Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedule. On behalf of Torre Group, I'd like to take this opportunity to extend my gratitude towards your continued understanding and your interest in our management and business activities. Now, I'd like to report Torre's business results for the first quarter ended June 30, 2025. Now, I'd like to follow the table of contents shown on page 1. This is a summary of the business performance and forecast. In the first quarter, while gradual recovery of Japanese economy continued, sluggishness in the flow of goods and holding back on purchases were also seen in some area against the backdrop of growing uncertainties triggered by U.S. policy shifts by the Trump administration. Under such business environment, the cooperating income for the first quarter decreased compared with the same period a year earlier to due to weak market conditions and inventory adjustment, although the company promoted business structure reform and strategic pricing. The consolidated business forecast for the fiscal year ending March 2026 is the same as the initial forecast announced on May 14, 2025. In terms of annual dividends for the fiscal year ending March 2026, The company anticipates paying ¥20 per share of common stock, a ¥2 increase compared with the previous fiscal year. Furthermore, the company is proceeding with share buybacks in line with the resolution at the Board of Directors meeting held in November 2024. As of the end of July 2025, the total repurchase price of shares has reached ¥80 billion, equivalent to 82 million shares. I'll explain the details starting from the next page. I'd like to begin with an overview of business results for the first quarter ended June 30, 2025. Please turn to page 4. Consolidated revenue for the first quarter decreased 6.6% compared with the same period a year earlier to ¥595.8 billion. Corporating income decreased 20.9% to 29.1 billion yen and profit decreased 36.1% to 17.2 billion yen. Special items for the first quarter worsened by 2.9 billion yen to negative 1.6 billion yen. Page 5 is about assets, liabilities, equity and free cash flows. Total assets through that 3,299.1 billion yen up 6.5 billion yen from the end of the previous fiscal year due primarily to an increase in inventories and tangible fixed assets in spite of decrease in trade and other receivables. Total liabilities increased 37.6 billion yen from the end of the previous fiscal year to 1,509.6 billion yen owing mainly to increases in borrowing. Total equity decreased by 31.1 billion yen from the end of the previous fiscal year to 1789.5 billion yen mainly due to share buybacks. Owners' equity was 1674.5 billion yen Interest-bearing liabilities was 904.3 billion yen and the DE ratio was 0.54. Precash flow was negative at 0.8 billion yen. Page 6 explains about capital expenditures, depreciation and amortization and R&D expenditures. Capital expenditures for the first quarter decreased by 1 billion yen to 35 billion yen on a year-to-year comparison. Depreciation and amortization decreased by 0.7 billion yen to 32.7 billion yen. R&D expenditures increased by 0.6 billion yen to 18.1 billion yen compared with the same period of the previous fiscal year. The table on page 7 describes revenue and cooperating income by segment. In addition, The graph on this page shows the factor analysis of 7.7 billion yen decrease in cooperating income for the current first quarter on a year-to-year comparison. As we promoted business structure reform and strategic pricing, the fibers and textile segment remained strong. On the other hand, the performance chemicals of decrease in cooperating income due to stagnant sales of battery separator film and lack of temporary refactors including reversal of allowance that increased profit in the first quarter of the previous fiscal year. In the environment and engineering segment, corporating income decreased due mainly to the shift in project timing at the Japanese subsidiary. Carbon fiber composite materials and the environment and engineering segments were impacted by the weak market conditions and inventory adjustment. Corporating income of the first quarter decreased 20.9%, while cooperating margin decreased 0.9 points. Using page 8 and after, I'd like to explain the results of each segment. First, fibers and textiles. Revenue of the fibers and textiles segment decreased 2% to 239.9 billion yen compared with the same period a year earlier, and cooperating income increased 2.5% to ¥15.2 billion. The apparel applications were robust overall, as sales momentum of the spring-summer closing in Japan and shipment from overseas trading sub-series were strong. The industrial applications fell short of a full recovery of the market conditions, especially in the automobile applications, but the group strived to reduce costs. Page 9 is the performance chemicals segment. Revenue decreased 9% to ¥220.1 billion compared with the same period a year earlier. Corporating income decreased 25.7% to ¥13.6 billion. In the resins and chemicals business, demand was on a recovery trend in the resins business as the effect of last fiscal year's production decline by the automobile manufacturers in Japan has resolved. the chemical business was affected by the worsened market conditions. The film business saw increase in electronic parts related to demand, but sales of battery separator film were stagnant. In the electronic and information materials business, already related materials and circuit materials were affected by the weak display panel demand in China. Page 10 is the carbon fiber composite materials segment. Revenue decreased 13.9% to 66.9 billion yen compared with the same period of year earlier, and this segment posted cooperating profits of 4.6 billion yen, 9.9% decrease from the same period of year earlier. The aerospace applications were affected by the inventory adjustment in the supply chain and the appreciation of the yen, although user demand was on the recovery trend. In the sports applications, Inventory adjustment in general-purpose products for the outdoor leisure continued, but sales of high-end products were strong. In the industrial applications, wind turbines laid applications for gradual recovery. However, other applications entered an adjustment phase. Page 11. In the environment and engineering segment, revenue decreased 7.9% to 53 billion yen compared with the same period a year earlier. and cooperating income decreased 38% to 3.1 billion yen. The water treatment business was affected by the delay of shipments for large projects in the Middle East and the stagnant market condition in China. As for sub-stories in Japan, revenue of Japanese engineering sub-stories decreased due to shifting project timing. Page 12 is the life science segment. Revenue decreased 3.4% to 11.7 billion yen compared with the same period a year earlier and cooperating income decreased by 0.2 billion yen to negative 1 billion yen. The pharmaceutical business was affected by the impact of the penetration of generic versions of the drugs. In the medical devices business, shipment of the mainstay products, stylizers for hemodial filtration was steady but affected by persistently high-priced raw materials. Page 13 shows the business results of major sub-series and regions. At Toray International, sales were strong mainly in the fibers and textiles. At our sub-series in Southeast Asia, in the fibers and textiles business, demand for the apparel applications and automobile applications and the industrial applications was slow. In the performance chemicals business, spread of ABS regions improved. After subsidiaries in China, in the fibers and textiles business, the upper applications were strong. In the performance chemicals business, the chemical business was impacted by the worsening market conditions. As for subsidiaries in the Republic of Korea, sales of the fibers and textiles business decreased stemming from the scale down of low profitability applications. However, spread has improved. In the performance chemicals business, sales of battery separator film were stagnant. Next, I'd like to explain the consolidated business forecast for the fiscal year ending March 2026. Please turn to page 15. The global economy, which was in a gradual recovery phase, is expected to slow down triggered by the imposition of reciprocal typos by the U.S. under the Trump administration. The Japanese economy also faces concerns over decline in exports following the imposition of U.S. tariffs and intensifying competition with China, and there is growing uncertainty over the sustainability of the economic recovery trend. Other causes of concern include the trends in oil price as well as the financial and foreign exchange markets centered on the U.S. against the backdrop of the imposition of tariffs and the situation in the Middle East. The direction of the trade policies of the U.S. under the Trump administration, as well as its negotiations with various countries, will likely affect the prevailing economic trends, which in the medium to long term may significantly alter supply chains and the trade structure. For the fiscal year ending March 2026, forecasts for revenue, corporating income, and profits attributable to owners of parents remain the same as the announcement on May 14th, given the current business performance and environment. Assume the exchange rate from July onwards is 145 yen per 1 US dollar. Page 16 shows the consolidated business forecast for the fiscal year ending March 2026 by segment. The impact from the US tariff measures remains the same as the announcement on May 14th, as trends of tariff measures and countermeasures to it by customers are still uncertain, although direct and indirect effects are expected, including increases in procurement costs at the U.S. production bases and global demand decrease. This concludes my presentation. Thank you very much.