To Our Shareholders & Investors

　Net sales for the fiscal year under review increased by 1.6% year-on-year to 40,594 million yen, driven by the steady growth of high-performance insulation materials demanded for both new construction and renovation, as well as the recovery in non-residential building materials and automotive-related components.

　In terms of profit, gross profit increased to 12,374 million yen (up 3.2% year on year) as a result of efforts to improve productivity in response to rising manufacturing costs. Although personnel expenses and digital-related costs increased, this was offset by the rise in gross profit, with operating profit growing to 1,733 million yen (up 11.8% year on year). Ordinary profit rose to 2,148 million yen (up 14.1% year on year) due to the recording of foreign exchange gains, and profit attributable to owners of parent increased to 1,680 million yen (up 14.6% year on year) as a result of gain on sale of investment securities. 

　In the third year of the Seventh Medium-Term Management Plan (FY2023–FY2027), under the slogan “Pushing Technology Forward, Excitement for the Future,” the Group worked to enhance corporate value by promoting initiatives based on the three basic strategies of “Expansion of Circular Business,” “Establishment of a Robust Profit Base,” and “Building an Organization that Drives Growth.”
 
・Expansion of Circular Business 
　We are accelerating the development of environmentally conscious product brands and expanding the scope of plastic recycling, aiming to achieve both a circular society and sustainable growth. 

　Brand Launch: 
　Amid strong performance of our flagship recycled wood product “PLUSWOOD,” “PLUSWOOD Deck ND KKAA” received the 2025 Good Design Award and has been highly evaluated in the market for its outstanding design and environmental performance. Building on our experience in developing products and spaces for public areas, we have launched the platform-type business brand “Fukuvi commons,” which fosters connections between people and communities by bringing together diverse individuals and ideas. 

　Utilization of Regional Resources and Innovative Technologies: 
　We advanced collaboration with local communities through product development utilizing Nara and Miyagi Prefecture timber. On the technology front, the integrated manufacturing process for CFRTP (carbon fiber reinforced thermoplastic) received the NEDO Energy Conservation Technology Development Award. Furthermore, to address environmental regulations of global automobile manufacturers, especially in Europe, we became the first in the industry to successfully develop a Light Guiding Bar PFAS-Free Type that does not use any fluorine compounds (PFAS). 

　Initiatives to Address Social Issues: 
　We have launched a demonstration project for thermal insulation renovation through industry-academia-government collaboration utilizing closed schools, contributing to the development of next-generation school facility models, the extension of existing building lifespans, and the reduction of environmental impact.

・Establishment of a Robust Profit Base 
　Leveraging our unique strengths in material formulation and molding processing technology, we have optimized operations to achieve profitability that exceeds capital costs.

　Enhancement of Insulation Business: 
　In response to the growing demand for high-performance insulation material "Phenova Board," we have decided to construct a second plant at Fukuvi Okayama (a wholly owned subsidiary). This project has been selected for the Ministry of Economy, Trade and Industry's "Large-scale Growth Investment Subsidy," and by establishing a dual-location structure with Fukui, we will simultaneously strengthen our BCP (Business Continuity Plan) capabilities and stable supply system. 

　Expansion of Growth Areas: 
　Products for factories and warehouses, “PLANTOOL,” as well as “Light Guiding Bar” used in automotive interior illumination components, have continued to perform strongly and are driving earnings.

　Business Restructuring: 
　In April 2026, we integrated the construction business within the Group and reorganized it as FUKUVI REFOJOULE ARCHITECTS CO., LTD.. This restructuring aims to accelerate optimal resource allocation and operational efficiency, further 
strengthen sales capabilities, product competitiveness, and the construction network, and drive continued business expansion and improved profitability.

・Building an Organization that Drives Growth 
　To achieve "Enhancement of Corporate Value 2030," we actively invested in human capital and promoted advanced governance. 

　Organizational Culture Reform: 
　As part of promoting flexible work arrangements, we encourage male employees to take childcare leave and have newly established the Childcare Leave Support Program (Special Allowance) for employees who support colleagues during their leave. Through these initiatives, we are fostering a renewed organizational culture where diverse talent can thrive and working to enhance employee engagement.

　AI and Digital Strategy: 
　We implemented an "AI Learning Program" for all employees to enhance literacy, alongside the development of "Usage Guidelines" from a governance perspective. 

　Challenges for the Future: 
　We implemented the "AI Challenge Project," which not only improves operational efficiency but also accelerates an innovation framework to create new value in this unpredictable (VUCA) era.

　The business environment surrounding our group remains highly uncertain, influenced by escalating global geopolitical risks, increased resource prices, fluctuations in foreign exchange markets, and ongoing structural shifts in industry associated with the advancement of digital technologies.

　Under these circumstances, we recognize the need to interpret such market “changes” as “opportunities for new growth” and to accelerate transformation beyond the scope of conventional business models. We aim to establish a resilient management foundation through innovative thinking and execution, while advancing strategic investments in growth and innovation with a long-term, next-generation perspective. Accordingly, we will focus on the following key priority initiatives.

(1) Promotion and Expansion of Circular Economy Business

　As a development-focused manufacturer of plastic products, our group has established strong technical capabilities in raw material compounding and molding technologies. Within the framework of the 7th Medium-Term Management Plan, we have designated the “expansion of circular economy business” as a core strategic pillar and have advanced the enhancement of our proprietary environmentally conscious product certification system, “Fukuvalue.”

　In light of the current uncertain global environment, the importance of the role our group must fulfill continues to increase. By further advancing the philosophies and technologies cultivated over many years, and leveraging them in the development and design of products with reduced environmental impact, we aim to achieve both the resolution of societal challenges and the creation of new revenue opportunities. Key initiatives include accelerating the utilization of timber resources and recycled plastics, as well as executing strategic investments in large-scale production facilities within the insulation business, which has been positioned as a primary growth driver.

(2) Establishment of a Resilient Earnings Base and Implementation of Capital Cost-Oriented Management

　To enhance corporate value, our group will pursue growth strategies and financial strategies in parallel. Within our growth strategy, we established FUKUVI REFOJOULE ARCHITECTS CO., LTD. (hereinafter “FRA”) in April 2026 as part of our initiative to expand into new business domains, specifically in the field of construction services. By integrating and consolidating the group’s construction-related operations into FRA, we aim to create higher value-added services by combining product excellence as a manufacturer with superior construction quality, thereby strengthening our overall earnings capacity.

　Furthermore, we will leverage data analytics made possible by the enterprise resource planning (ERP) system introduced in January 2024 to optimize our business portfolio. At the same time, we will promote management practices with a strong emphasis on capital efficiency indicators such as ROIC. Capital generated through these efforts will be allocated appropriately, with a focus on strategic investments in growth areas and the enhancement of shareholder returns.

(3) Reinforcement of Global Business Infrastructure

　In overseas markets, North America is recognized as a high-potential region with expected growth, and we will promote initiatives following the establishment of comprehensive domestic and international operational frameworks. Certain product categories, including construction materials and automotive components, have already demonstrated strong performance, and we will leverage the expansion of these product lines to establish a robust global business infrastructure.

　With respect to the supply chain, given the rapid changes in the global environment, including geopolitical developments in the Middle East, we recognize the necessity of further strengthening supply chain resilience while carefully monitoring external conditions. Furthermore, from the perspectives of profitability improvement and risk diversification, we have been evaluating optimal production allocation. As part of this initiative, we plan to transfer a portion of domestically manufactured products to the ASEAN region during fiscal year 2026.

(4) Advancement of Human Capital Management and AI Utilization

　From the perspective of advancing human capital management, we will establish an organizational framework that supports continuous employee development through sustained investment in human resources. Key initiatives include the operation of the “Challenge Job System,” which enables employees to proactively engage in career development, as well as the enhancement of a safe, secure, and engaging work environment through the analysis of company-wide engagement survey results.

　With regard to AI utilization, we have implemented an internal recruitment initiative for participation in the “AI Innovation Challenge Program,” which received a high level of interest. Selected proposals are being advanced to the trial phase. Furthermore, through the deployment of the “AI Learning Program,” we will promote the improvement of digital literacy across the organization, while leveraging AI to drive operational efficiency and enhance overall competitiveness.

　In Japan’s housing industry, which is the core market for our Group, not only has the rise in interest rates impacted housing demand, but continued increases in energy, logistics, and various material costs have further driven up construction costs. As a result, the number of new housing starts is expected to remain at a low level. Additionally, the structural issues facing the construction industry as a whole—namely, labor shortages and an aging workforce—remain evident, leading to increasing demand for productivity improvements and labor-saving construction methods. 

　Amidst these uncertain conditions, our Group is working to strengthen the resilience of our supply chain by diversifying procurement networks to avoid reliance on specific regions or routes. We are also visualizing cost fluctuations and appropriately passing on costs to ensure stable earnings. At the same time, we view this period of  ransformation as an opportunity for sustainable growth. We will accelerate strategic investments in growth-driving areas, such as establishing a production system for “Phenova Board,” a high-performance insulation material for which increased demand is anticipated following revisions to the Building Energy Efficiency Act, and “Light Guiding Bar,” a PFAS-free component for automotive interiors that complies with environmental regulations. Furthermore, to ensure growth in the renovation and refurbishment business for existing buildings and in the non residential construction sector, we will integrate our Group’s construction business into Fukuvi Refojoule Architects Co., Ltd. (wholly owned subsidiary). This will significantly enhance our expertise and agility in construction contracting, enabling us to shift from simply supplying materials to providing comprehensive solution-oriented business. 

　We will proactively advance the three basic strategies of the Seventh Medium-Term Management Plan—“Expansion of Circular Business,” “Establishment of a Robust Profit Base,” and “Building an Organization that Drives Growth”—with the aim of maximizing sustainable corporate value, including improvement of ROE. 

　In addition, our performance forecast for the first quarter of the fiscal year ending March 2027 is as follows: net sales of 10,200 million yen, operating profit of 400 million yen, ordinary profit of 500 million yen, and profit attributable to owners of parent of 430 million yen. The full-year forecast is “undetermined” and will be announced once it becomes reasonably predictable. 

　(Impact of the Middle East situation) 
Our Group manufactures and markets products primarily made from plastics derived from naphtha. Regarding the impact of the recent deterioration in the Middle East situation, we have secured procurement of raw materials through the end of June 2026. However, there are concerns about a sharp rise in crude oil prices and stable procurement of raw materials from July 2026 onward, which may affect our business operations and performance.

　Looking ahead, we remain firmly committed to the steady execution of our medium- to long-term strategies, with the aim of evolving into a company that continues to meet the expectations of our shareholders. We sincerely appreciate your continued understanding and support.