Business Performance Summary

Revenue of JVCKENWOOD Corporation (the "Company") and its consolidated subsidiaries (the "Group") for the first half of the fiscal year ending March 31, 2027 increased from the same period a year earlier due to an increase in sales in the Domestic Dealer-Installed Option Business in the Mobility & Telematics Services (M&T) Sector and strong sales of the Entertainment Business in the Entertainment Solutions (ES) Sector, along with the depreciation of the yen.

Core operating income increased from the same period a year earlier. Although it was affected by lower revenue in the Communications Systems Business in the Safety & Security (S&S) Sector and a surge in the prices of components such as memory in the M&T Sector beyond the levels anticipated at the beginning of the fiscal year, higher revenue in the Domestic Dealer-Installed Option Business and the Entertainment Business, as well as the recognition of the U.S. IEEPA (International Emergency Economic Powers Act) tariff refunds received during the first half as a reduction in cost of sales, contributed to the increase.

As a result of the increase in core operating income, profits at each level, from operating profit to profit attributable to owners of the parent, also increased from the same period a year earlier.

*1 Core operating income does not include nonrecurring items that mainly occur temporarily, such as other income included in operating income, other expenses, and foreign exchange losses (gains).

*2 Profit (loss) before tax + Interest expense + Depreciation expense + Impairment loss.

S&S:

Revenue of the S&S Sector for the first half of the fiscal year ending March 31, 2027 decreased approximately 3.3 billion yen, or 7.6%, from a year earlier to 40.4 billion yen. Core operating income increased approximately 0.4 billion yen, or 7.4%, from a year earlier to 5.5 billion yen.

Revenue

Revenue of the Communications Systems Business decreased approximately 1.3 billion yen from a year earlier.

This was mainly due to the suspension of anticipated projects and a slowdown in new orders in the North American public safety market, as local governments, which are key customers in this market, began reviewing their budget execution, despite a recovery in sales for the enterprise market. Revenue of the Professional Systems Business decreased approximately 2.1 billion yen from a year earlier mainly due to the impact of lower sales following the withdrawal from the Healthcare Business.

Core Operating Income

Core operating income of the S&S Sector as a whole increased from a year earlier, mainly due to the recognition of the U.S. IEEPA tariff refunds as a reduction in cost of sales in the second quarter, despite the impact of lower revenue due to a decrease in sales for the North American public safety market in the Communications Systems Business and an increase in fixed costs such as personnel costs and depreciation.

M&T:

Revenue of the M&T Sector for the first half of the fiscal year ending March 31, 2027 increased approximately 12.2 billion yen, or 12.8%, from a year earlier to 107.6 billion yen. Core operating income increased approximately 0.4 billion yen, or 16.8%, from a year earlier to 3.0 billion yen.

Revenue

Revenue of the OEM Business increased from a year earlier, mainly due to the depreciation of the yen, as well as an increase in sales of products newly introduced at the end of the previous fiscal year in the Domestic Dealer-Installed Option Business, despite the impact of lower sales at ASK Industries S.p.A. ("ASK"), which handles in-vehicle audio and transmission components, owing to the slowdown in the Chinese economy.

Revenue of the Aftermarket Business increased from a year earlier, mainly due to the effect of introducing new car navigation systems for the domestic market, as well as progress in reflecting the surge in the prices of memory and other components in selling prices.

Revenue of the Telematics Service Business increased from a year earlier, mainly due to an increase in sales of cloud connected dashcams for auto insurance companies, as well as progress in reflecting the surge in the prices of memory and other components in selling prices.

Core Operating Income

Core operating income was affected by the surge in the prices of memory and other components beyond the levels anticipated at the beginning of the fiscal year, as well as the decline in sales at ASK. However, core operating income of the entire M&T Sector increased from a year earlier, mainly due to an increase in sales in the Domestic Dealer Installed Option Business and the recognition of the U.S. IEEPA tariff refunds as a reduction in cost of sales in the second quarter. The impact of the surge in component prices on earnings continues, and the Group continues to take measures to address the situation.

ES:

Revenue of the ES Sector for the first half of the fiscal year ending March 31, 2027 increased approximately 5.4 billion yen, or 20.8%, from a year earlier to 31.3 billion yen. Core operating income increased significantly by approximately 3.3 billion yen, or 618.6%, from a year earlier to 3.8 billion yen.

Revenue

Revenue of the Media Business decreased approximately 1.3 billion yen from a year earlier mainly due to a decline in sales of projectors, despite a recovery in sales of headphones and earphones.

Revenue of the Entertainment Business increased significantly by approximately 6.6 billion yen from a year earlier mainly due to strong sales of content, including music streaming.

Core Operating Income

Core operating income of the ES Sector as a whole increased significantly from a year earlier, mainly due to higher revenue in the Entertainment Business driven by strong sales of content, including music streaming.

• Equity attributable to owners of the parent increased by approximately 1.5 billion yen from the end of the previous fiscal year to 145.4 billion yen, mainly due to an increase in retained earnings, despite dividend payments, share repurchases and a decrease in other components of equity.
• Net cash increased by approximately 3.6 billion yen from the end of the previous fiscal year to 0.8 billion yen, mainly due to improved cash flows from operating activities.

• Cash flows from operating activities: Increased year on year due to higher depreciation and amortization and the receipt of U.S. IEEPA tariff refunds.
• Cash flows from investing activities: Outflows increased year on year due to lower proceeds from the sale of fixed assets and payments for the acquisition of San Luis Aviation, Inc.
• Cash flows from financing activities: Outflows increased year on year due to repayment of interest-bearing debt.