■Review of performance in fiscal 2025

Fiscal 2025 was the second year of the Mid-Term Management Plan MEX26 (Maximum Excellence 2026). Net sales decreased by 0.3% year on year to 129.4 billion yen, while operating profit fell by 15.3% to 7.9 billion yen. Although net sales remained at roughly the same level as the previous fiscal year, their composition changed. Sales of prismatic lithium-ion batteries, whose production we discontinued in May 2025 due to persistently low profitability, declined, while sales of primary batteries, adhesive tapes, and coated separators, among growth businesses, increased. The decline in operating profit was largely attributable to soaring prices of raw materials such as silver, a key material used in our mainstay battery products, which alone reduced profit by 1.1 billion yen.
　Net profit attributable to owners of parent, on the other hand, rose by 102.0% year on year to 8.3 billion yen, driven by gains on the sale of our prismatic lithium-ion battery factory in China, marking our highest profit since our relisting in 2014. This reflects how the results of our business portfolio reform have translated into concrete financial performance, demonstrating that streamlining unprofitable businesses leads directly to an improved profit structure.
　ROIC declined by 1.2 points year on year to 4.6%, while ROE improved by 4.9 points to 9.3%. Further efforts are needed to achieve the final-year targets under MEX26 of an ROIC of 7.5% and an ROE of 10%, and we will continue to pursue both profit growth and improved capital efficiency simultaneously.

■Operations for performance management

To strengthen profitability, we continue to implement ABC-XYZ control (profit and loss control by business) and PIPJ (profit and loss improvement by model project).

　Under ABC-XYZ control, we assess each business category along the two axes of growth potential and profitability to determine which businesses to expand, which to scale back, and where to allocate resources for the future. Decisions such as acquiring the primary battery business from Murata Manufacturing Co., Ltd. to expand our battery business, discontinuing production of prismatic lithium-ion batteries due to low profitability, and transferring the EF2 (electro fine forming) business were all made based on this operation.
　Under PIPJ, we manage profit and loss at an even more granular, model-by-model level, generating profit by expanding profitable models and reducing unprofitable ones. In fiscal 2025, our systems advanced significantly, enabling us to calculate profit and loss by model on a timely basis. We can now instantly see what is working and what is not, including whether rising raw material costs are being reflected in selling prices, which has dramatically accelerated the speed of our PDCA cycle. This advancement was one of our greatest achievements in fiscal 2025.
　The price of silver, an important raw material for our Group, has risen sharply. While our priority is to secure the volumes that we need for production, we are also seeking to procure this material at appropriate prices. Silver prices are highly subject to market conditions, and our customers understand this. By using data from PIPJ to monitor, model by model, our progress in reflecting these cost increases in our selling prices, we are steadily recovering the impact of rising costs.

■Progress of our financial strategy

Investment in all-solid-state batteries, meanwhile, is expected to make a full-fledged contribution to profit during the period of our next mid-term management plan. While the scale of this development investment is large, we will continue to invest proactively with a clear timeline for recovery.
　As for shareholder returns, we are aiming for a total payout ratio of 100% or higher over the MEX26 period to maximize capital efficiency. In fiscal 2025, we acquired 13.2 billion yen of treasury shares, and subsequently cancelled all the treasury shares in May 2026. Rather than accumulating internal reserves, our basic capital policy is to use funds decisively and proactively for growth investment and shareholder returns.
　On the cash inflow side, we plan to secure funding through operating cash flow of 27.0 billion yen or more, supplemented by borrowings of more than 20.0 billion yen. Since the cost of debt is lower than the cost of shareholders' equity, we aim to reduce our overall cost of capital by applying appropriate financial leverage. By constantly monitoring this balance, we are achieving both financial soundness and growth investment at the same time.

■Progress of initiatives to strengthen our management foundation

Strengthening human capital
In the employee awareness survey conducted in fiscal 2025, our engagement score rose from 66% in the previous year to 69%. External experts have described this three-point improvement as considerable, confirming that our organization responds when we take action. Achieving a 100% career interview implementation ratio has helped convey management's thinking to employees, and we believe mutual understanding has deepened as a result. Going forward, we want to focus on improving the quality of these dialogues.
　We have also improved compensation under our re-employment system for senior employees, which has contributed to higher performance and engagement. Employee satisfaction with our benefits programs has risen as well.
　In our recruitment activities, we are strengthening mid-career recruitment: we hired approximately 80 people through this route in fiscal 2025 and plan to hire around 50 people in fiscal 2026. We are recruiting talent capable of contributing immediately in every area, placing emphasis on specialized expertise for engineering roles and on experience for administrative roles. Mid-career recruitment, which now exceeds the scale of our new graduate recruitment, is a key initiative supporting the speed of our transformation.
　In our DE&I activities, we continue to work toward our target of increasing the ratio of female managers to 10% by fiscal 2030. Our childcare leave usage rate among male employees in fiscal 2025 has reached 100%. This achievement is only possible with the understanding of the people around them, and we take it as a sign that organizational understanding has progressed.

Progress in DX
We have completed the integration of our core systems in Japan, including at Group companies. Maxell Sakura, which recently joined the Group, will also be integrated into the same system going forward. Overseas, China operates on a separate package system for institutional reasons, but systems in other regions have been unified, strengthening Group governance.
　The use of generative AI is also expanding, and as operations become more efficient, employees are able to devote more time to thinking and creative work. Compared to before we introduced it, the time savings have been substantial, which has also contributed to improved quality of work.

Strengthening our intellectual property
We continue to expand our portfolio of patent assets related to next-generation development technologies, aimed at "creating innovation through unique, original technologies," one of our materialities. With a strengthened organizational structure at the IP Innovation Division, we are building a portfolio of patents capable of contributing to profit over the medium to long term, and the number of patent applications continues to trend upward.

■To our shareholders and investors

Our PBR currently stands at around 1.0 times. To consistently achieve a PBR above 1.0 times and maximize corporate value, we will continue working to grow profit and improve capital efficiency. The drivers for improving our PBR are clear: first, expanding profit through growth investment centered on our small battery business; second, improving ROIC through portfolio realignment and greater capital efficiency; and third, continuing shareholder returns through our commitment to a total payout ratio of 100% or higher.

September 2026　by Integrated Report 2026

(Japanese)

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