NIPPON YAKIN KOGYO CO., LTD

Dear Shareholders

I would like to extend my heartfelt gratitude for the continued support and patronage of our shareholders.
In presenting the Annual Report for our 143rd year (from April 1, 2024 to March 31, 2025), I would like to offer a few words.
In the fiscal year under review, Japan’s economy was on a gradual recovery trend as employment and income conditions improved. However unstable conditions also persisted, such as rising prices, prolonged geopolitical risks in Europe and the Middle East, and the impact of the slowdown in China’s economy.

In the stainless and high nickel alloy industry, demand for vehicles and other transportation equipment was steady, but there was still a lack of vitality overall as labor shortages caused delays to projects in the construction field and recovery in demand remained slow in semiconductor-related fields.

President and
Representative Director
Shigemi Urata

With regard to the Group’s strategic field of highperformance alloys, demand has remained strong in the environment and energy fields including flue gas desulfurization equipment for thermal power plants in India. Some progress in inventory adjustments was seen in durable consumer goods, including sheathed heater materials for home appliances.

Yet overall demand remained sluggish due to factors including a slowdown in solar power-related projects in the Chinese market.

Under this type of external environment, the Group has steadily implemented measures set forth in the Medium-Term Management Plan 2024.

As a result of efforts to capture demand in the transportation equipment and consumer goods fields, which are on a recovery trend, as well as the oil, gas, and carbon neutralrelated markets, which have remained firm, we realized a year-on-year increase in sales volumes. However, revenues declined due to factors including the effects of the composition of high-performance alloy sales.

As a result, sales volume of the Company for the fiscal year under review increased 12.3% year on year (an increase of 7.3% in high-performance alloys and an increase of 14.1% in stainless steel), while consolidated net sales were ¥172,097 million, a decrease of ¥8,244 million year on year.

As for profits, consolidated operating profit was ¥16,967 million, a decrease of ¥3,044 million year on year, consolidated ordinary profit was ¥16,200 million, a decrease of ¥2,929 million year on year, and profit attributable to owners of parent was ¥11,579 million, a decrease of ¥1,986 million year on year.

On the subject of dividends of surplus, our basic policy is one of paying stable dividends while taking into account the investments necessary to maintain the business foundation and the outlook for business results, in addition to working to further improve the financial condition of the Company. With regard to the year-end dividend for the fiscal year under review, the dividend was ¥120 per share (common dividend of ¥100 and commemorative dividend in celebration of the 100th anniversary of the Company’s establishment of ¥20).

Accordingly, including the interim dividend with the record date of September 30, 2025 (¥100 per share), the annual dividend per share for the fiscal year totaled ¥220 per share.

The business environment surrounding the Group remains uncertain given factors such as the risk to the global economy from US tariff measures, the inflow and establishment of general stainless steel materials in the domestic market against the backdrop of production exceeding demand in the East Asia region, and rising labor costs and materials prices.

The Group will continue to capture demand for general stainless steel in the domestic market and we will strive to strengthen our revenue base and financial base by working to increase sales in the environment and energy field, with a focus on India and the Middle East where demand for highperformance alloys is steady, and by realizing greater quality and operational efficiency through the introduction of cutting-edge equipment, such as the highly efficient cold rolling mill that went into operation in the second half of FY2025.

We humbly request the support and cooperation of our shareholders as we move forward.

June 2025