Q&A on the Performance Results through the First Quarter of Fiscal Year Ending March 31, 2026 (FY2026.3) (Held on August 1, 2025)

A1: In the previous forecast, tariff impacts were not included, and we separately provided an estimate of the impact amount. However, in this forecast, we have incorporated both the tariff impacts and the offsetting factors. The impact amount has been estimated at minus 8.6 billion yen, taking into account changes in tax rates and the grace period for implementation since the previous forecast, which was minus 14.0 billion yen. Additionally, we have factored in the offsetting measures, resulting in a net impact of minus 5.0 billion yen.

A2: Factors such as price optimization and decrease in sales volume are included in the "increase in sales, production, and product mix, etc." category. As recovery measures, we have implemented various strategies such as suspending exports to the U.S. during the period when the tariff rate on Chinese products was 145%, and suppressing cost increases for products sold within the U.S., prioritizing exports of non-Chinese products to the U.S., and passing on price increases. Additionally, considering the reduction in volume due to price increases, the comparison with the previous forecast in the lower section projects a recovery of 3.6 billion yen against the tariff impact of minus 8.6 billion yen. However, on the other hand, factors such as reduced revenue from musical instruments and the price optimization measures being slightly more challenging than originally anticipated also exist, resulting in the "increase in sales, production, and product mix, etc." category totaling 400 million yen.

A3: While a 90-day extension of the grace period for China is under discussion, we have not factored in any uncertain elements and have based our calculations on the assumption that tariffs on Chinese products will be 54% starting in August. For Indonesia and Japan, we have assumed that tariffs will increase to 19% and 15%, respectively, starting in August, as agreed. Although tariffs for Malaysia were announced this morning at 19%, our calculations are based on a 25% assumption.

A4: This is entirely due to musical instruments, with the main factors being a decline in demand for acoustic pianos and a slowdown in the European economy.

A5: We are proceeding with changes to production sites for some products, but the effects are not factored into this fiscal year's projections.

A6: Production volumes have decreased for pianos and wind instruments, but increased for digital musical instruments and guitars, resulting in overall instrument production remaining largely unchanged. Audio equipment production has decreased slightly in the consumer and mobility use products.

A7: Due to seasonality, the impact will be higher in the third quarter when product shipments increase, and we expect the impact to be roughly the same in the second and fourth quarters.

A8: Negative factors include tariff impacts and reduced sales, while positive factors include cost reductions in selling, general, and administrative expenses.

A9: While there was some rush demand in certain areas, major online retailers did not see much growth, and actual sales in April-June period varied from month to month. Price movements also vary among companies, and while we have implemented price increases, orders have slightly decreased. Going forward, we will monitor consumers’ sensitivity to price increases as competitors align their price strategies and we will adjust accordingly.

A10: While it is true that there has been a significant decline compared to the previous year, the actual results have exceeded our initial projections, which had anticipated a temporary adjustment following the sharp growth of the previous year. We expect the trend to continue at a similar level in the second quarter and beyond. While Europe has seen a significant decline due to the previous year's strong performance, demand is growing in North America and emerging markets, particularly in Central and South America.