Financial Review

(1) Overview of Operating Results

(Billions of yen)

* EBITDA: Net income attributable to owners of the parent + Total income taxes + (Interest expenses - Interest income) + Depreciation and amortization + Amortization of goodwill

In fiscal year 2025, ended December 31, 2025, consolidated net sales slipped 1.8%, to ¥1,052.2 billion.

• Looking at key global economies, concerns about supply chain disruptions and the impact on shipments due to the burden of tariff costs arose immediately after the announcement of the reciprocal tariff measures by the United States. However, the situation calmed as key countries and territories reached agreements on trade policies. Nonetheless, apprehension regarding rising prices and a resurgence of trade friction between the United States and the People’s Republic of China (PRC) persisted, as a result of which an uncertain outlook lingered for both corporate entities and consumers.
• In this environment, operating conditions in customer industries identified as key growth areas diverged. In digital materials, used principally in electrical and electronics equipment and in displays, the operating rates of display manufacturers continued to cause fluctuations in the display market, while the semiconductor market remained robust, propelled by brisk demand for AI applications and for use in semiconductor devices, among others. In industrial materials,* used primarily in mobility solutions, the automobile market remained relatively stable, despite a temporary surge in demand due to the U.S. tariff policy and the emergence of manufacturers based in the PRC.
• Against this backdrop, results varied for different products. Shipments of jet inks, used in digital printing, and of other high-value-added products, core chemitronics offerings such as epoxy resins and industrial-use adhesive tapes, continued to see steady growth, while products used in mobility solutions, including polyphenylene sulfide (PPS) compounds, were level with the previous fiscal year. In contrast, sales of packaging inks, pigments for coatings and for plastics and other mass-market consumer-adjacent products trended downward, owing to fears over rising prices and the economic outlook.

Operating income advanced 17.2%, to ¥52.2 billion. This was despite the decline in sales and was due mainly to firm shipments of high-value-added products, ongoing price revisions, including those implemented to counteract tariffs and exhaustive cost management efforts. This result also reflected an improvement in the Color & Display segment, owing to ongoing structural reforms in the pigments business in the United States and Europe, which helped trim costs, underpinning a return to profitability overseas from an operating loss in the previous fiscal year.

Ordinary income, at ¥44.2 billion, was up 16.7%. While foreign exchange losses mounted, reflecting the application of hyperinflationary accounting and the impact of currency translation, interest expenses fell as a result of U.S. and European interest rate cuts.

Net income attributable to owners of the parent climbed 51.8%, to ¥32.4 billion. This was a consequence of higher extraordinary income, thanks to, among others, a gain on sales of shares and investments in capital of subsidiaries and affiliates arising from withdrawal from the liquid crystal (LC) materials business and the sale of works of art, and a decrease in extraordinary losses.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 14.2%, to ¥109.3 billion.

• DIC uses the term “industrial materials” to describe products for use in mobility solutions, namely, automobiles, railroads and shipping, and for general industrial applications such as construction equipment and industrial machinery.

（２）Segment Results

(Billions of yen)

Note: Effective from January 1, 2025, the Group revised its segment classification for certain net sales and operating income in “Packaging & Graphic”, “Functional Products” and “Others, Corporate and eliminations”.
Accordingly, certain figures for FY2024 have been restated.

Packaging & Graphic

Segment sales edged down 1.9%, to ¥549.7 billion. In the area of packaging inks, used chiefly on packaging for food products, shipments deteriorated in Japan, owing to a decline in consumption, as well as in the Americas and Europe—particularly Europe, which saw an economic slowdown and changes in the competitive environment—but sales in both geographic operating regions were up, bolstered by consistent efforts to adjust sales prices. In contrast, sales of these products in Asia and elsewhere waned as a consequence of flagging market conditions and persistent price competition everywhere except in the PRC, which reported an increase attributable to initiatives aimed at fostering new customers. Sales of publication inks, which center on inks for commercial printing and news inks, decreased, owing to ongoing structural demand declines worldwide and a sharp decline in shipments triggered by intensified price competition, notably in the Americas and Europe. Sales of jet inks, used in digital printing, advanced, as shipments remained firm, buttressed by advancing digitalization. Shipments of polystyrene, applications for which include food trays, dipped, owing to a variety of factors, including rising consumer prices and resulting consumer restraint in food purchases in Japan.

Segment operating income, at ¥31.1 billion, was down 1.7%. In Japan, operating income weakened, as steps taken to modify sales prices for packaging inks and publication inks were insufficient to counter elevated costs. In the Americas and Europe, operating income fell, owing to exchange rate fluctuations arising from the depreciation of emerging market currencies, among others, despite rising on a local currency basis thanks to ongoing efforts to maintain sales prices by ensuring stable supplies and services. In Asia and elsewhere, operating income declined as a consequence of lower sales.

Color & Display

Segment sales slipped 3.7%, to ¥247.5 billion. Shipments of pigments for coatings and for plastics—which together account for a significant share of sales—fell as demand remained sluggish, owing to economic uncertainty, particularly in the United States and Europe. Nonetheless, sales of these products expanded, buttressed by ongoing efforts to revise sales prices in response to tariffs and to improve profitability. Among high-value-added products, shipments of pigments for color filters used in displays dwindled, as the operating rates of display manufacturers remained unstable, although sales were up, thanks to changes in the product mix. Sales of pigments for cosmetics fell, as shipments were hindered by listless demand from cosmetics manufacturers in the Americas and Europe, the principal customers for these products, among others. Sales of pigments for specialty applications rose, as shipments of products for agricultural use recovered following the completion of inventory adjustments, and shipments of products used in building materials were up. Lower overall segment sales were also due to the absence of sales of LC materials as a result of withdrawal from this business.

The segment moved back into the black, reporting operating income of ¥5.0 billion. This improvement was bolstered by increased sales of high-value-added products such as pigments for color filters and of specialty pigments, as well as by ongoing structural reforms in the pigments business in the United States and Europe, which helped trim costs, underpinning a return to profitability overseas from an operating loss in the previous fiscal year.

Functional Products

Segment sales edged down 1.7%, to ¥290.9 billion. In the area of digital materials, sales of epoxy resins, the foremost application for which is electronics equipment—including semiconductors—increased, as demand for semiconductors fueled firm shipments overall. Sales of industrial-use adhesive tapes, used mainly in smartphones and other mobile devices, rose owing to steady efforts to lock in demand bolstered by broader adoption for use in new models. In the area of industrial materials, shipments of materials for mobility solutions, including PPS compounds, remained solid, despite concerns regarding the impact of U.S. tariffs on the automobile market. The decrease in segment sales also resulted from reduced sales of architectural interior materials stemming from the April 2025 divestiture of consolidated subsidiary DIC Decor, Inc.

Segment operating income advanced 7.9%, to ¥23.1 billion. This gain was despite higher costs due to advance investments in the area of chemitronics, and reflected factors such as expanded marketing of high-value-added products for use in electronics equipment and in mobility solutions and successful efforts to maintain sales prices for all products.

（3）Operating Results Forecasts for Fiscal Year 2026

(Billions of yen)

Despite prolonged uncertainty surrounding trade policy, global economic conditions are expected to remain unclear in fiscal year 2026, owing to the impact of tariffs on corporate profits and consumer prices, as well as to concerns about a resurgence of trade friction between the United States and the PRC. Against this backdrop, the DIC Group has positioned Phase 2 of its DIC Vision 2030 long-term management plan (fiscal years 2026–2030) as the period for realizing and expanding its vision for the future. The Group has made the following commitments for Phase 2:

Having taken these and other factors into consideration, the Company forecasts consolidated net sales of ¥1,100.0 billion, an increase of 4.5%, operating income of ¥56.0 billion, up 7.3%; ordinary income of ¥48.0 billion, an improvement of 8.5%; and net income attributable to owners of the parent of ¥33.0 billion, a gain of 2.0%. The Company also intends to pay annual dividends (interim dividend plus year-end dividend) per share for the period of ¥140.00.

For details on Phase 2 of DIC Vision 2030, please see the presentation materials titled “DIC Vision 2030 Long-Term Management Plan (Fiscal Years 2022–2030) (Phase 2) (Fiscal Years 2026–2030),” published today.

（4）Segment Results Forecasts for Fiscal Year 2026

(Billions of yen)

Disclaimer Regarding Forward-Looking Statements

Statements herein, other than those of historical fact, are forward-looking statements that reflect management’s projections based on information available as of the publication date. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from such statements. These risks and uncertainties include, but are not limited to, economic conditions in Japan and overseas, market trends, raw materials prices, interest rate trends, currency exchange rates, conflicts, litigations, disasters and accidents, as well as the possibility the Company will incur special losses related to the restructuring of its operations.