ｓFinancial Results for the Fiscal Year Ended March 31, 2020
(Japanese GAAP, Consolidated)
May 14, 2020

Name of Listed Company: Kaneka Corporation
Code Number:

Stock Exchange Listings: Tokyo, Nagoya

4118

URL https://www.kaneka.co.jp

Representative: Minoru Tanaka Title: President, Representative Director
Contact Person: Osamu Ishida
Title: Officer – Investor & Public Relations Department Phone: +81-3-5574-8090
Scheduled date for Ordinary General Meeting of Shareholders: June 26, 2020
Scheduled date of dividend distribution: June 11, 2020
Scheduled date for submitting financial statements: June 26, 2020
Note: Figures have been rounded down to the nearest million yen.

1. Consolidated Business Performance for the Fiscal Year Ended March 2020 (from April 1, 2019 to March 31, 2020)(1) Consolidated business performance(% indicates year-on-year change)
Net sales

Operating income¥ million

Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019% ¥ million

601,514621,043(3.1)
4.2% ¥ million

26,01436,041

Net income attributableto owners of parent

Ordinary income(27.8)(2.3)% ¥ million

20,166
31,268(35.5)(4.6)%

14,003
22,238(37.0)
3.1(Note) Comprehensive income: ¥4,099 million (-78.9％) in the fiscal year ended March 31, 2020
¥19,425 million (-34.1％) in the fiscal year ended March 31, 2019
Net income

Fully diluted net

per share

income per share¥214.28338.59¥Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019214.70339.15Return on equity
%
4.2
6.7

Ordinary
income – total
assets ratio
%
3.1
4.8

Operatingincome – sales
ratio
%
4.3
5.8

(Reference) Equity in earnings (losses) of affiliates: ¥150 million in the fiscal year ended March 31, 2020
¥29 million in the fiscal year ended March 31, 2019
Note: The Company conducted a consolidation of shares of common stock at the ratio of five shares to one share on October
1, 2018. However, net income per share and fully diluted net income per share have been calculated as though theshare consolidation took place on April 1, 2018.

(2) Consolidated financial position
Total assets¥ million
653,262
659,587

Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019

Shareholders'equity ratio

Net assets¥ million
354,094
360,726

Net assets
per share
%¥

50.7
51.1

5,082.08
5,166.88

Cash flows fromfinancing activities

Cash and cash equivalents
as of the fiscal year-end(Reference) Shareholders' equity: ¥331,483 million as of March 31, 2020
¥336,992 million as of March 31, 2019(3) Consolidated cash flows
Cash flows fromoperating activities¥ million
Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019

39,983
41,113

Cash flows frominvesting activities¥ million(41,807)(47,229)¥ million¥ million
(479)
(954)

37,60639,9702. Dividends
Annual dividends
1st Quarter 2nd Quarter 3rd Quarter Year-end
Annual¥¥¥¥¥Apr. 2018 – Mar. 2019
─
9.00
─
55.00
─
Apr. 2019 – Mar. 2020
Apr. 2020 – Mar. 2021
（Forecasts）

─

50.00

─

50.00

100.00

─

─

─

─

─

Total cash
dividends(Annual)¥ million
6,540
6,522

Net asset
payout ratio(Consolidated)
%
%
29.5
2.0

Payout ratio(Consolidated)

46.6

2.0

─

Notes: 1 The Company conducted a consolidation of shares of common stock at the ratio of five shares to one share on
October 1, 2018. The 2nd Quarter dividend per share for the fiscal year ended March 31, 2019 shows the actual
amount before the consolidation of shares.
2 The dividend forecasts for the fiscal year ending March 31, 2021 has not yet been determined.

3. Forecast for Consolidated Business Performance for the Fiscal Year Ending March 31, 2021
(from April 1, 2020 to March 31, 2021)
COVID-19 is spreading worldwide and has a great impact on the business environment in Japan and overseas. Since theGroup's business fields are diverse in Japan and overseas, and it is difficult to reasonably calculate the performance
forecasts at this time, we have not determined the consolidated performance forecast for the fiscal year ending March
2021. We will announce it as soon as it is possible to calculate the earnings forecast.

4. Other(1) Changes in principal subsidiaries during the fiscal year: No(2) Changes in accounting principles, changes in estimates, or restatements
1) Changes owing to revisions in accounting standards: Yes
2) Changes other than 1) above: No
3) Changes in accounting estimates: No4) Restatements: No
Note: For changes owing to revisions in accounting standards, please refer to the section entitled “(5) Notes to theConsolidated Financial Statements (Changes in Accounting Principles)” under “3. Consolidated Financial
Statements” on page 14.

(3) Number of shares outstanding (common stock)
March 31, 2020
68,000,000
March 31, 2019
68,000,000
1. Number of shares issued at the fiscal year-end
sharesshares(including treasury stock):
March 31, 2020
2,774,049
March 31, 2019
2,778,423
2. Number of shares of treasury stock at the fiscal
sharessharesyear-end:
March 31, 2020
65,224,682
March 31, 201965,571,874
3. Average number of shares during the period (calculatedsharessharescumulatively from the beginning of the fiscal year)
Note: The Company conducted a consolidation of shares of common stock at the ratio of five shares to one share on
October 1, 2018. However, average number of shares during the period has been calculated as though the shareconsolidation took place on April 1, 2018.

(Reference) Overview of Non-Consolidated Business Performance
1. For the Fiscal Year Ended March 2020 (from April 1, 2019 to March 31, 2020)(1) Non-consolidated business performance(% indicates year-on-year change)
Net sales

Operating income¥ million
Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019%

292,084
304,951¥ million

(4.2)
4.1

2,924
14,264

Net income per
share
Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019¥

Ordinary income%(79.5)(5.8)¥ million

5,660
18,642

Net income%¥ million(69.6)
6.2

6,923
17,436%(60.3)
43.8

Fully diluted
net income per share¥

106.15265.92105.97265.55

Note: The Company conducted a consolidation of shares of common stock at the ratio of five shares to one share on
October 1, 2018. However, net income per share and fully diluted net income per share have been calculated as
though the share consolidation took place on April 1, 2018.

(2) Non-consolidated financial position
Total assets¥ million
Apr. 2019 – Mar. 2020
Apr. 2018 – Mar. 2019

Net assets

Shareholders'equity ratio¥ million

451,798
443,810

Net assets
per share% ¥243,144
248,18453.7
55.8

3,721.14
3,799.54(Reference) Shareholders' equity: ¥242,714 million as of March 31, 2020
¥247,811 million as of March 31, 2019
(These financial statements are exempt from audit procedures)(Explanations or other items pertaining to appropriate use of business performance forecasts)
COVID-19 is spreading worldwide and has a great impact on the business environment in Japan and overseas. Since
the Group's business fields are diverse in Japan and overseas, and it is difficult to reasonably calculate theperformance forecasts at this time, we have not determined the consolidated performance forecast for the fiscal year
ending March 2021. We will announce it as soon as it is possible to calculate the earnings forecast.

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)[Supplementary Materials]
Contents
1. Overview of Business Performance and Financial Position------------------------------------ P. 2

(1) Overview of Results for the Fiscal Year Ended March 31, 2020 ---------------------------- P. 2
(2) Overview of Consolidated Financial Position(3) Overview of Consolidated Cash Flows-------------------------------------------------- P. 5---------------------------------------------------------- P. 5

(4) Performance Forecasts for the Fiscal Year Ending March 31, 2021 ---------------------- P. 5
2. Basic Rationale for Selection of Accounting Standards --------------------------------------------- P. 5
3. Consolidated Financial Statements -------------------------------------------------------------------- P. 6
(1) Consolidated Balance Sheets ----------------------------------------------------------------------- P. 6
(2) Consolidated Statements of Income and Comprehensive Income ------------------------- P. 8
(3) Consolidated Statements of Changes in Shareholders’ Equity ----------------------------- P.10
(4) Consolidated Statements of Cash Flows --------------------------------------------------------- P.12
(5) Notes to the Consolidated Financial Statements ----------------------------------------------- P.14
(Notes on the Premise of a Going Concern） ---------------------------------------------------- P.14
(Changes in Accounting Principles) ----------------------------------------------------------------- P.14
(Segment Information) ---------------------------------------------------------------------------------- P.14
(Per Share Information) ------------------------------------------------------------------------------- P.19
(Subsequent Events) ------------------------------------------------------------------------------------ P.19

―1―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

1. Overview of Business Performance and Financial Position(1) Overview of Results for the Fiscal Year Ended March 31, 2020
In the fiscal year ended March 31, 2020 (fiscal 2019), the global economy entered a period of
historic turmoil. For the first ten months or so of the fiscal year, global economic conditions weresluggish due to intensified U.S.-China trade friction, the U.K.’s exit from the E.U., and heightened
geopolitical risk in the Middle East. From January 2020 onward, the outbreak of the coronavirus
disease 2019 (COVID-19) pandemic has triggered an almost full shutdown of economic activity
around the world. The movement of people and goods has been almost completely severed. Thisdisruption has had a direct impact on the mobility field, including automobiles, air travel andrailways, as it has had on the tourism and lodging, restaurant, and retail and department store
industries. Businesses of all kinds that are connected globally over networks and supply chains
have suffered a huge impact. In addition, these trends have given rise to a historic drop in crude oil
prices.
In this business environment, the Kaneka Group’s business performance for the fiscal year
under review (April 1, 2019 to March 31, 2020) was marked by lower earnings on lower sales, as
follows. Consolidated net sales amounted to ¥601,514 million (down 3.1% year on year), operating
income was ¥26,014 million (down 27.8% year on year). Ordinary income was ¥20,166 million(down 35.5% year on year). Net income attributable to owners of parent was ¥14,003 million (down
37.0% year on year).
On a quarterly basis, business performance was strongly affected by sluggish demand in theautomotive and electronics fields till the 3rd quarter. In the 4th quarter, the momentum turned infavor of a recovery in business performance owing to volume growth in the Group’s main
businesses. However, the outbreak of COVID-19 temporarily cancelled out that momentum. Overall,the impact of the COVID-19 issue acted as a negative factor that reduced profit by approximately¥3 billion.
Operating performance by business segment was as follows:
1) Material Solutions Unit
In PVC resins and specialty PVC resins, sales increased steadily because of strong demand fromoverseas markets, primarily Asia, amid mostly flat shipment volume in Japan compared with theprevious year. However, exports stagnated following the COVID-19 outbreak. This impact is
expected to continue in the 1st quarter of fiscal 2020. Caustic soda had a significant impact on
business performance, due to persistently lackluster market conditions in Asia, against the
backdrop of the slowdown in the Chinese economy.
In the Performance Polymers business, amid the impact of the global economic slowdown,
modifiers saw progress on measures to create a new high-value-added market, such as measures
to expand sales for non-PVC applications and develop and launch new, large-scale products.
However, a decline in sales could not be avoided due to the COVID-19 issue. In the 1st quarter offiscal 2020, demand is expected to continue to decrease temporarily. With epoxy masterbatch,progress has been made on the development of applications that meet cutting-edge market needs,
such as structural adhesive for automobiles and electronics applications. As a result, full production
and full sales have continued. The Group will meet vigorous demand by launching production
facilities that will double the production capacity at the Takasago Manufacturing Site, as planned.
The new production facilities will start operations in July 2020. The Group will also implement thenext phase of production facility expansion at the earliest opportunity.

－2－Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

In modified silicone polymers, sales increased steadily, supported in part by a contribution
from enhanced production capacity in Belgium. The Group has been steadily pioneering the newfrontier that is the Asian market. In the 4th quarter, shipments to China were stagnant due to the
COVID-19 issue.
Kaneka Biodegradable Polymer PHBH has been taken up as a major topic by numerous
international bodies and exhibitions, such as the G20, and by major overseas news media, such as
the BBC and CNN. There has been a flood of inquiries from major brand holders in Japan andoverseas with a high interest in the issue of microplastics and environmental issues. A large numberof joint development projects have started. The completion of a 5,000-ton plant at the Takasago
Manufacturing Site has spurred steady progress on adoption by global brand holders such as major
convenience store chains, food manufacturers, and cosmetics manufacturers. The Group will
accelerate preparations for the construction of a full-scale mass production plant with a capacity of
20,000 tons as it intensively allocates management resources to this area, with the aim of
expanding business as early as possible.
2) Quality of Life Solutions Unit
In the Performance Fibers business, the Group has set up a Product Development Center in
Ghana, with the goal of stimulating new demand in the African market. The Group will work on
high-performance, high-value-added products, such as water-repellant fibers, for which there issurging demand, as it seeks to strengthen sales in close touch with the market. In the 4th quarter,
the Group faced temporary restrictions on operations of its Malaysian plant and was forced toreduce shipments to Africa due to the COVID-19 issue. This impact is expected to continue in the
1st quarter of fiscal 2020.
In the Foam & Residential Techs business, earnings from expandable polystyrene resin andextruded polystyrene foam board increased, as new products with high insulation, high expansion
ratio, and other features were launched and progress was made on the rationalization of logistics.
In polyolefin foam, earnings were lackluster because of the impact of reduced global automobile
production due to the COVID-19 issue. The impact of the lower global automobile production is
expected to continue in the 1st quarter of fiscal 2020.
In the PV & Energy management business, earnings improved substantially owing to steady
growth in sales to major homebuilders as the Group’s high-efficiency photovoltaic module products
received strong reviews in the market. Solar power systems are attracting attention once again as
the most promising solution for renewable energy. The Group will ramp up its supply capacity ofhigh-efficiency products in a timely fashion. Concurrently, the Group will address growth in demandby pursuing the development of a net zero energy management system for houses and buildings
with a major construction firm. It will also jointly develop see-through photovoltaic module products
for automotive use with a major automaker.
In the E & I Technology business, polyimide films and graphite sheets were strongly affectedby a slowdown in the smartphone market. In the 4th quarter, the Group was impacted by stagnationof supply chains in areas such as China and restrictions on operations of its Malaysian plant due tothe COVID-19 issue. A similar impact is expected to continue in the 1st quarter of fiscal 2020. The
Group will accelerate R&D activities for unique new products that will support digitaltransformation—products that have attracted high expectations for the Group’s innovativetechnologies. Among these products are organic electroluminescent displays and 5G smartphones,
and sensor materials for autonomous driving systems, for which demand is expected to grow going
forward.

－3－

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

3) Health Care Solutions Unit
In the Medical Devices business, sales of catheters increased as new products such as anembolization coil launched in November 2019 were rated highly by customers. Sales of thisembolization coil began in the U.S. in spring 2020. The Group will expand production facilities at its
Vietnam plant, and aggressively expand its business in new therapeutic fields such as drug-coatedballoon catheters and fractional flow reserve products. In addition, the Group will strive to achieve
rapid business expansion through technical and capital alliances with U.S. and European medical
equipment companies. COVID-19-related clinical Study on Lixelle has started. The Company will
enlarge its research fields so that it can apply its blood purification technology to infectious
diseases. Incidentally, a planned agreement on the licensing out of technology has been postponedto the 1st quarter of fiscal 2020.
In the Pharma business, a bulk shipment of small molecule pharmaceuticals expected in the
4th quarter was postponed to the 1st quarter of fiscal 2020 onward. In the next fiscal year,
increased production capacity for active pharmaceutical ingredients at Osaka Synthetic Chemical
Laboratories, Inc. and biopharmaceuticals at Kaneka Eurogentec S.A. will come online and are
expected to drive earnings growth. Kaneka Eurogentec has begun supplying reagents for COVID19 based on the urgent request of the Belgian government. In addition, the Company has reached
an agreement with FUJIFILM Corporation to supply active pharmaceutical ingredients for Avigan®
Tablet. The Company has also formed an intensive research team focusing on contracted
manufacturing of vaccines and the development of antiviral drugs using cutting-edge advanced
technologies such as mRNA and plasmid DNA.
4) Nutrition Solutions Unit
In the Foods & Agris business, sales were favorable to the bread sector, but were negatively
impacted by sluggish conditions in the confectionery bread and convenience store sectors. In the
4th quarter, the environment came under pressure from factors brought about by the COVID-19
issue, such as a deterioration in the markets for inbound tourism and souvenirs, along with adecline in demand for school lunches due to temporary school closures. Meanwhile, with more andmore people eating meals at home, demand for products such as frozen food and instant noodles
increased. As a result, Kaneka Sun Spice Corporation achieved record-high business results.
Overall, the Foods & Agris Solutions Vehicle posted business results that were mostly unchanged
from the previous year. In the dairy product business, sales of the “Milk for bread lovers” series
increased dramatically, supported by a positive reception of this series in the market. Going forward,
the Group will move quickly to construct a full-scale dairy product plant. The Group is constructing
a new plant in Indonesia as part of efforts to transplant Japan’s bread culture to overseas markets.
The new Indonesia plant is scheduled to start operations as early as this summer, and the Group
believes that the new plant will add further momentum to its business expansion in Asia.
In the Supplemental Nutrition business, there were timing differences in shipments to a major
U.S. brand holder of the Group’s reduced form of coenzyme Q10. The Group began sales of
Probiotics from AB-Biotics, S.A. located in Spain, which became a subsidiary last year, in the U.S.
and Japan, following on from Europe, where sales are favorable. The Group will accelerate its
brand strategy for a wide range of supplements by conducting a reorganization to strengthen thedissemination of scientific data about their health effects. Also, in response to rising consumer
health awareness, the Group will strengthen the development of foods such as yoghurt that offer
both tastiness and health benefits, which will create synergies with the diary product business inFoods.

－4－

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(2) Overview of Consolidated Financial Position
Total assets were ¥653,262 million as of March 31, 2020, down ¥6,325 million compared with
March 31, 2019, due to decreases in notes and accounts receivable-trade and investment
securities. Liabilities totaled ¥299,167 million, up ¥306 million due to an increase in loans payable.
Net assets were ¥354,094 million, down ¥6,631 million due to decreases in valuation difference on
available-for-sale securities and foreign currency translation adjustment.
(3) Overview of Consolidated Cash FlowsNet cash provided by operating activities was ¥39,983 million, mainly due to income before income
taxes and depreciation and amortization. Net cash used in investing activities amounted to ¥41,807
million, mainly owing to the purchase of property, plant and equipment. Net cash used in financing
activities came to ¥479 million, mainly owing to cash dividends paid. As a result, cash and cash
equivalents as of March 31, 2020 totaled ¥37,606 million, down ¥2,364 million compared with
March 31, 2019.
(4) Performance Forecasts for the Fiscal Year Ending March 31, 2021
It is generally believed that the worldwide spread of COVID-19 has put the global economy at riskof contraction. It remains to be seen whether COVID-19 infections can be contained at an earlystage. According to the IMF’s publication in April, for example, the global economy is projected tocontract sharply by –3 percent in 2020. This reduction reflects the marked economic downturn
observed in the first half of the year. The mainstream outlook is for the global economy, after
bottoming out in the April–June period, to return to a recovery path from the latter half of the year.
Under these conditions, various countries have been working in earnest to take maximum
economic measures to support their economies. However, considering the uncertainty in when the
pandemic will come to an end, it is not possible to clearly determine the timing of the economic
recovery at this time. The Group’s business fields cover a wide range of areas both in Japan andoverseas. It is difficult to estimate the environmental factors, such as recovery in demand,
normalization of crude oil prices, and exchange rate trends, that are needed to determine business
forecasts in each business field.
Accordingly, given that it is difficult to rationally determine business forecasts at this time, theGroup has decided to leave its consolidated business forecasts for the fiscal year ending March 31,
2021 as undetermined. The Group will promptly announce its business forecasts when it is possible
to disclose them.

2. Basic Rationale for Selection of Accounting Standards
The Kaneka Group had adopted Japanese Generally Accepted Accounting Principles (JapaneseGAAP). The timing of the adoption of International Financial Reporting Standards (IFRS) has not
yet been determined at this time. However, we are collecting information and have begun
examining the issues in preparation for implementing the adoption of IFRS in the future.

－5－

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)
3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
FY2018FY2019Term ended
March 31, 2019

Term ended
March 31, 2020

AssetsCurrent assets
Cash and deposits

40,90538,748Notes and accounts receivable-trade147,993

134,110

Short-term investment securities

232

190

Merchandise and finished goods

61,60966,057Work in process

9,365

8,727

Raw materials and supplies

41,45942,474

Other

13,91817,852

Allowance for doubtful accounts(1,237)(1,303)

Total current assets

314,245306,858

Buildings and structures, net

79,81584,012

Machinery, equipment and vehicles, net

106,395

110,073Land

31,35431,304

Construction in progress

26,33827,038Other, net

8,017

10,627

251,922

263,056

Goodwill

3,981

3,306

Other

9,443

9,874

Total intangible assets

13,424

13,18061,27348,548

Noncurrent assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets

Investments and other assets
Investment securities
Investments in capital

695

346

Long-term loans receivable

1,100

1,005

Long-term prepaid expenses

2,220

2,171

Deferred tax assets

6,864

10,035

Other

8,101

8,299

Allowance for doubtful accounts

(260)

(241)

Total investments and other assets

79,99470,166345,342

346,403659,587

653,262

Total noncurrent assets
Total assets-6-

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(Millions of yen)
FY2018FY2019Term ended
March 31, 2019

Term ended
March 31, 2020

Liabilities
Current liabilities
Notes and accounts payable-trade

84,79773,509

Short-term loans payable

67,66888,835Current portion of bonds

10,000－Accounts payable-other

29,53328,755

Accrued expenses

13,635

13,382

Income taxes payable

2,864

2,408

Accrued consumption taxes

772

1,030

Provision for directors' bonuses

128

107

4,512

3,572

213,912211,599－

10,000Long-term loans payable

45,12233,293

Deferred tax liabilities

2,137

1,576

Net defined benefit liability

34,98538,308

266

317

Other

2,437

4,071

Total noncurrent liabilities

84,94887,568298,861

299,167

Capital stock

33,04633,046

Capital surplus

32,78430,962Retained earnings

272,944

280,265

Treasury stock(11,601)(11,583)

Total shareholders' equity

327,173

332,691

19,642

14,246

(110)

(103)

Foreign currency translation adjustment(4,008)(7,395)Remeasurements of defined benefit plans(5,705)(7,956)

Total accumulated other comprehensive income

9,818(1,208)431

482

Noncontrolling interests

23,302

22,128

Total net assets

360,726

354,094

659,587

653,262

Other
Total current liabilities
Noncurrent liabilities
Bonds payable

Provision for directors' retirement benefits

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Subscription rights to shares

Total liabilities and net assets-7-

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Millions of yen)

FY2018FY2019From April 1, 2018
to March 31, 2019

From April 1, 2019
to March 31, 2020

Net sales

621,043

601,514

Cost of sales

446,254432,374

Gross profit

174,789

169,139

Selling, general and administrative expenses

138,747

143,124

Operating income

36,041

26,014

Interest income

146

138

Dividends income

1,774

1,545

Equity in earnings of affiliates

29

150

Insurance claim income

244

474

Gain on sales of noncurrent assets

427

315

Gain on step acquisitions

443－

Gain on contribution of securities to retirement benefit trust

－

378

Other

858

552

3,924

3,555

Interest expenses

2,014

1,714

Loss on retirement of noncurrent assets

2,521

1,916

Foreign exchange losses

333

968

Depreciation of inactive noncurrent assets

664

1,044

Other

3,163

3,760

Total non-operating expenses

8,697

9,403

31,268

20,166

Gain on sales of investment securities

1,515

627

Settlement received

1,051

－

Gain on contribution of securities to retirement benefit trust

1,608

－

Total extraordinary income

4,175

627

Patent protection court cost

1,683

996

Restructuring charges

1,851

－

Total extraordinary losses

3,534

996

Income before income taxes

31,90919,797

Income taxes-current

7,893

4,809

Income taxes-deferred

40

(490)

Total income taxes

7,933

4,318

Net income

23,975

15,479Net income attributable to non-controlling interests

1,736

1,475

Net income attributable to owners of parent

22,23814,003Non-operating income

Total non-operating income
Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses-8-Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

Consolidated Statements of Comprehensive Income(Millions of yen)

FY2018FY2019From April 1, 2018
to March 31, 2019

From April 1, 2019
to March 31, 2020

Net income

23,975

15,479Other comprehensive income
Valuation difference on available-for-sale securities(5,164)(5,437)(1)

7Foreign currency translation adjustment(1,178)(3,668)Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of associates
accounted for using equity method

1,800(2,280)(5)(0)

Total other comprehensive income(4,549)(11,379)

19,425

4,099

17,996

2,976

1,429

1,123

Deferred gains or losses on hedges

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to noncontrollinginterests-9-

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(3) Consolidated Statements of Changes in Shareholders' Equity
Previous fiscal year (from April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders' equity
Capitalstock

Balance at beginning of the period

33,046

Capitalsurplus32,799Retainedearnings

Treasury stock

264,963(18,683)

Total
shareholders'equity312,125

Changes of items during period
Dividends of surplus(5,906)(5,906)

Profit attributable to owners ofparent22,23822,238Purchase of treasury stock
Disposal of treasury stock
Cancellation of treasury stock
Change in treasury shares of parent
arising from transactions with
noncontrolling shareholders(1,767)(1,767)

(0)

498

498

(8,351)

8,351

―

(14)

(14)

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of the period

―

(14)

7,980

7,081

15,04733,04632,784272,944(11,601)

327,173

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities

Balance at beginning of the period

24,730

Total
Subscription Noncontrolling
DeferredForeign
Remeasurements accumulated
rights to shares
gains orcurrencyinterestsof defined benefit
otherlosses on translationplanscomprehensive
hedges adjustment
income(108)(3,035)(7,526)

14,060300

20,112

Total net
assets346,599

Changes of items during period
Dividends of surplus(5,906)

Profit attributable to owners ofparent22,238Purchase of treasury stock(1,767)

Disposal of treasury stock

498

Cancellation of treasury stock―

Change in treasury shares of parent
arising from transactions with
noncontrolling shareholders(14)

Net changes of items other thanshareholders' equity(5,087)

(1)

(972)

1,820

(4,241)

131

3,190

(920)

Total changes of items during period(5,087)

(1)

(972)

1,820

(4,241)

131

3,190

14,127

Balance at end of the period

19,642(110)(4,008)(5,705)

9,818

431

23,302360,726- 10 -

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

Current fiscal year (from April 1, 2019 to March 31, 2020)(Millions of yen)
Shareholders' equity
Capitalstock

Balance at beginning of the period

33,046

CapitalsurplusRetainedearnings

32,784

Treasury stock

272,944(11,601)

Total
shareholders'equity327,173

Changes of items during period
Dividends of surplus(6,848)(6,848)Change in scope of consolidation

167

167

Profit attributable to owners ofparent14,00314,003Purchase of treasury stock
Disposal of treasury stock(1)

Change in treasury shares of parent
arising from transactions with
noncontrolling shareholders

(4)

(4)

23

21

(1,821)(1,821)

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of the period－(1,821)

7,321

18

5,517

33,04630,962

280,265(11,583)

332,691

Accumulated other comprehensive income
Valuationdifferenceonavailablefor-salesecurities

Balance at beginning of the period

19,642

Total
Subscription Noncontrolling
DeferredForeign
Remeasurements accumulated
rights to shares
gains orcurrencyinterestsof defined benefit
otherlosses on translationplanscomprehensive
hedges adjustment
income(110)(4,008)(5,705)

9,818

431

23,302

Total net
assets360,726

Changes of items during period
Dividends of surplus(6,848)Change in scope of consolidation

167

Profit attributable to owners ofparent14,003Purchase of treasury stock(4)

Disposal of treasury stock

21

Change in treasury shares of parent
arising from transactions with
noncontrolling shareholders(1,821)

Net changes of items other thanshareholders' equity(5,395)

7(3,387)(2,250)(11,026)50(1,173)(12,149)

Total changes of items during period(5,395)

7(3,387)(2,250)(11,026)50(1,173)(6,631)

Balance at end of the period

14,246(103)(7,395)(7,956)(1,208)482

22,128354,094- 11 -

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(4) Consolidated Statements of Cash Flows(Millions of yen)

FY2018FY2019From April 1, 2018
to March 31, 2019

From April 1, 2019
to March 31, 2020

Income before income taxes

31,90919,797

Depreciation and amortization

32,15034,340Restructuring charges

1,851

－

Loss (gain) on step acquisitions

(443)

－

Settlement received(1,051)－

Loss (gain) on contribution of securities to retirement benefit trust(1,608)(378)

Increase (decrease) in net defined benefit liability

2,244

896

(11)

67

Interest and dividends income(1,920)(1,684)

Interest expenses

2,014

1,714

Equity in losses (earnings) of affiliates

(29)

(150)

Loss (gain) on disposal of noncurrent assets

445

53

Loss (gain) on sales of investment securities(1,515)(627)

Decrease (increase) in notes and accounts receivable-trade(5,329)13,197

Decrease (increase) in inventories(9,868)(5,572)

Increase (decrease) in notes and accounts payable-trade(141)(11,120)

Other, net

139(4,083)

Subtotal

48,83346,450Interest and dividends income received

1,997

1,787

Interest expenses paid

(2,009)(1,721)

Settlement package received

1,051

－

Income taxes paid

(8,760)(6,531)

Net cash provided by (used in) operating activities

41,11339,983(43,987)(42,977)

Proceeds from sales of property, plant and equipment

1,705

725

Purchase of intangible assets(1,809)(3,297)Purchase of investment securities(1,607)(175)

Proceeds from sales and distributions of investment securities

1,635

867

－

4,000

(1,878)－Net cash provided by (used in) operating activities

Increase (decrease) in allowance for doubtful accounts

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment

Proceeds from redemptions of investment securities
Purchase of shares of subsidiaries and associates
Proceeds from purchase of shares of subsidiaries resulting in change
in scope of consolidation
Payments of loans receivable

227

37

(1,220)(1,238)

Collection of loans receivable

1,162

872

Other, net(1,454)(620)

Net cash provided by (used in) investing activities(47,229)(41,807)- 12 -

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(Millions of yen)

FY2018FY2019From April 1, 2018
to March 31, 2019

From April 1, 2019
to March 31, 2020

Net increase (decrease) in short-term loans payable

13,64814,121

Proceeds from long-term loans payable

3,810

1,362

Repayment of long-term loans payable(10,880)(4,366)

Proceeds from issuance of bonds－

10,000

Redemption of bonds－(10,000)

(127)

(244)

(1,767)

(4)

395

0

(5,906)(6,848)Proceeds from stock issuance to noncontrolling shareholders

245

390

Dividends paid to noncontrolling interests
Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation
Net cash provided by (used in) financing activities

(351)

(314)

(21)

(4,574)

(954)

(479)

(373)

(201)

Net increase (decrease) in cash and cash equivalents(7,443)(2,505)

Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents resulting from change
in scope of consolidation
Cash and cash equivalents at end of period

47,41339,970－141

39,97037,606

Net cash provided by (used in) financing activities

Repayments of lease obligations
Purchase of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid

Effect of exchange rate change on cash and cash equivalents- 13 -

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(5) Notes to the Consolidated Financial Statements(Notes on the Premise of a Going Concern)
Not applicable(Changes in Accounting Principles)
At the Group’s subsidiaries adopting IFRS, IFRS 16 Leases (hereinafter, “IFRS 16”) has been
applied from April 1, 2019. Accordingly, lessees will, in principle, recognize all leases as assets
and liabilities on the balance sheets. In applying IFRS 16, the Group has applied the method
where the cumulative effect of applying this standard is recognized at the date of initial applicationin accordance with the transitional treatment of the standard. As a result, the ending balances of“Property, plant and equipment,” “Other” under current liabilities and “Other” under noncurrent
liabilities for the fiscal year ended March 31, 2020 increased by ¥2,466 million, ¥382 million and¥2,191 million, respectively. The application of IFRS 16 had a negligible impact on earnings for the
fiscal year ended March 31, 2020.
(Segment Information)
1) Overview of Reporting Segments
Kaneka’s reporting segments aim to gather financial information from the Company’s separatebusiness units to facilitate decisions by the Board of Directors on the allocation of management
resources and allow for the Board’s regular review of business performance.
The Company has established “Solutions Vehicle” as organizations for executing its growthstrategies from a solutions perspective. There are ten Solutions Vehicles grouped into four
solution domains called “Solutions Unit.” Each Solutions Unit has established a global Groupstrategy for its products and services, bringing together subsidiaries in Japan and overseas as one
to develop its business activities.
The Company therefore comprises four reporting segments categorized by solution: the“Material Solutions Unit,” “Quality of Life Solutions Unit,” “Health Care Solutions Unit,” and“Nutrition Solutions Unit.”
The Material Solutions Unit contributes to environmental protection and comfortable living by
providing solutions in the form of high-performance materials to support the development of social
infrastructure and mobility (i.e., weight reduction and improved fuel economy), and cutting-edge
materials such as biopolymers that assist directly with the realization of environmental societies.
The Quality of Life Solutions Unit contributes to energy conservation and the creation of highquality lifestyles by providing solutions in the form of high-performance materials and uniqueservices that respond to the need for energy conservation and adoption of smart technologies inhousing and daily infrastructure. The unit is also responding to innovation in information-driven
societies, such as the advancement of the IoT and AI. The Health Care Solutions Unit contributes
to a society with better longevity and more sophisticated medical care by providing valuable
solutions that combine devices and pharmaceuticals in fields such as medicine, health, andnursing care. The unit is also developing a unique health care business based on advanced
medical technologies such as biopharmaceuticals and regenerative and cellular medicine. The
Nutrition Solutions Unit contributes to health and high-quality food by providing a wide range ofsolutions in the form of distinctive materials and supplements that meet needs around fooddiversification and health promotion. The unit also provides solutions that contribute to foodproduction support in the fields of agriculture, livestock, and fishery.

―14―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

The Solutions Vehicles and main products that belong to each reporting segment are as follows:
Solutions Unit
(Reporting Segments)

Solutions Vehicle

Main products

Vinyls and Chlor-Alkali
Material
Solutions Unit

Performance Polymers (MOD)
Performance Polymers (MS)Foam & Residential Techs
Quality of Life
Solutions Unit

E & I Technology
PV & Energy management

Health Care
Solutions Unit

Nutrition
Solutions Unit

General PVC resins, Caustic soda,
Specialty PVC resins
Modifiers, Epoxy masterbatch,
Biodegradable polymers
Modified silicone polymers
Expandable polystyrene resins and products,
Extruded polystyrene foam boards,
Bead-method polyolefin foam,
Solar circuit construction method(external insulation and double ventilation
construction) products
Polyimide films, Optical materials,
Graphite sheets
Photovoltaic modules,
Energy storage batteries for residences

Performance Fibers

Acrylic synthetic fibers

Medical Devices

Medical devices

Pharma & Supplemental Nutrition(Pharma)

Low-molecular pharmaceutical materials,
API, Biopharmaceuticals

Pharma & Supplemental Nutrition(Supplemental Nutrition)

Functional foodstuffs

Foods & Agris

Margarine, Shortening, Bakery yeast, Spices,
Antifreeze materials, Dairy products,
Functional fertilizers and feeds

2) Basis of Calculation of Monetary Amounts for Net Sales, Profit or Loss, Assets, Liabilities, andOther Items by Reporting Segment
Accounting treatment and procedures for reporting segments are the same as those shown in the“Notes to the Consolidated Financial Statements.” Intersegment transactions are based onprevailing market prices.

―15―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

3) Segment Information by Business Category
Previous fiscal year (from April 1, 2018 to March 31, 2019)(Millions of yen)Segment information

Figures in
consolidated
Adjustment
financial statements(Note 2)Others(Note 1)

Total

619,0022,040

621,043―

621,043

28

1,250

1,089

2,340

(2,340)―47,442

158,996620,2533,130

623,383(2,340)621,043

15,092

10,583

5,930

57,5691,464

59,034(22,992)

36,041

237,437

173,350

59,956

113,500

584,245795

585,040

74,547

659,587

10,747

10,979

2,462

3,913

28,10319

28,122

3,755

31,877

Amortization of
goodwill

34

―

332

―

367

―

367

86

454

Investment inequity method

67

2,124

―

―

2,191

―

2,191

―

2,191

13,47020,500

3,927

9,251

47,149387

47,537

6,056

53,594

Material
Solutions
Unit

Quality ofLife
Solutions
Unit

Health Care
Solutions
Unit

Nutrition
Solutions
Unit

Total

Customers

255,918

156,674

47,442

158,968

Intersegment

1,203

18

―

Total

257,122

156,692

Segment profit

25,961

Segment assets

Sales

OthersDepreciation

Increase in
assets

Notes: 1 Others is a business segment that is not included in the reporting segments and includes
property insurance and life insurance business.
2 Segment profit is reconciled with operating income in the quarterly consolidated financial
statements.

―16―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)

Fiscal year under review (from April 1, 2019 to March 31, 2020)(Millions of yen)Segment information
Material
Solutions
Unit

Quality ofLife
Solutions
Unit

Health Care
Solutions
Unit

Customers

241,795

154,837

Intersegment

1,015

Total

Others(Note 1)Figures in
consolidated
Adjustment
financial statements(Note 2)

Total

Nutrition
Solutions
Unit

Total

46,352

157,431

600,416

1,097

601,514―

601,514

24

―

33

1,073

1,088

2,162

(2,162)―242,811

154,861

46,352

157,465

601,4902,186

603,676(2,162)

601,514Segment profit

20,625

14,189

8,917

5,647

49,379547

49,927(23,912)26,014

Segment assets

233,548

181,176

64,979110,440

590,145365

590,51062,751

653,262

11,55911,395

2,692

4,547

30,19519

30,215

3,904

34,120

Amortization of
goodwill

32

―

315

108

456

―

456

88

544

Investment inequity method

67

2,249

―

―

2,316

―

2,316

―

2,316

13,09913,518

4,313

6,052

36,983

162

37,146

10,66347,809Sales

OthersDepreciation

Increase in
assets

Notes: 1 Others is a business segment that is not included in the reporting segments and includes
property insurance and life insurance business.
2 Segment profit is reconciled with operating income in the quarterly consolidated financial
statements.
4) Reconciliation between Segment Totals and Amounts on Consolidated Financial Statements(Adjustments)(Millions of yen)
From April 1, 2018
to March 31, 2019

IncomeFrom April 1, 2019
to March 31, 2020

Segment total

57,56949,379Segment profit of Others

1,464

547

11

(0)

(23,091)(23,933)87

21

36,041

26,014

Elimination of intersegment transactions
Companywide expenses (Note)
Other adjustments
Operating income in the consolidated statements of income

Note: Companywide expenses primarily are expenses for basic R&D that are not allocable to any
reporting segments.

―17―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(Millions of yen)
From April 1, 2019
to March 31, 2020

From April 1, 2018
to March 31, 2019

Assets584,245590,145795

365

Elimination of intersegment transactions(14,184)(16,179)

Companywide assets (Note)

88,16877,373563

1,556

659,587

653,262

Segment total
Segment assets of Others

Other adjustments
Total assets in the consolidated balance sheets

Note: Companywide assets are working capital, investment securities and land that are not allocable
to any reporting segment.
(Millions of yen)Segment total
Other items

Depreciation
Amortization of
goodwill
Increase in assets

OthersAdjustments (Note)

Consolidated

Previous
fiscal year

Current
fiscal year

Previous
fiscal year

Current
fiscal year

Previous
fiscal year

Current
fiscal year

Previous
fiscal year

Current
fiscal year

28,10330,195

19

19

3,755

3,904

31,877

34,120

367

456

―

―

86

88

454

544

47,14936,393

387

162

6,056

10,66353,59447,809Note: Adjustments primarily are expenses for basic R&D that are not allocable to any reporting
segment.
(Related Information)
Geographic Area
(Sales)Previous fiscal year (from April 1, 2018 to March 31, 2019)(Millions of yen)Japan
371,315

Asia
115,661

North America
48,841

Europe59,264

Other areas
25,961

Total
621,043

Note: Sales are classified into countries or regions based on the geographic location of customers.
Fiscal year under review (from April 1, 2019 to March 31, 2020)(Millions of yen)Japan
364,960

Asia
109,344

North America
47,306

Europe53,426

Other areas
26,475

Total
601,514

Note: Sales are classified into countries or regions based on the geographic location of customers.

―18―

Financial Results for the Fiscal Year Ended March 31, 2020, Kaneka Corporation (4118)(Per Share Information)
Net assets per share, net income per share and the corresponding basis for computation, andfully diluted net income per share and the corresponding basis for computation are shown below.
Item

Previous fiscal year
From April 1, 2018
to March 31, 2019

Fiscal year under review
From April 1, 2019
to March 31, 2020

Net assets per share¥5,166.88¥5,082.08

Net income per share¥339.15¥214.70

Fully diluted net income
per share¥338.59¥214.28

Item

Previous fiscal year
From April 1, 2018
to March 31, 2019

Fiscal year under review
From April 1, 2019
to March 31, 2020

Net income per share
Net income attributable to ownersof parent (Millions of yen)

22,23814,003

Net income attributable to owners ofparent ascribed to common stock(Millions of yen)

22,23814,003

Average number of shares ofcommon stock during theperiod (Thousands of shares)

65,571

65,224

Adjustment of net income attributable toowners of parent (Millions of yen)

(4)

(3)

(Adjustment of dilutive shares issued bysubsidiaries) (Millions of yen)

(-4)

(-3)

Increase in shares of common
stock (Thousands of shares)

92

111

(Of which, subscription rights toshares) (Thousands of shares)

(92)

(111)

Fully diluted net income
per share(Note) 1. Regarding the calculation of net income per share and fully diluted net income per share,
the number of Kaneka shares held by the Kaneka Employee Stock Ownership Association
Trust has been included in the treasury stock that was deducted during the calculation of
the average number of shares during the period. Moreover, the average number of sharesof the deducted corresponding treasury stock used to calculate net income per share andfully diluted net income per share was 37 thousand shares for FY2018 and there were noshares for FY2019, since the Kaneka Employee Stock Ownership Association Trust was
terminated in December 2018.
2. The Company conducted a consolidation of shares of common stock at the ratio of five
shares to one share on October 1, 2018. However, net income per share and fully diluted
net income per share have been calculated as though the share consolidation took place
on April 1, 2018.
(Subsequent Events)
Nothing to report―19―