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AWATY · Air Water Inc.

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Earnings call · FY2025 Q4

Air Water Inc. (AWATY) Q4 2025 Earnings Call Transcript

Concluded Jul 31, 2026

Jul 31, 2026 0 turns

Period: FY2025 Q4
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FY2025 Financial Results 97 Inappropriate Accounting Incident 89 Capital Expenditure / Investment 70 FY2026 Forecast 50 Industrial Gas / Digital & Industry 38 Securities on Alert Designation Removal 30

Management tone

Cautious

Net tone -35 · high hedging

Grounding quotes

“As a result, the Company recorded an operating loss of ¥37.2 billion for FY2025.”
“we forecast revenue of ¥1.14 trillion, business profit of ¥76.4 billion, operating profit of ¥48.0 billion, and profit attributable to owners of the parent of ¥28.0 billion, representing a return to profitability.”
“the FY2026 dividend forecast remains undecided pending a review of our shareholder return policy.”
“we recorded a net loss for the fiscal year, we determined that maintaining a stable dividend was appropriate after considering our future business outlook and the current strength of our financial position.”

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te r r AWe l l 3 0 2 n d s ta g e F i s c a2025.4.21 l year 2025 Full Year Financial Results Explanatory Material （Supplementary Materials for Self -Inspection）

July 31, 2026

Air Water Inc. Fisical Year 2025 Full-Year Financial Results Briefing Script Speaker: Yoshihiro Senzai Representative Director, President and Executive Officer Yu Karato Representative Director, Executive Vice President and Executive Officer Hirokazu Nishimura Corporate Director, Senior Managing Executive Officer Hirotaka Shiraiwa Senior Executive Officer GM. Financial & Investor Relations Dept. Moderator: Aya Uesugi General Manager, Investor Relations Group, Finance & Investor Relations Department July 31, 2026

Agenda Contents

Ⅰ． Introduction ◼ Overview of the Inappropriate Accounting Matter ◼ New Management Structure ◼ Status of Recurrence Prevention Measures ◼ Toward Removal of the Security on Alert Designation ◼ Overview of the Improvement Plan and Status Report ◼ Progress and Outlook of the Improvement Plan ◼ Toward Restarting Management and Enhancing Corporate Value

・・・・・ 4 ・・・・・ 5 ・・・・・ 6 ・・・・・ 7 ・・・・・ 8 ・・・・・ 9 ・・・・・ 10

Ⅱ．Fiscal Year 2025 Full-Year Results ◼ Financial Results Summary ◼ Impact of Inappropriate Accounting, etc. on Financial Results ◼ Scope of the Voluntary Investigation ◼ Consolidated Financial Results / Key Points of Full-Year Results ◼ Consolidated Income Statement ◼ Consolidated Statement of Financial Position ◼ Cash Flow Overview ◼ Capital Investment and Depreciation

・・・・・ 12 ・・・・・ 13 ・・・・・ 15 ・・・・・ 17 ・・・・・ 20 ・・・・・ 21 ・・・・・ 22 ・・・・・ 23

Ⅲ．Fiscal Year 2026 Full-Year Financial Results Forecast ◼ Consolidated Earnings Forecast ◼ Current Business Environment ◼ Capital Investment Plan ◼ Dividends and Shareholder Returns

・・・・・ 25 ・・・・・ 26 ・・・・・ 27 ・・・・・ 28

Speaker: Yoshihiro Senzai,Representative Director, President and Executive Officer Good afternoon, everyone. My name is Yoshihiro Senzai, President of the Company. Thank you very much for taking the time out of your busy schedules to attend our FY2025 Financial Results Briefing today. First, I would like to sincerely apologize once again for the significant delay in announcing our financial results due to the inappropriate accounting incident, which caused considerable inconvenience and concern to our shareholders, investors, and many other stakeholders.

Overview of the Inappropriate Accounting Matter 2025

2026

Timeline of Events

Jul

Discovered inappropriate accounting (loss deferral) involving inventory at a consolidated subsidiary

Oct 9

Established a Special Investigation Committee composed of external experts; formed a self-inspection team

Nov 14

Approved an extension of the semi-annual report filing deadline (Q2 FY3/2026 results postponed)

Feb 6

Disclosed that the Q3 FY3/2026 earnings report would exceed 45 days after quarter-end

Feb 12

Received the Special Investigation Committee's report (as of Feb 9)

Feb 13

Filed the semi-annual report (independent auditor's review: "qualified conclusion") Announced Q2 FY3/2026 financial results; published recurrence-prevention measures (outline) Received the Special Investigation Committee's report

Apr 3

Disciplinary action for those involved; published recurrence-prevention measures (detailed version)

May 1

Designated as a Security on Special Alert by the Tokyo Stock Exchange and charged a listing-agreement penalty

Jun 19

Established a Responsibility Investigation Committee; received a supplementary report from the Special Investigation Committee

Jun 30

Approved an extension of the Annual Securities Report filing deadline

Jul 31

Announced Q3 and full-year FY3/2026 results; corrected prior-year securities reports, earnings reports, etc. Filed the Improvement Plan and Status Report(Plan)

Summary in Light of This Matter

•

Inappropriate accounting practices were identified at 43 Group companies, including Air Water

•

Not merely an accounting issue, but weaknesses in corporate culture, governance, and internal controls

•

In addition to the investigation by the Special Investigation Committee, a thorough self-inspection was conducted covering all 211 consolidated subsidiaries, significantly expanding the scope of investigation and review items to ensure the reliability of f inancial reporting

Having advanced prior-year earnings corrections and the formulation and rollout of recurrence-prevention measures, With today's earnings announcement and the submission of the Improvement Plan and Status Report(Plan), we have fully launched our efforts to rebuild credibility and trust and rebuild management foundations.

Mar 31

I would like to begin with an overview of the inappropriate accounting incident. The issue came to light in July 2025 when inappropriate accounting practices were discovered at a consolidated subsidiary. The matter subsequently developed into investigations by the Special Investigation Committee, additional investigations, and a group-wide self-inspection. As a result of this matter, the Company was designated as a Security on Alert by the Tokyo Stock Exchange on May 1, 2026. Today, July 31, we announced our full-year financial results for FY2025, submitted the Annual Securities Report and related disclosure documents, and filed our Improvement Plan and Status Report. In summary: First, inappropriate accounting cases were identified at 43 companies across the Group. This issue revealed challenges not only in accounting practices but also in our corporate culture, governance, and internal control systems. In addition to the investigation conducted by the Special Investigation Committee, we expanded our review to all 211 consolidated subsidiaries and carried out a comprehensive self-inspection. Through these efforts, we ensured the reliability of the financial information disclosed today. As a result, we have completed the correction of prior-period financial statements and advanced the formulation and implementation of recurrence-prevention measures. With today’s earnings announcement and the submission of the Improvement Plan and Status Report, we have entered a new phase focused on restoring trust and rebuilding our management foundation. 4

New Management Structure ［Restructuring of Management Structure］ Internal Directors (4 → 3)

Outside Directors (4 → 5)

Internal director structure renewed; Senzai,formerly an outside Diretor, has been appointed as an internal director

Outside directors increased to a majority; 5 directors, 3 newly appointed New

Reappointed

Director

Representative Director, President and Executive Officer

Yuko Haga

Mikihiko Kato

Yoshihiro Senzai

Management strategy, M&A, Governance

Management strategy, Finance & Accounting

※Chair of the Nomination and Compensation Committee

Reappointed

New

Director

Yu Karato

Rochelle Kopp Human capital, Global, ESG

Legal affairs, Governance

New

Director

Mitsutoshi Matsushita

Director

Shinichi Kawasaki

Director

Hirokazu Nishimura Management strategy, Technology strategy

Newly established

Management Reform Office Driving governance strengthening and structural reform in an integrated manner

Board of Directors Secretariat

Corporate Secretary Enhanced information provision to outside directors

Enhanced management support via a Board Secretariat and a new Management Reform Office

Strengthening oversight and advisory functions by appointing directors with expertise in areas requiring further enhancement

Oversight & checks strengthened

Representative Director Executive Vice President

New

Following the Annual General Meeting of Shareholders held in June of this year, the Company transitioned to a new management structure. While reducing the number of internal directors from four to three, we increased the number of outside directors from four to five, further strengthening the independence and oversight function of the Board of Directors. To address areas where our management capabilities needed reinforcement, we have appointed outside directors with specialist expertise to enhance oversight and supervisory functions. We have also established the Management Reform Office and the Board Secretariat to provide stronger support for promoting governance reforms

Status of Recurrence Prevention Measures [Overview and Implementation of Recurrence Prevention Measures] Basic Framework (announced February 13, 2026)

Specific Implementation Status (as of 7/31) • Monthly messages from top management to all employees • Town hall meetings held at 51 major Group companies • Enhanced operation of the whistleblowing system, including the establishment of new reporting channels to outside Audit & Supervisory Board Members and an independent external third party • Enhanced training for all managers on business ethics and compliance • Enhanced accounting literacy training for all employees

(2) Governance Reform

• Strengthening the oversight function of the Board of Directors • Strengthening the oversight function of the Board of Auditors • Strengthening the role of the Nomination and Compensation Committee

• Review of the management structure and renewal of internal directors, increase in outside directors • Participation of outside directors in key executive meetings, with accompanyingenhanced information provision • Establishment of a Board Secretariat and strengthening of the Corporate Secretary • Change of Nomination and Compensation Committee members(operated and assessed solely by outside directors) • Establishment of a Responsibility Investigation Committee (investigating the legal responsibility of current and former directors and auditors)

(3) Management foundation and rebuilding of internal controls

• Appointment of an officer for administration and an officer for finance • Strengthening administrative functions centered on the accounting department • Rebuilding internal controls across the entire group • Strengthening the internal audit function

• Creation of a Chief Accounting and Finance Officer • Increased headcount in HQ accounting • Increased headcount in internal audit; strengthened external support structure • Strengthened regular meetings with major group companies on financial closing and accounting (major domestic 28 companies and major overseas 11 companies)

• Redefinition of core competencies • Selection and concentration of businesses • Optimization and restructuring of group companies

• Held company-wide strategy meetings to redefine core competencies • Launch and operation of a Portfolio Management Committee (held multiple times) (based on the above, a total of 4 business transfers implemented)

(4) Review of Companywide Strategy (review of the business portfolio)

(1) Corporate Culture Reform

• Reform toward a sound, open corporate culture that prioritizes compliance and encourages proper conduct • Setting performance targets while eliminating excessive performance pressure • Fundamental strengthening of education and training (ethics, accounting literacy) • Strengthening of the internal whistleblowing system

We are currently advancing our recurrence-prevention initiatives based on four key pillars: 1.Corporate Culture Reform 2.Governance Reform 3.Reconstruction of Management Infrastructure and Internal Controls 4.Review of Company-wide Strategy and the Business Portfolio Through these four pillars, we are steadily implementing measures to fundamentally strengthen the Company’s management and control framework.

Toward Removal of the Securities on Special Alert Designation

FY2026 Q1 (Apr–Jun 2026)

FY2026 Q2 (Jul–Sep)

FY2027 Q1 (Apr–Jun)

May 1, 2026: Designated as a Security on Special Alert Advancing initiatives to remove the designation Completed submission of the Improvement Plan and Status Report(Plan)

(3/31) (4/30) Submission Submission of Internal of Internal control control confirmation confirmation letter letter draft

(thereafter) Review of DesignationRemoval

(Future outlook) Based on the “Improvement Plan / Status Report” and the “Internal Control Confirmation Letter,” we aim to achieve the following ① Build a management system that ensures such incidents never recur ② Meet the standards required for continued listing eligibility

We aim to achieve removal of the Securities Under Special Alert designation by the end of 2027

(7/31) Improvement Plan/ Status Report submitted

(Current progress) • • •

FY2026 Q4 (Jan–Mar 2027)

Rebuild and operate the internal control system Group-wide (JPX-R-led verification)

Completed

(5/29) (6/15) (5/1) Securities Improvement Improvement plan Plan/ on direction Status Special Alert set Report designation draft submitted

FY2026 Q3 (Oct–Dec)

The Company was designated as a Security on Alert by the Tokyo Stock Exchange on May 1 of this year. This slide outlines the schedule and roadmap for the removal of that designation. Today, July 31, we submitted the Improvement Plan and Status Report to the Tokyo Stock Exchange, and the submission has been accepted. We will next submit the Internal Control Confirmation Letter by April 30 of next year. Following that submission, the review process for the removal of the designation will begin. We are fully committed to building a system that will prevent similar incidents from ever occurring again. At the same time, we will respond sincerely and diligently to the review process conducted by the Tokyo Stock Exchange and aim for the earliest possible removal of the designation.

Overview of the Improvement Plan and Status Report Root-Cause Analysis

Measures to Prevent Recurrence

Structural issues behind the improper accounting, organized via investigation and self-inspection

To address the root-cause findings, five improvement measures were established to drive integrated reform across corporate culture, governance, internal control, and audit functions.

Corporate Culture & Compliance

• A culture prioritizing performance targets, with dulled accountingcompliance awareness • Organization run by a dominant top management, with a culture of deferring to its intentions • Excessive performance pressure on the front line • Insufficient ethics and accounting literacy • Inadequate review of the whistleblowing system and its operation

Governance & Oversight • No director in charge of finance and accounting • Insufficient oversight by the Board of Directors • Insufficient audit function of the Audit & Supervisory Board • Weak internal audit function

Shift to a culture that puts compliance first

Strengthening Internal Audit

Governance Reform Building a transparent, objective management structure

Supporting early detection and correction of risk Strengthening the audit system

Strengthen Audit & Supervisory Board Strengthening independent oversight

Internal Control & Management Structure

• Weak management foundation and internal controls • Insufficient functioning of administrative divisions, centered on accounting • Lack of effective internal control, including organizational roles and responsibilities • Business flows that enabled improper processing, and lax inventory management • Insufficient review of business risks, organization, and processes

Rebuild Management Foundation & Controls Review of the business portfolio

Rebuilding internal controls through the improvement plan — an integrated approach across corporate culture, governance, and internal control

Corporate Culture Reform

Next, I would like to explain the overview of the Improvement Plan and Status Report. Based on our root-cause analysis, we recognize that the inappropriate accounting practices arose and persisted due to a combination of issues relating to corporate culture, governance, and internal control and management systems. In response, we have established five key reform initiatives: •Corporate Culture Reform •Governance Reform •Reconstruction of Management Infrastructure and Internal Controls •Enhancement of Internal Audit Functions •Enhancement of Audit & Supervisory Board Audits Through the implementation of these measures, we will rebuild our internal management systems through an integrated approach encompassing corporate culture, governance, and internal controls.

Progress and Outlook of the Improvement Plan Key Initiatives We will translate these improvement measures into concrete initiatives from the perspectives of corporate culture reform, governance reform, the reconstruction of management infrastructure and internal controls, the strengthening of internal audits, and the enhancement of Audit & Supervisory Board audits. Through the steady execution and embedding of these improvement plans, we will continue our efforts to enhance the effectiveness of our internal management framework.

Corporate Culture Reform

Governance Reform Strengthen Board functions

Reform messaging from top management

Reform nominations & pay

Promote two-way communication

Review governance rules

Enhance the whistleblowing system

Strengthen Internal Audit

Strengthen management of group companies Strengthen Audit & Supervisory Board

Advance internal audit

Strengthen Board

Develop audit personnel

functions

Coordinate with auditors

Improve audit response

Review company-wide strategy (Review of business portfolio) Reform the budget management process

Detect risk signs early etc.

Future Roadmap

FY2026

2026～FY2026–27

2027 (within the year)

Build and establish systems

Embed and improve effectiveness

Removal from Securities Under Supervision Rebuild trust

Clarify roles & authority

Strengthen internal control at subsidiaries Strengthen subsidiary governance

Strengthen risk controls

Foster compliance awareness

Review appointment/dismissal and HR evaluation systems

Transition to an audit-committee company

Rebuild Foundation & Internal Controls

This slide summarizes the key reform measures and our roadmap going forward. In FY2026, we will focus on developing and establishing the required systems and frameworks. From FY2027 onward, we will focus on embedding these reforms throughout the organization and improving their effectiveness. Through these efforts, we aim to achieve the removal of the Security on Alert designation and restore the trust of our stakeholders.

Restoring Trust and Enhancing Corporate Value through Management Restructuring Steadily execute management reform and rebuild the management foundation, prioritizing the restoration of trust

Review of Business Portfolio

Rebuild Foundation & Governance

■Concentrate resources on businesses that leverage our strengths

■Toward a robust management structure that supports sustainable growth

⚫ Strengthen the competitiveness of the core industrialgas and adjacent businesses

⚫ Strengthen, streamline, and advance group management and internal control

⚫ Improve growth, profitability, and capital efficiency through selection and concentration

⚫ Review the business portfolio from a best-owner perspective

Reinforce professional talent ⚫ Business and organizational restructuring from an internal-control perspective
Streamline group companies

Accelerate the business-portfolio transformation toward our long-term vision, aiming to enhance sustainable corporate value Leverage the stable cash generation of industrial gas to return to a growth trajectory through investment in growth areas

Finally, I would like to discuss the direction of our management reforms going forward. Our highest priority is the restoration of trust in the Company. We will move forward with reviewing our business portfolio and rebuilding our management foundation and governance framework. Through these initiatives, we aim to accelerate structural reform of our business and enhance corporate value. Through today’s earnings announcement, we are entering a new stage of management, one supported by stronger governance and a more robust management structure. Once again, we sincerely ask for your continued support going forward. This concludes my presentation.

Ⅱ. Fiscal Year 2025 Full Year Result Results

Financial Results Summary FY2024 Actual (Restated)

(Unit: Billion yen)

FY2025 Actual

Change

FY2026 Forecast

Change

1,013.1

1,066.8

+53.7

1,140.0

Business profit (①)*

70.2

74.5

+4.3

76.4

+1.8

Non-recurring factors (②)*

▲7.7

▲111.7

▲104.0

▲28.4

+83.3

Operating profit (①+②)

62.5

▲37.2

▲99.7

48.0

+85.2

Profit attributable to owners of parent

39.9

▲63.9

▲103.9

28.0

+91.9

75 yen

±0 yen

TBD

Revenue

Dividend per share

Main Business Conditions

•

Profitability

: Business profit ¥74.5 billion, remaining solid / operating cash flow ¥107.6 billion, a record high

•

Non-recurring factors

: Recorded impairment losses on goodwill, fixed assets, etc., mainly in overseas businesses, of ¥108.0 billion,

•

Shareholder returns

: Taking into account the future business outlook and current financial base, maintained the annual dividend of ¥75

•

Industrial Gas

: Domestic: pricing measures progressed and semiconductor-related demand was strong

•

Medical & Disaster Prevention : Disaster-prevention products such as gas fire-extinguishing systems saw strong orders

•

Other

(stable earning power and cash generation) and investigation-related expenses of ¥13.0 billion

Overseas businesses struggled overall (including a temporary slowdown in India) Hospital-related sales, including medical gases, medical equipment, and consumables, declined : Continued cost increases in purchasing prices, labor, etc. / Promoting appropriate pricing and contract fees across all businesses

*About Business Profit / Non-recurring Factors • Business profit : A proprietary indicator calculated by excluding gains and losses that arise temporarily from non-recurring events and factors from operating profit • Non-recurring factors : Impairment losses (impairment of goodwill, fixed assets, etc.), impact of business withdrawals, gains on step acquisitions, other special gains and losses, investigation-related expenses

Performance Highlights

+73.2

Speaker: Yu Karato, Representative Director & Executive Vice President I would now like to provide an overview of our FY2025 financial results. Revenue increased by ¥53.7 billion year on year to ¥1,066.8 billion. On the other hand, operating profit declined by ¥99.7 billion, resulting in an operating loss of ¥37.2 billion. The primary reasons were non-recurring losses totaling ¥111.7 billion, including impairment losses of ¥108.0 billion, mainly related to overseas businesses, and investigation-related expenses of ¥13.0 billion. As a result, profit attributable to owners of the parent amounted to a loss of ¥63.9 billion. To provide greater visibility into the earnings power of our core businesses, we are disclosing business profit excluding non-recurring factors from this time. Business profit increased by ¥4.3 billion to ¥74.5 billion. In addition, operating cash flow reached a record high of ¥107.6 billion, demonstrating the stability of our earnings base and cash-generating capabilities. We have decided to maintain the annual dividend at ¥75 per share, the same level as the previous fiscal year, after considering our financial condition and other factors. Looking at business conditions, domestic industrial gas operations benefited from progress in pricing initiatives and strong demand from semiconductor-related industries, while overseas operations faced challenges, including a temporary slowdown in India. In the Medical business, disaster prevention-related demand remained strong. Furthermore, despite various cost increases, we maintained profitability through continued pricing optimization initiatives. For FY2026, we forecast revenue of ¥1.14 trillion, business profit of ¥76.4 billion, operating profit of ¥48.0 billion, and profit attributable to owners of the parent of ¥28.0 billion, representing a return to profitability. Although we are currently reviewing our new management policy, business strategy, and business portfolio, these factors have not yet been reflected in our earnings forecast. The FY2026 dividend forecast remains undecided pending a review of our shareholder return policy. We will disclose our outlook promptly when a reasonable estimate becomes 12 available. Our basic policy of maintaining stable dividends remains unchanged.

Initiatives to Ensure the Reliability of Financial Statements (Overview of the Self-Inspection) ［Background of the Self-Inspection］・ Following the discovery of inappropriate accounting practices related to inventories, the Company established a Special Investigation Committee composed of external experts and conducted an investigation into the facts. ・ In parallel, the Company conducted its own voluntary inspection (“self-inspection”). As a result, it was confirmed that inappropriate accounting practices were widely prevalent across the Group. ・ Based on these findings, the Company recognized that deficiencies existed in the internal control over financial reporting (including entity-level controls and business process controls) throughout the Group. Accordingly, in order to ensure the reliability of the financial statements for the fiscal year ended March 31, 2026, the Company conducted a self accounting inspection covering all consolidated subsidiaries.

・ In light of the identified deficiencies in internal controls, the Company conducted additional verification procedures on significant accounts and transactions with the objective of confirming the following two matters:

① That the financial statements have been prepared and presented appropriately in accordance with applicable accounting standards; ② That there are no additional material weaknesses in internal control over financial reporting that require disclosure.

［Purpose of the Self-Inspection］

Next, I would like to explain our efforts to ensure the reliability of our financial reporting through accounting self-inspections. Following the discovery of inappropriate accounting related to inventory transactions, we established a Special Investigation Committee consisting of external experts and carried out an independent investigation. In parallel, the Company conducted its own selfinspection. As a result, we confirmed that inappropriate accounting practices had occurred broadly across the Group. Based on these findings, we concluded that deficiencies existed in the internal controls related to financial reporting. Accordingly, in connection with the FY2025 year-end closing process, we conducted accounting self-inspections across all consolidated subsidiaries to ensure the reliability of the financial statements. The objectives were twofold: first, to verify that the financial statements were prepared and presented appropriately in accordance with accounting standards; and second, to confirm that no additional material weaknesses in internal controls over financial reporting required disclosure.

Scope of the Self-Inspection ［Background and Scope of the Self-Inspection］・ Triggered by the inappropriate inventory accounting, a Special Investigation Committee composed of external experts (investigation and correction of the inappropriate inventory accounting) ・ In response to the above, to clarify the identified inappropriate accounting and identify any similar cases across the Group, an outside-expert SelfInspection Team was established → Expanding the scope of investigation, complementing internal-control issue identification and deficiency remediation (As of fiscal year-end: covering all 211 consolidated companies)

*Conducted for certain companies, such as those above a certain business scale

(Investigation & inspection structure)

The Company

Self-Inspection Team

【Q2 to fiscal year-end】 Inappropriate inventory accounting investigation & correction

【Q2】 Clarify identified inappropriate accounting & check similar cases →Root-cause analysis; recurrence prevention

【Fiscal year-end】 Compensating procedures to address identified internal control defciencies: ensure reliable financial reporting →Scope expanded to all consolidated companies

The inappropriate ac c ounting identified this time — all responses c ompleted (inc luding prior - y ear c orrec tions)

Fiscal year-end

Physical inventory count

Physical inventory count ① (Observation)

Negative sales data

Job-costing applied cases Cost transfer check*

Special Investigation Committee Follow-up

Physical inventory count ② (Alternative procedures)

Monthly trend analysis of sales & gross profit

Job-costing applied cases Gross margin analysis*

Financial analysis

Physical inspection of fixed assets

Revenue recognition questionnaire

Monthly trend analysis of each expense

Digital forensics & interviews

Fixed asset retirement transaction check

Verification of sales details

Unrecorded liabilities check

Promotion of information gathering

Capitalization of repair & research expenses

Percentage-of-completion method (Application to accounting standards)*

Confirmation of nonrecurring events

Cross-application of findings

Recognition of asset retirement obligations

Monthly analysis of construction budgets*

Estimated accrued expenses basis check

Revenue recognition questionnaire Construction transaction questionnaire

Impairment of fixed assets

Construction cases: purchasing & raw material outbound data consistency*

Financial analysis*

Verification of intersegment transactions

Review of provision for bonuses

Construction progress-rate analysis*

Intersegment reallocation verification*

Balance confirmation (accounts receivable)

Costs on uncompleted construction contracts aging check*

Verification of overdue receivables

Special Investigation Committee

Self-Inspection: group-wide investigation conducted

(Summary of procedures performed)

Next, I will explain the scope and procedures of the self-inspection process. The Special Investigation Committee focused on investigating and correcting inappropriate inventory accounting issues from the second quarter through fiscal yearend. In addition, to fully understand the extent of the issues and identify similar cases, we established a self-inspection team consisting of external specialists. By fiscal year-end, inspections had been conducted across all 211 consolidated companies within the Group. At the second-quarter stage, we performed physical inventory counts, financial analyses, digital forensic reviews, and interviews. By fiscal year-end, we expanded the scope to cover all consolidated companies in order to compensate for weaknesses in internal controls and ensure the reliability of financial reporting. This process included fixed-asset inspections, impairment reviews, analyses of sales and gross profit trends, revenue recognition reviews, and construction-project assessments, among many other procedures. Through these efforts, all matters relating to the inappropriate accounting issues identified, including prior-period corrections, have been fully addressed. Details of the procedures performed and findings identified are included in the supplementary materials.

Impact of Inappropriate Accounting, etc. [PL Prior-Year Restatement] Prior-Year Restatement Amounts (Unit: Billion yen)

Revenue

2020

2021

2022

2023

2024

Revenue (before)

806.6

888.7

1,004.9

1,024.5

1,075.9

Special Investigation Committee *1

▲6.7

▲0.7

▲5.7

▲2.3

▲4.8 ▲38.5

Self-inspection *2

▲11.3

▲18.5

▲23.3

▲35.7

Stricter accounting standards *3

▲21.5

▲22.7

▲21.9

▲20.2

▲19.5

Revenue (after)

767.2

846.8

954.0

966.4

1,013.1

(5%)

(6%)

Operating profit (before)

51.2

65.2

62.2

68.3

75.2

Special Investigation Committee *1

▲1.9

▲1.7

+1.3

▲3.6

Self-inspection *2

▲1.7

▲0.7

▲4.3

▲5.6

▲6.8

Impairment losses

▲0.1

▲0.0

▲32.6

▲2.6

▲0.1

Stricter accounting standards *3

+0.2

▲0.2

▲0.9

▲2.3

▲2.1

Operating profit (after)

47.8

62.5

22.7

59.0

62.5

(Ref.) Impact ratio

(7%)

(4%)

(63%)

(14%)

(17%)

(Revenue restatement factors) ① Refinement of principal vs. agent accounting ・Beverage: paid supply transactions ・Medical devices: delivery, sales and maintenance services ・SPD-related: contracted operations, etc. ② Elimination of double sales, etc.

(Operating profit restatement factors) ・As shown in the attached supplementary materials (Details of impairment losses) ・Prior-year impairment related to biomass power generation (Ako, Kanda, Onahama)

*2026/4/3 release “Details of the investigation results, disposition of involved parties, and recurrence-prevention measures regarding the inappropriate accounting case”, and the 6/22 release “Notice regarding receipt of the additional investigation report from the Special Investigation Committee and future response” reflected. *1= Fraud *2= Largely error *3= Restatement due to stricter accounting standards

Operating profit

(Ref.) Impact ratio

Main impact items (restatement items)

Next, I will explain the profit and loss impact of prior-period corrections related to the inappropriate accounting issues. The impact on revenue was generally between 5% and 6% in each fiscal year. The primary drivers were refinements to principal-versus-agent accounting assessments in businesses such as beverages and medical devices, as well as the elimination of duplicate sales transactions. The impact on operating profit varied by fiscal year. The major factors included impairment losses on goodwill and fixed assets, as well as accounting adjustments associated with addressing inappropriate accounting matters.

Impact of Inappropriate Accounting, etc . [BS Prior-Year Restatement] Amount of Prior Period Adjustments (Fiscal Year) (Unit: Billion yen)

2020

Assets

2021

2022

2023

2024

Before restatement

926.8

1,022.0

1,091.6

1,222.7

1,250.1

After restatement

1,210.1

Equity

1,042.6

1,086.6

1,187.3

39.5

20.6

▲5.0

▲35.4

▲40.0

% change

4.3%

2.0％

▲0.5%

▲2.9%

▲3.2%

Before restatement

554.4

602.2

645.2

714.2

713.3

After restatement

619.6

653.2

704.7

747.4

751.9

Difference

65.2

51.0

59.6

33.2

38.6

% change

11.8%

8.5%

9.2%

4.6%

5.4%

Before restatement

372.4

419.9

446.5

508.5

536.9

After restatement

346.6

389.5

381.9

439.9

458.2

Difference

▲25.7

▲30.4

▲64.6

▲68.6

▲78.6

% change

▲6.9%

▲7.2%

▲14.5%

▲13.5%

▲14.6%

Liabilities

966.3

Difference

Next, I would like to discuss the impact on our financial position. As of the end of FY2024, shareholder equity was reduced by approximately ¥78.6 billion as a result of the corrections. Going forward, we intend to restore this reduction through the strengthening of our stable cash-generating capabilities.

Consolidated Results / Full-Year Results Highlights ［Full-year results］ (Unit: Billion yen)

2024 Results (Restated)

Change

2025 Results

Amount

Rate

1,066.8

+53.7

+5.3%

Business profit (①)

70.2

74.5

+4.3

+6.1%

Non-recurring factors (②)

▲7.7

▲111.7

▲104.0

－

Operating profit (①+②)

62.5

▲37.2

▲99.7

－

Profit attributable to owners of parent

39.9

▲63.9

▲103.9

－

Business profit margin

6.9%

7.0%

+0.1%

－

Operating profit margin

6.2%

▲3.5%

▲9.7%

－

175 Yen

▲279 Yen

▲454 Yen

－

ROE (Return on equity)*2

9.2%

－

ROIC (Return on invested capital)*3

4.8%

－

EPS (net income per share)*1

*1 *2 *3

Basic earnings per share is calculated using the weighted-average number of shares outstanding during the period. “Profit attributable to owners of the parent”÷“Equity attributable to owners of the parent (average of beginning and end of period)” “Profit attributable to owners of the parent”÷“Invested capital, calculated as equity attributable to owners of the parent plus interest-bearing debt”

（Finance Cost） ⚫

Losses on Overseas Hydrogen-Related Investments： ▲12.2 billion yen

1,013.1

Revenue

（As this information is largely covered in the financial summary presented on Page 12, I will omit a detailed explanation here.）

Consolidated Results / Key Points of Year-End Results [Business Profit / Operating Profit — Changes] Recurring factors

(Unit: Billion yen)

Increase

Decrease

＋7.0

▲2.7

Non-recurring factors Impairment loss

74.5

70.2

▲108.0

[Main factors] ・ India/N. America/UPS (goodwill, etc.) ・ Dental-related (goodwill, etc.) ・ Overseas vegetable production (goodwill) ・ Impact of consolidating non-consolidated subsidiaries

[Main factors] [＋] Gas & other pricing measures advancing [＋] Semiconductor-related strong [＋] Disaster-prevention steady [＋] New consolidation of dental business

[Main factors]

[－] India/N. America/UPS stagnant [－] Deterioration in Helium Market Conditions [－] Higher facility/equipment depreciation

Dental-related: fair value remeasurement on new consolidation

[Main factors] • Self-inspection • Special Investigating Committee • Enhanced audit response

▲37.2 FY2024 Business profit

FY2025 Business profit

Business exit impact

▲1.1

Fixed assets disposal gain/loss

Step acquisition gain

＋12.3

Other special items Investigationrelated costs

▲1.9

▲13.0

▲0.0 FY2025 Operating profit

This slide explains the major factors affecting business profit and operating profit. Recurring factors contributed positively to earnings. However, non-recurring factors had a significant negative impact. As a result, the Company recorded an operating loss of ¥37.2 billion for FY2025.

Consolidated Results / Full-Year Results Highlights [Non-recurring factors] (Unit: Billion yen)

FY2025 (at Q2)

FY2025 actual

Change

Main factors for FY2025 actual results • Review of future profitability India industrial gas/goodwill & fixed assets (▲46.4), dental-related/goodwill (▲16.4) high-output UPS/goodwill (▲10.4), N. America industrial gas/goodwill (▲6.6) Onahama biomass power/fixed assets (▲4.7), Kanda biomass power/fixed assets (▲3.8)

Impairment loss

▲37.8

▲108.0

▲70.2 • Decline in business profitability N. America cryogenic equipment/goodwill, etc. (▲3.9), overseas vegetable production/goodwill (▲3.2) Domestic biomass facilities/fixed assets (▲3.0), N. America engineering/intangible assets (▲2.2)

▲6.6

▲1.1

＋5.5

Gain/loss on disposal of fixed assets

0.0

▲0.0

Other special gains/losses

▲13.5

▲2.6

＋10.9

Non-recurring factors (②)

▲57.9

▲111.7

▲53.8

(▲6.6: partial reclassification of Impairment losses & Other special gains/losses included therein)

• Step-acquisition gain from new consolidation of dental-related business (+12.3) • Investigation-related expenses (▲13.0)

(Investigation-related expenses breakdown) ⚫

FY2025 actual: ¥13.0 billion — Self-inspection support (60%), Special Investigating Committee operation (20%), Enhanced audit response (20%)

Business exit impact

*Self-inspection support: accounting/bookkeeping support, internal-control support, leniency response

Next, I will explain the details of the non-recurring factors. Total non-recurring losses amounted to ¥111.7 billion. The largest factor was impairment losses of ¥108.0 billion, representing an increase of ¥70.2 billion compared with the second-quarter results. Impairment losses associated with revisions to future business plans included: •Industrial Gas Business in India: ¥46.4 billion •Dental-related Business: ¥16.4 billion •High-Capacity UPS Business: ¥10.4 billion •Industrial Gas Business in North America: ¥6.6 billion •Onahama and Kanda Biomass Power Generation Facilities: total ¥8.5 billion Additional impairments resulting from deterioration in market conditions and intensified competition included: •North American Cryogenic Equipment Business: ¥3.9 billion •Overseas Vegetable Production Business: ¥3.2 billion Losses related to business withdrawals amounted to ¥1.1 billion. Other special gains and losses resulted in a net loss of ¥2.6 billion, consisting mainly of a gain on step acquisition of ¥12.3 billion in the dental-related business and investigationrelated costs of ¥13.0 billion. These items are classified as one-time gains and losses associated with asset value reassessments, responses to inappropriate accounting issues, business restructuring, withdrawals, and M&A-related activities. Of the ¥13.0 billion investigation-related expenses, approximately 60% was attributable to self-inspection activities, 20% to operation of the Special Investigation Committee, and 20% to the enhancement of audit response activities. 19

Consolidated Statement of Income ［Statement of Income］ (Unit: Billion yen)

FY2024 actual (restated)

Change

FY2025 actual

Amount

1,066.8 826.5 240.3 201.5 ▲79.9 4.0 ▲37.2 ▲14.3 ▲51.4 ▲14.8 － ▲66.3 ▲63.9 ▲2.3

EPS (net income per share)*1

175 Yen

▲279 Yen

Cost of sales Gross profit Selling, general & administrative expenses Other income and expenses Share of profit of equity-method investments Operating profit Finance income and costs Profit before tax Income tax expense Profit from discontinued operations (▲=loss) Profit for the period Profit attributable to owners of parent

ROE (return on equity)*2

9.2%

－

ROIC (return on invested capital)*3

4.8%

－

+53.7 +37.2 +16.5 +32.8 ▲83.2 ▲0.3 ▲99.7 ▲12.6 ▲112.3 ＋7.1 ＋0.0 ▲105.2 ▲103.9 ▲1.4

Rate

+5.3% +4.7% +7.4% +19.4% － ▲7.6% －－－－－－－－

Basic net income per share is calculated using the weighted-average number of shares outstanding during the period.

“Profit attributable to owners of parent” ÷“Equity attributable to owners of parent (average of beginning and end of period)”

“Profit attributable to owners of parent” ÷“Invested capital (shareholders’ equity + interestbearing debt)”

Non-controlling interests

1,013.1 789.3 223.8 168.8 3.2 4.3 62.5 ▲1.7 60.9 ▲21.9 ▲0.0 39.0 39.9 ▲1.0

Revenue

This slide presents the consolidated statement of profit and loss. The increase in finance costs includes approximately ¥12.0 billion in losses associated with overseas hydrogen-related investments.

Consolidated Statement of Financial Position [Financial Statements]

(Unit: Billion yen)

2025/3 (after restatement)

2026/3

Change (Unit: Billion yen)

2026/3

Change

[Liabilities]

[Assets] Cash and cash equivalents

2025/3 (after restatement)

87.1

＋13.9

Trade payables

177.9

173.4

▲4.4

Trade receivables

230.4

206.9

▲23.4

Interest-bearing debt

466.1

515.7

＋49.6

Inventories

101.0

121.8

＋20.8

Others

108.0

116.2

＋8.2

Others

37.9

50.8

＋12.9

751.9

805.3

＋53.4

Current assets Total

442.5

466.6

＋24.1

Property, plant and equipment

506.2

505.6

▲0.6

▲52.0

Goodwill

78.2

51.6

▲26.6

Intangible assets

41.7

32.0

▲9.7

Others

141.4

160.5

＋19.0

Non-current assets Total

767.6

749.7

▲17.9

Total assets

1,210.1

1,216.3

＋6.2

Total liabilities

[Equity] Equity attributable to owners of parent

442.2

390.2

Non-controlling interests

16.0

20.7

＋4.7

Total equity

458.2

411.0

▲47.3

(Net D/E ratio*)

(0.89)

(1.10)

(+0.21)

"Net interest-bearing debt" ÷ "Equity attributable to owners of parent"

Liabilities・ Equity （Total）

1,210.1

1,216.3

＋6.2

73.2

Next, I would like to explain our consolidated statement of financial position. Total assets increased by ¥6.2 billion year on year to ¥1.2163 trillion, remaining largely unchanged. Cash and cash equivalents increased by ¥13.9 billion to ¥87.1 billion, while inventories increased by ¥20.8 billion to ¥121.8 billion. Meanwhile, goodwill decreased by ¥26.6 billion to ¥51.6 billion due to impairment losses. Total liabilities increased by ¥53.4 billion to ¥805.3 billion, mainly due to an increase in interest-bearing debt of ¥49.7 billion. On the equity side, shareholders’ equity attributable to owners of the parent declined by ¥52.0 billion to ¥390.2 billion as a result of the net loss for the year. Total equity decreased by ¥47.3 billion to ¥411.0 billion. Our net debt-to-equity ratio increased from 0.89x to 1.10x, exceeding our target level of approximately 1.0x. The decline in equity resulted from temporary factors. Supported by stable operating cash flow, we intend to maintain a sound financial base while building a cash-rich balance sheet.

Cash Flow Overview [Cash Flow Statement]

(Unit: Billion yen)

FY2024 Actual (after restatement)

FY2025 Actual

Change

Profit before tax

６０.９

▲51.4

Depreciation and amortization

４８.２

57.1

＋8.8

９.５

108.0

＋98.5

Loss on disposal and sale of non-current assets

▲4.9

▲0.2

＋4.7

Change in working capital

▲5.5

16.9

＋22.4 ▲12.3

Impairment losses

Gain on step acquisition

Operating cash flow (①) Capital expenditure, etc. Change in investment securities Payments for acquisition of subsidiary shares Asset sales and others Investing cash flow (②)

ー

▲12.3

▲15.5

▲10.4

＋5.1

＋92.7

＋107.6

＋14.8

▲69.9

▲73.3

▲3.3

4.0

5.0

＋1.0

▲2.5

▲25.8

▲23.3

8.1

5.5

▲2.6

▲60.3

▲88.6

▲28.3

Free cash flow (①+②)

32.5

19.0

▲13.5

Financing cash flow (③)

▲28.3

▲5.7

＋22.6

Cash and cash equivalents at end of period

73.2

87.1

＋13.9

Taxes and others

▲112.3

Next, I will explain our cash flow position. Operating cash flow increased by ¥14.8 billion to a record-high ¥107.6 billion. Although profit before tax was a loss of ¥51.4 billion, strong cash generation was supported by non-cash charges such as impairment losses of ¥108.0 billion and depreciation and amortization of ¥57.1 billion, together with a ¥16.9 billion improvement in working capital. Investing cash flow resulted in an outflow of ¥88.6 billion, an increase of ¥28.3 billion from the previous year. This reflected capital expenditures of ¥73.3 billion and acquisitions of subsidiary shares totaling ¥25.8 billion. As a result, free cash flow remained positive at ¥19.0 billion. Financing cash flow was an outflow of only ¥5.7 billion, and year-end cash and cash equivalents increased by ¥13.9 billion to ¥87.1 billion. Despite the substantial impairment losses recognized during the year, the Company’s cash-generating capability remains solid.

Capital Expenditure and Depreciation [Company-wide total]

(Unit: Billion yen)

Capital expenditure

(of which global-related*)

FY2024 Actual

FY2025 Actual

Change

80.5

65.1

▲15.3

(12.9)

(23.0)

(+10.0)

*Capital expenditure of global businesses (India, North America, UPS, etc.)

[Breakdown by segment] FY2025 Main new & growth capital expenditure

Depreciation

Digital & Industry

33.1

28.9

Energy Solution

6.3

5.6

Biomethane production facility, hydrogen production plant, LP gas and kerosene sales equipment

Health & Safety

5.2

6.2

Aerosol factory equipment

Agriculture & Food

6.0

6.4

Beverage filling equipment, agricultural product processing equipment

Other businesses

9.0

9.9

Salt production plant, additional truck vehicles, truck body fabrication factory

Head office

5.6

65.1

57.1

(Unit: Billion yen)

Total

FY2025 Actual Capital expenditure

India industrial gas plant, North America industrial gas plant, domestic gas plant for semiconductors

Head office relocation, Sakai office renewal

Next, I would like to discuss capital expenditures and depreciation for FY2025. Capital expenditures totaled ¥65.1 billion, a decrease of ¥15.3 billion from the previous fiscal year. Of this amount, investments related to our global businesses, including India, North America, and UPS operations, increased by ¥10.0 billion to ¥23.0 billion. We have therefore continued to invest in selected growth areas. Depreciation and amortization totaled ¥57.1 billion. By segment, Digital & Industry accounted for the largest share of capital expenditures at ¥33.1 billion, primarily for industrial gas plants in India and North America and gas supply facilities for semiconductor customers in Japan. Capital expenditures amounted to ¥6.3 billion in Energy Solutions, ¥5.2 billion in Health & Safety, ¥6.0 billion in Agriculture & Foods, ¥9.0 billion in Other Businesses, and ¥5.6 billion in Corporate. Going forward, while maintaining financial discipline, we will continue to prioritize investments in growth areas by carefully managing both investment scale and allocation.

Ⅲ. FY2026 Full-Year Financial Results forecast

Next, I would like to explain our full-year earnings forecast for FY2026.

Consolidated Earnings Forecast [Full-Year Results] (Unit: Billion yen)

FY2025 Actual

FY2026 Forecast

Change

Amount

Rate

1,140.0

+73.2

+6.9%

74.5

76.4

+1.8

+2.5%

Non-recurring Factors (2)

▲111.7

▲28.4

+83.3

－

Operating Profit (1+2)

▲37.2

48.0

+85.2

－

Profit attrib. to owners of parent

▲63.9

28.0

+91.9

－

Business Profit Margin

7.0%

6.7%

▲0.3%

－

Operating Profit Margin

▲3.5%

4.2%

+7.7%

－

Business Profit (1)

(External support cost breakdown) ⚫ FY2026 estimate: Approximately ¥25.0 billion Main components = Self-inspection response, Special Investigation Committee, whose investigation concluded at the end of June, strengthened audit response, removal of Securities-on-Alert designation Going forward, part of the self-inspection response is expected to shift to internal personnel costs with plans to assign an additional 100 to 200 personnel *Self-inspection: accounting/bookkeeping support, internal -contro l support, leniency response

1,066.8

Revenue

Turning to our FY2026 full-year earnings forecast. We expect revenue to increase by ¥73.2 billion, or 6.9%, to ¥1.14 trillion. Business profit is forecast to increase by ¥1.9 billion, or 2.6%, to ¥76.4 billion. Non-recurring losses are expected to improve significantly, declining to ¥28.4 billion from ¥111.7 billion in FY2025. As a result, operating profit is forecast to be ¥48.0 billion, while profit attributable to owners of the parent is expected to be ¥28.0 billion, representing a return to profitability. Business profit margin is expected to decline slightly by 0.3 percentage points to 6.7%, while operating profit margin is projected to improve by 7.7 percentage points to 4.2%. Among the non-recurring items, we currently estimate approximately ¥25.0 billion in external support costs. These costs primarily relate to voluntary inspection activities, operation of the Special Investigation Committee, enhanced audit procedures, and efforts associated with the removal of our Security on Alert designation. The Special Investigation Committee completed its activities at the end of June. However, until the reconstruction of our internal control framework has been fully completed, we believe it is necessary to continue certain self-inspection activities, and therefore related costs will continue to be incurred. Ultimately, we intend to transition these activities to an internally managed structure. At present, we are planning to increase staffing by more than 100 personnel in the future to strengthen our internal capabilities. 25

Current Business Environment [Business Environment] Business environment and measures for core products : Backed by generative AI demand, advanced semiconductors strong : Centered on India steel & N. America semiconductors, demand robust

Continue strengthening new-customer acquisition and pricing Advance new acquisition and production-capacity enhancement

Energy Solution

• LP gas & kerosene • CO2 & hydrogen

: Crude oil price risk from Middle East situation : Feedstock gas shortage remains an industry issue

LP gas fuel conversion and continued business-rights acquisitions Domestic: focus on building a stable supply system

Health & Safety

• Medical gas • Facility construction

: Hospitals & medical institutions curbing consumables use : New hospital-facility construction stagnating, but renewal needs exist

Strengthen new acquisition and total solutions In disaster-prevention equipment, cultivate power-related & DC-oriented demand

Agriculture & Food

• Produce distribution & processing • Beverage contract manufacturing

: Rising temperatures & heatwaves cloud harvest volumes : Product price rises may weaken consumer sentiment

Expand contract farms and promote variety switching Continue cost optimization and productivity gains

Other Businesses

• Logistics • Specialized trading

: Diesel prices & labor costs keep rising : Advanced semiconductors stay strong on factory expansions

Continue optimizing contract fees Drive volume expansion in response to demand trends

Digital & Industry

• Domestic industrial gas • Overseas industrial gas

[Middle East Situation Impact] Impact on key divisions and measures

Raw material procurement (Direct impact)

• Impact on helium gas procurement & sales is limited; maintaining stable supply domestically and overseas

LP gas & kerosene: reflecting crude wholesale price changes, implement timely pass-through to selling prices

Electricity cost (Indirect impact)

• For electricity charges, driven by surging crude oil prices, assume cost increases (manufacturing cost)

Especially for industrial gas, strengthen & advance price-management strategy

Logistics cost (Indirect impact)

• For logistics costs, higher diesel raises procurement cost and assume higher transport-outsourcing fees (cost of goods)

Advance appropriate price pass-through; in logistics, consider flexible fee optimization and diesel procurement

Next, I would like to discuss our current view of the business environment and our response measures. In Digital & Industry, demand remains strong both domestically and internationally. In Japan, advanced semiconductors continue to benefit from growing demand related to generative AI. Overseas, demand remains robust, particularly in India’s steel sector and the North American semiconductor market. We will continue to strengthen customer acquisition initiatives, pricing measures, and production capacity. In Energy Solutions, crude oil prices affected by developments in the Middle East remain a risk factor for LP gas and kerosene businesses. In addition, shortages of feedstock sources continue to affect the carbon dioxide and hydrogen markets. We will focus on fuel conversion initiatives, acquisition of distribution rights, and the establishment of a stable domestic supply system. In Health & Safety, hospitals and healthcare institutions continue to reduce the use of consumable products. At the same time, we are focusing on expanding demand for disaster-prevention equipment, particularly in electricity-related facilities and data centers. In Agriculture & Foods, uncertainty surrounding harvest volumes due to extreme heat and weaker consumer sentiment remain challenges. We will respond through expansion of contract farming operations and continued cost optimization efforts. In Other Businesses, we will continue promoting appropriate pricing for logistics services while expanding sales volumes in semiconductor-related markets, which remain strong. Regarding developments in the Middle East, the impact on helium procurement and sales has been limited, and stable supply has been maintained. We will continue addressing increases in electricity and logistics costs through stronger price management initiatives and appropriate pass-through pricing. 26

Capital Expenditure Plan [Company-wide Total]

(Unit: Billion yen) Capital Expenditure

(of which global-related*)

FY2025 Actual

FY2026 Forecast

65.1

74.8

＋9.6

(２３．０)

(13.4)

(▲9.6)

Change

*Capex for India, North America, UPS, etc.

[Breakdown by Segment] FY2026Forecast Key New & Growth Capex

FY2026 Forecast

Digital & Industry

33.1

38.0

＋4.9

Gas plants for semiconductor factories, overseas on-site gas plants

Energy Solution

6.3

5.9

▲0.3

CO2 & hydrogen-related facilities, biomethane-related facilities

Health & Safety

5.2

9.8

＋4.6

Medical gas filling, aerosol plant, dental plant facilities

Agriculture & Food

6.0

6.6

＋0.6

New beverage production lines, agricultural productprocessing & storage, ham/deli plant facilities

Other Businesses

9.0

13.1

＋4.1

Salt plant power generation, magnesia plant, semiconductor materials center relocation

Headquarters

5.6

1.3

▲4.3

Gas-related, medical-related,seawater-related R&D facilities & equipment

65.1

74.8

＋9.6

(Unit: Billion yen)

Total

Change

Capital Expenditure FY2025 Actual

Next, I will explain our capital expenditure plan for FY2026. Total capital expenditures are planned at ¥74.8 billion, representing an increase of ¥9.6 billion from FY2025. Of this amount, investment associated with global businesses, including India, North America, and UPS operations, is expected to decline by ¥9.6 billion to ¥13.4 billion. By segment, Digital & Industry is expected to account for ¥38.0 billion in capital expenditures, an increase of ¥4.9 billion. Major projects include gas plants for semiconductor manufacturers and industrial gas plants in North America and India. Capital expenditures are planned at ¥9.8 billion in Health & Safety, ¥13.1 billion in Other Businesses, ¥6.6 billion in Agriculture & Foods, ¥5.9 billion in Energy Solutions, and ¥1.3 billion in Corporate functions. Please note that these figures do not yet incorporate the impact of the business portfolio review currently under consideration. We will continue refining our plans going forward.

Dividends and Shareholder Returns [Dividend Forecast and Historical Trend] (Dividend results and forecast)

Dividend per share

FY2024 Actual

FY2025 Actual

FY2026 Forecast

¥75

TBD

Change

TBD

(Past 10 years — dividend and payout ratio trend) 100

(Dividend: ¥)

(Payout ratio: %)

50%

40%

30%

20%

10%

0% FY16

FY17

FY18

FY19

FY20

Dividend

FY21

FY22

FY23

FY24

FY25 Actual

Payout ratio

Finally, I would like to discuss dividends and shareholder returns. For FY2025, we have decided to maintain the annual dividend at ¥75 per share, unchanged from the previous fiscal year. Although we recorded a net loss for the fiscal year, we determined that maintaining a stable dividend was appropriate after considering our future business outlook and the current strength of our financial position. Going forward, we will reassess our shareholder return policy in conjunction with our review of the new management policy and business portfolio. Accordingly, our dividend forecast for FY2026 is currently undecided. While continuing to place priority on stable dividends, we will seek to enhance shareholder returns while balancing earnings recovery, financial soundness, and growth investments.

Ⅳ. Segment Information

Performance by Segment [Results Summary] Revenue

Business Profit

Operating Profit

FY2025 Actual

Change

Change %

FY2024 Actual

FY2025 Actual

Change

Change %

FY2024 Actual

FY2025 Actual

Change

Change %

Digital & Industry

344.5

329.9

▲14.5

▲4.2%

33.8

32.6

▲1.2

▲3.6%

30.1

▲40.9

▲71.0

－

Energy Solution

92.7

98.5

+5.8

+6.3%

8.2

10.1

+1.9 +23.2%

8.1

6.4

▲1.7 ▲21.4%

Health & Safety

220.5

268.5

+48.0 +21.8%

13.5

16.2

+2.7 +20.0%

11.9

10.4

▲1.5 ▲13.0%

Agriculture & Food

149.7

153.0

+3.3

+2.2%

6.5

7.1

+0.6

+9.2%

5.0

3.7

▲1.3 ▲26.5%

Other Businesses

205.7

216.9

+11.1

+5.4%

11.8

13.4

+1.6 +13.6%

7.5

1.5

▲6.0 ▲80.3%

0.0

+0.0

－

▲3.6

▲4.8

▲1.2 +33.3%

▲0.1

▲18.2

▲18.1

－

1,013.1 1,066.8

+53.7

+5.3%

70.2

74.5

+4.3

62.5

▲37.2

▲99.7

－

Adjustments*

Total

+6.1%

*Adjustments: elimination of inter -segment transactions and co rpotate income and expenses not allocated to individual segments

FY2024 Actual

(Unit: Billion yen)

Performance by Segment [Business Profit Composition Trend] Business Profit

※Percentages in te chart represent each segment's share of total business profit.

(Unit: Billion yen)

74.5 70.2

FY2024 Actual

FY2025 Actual

Change

Digital & Industry

33.8

32.6

▲1.2

Energy Solution

8.2

10.1

+1.9

[+] CO2 gas pricing, higher household energy

Health & Safety

13.5

16.2

+2.7

[+] Strong fire-suppression, new dental consolidation

Agriculture & Food

6.5

7.1

+0.6

[+] Ham/deli pricing, produce-retail site rationalization

Other Businesses

11.8

13.4

+1.6

[+] Logistics fee revisions, lower power-fuel prices

Adjustments*

▲3.6

▲4.8

▲1.2

Total

70.2

74.5

+4.3

41% 46%

11% 20% 18% 9%

[－] India industrial gas & high-output UPS sluggish

[－] Higher depreciation for renewables & green industrial gas

[－] Lower supply/sales of medical gases, devices & consumables

[－] Lower overseas farming, produce distribution & processing

[－] Power output curtailment, intensified magnesia competition

16%

17%

2024年度 FY2024 実績 Actual

2025年度 FY2025 実績 Actual

13%

Key Change Factors [+] Air-separation gas pricing, strong semiconductor demand

*Adjustments: elimination of inter -segment transactions and HQ P&L not allocated to segments

Performance by Segment [Non-recurring Factors] FY2024 Actual

(Unit: Billion yen)

Nonrecurring Factors

FY2025 Actual

Gain/Loss on NonImpairment Business Other Sale and recurring loss withdrawal Disposal of special P&L Factors Fixed Assets

Gain/Loss on

Impairment Business Other Sale and loss withdrawal Disposal of special P&L Fixed Assets

▲3.7

▲3.0

▲1.4

▲0.1

+0.8

▲73.5

▲70.4

▲1.8

+0.9

▲2.2

Energy Solution

▲0.1

▲0.0

+0.0

▲0.0

＋0.0

▲3.7

▲4.0

+0.0

+0.3

+0.0

Health & Safety

▲1.5

▲1.4

+0.0

▲0.1

▲5.8

▲18.0

+0.0

▲0.2

+12.4

Agriculture & Food

▲1.5

▲1.4

+0.4

▲0.1

▲0.5

▲3.4

▲3.6

+0.6

▲0.2

Other Businesses

▲4.3

▲3.5

+0.0

+0.1

▲0.9

▲11.9

▲11.4

+0.0

▲0.7

+0.2

Adjustments*

+3.5

▲0.0

+0.0

+3.5

＋0.0

▲13.4

▲0.5

+0.0

▲0.1

▲12.8

Total

▲7.7

▲9.5

▲1.0

+3.4

▲0.6

▲111.7

▲108.0

▲1.1

▲0.0

▲2.6

*Adjustments: elimination of inter -segment transactions and HQ P&L not allocated to segments

Digital & Industry

Segment Details

Segment Policy & Strategy

Digital & Industry

Strengthen semiconductor & electronics businesses
Expand global business (India, N. America, UPS)
Thorough price management, streamline supply chain

(Unit: Billion yen)

FY2024 Actual

FY2025 Actual

⚫ Strong demand continues for advanced semiconductors for generative AI ⚫ Other domestic industries mostly flat ⚫ India & N. America: volatile environment with risks

FY2025 Business Profit (①): Key Change Factors Change ● Air-separation gas price management

344.5

329.9

▲14.5

Business Profit (①)

33.8

32.6

▲1.2

Business Profit Margin

9.8%

9.9%

+0.1%

Impairment loss

▲3.0

▲70.4

▲67.4

Business withdrawal

▲1.4

▲1.8

▲0.4

Gain on step acq.

▲0.1

+0.9

Revenue

FY2025 Business Environment

Positive

◆ Higher sales of semiconductor gas & related products ◆ O-ring & functional materials: demand recovery, price revisions ■ Better cost & procurement for N. America industrial gas

■ Lower N. America cryo-equipment sales on weak environment

▲2.2

▲3.0

▲3.7

▲73.5

▲69.8

Operating Profit (①+②)

30.1

▲40.9

▲71.0

Other special P&L

Operating Profit Margin

8.7%

▲12.4%

● Weaker helium market ★ Lower on-site volume for steel

FY2025 Non-recurring Factors (②) ■ Industrial gas (India) Impairment ■ High-output UPS loss ■ Industrial gas (N. America)

Goodwill

▲46.4 Review of future profitability

Goodwill, etc.

▲10.4 Review of future profitability

Goodwill

▲6.6 Review of future profitability

■ Cryo equipment (N. America) Goodwill, etc.

▲21.1%

(Note) From Q3 FY2025, regional companies' CO2 & hydrogen businesses are managed under Energy Solution. (Including a negative impact of ▲0.8 billion yen from business transfers.)

■ Lower India industrial-gas on-site & merchant volume

Business withdrawal

■ Cryo equipment (N. America)

Company liquidation

▲3.9 Lower profitability

▲1.7

One-time loss on withdrawal (incl. impairment loss)

+0.8

Non-recurring Factors (②)

Negative

● Industrial Gas ★ Gas Products ◆Digital ■ Global Engineering

Segment Details

Segment Policy & Strategy

Energy Solution

Secure feedstock-gas sources, maintain stable supply
Expand response to low-carbon & carbon neutrality
Thorough price management, stronger business-right acquisitions

(Unit: Billion yen)

FY2024 Actual

FY2025 Actual

FY2025 Business Profit (①): Key Change Factors ★ Price management for CO2 & hydrogen

98.5

+5.8

8.2

10.1

+1.9

8.9%

10.2%

+1.4%

Impairment loss

▲0.0

▲4.0

Business withdrawal

+0.0

Gain on step acq.

▲0.0

+0.3

+0.4

Business Profit (①) Business Profit Margin

⚫ Active demand in strategic industries like semiconductors & shipbuilding ⚫ Feedstock-gas source industries trending to lower output ⚫ Hokkaido energy consumption declining with population

Change

92.7

Revenue

FY2025 Business Environment

Positive

● LP gas & kerosene price revisions, higher household volume ● LP gas & kerosene ancillary-service fee revisions ★ K&O Energy equity-method profit

★ Higher depreciation for renewables & green industrial gas

+0.0

▲0.1

▲3.7

▲3.6

Operating Profit (①+②)

8.1

6.4

▲1.7

Operating Profit Margin

8.8%

6.5%

▲2.3%

Other special P&L

(Note) From Q3 FY2025, regional companies' CO2 & hydrogen businesses are managed under Energy Solution. (Including a positive impact of +0.8 billion yen from business transfers)

● LNG-related equipment sales down ● LNG sales down ● LP gas & kerosene equipment & construction down

FY2025 Non-recurring Factors (②)

Impairment ★ Biogas related loss

Business withdrawal

Fixed assets

▲3.0

Loss of recoverable amount (accidents/troubles, etc.)

(None)

+0.0

Non-recurring Factors (②)

Negative

●E n e r g y S o l u t i o n ★ Green Innovation

Segment Details

Health & Safety

Segment Policy & Strategy

Fire suppression, dental materials, etc.: strengthen & expand growth areas 2. Maintain stable earnings base (medical gases, hospital equipment, etc.) 3. Review product lineup, streamline supply chain

(Unit: Billion yen)

FY2024 Actual

FY2025 Actual

⚫ Strong equipment demand for power facilities & data centers ⚫ Medical: tough environment continues in hospital management ⚫ Dental: tailwind from aging demand & digitalization

FY2025 Business Profit (①): Key Change Factors Change ■ Ci Medical equity-method profit & new consolidation

220.5

268.5

+48.0

Business Profit (①)

13.5

16.2

+2.7

Business Profit Margin

6.1%

6.0%

▲0.1%

Impairment loss

▲1.4

▲18.0

▲16.6

Business withdrawal

+0.0

Gain on step acq.

+0.0

▲0.2

Other special P&L

Revenue

FY2025 Business Environment

★ More fire-suppression orders for power facilities

Positive

◆ Higher injection-needle sales ◆ Higher consumer hygiene-product sales

● Lower supply/sales of medical oxygen, devices & consumables

+12.4

+12.5

▲1.5

▲5.8

▲4.2

Operating Profit (①+②)

11.9

10.4

▲1.5

Operating Profit Margin

5.4%

3.9%

▲1.5%

★ Reaction to prior-year marine fire-suppression demand ◆ Reaction to prior-year aerosol special demand

FY2025 Non-recurring Factors (②)

Impairment ■ Dental related loss

Business withdrawal

Goodwill, etc.

▲16.4 Review of future profitability

(None)

▲0.1

Non-recurring Factors (②)

★ Fewer overseas hospital orders, higher material costs

Negative

● Medical Products ★ Disaster Prevention ◆Home Healthcare ■ Dental Care

Segment Details

Segment Policy & Strategy

Agriculture & Food

Build a high-profit value chain in Agri
Strengthen stable procurement, distribution & processing platforms
Price optimization for cost increases and consumption trends

(Unit: Billion yen)

FY2024 Actual

FY2025 Actual

FY2025 Business Profit (①): Key Change Factors ★ Stronger ham/deli sales, pricing management

153.0

+3.3

6.5

7.1

+0.6

4.4%

4.6%

+0.2%

Impairment loss

▲1.4

▲3.6

▲2.2

Business withdrawal

+0.4

+0.6

+0.2

Gain on step acq.

▲0.1

▲0.2

Other special P&L

Business Profit (①) Business Profit Margin

⚫ Farm produce hit hard by recent temperature rise and heat waves ⚫ Ham & deli face continued rise in imported material costs ⚫ Beverages: concern over weaker sentiment amid price hikes

Change

149.7

Revenue

FY2025 Business Environment

Positive

● Streamlined produce-retail store ops ★ Better factory productivity for CVS sweets ◆ Pricing management in beverage contract mfg

★ Lower overseas vegetable output on poor weather

▲0.2

+0.3

▲1.5

▲3.4

▲1.8

Operating Profit (①+②)

5.0

3.7

▲1.3

Operating Profit Margin

3.3%

2.4%

▲0.9%

(Note) In the second quarter of FY2025, Logistics was reclassified into the "Other Businesses" segment. Accordingly, prior-year figures have also been reclassified and presented under the latest segment structure.

★ Intensified competition in CVS sweets ● Lower produce volume, higher processed-goods costs ◆ Inventory write-downs in processing vegetables, etc.

FY2025 Non-recurring Factors (②) *500M or more listed

Impairment ★ Vegetable prod. loss (overseas)

Business withdrawal

Goodwill

▲3.2 Lower profitability

(None)

▲0.5

Non-recurring Factors (②)

Negative

● Agriculture ★ Foods ◆Beverages

Segment Details

Other Businesses

Segment Policy & Strategy

Strengthen earnings power centered on salt & magnesia pricing measures 2. Agile optimization of contract fees in logistics 3. Strengthen sales of electronic materials for semiconductors & electronics

(Unit: Billion yen)

FY2024 Actual

FY2025 Actual

⚫ Salt & magnesia: intensifying competition in Japan and overseas ⚫ Logistics: continued rise in labor costs and ongoing driver shortages ⚫ Semiconductors: advanced-chip production expected to keep expanding

FY2025 Business Profit (①): Key Change Factors Change ■ Lower biomass fuel costs; zero unplanned outages

205.7

216.9

+11.1

Business Profit (①)

11.8

13.4

+1.6

Business Profit Margin

5.7%

6.2%

+0.5%

Impairment loss

▲3.5

▲11.4

▲7.9

Business withdrawal

+0.0

Gain on step acq.

+0.1

▲0.7

▲0.8

Other special P&L

Revenue

FY2025 Business Environment

Positive

★ Food-logistics fee optimization; new rice-logistics deals ● Salt price-management gains; more water-treatment sales ◆ More electronic-material sales for advanced chips

■ More biomass output curtailment; higher demurrage costs

+0.2

+1.1

▲4.3

▲11.9

▲7.6

Operating Profit (①+②)

7.5

1.5

▲6.0

Operating Profit Margin

3.6%

0.7%

▲3.0%

● Lower road de-icing salt resale ● Tougher overseas competition in heater magnesia ★ Higher costs from new food cold-storage launch

FY2025 Non-recurring Factors (②)

Impairment ●■Biomass Power loss Generation

Business withdrawal

Fixed assets

▲8.5 Review of future profitability

(None)

▲0.9

Non-recurring Factors (②)

Negative

● Seawater ★ Logistics ◆ Trading ■ Electric Power ※Other

Ⅴ. Supplementary Material (Business Information)

Company & Business Overview (As of July 1, 2026 / Certain information is presented based on the former organizational structure.)

AIR WATER INC.

Corporate Name (English)

AIR WATER INC.

Established

September 24, 1929

Representative

Representative Director, President and Executive Officer Yoshihiro Senzai

Head Office

5-54 Ofukacho, Kita-ku, Osaka-shi, Osaka, Grand Green Osaka South Building Park Tower 13F

Capital

¥55.9 billion

Revenue (2025 Actual)

Consolidated 1,06６.８ billion yen Non-consolidated 143.4 billion yen

Number of Employees (As of end-March 2026)

Consolidated 21,824 Non-consolidated 685

Number of Group Companies

26２ (consolidated subsidiaries: 206)

Business Segments

■ Digital& Industry (D&I) ■ Energy Solutions (ES) ■ Health& Safety (H&S) ■ Agriculture& Foods (A&F) ■ Other (Other)

Securities Code

4088

Listed Stock Exchanges

Tokyo Stock Exchange Prime Market, Sapporo Stock Exchange

Total Shares Issued

229,755,057 shares

Number of Shareholders

47,329

Fiscal Year

April 1 to March 31 of the following year

Purpose / Vision

Meeting society's needs with nature's blessings.

Group Consolidated Results, etc.(2025 Actual) Revenue

Business Profit

17％

20％ 31％ 1４％

1,０６６.8 B il l ion yen

9％ 9％

2５％

74.5 41％ B il l ion yen

20％ 13％

(Consolidated Results Summary) Net Sales Business Profit Business Profit Margin Operating Profit Operating Profit Margin Profit attributable to owners of the parent

1,066.8 74.5 7.0％ ▲37.２－

▲63.9

EPS ■D&I ■ES ■H&S

■A&F ■Other

－ Unit: Billion yen

*Note: The percentages shown within the graph represent the profit composition ratio of each business segment.

Corporate Name

Number of Consolidated Companies End of March 2025

End of March 2026

Change

Consolidated subsidiaries*

202 (159)

206 (164)

Increase of 4 (increase of 5)

Equity-method affiliates

Increase of 2

Total

253 (159)

259 (164)

Increase of 6 (increase of 5)

[FY2025 Major New Consolidated Companies] In the third quarter of FY2025, Ci Medical Co., Ltd. was newly consolidated in the Health & Safety segment. Accordingly, Nissen Holdings Co., Ltd., which has a capital relationship with Ci Medical, and 18 other companies were also newly consolidated. In addition, as of the end of March 2025 and the end of September 2025,certain non-consolidated subsidiaries were included in the scope of consolidation.

*Figures in parentheses ( ) are reference values that count only companies for which Air Water directly performs consolidated accounting. Affiliates for which a consolidated subsidiary performs consolidated accounting are excluded from that count. The consolidated subsidiaries above include joint operations (jointly controlled operations).

Business Overview by Segment / Unit (FY2025 Disclosure Criteria) Unit

Digital & Industry

Gas Products

On-site gas supply for steelmaking

Digital

Gases for semiconductors & electronics, specialty gases, specialty chemicals, equipment/devices & construction, functional materials

Global Engineering

Industrial gases, cryogenic equipment (India, North America, etc.), engineering, high-output UPS (uninterruptible power supply)

Energy Solution

LP gas & kerosene, LP gas-related equipment & construction, LNG & LNG-related equipment & construction

Green Innovation

Industrial gases (carbon dioxide, hydrogen), liquefied biomethane, low-carbon/decarbonization business development

Medical Products

Medical gases, medical devices, home medical care, SPD, contract sterilization, cardiovascular products

Disaster Prevention

Hospital facility construction, gas fire-extinguishing systems, respirators (air respirators for firefighting)

Home Healthcare

Aerosols & cosmetics (OEM/ODM contract manufacturing), injection needles, sanitary materials

Dental Care

Dental materials, dental mail-order

Agriculture

Agriculture & Foods

Fresh produce distribution/processing/retail, farm tools & agricultural machinery

Foods

Ham & delicatessen, frozen vegetables

Beverages

Vegetable & fruit beverages (OEM contract manufacturing)

Seawater

Salt, environmental products, woody biomass power generation (Ako City, Hyogo; Kanda Town, Fukuoka), magnesia

Other

Logistics

General logistics, food logistics, medical & environmental logistics, vehicle body outfitting

Electric Power

Woody biomass power generation (Iwaki City, Fukushima)

Specialized Trading

Semiconductor & electronics-related products

Other

Construction work, etc.

Industrial gases (air-separation gases, etc.; supply by tanker/cylinder/SOG), equipment, devices & construction

Energy Solutions

Health & Safety

Business description

Industrial Gas

Industrial Gas Supply Model Main Gas Supply Destinations

Air Separation Gases Air Separation Unit

Carbon Dioxide, Hydrogen, etc. Customer Plant (Feedstock Source)

On-site (Large Volume)

CE (Liquefied Gas Storage)

Liquefied Gas Tank On-site Supply (Gas)

Steel (Blast Furnace)

Semiconductor Electronics

Chemical

Glass & Paper

CO2 & Hydrogen Production Plant

On-site Gas / SOG Plant

Merchant Gas

Liquefied Gas Tanker

Merchant Gas Cylinder Supply (Liquid/Gas)

Filling Station

Truck

Chemical

Semiconductor Electronics

Steel (Electric Furnace)

Automotive

Shipbuilding

Construction Machinery

Beverage & Food

Medical Home Healthcare

Merchant Gas Tanker Supply (Liquid)

Liquefied Gas Tanker Merchant Gas Cylinder Supply (Liquid/Gas)

Truck / Gas Trailer

Filling Station

Tanker Supply (Liquid)

Tanker (Medium Volume) Cylinder (Small Volume)

5-Year Consolidated Results Trend (Restated)

(Unit: Billion yen)

FY2021 Actual (Restated)

FY2022 Actual (Restated)

FY2023 Actual (Restated)

FY2024 Actual (Restated)

FY2025 Actual

846.8

954.0

966.4

1,013.1

1,066.8

Operating Profit

62.5

22.7

59.0

62.5

▲37.2

Profit Attributable to Owners of Parent

41.7

9.3

36.6

39.9

▲63.9

Operating Profit Margin

7.4％

2.4％

6.1％

6.2％

－

Revenue

75.5

58.7

78.7

92.7

107.6

Investing Cash Flow(②)

▲57.5

▲74.6

▲95.5

▲60.3

▲88.6

Free Cash Flow (①+②)

▲17.9

▲15.9

▲16.8

32.5

19.0

Financing Cash Flow

▲6.8

22.3

12.7

▲28.3

▲5.7

Cash and Cash Equivalents at End of Period

62.7

70.7

67.4

73.2

87.1

Operating Cash Flow(①)

Revenue & Operating Profit Trend (After restatement) (Unit: Billion yen)

1,066.8 1,013.1

954.0

966.4

846.8 753.6 7.0%

6.8%

6.5% 540.0

471.8

641.3 5.7%

660.5

660.6

6.2%

5.8% 5.3%

492.7

742.3

765.4

767.2 7.4%

670.5 6.2% 5.8%

5.5%

44.7

42.8

42.0

6.1%

62.5

33.0

33.6

35.2

36.3

38.2

35.1

41.3

2.4%

47.8

59.0

6.2%

62.5

22.7

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

*Profit shown as "Ordinary profit" (J-GAAP) through FY2018, and "Operating profit" (IFRS) from FY2019 onward

FY24

FY25

-37.2

(A f te r r e s tate m e nt)

5.9%

Net Income & ROE Trend (After restatement) (Unit: Billion yen) 12.0% 10.5%

10.3%

9.9%

9.6%

8.7%

9.1%

9.4%

9.3%

17.2

18.4

19.2

20.7

20.1

22.3

9.3%

8.0%

7.5% 25.2

26.5

22.8

7.5%

41.7 36.6

23.9

2.5%

11.7

FY10

9.2% 39.9

9.3

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

FY24

FY25

*Net income： Profit attributable to owners of the parent

(A f te r r e s tate m e nt)

-63.9

Cash Flow Trend (After restatement) (Unit: Billion yen)

107.6 92.7

82.2

48.2 32.6

-34.8

FY12

FY13

-28.7

FY14

-35.5

-42.5 -52.2

58.7

47.8

43.5

37.3

30.1

FY11

78.7

75.5

56.7

FY15

FY16

-40.6

-44.4

FY17

FY18

FY19

FY20

FY21

FY22

FY23

-57.5

-61.6

FY24

FY25

-60.3

-66.4 -74.6 -88.8

-95.5 -117.8

(A f te r r e s tate m e nt)

-88.6

FY10

51.1

39.7

58.9

Ⅵ. Supplementary Material (Business Information)

Roles and Positioning of Self-Inspections at the Q2 and Fiscal Year-End Closings The self -inspections conducted this time differ in their purpose and structure between the Q 2 closing, when a response to the misconduct was required, and the fiscal year-end closing, when the reliability of financial reporting had to be ensured.

Q2 Closing (Investigation via Self Inspection) Purpos e

Structu re

• • •

Clarify the full scope of the improper accounting Check comprehensively for the same or similar cases Analyze causes and consider recurrence prevention

F o r m e d a s e l f - ins p e c tio n te am f o r e ar l y f ac t - f ind ing Co m m is s io ne d an ind e p e nd e nt inv e s tigat io n

Fiscal Year-End Closing (Self Inspection)

•

Conduct expanded self-inspections replacing internal controls to ensure reliable financial reporting

P r o v id e ad v ic e and c he c k s f o r the s e l f - ins p e c tio n s to e ns ur e r e l iab l e f inanc ial r e p o r ting Conducted jointly

Reviews c o n d u c te d Commissioned with independence a n d o b j e c t i v i ty

Expanded review conducted Commissioned with independence and objectivity

Reviewed companies I n v e s ti ga ti o n c o n d u c te d

Special Investigation Committee (External experts)

Self-Inspection Team (External experts)

Air Water

Reviewed companies Investigation conducted

Investigation coordination

Special Investigation Committee (External experts) Plus some subsidiaries

Investigation coordination

Self-Inspection Team (External experts)

Air Water

Overview of Self-Inspections at Fiscal Year-End Closing Scope: all consolidated companies (211 companies, excluding those in liquidation, etc.)

⚫ Balance confirmation (accounts receivable) ⚫ Verification of aged receivables

⚫ Physical inventory count

(Below: certain companies) ⚫ Cost-transfer check for job-order costing projects ⚫ Gross-margin analysis for job-order costing projects

⚫ Monthly trend analysis of each expense ⚫ Check of unrecorded liabilities ⚫ Confirmation of non-recurring events ⚫ Confirmation of basis for estimated expenses

XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

Trade payables Bonds and borrowings Other financial liabilities Income taxes payable Provisions Other current liabilities Retirement benefit liabilities Deferred tax liabilities

XXX XXX XXX XXX XXX XXX XXX XXX

Share capital Capital surplus Treasury shares Retained earnings Other components of equity Non-controlling interests

XXX XXX XXX XXX XXX XXX

Income Statement Cost of sales SG&A expenses Other expenses Finance costs Income tax expense Discontinued operations

XXX XXX XXX XXX XXX XXX

Revenue Other income Share of profit of equity-method investments Finance income

XXX XXX XXX XXX

⚫ Verification of inter-segment reallocations (certain companies) ⚫ Financial analysis (companies above a certain size)

⚫ Review of bonus provisions ⚫ Recognition of asset retirement obligations

⚫ Negative sales data ⚫ Monthly trend analysis of sales and gross profit ⚫ Revenue recognition questionnaire ⚫ Verification of sales details (Below: certain companies) ⚫ Percentage-of-completion method (application to standards) ⚫ Monthly analysis of construction budgets ⚫ Consistency of raw-material issue data for construction projects ⚫ Progress-rate analysis of construction projects ⚫ Aging check of construction in progress

⚫ Physical inspection of fixed assets ⚫ Check of fixed-asset retirement transactions ⚫ Check of capitalized repair and research costs ⚫ Recognition of asset retirement obligations ⚫ Impairment of fixed assets

Balance Sheet Cash and deposits Trade receivables Inventories Other financial assets Other current liabilities Assets held for sale Property, plant and equipment Goodwill Intangible assets Equity-method investments Deferred tax assets Other non-current assets

Results of self-inspection [Self-inspection procedures / findings] Inventories & fixed assets

*Performed for selected companies, e.g. those above a certain business scale

Area

Procedures performed

Physical inventory count 1 (observation)

• Sept 25 closing bal. of 1 hundred million yen or more: 128 locations (78 companies, 94% coverage) subject to inventory count observation

Findings (prior-year total)

Physical inventory count 2 (alternative procedures)

• For the 71 companies where inventory observation was not performed, alternative procedures (questionnaire) were conducted

Fixed asset physical inspection

• Excluding companies with no fixed assets, 172 companies subject to physical inspection of fixed assets balances as of end of March

• 45 companies / impact amount 12.4 hundred million yen (AW Life Solution, AW East Japan, etc.)

Fixed asset retirement transaction check

• For all companies, verified whether March-period fixed asset retirement transactions were processed at the appropriate time based on supporting documentation

• 10 companies / impact amount 9.9 hundred million yen (Nihon Kaisui, Rimohab, etc.)

Capitalization of repair and research costs

• Reviewed fixed asset recognition of expenditures lacking asset value • Extracted target line items and confirmed asset value and reversal processing

• 13 companies / impact amount 62.0 hundred million yen (Nihon Kaisui, AW West Japan, etc.)

Impairment of fixed assets

• For all companies, confirmed presence of impairment indicators and whether impairment recognition was required

• 61 companies / impact amount 1586.9 hundred million yen (Nihon Kaisui, AW India, etc.)

• At some locations, potential errors and irregularities in the inventory count arose but were appropriately reflected in the books. Alternative procedures identified no material errors.

Results of Self-Inspection [Self-Inspection Procedures / Findings］ Receivables / Sales

*Performed on selected companies, such as those above a certain business scale

Procedures Performed

Findings (Prior-Year Total)

Balance Confirmation (Accounts Receivable)

•Performed March month-end balance confirmation across all companies •Alternative procedures for uncollected accounts and receivables excluded from confirmation dispatch (of total 6.5%) performed

• Total adjusting entries: 1.0 hundred million yen (net)

Verification of Aged Receivables

•Performed March month-end balance confirmation across all companies • Verified the reasonableness of collection-delay reasons for aged receivables and the validity of related sales transactions

• 2 companies / impact amount 0.1 hundred million yen (Hitec Holding, etc.)

Negative Sales Data (sales reversal entries) check

• Extracted transactions with repeated sales recognition and reversal processing • Verified the supporting evidence for the original recognition and the validity of the reversal processing

• None applicable

Sales / Gross Profit Monthly Trend Analysis

• Analyzed sales and gross profit trends on a monthly basis • Verified the validity of the causes of abnormal increases and decreases

• None applicable

Revenue Recognition Questionnaire

• All companies: confirmed distribution flow and sales recognition • Additional investigation of double-counted sales for high-risk parties •Identified issues (principal vs. agent, double-counted sales, etc.) rechecked for compliance

•Agent transactions: 24 companies / impact amount 1729.7 hundred million yen (AW Mediach, AW Mach, etc.) •Paid-material supply: 8 companies / impact amount 1180.3 hundred million yen (Gold Pack, etc.) •Double-counted sales transactions: 18 companies / impact amount 226.2 hundred million yen (AWI, AW West Japan, etc.) •Bill-and-hold sales: 17 companies / impact amount 13.7 hundred million yen (AW Material, M1 Engineering, etc.)

Verification of Sales Line Items

•Verification of March sales across the entire company •10 million yen or more: supporting evidence collected and organized •Including alternative procedures, sales of 96.3% covered

• 3 companies / impact amount 31.9 hundred million yen (AWMX, AW Agriculture & Food, etc.)

Procedure Category

Results of self-inspection ［Self-inspection procedures / findings］ Item Construction projects

Percentage-ofcompletion method (Application to accounting standards)* Monthly analysis of construction budget*

*Performed for selected companies, such as those above a certain business scale

Procedures performed

Analyzed monthly trends of the execution budget Verified revisions based on reasonable grounds

Construction projects Purchasing and raw materials Issuance data consistency*

Confirmed consistency with purchasing and inventory receipt/issuance data •Performed variance analysis and voucher verification for inconsistencies

Construction projects Progress rate analysis*

•Analyzed monthly trends of construction progress rates Verified significant changes and negative progress

Job-order costing applied Projects Cost transfer check*

• 3 companies / Impact amount 22.3 hundred million yen (AW Industries medical gases, AW West Japan, etc.)

•Reviewed long-term aged construction in progress (costs) •Verified the causes and appropriateness of asset recognition

• None

Confirmed cost transfers performed between projects •Verified the appropriateness of construction and job-order costing projects

• None

Construction in progress (costs) Aging check*

Findings (total for prior years)

•Verified across 19 target companies •Confirmed applicability on a project-by-project basis

Self-inspection results [Self-inspection procedures / detected results] Category Expenses and other

*Applied to certain companies, such as those above a certain business size

Procedures performed

Detected results (cumulative prior years)

•Analyzed monthly trends of expenses across all companies •Analyzed reasonableness of expense recognition timing

• 5 companies / Impact amount 0.5 hundred million yen (AW Green Design, Minami-Kyushu Gas Center, etc.)

Unrecorded liabilities check

• April 2026 journal entries and invoices • Verified expenses that should be recognized in the current period were not omitted to the next period

• 28 companies / Impact amount 0.5 hundred million yen (PTX, Ecofroz S.A etc.)

Non-recurring events confirmation

• Confirmed whether means exist to gather information on non-recurring transactions across all consolidated companies • Verified assessment of whether accounting treatment was required

• 1 company / Impact amount 5 hundred million yen (AW West Japan)

• March 2026 estimated / accrued expenses • Verified validity of recognized amount and timing

• 7 companies / Impact amount 0.1 hundred million yen (M1 Engineering, Pacific Petro, etc.)

Verification of intersegment reallocation*

•Based on the self-inspection results in the Q2 financial results, performed additional verification of segment reallocation risk •Confirmed recognition errors and validity of period adjustments for sales, expenses, bonus provisions, etc. •Verified 15 companies including AWI (standalone) for FY March 2020 through FY March 2026

•7 companies / 14.8 hundred million yen (AW East Japan, AW Hokkaido, AW West Japan, etc.)

Financial analysis*

• For the 79 companies with large business size, B/S / P/L trend analysis performed • For key KPI, performed year-over-year and quarter-over-quarter variance analysis

• 13 companies / 40.9 hundred million yen (Nihon Kaisui, AW India, etc.)

Estimated / accrued expenses basis confirmation

individual expenses Monthly trend analysis

Notes • The numerical targets and forecasts presented in this document reflect the judgment of our company based on information currently available and involve potential risks and uncertainties. Therefore, the reader should note that actual business performance may differ significantly from the projections made herein due to changes in various factors. © 2026 AIR WATER INC. All Rights Reserved.

• Air Water Inc.'s financial statements are prepared in accordance with ”IFRS"(International Financial Reporting Standards).

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