Business Performance Forecast

Revenue for the first half of the fiscal year ending March 31, 2027 exceeded expectations, mainly due to an increase in sales in the Domestic Dealer-Installed Option Business in the M&T Sector and strong sales in the Entertainment Business in the ES Sector, as well as the depreciation of the yen. However, excluding the effects of the U.S. IEEPA tariff refunds, core operating income fell short of expectations, mainly due to the impact of lower sales in the Communications Systems Business in the S&S Sector.

From the third quarter of the fiscal year ending March 31, 2027 onward, the Group expects solid performance in the Domestic Dealer-Installed Option Business and the Entertainment Business, while there are concerns about the impact of a surge in the prices of memory and other components on earnings in the M&T Sector. In the Communications Systems Business, sales for the North American public safety market are expected to fall short of expectations.

Accordingly, as stated in the "Revision of Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2027," separately disclosed on October 30, 2026, the Company has revised the consolidated earnings forecast for the fiscal year ending March 31, 2027 initially announced on May 1, 2026, as follows.

* 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.

S&S: As sales in the North American public safety market are expected to fall short of expectations in the Communications Systems Business, full-year results are expected to fall below the initial forecast.

M&T: Although the impact of higher prices for memory and other components is expected to continue, strong sales are expected throughout the year, particularly for products newly introduced at the end of the previous fiscal year in the Domestic Dealer-Installed Option Business, and full-year results are expected to exceed the initial forecast.

ES: As sales of content, including music streaming, in the Entertainment Business were stronger than expected in the H1, full-year results are expected to exceed the initial forecast.

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