Nippon Sanso Holdings Corp

Thank you very much indeed for taking time despite your busy schedules. My name is Ishimoto from IR team. Thank you for joining this conference. Some housekeeping announcements. First The conference materials are the financial results, Tanshin, the earning score reference we have just released. Please have these materials ready. Today's main speakers are Hama, the President CEO, Draper, Senior Executive Officer, Group Finance and Accounting Office and CFO, and Kajiyama, General Manager of IR. In addition, Kubo, Executive Officer, Group Corporate Planning Office, Miki, Senior Executive Officer and CSO, the Group Sustainability Management Office, and Yoshida, General Manager of Accounting are also in attendance. Today's agenda begins with explanation from CEO Hamada, CFO Draper, and IR GM Kajiyama, covering Q2 results based on the materials. We have time for Q&A in the end. Zoom simultaneous interpretation function is available for English and Japanese. Please select your preferred language in the Zoom control panel. If you prefer communicating in English during Q&A, please set the Zoom audio language to English. Now, Hamada-san, over to you.

Hello, everyone.

We're having this earnings call a bit earlier than before. Thank you for joining. This is Hamada from Nippon Sons of Holdings. Thank you for taking the time to join our second quarter earnings call today. As usual, the global situation and economic environment, I would like to briefly touch upon these topics. There are geopolitical issues that remain unsolved. Therefore, there's still a lot of tension in the world. And amid such environment, the global economy, Europe and the United States, inflation is settling down. and interest rates had remained high, but also countries started to lower interest rates, including the United States. In the United States, there's the presidential election, and in various countries there are many elections, and a ruling party, an opposition party being replaced, and the main force being changed in various governments. There's a lot of change in the world. and that has a substantial impact on the global economy. And we think such trends may continue. And our group, we want to have an accurate understanding of such global trends, and we want to be able to continue business in a flexible and agile manner. Financial performance we will refer to later on, but in this business environment, We have approximately 20,000 employees and staff, and thanks to the sincere efforts of our employees and staff, as well as the support of our customers and other stakeholders, we are making steady progress towards the goal of the final year of our medium-term management plan and its vision, 2026. First, I wish to express my gratitude in this regard. Concerning the business trend, gas volume is on a declining trend, and There are ups and downs, but for example in the United States, cylinder and equipment business somewhat slowing down. Small users use a lot of these services and it's the fundamentals of the gas business. And at one time, semiconductor specialty gas was at its bottom, but... mainly for memory-related semiconductors, we are seeing a recovery trend. But I think you hear and see in the media a lot about AI-related news, logic. Semiconductor manufacturers seem to be struggling amidst the AI trend, and utilization rate in the factories seem to be lagging behind. And the We want to make our utmost effort to continue our business, continue a stable supply of gas. Based on that, we want to continue to grow and we want to enhance our corporate value. These, I think, are the important points for the NSHD group. NS Vision 2026, there are five focus fields like operational excellence and pricing. Each segment also has its own strategies, so bearing these in mind, we want to make our utmost effort, and four or five years have passed since we transformed into a holding company structure. We want to capitalize on our strengths to our maximum extent, and we want to be clear on the roles of the holding company as well as operating companies, and details of financial performance will be explained later on by Mr. Draper and Mr. Kajiyama. To summarize what I just mentioned, customers and social trend, we have to be able to respond flexibly and in an agile manner. Operational excellence, productivity improvement, price management, we want to continue such efforts so that we can maximize our profit. And the business expansion opportunity we want to be able to capture as much as possible. And mainly around sustainability, non-financial KPIs, we want to work on them as well so that we can respond to the fundamental needs of society. And through such efforts, we want to continue and commit to enhancing our corporate value. May 2025. we announced our medium-term management plan, NS Vision 2026. And as written on the slide, we have five focused fields. And we have explained our initiatives for the four years through March 2026. Today, I would like to talk about Last fiscal year's performance in terms of non-financial KPIs of our meeting term plan introduced our sustainability initiatives, particularly in the environment field. And 4 o'clock Japan time, there was a business acquisition announcement in Europe, and we would like to explain about this business acquisition in Europe. These are the topics I want to share with you today. fiscal year ending March 2026, which is the final year of NX Vision 2026, we set financial and non-financial KPIs. For non-financial KPIs, we set a target for each of the items of E-Environment, SSIT, and G-Governance, and the numbers are as written on the slide. First quarter results, when we announced that the we were not able to explain about non-financial KPIs because a lot of the matters were not approved. Today, we are ready to explain about this topic. And we have non-financial KPIs, one of the indicators that are linked to executive compensation. We have non-financial indicators linked to executive compensation so that it will become an incentive for executives. We will continue to thoroughly implement environmental management, occupational health, promoting women's participation in the workforce, and compliance education. For more information on our sustainability initiatives, please refer to our recently released integrated report. There's a lot of detailed explanation there. Next, I would like to explain about our group's material balance and environmental contribution. The input column on the left side of the slide shows the raw materials, energy, and water resources required for our business activities, while the output column on the right shows the amount of greenhouse gases, water, waste, et cetera, emitted as a result of business activities. The light green box shows the amount of greenhouse gas emissions reduced by our customers through the NSHD group products and services, including gas. I may be repeating, but the characteristics of our group's business is the fact that our group's energy consumption is mainly electricity as a result. Scope 2 accounts for approximately 80% of greenhouse gas emissions and the amount of water resource used and discharged is small compared to the scale of our business.