Kioxia Hldgs Corp

I am Hanazawa, the財務統括責任者. Nice to meet you. First, I would like to explain the highlights of the first quarter of March of 2026. The sales revenue, non-gap business profits, and current net profits, mainly due to the increase in sales costs and the influence of a part of the exchange rate, exceeded the upper limit of the guidance, the recovery from the deluxe trend since the third quarter of last year has been clear. Mainly, the demand for data centers and enterprise SSDs by AI investment continues to rise, and in addition to the demand for flash memory products for mobile and PC markets, By continuing to improve productivity, we will increase our guidance and improve our revenue with all market share. The sales revenue of the first market share was 34.28 billion yen, which is 1.2% less than the total market share. The non-gap operating profit was 45.2 billion yen. The profit rate rose by 2.4 points to 2.4% with a total market share of 2.4 points, which was 13.2%. The change-over profit was 34.31 yen. The sales revenue was 154 yen for the fourth market share of Kawase, and the results were It was sold for 145 yen, which is roughly the same as the yen price and the dollar price, which is a horizontal increase in the total market share, but we were able to improve the profitability. The selling price of our company has been improved for smartphone, PC, and data center for the assumption of guidance. In addition to the increase in sales unit prices for flash memory products for consumers in SSD and storage, the higher the sales unit price relative to the consumer, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for consumers, the higher the sales unit price for flash memory products for For client PC-based SSDs, there were some pre-purchases, but as a whole, the total sales volume was doubled at all market price. Next, I will explain the sales performance of each application based on the market price. Our application is a smart device. SSD and storage, and so on. Other than that, it includes B2C products such as SD memory cards, as well as sales revenue for 3DISK, which are designed by three manufacturing subsidiaries. Smart devices for smartphones and tablets The total sales revenue was 0.7% of the total sales revenue, which is 7.9 billion yen. The total sales revenue was 23% of the total sales revenue. Due to the optimization of customer stock and the use of new models, some customers switched from the 5th generation to the 8th generation VIX FLASH. It was expected that the number of shipments would be temporarily suppressed. SSD and storage, which are SSD products for PC servers and memory products, are 217.4 billion yen, which is 1% more than the total market share, and 63% of the total sales revenue. The sales revenue of SSD and STORAGE was less than 50% for data centers and enterprises, and less than 50% for PCs. The sales revenue for PCs and others has increased temporarily due to the increase in all market expenses, some of which were due to demand. The sales revenue for the data center was high due to the high demand for the AI server, but due to the decline in the price of sales, it was almost doubled in all market expenses. In addition, the mass production and export of the 8th generation VIX Flash, which is competitive, is going well. Next, I would like to explain the cash flow of the first quarter. At the end of June 2025, the balance of the cash and the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance of the balance In the first half of the year, there has been a payout of priority stocks along with a payout of priority stocks. This time, the payout of priority stocks was 23.8 billion yen, and the payout of priority stocks was 36.8 billion yen. In total, more than 6 billion yen of seasonal losses occurred. In addition to these, We are actually losing the sales cash flow that exceeds the entire market share. We will continue to control and reduce the cost of other companies to maximize the sales cash flow. The gross equipment investment of the investment cash flow is 5.36 billion yen. In addition to securing the business cash flow, there is also the effect of a thorough financial record, and the free cash flow has been a plus for six consecutive quarter-finals. As a result, we have improved our financial quality, and we have been able to connect to the diversity of funding procurement, and we hope to continue to lose our free cash flow firmly in the future. On the other hand, the financial cash flow was a minus of 17.3 billion yen due to the repayment of temporary income. In terms of equipment investment, we are focusing on investing in the 8th generation VIX FLASH, which is expanding production. In addition, we are also investing in the 10th generation VIX FLASH for the future. We will prepare for the supply of products required for future AI demand. As for the balance sheet, At the end of June 2025, the total assets were reduced by 2.8940 billion yen and 25.7 billion yen compared to the end of 2024. As for TANOWORSHI, the number of days of sales based on sales was increased from 112 days at the end of the previous year to 123 days at the end of the first quarter, We think that this is the result of a large-scale production increase since the second half of the market year. We will continue to control TANAHORO's assets to an appropriate level in the future. As for Yurishi Fu-sai, the temporary deposit of 76.89 billion yen, It is 1.906 trillion yen in total, including 3,217 billion yen of priority stocks. As I explained earlier, by securing free cash flow, Ulysses' debt was reduced from 1.99 billion yen at the end of 2024. By securing profits in a difficult situation, The share of capital has increased from 76.3 billion yen at the end of 2024 to 7,377 billion yen at the end of 2024. This means that the net DE ratio has improved from 126% at the end of 2024 to 120% at the end of the first quarter of 2025. In addition, after the re-construction of the capital after the second quarter of the second quarter due to the acquisition and disposal of priority stocks, priority stocks issued in July, and the replacement of the new term loan, it is expected to reduce the financial burden. I will explain the details later. In the future, it is a policy to continue to invest in equipment with sufficient profit and stability and improve the quality of finance. Next, I will explain the guidance of the market pre-investment and the second quarter. I will explain the market pre-investment by application. Smartphone and the stock market of PC customers are normalizing, and demand is expanding. In terms of smartphones, demand for new models is increasing, and in terms of PCs, the momentum of purchase and replacement of products and PCs with AI is continuing. Also, AI investment in data centers and enterprises is very strong, The continued expansion of demand for AI-based SSDs is expected to lead to a difficult demand for CY2025. As of now, there is no direct or indirect impact on debt, but we will continue to focus on the uncertainty of future demand movements. Due to this situation, the Nando market of CY2025 is expected to grow by 10% in the first half of the year. There are various factors that have changed, but they have not changed from what we have seen so far. Next, I would like to explain the guidance for the second quarter of 2025. Overall, we expect a large increase and increase compared to the previous quarter. As a market environment, in addition to the recovery of the market from the first quarter, we are planning to move from the fifth-generation product of VIX FLASH to the eighth-generation product. The sales revenue is expected to be 4,200 billion yen to 4,700 billion yen. In addition to seasonal factors, the transition from the fifth-generation product of VIX Flash to the eighth-generation product will continue, and the total amount of gigabyte-based shipping will increase significantly for smart device customers. The non-gap operating profit is 4.9 billion yen to 8.3 billion yen, and the profit rate aims to raise further from 13% of the first quarter. In addition to the increase in sales prices and the increase in the amount of output based on gigabytes, the company is continuing to improve productivity and manufacturing costs. We will ensure the profitability of the project by optimizing the production plan according to the current situation. Non-GAAP's net net profit is estimated at 1.7 billion to 1.4 billion yen. This estimate includes about 1 billion yen in the negative impact of the refinance implemented in July. For data centers and enterprises, AI servers are leading the market, and high demand continues. In addition, for PC and smartphones, customer stock is stabilizing, and the AI installation model is also increasing, so it is expected that the supply and demand balance throughout the market will improve. On the other hand, we will continue to pay attention to the demand by the government tax. As we improve revenue through AI demand, we will continue to increase the ratio of the 8th generation VIX Brush, which is competitive, aiming to expand revenue and develop products that are required for AI demand. Finally, I would like to summarize today. The first quarter has exceeded the limit of guidance, and recovery from the trend of decline from the third quarter of last year has become clear. In addition, the loss of cash left behind in profitability has improved, and the free cash flow has been a plus in six quarters in a row. we have been able to carry out investment implementation with a financial standard and improve financial quality. We believe that it is important to implement investment implementation with a financial standard for the 8th generation VIX Flash, which has high investment efficiency, and we will continue to implement it. In July, we carried out refinancing for the balance sheet. AI demand is strong. Second, for PC and smartphones, the second-hand market is at a suitable level for customer stock. Gigabyte-based shipping for smart devices has increased significantly. The data center Enterprise continues to improve for AI. We expect a large increase and increase in sales at all market prices. In the future, we will continue to develop and develop new products that are competitive, such as the sample shipment of the 9th generation VIX Flash and the SSD equipped with the 8th generation VIX Flash. That's all from me.

Next, I would like to talk about the issuance and refinance of the company in July. First of all, the background of the refinance this time is that the senior loan and non-transferred優先株式 were in full swing in 2027, and there was still time. On the other hand, since the IPO was realized last December, it is more flexible as a fund-raising method, and the foreign exchange market is in a very favorable situation at the foot of the bridge, so by conducting fund-raising by issuing funds this time, we will replace the priority shares of the Japan Policy Investment Bank, At the same time, we did the restructuring of the entire debt, including the replacement of the senior loan. The three effects of refinance are shown in the資料. The first is the condition of the debt, but as a result of the negotiation with the bank, the account was completely removed from the senior loan, In addition, the ZAM Covenant has been greatly improved in terms of test items as well as market position. The new comparison of Covenant conditions is posted on Appendix, so please refer to it. The second point is that by replacing the priority stock with a shareholder at a cash cost, If you include dollar-yen swaps and tax benefits, you can lower the interest rate by about 5.8%, and we expect a cost-benefit of about 1.8 billion yen per year. The third point is the extension and repayment pitch of the full-time period, but the senior loan will be extended from the full-time period of 2027 to 2019 for about 2 years. And by replacing the priority stock with a subsidiary, the time of acquisition is 30 years from 2027 and 33 years from the next year, which is an extension of about 3 to 6 years. In addition, about 6 billion yen is reduced annually for the remittance of senior loans, which is expected to improve the liquidity at hand and improve financial flexibility. I would like to add one more thing. The Japanese Capital Investment Bank, which has been supported as a subsidiary of Yusen Corp. so far, has joined as a lender of the senior loan, and the loan lead arranger Mitsubishi Sumitomo Bank, Mitsubishi UFJ Bank, and Mizuho Bank will continue to receive support from the Japanese financial institutions. Next, I will explain the specific usage numbers and conditions. To the left is the priority stock and loan before refinance, and to the right is the refinance after the settlement and the main term of the new loan. First of all, from the priority stock to the settlement, as shown in the資料, large-scale金利, reduction in debt costs, and we have achieved a full-time extension. Also, as shown in the bottom row, we have made a loan replacement from a short-term loan to a non-short-term loan, and we have achieved a full-time extension by reducing interest rates, improving debt covenants and full-time extension. This time, the depreciation amount is 3,230 billion yen, on the left is the use of cash, and on the right is the source of cash. There are a lot of short-term benefits, such as the payment of the year-end balance of the priority stock and the payment of the refinance transaction fee, as well as the usual business management funds, so-called general purpose cash. Please check this graph for the reduction and extension of the repayment burden explained earlier. In summary, we can emphasize the benefits of the improvement of governance by refinance this time, a large reduction in debt costs, a reduction in repayment pitches, and an extension of the full-time payment period. We will continue to consider the situation of the capital market in the future, and we would like to continue to consider the optimization of the capital structure at the time, as well as the mobile funding acquisition. That's all I have to say.