Slide 1: FY2021 Financial Report
FY2021 Financial Report May 12, 2022
Slide 2: Contents
1 Contents I. FY2021 Operating Results IV. ‘Kureha’s Challenge 2022’ Mid-term Management • FY2021 financial summary 3-5 Plan & Priority Measures • Segment performance 6-10 • FY2021-2022: What we do 29 • Financial position 11 • FY2022 business environment & • Cash flow 12 management policy 30 • Key i
Slide 3: I. FY2021 Results Highlights
2 I. FY2021 Results (April 1, 2021 – March 31, 2022) Highlights • Delivered ¥6.5bn growth in core operating profit, driven by Advanced Materials (PVDF, PPS) and Specialty Plastics (wrap film, fishing lines) • PPS capacity increase of 5000tpa (completed by FY20/4Q) contributing in 2Q onward • Capacit
Slide 4: FY2021 Financial Summary (1)
3 FY2021 Financial Summary (1) (in billions of yen) Change Vs. FY2020 FY2020 FY2021 YOY • Revenue growth driven by Advanced Materials, 23.8 Specialty Chemicals and Specialty Plastics, Revenue 144.6 168.3 (+16.4%) partially offset by declines in Construction and 6.5 Other Operations Core operating pr
Slide 5: FY2021 Financial Summary (2)
4 FY2021 Financial Summary (2) (in billions of yen) Revenue & Core Operating Profit by Segment (vs. FY2020) FY2020 FY2020 Revenue Core operating profit FY2021 FY2021 10.0 9.9 66.7 7.7 44.5 42.4 44.8 4.4 23.5 26.2 3.5 3.1 20.3 18.5 13.9 12.2 2.2 1.4 1.1 1.0 Advanced 機能製品 Specialty 樹脂製品 Other Specialt
Slide 6: FY2021 Financial Summary (3)
5 FY2021 Financial Summary (3) (in billions of yen) FY2020 FY2021 Notes - Other expenses in FY2020 include an ¥1.6bn impairment loss related to the PGA business Core operating profit 18.9 25.3 - Other expenses in FY2021 include a ¥5.3bn Adjustments 0.1 0.1 impairment loss related to the PGA business
Slide 7: Segment Performance: Advanced Materials
6 Segment Performance: Advanced Materials (billions of yen) Vs. FY2020 FY2020 FY2021 Change % Revenue ➚ Operating profit ➚ Advanced Materials Advanced plastics: Revenue and profit up: Advanced plastics 28.8 47.8 +66% Higher sales volumes of PVDF LiB binder, PPS and PGA (for shale development) partia
Slide 8: Segment Performance: Specialty Chemicals
7 Segment Performance: Specialty Chemicals (billions of yen) Vs. FY2020 FY2020 FY2021 Change % Revenue ➚ Operating profit ➘ Specialty Chemicals Agrochemicals: Revenue leveled off, profit down Agrochemicals 7.1 7.1 -1% Flat fungicide sales; higher raw material and fuel costs Pharmaceuticals 4.0 4.2 +
Slide 9: Segment Performance: Specialty Plastics
8 Segment Performance: Specialty Plastics (billions of yen) Vs. FY2020 FY2020 FY2021 Change % Revenue ➚ Operating profit ➚ Specialty Plastics Home products/Fishing lines: Revenue and profit up Home products 21.8 23.2 +6% Continued volume growth of ‘NEW Krewrap’ film and ‘Seaguar’ fishing lines Fishi
Slide 10: Segment Performance: Construction
9 Segment Performance: Construction (billions of yen) Vs. FY2020 FY2020 FY2021 Change % Revenue ➘ Operating profit ➘ Construction Construction: Revenue and profit down Construction 21.1 20.2 -4% Construction projects decreased in both private and public sectors Elimination -7.2 -8.0 -- (Intercompany
Slide 11: Segment Performance: Other Operations
10 Segment Performance: Other Operations (billions of yen) Vs. FY2020 FY2020 FY2021 Change % Revenue ➘ Operating profit ➘ Other Operations Environmental engineering: Revenue and profit down Environmental - Flat volume growth for low-level PCB waste engineering 14.9 13.4 -10% treatment Logistics 7.8
Slide 12: Financial Position
11 Financial Position (billions of yen) Assets Liabilities and Equity Mar. 31 Mar. 31 Mar. 31 Mar. 31 Change Change 2021 2022 2021 2022 Cash and cash equivalents 17.8 30.6 12.8 Trade and other payables 19.2 29.5 10.3 Trade and other receivables 28.2 35.8 7.6 Interest-bearing debt 29.5 28.5 -1.0 Inve
Slide 13: Cash Flow
12 Cash Flow (billions of yen) FY2020 FY2021 Change Profit before income tax 17.7 20.4 2.7 Depreciation 11.7 11.6 -0.1 Other -2.7 -3.4 -0.6 Cash flow from operating activities 26.7 28.6 1.9 Cash flow from investing activities -3.9 -11.0 -7.1 Free cash flow 22.8 17.6 -5.2 Cash flow from financing act
Slide 14: Key Indicators (1)
13 Key Indicators (1) (billions of yen) Capital investment Depreciation expenses 27.1 30 15 12.1 11.7 11.6 11.9 10.3 10.2 9.9 10.3 20 14.9 14.3 14.3 10 6.1 5.9 5.9 13.2 5.4 5.1 5.0 5.4 11.4 10.3 9.8 7.4 8.2 8.2 7.6 10 6.0 5.5 5.8 5 5.0 5.1 4.9 5.0 6.0 5.8 5.7 5.4 4.8 4.0 5.8 6.7 6.1 6.7 0 0 2015 201
Slide 15: Key Indicators (2)
14 Key Indicators (2) ROE ROIC 10% 9.0% 8% 8.4% 6.7% 7.7% 7.4% 7.8% 6.3% 6.5% 6.1% 6.6% 8% 7.1% 5.8% 6% 4.9% 6% 4.1% 3.5% 4% 2.9% 4% 2% 2% 0% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022 estimate estimate ROA DE Ratio 10% 1 7.7% 8% 7.1% 7.3% 7.0% 7.6% 0.69 5.3%
Slide 16: II. Consolidated Companies
15 II. Consolidated Companies
Slide 17: FY2020-2021 Revenue & Assets
16 FY2020-2021 Revenue & Assets (billions of yen) FY2020 FY2021 Change Revenue Total assets Revenue Total assets Revenue Total assets Kureha Corp. 74.2 199.1 89.6 211.1 15.4 12.0 Kureha Trading Group 23.2 13.3 26.3 14.7 3.1 1.3 Kureha Corp. 29.8 -- 41.6 -- 11.9 -- Kureha Trading Group 11.9 -- 14.8 -
Slide 18: FY2020-2021 Revenue & Assets (cont'd)
17 FY2020-2021 Revenue & Assets (cont’d) (billions of yen) FY2020 FY2021 Change Revenue Total assets Revenue Total assets Revenue Total assets Kurehanishiki Construction 17.4 11.9 16.2 11.8 -1.2 -0.2 Group Construc- Kureha Service Group 3.7 2.0 4.0 2.8 0.3 0.8 tion Consolidation adjustments -7.2 --
Slide 19: III. FY2022 Outlook
18 III. FY2022 Outlook (April 1, 2022 – March 31, 2023) Highlights: • FY2022 guidelines reflecting impact of potential risks associated with the Ukraine crisis and China-related pandemic restrictions ✓ Higher prices of raw materials, coal and other fuels (impact partially mitigated by pricing action
Slide 20: FY2022 Financial Forecast (1)
19 FY2022 Financial Forecast (1) (in billions of yen) Vs. FY2021 FY2021 FY2022e Change • Revenue expected to increase on the back 1H 2H FY YOY of higher PVDF binder, PGA and PPS sales 11.7 volumes and pricing actions to reflect higher Revenue 168.3 90.0 90.0 180.0 (+6.9%) fuel and materials costs in
Slide 21: FY2022 Financial Forecast (2)
20 FY2022 Financial Forecast (2) Revenue and Core Operating Profit: Segment Breakdown (in billions of yen) FY2021 FY2022e 1H 2H FY 1H 2H FY Revenue 79.1 89.3 168.3 90.0 90.0 180.0 Advanced Materials 28.8 37.9 66.7 41.5 40.5 82.0 Specialty Chemicals 12.8 13.4 26.2 13.5 13.0 26.5 Specialty Plastics 22
Slide 22: FY2022 Financial Forecast (3)
21 FY2022 Financial Forecast (3) (in billions of yen) Segment Revenue & Core Operating Profit (vs. FY2021) Revenue FY2021 Core operating profit FY2021 82.0 FY2022e 13.5 FY2022e 66.7 10.0 9.9 44.8 44.0 6.5 26.2 26.5 3.1 18.5 17.0 12.2 10.5 1.4 2.0 0.5 1.0 0.5 機能製品 化学製品 Advanced 樹脂製品 Construction Spec
Slide 23: Segment Performance Forecast: Advanced Materials
22 Segment Performance Forecast: Advanced Materials (billions of yen) Vs. FY2021 FY2021 FY2022e Change Revenue ➚ Operating Profit ➚ % Advanced plastics: Revenue and profit up Advanced Materials - Sales expansion of PVDF specialty polymers - PPS capacity increase contributing year-round Advanced plas
Slide 24: Segment Performance Forecast: Specialty Chemicals
23 Segment Performance Forecast: Specialty Chemicals (billions of yen) Vs. FY2021 FY2021 FY2022e Change Revenue ➚ Operating Profit ➘ % Agrochemicals: Revenue up, profit down Specialty Chemicals Higher fungicide sales volume more than offset Agrochemicals 7.1 8.0 +13% by higher raw material cost and
Slide 25: Segment Performance Forecast: Specialty Plastics
24 Segment Performance Forecast: Specialty Plastics (billions of yen) Vs. FY2021 FY2021 FY2022e Change Revenue ➘ Operating Profit ➘ % Home products/Fishing lines: Revenue and profit down Specialty Plastics - Intensifying post-pandemic competition in the Home products 23.2 21.0 -9% home products mark
Slide 26: Segment Performance Forecast: Construction
25 Segment Performance Forecast: Construction (billions of yen) Vs. FY2021 FY2021 FY2022e Change Revenue ➘ Operating Profit ➘ % Construction: Revenue and profit down Construction - Intensifying competition in the civil engineering Construction 20.2 20.5 +1% business - Reduced private capital investm
Slide 27: Segment Performance Forecast: Other Operations
26 Segment Performance Forecast: Other Operations (billions of yen) Vs. FY2021 FY2021 FY2022e Change Revenue ➘ Operating Profit ➘ % Environment engineering: Revenue and profit down Other Operations - Completion of large low-level PCB waste Environmental treatment projects in prior year 13.4 12.6 -6%
Slide 28: Cash Flow Forecast
27 Cash Flow Forecast (billions of yen) FY2021 FY2021e Change Profit before income tax 20.4 22.0 1.6 Depreciation 11.6 11.9 0.4 Other -3.4 -8.8 -5.5 Cash flow from operating activities 28.6 25.1 -3.5 Cash flow from investing activities -11.0 -23.9 -12.9 Free cash flow 17.6 1.1 -16.4 Cash flow from f
Slide 29: IV. 'Kureha's Challenge 2022' Mid-Term Management Plan
28 IV. ‘Kureha’s Challenge 2022’ Mid-Term Management Plan & FY2022 Priority Measures
Slide 30: Kureha's Challenge 2022
29 Kureha’s Challenge 2022 ▶ Complete the measures remaining from Kureha’s Challenge 2020 – Instill a ‘follow-through’ 2021-2022 attitude in our corporate culture What ▶ Clarify the future vision of Kureha Group and formulate an action plan to realize this vision We Do from a medium- to long-term pe
Slide 31: FY2022 business environment and management policy
30 FY2022 business environment and management policy ➢ We expect to see continued impact of the COVID pandemic on our operations during FY2022. Global inflation triggered by the Russian invasion of Ukraine is also escalating and causing oil, gas and coal prices to rise. Our business environment ther
Slide 32: FY2022 Priority Measures
31 FY2022 Priority Measures Expanding the Advanced Materials businesses Improving competitiveness and profitability in existing businesses Identifying and developing new businesses Reinforcing efforts toward carbon neutrality and zero emissions Strengthening the management foundations
Slide 33: Expanding the Advanced Materials businesses - PVDF
32 Expanding the Advanced Materials businesses - Polyvinylidene fluoride (PVDF) - PVDF Business Revenue (¥ billion) 50 • Maintains a roughly 40% share in the automotive LiB cathode binder market • Continued strong demand for LiBs driven by increasing EV and PHEV production in FY21 and to be further
Slide 34: Expanding the Advanced Materials businesses - PGA
33 Expanding the Advanced Materials businesses - Polyglycolic acid (PGA) - PGA Business Revenue Market conditions - FY2021: Shale drilling activities were slow to recover despite oil price hikes; US drilling rig (¥ billions) 5.0 counts still below FY2019 pre-pandemic levels as of the end of the year
Slide 35: Identifying and developing new businesses
34 Identifying and developing new businesses New Business Creation Project • Is currently working with a technology/business partner to develop and launch PVDF Piezo film for high-end touch panel applications; will also accelerate the development of other applications for piezo film • Is exploring g
Slide 36: Reinforcing efforts toward carbon neutrality and zero emissions
35 Reinforcing efforts toward carbon neutrality and zero emissions ⚫ Declared support for the Task Force on Climate-Related Financial Disclosures (TCFD) and published 1st TCFD Report (May 9, 2022) https://www.kureha.co.jp/en/csr/pdf/TCFD20220509en.pdf ⚫ Aiming to achieve carbon neutrality by FY2050
Slide 37: Strengthening the management foundations
36 Strengthening the management foundations Promoting sustainable management Strengthening Increasing risk management corporate value • Reinforces the function of the Risk • Conducts disciplined, capital-efficient Management Committee to address varied investment for sustainable growth; enhances and
Slide 38: V. Governance, Capital Management
37 V. Governance, Capital Management
Slide 39: Strengthening governance
38 Strengthening governance • Electing additional Internal and Outside Directors to the Board of Directors with aim to further enhance governance (subject to approval at the General Shareholders Meeting in June 2022) FY2021（total 5 Directors) FY2022 (total 7 Directors) Internal Directors(3) Outside
Slide 40: Reducing Cross-Shareholdings
39 Reducing Cross-Shareholdings ◼ Kureha has reduced the number of cross-shareholdings and sold shares in the companies which roles and benefits had lessened for Kureha businesses Value of cross-shareholdings/ Net assets 単位：億円 (¥billion) 30030 17.2% 20% 16.8% 15.8% 15.1% 12.1% 15% 20020 9.4% 8.3% 10
Slide 41: Capital policy and shareholder returns
40 Capital policy and shareholder returns Capital policy Aiming for sustainable growth and enhanced corporate value, we will set the stage for future business development by steadily achieving the management goals and quantitative targets set forth in Kureha's Challenge 2022. While maintaining finan
Slide 42: Disclaimer
41 Disclaimer • This presentation material is provided for a deeper understanding of our company, and is not intended to be used as a solicitation for investment or other activities. • This material has been prepared by our company based on the information available at the time of the presentation.