Business and Financial Highlights

During the current consolidated fiscal year, the business environment surrounding our group saw a moderate economic recovery, supported by improvements in employment and income conditions, leading to a gradual rebound in personal consumption. On the other hand, the escalating tensions in the Middle East are having a significant impact on the global economy, and domestically, effects such as soaring crude oil prices and supply constraints of raw materials have begun to emerge, resulting in continued uncertainty about the future.

Amidst this situation, our group has been working as one company-wide unit toward achieving the goals of the 'Medium-Term Management Plan 2025,' which has entered its final year.
During the current consolidated fiscal year, the number of continuing transaction customers in the group increased by 48 thousand (an increase of 64 thousand in the same period last year), totaling 3,471 thousand. The number of TLC members increased by 59 thousand (an increase of 53 thousand in the same period last year), reaching 1,326 thousand.
Due to the increase in the number of group customers, net sales amounted to 244,838 million yen (an increase of 0.6% compared to the same period last year), operating profit was 18,699 million yen (an increase of 11.0%), ordinary profit was 19,152 million yen (an increase of 10.3%), and profit attributable to owners of parent was 10,749 million yen (an increase of 16.6%).Furthermore, net sales increased for the ninth consecutive period, and all profit categories recorded profit growth for the third consecutive period, each reaching a new all-time high.

During the current consolidated fiscal year, a key topic was the expansion of our telecommunications infrastructure to the Kyushu area in April 2025, aimed at providing a variety of services to support corporate digital transformation (DX) in the region. This expansion has extended our service area from the Northern Kanto region to Kyushu.
In addition, within the Aqua business, we offer three services: "Tasty Water Delivered to your Door" (returnable bottles), "The Gift of Delicious Water: Ulunon" (one-way bottles), and "Shizuclear" (water supply type purification servers). As of the end of July of this year, the total number of customers for these services surpassed 200 thousand accounts.

Our group has newly formulated the TOKAI Group ''Medium-Term Management Plan 2028' targeting the three fiscal years from 2026 to 2028. In this new medium-term management plan, we will focus our investments on growth businesses and promote the "Triple Accel Strategy," which aims to expand in three key areas: Area (expansion of regions), Account (increase in customers and contracts), and ARPU (enhancement of service menus). By leveraging the overwhelmingly dominant business model established in Shizuoka, we will expand it nationwide and achieve further growth.
For more details, please refer to the "Medium-Term Management Plan 2028" announced on May 8, 2026.

Based on the above, the consolidated performance outlook for the fiscal year 2026 is as follows.

During the first quarter cumulative period, the business environment surrounding our group saw a moderate economic recovery, supported by improvements in employment and income conditions, leading to a gradual rebound in personal consumption. On the other hand, concerns persist that the surge in energy prices due to the situation in the Middle East, supply constraints of raw materials, and fluctuations in financial and capital markets will affect domestic price trends, and the outlook remains uncertain.

Amid these circumstances, our group announced the "Medium-Term Management Plan 2028" in May 2026. This plan centers on "expanding business profits" and "strengthening shareholder returns," aiming to increase earnings through proactive investment in growth businesses and asset-efficient operations, while targeting an optimal capital structure by maintaining stable dividends and executing agile share buybacks. Furthermore, by simultaneously promoting the “Triple Accel Strategy”—expansion of Area, increase in Accounts (customers and contracts), and improvement of ARPU (enriching service menus)—we strive to both expand our business foundation and strengthen profitability, aiming for sustainable growth.
Regarding the performance during the first quarter cumulative period, the number of continuing transaction customers in the group increased by 6 thousand (an increase of 18 thousand in the same period last year), reaching a total of 3,476 thousand. The number of TLC members increased by 14 thousand (an increase of 15 thousand in the same period last year), totaling 1,339 thousand. Due to the increase in the number of group customers, sales amounted to 59,993 million yen (an increase of 3.2% compared to the same period last year), operating profit was 4,524 million yen (an increase of 14.8%), ordinary profit was 4,878 million yen (an increase of 18.6%), and net profit attributable to the parent company's shareholders for the quarter was 3,005 million yen (an increase of 21.7%).

During the first quarter cumulative period, a key topic was the number of app members for the TLC membership service exceeded 500,000 in April 2026. In the same month, we acquired shares of Osada Gas Co., Ltd. (Kawazu Town, Kamo District, Shizuoka Prefecture), which operates an LP gas business, making it a consolidated subsidiary.
In May of the same year, we reviewed our materiality issues, which we position as important management challenges in promoting sustainability management. The evaluation was conducted from two perspectives: "the impact society has on the Group" and "the impact the Group has on society." Through this, we reorganized the Group’s roles in society and the environment and identified four new materialities that pursue the "TOKAI Group uniqueness": "Contribution to a life filled with smiles," "Promoting of eco-friendly business activities," "Challenge-oriented human capital and organizations," and "Governance enhancement." The Group will work as one to advance initiatives on these materialities, aiming to realize a sustainable society and enhance corporate value.