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• Medium-term Plan Update: 2026 March term is the final year of the "NEW C.C.J2200" medium-term plan, which was designed to build the foundation to become a 200-year company. The plan's full-year sales and operating profit targets of 220 billion yen and 7 billion yen have already been raised to 225 billion yen and 7.5 billion yen, respectively. The next 5-year medium-term plan will be structured into flexible 2-year/2-year/1-year review cycles to adapt to high market uncertainty, instead of a fixed 5-year framework. The plan development is currently underway alongside the final review of "NEW C.C.J2200".
• Core Strategic Initiatives: 1. Update business strategy for each segment: strengthen the "FA by Tachibana" domestic market position and build a foundation for global growth; focus on data center/AI and sensor-AI combination opportunities in the semiconductor business; capture LED replacement and urban redevelopment demand in the facilities business; advance localization of overseas operations, particularly for the new India market. 2. Strengthen internal foundation: advance OA/Digital transformation including generative AI adoption and global base system upgrades; launch the first phase of a job-based human resources system in April 2026, with full completion targeted in the next medium-term plan. 3. Build a platform to sustainably maintain over 200 billion yen in annual sales, a goal the company has already achieved intermittently and is working to make permanent through company-wide efforts.
• Key Operational Updates: 1. Overseas: Launched operations in India in January 2025, has hired 9 local employees, expects full revenue generation to start in April 2026, and is currently finalizing cross-regional supply chain, tax, and foreign exchange processes. Tachibana now operates 10 overseas sales companies across 14 total global locations. 2. Marketing: Continues to regularly participate in major industry trade shows, including 3 consecutive years at FOOMA JAPAN for FA systems and 10 consecutive years at Embedded Technology Expo for semiconductor technologies. 3. Internal: Is renovating the full Osaka head office facility to improve employee motivation amid a tight hiring market, with completion planned by the end of the calendar year.
• Capital Return: Plans to maintain an annual dividend of 100 yen (50 yen interim, 50 yen year-end) for the 3rd consecutive year, and is on track to complete its planned share repurchase program of up to 3 million cumulative shares.

• Full-year 2026 March term guidance is maintained with no revisions, despite a lower revenue and profit result in the first half. The weak first half performance was already incorporated into the full-year forecast. The full-year guidance is: 225 billion yen in total sales (49 billion yen increase year-over-year), 7.5 billion yen in operating profit (91.2% of prior year profit), 8 billion yen in ordinary profit (92.1% of prior year), and 5.5 billion yen in net profit (78.1% of prior year). The 2Q 2026 result was 103.1 billion yen in sales (96.6% of prior year 2Q) and 3 billion yen in operating profit (76.9% of prior year 2Q), representing a 45.8% progress rate for full-year sales and a 40.8% progress rate for full-year operating profit. Management is tracking Q3 trends against the Chinese Spring Festival calendar to work toward full-year target achievement.
• The company maintains ROE target of 10% and PBR target of over 1x, and is actively developing strategy to hit these targets amid recent weaker performance and stock price pressure.

1. FA System Business: Full-year 2026 sales target of 115.1 billion yen, expected to account for 49.3% of total company revenue. System solution business inquiries and projects are growing in line with plan, but the segment was negatively impacted by prolonged delivery adjustment issues and slower-than-expected China market launch, which increased market inventory across the supply chain and hurt single-unit equipment sales. 3D printer sales expansion is ongoing as a carbon neutrality-focused priority. 2. Semiconductor Device Business: Full-year 2026 sales target of 83.2 billion yen, expected to account for just under 40% of total company revenue (up from the previous medium-term target of 78 billion yen). Demand increased for power modules, memory including SSDs, and LCD display devices for consumer electronics, but the segment faced difficulty forecasting global demand, with some client projects delayed or canceled due to international economic uncertainty from US tariffs, exchange rate volatility, and Chinese regulatory changes. The company is strategically securing delivery and inventory to address tight supply-demand balance from reduced legacy semiconductor production driven by data center and AI investment growth. 3. Facilities Business: Full-year 2026 sales target of 21 billion yen, exceeding the long-term 20 billion yen target. Growth is driven by strong demand for data centers and urban redevelopment in Tokyo and Osaka, as well as robust demand for solar power installation projects for global clients' factories, as Japanese solar panel brands have weakened in the market.

• Persistent yen depreciation (USD/JPY trading between 145 and the upper 150 range) combined with uncertain interest rate movements creates high difficulty forecasting future business conditions.
• International economic uncertainty from US tariffs, global foreign exchange volatility, and Chinese regulatory changes has led some key clients to delay or cancel existing projects, creating pressure on near-term performance.
• Slower-than-expected recovery in the China market and prolonged excess inventory across the FA system supply chain has had a larger-than-anticipated negative impact on FA system sales, as the segment carries high volume of single-unit equipment sales.
• Operating in India carries elevated risks related to local currency management, tax regulation, and cross-border remittance, which the company is still addressing in its pre-revenue launch phase. Managing local talent in new overseas emerging markets is also a core ongoing challenge for Japanese management.
• Global industry consolidation and business restructuring creates risk of losing existing client relationships, as consolidated clients may shift to pre-existing supplier relationships of merged entities, depending on Tachibana's ability to maintain its value proposition.
• Increasing competition from Chinese companies in high-growth sectors including EV, renewable energy, and industrial technology, where Chinese firms have advanced faster than Japanese brands in some areas, creates a more challenging competitive landscape for Tachibana's Japanese clients and its own business.

Q: What are the key priorities for the next medium-term management plan, based on what can be shared currently? / A: Management focuses on two core areas: operations and management. In management, the company is strengthening foreign exchange risk management as global expansion increases foreign currency exposure, and will improve balance between yen and foreign currency holdings from a financial perspective. It is also upgrading logistics operations via DX to shift from fully outsourced models to flexible models matching changing client needs, improving operational speed and visibility. In sales, the company is addressing market share loss to Chinese and Western firms, with the EV sector as a key battleground for Japanese brands. It will support Japanese brand value growth in competitive segments including EV, medical, carbon neutrality, renewable energy, and robotics, leveraging its broad product platform to adapt flexibly to each sector's challenges.

Q: Which countries or regions will be the focus in the next medium-term plan, and what is the approach to market entry? / A: India is a core focus given its large population, existing demand, and many key Japanese clients already expanding into the market, so Tachibana will follow clients into the market. Outside India, Vietnam is a key priority in Southeast Asia, and the company will follow client demand to consider local expansion in other markets as tariff policies change. It also plans to increase focus on Western markets, with Mexico as a key priority for automotive-related business, and will look to establish partner local presence even if it does not set up its own legal entity immediately.

Q: How will industry restructuring (especially active restructuring among semiconductor distributors) impact Tachibana's business and strategy? / A: When clients restructure, combined business often brings existing supplier relationships from both merging firms. Retaining client business depends entirely on Tachibana's ability to deliver unique added value; the company will work to retain existing commercial flow by supporting clients with talent and technology succession needs from consolidation, and pivot to new product pitches if retention is not possible. Semiconductor distributor consolidation is expected to continue, and Tachibana acknowledges it may need to consider consolidation options as well. Global expansion is a requirement for long-term survival, so any M&A will be pursued carefully with clear priority on business goals rather than just sales growth, with thorough due diligence on terms and fit.