• Value enhancement plan addresses key factors underpinning TOTO’s valuation disconnect and outlines a clear pathway to unlock over 55% upside for shareholders
• Presentation highlights TOTO as “The Most Undervalued and Overlooked AI Memory Beneficiary” and the opportunity for a meaningful share price re‑rating

Palliser Capital (“Palliser”), a top 20 shareholder of TOTO Ltd. (“TOTO”), today published a comprehensive presentation outlining the opportunities available to unlock significant value at TOTO. To promote market transparency and respond to growing interest from shareholders and other stakeholders, Palliser has made public a detailed presentation titled “Maximizing the Value of TOTO – The Most Undervalued and Overlooked AI Memory Beneficiary.” The presentation sets out Palliser’s assessment of TOTO’s unique strategic positioning, structural undervaluation, and the tangible steps required to drive a re‑rating of the company’s equity, with TOTO currently trading at a JPY554 billion (US$3.6 billion) value gap¹.

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While TOTO is widely recognised as Japan’s leading sanitaryware company, Palliser’s analysis highlights the company’s transformation into a strategically critical semiconductor materials innovator and supplier. TOTO’s Advanced Ceramics segment - now contributing more than 50% of total operating profit - is a critical enabler of next‑generation semiconductor manufacturing, supplying highly specialized electrostatic chucks used in cryogenic dielectric etching tools for advanced 3D NAND memory production.

In Palliser’s view, the factors driving the TOTO value gap are readily solvable and, if remedied, could unlock well over 55% upside on the current share price and position TOTO for long-term success in a manner that serves the best interests of all its stakeholders. The TOTO Value Enhancement Plan includes three core initiatives:

• Improve disclosure and transparency of the Advanced Ceramics business, enabling investors and analysts to properly assess its competitive moat, growth trajectory, and intrinsic value;
• Implement a best‑in‑class capital allocation framework, prioritising investments that deliver the highest-returning utilisation of capital, with clear ROIC targets above cost of capital; and
• Enhance capital efficiency by optimising the capital structure in line with TOTO’s stated financial discipline rules, including accelerating the sale of cross‑shareholdings and more efficient deployment of excess cash.

Full details of the presentation are outlined in the accompanying attachment.

About Palliser Capital

Palliser is an alternative investment manager that applies a value-oriented, event-driven philosophy to investing across a range of distinct yet complementary strategies on a global basis with a focus on situations where positive change and value enhancement can be achieved through thoughtful, constructive, and long-term engagement with companies and across a range of different stakeholder groups.

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¹ Any and all market data contained or referred to herein is as of close of trading on the Tokyo Stock Exchange on 6 February 2026 unless otherwise stated.

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