Agc Inc Unsp/Adr

It is time, so let us get started. Welcome to the earnings briefing of AGC Inc. for the third quarter of fiscal year 2025. I'm Kazumi Tamaki, General Manager, Corporate Communications and Industrial Relations, serving as moderator. Today's attendees are Shinji Miyagi, Executive Vice President, Executive Officer, and CFO. and Tomoyuki Shiokawa, Executive Officer, General Manager of Finance and Control Division. We will first have CFO Miyaji provide an overview of the financial results for the third quarter, followed by a Q&A session. We are planning to finish at 3.45 p.m. Your cooperation is appreciated. Without further ado, I ask CFO Miyagi to start his presentation. Thank you. This is Shinji Miyagi, the CFO. Please turn to page 3. The highlights. Net sales for the first nine months totaled ¥1,512.1 billion, down ¥22.1 billion year-on-year. Positives included an improved product mix and pricing policies for automotive glass, increased shipments and pricing policies for performance chemicals, and pricing policies for architectural glass in Europe and the Americas, while negatives included a PVC price decline, decreased shipments of EUV photo blanks and European architectural glass, and the impact of last year's Russian business transfer. Operating profit was 94.8 billion, up 0.8 billion on effects of profit improvement measures and displays and others, despite the adverse impact of the aforementioned factors, as well as higher raw materials and fuel costs. Net income attributable to the owners of the parent was up 145.9 billion at 39.5 billion yen due to the aforementioned positive factors and the non-recurrence of last year's loss and sale of shares related to the Russian business transfer and large impairment losses in biopharmaceutical CDMO. Operating profit for the third quarter exceeded 40 billion yen for the first time in three years since Q2 of 2022, following profit improvement measures such as pricing policies for European architectural glass and automotive glass. Four-year outlook remains unchanged from that announced in August. Page 6 Net sales and operating profit were as explained earlier. Profit before tax included profit-increasing factors mentioned earlier in relation to the net income attributable to the owners of the parent, as well as impairment losses and foreign exchange losses in biopharmaceutical CDMO during Q2. Page 7. by segment architectural glass electronics and chemicals saw a decrease in the sales and profit automotive posted higher sales and profit life science posted lower sales but improved profit page eight

I will explain the factors behind year-on-year variance in operating profit, sales volume, prices, product mix resulted in a positive impact of 10.9 billion yen. While there was a decline in the selling price of PVC and in shipments of semiconductor-related materials and architectural glass in Europe, there were positive effects from improvements in the product mix and pricing policies for automotive glass and for architectural glass in Europe and the U.S. performance chemicals. Raw material prices differences resulted in a 8.1 billion decrease and cost and other differences, a 2 billion yen decrease. As a result, operating profit increased by 0.8 billion to 94.8 billion yen. Page 9, please. Next, the balance sheet. The total assets amounted to 2 trillion, 874.2 billion yen, down 15.5 billion from the end of last year. The DE ratio was 0.42 times. Please turn to page 10. This is the cash flow statement. Operating cash flow was 164.7 billion yen. Investment cash flow, negative 126.4 billion yen. Consequently, free cash flow was 38.4 billion yen. Page 11, please. I will now explain CapEx depreciation and R&D expenses. CapEx totaled ¥174.1 billion, depreciation amounted to ¥132.6 billion, and R&D expenses ¥44.1 billion. Major capital investment projects are listed as shown. Next, I will move to the segment by segment presentation. Please turn to page 13. First, architectural glass segment. Sales were 320.8 billion yen, operating profit 10 billion yen. In Asia, sales decreased by 3.8 billion to 109.7 billion due to lower prices in Indonesia and other regions, coupled with reduced shipments. In Europe and America, sales decreased by 5.2 billion yen to 209.2 billion yen due to low shipments in Europe and transfer of Russian business in February of the previous year. The effects of our pricing policy began contributing from the second quarter onward. Operating profit decreased by 4 billion yen due to the revenue decline factors that I mentioned earlier and rising raw material and fuel costs. Asia accounted for about 30% of operating profit, while Europe and America's about 70%. Please turn to page 14. Automotive segment sales increased by 10.6 billion to 385.6 billion yen and operating profit increased by 12 billion to 23.4 billion yen. Shipments decreased in Europe but increased in Japan. To counter rising raw material and fuel prices and manufacturing costs, we implemented structural reforms and productivity and product mix improvements and pricing strategies. Please turn to page 15. The electronic segment sales reached 259.7 billion yen, operating profit 36 billion yen. The display segment saw sales increase by 4 billion to 136.2 billion yen, driven by higher shipments of LCD glass substrate. The electronics materials segment experienced a 11.1 billion decrease in sales to 122.2 billion yen due to lower shipments of EUV mask lengths compounded by the impact of yen's appreciation. As a result, operating profit decreased by 400 million yen. In operating profit, 70% was represented by electronic materials and 30% by displays. Please turn to page 16.

Next, chemicals. Net sales, 431.3 billion yen, and operating profit, 39.7 billion. Essential chemical sales were down 20 billion at 284.6 billion yen on a declining prices of PVC. Sales in performance chemicals up 11.4 billion at 143.6 billion yen on increased shipments and higher prices of fluorine-related products for semiconductors and transport applications. Profit breakdown was essential chemicals about 30%, performance chemicals around 70%. Page 17. life science, net sales 96.1 billion yen and operating loss 16.2 billion. Sales were down despite increased shipments on expanded bio-formats called CGMO capacity due to the non-recurrence of last year's one-time revenue from the contract project settlements and production issues at the Boulder site. Despite effective fixed cost reductions in biopharmaceutical CDMO, profit improvement was only half a billion yen, seriously affected by aforementioned revenue-reducing factors. Page 18 strategic businesses net sales were down 2.2 billion at 363.3 billion year on year despite growth in performance chemicals and mobility affected by a temporary slowdown in electronic shipments and the non-recurrence of one-time revenue from contract project settlements in life science It's down 7.2 billion at 40.7 billion yen, strongly affected by declining electronics shipments. Page 20. The full-year forecast remains unchanged from August. Page 21. No changes to the full-year forecast by segment either. Page 22. Comparing the fourth quarter forecast to the third quarter by segment, architectural glass expects increased shipments in Japan with a demand increasing for renovation to energy-saving glass. Asia also expects increased shipments on a recovering demand. South America expects shipments to remain strong. Europe expects flat shipments quarter and quarter, affected by the continued weak economy. In automotive, shipments to increase in Japan but decrease in Europe and the Americas. We'll continue working on pricing policies and structural reforms. In electronics, display expects slight decrease in shipments of LCD glass substrates. Electronic materials expects shipments of semiconductor-related materials to be flat quarter and quarter. Up to electronics expects decreased shipments due to the entry into the adjustment period. Page 23.