Business Performance Forecast

For the first six months of the fiscal year under review, although the Communications Systems Business in the Safety & Security Sector was affected by component supply shortages, the Mobility & Telematics Services Sector performed above expectations.

In response to the U.S. tariff measures, we have been taking both short-term actions — such as passing on costs through price adjustments, reducing sales of China-made products, and cutting expenses — and medium- to long-term measures, including production site relocation and investment review, to minimize the overall impact on earnings.

In the previous full-year consolidated earnings forecast for the fiscal year ending March 2026, announced on May 1, 2025, we incorporated the estimated negative impact of the U.S. tariff measures at approximately JPY 13.0 billion in revenue and JPY 5.0 billion in operating profit. However, as a result of the aforementioned initiatives, the negative impact is now expected to be mitigated to around JPY 9.8 billion in revenue and JPY 3.7 billion in operating profit for the full year.

From the third quarter onward, production and sales are projected to decline compared to previous expectations, reflecting a delay in the timing of recovery production in the Communications Systems Business due to the prolonged component supply shortage.

Based on the above, we have revised upward the consolidated earnings forecast for the fiscal year ending March, 2026, announced on May 1, 2025.

Forecasts by business sector are presented as follows.

• Core operating income for the Mobility & Telematics Services Sector and the Entertainment Solutions Sector is expected to exceed the previous forecast
• For the Safety & Security Sector is projected to fall below

* Core operating income is calculated by deducting cost of sales, selling and general administrative expenses from revenue, and does not include other income, other expenses, and foreign exchange gains and losses, which are nonrecurring items that mainly occur temporarily.

M&T: Earnings are expected to exceed the forecast announced on October 31, 2025, driven mainly by solid sales at ASK Industries S.p.A. in overseas OEM Business.

S&S: Earnings are expected to fall below the forecast announced on October 31, 2025, affected by lost sales opportunities resulting from delayed product supplies in the enterprise market, despite a recovery in sales in the North American public safety market of the Communications Systems Business.

• M&T: Mobility & Telematics Services Sector
• S&S: Safety & Security Sector
• ES: Entertainment Solutions Sector