Interim report
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1 DISCLAIMER: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. February 12, 2026 Consolidated Financial Results for the Fiscal Year Ended December 31, 2025 (Under Japanese GAAP) Company name: Mitsubishi Pencil Company, Limited Listing: Tokyo Stock Exchange Securities code: 7976 URL: https://www.mpuni.co.jp/ Representative: Shigehiko Suhara, Representative Director, President Inquiries: Masami Hiruma, General Manager of Financial Resources and Accounting Department Telephone: +81-3-3458-6215 Scheduled date of annual general meeting of shareholders: March 26, 2026 Scheduled date to commence dividend payments: March 27, 2026 Scheduled date to file annual securities report: March 23, 2026 Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for institutional investors and analysts) (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated financial results for the fiscal year ended December 31, 2025 (from January 1, 2025 to December 31, 2025) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % December 31, 2025 89,814 1.1 9,692 (20.5) 10,028 (22.6) 6,235 (44.7) December 31, 2024 88,820 18.7 12,189 2.9 12,952 0.5 11,272 10.9 Note: Comprehensive income For the fiscal year ended December 31, 2025: ¥14,770 million [(17.1)%] For the fiscal year ended December 31, 2024: ¥17,817 million [20.4%] Basic earnings per share Diluted earnings per share Return on equity Ratio of ordinary profit to total assets Ratio of operating profit to net sales Fiscal year ended Yen Yen % % % December 31, 2025 114.27 - 4.7 5.6 10.8 December 31, 2024 204.80 - 9.3 8.0 13.7 (2) Consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen December 31, 2025 183,005 140,432 75.7 2,560.99 December 31, 2024 176,881 130,708 72.6 2,320.42 Reference: Equity As of December 31, 2025: ¥138,526 million As of December 31, 2024: ¥128,357 million (3) Consolidated cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Fiscal year ended Millions of yen Millions of yen Millions of yen Millions of yen December 31, 2025 2,413 (7,920) (1,874) 32,807 December 31, 2024 6,467 (27,910) 4,108 39,587
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2 2. Cash dividends Annual dividends per share Total cash dividends (Total) Payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) First quarter- end Second quarter- end Third quarter- end Fiscal year-end Total Yen Yen Yen Yen Yen Millions of yen % % Fiscal year ended December 31, 2024 - 21.00 - 25.00 46.00 2,666 22.5 2.1 Fiscal year ended December 31, 2025 - 26.00 - 26.00 52.00 2,947 45.5 2.1 Fiscal year ending December 31, 2026 (Forecast) 27.50 27.50 55.00 38.6 Note 1: The dividend of 21 yen at the end of the second quarter of the fiscal year ending December 31, 2024 includes a special dividend of 1 yen. Note2: The year-end dividend of 25 yen for the fiscal year ending December 31, 2024 includes a special dividend of 1 yen. Note3: The dividend of 26 yen at the end of the second quarter of the fiscal year ending December 31, 2025 includes a special dividend of 1 yen. Note4: The year-end dividend of 26 yen for the fiscal year ending December 31, 2025 includes a special dividend of 1 yen. Note5: The dividend of ¥27.5 at the end of the second quarter of the fiscal year ending December 31, 2026 includes a special dividend of ¥1 per share and a dividend of ¥140 commemorating the company's founding of the company. Note6: The year-end dividend of ¥27.50 for the fiscal year ending December 2026 includes a special dividend of ¥1.00 and a commemorative dividend of ¥1.00 marking the 140th anniversary of the company's founding. 3. Forecast of consolidated financial results for the fiscal year ending December 31, 2026 (from January 1, 2026 to December 31, 2026) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Fiscal year ending December 31, 2026 94,000 4.7 10,500 8.3 11,000 9.7 7,700 23.5 142.35 Note: Since the Company manages its operations on an annual basis, the forecasts of consolidated financial results for the first half of the fiscal year have been omitted.
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3 * Notes (1) Significant changes in the scope of consolidation during the period: Yes Newly included: 1 company (UNI LINC INDIA PRIV ATE LIMITED) Excluded: 1 company(Shanghai Shen Kai Ling Compnay Ltd.) (2) Changes in accounting policies, changes in accounting estimates, and restatement (i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (3) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of December 31, 2025 60,042,592 shares As of December 31, 2024 61,042,592 shares (ii) Number of treasury shares at the end of the period As of December 31, 2025 5,951,757 shares As of December 31, 2024 5,726,013 shares (iii) Average number of shares outstanding during the period Fiscal year ended December 31, 2025 54,567,244 shares Fiscal year ended December 31, 2024 55,043,190 shares [Reference] Overview of non-consolidated financial results 1. Non-consolidated financial results for the fiscal year ended December 31, 2025 (from January 1, 2025 to December 31, 2025) (1) Non-consolidated operating results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit Fiscal year ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % December 31, 2025 50,791 (10.5) 3,987 (53.9) 9,459 (32.9) 8,117 (42.4) December 31, 2024 56,774 12.2 8,643 49.9 14,090 91.8 14,087 111.6 Basic earnings per share Diluted earnings per share Fiscal year ended Yen Yen December 31, 2025 142.45 - December 31, 2024 245.45 - (2) Non-consolidated financial position Total assets Net assets Equity-to-asset ratio Net assets per share As of Millions of yen Millions of yen % Yen December 31, 2025 132,167 101,230 76.6 1,785.78 December 31, 2024 129,669 94,432 72.8 1,637.51 Reference: Equity As of December 31, 2025: ¥101,230 million As of December 31, 2024: ¥94,432 million 2. Individual earnings forecasts for the fiscal year ending December 31, 2026 have been omitted due to the judgment of the importance of individual information. (Percentages indicate year-on-year changes.) * Financial results reports are exempt from audit conducted by certified public accountants or an audit firm. * Proper use of earnings forecasts, and other special matters Note: Forecasts are based on information available at the time, but include potential risks and uncertainties. Therefore, please be aware that actual results may differ from forecasts due to changes in various factors. (Method of accessing supplementary material on financial results) Supplementary financial results materials will be disclosed to the Tokyo Stock Exchange in a timely manner through TDnet. It will also be posted on our website.
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4 Consolidated balance sheet (Millions of yen) As of December 31, 2024 As of December 31, 2025 Assets Current assets Cash and deposits 41,349 37,067 Notes and accounts receivable - trade 19,586 20,327 Inventories 30,430 30,753 Other 4,072 4,074 Allowance for doubtful accounts (234) (429) Total current assets 95,205 91,793 Non-current assets Property, plant and equipment Buildings and structures 27,991 28,786 Accumulated depreciation (12,873) (13,199) Buildings and structures, net 15,117 15,587 Machinery, equipment and vehicles 35,486 38,522 Accumulated depreciation (28,302) (30,784) Machinery, equipment and vehicles, net 7,184 7,738 Land 3,328 3,428 Construction in progress 3,797 4,264 Other 16,230 16,012 Accumulated depreciation (13,841) (13,768) Other, net 2,389 2,244 Total property, plant and equipment 31,817 33,262 Intangible assets Goodwill 5,739 5,844 Trademark right 5,267 5,580 Other 1,184 1,320 Total intangible assets 12,190 12,746 Investments and other assets Investment securities 26,130 32,024 Investment property, net 5,917 5,822 Deferred tax assets 618 624 Retirement benefit asset 3,889 5,702 Other 1,195 1,112 Allowance for doubtful accounts (83) (83) Total investments and other assets 37,668 45,203 Total non-current assets 81,676 91,212 Total assets 176,881 183,005
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5 (Millions of yen) As of December 31, 2024 As of December 31, 2025 Liabilities Current liabilities Notes and accounts payable - trade 10,014 3,140 Short-term borrowings 1,736 1,735 Income taxes payable 2,849 904 Provision for bonuses 723 656 Accounts payable - other 3,833 3,313 Other 5,238 4,952 Total current liabilities 24,396 14,703 Non-current liabilities Long-term borrowings 9,887 13,166 Deferred tax liabilities 7,700 10,638 Retirement benefit liability 2,951 2,880 Provision for retirement benefits for directors (and other officers) 59 74 Other 1,177 1,109 Total non-current liabilities 21,776 27,869 Total liabilities 46,173 42,573 Net assets Shareholders' equity Share capital 4,497 4,497 Capital surplus 3,964 4,809 Retained earnings 104,604 106,521 Treasury shares (5,156) (6,002) Total shareholders' equity 107,909 109,825 Accumulated other comprehensive income Valuation difference on available-for-sale securities 12,522 16,456 Foreign currency translation adjustment 6,689 10,019 Remeasurements of defined benefit plans 1,236 2,225 Total accumulated other comprehensive income 20,448 28,701 Non-controlling interests 2,351 1,906 Total net assets 130,708 140,432 Total liabilities and net assets 176,881 183,005
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6 Consolidated statement of income (Millions of yen) Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2025 Net sales 88,820 89,814 Cost of sales 41,980 45,291 Gross profit 46,840 44,522 Selling, general and administrative expenses 34,650 34,830 Operating profit 12,189 9,692 Non-operating income Interest income 191 103 Dividend income 535 690 Rental income from land and buildings 292 391 Insurance claim income 23 31 Subsidy income 10 4 Foreign exchange gains 57 - Other 228 98 Total non-operating income 1,339 1,321 Non-operating expenses Interest expenses 99 256 Rental expenses 211 214 Commission for syndicated loans 143 52 administrative expenses for investment partnerships 59 76 Loss on investments in investment partnerships - 81 Foreign exchange losses - 203 Other 62 100 Total non-operating expenses 576 985 Ordinary profit 12,952 10,028 Extraordinary income Gain on sale of non-current assets 3,626 2 Gain on sale of investment securities 110 96 Gain on liquidation of subsidiaries and associates - 82 Compensation income 173 - Total extraordinary income 3,910 181 Extraordinary losses Loss on sale and retirement of non-current assets 83 56 Factory restructuring loss 25 37 Loss on store closings - 371 Subsidiary director's retirement benefits 108 - Other 4 - Total extraordinary losses 220 466 Profit before income taxes 16,642 9,743 Income taxes - current 4,950 3,016 Income taxes - deferred 130 249 Total income taxes 5,080 3,266 Profit 11,561 6,477 Profit attributable to non-controlling interests 289 241 Profit attributable to owners of parent 11,272 6,235
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7 Consolidated statement of comprehensive income (Millions of yen) Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2025 Profit 11,561 6,477 Other comprehensive income Valuation difference on available-for-sale securities 3,624 3,933 Foreign currency translation adjustment 2,149 3,367 Remeasurements of defined benefit plans, net of tax 481 992 Total other comprehensive income 6,256 8,293 Comprehensive income 17,817 14,770 Comprehensive income attributable to Comprehensive income attributable to owners of parent 17,541 14,491 Comprehensive income attributable to non-controlling interests 275 279
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8 Consolidated statement of changes in equity Fiscal year ended December 31, 2024 (Millions of yen) Shareholders' equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders' equity Balance at beginning of period 4,497 3,978 100,018 (8,005) 100,490 Changes during period Dividends of surplus (2,360) (2,360) Profit attributable to owners of parent 11,272 11,272 Purchase of treasury shares (1,540) (1,540) Disposal of treasury shares (1,736) 1,782 46 Cancellation of treasury shares (2,605) 2,605 - Transfer from retained earnings to capital surplus 4,327 (4,327) - Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders' equity Total changes during period - (14) 4,585 2,848 7,419 Balance at end of period 4,497 3,964 104,604 (5,156) 107,909 Accumulated other comprehensive income Non- controlling interests Total net assets V aluation difference on available-for- sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of period 8,898 4,526 750 14,175 2,194 116,860 Changes during period Dividends of surplus (2,360) Profit attributable to owners of parent 11,272 Purchase of treasury shares (1,540) Disposal of treasury shares 46 Cancellation of treasury shares - Transfer from retained earnings to capital surplus - Change in ownership interest of parent due to transactions with non-controlling interests Net changes in items other than shareholders' equity 3,624 2,163 485 6,272 156 6,429 Total changes during period 3,624 2,163 485 6,272 156 13,848 Balance at end of period 12,522 6,689 1,236 20,448 2,351 130,708
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9 Consolidated statement of changes in equity Fiscal year ended December 31, 2025 (Millions of yen) Shareholders' equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders' equity Balance at beginning of period 4,497 3,964 104,604 (5,156) 107,909 Changes during period Dividends of surplus (2,783) (2,783) Profit attributable to owners of parent 6,235 6,235 Purchase of treasury shares (2,385) (2,385) Disposal of treasury shares 19 28 47 Cancellation of treasury shares (1,555) 1,555 - Transfer from retained earnings to capital surplus 1,535 (1,535) - Change in ownership interest of parent due to transactions with non-controlling interests 845 (44) 801 Net changes in items other than shareholders' equity Total changes during period - 845 1,916 (846) 1,915 Balance at end of period 4,497 4,809 106,521 (6,002) 109,825 Accumulated other comprehensive income Non- controlling interests Total net assets V aluation difference on available-for- sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans Total accumulated other comprehensive income Balance at beginning of period 12,522 6,689 1,236 20,448 2,351 130,708 Changes during period Dividends of surplus (2,783) Profit attributable to owners of parent 6,235 Purchase of treasury shares (2,385) Disposal of treasury shares 47 Cancellation of treasury shares - Transfer from retained earnings to capital surplus - Change in ownership interest of parent due to transactions with non-controlling interests 801 Net changes in items other than shareholders' equity 3,933 3,329 988 8,252 (445) 7,807 Total changes during period 3,933 3,329 988 8,252 (445) 9,723 Balance at end of period 16,456 10,019 2,225 28,701 1,906 140,432
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10 Consolidated statement of cash flows (Millions of yen) Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2025 Cash flows from operating activities Profit before income taxes 16,642 9,743 Depreciation 4,069 4,930 Increase (decrease) in allowance for doubtful accounts 12 167 Increase (decrease) in retirement benefit liability (2,697) (152) Decrease (increase) in retirement benefit asset (586) (593) Rental income from land and buildings (291) (391) Interest and dividend income (726) (794) Interest expenses 99 256 Foreign exchange losses (gains) (28) 196 Compensation income (173) - Loss (gain) on sale and retirement of non-current assets (3,543) 53 Loss (gain) on sale of investment securities (110) (96) Amortization of goodwill 380 523 Decrease (increase) in trade receivables 335 (339) Decrease (increase) in inventories (2,949) 914 Increase (decrease) in trade payables 479 (6,889) Decrease (increase) in consumption taxes refund receivable (437) (155) Other, net (298) (370) Subtotal 10,174 7,002 Interest and dividends received 742 795 Interest paid (99) (250) Proceeds from compensation 173 - Income taxes paid (4,524) (5,134) Net cash provided by (used in) operating activities 6,467 2,413
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11 (Millions of yen) Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2025 Cash flows from investing activities Purchase of non-current assets (3,956) (5,929) Proceeds from sale of non-current assets 3,746 (5) Purchase of investment securities (905) (577) Proceeds from sale of investment securities 112 139 Purchase of investment property (5,993) - Proceeds from redemption of investment securities - 400 Proceeds from land and house rent received 291 391 Payments into time deposits (2,762) (3,571) Proceeds from withdrawal of time deposits 3,175 1,156 Purchase of shares of subsidiaries resulting in change in scope of consolidation (21,122) - Other, net (495) 76 Net cash provided by (used in) investing activities (27,910) (7,920) Cash flows from financing activities Net increase (decrease) in short-term borrowings 218 (1) Proceeds from long-term borrowings 10,000 5,000 Repayments of long-term borrowings (1,970) (1,720) Proceeds from share issuance to non-controlling shareholders - 174 Purchase of treasury shares (1,540) (2,391) Dividends paid (2,360) (2,774) Dividends paid to non-controlling interests (116) (90) Other, net (122) (71) Net cash provided by (used in) financing activities 4,108 (1,874) Effect of exchange rate change on cash and cash equivalents 1,066 602 Net increase (decrease) in cash and cash equivalents (16,268) (6,779) Cash and cash equivalents at beginning of period 55,856 39,587 Cash and cash equivalents at end of period 39,587 32,807