TORAY INDUSTRIES,INC. Q4 FY2026 earnings call

• Overall Consolidated Results • Total consolidated revenue for FY ended March 2026 increased 0.9% year-on-year to 2,585.1 billion yen, while corporate income decreased 0.6% year-on-year to 141.9 billion yen, and net income increased 2.1% to 79.5 billion yen. • RIC was 4.7% and ROE was 4.5%. Special items worsened 29.4 billion yen year-on-year to -44.7 billion yen, including 25.1 billion yen in payment losses tied to weak profitability in the battery separator film business and a South Korean subsidiary amid the sluggish EV market. • Total assets reached 3,477.0 billion yen, total equity hit 1,927.8 billion yen, and free cash flow was positive at 144.8 billion yen.

• Segment Operational Performance • Fibers and Textiles: Apparel applications remained strong overall despite European market stagnation and ongoing competition from overseas products; industrial applications focused on cost reduction amid soft automotive demand. • Performance Chemicals: Resins and chemical businesses suffered from weak automotive market conditions; electronic component and automotive capacitor film demand grew, but battery separator film sales stagnated; power inductor new product sales expanded, while OLED and circuit materials faced slow display panel demand and heightened Chinese competition. • Carbon Fiber Composite Materials: Aerospace customer sales recovered steadily post-supply chain inventory adjustment; high-end outdoor leisure product sales were steady, but general product inventory adjustment continued; industrial pressure vessel and wind turbine blade applications faced demand delays. • Environment and Engineering: Middle Eastern RO membrane and domestic Japanese plant projects remained solid, but faced Chinese market stagnation and increased competition; domestic engineering and construction sub-contracts were strong. • Life Science: Overseas pharmaceutical sales grew primarily in China, but domestic Japanese sales were hurt by generic penetration; hemodialysis device sales stagnated, with ongoing efforts to shift to high-value products and cut costs.

• Shareholder Return Policy • Maintains a core policy of stable continuous dividends aligned with performance growth, paired with flexible share buybacks based on financial position and capital structure under the Ignition 2028 strategic plan.

1. Fibers and Textiles: Revenue increased 4% year-on-year to 1,051.0 billion yen, marking the second consecutive year exceeding 1 trillion yen. Corporate income rose 6% year-on-year to 68.0 billion yen. This segment contributes approximately 40.6% of total consolidated revenue. 2. Performance Chemicals: Revenue decreased 5.3% year-on-year to 894.4 billion yen. Corporate income fell 6.2% year-on-year to 56.3 billion yen. This segment contributes approximately 34.6% of total consolidated revenue. 3. Carbon Fiber Composite Materials: Revenue was nearly unchanged year-on-year at 300.1 billion yen. Corporate income dropped 21.7% year-on-year to 17.6 billion yen. This segment contributes approximately 11.6% of total consolidated revenue. 4. Environment and Engineering: Revenue increased 12.8% year-on-year to 266.9 billion yen. Corporate income rose 11.2% year-on-year to 28.8 billion yen. This segment contributes approximately 10.3% of total consolidated revenue. 5. Life Science: Revenue decreased 1.4% year-on-year to 52.4 billion yen. Corporate income improved by 0.7 billion yen year-on-year to a negative 0.1 billion yen. This segment contributes approximately 2.0% of total consolidated revenue.

• For the fiscal year ending March 2027, management forecasts total consolidated revenue of 2,830.0 billion yen, corporate income of 160.0 billion yen, and net profit attributable to parent owners of 90.0 billion yen, representing a year-on-year increase from FY ended March 2026 actual results. • Revenue and corporate income growth is projected across all segments, driven by demand capture in core growth segments, benefits from strategic pricing, and ongoing profitability improvement projects. • Capital expenditures are projected at 160 billion yen, depreciation and amortization at 140 billion yen, and R&D expenditures at 86 billion yen for FY ending March 2027. • The full-year annual common stock dividend is projected at 26 yen per share (a 6 yen year-on-year increase), including a 3 yen 100th anniversary commemorative dividend split between interim and year-end dividends (13 yen per share for each payment).

• Downside macroeconomic risks remain from escalating Middle East tensions, which could drive raw material price increases and supply chain constraints, weighing on global economic performance. • Global economic and business performance faces additional uncertainty from the direction of U.S. trade and foreign policy, global responses to U.S. policy shifts, trends in AI-related demand, and the ongoing slowdown of the Chinese economy. • These macro factors could materially impact global supply chains and trade structures over the medium to long term. • The company already recorded material 25.1 billion yen in losses in the reporting period from sluggish EV market demand affecting its battery separator film business and South Korean subsidiary.

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