Plan： The Three-Year Initiative～Discover Future～

KANEKA CORPORATION

Ⅰ. Purpose Management

Our purpose management

Life Focus Management
Before we are no longer able to live on the Earth.

LIFE is Chemical Reaction

The reason why Kaneka’s management policy is to research the “mysteries of life” and support a society that nurtures life is precisely
because our universal understanding that “life is a chemical reaction” is at our very origin.
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1

Chemistry of Life

2

The Dreamology Company－Make your dreams come true－ Kaneka
Deepen our
understanding of natureand rapidly deploy
appropriate technology
The crisis we, as humans, inflict on the environment affects all life on Earth.
Our ability to solve this depends on our wisdom. Kaneka has a significant role.
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Plan： The Three-Year Initiative

Transforming the Mid-term Plan into
“Plan: The Three-Year Initiative”

Mid-term
Plan◼ Be postponed◼ Nothing starts◼ Maintain status quo

Plan：
The Three-Year
Initiative◼ Creative mechanism◼ Start from this instant◼ Curiosity and dreams

The transition from the “Mid-term Plan” to the “Plan: The Three-Year Initiative” demonstrates our will to act by focusing on what we can do now.
This is a significant shift in mindset for us.
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3

Kaneka Tower

Key basic structure of our management model

Kaneka Tower represents our purpose management and three values,
meaning our perspective and point of view (what we value).
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4Hybrid Management of the Toy Box

Combining different thingsin different business fields in a new way

Kaneka is like a toy box, filled with diverse products and technologies.
By combining these unique elements, we deliver innovative solutions.
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5

Human Driven Company

Trust ＆ Respect
Trust colleagues and respect differences

Customers and colleagues work together as “One Team”

Diversity
Bring forth new ideas by tapping into diversity
Delivering unique Kaneka value that amazes the world

The combination of diverse individuals, regardless of nationality or gender and based on mutual trust, is the source of our company’s value creation.
We value communication not only within the company but also outside to gain trust.
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6

Domains

Environment / Energy crisis⚫ Green Planet⚫ High-efficiency photovoltaic
modules

7

Food crisis

Wellness crisis⚫ Dairy products, organic andrecycling-oriented dairy farming⚫ Biopharmaceuticals⚫ Adaptation of Supplemental Nutrition
ingredients into the food field⚫ Probiotics and such in
Supplemental Nutrition Business⚫ Catheters and blood purification⚫ Seed businessTransform the current business portfolio into one that solves three crises.
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Wellness First

8

Human-driven management
New Portfolio
Transformation and
GrowthHybrid Managementof the Toy Box

Saving the World
with Chemistry

Sustainability

Value Creating
Company

Kaneka thinks “Wellness First.”
Contributing to the creation of a sustainable society through the power of chemistry.
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Ⅱ. Core Philosophy

Core Philosophy of Management

GlobalStrategies

ESG

R2B＋P
Strategies

Human Resource
Strategies(Carbon Neutral, Digital Transformation)

Our management is founded on three strategies: global, R2B+P, and human resources, with R2B+P being paramount.
Our commitment to ESG, including carbon neutrality and digital transformation (DX), is the foundation of management.
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9

Focus Shift to the Life Science Fields

Technology that makes life on Earth healthy
Biomanufacturing to drive growth / Medical to accelerate growth※Biomanufacturing

We are shifting our focus towards the life sciences fields.
We will particularly allocate resources to the advancement of key biomanufacturing techniques within these fields.
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10

R2B Strategies

and

to

We are transforming R&B intoto speed up the process from research to business implementation.
The goal of our research is social implementation.
Social implementation will not occur without “research” not only in the laboratory, but also in production and sales.
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11

R2B Strategies

12

Concentrate 85% of R2B expense in FY2024 on priority areas❙Realization and acceleration of leading-edge businesses

Foundation
businesses

R2B expense
FY2024 Plan

¥ 40

billion85%

Green Planet

OLED

Optical film

PV

Probiotics and othersupplements

Food production
support❙Strengthening of life sciences

MedicalPharmaceuticals

Invest resources with a focus on the priority areas of leading-edge businesses and life sciences,which will contribute to the portfolio transformation, to generate R2B results.
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R2B Strategies
Input

OutputR2B expense: Maintain 5% of net sales

13

New product net sales ratio: Targeting 40%＜R2B Expense＞(Billions of yen)

50

4.6 %

5.0 %

＜Net Sales of New Products＞

5.3 %R2B expense
net sales ratio
5%40

Leading-edge
3%businesses

20

1%Foundation
businesses
0%0
FY2023ResultFY2024
Plan

300

40%

32 %

35%
30%

21 %

25%
20%

200

2%

10

product
40 % New45%
net sales ratio

500
400

4%
30

(Billions of yen)

15%
10%

100

FY2026
Plan

5%
0

0%

FY2023ResultFY2024Plan

FY2026
Plan

Life Science accounts for about 50% of net sales of new products
Our policy for R2B is to invest resources equivalent to 5% of our net sales. By 2026, we aim to achieve 40% new product net sales ratio.
The ratio of new product sales is one indicator of the portfolio transformation, and we will be focusing on increasing this ratio.
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Strengthen Research Institute Functions

14❙Kaneka’s Biomanufacturing
Medical & Pharmaceutical
Bio-Pharma Research Laboratories（Japan＋Belgium）
Regenerative Medicine and Cell
Therapy Laboratories

Dietary supplement andlactic acid bacteria

Food & Agriculture

Biopharmaceuticals

Organic dairy products

Regenerative medicine andcell therapy

Food production support

Green Planet Technology
Laboratories❙Advanced Technology Research

Green Planet
Biodegradable polymer

Supplement & Probiotics ResearchLaboratories
Food Production Support
Strategic Unit

CO2 Innovation Laboratory

Environment

Material Solutions
New Research Engine

Photovoltaic & Thin Film Device
Research Laboratories

Plastics Molding and Polymer processing
Process Development ResearchLaboratories

Electronics ResearchLaboratories

Engineering ResearchLaboratories

Thin Film Process Development ResearchLaboratories

From this fiscal year, we have enhanced our research and development structure in the field of biomanufacturing, and established an effective framework.
Additionally, in the advanced technology area, we have a robust research and development structure capable of solving critical issues.
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Green Planet

Towards social implementation
Progress in processing technology

Diversification of raw materials⚫ Waste cooking oil
Initiation of Green Planet production using waste cooking oil⚫ CO2Development of safe and highly efficient gas cultivation technology by
2030

Expansion of global supply system⚫ Europe: Strengthening of development activity structure⚫ Americas: Examination of facilities towards realizing local
production⚫ Japan (Takasago): Demonstration facilities for new processes,
enhancing current facility capabilities

We are steadily establishing a framework aimed at social implementation on a global scale. We are advancing in the development of manufacturing
technologies and making progress in exploring ways to expand our supply systems to meet the demands of major global suppliers.
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15

Supplement

16

Development of new material, active form of coenzyme Q10
Establishment of Supplement & Probiotics Research Laboratories, strengthening the system
Functionality addition
Improvement ofstability

Diversification of
intake methods

Research

Business

Control of taste and texture

Development of tablet
formulations

Development of high absorption
formulations

Domestic test marketing
Global formulation consideration

Establishment of patent network

Production
Improvement of production efficiency

We are developing a technology that can dramatically improve the stability of coenzyme Q10 to resist oxidation.
This technology will greatly expand the range of applications.
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Human Resource Strategies

17

Kaneka’s philosophy since its foundation

Human Driven Company
A lean, high-quality team and merit-based appraisal

Promotion ofDiversity
By going beyond attributes and tapping into diversity,
we bring forth new ideas. In this way, we aim tocontinue delivering unique Kaneka value thatamazes the world.

Human Resource Development
Development of human resources andleaders centered on Kaneka 1-on-1

Since 2018, we have been carrying out Kaneka
1-on-1, a system that aims to drive company
growth through personal growth by “lighting afire in people’s hearts.”

Promotion of
Wellness
We are working to improve the wellness of each
employee and the organization. The ties between our
employees is what lies at the heart of this.

The growth of a company is driven by each and every employee taking on challenges.
We create an environment where taking on challenges is possible, provide opportunities, promote growth, and achieve corporate transformation.
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Human Resource Strategies
Centered on Kaneka 1-on-1X
Development andpromotion of people

Great ambition
to move mountains
Results
・agility・scaleDesign of organization
Clarification of roles

People grow through work, and companies grow through people.
Team leaders should spend 80% of their effort on nurturing their team members.
Since 2018, we have been operating “Kaneka 1-on-1” linked to the personnel system.
We will evolve it to a new stage, “Kaneka 1-on-1X,” to improve individual growth and organizational performance.
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18

Think Global, Act Local

A Network Connecting Global and Local
See the world through someone else’s eyes,
like putting your foot in someone else’s shoe.
Rooted in local communities,
Overcoming cultural differences

We are building a global network that enables business development rooted in local communities.
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19

Global Strategies
Growth strategy function of
headquarters in each region

Basic policy of global strategy⚫

Production / Sales systems with deep local roots⚫

Seeking global management resources
through M&A / Open Innovation⚫

Developing global talents who can overcome culturaldifferences

EuropeAmericas

Expanding business capacity inthe environmental and energy,
healthcare fields

Leading global innovation⚫

Shifting the research base forbiopharmaceuticals❶ Active deployment of

Proportion of overseas sales

20

⚫

⚫

Mobilizing the Kaneka US
Innovation Center⚫

Creating large-scale new
businesses originating in the U.S.

environmentally friendly products

10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0

44%

46%

48%

50%
Europe/Other
Americas
Asia

Asia

Market-out type businessdevelopment
Japan

2023

2024

2025

2026

⚫

Strengthening market
development platforms⚫

Capturing growing demandJapan
Planning and implementing
global strategies as acentral function

We plan to increase the overseas sales ratio to 50% by FY2026.
We aim to be a globally recognized company by providing valuable solutions in a timely manner to markets around the world, without borders.
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Carbon Neutrality

21

Roadmap to Carbon Neutrality
Decarbonizationahead of schedule(3 years)

GHG emissions
reduction
total potential

Item2023 potential

720,000 tons

1)

Fuel conversion

310,000 tons

2)

Energy saving

200,000 tons

3)

Process innovation

100,000 tons

4)

Use of renewable energy, low CO2 emission
factor for electricity and steam power

110,000 tons

Total

720,000 tons

2030 GHG emissions (target)

Total 1.08 million tons
30% reduction
compared to FY2013*

Since the CO2 emission factor for electric power companies issubject to change, we expect our emissions in Scope 2 to beequivalent to those of FY2013.

Zero GHG emissions by 2050 is a major goal. We believe it is important to be able to create GHG reduction potential.
This year, we have created a new potential of 180,000 tons, and have created a cumulative reduction potential of 720,000 tons.
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Carbon Neutrality
Global conversion of energy at major manufacturing bases
Takasago

Malaysia

Decision to make large-scale capital investments
to abolish coal boilers

Introduction of biomass boiler steam⚫

Reduction of variable costs through optimal fuel selection⚫

⚫

Improvement in overall efficiency due to reduced heat loss

Reduction effect of 30,000 tons of GHG emissions (equivalent
to about 30% of Kaneka Malaysia)⚫

Looking ahead to fuel conversion to synthetic methane and hydrogen
combustion in the future⚫

About half of the steam volume is derived from biomass fuelInstallation of PV in our factories
using in-house products⚫

Five Main Manufacturing Sites (Domestic)⚫

Group companies in Japan⚫

Overseas Group companies

Demonstration of microgrid concept in cooperation
with local governments and communities⚫

Area around Toyooka IndustrialPark

In FY2027, we will advance the phase-out of coal by three years from the original plan.
We will promote fuel conversion of in-house power generation and process innovation for GHG reduction and accelerate energy conservation.
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22

Digital Transformation

23

Production innovation using digital technology
Kaneka’s Unique, Field-Led

Shifting to Creative WorkAI and Data Utilization

Enhancing overall operational efficiency– Introduce AI and data infrastructure to each site to advance problem-solving throughin-house production.

– Enhance operational efficiency to reduce basic work to about half of2020 by 2030.

– Work on 120 themes and realize 30 of them (about 600 million yen/year).

– Shift human resources from basic work to creative work.
ImpactAI and Data Utilization Themes
・Optimal automatic operation of the drying process
・Automatic adjustment of molecular weight in culture
processes, etc.

300

（Equipment and quality）

・Detecting equipment anomalies to improve operating rate
・Prediction system for foaming conditions, etc.

200

Image and soundanalysis

・Reducing losses by monitoring the coating furnace exit
・Detection of print stains, etc.

50

Plan optimization

・Optimization of inventory provisions
・Production planning optimization, etc.

50

Optimal operation
Automatic control
Anomaly prediction（Production/sales/inventory）

Basic work
Creative work

(Millions of
yen/year)

Total

600

FY2020 FY2022 FY2023(Result) (Result) (Result)

FY2024(Plan)FY2025(Plan)

We will work on the sophistication of business digital platforms and transform them into operations that match the new era.
We will create new values such as “creation of new businesses” and “transformation of work culture.”ⓒ2024Kaneka
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FY2030(Target)Ⅲ. Plan: The Three-Year Initiative

Review of FY2023
Operating income ¥42 billion, targeted in the beginning of FY2023, was not achieved.
Business performance abruptly turned towards recovery in the 2nd half (Operating income in FY2023：1st half ¥12.6 billion→
2nd half ¥20.0 billion).
⇒ Net sales and operating income are expected to increase in the next fiscal year as momentum in each market recovers.
(Billions of yen)

Initial target

50

43.6

40
30

42.0 1,400
1,200

35.1
26.0

27.5

32.6 1,000
800

20
10

Variance factors （vs. initial target）⚫ Foods： Shift to high-valued-added products （Price↑）⚫ Foam： Improvement of profit margin （Price↑）⚫ MOD： Downturn in construction demand in Europe and the U.S.（Quantity↓）⚫ Fiber： Sluggish market due to currency depreciation in African countries （Quantity↓）⚫ Pharma： Longer-than-expected inventory adjustments from customers （Quantity↓）

600

602

577

756

692

762

0
2019

2020
Net Sales

2021

2022

400

Growth plan after FY2024

200⚫

Sales expansion of leading-edge businesses through operation of
aggressive capital investment0⚫

Increased selling price by introducing new products/grades⚫

Increase in sales as momentum in each market recovers

2023

Operating income

In FY2023, although we saw an improvement in profit margin due to price increases, demand in overseas markets remained sluggish.
For FY2024, we aim to expand businesses by steadily capturing the recovery since the second half of FY2023.
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Review of FY2023

25

Rapid recovery of business performance⚫

Operating income bottomed out in 1Q, and the pace of recovery accelerated in each successive quarter.

⚫

Strong momentum returned to each market in the 2nd half despite a sluggish 1st half primarily due to volatilefluctuations in demand.
＜Operating Income (FY2023)>(Billions of yen)
15.0

10.0

5.0

5.6

7.0

9.0

11.0

0.0

1Q

2Q

3Q

4Q

Through advancing the portfolio transformation in leading-edge businesses, and the strong performance of foundation businesses,
we have achieved significant profit growth in both the first and second halves of the year.
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Plan： The Three-Year Initiative 2024

26

－ Announced on May 27, 2024 －Expanding net sales and operating income
Introduction of new products
Shift to high-value-added products＜Net Sales＞(Billions of yen)

762.3
187.2
74.9
176.2

322.9

FY2023ResultMaterial

790.0
188.0

900.0

325.0

FY2024
Plan
Quality of Life

(Billions of yen)

65.0

178.0

32.6
226.0

12.1
12.9

38.0
13.0

Health Care

26.5

16.0

FY2024Plan

FY2026Plan

Net sales

762.3

790.0

900.0

Operatingincome

32.6

38.0

65.0

Operatingincome rate

4.3%

4.8%

7.2 %

Net income

23.2

24.5

49.0

ROE

5.3%

5.4%

10.0%

ROIC

4.4%

5.0%

8.3%

(Billions of yen)

26.0

15.4

17.5

27.5

28.0

33.0

FY2023ResultFY2024Plan

FY2026Plan

360.0

FY2026Plan

FY2023Result

16.0

135.0

89.0
187.0

＜Operating Income＞

Nutrition

Exchange rate：¥140/＄、¥155/€ ／ Domestic naphtha price：¥65,000/KL

While strengthening our foundation businesses that generate cash,
we will actively invest management resources in R2B activities, which are investments for the future.
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Portfolio Transformation◼ Development of unique and differentiatedtechnologies that cannot be copied

Leading-edgebusinesses◼ Accelerating social implementation of big-scale
Research & Business themes

Achieve dramatic growth bystrategic investment in humanresources, goods, and capital

27

Aim for over 60%
leading-edge businesses%◼ Active use of external resources

57 55

49
◼ Strengthen differentiation
capabilities by developing new
products

Foundation businesses
Steadily strengthen capabilities to earn cash byreinforcement of business foundation◼ Improve cost competitivenessthrough process innovation

%

51
%

◼ Capital investment tostrengthen supply baseLeading-edge businesses

Performance Polymers(MS), E & I Technology, Pharma, Medical, Supplemental Nutrition, Agris, PV & Energy management

Foundation businesses

Vinyls and Chlor-Alkali, Performance Polymers(MOD), Foam & Residential Techs, Performance Fibers, Foods

660
0%＜Operating Income＞

45
%

55
%

FY2022 FY2023
Result Result

50

% %

%

45
50 43
%
%

FY2024
Plan

%

4 40
0 %

FY2026Plan

We will accelerate the “selection and concentration” of investments and hasten the transformation of our business portfolio.
Through the transformation of our profit structure, we will increase profitability and achieve dramatic growth.
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ⓒ2024%

2026+X
Plan

Portfolio Change Drivers

28

Growth drivers leading Kaneka’s portfolio transformation
New high-value-added products⚫
⚫
⚫
⚫

： Non-PVC resin modifier： New method foaming products： New functional performance fibers： New products for consumers such as dairy products, etc.

MOD
Foam
Fibers
Foods

60％

65%

80% (2026+X Plan)

55％
50％

45％

10％

5％
50％

45％

35％

FY2023ResultFY2024Plan

FY2026Plan

New high-value-added products

Portfolio change drivers

55%

50%

5％

Leading-edge businesses +Foundation
businesses

20％
20％2026+XPlan

We will shift sales to new high-value-added products to improve the cash generation capability of foundation businesses
and achieve the portfolio transformation.
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Investment Plan

29

Plan for capital investment including infrastructure (environment/ DX)
FY2024~FY2026
Total amount of investment¥300 billion

Nutrition

Material

Construct new dairy product plant

Increase biodegradable polymer capacity

Construct new probiotics product plant

Increase modified silicone polymer capacity

Increase coenzyme Q10 capacity

Increase PVC capacity

Health Care

Quality of Life

(Including M&A)

Construct new catheter plant

Increase high-performancepolyimide film capacity

Increase blood purification device capacity¥260 billion

Increase biopharmaceutical capacity

Construct new building integrated
photovoltaics production facility

Increase small molecule
pharmaceutical capacity

Infrastructure/Environmental investment, etc.

¥40 billion

OthersDX-related

Fuel conversion(Takasago)

Environment-related

We plan to invest 260 billion yen in business areas, especially actively investing resources in leading-edge businesses.
We will also invest 40 billion yen in infrastructure-related areas and promote DX and fuel conversion at Takasago.
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Business Expansion throughAggressive Capital Investment

Businesses where capital investments bloom

FY2023⇒FY2026

Increase of operating
incomeAbout ¥32 billion

Start of operation

MS：❶mRNA：

Capacity
increase 10,000t

1st half of
FY2024

Capacity increase
approx. 5 times

1st half of
FY202430

Profit contribution
from major capital
investments

Start of operation

Capacity
increase 15,000t

2nd half of
FY2024：

Capacity increase

1st half of
FY2024

PV & Energy management
Heterojunction Cells：

Capacity increase

1st half of
FY2024

Blood purification devices（Tomatoh）:

New production
facility

1st half of
FY2024

Green Planet（Takasago）：
Resins for optical film

Contribution from the
expansion of existing
businesses

FY2023

For FY2026, we plan to increase profits by about 32 billion yen compared to FY2023.
We aim to maximize profits through the operation of major capital investments.
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FY2026Plan

Priority Strategy by Segment

31

Health Care Solution Unit
To create a world where advanced medical means are available to as many people as possible, Medical Edge Explorer(Billions of yen)
35

Medical SV

200

Our goal is to become a medical company that leverages open innovation to
generate unique innovations in a wide range of technologies and products thatsave lives. We aim to continuously provide globally distinctive solutions.

50

As an open innovator, we strive to refine our biomanufacturing technologies andprocess development capabilities, aiming to become a brand holder with scale
and presence as a global niche player in specific medical domains that are still in
their early stages.

12.9

20

16.0

15

135.0
74.9

89.0

10
5

0

0
FY2023ResultFY2024Plan
Net Salesⓒ2024 Kaneka Group All rights reserved.

30
25

150

100

Pharma & Supplemental Nutrition SV(Pharma)

26.5

FY2026
Plan
Operating Income

Priority Strategy by Segment

32

Nutrition Solution Unit
To re-innovate food and health, Nutrition Value Chain Innovator

Pharma & Supplemental Nutrition SV(Supplement)(Billions of yen)
25

300
250

Following QH and probiotics, we will line up multiple new products and build a global
brand that contributes to human health around the world through reliable products
backed by evidence.

16.0

200
150

12.1

13.0

20

15

10

Foods & Agris SV

100

With a focus on Wellness First, we will scale up new business and construct a
unique business model (new portfolio) as a creator delivering new food values
to consumers.

187.2

188.0

178.0

FY2023ResultFY2024Plan

FY2026Plan

0

0

Net Salesⓒ2024 Kaneka Group All rights reserved.

550

Operating Income

Priority Strategy by Segment

33

Quality of Life Solution Unit
To produce the leading edge of the enhancement of the quality of life through the power of materials, Quality of Life Pathfinder

Foam & Residential Techs SV
Aiming to deepen our cultivated foam technology, we will foresee changes inindustrial structures, and convert to a new portfolio with scale.

(Billions of yen)
35

300

26.0

250

E&I Technology SV
Anticipating advances in electronics, we aim to deliver solutions to unexplored
growth areas by fusing material functions and devices, centered on
partnerships with key players in the market.

25

200
150

PV & Energy management SV

100

We aim to harness the infinite benefits of solar energy to the fullest, and realize
a global large-scale niche business concept that contributes to solving social
energy issues. We will continue to develop unique solar cell technology andprovide unique and attractive solutions.

50

15.4
176.2

17.5
187.0

We will aim to deliver unique high-performance fibers based on innovation to
the world and be reborn (rejuvenated) as a business that enriches people’s
Quality of Life on a scalable model.

ⓒ2024 Kaneka Group All rights reserved.

20

226.0

15
10
5

0

0
FY2023ResultFY2024Plan
Net Sales

Performance Fibers SV

30

FY2026
Plan
Operating Income

Priority Strategy by Segment

34

Material Solution Unit
To support the advancement of life and the environment by drawing out the richness of materials, Material Value Creator

Vinyls and Chlor-Alkali SV
We aim to evolve our hybrid model, which spans from electrolysis to monomers,
polymers, and processing, on a global scale. As Kaneka within Asia, we will
widely provide products refined with unique technology and achieve the scaleup of a unique business form.

27.5

28.0

322.9

325.0

30
28

200
150

360.0

We aim to create one-of-a-kind high-performance polymers along withcompounding and application technology. We provide material solutions forunresolved issues, including expansion into downstream areas starting from
Cemedine Co., Ltd.

ⓒ2024 Kaneka Group All rights reserved.

26
24

100

22

50
0

Performance Polymers (MS) SV

34
32

350

250

By continuously providing solutions that improve the functionality of various
matrices to the market, we will contribute to the creation of new materials thatmeet the needs around the world as a reforming material innovator with apresence in the global market.

33.0

400

300

Performance Polymers (MOD) SV(Billions of yen)

450

20
FY2023ResultFY2024Plan
Net Sales

FY2026
Plan
Operating Income

Cash Allocation

35

Funding sources and use framework(FY2024-FY2026 three-year period)

Operating cash flow
Fund procurement
Increase/decrease ofinterest-bearing debt

¥250 billion(Total of three-year period)

Planning to raise capital through ESG bonds

Shareholder returns

Investing cash flow

¥190 billion
Timely capital investments that enable growth strategies

Dividend
payout
ratio
配当性向

30

％ benchmark

Stable dividends and flexible repurchase of treasury shares

We aim to bolster cash generation and reinvestment in leading-edge and new businesses from our foundation businesses.
With a 30% dividend payout ratio as a benchmark, we will maintain stable dividends and flexible repurchase of treasury shares.
ⓒ2024Kaneka
KanekaGroup
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rights reserved.
reserved.
ⓒ2024

Ⅳ. Improvement of Return on Capitaland Shareholder Returns

For Improvement of Return on Capital
For the improvement of market evaluation and return on capital

Focusing on initiatives conscious of appropriate distribution of management resources
FY2023 PBR= 0.54 / ROE= 5.3%

⇒ Target PBR= above 1.0 / ROE= above 10%

Promote growth strategies⚫

Accelerate expansion of growing
businesses⚫

Expand specialized products offoundation businesses⚫

Promote ESG activities

Enrich shareholder returns⚫
⚫

Improve ROE/ROIC⚫

Steadily strengthen earning
capabilities⚫

Decrease cost of capital⚫

Reduce cross-shareholdings

Implement stable dividends
Flexible repurchase of treasury
sharesStrengthen IR activities⚫

Enrich disclosure information⚫

Strengthen constructive dialogue⚫

Implement effective PR activities

We will demonstrate the results of our growth strategy, recover profitability and growth potential at an early stage,
and work to improve return on capital.
ⓒ2024Kaneka
KanekaGroup
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rights reserved.
reserved.
ⓒ2024

36

Return on Capital Index
<ROE>
10%
8%

5.7%

6%

10%

7.4%

7.1%
5.3%

<ROIC>

10.0%

ROE recovers to CAPM level again andcontinuously improves in FY2025
Aim for over 10% in FY2026

5.4%

ROIC recovers to WACC level andcontinuously improves after FY2024
Aim for over 8% in FY2026

6.5%
5.5%

6%

4.4%
4%
FY2021ResultFY2022
ResultFY2023ResultFY2024Plan

FY2025Plan

FY2026Plan<PER>
Aim for continuous
14
improvement in PER
12
10

8.73

9.87

8.3%

7.7%

8%

CAPM

37

WACC

5.0%

4%
FY2021ResultFY2022
ResultFY2023ResultFY2024Plan

FY2025Plan

FY2026Plan

FY2024Plan

FY2025Plan

FY2026
Plan

<PBR>
1.4
1.2

10.66

Aim for over 1.0 in PBR
as soon as possible

1.0

8

0.8

6

0.6

4

0.60

0.54

0.54

FY2021ResultFY2022
ResultFY2023Result0.4
FY2021ResultFY2022
ResultFY2023ResultFY2024Plan

FY2025Plan

FY2026Plan

We will improve return on capital index through the promotion of growth strategies and steady strengthening of profitability,
and aim to increase corporate value and share prices.
ⓒ2024Kaneka
KanekaGroup
Group All
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rights reserved.
reserved.
ⓒ2024

Policy of Shareholder Returns

38⚫ Benchmark: Consolidated dividend payout ratio of 30%⚫ Continue stable shareholder returns with treasury shares repurchased(Flexibly consider total return ratio of 40% or more as benchmark)Net income
22.2 billion
Dividend
payout ratio
29.5%

46.6%

14.0

41.2%

15.8

26.5

27.1%

23.0

23.2

24.5

31.5%

30.7%

30.9%
Execute repurchase of treasury
shares as planned(Billions of yen)

15

(Estimated amount: about 5.0

Dividends

billion yen)

Treasury shares repurchased

8.0

10

2.8

1.7
5

6.5

6.5

6.5

7.2

FY2018FY2019FY2020

FY2021

7.3

7.1

5.0
Plan to increase dividend

7.6

110 yen/share→120 yen/share（vs. FY2023 ＋10 yen/share）

0

FY2022

FY2023

FY2024Plan

Our policy for shareholder returns is to continue stable profit returns, considering each quarter’s business performance,
mid/long-term profit trends, investment plans, and financial conditions.
ⓒ2024Kaneka
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reserved.
ⓒ2024

Current Situation of Cross-shareholdings

39⚫ Net asset ratio in FY2023 increased due to anincrease in the fair value of shares held

⚫ Steadily dispose of cross-shareholdings⚫ Endeavor to continue reduction⚫ Aim for a net asset ratio of 10% or less(Billions of yen)

10.0
8.0

120

124

123

119

6.0
4.0

8.8

2.0
0.0

105
105

0.9
FY20200.04

2.3

FY2021

FY2022(Billions of yen)

(％)

60

15

100
80

40

60
40

20

12.6

11.8

11.1

48.0

48.6

48.3

FY2020

FY2021

FY2022

12.7

10

60.3
5

20
0

0

FY20230
FY2023

Amount of disposal （Left axis）

Cross-shareholdings recorded on BS（Left axis）

Number of brands of cross-shareholdings

Cross-shareholdings ratio of consolidated net assets（Right axis）

Although the ratio of net assets has increased due to an increase in the fair value of shares held, we have been further reducing cross-shareholdings
since FY2023, and will continue to reduce them flexibly depending on the situation.
ⓒ2024Kaneka
KanekaGroup
Group All
Allrights
rights reserved.
reserved.
ⓒ2024