Nitto Boseki : Main Questions and Answers at the Financial Results Briefing (Fiscal Year Ending 2024/Mar) （517KB）

Nittobo

Main Questions and Answers at Financial Results Briefing

For the Fiscal Year Ended March 31, 2024

（Held on May 9, 2024）

Q: Please tell me the full-year forecasts for fiscal 2024?

1. The forecasts were built on the assumption that there will be a continuation of the favorable business environment, characterized by such factors as a recovery in semiconductor market conditions and rising demand associated with AI servers. Nevertheless, in terms of downside risks, we do recognize the possibility of an inventory adjustment in the supply chain leading to a loss of momentum.

1. Why is the second half fiscal 2024 forecast for operating profit in the Electronic Materials segment more or less flat compared to the forecast for the first half?

1. We have been expanding production capacity for Special Glass in line with plans, and the new furnaces will gradually be brought into operation. We expect the rising burden of reinforcement costs to put pressure on profits in the second half, and we do not expect a full-fledged contribution from this fiscal year's increase in production until next fiscal year and beyond.

1. Under the new Medium-Term Management Plan (MTMP) you have set an operating profit target of 20.0 billion yen for fiscal 2027. How do you see that profit emerging

over the four years of the plan, and what will it look like by segment?

1. Over the four years of the new MTMP the Electronic Materials segment, centered on Special Glass yarn and cloth, will be a major growth engine, followed by the Medical segment, mainly in vitro diagnostic reagents, which will also play an important role. The function of the new MTMP is to devise various measures to hit that target of 20.0 billion yen, with the expectation of generating profit in the latter half of the period.

1. In terms of the breakdown of the approximately 80.0 billion yen in capital investment over the four years of the new MTMP, should we take it that it will be focused on Special Glass? What will be the investment amounts for each of the Special Glass

product lines?

1. We will use it to increase production capacity for Special Glass at production locations both in Japan and overseas, and also to maintain and upgrade facilities other than those used for Special Glass. The breakdown of investment amounts by product line will be determined at a later date in accordance with trends in demand.

Q: What is the demand and supply situation for Special Glass (NE-glass,NER-glass, T- glass)?

1. Demand for low-dielectric (NE) glass remains strong, and we expect demand to continue to rise over the medium to long term. We do not believe that the needs of the market can be met by ourselves alone, and so we expect an increase in new entrants going forward. As for next-generationlow-dielectric (NER) glass, the number of inquiries is increasing but our view is that the market itself is just beginning to expand, so we will increase production capacity next fiscal year and beyond with the intention of taking market share. As for low-thermal expansion (T) glass, demand for high-end semiconductor package substrates is strong and the number of suppliers is limited, and with that in mind the Company intends to take the responsible approach of maintaining stable production in line with demand.

Q: Based on both recent results and the forecast for this fiscal year, conditions in the

Composite Materials business appear to be difficult. Can you give us some idea of what you would like the business to look like in the final year of the new MTMP?

1. We are investigating ways to make this a profitable business, such as by changing the business model, and we want to eliminate these losses during the course of the new MTMP.

Q: What is the background to the Company not having made a decision on the dividend for fiscal 2024?

1. During the new MTMP, we will decide dividends in accordance with the basic policy on shareholder returns. Our approach will be to decide the year-end dividend forecast and communicate it to shareholders after working to achieve the profit targets set at the beginning of the fiscal year, and in the process gaining some insight into the outlook for the full fiscal year.

End

※This document is provided for reference purposes only and is not a word-for- word transcript of the question-and-answer session at the briefing, but rather a concise summary based on our own judgment.

※The forecast figures and business environment forecasts contained in this document are based on information available to the Company at the time of publication. These statements include potential risks and uncertainties, and therefore do not imply a commitment or guarantee of future business performance and measures. Factors that may affect the Company's performance include, but are not limited to, economic conditions, demand trends, exchange rate fluctuations, and fuel price fluctuations.