To our shareholders/Investors

During the six months ended September 30, 2025, the global economy generally remained firm, despite lingering uncertainties due to trends in trade policies and other factors. In China, demand remained firm on the back of continued replacement support program by the government and expanding exports to non-U.S. destinations. In Japan, while the employment and income environment improved, the recovery was moderate, with weakness remaining mainly in export-related sectors due to uncertainty in the trade environment. In the U.S., while consumer spending remained strong, upward pressure on prices continued to be seen.

In the automotive sector, to which the Group is mainly related, domestic sales and exports remained strong in China. In ASEAN, however, demand growth slowed and sales were sluggish. In the U.S., sales were sluggish among some European and U.S. manufacturers.

In this business environment, for the six months ended September 30, 2025, net sales decreased year on year due mainly to lower sales in the automotive exterior business. Operating profit and ordinary profit also decreased from the same period of the previous year due to the impact of product mix. Profit attributable to owners of parent increased year on year due to the recording of an extraordinary income on the sale of assets held by the Company.

The Company is promoting its 2026 Medium-Term Management Plan, which is based on the two-wheeled management of its existing powertrain business and its new frontier business.

In the powertrain business, we are systematically introducing high-efficiency lines with the aim of streamlining global production while increasing production capacity in markets where engine-equipped vehicles are expected to expand.

In the frontier business, in order to expand the aluminum business to meet the growing demand for lighter weight products in line with the progress of EVs, we will acquire equity interest in a company with aluminum die-casting technology through our consolidated subsidiary. In addition, we were selected by the Tokyo Metropolitan Government as one of the five large companies participating in the Tokyo Cross Lab, a project to promote open innovation by leveraging the assets held by large companies, etc. We expect to collaborate with startup companies in the fields of next-generation mobility and frontier industries going forward.

Furthermore, in order to create an environment conducive to investors investing in our stock, we implemented a stock split and strived to improve capital efficiency and enhance shareholder returns through the reduction of underperforming assets and share buybacks. We will continue to focus on communication with our shareholders and investors while enhancing profitability and improving capital efficiency.

We greatly appreciate the continued support of our shareholders.