Message from the President

conduct at our consolidated subsidiary,Okayama Chemical Co., Ltd.,disclosed on October 26, 2023,and the temporary suspension of the JIS mark announced on November 29, 2024. The special investigation committee has provided recommendations for preventing recurrence, and I consider it my utmost responsibility to earnestly and promptly implement these recommendations to regain your trust. I sincerely apologize to our shareholders, business partners, and all related parties for the significant inconvenience and concern caused.

Regarding the business performance for the current period, despite the impact of sales decline due to a series of inappropriate conduct issues in the domestic paint business, the progress in price corrections that we have been advancing, and the expansion of new products and adoption for display applications in ink and dispersion technology-related areas, resulted in performance exceeding the previous year. Additionally, with the steady progress in the lighting equipment business, consolidated net sales reached 72,511 million yen (an increase of 0.8% compared to the previous period). On the other hand, in terms of profit, due to increased costs in the domestic paint business and a decline in profit margins due to sales decreases in the overseas paint business, operating profit was 4,716 million yen (a decrease of 3.8% compared to the previous period), and ordinary profit was 5,199 million yen (a decrease of 2.6% compared to the previous period). However, the net income attributable to the parent company's shareholders was 9,437 million yen (an increase of 105.1% compared to the previous period), due to the occurrence of negative goodwill from the acquisition of Shinto Paint Co., Ltd. (hereinafter referred to as Shinto Paint) as a subsidiary and the recording of gains on the sale of investment securities due to the reduction of policy-holding stocks.

Our group has set Vision 2029, aiming to grow to a corporate scale with consolidated net sales of 100 billion yen, consolidated operating profit of 10 billion yen, and NOPAT (Net Operating Profit After Tax) - ROE of approximately 8% by the fiscal year 2029, marking our 100th anniversary. The medium-term management plan starting in fiscal 2024, known as the 2026 Medium-term Management Plan, focuses on deepening business strategies and foundations to realize Vision 2029, with three basic policies: "Focusing on growth markets and pioneering areas," "Expanding business foundations through the acquisition and utilization of external resources," and "Optimizing human resources and business activities company-wide." As part of the initiatives based on these basic policies, we acquired shares of Shinto Paint, a comprehensive paint manufacturer, and made it a consolidated subsidiary as of March 18th this year. Moving forward, we will steadily generate synergies with the company and accelerate our steps towards realizing Vision 2029. We kindly ask for your continued and even greater support as we move forward.

Takayuki Sato
Representative Director and President
Dai Nippon Toryo Co., Ltd.