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• 2025 September Fiscal Year (FY2025) Results

• Group achieved 8.5% YoY revenue growth, 62% YoY operating profit growth, and 70% YoY ordinary profit growth. Results were in line with initial expectations, as 0.1 billion yen in Fuskia Group acquisition-related costs was fully absorbed by growth from large new construction/renovation projects.
• Gross margin has remained at higher levels for the past 2-3 reporting periods, which management attributes to increased early-stage involvement in projects via the "Total Pack System" that has raised the value-added of the business.
• Balance sheet remains stable, with an equity ratio of 51.8%. Operating cash flow was negative 86 million yen due to temporary working capital pressure, which is expected to resolve in FY2026 via accounts receivable collection. Investment cash flow was negative 619 million yen due to capital alliances and investment securities purchases.

• Fuskia Group Acquisition

• Completed 100% acquisition of Fuskia Group in October 2025 for a total consideration of 7.15 billion yen, funded via internal cash and 5.0 billion yen in bank borrowing. The acquisition adds minimally invasive medical device sales, hearing aid sales, and medical equipment rental to the group's portfolio.
• The core strategic goal is to reduce historical earnings volatility from the project-dependent Medical Total Solutions business, scale group size, and stabilize operations by adding Fuskia Group's stable, recurring revenue stream.
• The acquisition creates a dual-approach business model: レオクラン focuses on medical infrastructure development via new construction/renovation projects, while Fuskia Group focuses on medical operation support via clinical medical device sales. The complementary business models are expected to enable broader and deeper value delivery to healthcare customers.
• The existing Fuskia Group management team will be retained, with レオクラン appointing directors to support governance improvement and synergy maximization. Management confirms sufficient capital remains available for future growth investment and M&A after the transaction, with the group remaining in a effectively debt-free position.

• Strategic Positioning Update

• レオクラン is transitioning from a hunting-style medical equipment trader focused exclusively on hospital new construction/renovation projects to a high value-added medical equipment trader specialized in supporting advanced specialized medicine, covering the full spectrum from infrastructure to clinical operations. Management aims to accelerate growth via M&A to move into this new strategic stage.
• Management remains focused on capital cost and share price-conscious management, and recognizes the need to deliver results to meet market expectations raised by post-acquisition share price gains.

• For FY2026, management forecasts consolidated revenue of 42.0 billion yen (approximately 2x FY2025), operating profit of 460 million yen (60% YoY growth), EBITDA of 933 million yen (2.5x YoY), and ordinary profit of 380 million yen (23% YoY growth).

• Goodwill amortization and acquisition-related costs (which do not generate a tax reduction benefit) will push forecast parent net income down to just 8 million yen, a large YoY decline. • For Medical Total Solutions, the 44% forecast decline in new construction/renovation revenue will be offset by planned growth in healthcare information systems, other medical equipment, preventive medicine, and maintenance services. • Fuskia Group is expected to contribute 310 million yen in net incremental ordinary profit to the group in FY2026, after 240 million yen in goodwill amortization and 150 million yen in acquisition-related costs. The goodwill amortization figure is preliminary pre-PPA and subject to change. • FY2026 will still see earnings volatility: high revenue and profit are expected in Q2 and Q4, while Q1 and Q3 are forecast to see low levels of performance, as Fuskia Group's stable revenue only partially offsets the project-driven volatility of Medical Total Solutions. • Management expects new construction/renovation sales to recover to FY2025 levels by FY2027, as postponed projects will be recognized in later periods. After FY2026, temporary acquisition-related costs will fall away, and synergy effects will emerge, leading to further EBITDA growth.

For the 2025 September fiscal year (FY2025):

1. メディカルトータルソリューション (Medical Total Solutions): Increased revenue and profit year-over-year, driven by recognition of revenue from large new construction/renovation projects. Within the segment, new construction/renovation projects, healthcare information systems, and maintenance all saw revenue growth, while other medical equipment sales declined due to customer budget cuts from a tough market environment.
2. 遠隔画像診断サービス (Remote Image Diagnostic Services): Performed steadily. Rising contracted and personnel costs were offset by growth in diagnostic volume, and operating margin was maintained at a stable level.
3. 給食事業 (Catering Business): Declined in both revenue and profit. Despite pricing revisions to improve profitability, the segment faced continued revenue impact from facility contract terminations in FY2024, plus rising material and labor cost pressures.

For the 2026 September fiscal year (FY2026) forecast, after segment restructuring:

1. メディカルトータルソリューション: Forecast a decline in profit due to lower large new construction/renovation project volume, with new construction/renovation revenue expected to drop 44% to 4.5 billion yen.
2. 低侵襲医療機器販売事業 (Minimally Invasive Medical Device Sales, new segment from Fuskia Group): Expected to contribute significantly to group profit even after accounting for goodwill amortization and acquisition-related costs. Fuskia Group has historically delivered stable annual revenue of 15 billion to 20 billion yen and operating profit of 0.5 billion to 0.7 billion yen.
3. レンタル事業 (Rental Business, new segment): Expected to contribute positively to consolidated performance.
4. 遠隔画像診断サービス: Forecast to continue steady performance.
5. Other: Combines the legacy catering business and Fuskia Group's hearing aid sales business.

• Medical Total Solutions faces significant headwinds: the tough operating environment for healthcare institutions, surging construction costs, and project delays have led to a large expected decline in new construction/renovation revenue in FY2026, and this tough operating environment may continue beyond FY2026. • Earnings remain highly volatile quarter-to-quarter due to the lumpy nature of large construction/renovation project revenue recognition, even after the Fuskia Group acquisition. • Preliminary goodwill amortization for the Fuskia acquisition is subject to change after PPA is finalized, which could alter forecast tax expense and net income. • While capital for future M&A is available, any ill-considered transactions could pressure the group's financial position and profitability.

Q: What has driven the recent sales growth of healthcare information systems in the Medical Total Solutions segment? Is this the result of レオクラン's focused investment in the space, or other external factors? / A: External market demand has grown sharply, as healthcare institutions need to modernize their information systems for efficiency and remote care, but lack in-house personnel to select and implement systems on their own. レオクラン has expanded its dedicated team and built up implementation expertise from ongoing projects, allowing it to meet this unmet customer demand. The combination of strong market demand and レオクラン's built-out service capabilities is what has driven sales growth.

Q: Why is Medical Total Solutions forecast to decline in FY2026 even though the Total Pack System new order indicator has been strong? Does this mean the leading indicator is no longer reliable? What is the current order trend? / A: The leading indicator is still valid, but Total Pack System projects take multiple years from order to revenue recognition, and many healthcare institutions are currently delaying projects due to their difficult operating environment. This delayed revenue recognition is why FY2026 new construction/renovation sales are forecast to fall. Management expects sales of these delayed projects to recover to FY2025 levels by FY2027, but will continue to focus on securing revenue from existing orders and winning new business to offset ongoing market headwinds.

Q: What is the nature of synergies between Medical Total Solutions and the new minimally invasive medical device sales business, and when can these synergies be expected to materialize? / A: The two businesses have complementary go-to-market approaches: レオクラン works with hospitals on infrastructure projects, while Fuskia focuses on clinical device sales for day-to-day operations. This complementarity will let both businesses cross-sell their products and services to each other's existing customer bases, offering a broader range of value that neither could provide alone. Management notes that synergy effects will likely take some time to emerge given the nature of the business, but will work to accelerate their realization.

Q: Will レオクラン continue to pursue active M&A now that the Fuskia acquisition is complete, given the group's current net cash position? / A: Management confirms that it will continue to actively evaluate M&A opportunities that increase corporate value, and sufficient capital is still available for additional transactions. However, management will not pursue M&A just to increase the number of deals, and will carefully evaluate whether any prospective transaction adds long-term value to the group given the change in the group's financial position after the Fuskia acquisition before moving forward.