Sumitomo Heavy Industries, Ltd. CONSOLIDATED FINANCIAL REPORT For the Three-Month Period from January 1 to March 31, 2025 All financial information has been prepared in accordance with generally accepted accounting principles in Japan. This document has been translated from the Japanese original as a guide to non-Japanese investors, and contains forward-looking statements that are based on management’s estimates, assumptions, and projections at the time of publication. A number of factors could cause actual results to differ materially from expectations. Amounts shown in this financial statement have been rounded to the nearest million yen. Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 Summary of Consolidated Financial Results For the Three-Month Period from January 1 to March 31, 2025 Presented April 28, 2025 Sumitomo Heavy Industries, Ltd. Listed exchanges Tokyo Stock Exchange Stock code 6302 Head office Tokyo President Shinji Shimomura URL www.shi.co.jp Yoshitaka Shimamura Inquiries General Manager, Corporate Communications Dept. Telephone +81 3 6737 2332 Scheduled date of payment of cash - dividends Availability of supplementary explanatory Yes materials for financial statement Holding of meeting to explain financial Yes statement 1. FY2025 First Quarter Consolidated Results (January 1, 2025 to March 31, 2025) (1) Business Results (Units: millions of yen) First Quarter First Quarter January 1 to March 31, 2025 January 1 to March 31, 2024 % change % change Net sales 241,536 (5.2) 254,811 2.6 Operating profit 11,182 (39.3) 18,434 14.1 Ordinary profit 10,050 (46.4) 18,766 14.7 Profit attributable to owners of parent 6,495 (52.2) 13,599 25.8 Profit attributable to owners of parent ratio (yen) 54.04 ― Fully diluted profit attributable to owners of parent ratio 111.13 ― Note 1: Comprehensive income: Fiscal quarter ended March 31, 2025: (9,394) million yen, (— %) Fiscal quarter ended March 31, 2024: 30,600 million yen, (86.2 %) 2 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 (2) Financial Position (Units: millions of yen) | | | End of First Quarter | | End of Previous Full Year | | | | | ----------------- | --- | --------------------- | ---------- | -------------------------- | --- | ---------- | ----- | | | | As of March 31, 2025 | | December 31, 2024 | | | | | Total assets | | | 1,252,691 | | | 1,260,242 | | | Total net assets | | | 629,127 | | | 646,418 | | | Equity ratio (%) | | | 49.8 | | | | 50.8 | Reference: Equity: | Fiscal quarter ended March 31, 2025: 623,545 million yen | | | | | | | | | ---------------------------------------------------------- | --- | --- | --- | --- | --- | --- | --- | | Fiscal year ended December 31, 2024: 640,681 million yen | | | | | | | | 2. Dividends (Unit: yen) | | | | | | | | | | --- | ----------- | --- | ------------ | --- | ------------ | --- | --- | | | Year Ended | | Year Ending | | Year Ending | | | December 31, 2025 | | December 31, 2024 | | December 31, 2025 | | | | | | --- | ------------------ | --- | ------------------ | --- | --- | --- | --- | (forecast) Annual dividends per share | First quarter | | ― | | ― | | | | | --------------- | --- | ------- | --- | --- | --- | --- | ------- | | Second quarter | | 60.00 | | | | | 60.00 | | Third quarter | | ― | | | | | ― | | End of term | | 65.00 | | | | | 65.00 | | | | 125.00 | | | | | 125.00 | Annual dividends Note: Changes from the most recent dividend forecast: No 3. FY2025 Consolidated Forecasts (January 1, 2025 to December 31, 2025) (Units: millions of yen) Full Year January 1, 2025 to December 31, 2025 | | | | % change | | | | | | ---------------------------------------------------- | --- | ---------- | --------- | ------ | --- | --- | --- | | Net sales | | 1,090,000 | | 1.8 | | | | | Operating profit | | 60,000 | | 8.9 | | | | | Ordinary profit | | 53,000 | | 7.8 | | | | | Profit attributable to owners of parent | | 28,000 | | 262.6 | | | | | Profit attributable to owners of parent ratio (yen) | | | 232.98 | | | | | Note: Changes from the most recent dividend forecast: No 3 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 Additional Notes (1) Significant changes in the scope of consolidation during the three months ended March 31, 2025: None Newly consolidated: — Excluded from consolidation: — (2) Special accounting measures applied in the quarterly consolidated financial report: Yes (3) Changes to accounting policies, changes to accounting estimates, and retrospective restatements (i) Changes to accounting policies due to revisions to accounting standards: Yes (ii) Changes to accounting policies not otherwise stated in (i): None (iii) Changes to accounting estimates: None (iv) Retrospective restatements: None (4) Number of shares issued (share capital) (i) Number of shares issued at end of fiscal period (including treasury shares): As of March 31, 2025 122,905,481 shares As of December 31, 2024 122,905,481 shares (ii) Number of treasury shares at end of fiscal period: As of March 31, 2025 2,720,126 shares As of December 31, 2024 2,725,562 shares (iii) Average number of shares during fiscal period (cumulative quarterly period): As of March 31, 2025 120,183,482 shares As of March 31, 2024 122,373,007 shares *Treasury stock that is deducted to calculate the number of term-end treasury stock and the average number of shares during the fiscal period includes shares of the Company held in the trust account related to the share delivery trust established for the stock compensation plan for directors and others. *Review of the attached quarterly consolidated financial statements by a Certified Public Accountant or an Independent Auditor: None * Explanation on the proper use of earnings forecasts, and other special remarks Earnings and outlooks concerning future financial results are believed to be reasonable based on information available at the time of publication. Actual financial results may vary from the above forecast and outlook due to a variety of factors. For information on the assumptions that form the basis of the earnings forecast and items to note concerning the use of earnings forecasts, please refer to the Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates in the Supplementary Materials section beginning on page 8. 4 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 Supplementary Materials – Table of Contents I. Summary of Operating Performance ..................................................................................................... 6 1. Summary of Operating Performance for the Quarterly Consolidated Cumulative Period Under Review .......................................................................................................................................... 6 2. Summary of Financial Condition for the Quarterly Consolidated Cumulative Period Under Review ..... 8 3. Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates ................ 8 II. Quarterly Consolidated Financial Statements and Key Explanatory Notes ...................................... 9 1. Quarterly Consolidated Balance Sheets ................................................................................................. 9 2. Quarterly Consolidated Income Statements and Quarterly Consolidated Statement of Comprehensive Income ................................................................................................................................................... 11 Quarterly Consolidated Income Statements ......................................................................................... 11 Quarterly Consolidated Statement of Comprehensive Income ............................................................ 12 3. Consolidated Cash Flows Statement .................................................................................................... 13 4. Items of Special Note Concerning the Quarterly Consolidated Financial Statements ......................... 14 (Significant Events or Conditions that Question the Premise of a Going Concern) ............................. 14 (Application of Accounting Procedures Specific to Preparation of Quarterly Consolidated Financial Statements) ........................................................................................................................................... 14 (Changes to Accounting Policies) ......................................................................................................... 14 (Notes regarding Significant Fluctuations to Shareholders’ Equity) ..................................................... 14 (Notes on Segment Information, etc.) ................................................................................................... 15 (Subsequent Events of Significant Importance) .................................................................................... 17 III. Supplemental Information ...................................................................................................................... 18 5 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 I. Summary of Operating Performance 1. Summary of Operating Performance for the Quarterly Consolidated Cumulative Period Under Review Regarding the economic environment surrounding the Group for the first quarter under review, in Japan, capital investment and exports were on a gradual recovery trend, while the recovery of the semiconductor market continued to show signs of hesitancy. Turning to overseas regions, uncertainty surrounding the United States increased due to its trade policy, but recent economic conditions there remained robust. In Europe, economic weakness persisted, particularly in Germany, while in China, the slowdown continued as the impact of its domestic demand-stimulating policies remained limited. In this business environment, according to the “Medium-Term Management Plan 2026,” the Group aimed to increase corporate value in a sustainable manner by solving social issues through products and services. Also, we moved forward with measures, such as expanding contributions to SDGs and strengthening initiatives for reducing negative environmental impacts, as well as improving our earning capacity and capital efficiency and strengthening our efforts to explore new businesses to develop a robust entity. As a result, the Group’s orders came to JPY260.2 billion (up 18% year on year), while sales amounted to JPY241.5 billion (down 5% year on year). In terms of profitability, the Group posted operating profit of JPY11.2 billion (down 39% year on year), ordinary profit of JPY10.0 billion (down 46% year on year) and profit attributable to owners of parent came to JPY6.5 billion (down 52% year on year). The situation by segment is described below. In addition, starting in the current consolidated fiscal year, we have decided to reconfigure businesses across segments to streamline segment management and promote synergies. Specifically, we have reallocated the laser systems business in the Mechatronics segment to the Industrial Machinery segment, and the cryocoolers business in the Industrial Machinery segment to the Mechatronics segment. For this reason, the year-on-year quarterly figures are presented as a comparison with the figures for the previous consolidated cumulative first quarter, which have been restated based on the reporting segment categories after the reconfiguration. (i) Mechatronics Orders for gear reducers showed increases in the United States, Europe, and Asia, while certain semiconductor-related products also increased . Sales and operating profit also increased due to a rise in orders. As a result, in year-on-year terms, orders increased by 16% to JPY67.3 billion, sales rose by 4% to JPY64.5 billion, and operating profit grew by 13% to JPY4.8 billion. (ii) Industrial Machinery The plastics machinery business saw increases in orders and sales due to a rise in demand from China. However, operating profit decreased due to declining profitability in Europe. For other businesses, orders for medical-related products from overseas customers increased. On the other hand, for semiconductor-related products in particular, sales and operating profit decreased due to a smaller order backlog. As a result, in year-on-year terms, orders increased by 6% to JPY54.4 billion, sales declined by 10% to JPY48.6 billion, and operating loss amounted to JPY0.4 billion. (iii) Logistics & Construction The hydraulic excavator business saw an increase in orders as inventory adjustments progressed at distributors mainly in North America. Meanwhile, sales and operating profit decreased due to a smaller order backlog. For other businesses, the mobile crane business recorded an increase in overseas orders but sales and operating profit remained flat year on year. In the material handling system business, orders and sales increased due to strong market conditions, but a decrease in highly profitable projects led to a decline in operating profit. As a result, in year-on-year terms, orders increased 13% to JPY95.4 billion, sales decreased by 14% to JPY81.5 billion, and operating profit declined by 64% to JPY3.3 billion. 6 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 (iv) Energy & Lifeline The energy plant business saw an increase in orders due to expansion of service projects in Europe. Sales declined due to a lower order backlog but improved profitability led to higher operating profit. For other businesses, overall orders—including those for water treatment equipment—increased. Sales and operating profit also rose due to order backlogs. As a result, in year-on-year terms, orders increased by 66% to JPY41.4 billion, sales rose by 5% to JPY44.9 billion, and operating profit soared by 239% to JPY3.0 billion. (v) Others Orders increased by 2% to JPY1.7 billion, sales increased by 19% to JPY1.9 billion, and operating profit increased by 6% to JPY0.5 billion from the previous fiscal year, respectively. 7 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 2. Summary of Financial Condition for the Quarterly Consolidated Cumulative Period Under Review 1. Condition of Assets, Liabilities, and Net Assets Total assets at the end of the first quarter of the current consolidated fiscal year (ended March 31, 2025) amounted to JPY1,252.7 billion, a decrease of JPY7.6 billion as compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease of JPY27.2 billion in notes and accounts receivable - trade and contract assets, while cash and deposits increased by JPY10.8 billion and inventory assets rose by JPY5.0 billion as compared to the end of the previous consolidated fiscal year. Total liabilities came to JPY623.6 billion, an increase of JPY9.7 billion as compared to the end of the previous consolidated fiscal year. This was partly because interest-bearing liabilities increased by JPY22.6 billion, while notes and accounts payable - trade decreased by JPY4.7 billion. Net assets amounted to JPY629.1 billion, a decrease of JPY17.3 billion as compared to the end of the previous consolidated fiscal year. This was mainly due to a decrease of JPY14.2 billion in foreign currency translation adjustments. As a result of the above, the shareholders’ equity ratio decreased by 1.1 point from the end of the previous consolidated fiscal year to finish at 49.8%. 2. Cash Flow Condition Cash and cash equivalents at the end of the first quarter of the current consolidated fiscal year under review came to JPY118.6 billion, an increase of JPY11.0 billion from the end of the previous consolidated fiscal year. Cash flows for the consolidated cumulative first quarter under review and the factors contributing to increases or decreases in cash flows are as follows. (Cash Flow from Operating Activities) In the cumulative first quarter of the current consolidated fiscal year, cash flow from operating activities generated a JPY12.5 billion increase in cash, up by JPY17.9 billion year on year. This was mainly due to a greater reduction in accounts receivable – trade and contract assets, as well as a slower decline in notes and accounts payable, while quarterly profit before income taxes decreased. (Cash Flow from Investing Activities) In the cumulative first quarter of the current consolidated fiscal year, cash flow from investing activities resulted in a JPY15.6 billion cash outflow. This represented a JPY3.0 billion year-on-year increase in outflow. This was partly due to increased spending on tangible and intangible fixed assets, as well as the acquisition of shares in subsidiaries, which resulted in a change in the scope of consolidation. (Cash Flow from Financing Activities) In the cumulative first quarter of the current consolidated fiscal year, cash flow from financing activities resulted in a JPY16.6 billion increase in cash. This represented a JPY13.2 billion year-on-year decrease in inflow. This was partly because the increase in interest-bearing debts slowed down. 3. Explanation of the Consolidated Earnings Forecast and Other Forward-Looking Estimates No change has been made to the consolidated earnings forecast for the fiscal year ending December 31, 2025 that was announced in the financial report dated February 14, 2025. 8 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 II. Quarterly Consolidated Financial Statements and Key Explanatory Notes 1. Quarterly Consolidated Balance Sheets (Units: millions of yen) End of Full Year End of First Quarter As of December 31, 2024 As of March 31, 2025 Amount Amount | Assets | | | | | ------------------ | --- | -------- | -------- | | Current assets | | | | | Cash and deposits | | 111,132 | 121,972 | Notes and accounts receivable - trade | | | 307,423 | 280,266 | | --- | --- | -------- | -------- | and contract assets | Inventory assets | | 333,852 | 338,882 | | ----------------- | --- | -------- | -------- | | | | 34,350 | 37,210 | Other | | | (2,263) | (2,187) | | --- | --- | -------- | -------- | Allowance for doubtful accounts | Total current assets | | 784,495 | 776,144 | | ---------------------- | --- | -------- | -------- | | Fixed assets | | | | | Tangible fixed assets | | | | | Land | | 112,062 | 111,398 | | | | 235,936 | 237,775 | Other (net) | Total tangible fixed assets | | 347,998 | 349,173 | | ---------------------------- | --- | -------- | -------- | | Intangible fixed assets | | | | | Goodwill | | 8,020 | 9,489 | | Other | | 20,241 | 20,301 | | | | 28,261 | 29,790 | Total intangible fixed assets | Investments and other assets | | | | | ----------------------------- | --- | -------- | ------- | | | | 100,431 | 98,538 | Other | Allowance for doubtful accounts | | (944) | (954) | | ----------------------------------- | --- | ---------- | ---------- | | Total investments and other assets | | 99,487 | 97,585 | | Total fixed assets | | 475,747 | 476,547 | | Total assets | | 1,260,242 | 1,252,691 | 9 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 End of Full Year End of First Quarter As of December 31, 2024 As of March 31, 2025 Amount Amount | | | | | | | --- | --- | --- | --- | --- | Liabilities | Current liabilities | | | | | | ----------------------------------- | -------- | --- | -------- | --- | | Notes and accounts payable - trade | 153,158 | | 148,493 | | | Short-term loans payable | 84,806 | | 88,015 | | | Current portion of bonds payable | 20,000 | | 20,000 | | Current portion of long-term loans | | 4,649 | | 3,879 | | | --- | ------ | --- | ------ | --- | payable | Commercial Papers | 17,000 | | 35,000 | | | -------------------------------------- | -------- | ---- | -------- | ---- | | Provision for bonuses | 7,963 | | 15,016 | | | Provision for construction warranties | 11,451 | | 11,563 | | | Other provision amount | 4,077 | | 3,896 | | | Other | 112,788 | | 98,795 | | | Total current liabilities | 415,892 | | 424,656 | | | Fixed liabilities | | | | | | Bonds payable | 40,000 | | 40,000 | | | Long-term debt due after one year | 72,166 | | 74,307 | | | Defined benefit liability | 35,011 | | 34,696 | | | Deferred income taxes on revaluation | 20,408 | | 20,868 | | | Provision amount | | 167 | | 164 | | Other | 30,181 | | 28,874 | | | Total fixed liabilities | 197,933 | | 198,908 | | | Total liabilities | 613,824 | | 623,565 | | | Net assets | | | | | | Shareholders' equity | | | | | | | 30,872 | | 30,872 | | Capital stock | Capital surplus | 25,203 | | 25,201 | | | ------------------------------------------- | --------- | --- | --------- | --- | | Retained earnings | 428,776 | | 427,696 | | | Treasury shares | (11,207) | | (11,191) | | | Total shareholders' equity | 473,644 | | 472,578 | | | Accumulated other comprehensive income | | | | | | Valuation difference on available-for-sale | 7,953 | | 6,863 | | securities | Deferred gains or losses on hedges | (1,233) | | (659) | | | ----------------------------------------- | -------- | --- | ------- | --- | | Revaluation reserve for land | 40,307 | | 39,402 | | | Foreign currency translation adjustments | 96,993 | | 82,834 | | Remeasurements of defined benefit | | 23,017 | | 22,527 | | | --- | ------- | --- | ------- | --- | plans Total accumulated other comprehensive | | 167,037 | | 150,967 | | | --- | -------- | --- | -------- | --- | income | Non-controlling interests | 5,737 | | 5,582 | | | --------------------------------- | ---------- | --- | ---------- | --- | | Total net assets | 646,418 | | 629,127 | | | Total liabilities and net assets | 1,260,242 | | 1,252,691 | | 10 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 2. Quarterly Consolidated Income Statements and Quarterly Consolidated Statement of Comprehensive Income Quarterly Consolidated Income Statements Three months ended March 31, 2025 (Units: millions of yen) Previous First Quarter Present First Quarter January 1, 2024 to January 1, 2025 to March 31, 2024 March 31, 2025 Amount Amount | Net sale | 254,811 | 241,536 | | -------------- | -------- | -------- | | Cost of sales | 190,239 | 181,284 | | Gross income | 64,572 | 60,253 | Selling, general and administrative expenses 46,138 49,071 | Operating profit | 18,434 | 11,182 | | ------------------------ | ------- | ------- | | Non-operating profit | | | | Interest income | 365 | 492 | | Dividend income | 39 | 71 | | Foreign exchange profit | 145 | ― | Proceeds from sale of investment | | 825 | 1,345 | | --- | ---- | ------ | securities | Other | 825 | 1,338 | | --------------------------- | ------ | ------ | | Total non-operating profit | 2,200 | 3,246 | Non-operating expenses | Interest expenses | 838 | 856 | | ----------------------------- | ------- | ------- | | Foreign exchange loss | ― | 2,144 | | Patent related expenses | 377 | 333 | | Other | 653 | 1,044 | | Total non-operating expenses | 1,869 | 4,378 | | Ordinary profit | 18,766 | 10,050 | Extraordinary losses | Impairment loss | 170 | 126 | | ------------------------------------------------- | ------- | ------ | | Total extraordinary losses | 170 | 126 | | Profit before income taxes | 18,595 | 9,924 | | Income taxes | 4,642 | 3,351 | | Profit | 13,954 | 6,574 | | Profit attributable to non-controlling interests | 354 | 79 | | Profit attributable to owners of parent | 13,599 | 6,495 | 11 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 Quarterly Consolidated Statement of Comprehensive Income Three months ended March 31, 2025 (Units: millions of yen) Previous First Quarter Present First Quarter January 1, 2024 to January 1, 2025 to March 31, 2024 March 31, 2025 Amount Amount Profit | | | 13,954 | 6,574 | | --------------------------- | --- | ------- | ------ | | Other comprehensive income | | | | Valuation difference on available-for-sale | securities | | 907 | (1,090) | | ----------------------------------- | --- | ------ | -------- | | Deferred gains or losses on hedges | | (888) | 575 | | Revaluation reserve for land | | ― | | (596) | Foreign currency translation adjustments | | 17,106 | (14,367) | | ----------------------------------------- | --- | ------- | --------- | | Adjustment to retirement benefits | | (485) | (488) | Share of other comprehensive income of 6 | entities accounted for using equity | | | (1) | | ------------------------------------ | --- | --- | ---- | method | Total other comprehensive income | | 16,646 | | | --------------------------------- | --- | ------- | --- | (15,968) Comprehensive income | | | 30,600 | (9,394) | | ------------ | --- | ------- | -------- | | (Breakdown) | | | | Quarterly comprehensive income | | | 29,912 | (9,266) | | --- | --- | ------- | -------- | attributable to owners of parent Quarterly comprehensive income | attributable to non-controlling interests | | 688 | (127) | | ------------------------------------------ | --- | ---- | ------ | 12 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 3. Consolidated Cash Flows Statement (Units: millions of yen) | | Previous First Quarter | Present First Quarter | | | --- | ----------------------- | ---------------------- | --- | January 1, 2024 to January 1, 2025 to | | March 31, 2024 | March 31, 2025 | | | -------------------------------------------- | --------------- | --------------- | -------- | | Cash flows from operating activities | | | | | Profit before income taxes | | 18,595 | 9,924 | | Depreciation | | 9,179 | 9,177 | | Impairment loss | | 170 | 126 | | Proceeds from sale of investment securities | | (825) | (1,345) | | Interest and dividend income | | (404) | (563) | | Interest expenses | | 838 | 856 | | Increase (decrease) in reserve amount | | 5,969 | 7,132 | (Increase) decrease in notes and accounts receivable and contract | | | 10,461 | 21,809 | | --- | --- | ------- | ------- | assets | (Increase) decrease in inventories | | (16,889) | (11,093) | | ----------------------------------- | --- | --------- | --------- | Increase (decrease) in notes and accounts payable (11,722) (1,193) | Other | | (8,945) | (16,514) | | -------------------------------- | --- | --------- | --------- | | Subtotal | | 6,428 | 18,316 | | Interest and dividends received | | 413 | 482 | | Interest expenses | | (967) | (693) | | Payments for income taxes | | (11,359) | (5,652) | Net cash provided by or used in operating activities (5,485) 12,452 | Cash flows from investing activities | | | | | ------------------------------------- | --- | --- | --- | Cash outflow due to the acquisition of tangible and intangible fixed | | | (12,314) | (14,783) | | --- | --- | --------- | --------- | assets Cash flow from the sale of tangible and intangible fixed assets 20 1,081 Cash outflow due to the acquisition of shares in subsidiaries that | | | ― | (3,047) | | --- | --- | --- | -------- | results in change in scope of consolidation | Purchase of investment securities | | (2) | (2) | | ---------------------------------- | --- | ---- | ---- | Proceeds from the sale of investment securities 1,086 1,724 | (Increase) decrease in short-term loans | | (104) | 36 | | -------------------------------------------- | --- | --------- | --------- | | Payments of loans receivable | | (1,657) | (2,733) | | Cash flow from loan recoveries | | 437 | 2,253 | | Other | | (64) | (97) | | Net cash used in investing activities | | (12,599) | (15,569) | | Cash flows from financing activities | | | | | Net increase (decrease) in short-term loans | | 14,600 | 5,361 | | Increase (decrease) in commercial papers | | 30,000 | 18,000 | | Proceeds from long-term debt | | 1,486 | 3,373 | | Repayments for long-term debt | | (6,745) | (1,647) | | Cash dividends paid | | (7,174) | (7,630) | Payment of dividends to non-controlling stockholders (2) (1) | Acquisition of treasury shares | | (1,571) | (1) | | ------------------------------------------ | --- | -------- | ------- | | Other | | (780) | (823) | | Net cash provided by financing activities | | 29,814 | 16,631 | Effect of exchange rate changes on cash and cash equivalents 2,073 (2,335) Net increase (decrease) in cash and cash equivalents 13,804 11,179 Cash and cash equivalents at beginning of year 100,235 107,542 Decrease in cash and cash equivalents due to deconsolidation ― (135) Cash and cash equivalents at end of quarter 114,039 118,586 13 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 4. Items of Special Note Concerning the Quarterly Consolidated Financial Statements (Significant Events or Conditions that Question the Premise of a Going Concern) There are no applicable items. (Application of Accounting Procedures Specific to Preparation of Quarterly Consolidated Financial Statements) (Calculation of tax expenses) The effective tax rate expected to be imposed on pretax profit (after tax effect accounting) applicable to the consolidated fiscal year in which the first quarter of the current consolidated fiscal year under review is included was estimated based on reasonable assumptions, and tax expenses were calculated by multiplying the quarterly pretax profit by the estimated effective tax rate. (Changes to Accounting Policies) (Application of “Accounting Standards for Corporation Tax, Resident Tax, Business Tax, etc.”) “Accounting Standards for Corporation Tax, Resident Tax, Business Tax, etc.” (ASBJ Statement No. 27, issued on October 28, 2022; hereinafter referred to as “2022 Revised Accounting Standards”), along with other guidance, have been applied from the beginning of the first quarter of the current consolidated fiscal year. In connection with the amendment to the accounting classification of corporation taxes, etc. (taxation on other comprehensive income), we follow the transitional treatments set forth in the proviso to Paragraph 20-3 of the 2022 Revised Accounting Standards and in the proviso to Paragraph 65-2 (2) of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on October 28, 2022; hereinafter referred to as the “2022 Revised Implementation Guidance”). This change in accounting policy has no impact on the consolidated financial statements for the first quarter under review. In addition, regarding the amendments related to the revision of the treatment in consolidated financial statements when gains or losses from the sale of subsidiary shares, etc., between consolidated companies are deferred for tax purposes, the 2022 Revised Implementation Guidance has been applied from the beginning of the first quarter of the current consolidated fiscal year. Please note that since the impact of this change in accounting policy on prior periods is minimal, no retroactive application or modification of retained earnings, etc., at the beginning of the current consolidated fiscal year has been made. In addition, the impact of this change on consolidated financial statements for the first quarter under review is minimal. (Notes regarding Significant Fluctuations to Shareholders’ Equity) There are no applicable items. 14 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 (Notes on Segment Information, etc.) (Segment Information) 1. Summary of Reporting Segments The Group’s reporting segments are based on those units within the Group where separate financial information is available and where the Group’s Board of Directors periodically deliberates over such matters as the distribution of management resources and the financial performance of such segments. The Group formulates a comprehensive international and domestic strategy for individual products and services for the head office and for each consolidated subsidiary, and executes such strategies at the operating level. Consequently, the Group comprises segments that are split by categories of products and services offered by the head office and consolidated subsidiaries. More specifically, the four reporting segments of the Group are “Mechatronics”, “Industrial Machinery”, “Logistics & Construction”, and “Energy & Lifeline”. Businesses Main Products Gear reducers, motors, inverters, cryogenic equipment, precision positioning Mechatronics equipment, control components Plastics machinery, film forming machines, precision forgings, semiconductor production equipment, laser processing systems, ion accelerators, medical Industrial Machinery machines and equipment, forging press machines, machining tools, air- conditioning equipment, defense equipment Hydraulic excavators, mobile cranes, road machinery, material handling Logistics & Construction systems, logistics systems, automated parking systems Private power generation facilities, boilers, air pollution control equipment, Energy & Lifeline water and sewage treatment systems, turbines, pumps, pressure vessels, mixing vessels, food processing machinery, ships 15 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 2. Matters Related to Changes in Reporting Segments, etc. Starting in the current consolidated fiscal year, we have decided to reconfigure businesses across segments to streamline segment management and promote synergies. Specifically, we have reallocated the laser systems business in the Mechatronics segment to the Industrial Machinery segment, and the cryocoolers business in the Industrial Machinery segment to the Mechatronics segment. For this reason, the figures for the previous consolidated cumulative first quarter, as outlined in “3. Information on Sales, Profit, and Loss Amounts by Reporting Segment,” have been restated in this document based on the reporting segment categories after the reconfiguration. 3. Information on Sales, Profit, and Loss Amounts by Reporting Segment Previous First Quarter January 1, 2024 to March 31, 2024 (Units: millions of yen) Segment A B C D Subtotal Other1 Total E2 F3 Item Net sales Sales to external customers 62,070 53,789 94,464 42,865 253,187 1,623 254,811 ― 254,811 Internal sales between segments or exchanges 881 355 42 134 1,412 850 2,262 (2,262) ― Total 62,951 54,144 94,506 42,999 254,599 2,474 257,073 (2,262) 254,811 Segment profit 4,205 3,602 9,236 875 17,918 503 18,421 13 18,434 Segments: A: Mechatronics B: Industrial Machinery C: Logistics & Construction D: Energy & Lifelines E: Adjustments F: Amounts recorded in Quarterly Consolidated Income Statements Notes: 1. “Other” represents businesses that are not included in the reporting segments. This includes the Group’s real- estate businesses, software-related business, and other businesses. 2. The segment profit (loss) adjustment of minus JPY13 million is due to the deletion of intersegment transactions. 3. Segment profits have been adjusted as compared to the operating profit recorded in the Quarterly Consolidated Income Statement. 16 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 Present First Quarter (January 1, 2025 to March 31, 2025) (Units: millions of yen) Segment A B C D Subtotal Other1 Total E2 F3 Item Net sales Sales to external customers 64,529 48,643 81,541 44,899 239,611 1,925 241,536 ― 241,536 Internal sales between segments or exchanges 596 296 84 634 1,610 802 2,412 (2,412) ― Total 65,125 48,939 81,624 45,533 241,221 2,727 243,948 (2,412) 241,536 Segment profit (loss) 4,762 (432) 3,344 2,964 10,637 546 11,184 (1) 11,182 Segments: A: Mechatronics B: Industrial Machinery C: Logistics & Construction D: Energy & Lifelines E: Adjustments F: Amounts recorded in Quarterly Consolidated Income Statements Notes: 1. “Other” represents businesses that are not included in the reporting segments. This includes the Group’s real- estate businesses, software-related business, and other businesses. 2. The segment profit (loss) adjustment of minus JPY1 million is due to the deletion of intersegment transactions. 3. Segment profits (losses) have been adjusted as compared to the operating profit recorded in the Quarterly Consolidated Income Statement. (Subsequent Events of Significant Importance) There are no applicable items. 17 Consolidated Results for the Three-Month Period from January 1 to March 31, 2025 III. Supplemental Information (Orders Received, Sales, and Balance of Orders Received, by Segment) As described in “1. Summary of Operating Performance, (1) Summary of Operating Performance for the Quarterly Consolidated Cumulative Period Under Review,” businesses across segments have been reconfigured starting in the current consolidated fiscal year. For this reason, the figures for the previous consolidated cumulative first quarter and the previous consolidated fiscal year have been restated in this document based on the reporting segment categories after the reconfiguration. (1) Orders Received (Units: millions of yen) | | Previous First Quarter | | | Present First Quarter | | | | | | | --- | ----------------------- | ------------------- | --- | ---------------------- | --------------- | --- | --- | ----------- | --- | | | | January 1, 2024 to | | January 1, 2025 to | | | | Y/Y Change | | | | | March 31, 2024 | | | March 31, 2025 | | | | | Segment | | | Amount | | | Amount | | | Amount | % | | --------------------- | --- | ------- | --------- | --- | ------- | ------- | --- | ------- | ----- | | Mechatronics | | | 58,284 | | | 67,325 | | 9,041 | 15.5 | | Industrial Machinery | | | | | | | | | | | | | | 51,482 | | | 54,417 | | 2,935 | 5.7 | | Logistics & Construction | | | 84,730 | | | 95,432 | | 10,702 | 12.6 | | ------------------------- | --- | --- | ---------- | --- | --- | -------- | --- | ------- | ----- | | Energy & Lifelines | | | | | | | | | | | | | | 24,962 | | | 41,396 | | 16,434 | 65.8 | | Others | | | | | | | | | | | | | | 1,644 | | | 1,679 | | 35 | 2.1 | | Total | | | 221,102 | | | 260,250 | | 39,148 | 17.7 | (2) Sales (Units: millions of yen) | | Previous First Quarter | | | Present First Quarter | | | | | | | --- | ----------------------- | --- | --- | ---------------------- | --- | --- | --- | --- | --- | | | | January 1, 2024 to | | January 1, 2025 to | | | | Y/Y Change | | | --- | --- | ------------------- | --- | ------------------- | --- | --- | --- | ----------- | --- | | | | March 31, 2024 | | | March 31, 2025 | | | | | | --- | --- | --------------- | --- | --- | --------------- | --- | --- | --- | --- | Segment | | | Amount | | | Amount | | | Amount | % | | --------------------- | --- | ------- | --------- | --- | ------- | --------- | --- | -------- | ------ | | Mechatronics | | | 62,070 | | | 64,529 | | 2,459 | 4.0 | | Industrial Machinery | | | | | | | | | | | | | | 53,789 | | | 48,643 | | (5,146) | (9.6) | Logistics & Construction 94,464 81,541 (12,923) (13.7) | Energy & Lifelines | | | | | | | | | | | ------------------- | --- | --- | ---------- | --- | --- | ---------- | --- | --------- | ------ | | | | | 42,865 | | | 44,899 | | 2,035 | 4.7 | | Others | | | | | | | | | | | | | | 1,623 | | | 1,925 | | 302 | 18.6 | | Total | | | 254,811 | | | 241,536 | | (13,274) | (5.2) | (3) Balance of Orders Received (Units: millions of yen) | | | | | Present First Quarter | | | | | | | --- | ------------------------ | ----------------- | --- | ---------------------- | --- | --- | --- | ----------- | --- | | | | End of Full Year | | | | | | Y/Y Change | | | | As of December 31, 2024 | | | As of March 31, 2025 | | | | | | Segment | | | Amount | | | Amount | | | Amount | % | | --- | --- | ------- | --- | --- | ------- | --- | --- | ------- | --- | Mechatronics | | | | 90,195 | | | 92,991 | | 2,796 | 3.1 | | --------------------- | --- | --- | ---------- | --- | --- | -------- | --- | ------ | ---- | | Industrial Machinery | | | 145,458 | | | 151,232 | | 5,774 | 4.0 | Logistics & Construction | | | | 204,661 | | | 218,553 | | 13,892 | 6.8 | | ------------------- | --- | --- | ---------- | --- | --- | -------- | --- | -------- | ------- | | Energy & Lifelines | | | 187,971 | | | 184,468 | | (3,503) | (1.9) | | Others | | | | | | | | | | | | | | 1,926 | | | 1,680 | | (246) | (12.8) | Total | | | | 630,211 | | | 648,924 | | 18,713 | 3.0 | | --- | --- | --- | ---------- | --- | --- | -------- | --- | ------- | ---- | 18