable items amid the slump in the publishing market.
In the plastic colorants business, which the Group considers a profitable core business, overseas sales fell due to inventory adjustments affecting colorants for solar cell applications. In Japan, meanwhile, the Group reduced costs and revised prices.
Adhesives and liquid ink products were affected by rising raw material and transportation costs in Japan. The Group secured a profit by improving efficiency through product integration, cost cutting and reorganizing the sales structure, and also decided to invest in increasing production efficiency at its core Saitama Factory. As the information-related printing market continued to contract, the Group improved profitability in the domestic offset ink business by furthering production and logistics alliances and promoting supply chain efficiency.

The second policy is the creation of strategic priority businesses. In the Display & Advanced Electronics Related Businesses,the shift of LCD display market to China accelerated rapidly. In this environment, the Group established a joint venture with a local partner in China and began the local supply of materials for color filters. The Group also expanded its sales of optical semiconductor materials, including CMOS image sensors. In addition, sales of pressure sensitive adhesives for displays in the Chinese market grew significantly, and the Group also started to reorganize the supply chain. In semiconductor related products, insulation protective sheet for encapsulating semiconductor chips grew, and the Group also began providing low dielectric resin materials to the semiconductor industry.
In the Mobility & Battery Related Businesses, shipments of materials for lithium-ion batteries for automotive applications from all production facilities were slow due to a global downturn in the EV market. The Group postponed the start of operation at a new plant that will produce materials for lithium-ion batteries used in automotive applications in Kentucky,the Group's second production base in North America. Meanwhile, the Group completed expansion of its facilities in Hungary, with a view to supplying a second company, but revised the business plan to reflect the recent market trend. This situation required the Group to recognize impairment losses on both facilities. In addition, the Group continued to develop products for new applications, particularly for anode materials and all-solid-state batteries. However, it reviewed the amounts and timing of investments across the board and decided to use funds for strategic investments such as M&A.

The third policy is the reform of business foundation. The Group sought to strengthen its management resources with an emphasis on environmental, social and corporate governance (ESG) criteria and sought to raise awareness internally and externally of the new materiality developed based on the artience asv2050/2030 Sustainability Vision. The Group also steadily implemented sustainability management, promoting the adoption of electricity derived from renewable energy and the additional installation of solar power generation facilities both in Japan and overseas. To enhance its human resources, the Group expanded the scope of the engagement survey conducted for the first time last year to include all Southeast Asian companies and increased dialogue with them for the resolution of any issues. The Group also implemented initiatives focusing on diversity, equity and inclusion (DE&I). In addition, the Group introduced artience HR CANVAS, a new personnel system where each employee's potential is maximized through proactive career autonomy and growth,and challenge is encouraged. Moreover, as corporate identity (CI) activities following the change of its business name and corporate philosophy system, the Group continued to organize sessions where the CEO visits sites to exchange opinions with employees in the form of a roundtable discussion. The Group also opened Incubation CANVAS TOKYO, a global co-creation hub specialized in the materials field established within head office to encourage employees to take on challenge and achieve personal growth,foster a challenging culture, and generate innovation.
The Group promoted the use of digital transformation technologies, including artificial intelligence, to drive the development of technology and production innovation. Under the Generative AI Native 500 project, the Group also promoted the development of human resources, with the aim of securing 500 employees who are digital core talent by 2027. It also improved operational efficiency across many functions and expanded global sourcing by utilizing the Enterprise Resource Planning system, while also strengthening measures to address cybersecurity and other risks. To enhance capital efficiency and adopt management practices that consider share prices, the Group raised the ROE target to 8% by the end of 2026, and made progress in introducing return on invested capital (ROIC) throughout the organization,improving the cash conversion cycle (CCC) and reducing working capital,decreasing the shares held and repurchasing treasury shares. To enhance governance, the Group increased the number of independent outside directors with management experience, continued engaging in dialogue with shareholders through investor relations (IR) and shareholder relations (SR) activities, and incorporating their feedback into management initiatives.

As a result, net sales for the fiscal year under review fell to 349,979 million yen (down 0.3% year on year), but operating profit rose to 20,765 million yen (up 1.7% year on year). Ordinary profit decreased to 20,888 million yen (down 0.6% year on year), and profit attributable to owners of parent dropped to 10,340 million yen (down 44.2% year on year) due in part to impairment losses. Operating results by segment are as follows.

Earnings forecast

(FY12/2026)

Released on February 13, 2026

Unit: million yen

While the economic environment is expected to continue to recover moderately in the current fiscal year, there are also risks that will put a downward pressure on the economy, such as the impact of continued price increases on private consumption. In addition, although there is uncertainty about the environment surrounding the Group, such as the impact of U.S. policy trends and economic stagnation in China, the next fiscal year is expected to be net sales of 360 billion yen (up 2.9%), operating income of 23.0 billion yen (up 10.8%), ordinary income of 22.5 billion yen (up 7.7%), and Net income attributable to shareholders of the parent company is expected to be 21.0 billion yen (up 103.1% in growth). (As of February 13, 2026).

◆Issues to be addressed

In the next consolidated fiscal year, which is the third year of the new medium-term management plan "artience 2027", we will promote each business as follows.
In the color and functional materials business, we will work to improve our ability to respond to market needs and increase market share of liquid crystal display color filter materials, starting from the production system established through joint ventures with local Chinese companies. In the field of optical semiconductor materials, we will continue to expand steadily, and based on the knowledge we have accumulated in this business, we will develop next-generation technologies and develop applications in collaboration with related materials within the Group. We will steadily build up our track record of automotive lithium-ion battery materials, including full-scale production for major Chinese companies and supply to new customers in Hungary, while maintaining an appropriate production system by flexibly responding to the business environment. In addition to expanding conductive auxiliaries for anodes and LFMPs, we will diversify our earnings opportunities by expanding our product portfolio, such as considering ESS applications in addition to automotive. At the same time, we will also promote the development of next-generation technologies such as solid-state batteries.
In the polymer and coatings-related business, we will promote the development of new products and production innovation that captures customer needs in the adhesive adhesives to improve profitability. In particular, the optical pressure sensitive adhesives for displays will further expand its business by increasing production capacity and optimizing the supply chain. can coatings will strengthen its global network of sites to accelerate the creation of synergies. In advanced electronics-related materials, we will steadily expand our semiconductor-related products, which are becoming more and more effective, and expand our functional product line that meets market demands.
In the packaging-related business, we will continue to capture growth in overseas markets and strengthen our earnings base in the domestic market. The new plant in Turkey will be the core base in the region, and in addition to liquid inks, we will also expand our business in laminating adhesives. In India, we will steadily capture market growth and promote investment to increase production capacity. In China, we will accelerate business growth under a new system of production, sales, and technology at multiple sites. In the domestic market, we will strengthen our earnings base by investing in efficiency through labor saving and automation. In addition, we will promote the development and expansion of environmentally friendly product lines and promote marketing activities that anticipate customer needs.
In the printing and information-related business, we will expand sales of functional inks (UV-curable inks, metal decorating inks, and screen inks) overseas. In particular, for UV-curable inks, we will work on the global expansion of differentiated products using our unique materials and the expansion of sales of UV and LED inks that meet energy-saving needs. In addition, we will continue to expand our functional coating agents for high-end folding containers. In addition, on the premise that the domestic information printing market will continue to shrink in the future, we will further improve efficiency, including the expansion of joint logistics.

In addition to these business activities, we will strengthen our management foundation that will lead to the practice of sustainable management. In particular, with regard to human capital, which is the foundation, we will further strengthen it by promoting various measures that will lead to the acquisition and development of human resources linked to our global business strategy and the improvement of productivity. We will promote DE&I and hold business idea contests to improve engagement and foster a culture of challenge. On the other hand, we will promote initiatives to improve capital efficiency, such as allocating resources to growth businesses based on ROIC and other indicators, and working on improvement activities for existing businesses. In addition, based on our Sustainability Vision ASV2050/2030 and newly established materiality, we will continue our efforts to respond to social demands, including environmental issues. We will accelerate the use of AI in all areas of our business activities and management infrastructure, promote product development and operational transformation, and promote smart factories using DX to improve productivity and ensure the sustainability of production, and strengthen initiatives related to information security. We will further promote the penetration of new brands based on the new CI and philosophy system.

Note: The above forecasts are based on information available as of the date of announcement on February 13, 2026, and actual results may differ from forecasts due to various factors in the future.

In this fiscal year, the economy is expected to continue its moderate recovery. However, there are still downside risks to the economy, such as the impact of persistent price increases on personal consumption. The Group's business environment remains uncertain, with challenges such as the impacts of US policies and China's economic stagnation. This notwithstanding, the Group forecasts net sales of 360,000 million yen (growth rate of 2.9％), operating profit of 23,000 million yen (growth rate of 10.8％), ordinary profit of 22,500 million yen (growth rate of 7.7％), and profit attributable to owners of parent of 21,000 million yen (growth rate of 103.1％) as a result of the measures to address the issues described on page 8. (as of Feb.13,2026)


◆Our challenges
In the next fiscal year, which is the third fiscal year under the "artience 2027," the new medium-term management plan, the Group will move forward with each business as described below .
In the Colorants and Functional Materials Related Business, the Group will work to increase market share for materials used in LCD color filters by leveraging the production system established through its joint venture with a Chinese company to better meet market needs. In the area of optical semiconductor materials, the Group will keep expanding steadily and use the knowledge it has accumulated in this business to develop next generation technologies and expand applications by bringing together optical
semiconductor materials and the Group's other related materials. In the area of materials for automotive lithium-ion batteries, the Group will steadily build up a track record through activities such as scaling up production for major Chinese companies and supplying new customers in Hungary, while maintaining appropriate production systems by adapting flexibly to changes in the business environment. The Group will also seek to diversify its profit opportunities through expansion of product lines, including
branching out into conductive agents for negative electrodes and LMFP batteries and considering ESS applications in addition to automotive applications. At the same time, the Group will push ahead with the development of next-generation technologies,including all-solid-state batteries.
In the Polymers and Coatings Related Business, the Group plans to improve the profitability of pressure sensitive adhesives by developing products to meet customer needs and transforming production. Especially in the area of optical pressure sensitive adhesives for displays, the Group will seek further business expansion through increase in production capacity and optimization of the supply chain. As for can coatings, the Group will enhance its global network to accelerate the generation of synergy. Regarding
materials related to advanced electronics, the Group aims to steadily expand semiconductor-related products on the back of its 9 growing track record, and to also expand functional product groups that meet market requirements.
In the Packaging Materials Related Business, the Group aims to capture growth in overseas markets, and to strengthen the profit base in the domestic market. Positioning the new plant that commenced operation in Turkey as its core production site in the region,the Group will pursue business expansion not only for liquid ink products but also for laminating adhesives. In India,the Group will steadily tap into market growth and also push ahead with investment to expand production capacity. In China, the Group will
accelerate business growth under a new system that integrates the production, sales and technologies of multiple sites. In the domestic market, the Group will seek to strengthen the profit base through investments in labor-saving and automation to increase efficiency. In addition, the Group will develop and enhance environmentally friendly products and conduct marketing activities that anticipate customer needs.
In the Printing and Information Related Business, the Group will pursue overseas sales expansion of functional inks (UV curable inks, metal decorating inks and screen inks). Especially in the area of UV curable inks, the Group will focus on the global expansion of differentiated products using its own materials and on the sales expansion of UV and LED inks that meet energy saving needs. Additionally, the Group will pursue further expansion of functional coatings for high-grade paper containers. Meanwhile, in Japan,the Group will seek to further improve efficiency through expansion of joint logistics and other means, based on the assumption of a continued contraction in Japan's information-related printing market.
In addition to undertaking these business activities, the Group will strengthen the management foundation to help implement sustainable management practices. In particular, the Group will work to further strengthen human capital, which is the cornerstone of management, implementing a range of measures that will help secure and develop talent linked to global business strategies and improve productivity. The Group aims to enhance employee engagement and foster a corporate culture that encourages employees to embrace challenges by implementing DE&I initiatives and conducting business idea contests and other related efforts. At the same time, the Group will implement initiatives to improve capital efficiency, including allocating resources to growing businesses based on indicators such as ROIC and focusing on activities to improve existing businesses. Additionally, the Group will continue actions to address the demands of society, including addressing environmental issues, in accordance with the asv2050/2030 artience Sustainability Vision and the newly established materiality. The Group will accelerate the use of AI across all areas of its business activities and management foundations to drive product development and the transformation of operations. To ensure improvement in productivity and production sustainability, the Group will promote creating smart factories using digital transformation, while
also stepping up information security initiatives. The Group will also work to further increase penetration of its new brand based on its new CI and corporate philosophy system.

Note: The above forecasts are based on the information available as of February 13,2026. Actual results could differ materially from these forecasts due to various factors in the future.