We will promote strategies for sustainable growth with a focus on expanding our market share of the auto auction business.

We have achieved our best financial results while increasing dividends for 25 consecutive fiscal terms.
USS also expects to increase income and profit in fiscal 2025 as well.

In FY2024, the auto auction business performed very well. The driving factors behind the growth in our business performance were not only an increase in the number of vehicles on auction but also a significant increase in the number of completed contracts. One positive factor has been the increase in auction lanes at the Tokyo Auction Site to 16 lanes with the aim of reducing auction times which typically went late into the night, resulting not only in earlier auction finishing times but also more available auction slots during the evening slot which is more amenable to sales, and therefore a greater number of vehicles able to be auctioned. Another factor contributing to our performance has been the high percentage of high quality vehicles on auction, including popular models and luxury vehicles. Above all, we perceive that the intensive increase in the number of vehicles on auction has been due to our brand reputation for fair and equitable transactions that we have fostered over many years.
            The business performance for the fiscal year ended March 31, 2025 marked a record high, with net sales of ¥104,021 million, up 6.6% year on year (YoY), operating profit of ¥54,206 million, up 10.8% YoY, and profit attributable to owners of the parent of ¥37,636 million, up 14.4% YoY. We achieved increases in both revenue and profit for the fourth consecutive fiscal year. ROE (return on equity) was 18.9%, exceeding our mid-term management goal of 15% for the fourth consecutive year. Based on this strong performance, we set the annual dividend per share rose to ¥43.4, representing a payout ratio of 55.0%. As a result, we achieved dividend increases for the 25th consecutive fiscal year since our listing.
            As for the outlook in the fiscal year ending March 31, 2026, USS plans ¥111,800 million in net sales, up 7.5% YoY, ¥56,500 million in operating profit, up 4.2% YoY, and ¥38,850 million in profit attributable to owners of the parent, up 3.2% YoY. We also anticipate an annual dividend per share of ¥50.40, aiming to achieve our 26th consecutive year of dividend increases.
            In the used vehicle purchasing and selling business, our earnings were solid in the first half of the year but our gross profit per vehicle decreased in the second half, resulting in full-year earnings matching the level of the previous year (for more information, see pp. 41-42).
            In the recycling business, the profit level of plant recycling declined significantly compared to FY 2023 and FY 2024 (for more information, see pp. 43-44).
            Looking at our performance in the first quarter (April to June) of FY 2025, the number of new vehicle registrations continued to recover. Our auto auction business performed well in the first quarter, with a 20.4% YoY increase in the number of vehicles to 907,000, a 7.8% YoY increase in the number of completed contracts to 571,000, and a 62.9% contract completion rate compared to 70.3% in the same quarter of last year. Accordingly, our consolidated results for the first quarter all reached record levels, with a 6.8% YoY increase in net sales to ¥27.389 billion and a 9.4% YoY increase in operating profit to ¥14.708 billion, leading to an upward revision of our full-year earnings and dividend forecasts.*

* Our forecasts reflect revisions made on August 5, 2025.

We are implementing measures that will lead to an increase in members and auctioned vehicles through strategic projects toward a 50% market share.

Amidst these circumstances, from FY 2025 USS has shifted its medium- to long-term management goal to a policy of driving company-wide growth by concentrating resources on the auto auction business and realizing the "50% Market Share" strategic project described later in this report. In terms of our financial targets, we will raise ROE from 15% or higher to 20% or higher, our dividend payout ratio from at least 55% to at least 60%, and our total payout ratio over the three-year period from FY 2025 from at least 80% to at least 100% (for more information, see pp. 29-30).

To achieve this medium- to long-term management goal, in April 2024 we launched the strategic project "50% Market Share" under the leadership of our management team and core employees, and incorporating the knowledge of outside experts.
            After surveying and reviewing the business environment and market trends, our initial target over the next few years is to achieve a 45% market share, with the aim of realizing our ultimate goal of 50% market share. Under our new strategic roadmap developed in September 2024, we have positioned service improvements in both our auction site facilities and equipment and our provision and analysis of information as crucial elements for achieving our goals (for more information, see p. 22).
            As part of our activities for the "50% Market Share" strategic project, we are implementing the "Breakthrough Project" to achieve results in a short 90-day intensive period for issues such as acquiring new members and increasing the number of vehicles on auction, and have implemented several measures (for more information, see p. 23).
            In addition to marketing measures, we are also promoting a workplace environment improvement project to encourage activities among our young employees. This is an initiative to encourage our young employees to proactively identify issues, consider measures for their improvement, and independently take action. USS will strive to strengthen our human resource base by respecting the individuality of our site employees and enhancing the capabilities of individual human resources while pursuing positive outcomes.
            Another one of our priority measures under the "50% Market Share" strategic project is to enhance our systems. We are building the "USS Digital Platform" to provide our members with auction information and business support services by leveraging big data gathered from auto auctions (for more information, see p. 24). We believe that this platform will be a powerful driving force in our efforts to expand market share by contributing to strengthening our marketing power and improving our operational efficiency.
            While monitoring changes in the long-term business environment, we will do our utmost to promote the strategic project for achieving a 45% share of the auto auction market in three years.

Enhancing our existing businesses and expanding into new areas with a basic policy of stabilizing earnings in the recycling business We will diversify our business portfolio.

In the recycling business, our basic policy is to secure stable earnings. Our group companies ARBIZ, which is expanding the resource recycling business, and SMART, Inc., which is expanding the plant recycling business, are both aiming to achieve net sales of ¥10 billion.
            In the resource recycling business, we will expedite the commercialization of closed aluminum recycling and solar panel recycling. We also plan to expand our business into the recycling of IT-related equipment, which has seen increased demand in recent years (for more information, see pp. 43-44).
            In the plant recycling business, we are strengthening our marketing activities to restore profitability, and are aiming to increase orders by leveraging the information and expertise of SMBC Group while also deepening collaboration with our partner SMFL Mirai Partners Co., Ltd. (a wholly owned subsidiary of Sumitomo Mitsui Finance and Leasing) (for more information, see p. 44).
            In April 2023, USS Support Service, Inc. began offering auto loans and has continued offering this service over the past two fiscal years. As of the end of March 2025, the number of franchise stores was approximately 850 and the number of vehicle loans was approximately 8,000.
            Going forward, we will continue to strengthen our existing businesses and diversify our business portfolio, including businesses that contribute to the realization of a recycling-oriented society and circular economy. With the "fair and equitable auto auction" business at the core of our operations, we will enhance our corporate value to become an entity that continues to earn the trust and confidence of our customers, employees, and all other stakeholders.