Investor Briefing
Shikoku Kasei HD Corp.
For FY 2023 2Q
2023/8/4

SHIKOKU KASEI HOLDINGS CORPORATION(Tokyo Stock Exchange Prime Market 4099)

1

I am Watanabe (President and C.E.O.) of Shikoku Kasei Holdings Corporation.
Thank you very much for taking the time out of your busy schedule to attend the investor briefing on the financial resultsof the Group.

Topics

1. Consolidated Financial Results
2. Financial Forecast for the Fiscal Year Ending 2023
3. Action to Implement Managementthat is Conscious of Cost of Capital and Stock Price

4. Review of the First Half

5. Appendix
2

As you can see, I will explain the results for the first half of the fiscal year ending December 2023 and the forecast for theentire year ending December 2023. Subsequently, I will explain the details of the management that are illustrative of thecost of capital and stock price, which we have disclosed from this quarter.

Finally, I will report on the progress and activities in the first half of this year in our long-term vision, "Challenge 1000,"that we are currently working on.

1. Consolidated Financial Results

3First, I will explain the results for the first half of the fiscal year ending December 2023.

Financial Highlights

Increased revenues and decreased profits year on year (January-June)
million yen

Previous year*
January to June
2022

30,705

FY2023
2Q

30,880Ordinary profit

4,016

3,786

▲229
▲5.7％

5,130

4,720

▲410

Remarks
 The Chemicals business remained flat due to the
yen's depreciation despite deteriorating market
conditions
 The Housing Materials business increased its
revenues due to the success of price hikes

 Decrease in profits due to higher costs for raw
materials, labor, depreciation, etc.
 Foreign exchange gains 554 (YoY -283)

▲8.0％

3,663

3,212

Profit attributable toowners of parent

Exchange rate

+174
+0.6%

Net sales

Operating profit

Change/Rate▲45０▲12.3％

1 USD = 122 JPY

1 USD = 134 JPY

Net sales

1 EUR = 132 JPY
1 RMB = 18.4 JPY

1 EUR = 144 JPY
1 RMB = 19.4 JPY+1,100Operating profit+600

 Gain on the sale of investment securities - (YoY 856)
 Impairment losses and loss on the valuation of
investment securities - (YoY +760)
 The impact of the yen's conversion of PL included in
the YoY increase/decrease calculation.
Only the impact of exchange rate fluctuations on foreign currency transactions
are extracted. Many yen-denominated transactions are also substantiallyaffected by exchange rate fluctuations but are not included.

* Since the Company has changed the fiscal year-end from March 31 to December 31 since the previous
year, for comparison with the previous year, the six-month period from January to June 2022 iscompared with the "same period previous year," as a reference.

4

The Company has changed the fiscal year-end from March 31 to December 31 in fiscal 2023. For comparison with theprevious year, the six-month period from January to June 2022 is juxtaposed with the "same period during the previous
year" as a reference.

Regarding the consolidated financial results for the first half of the fiscal year ending December 2023, net sales increased
0.6% from the same period the previous year to ¥30.88 billion, operating profit decreased 5.7% to ¥3,786 million, ordinary profit
decreased 8.0% to ¥4,720 million, and profit attributable to owners of parent dropped 12.3% to ¥3,212 million. Net sales
increased, but profit decreased compared to the previous year.
I will explain net sales and operating profit in detail by segment later. Foreign exchange rates were ¥134 against the dollar
and ¥144 against the euro, owing to the ongoing depreciation of the yen. FX impacts on profits, and losses were positiveof ¥1.1 billion for net sales and about ¥600 million for operating profit.
For ordinary profit and profit attributable to owners of the parent, the amount of decrease in profit widened year on year
since we recognized a large amount of gains, including foreign exchange gains and gains on sales of investment
securities in the previous year.

Trends in Net Sales and Operating Profit (YTD)
Net sales soared companywide (+1.7 in total), with Chemicals remaining flat year-over-year (+0.1) and with
Housing Materials up (+2.1)
Operating profit decreased slightly for the Chemicals (-2.0) and Housing Materials (-1.3) segments due to a
decline in profit margin and a companywide decline (-2.3 in total).
Net Sales

307.1

308.8

YoY
+1.7
+0.6%

100 million yen

Operating Profit
Ratio % 17.3

257.7

255.5

267.2

16.2

264.4
250.0

93.6

95.7

Housing
Materials

14.5
13.9

YoY+2.1

98.6

98.3

13.1

12.5

94.8

108.1

44.5

102.5

14.6

42.8
35.4
12.1

208.2
156.1

154.0

155.9

14.2

143.7

38.6

35.5

13.3

YoY
▲2.3
▲5.7%

40.2
8.5

15.8

37.9
7.2

Housing
Materials

YoY▲1.3

16.4

208.3 Chemicals
YoY+0.1

162.6

Chemicals

29.5

28.7
23.0

1-6

1-6

1-6

1-6

1-6

1-6

2Q

2017

2018

2019

2020

2021

2022

FY2023

22.5

30.9

29.0

YoY▲2.0

18.4

1-6

1-6

1-6

1-6

1-6

1-6

2Q

2017

2018

2019

2020

2021

2022

FY2023* Results for the previous year have been recalculated for the same period in the current year (January-June).
* From the current period, accompanying changes to the management framework, corporate expenses that were previously not allocated to each segment
are now allocated to each segment based on reasonable criteria. In addition, the results before the previous year are also compared by using the revised
measurement method.

5

Let’s look at each segment. From fiscal 2023, accompanying changes to the management framework, corporate
expenses that were previously not allocated to each segment are now allocated to each segment to calculate segment
profits. The results before the previous year are also compared using the revised measurement method. Please note thatthe figures differ from those disclosed in the previous period.
Now, I will explain net sales on the left. In the chemicals operations segment, net sales remained unchanged at ¥20.83
billion as organic chemicals performed well, but inorganic and fine chemicals were affected by the worsening market
condition. In the housing materials operations segment, net sales increased ¥210 million to ¥9.57 billion due to the price revision in
January this year and efforts to pass on high raw material costs.
Next, let’s see the operating profit on the right. Operating profit decreased ¥200 million to ¥2.9 billion in the chemicals operations
segment and ¥130 million to ¥720 million in the housing materials operations segment. I will explain operating profit in detail in thenext slide considering the existence of various variation factors.

YoY Changes in Operating Profit
While profitability declined due to rising costs (raw material costs and depreciation), this was partially offset by
the positive impact of the weaker yen in exchange rates and the normalization of export logistics costs.
Rise in gross profit
margin (Housing
Materials)
Increased profits accompanying
higher net sales (Housing
Materials)
Decreased logistics
costs (Chemicals)

Decreased R&D
expensesmillion yen

Increased logistics
costs (Housing
Materials)
Increased profits
accompanying higher
net sales (Chemicals)Jan. to Jun.
2022
OperatingprofitDecreased grossprofit margin(Chemicals)(▲229)
 Price revised from January (about 10%)
 Impact of exchange rate fluctuations:-0.1 bn yen decrease in profit

Increased other
SG&A expenses

 Cost of the company split
 Cost of sponsoring the
Marugame Half Marathon
 Increase in the provision
for bonuses
 Impact of increased depreciation accompanying changes tothe fiscal year-end
costs of new NEO-CHLOR plant
Approx. ¥ 0.44 bn increase in
manufacturing cost

 Impact of exchange rate fluctuations: ¥0.7 bn increase in profit(Net of positive impact on sales in foreign currencies and a negative
impact on purchases and transportation costs in foreign currencies)

FY2023/2Q
Operatingprofit6

The slide shows year-on-year changes in operating profit in a waterfall chart.
In the chemicals operations segment, the gross margin fell due to the deterioration of profitability affected by stagnant sales ofelectronics materials in the fine chemicals business, which is the most profitable in the Company, a decrease in sales prices of
insoluble sulfur in the Chinese market, and rising prices of various raw materials. This is caused by a reduction in profit byapproximately ¥1 billion. This includes a positive impact of the weaker yen of ¥700 million and a negative impact of ¥440 million due
to an increase in depreciation costs associated with a new NEO-CHLOR plant that has started operation in this period. Most of thedepreciation expenses of the new NEO-CHLOR plant are for machinery and equipment, which have been depreciated over eight
years using the declining balance method, and the expenses are expected to decrease significantly year by year after the following
year. On the other hand, marine freight costs associated with export have sharply dropped from the previous period. This resulted ina positive impact of over ¥1.1 billion after absorbing an increase in yen-denominated costs due to the weaker yen and offsetting adecrease in gross profit.
In the housing materials operations segment, net sales increased, and gross margin improved in association with the price revisionin January. However, due to a rush of incoming orders before the price revision took effect, sales volume did not grow as expected,
and profit was lower compared to a 10% increase in sales price.
In terms of SG&A expenses, operating expenses in the housing materials operations segment increased due to the resumption of
face-to-face sales activities after COVID-19 and the holding of various exhibitions, etc. Other SG&A expenses also increased due
to an increase in the provision for bonuses associated with the change in the fiscal year-end and an increase in temporary
expenses arising from a shift to a holding company. As a result, operating profit decreased.

Trends in Net Sales and Operating Profit (QTD)
 Companywide, revenues increased by ¥0.4 bn YoY. The Chemicals business increased
in revenue (+4.2) due to a tailwind from the yen's depreciation, although market
conditions continued to deteriorate. The Housing Materials segment remained flat(+0.4) due to a reactionary decline after the January price revision.
 QoQ, revenues increased sharply by ¥ 1.51 bn. Revenue from Chemicals increased(+26.6) due to temporary supply and demand factors for organic chemical products,
and that from Housing Materials declined (-11.3) due to seasonal factors (end-ofyear demand) and a reactionary decline from price revisions.

Net Sales
158.0
149.1

QoQ
+15.1
+10.3%

128.7

118.2

41.7

124.0

155.0 152.7

54.0

40.8

100 million yen

18.5
16.3

42.2

53.5

11.2

Ratio %

▲22.4%

26.0
23.6
20.3

7.5

113.3
83.9

8.5

YoY
▲4.0

41.2

25.1

78.7

16.4

13.8

22.8

76.9

16.7
15.0

11.4

43.5

72.5

16.9

13.7

Housing
Materials

YoY+0.4
QoQ▲11.3

49.2

51.9

18.1

146.9

42.6

45.7

46.4

Operating Profit

161.9

139.6

135.7
126.2

YoY
+4.0
+2.5%

 Companywide, profit decreased by ¥ 0.4 bn YoY. Chemicals posted a decline inprofit (-2.5), as positive factors — such as higher sales, the yen’s depreciation,and lower distribution costs were offset by higher costs for raw material,
depreciation, and labor.
Housing Materials posted an operating loss for the quarter due to sluggish sales,high raw material prices, and a year-over-year decline in profit (-2.1).
 QoQ, profit declined sharply (-10.3): profits from the Chemicals declined slightly(-1.9), but seasonal factors in Housing Materials added to the decline (-8.4).

90.9

110.0

95.0

117.5
100.5

90.8

80.2

10.4

17.7

Chemicals

YoY+4.2
QoQ+26.6

QoQ▲10.3▲42.8%

20.9

4.7
7.0

4.1

17.8

Housing
Materials

7.8
5.3

1.5

2.9

13.5

24.1

3.1

22.4

13.8

YoY▲2.1
QoQ▲8.4

22.6

5.6

18.5
14.9

14.4

14.4

3Q 10-12 4Q 1-3
FY2020

1Q 4-6

15.8

14.9

16.0

15.1

15.4

Chemicals

13.6

YoY▲2.5
QoQ▲1.9

7.6-0.6
2Q 7-93Q 10-12 4Q 1-3

FY2020

1Q 4-6

2Q 7-93Q 10-12 4Q 1-3

1Q 4-6FY2021

2Q 7-9FY2022

3Q 10-12 1Q 1-3

2Q 4-6FY20232Q 7-92Q 7-9 3Q 10-12 4Q 1-3
FY2021

1Q 4-6

2Q 7-9 3Q 10-12 1Q 1-3
2Q 4-6FY2022
FY2023

7

Next is the quarterly comparison.
Let’s see the graph on the left, net sales. Total net sales increased ¥400 million year-on-year and ¥1.51 billion quarter-onquarter. Net sales in the chemicals operations segment increased ¥420 million year-on-year and ¥2.66 billion quarter-onquarter. As I will explain later, this is due to the substantial growth of organic chemicals.
On the other hand, though the price was revised in the housing materials operations segment, the shipment remained low,and net sales slightly increased ¥40 million year-on-year. Due to seasonal factors, net sales decreased by approximately¥1.13 billion quarter-on-quarter.
Let’s move to the graph on the right, operating profit. Total operating profit decreased ¥400 million year-on-year and ¥1.03
billion quarter-on-quarter. In both the chemicals operations and housing materials operations segments, a rise in
manufacturing costs is particularly accelerated, and price revision has not been able to cover all of them.

Operating Results by Segment: Chemicals (QTD)
 Inorganic products registered a -1.4 YoY decline and growth of +1.6 QoQ. They are yet to break outof the slump considering the exchange rate.
The insoluble sulfur business continued to face challenges as oversupply in the Chinese market
prevented a recovery in selling prices, shrinking the room for sales expansion.
 Organic chemicals increased significantly both YoY +6.6 and QoQ +24.8. NEO-CHLOR entered thepool season, but the supply-demand balance in the North American market tightened again due tosupply causes; unit sales prices remained in a high range, resulting in higher revenues.
 Fine Chemicals, with -1.0 YoY and +0.2 QoQ, show slow recovery. Glicoat-SMD's performanceremained weak due to inventory adjustments in the supply chain in response to deteriorating
semiconductor and electronics market conditions. However, newly developed advanced andspeciality chemicals (semiconductor process materials) are steadily expanding.
 The impact of foreign exchange rate fluctuations was +0.5 bn yen (127->136) YoY and +0.2 bn yen(133->136) QoQ.

Net SalesOperating Profit

QoQ
+26.6

YoY
+4.2

With -2.5 YoY and -1.9 QoQ, profits declined due to lower profitability, despite an increase insales of organic chemicals.
A weak appreciation of the yen increased profit by ¥ +0.3 bn YoY, and lower export logistics costs
were also a positive factor.
 However, the negative impact of cost factors, such as depreciation costs for the new NEO-CHLOR
plant and soaring raw material costs, and the negative impact of sales factors, such as sluggish
sales of the highly profitable Glicoat-SMD and declining profitability of insoluble sulfur in the
Chinese market, outweighed the positive impact, resulting in lower earnings.
 Although the yen continued to depreciate QoQ, labor costs (provisions) increased due to a change
in the period subject to bonus payments following a change in the fiscal year-end, resulting in adecrease in profit.


19.4+29.3%

+3.7%

113.3

90.9
83.9
72.5
19.0

28.7

76.9

78.7

25.2

21.3

100.5

22.4
26.9

90.8

24.4

21.1

23.0

61.4

25.2

29.2

45.2

41.1

15.7

YoY
▲2.5

29.4

28.3

29.3

Organic
chemicals

22.6

27.7

29.5

18.5

33.7

29.5

36.1

34.8

1USD
127JPY

2Q 7-93Q 10-12 4Q 1-3

FY2020

1Q 4-6

2Q 7-9QoQ▲1.9▲12.2%

YoY+6.6
QoQ+24.8

36.6

11.5

▲15.5%

14.9

24.8

15.1
14.2

YoY▲1.0
QoQ+0.2

Ratio %

48.4

24.4

Fine
chemicals

10.5

54.8

32.2

100 million yen

17.0

117.5
110.0

25.4

80.2

20.5

20.3

17.2

28.0
22.4

23.0

95.0

19.7
18.2

3Q 10-12 4Q 1-3

FY2021

1Q 4-6

2Q 7-9FY2022

33.1

34.7

1USD
133JPY

1USD
136JPY3Q 10-12 1Q 1-3

2Q 4-629.9

FY2023

Inorganic
chemicals

14.4

14.4

3Q 10-12 4Q 1-3
FY2020

1Q 4-6

15.8

14.9

16.0

15.1

15.4

13.6

7.6

YoY▲1.4
QoQ+1.6

1USD
127JPY

2Q 7-92Q 7-9 3Q 10-12 4Q 1-3
FY2021

1Q 4-6

1USD
133JPY

1USD
136JPY

2Q 7-9 3Q 10-12 1Q 1-3
2Q 4-6FY2022
FY20238First, I will explain the details by segment from the chemicals operations segment.
Please see the graph on the left, net sales.
Net sales in the inorganic chemicals business decreased ¥140 million year-on-year but increased ¥160 million quarter-onquarter. Unit selling prices of insoluble sulfur have not returned due to the loosening of supply and demand in the Chinese
market, and severe conditions continue. However, it seems to bottom out from the previous period.
Net sales in the organic chemicals business increased ¥660 million year-on-year and ¥2.48 billion quarter-on-quarter,
showing significant growth. In the second quarter, shipment of NEO-CHLOR tends to increase toward the pool season. In
addition, the supply-demand balance in the North American market tightened again due to a temporary decrease in the
supply capacity of other local companies. However, the supply-demand balance was slacked up to the previous quarter.
As a result, sales growth has accelerated.
The fine chemicals business generally remained unchanged, with a decrease in net sales of ¥100 million year-on-year
and an increase of ¥20 million quarter-on-quarter. However, because this figure included the positive impact of the yen
depreciation, sales volume remained stagnant. Since the recovery of semiconductor and electronics market conditions
was behind our expectations, inventory adjustments have extended throughout the supply chain. So, sales remained
lower than the actual demand. On the other hand, sales of newly developed products such as semiconductor processmaterials and GliCAP steadily surpassed that of the previous year.
Next, please see the graph on the right. Operating profit decreased ¥250 million year-on-year and ¥190 million quarteron-quarter. Positive factors included the strong performance of organic chemicals, the weaker yen, and a decrease inexport logistics costs. Negative factors were mainly due to sales, including sluggish sales of highly profitable electronics
chemicals materials and the deterioration of profitability of insoluble sulfur, and due to costs such as the rise in raw
material costs without sign of stopping. Raw material costs only for the second quarter have a negative impact of about¥400 million. As shown above, there were many positive and negative factors in the second quarter as various factors
were involved complicatedly. But as a result, the first half results were slightly lower than those in the previous year.

Operating Results by Segment: Housing Materials (QTD)
 Overall, the Housing Materials business achieved YoY revenue growth of ¥ 0.04 bn,
or +1.1%.
 Revenues registered from interior, exterior finishes declined by -0.3 YoY. Thisdecline from the previous year is due to a reactionary drop in rush orders(December sales) before the price hike.
 Exterior products: Revenues increased by +0.8 YoY. Revenue increased because of
the effect of two price revisions in April 2022 and January 2023 (in response tosoaring aluminum ingot prices).
 The QoQ decline in revenue was due to a reactionary drop from the end-of-year
demand for landscape and exterior construction in 1Q.

Net Sales The Housing Materials business, as a whole, posted an operating loss of ¥ -0.21 bn
for the quarter, although profitability usually declines from April to June due toseasonal factors.
 The Exterior product business recovered profits after two price revisions; however,this was not enough to make up for the decline in volume, especially forlandscaping exterior products. In addition, the shrinkage of the highly profitablewall materials also had an impact.
 In terms of raw material prices, there is significant pressure to raise the price ofresin and other materials derived from crude oil; aluminum ingots continue toremain stable at high prices — therefore, the effects of the price revision in
improving profitability remain limited.

Operating Profit

YoY
+0.4

100 million yen

+1.1%

54.0

QoQ
▲11.3

53.5

51.9

46.4

13.5

▲21.2%

49.2

19.3

Ratio %

40.8

14.6

12.9

45.7

43.5

10.7

10.3

16.2

10.0

41.7

41.2

42.2

42.6

7.3

7.1

3.5
-1.5
50.4
39.9

48.2

42.5

42.2

37.3

45.6

38.3

38.0

Exterior
Products

50.3

QoQ
▲8.4

YoY+0.8
QoQ▲11.2

10.4

-%

7.5

2Q 7-94.0

3.7

3Q 10-12 4Q 1-3

FY2020

3.5

3.2

1Q 4-6

2Q 7-93.5

3.7

3Q 10-12 4Q 1-3

FY2021

3.4

3.1

1Q 4-6

2Q 7-9FY2022

3.6

3.2

3Q 10-12 1Q 1-3

3.1
2Q 4-6

2.9Interior, exterior
finishes

YoY▲0.3
QoQ▲0.1

FY20232Q 7-93Q 10-12 4Q 1-3
FY2020

7.8

7.0

5.6

3.6

-%

YoY
▲2.1

39.1

39.5

1Q 4-6

4.1

5.3

4.7

2Q 7-9 3Q 10-12 4Q 1-3
FY2021

3.1

1.5

-0.6

1Q 4-6

2Q 7-9 3Q 10-12 1Q 1-3
2Q 4-6FY2022
FY2023

9 9

Next, let’s see the housing materials operations segment.
Net sales increased ¥40 million year-on-year but decreased ¥1.13 billion quarter-on-quarter. The QoQ decline in sales
reflected a seasonal factor of a reactionary drop from demand for a large-scale project in March. But sales increased year
on year. Although a 10% price increase in January has contributed, demand remained weak due to a reactionary drop inrush orders before the price hike. As a result, sales on a monetary basis were almost the same as in the previous period.
Operating profit decreased ¥210 million year-on-year, and we posted an operating loss of ¥60 million this quarter. In the
housing materials operations segment, two price revisions in April last year and January this year were not enough tomake up for a drop in highly profitable wall materials and a decline in volume in landscape exterior, one of our strengths.
Therefore, the effects of the price revision in improving profitability remain limited.
Once again, we recognize that our top priority is to develop attractive new products that meet the current market needs
and recover our competitiveness by strengthening and improving product appeals.

2. Financial Forecast

for the Fiscal Year Ending 2023

10This is a summary of financial results for the first half of the fiscal year ending December 2023.
Next, I will explain the consolidated earnings forecast for the fiscal year ending December 2023, especially the revisions.

Revision of Consolidated Earnings Forecast
The full-year forecast has been revised due to profits exceeding the initial forecast.
Comparison of initial and revised forecast
Forecast of the
beginning of period
64,000

million yen

Revisions of the forecast(released July 26, 2023)

Change/Rate

63,000▲1,000Net sales(Chemicals)41,500(Chemicals)42,500(Housing Materials)21,000(Housing Materials)19,500

6,500

Operating profit
Ordinary profit
Profit attributable to owners ofparent company

Exchange rate

7,500

+1,000+15.4%(Chemicals)4,800(Chemicals)5,600(Housing Materials)1,500(Housing Materials)1,500

7,000

8,300

+1,300+18.6%

4,900

6,800

+1,900+38.8%

1 USD = 125 JPY

1 USD = 135 JPY

1 EUR = 135 JPY
1 RMB = 18 JPY

1 EUR = 150 JPY
1 RMB = 19 JPY

Remarks
 In the Chemicals business, inventory adjustment of fine chemicals willcontinue; however, the yen is expected to weaken, and the supply-demandbalance of organic chemicals in North America will remain temporarily tightin the second half, leading to an upward revision.
 The Housing Materials business was revised downward due to a worsethan-expected fall in sales following a price revision.

614.8

Net sales
510.0

▲1.6％

100 million yen

521.0

528.0

520.5
494.3

192.2

197.7

310.8

315.3

207.2

630.0

185.4

195.0

Housing
Materials

418.8

425.0

Chemicals

181.8
192.5

 The Chemicals business was revised upward due to a weaker yen and agreater-than-expected fall in export freight rates.
 The Housing Materials business is expected to secure the initially assumed
level of profit due to improved profitability, despite the decline in sales.
 The upward revision was due to the large amount of unplanned foreignexchange gains recorded up to 2Q.
(Foreign exchange gains in 2Q was +554)

305.7

293.0

333.7

 The upward revision incorporates gains from the sale of crossshareholdings to be implemented from 3Q onward.
 Change in exchange rate assumptions: calculated at 1 USD for ¥135 forboth the second half and the full year.
 1 yen change in the exchange rate positively impacts about ¥150 yen on
net sales and about ¥70 million on operating profit for the full year.

1-12

1-12

1-12

1-12

1-12

1-12

1-12

2017

2018

2019

2020

2021

2022

(plan)FY2023（計画）

86.7

87.0

Comparison of previous year and revised forecast
Previous
year*(January to
December 2022)

61,475Net sales

Operating profit

Revisions of the forecast(released July 26, 2023)

Change/Rate

63,000+1,525+2.5%(Chemicals)41,876(Chemicals)42,500(Housing Materials)18,543(Housing Materials)19,500

8,703

7,500

(Chemicals)6,865(Chemicals)5,600▲1,203▲13.8％(Housing Materials)1,682(Housing Materials)1,500

Ordinary profit

9,840

8,300

▲1,540

Profit attributable to owners ofparent company

7,081

6,800

▲281

▲15.7％

Remarks

Operating profit

 In the Chemicals business, a growth in the export of organic chemicals to
North America is expected to continue throughout the current fiscal year,
offsetting the deterioration in the market for other products.
 In the Housing Materials business, revenue is expected to increase fromthe previous year due to two price hikes.
 In Chemicals, revenue is expected to increase, and income is expected todecrease due to a significant impact of lower sales in Glicoat-SMD andlower profitability of insoluble sulfur.
 For the Housing Materials business, the profitability of the interior,exterior finishes is expected to decline.

87.2
79.1

27.2

Exchange rate

1 USD = 128 JPY

1 USD = 135 JPY

1 EUR = 135 JPY
1 RMB = 19.4 JPY

1 EUR = 150 JPY
1 RMB = 19 JPY

31.3

71.7

 A decrease in profits was lessened by the gain from the sale of crossshareholdings made in the current fiscal year.
17.1

 1 yen change in the exchange rate has a positive impact of about ¥150
million on net sales and about ¥70 million on operating profit for the full
year.

22.2

15.2

75.0
15.0
Housing
Materials

63.0
51.2

16.8

29.6

 Foreign exchange gains, which were extremely large in the previous year,
will be a factor in reduced profit.

58.3
▲4.0％

77.0

28.0

44.8

40.9

14.8

14.5

16.4

68.7

56.0

14.2

Chemicals

11.9

1-12

1-12

1-12

1-12

1-12

1-12

1-12

2017

2018

2019

2020

2021

2022

FY2023(plan)（計画）

11* In comparison and in the graphs, performance in prior years is adjusted to the same period in FY2022 (January to December).

First, please see the table above for a comparison of the initial forecast and the revised figures.
Consolidated sales are reduced by ¥1 billion from the initial forecast to ¥63 billion. In the chemicals operations segment,
we revised our forecast upward as the supply-demand balance of organic chemicals in North America is expected toremain tight in the second half, in addition to the change in the assumption of the exchange rate. On the other hand, theforecast of the housing materials operations segment was revised downward due to a worse-than-expected fall in sales.
The table below shows the comparison with the same period the previous year, and sales are expected to increase by
2.5%, hitting a record high.
Operating profit is set at ¥7.5 billion, an increase of ¥1 billion from the initial forecast. We revised the forecast of thechemicals operations segment upward by reflecting the change in exchange rate assumptions and the normalization ofexport transportation costs. On the other hand, operating profit will decrease 13.8% from the same period the previous
year, and we cannot deny the decline in profitability due to a steep rise in raw materials and the deterioration in market
conditions. While organic chemicals maintain their good performance, we will try to put our business on the growth track
again by contributing new products we are currently developing and exploitation of new customers of insoluble sulfur,
which is currently stagnant, and with an expectation of improvement of the electronics market conditions due to bottoming
out of the silicone cycle. Meanwhile, in terms of foreign exchange sensitivity, a one-yen change in the exchange rate has
a positive impact of about ¥150 million on net sales and about ¥70 million on operating profit for the entire year, and there
is no major change in this level.
Ordinary profit is set at ¥8.3 billion, up ¥1.3 billion from the initial plan. Ordinary profit will increase more than operating
profit, which reflects the recording of a large amount of unplanned foreign exchange gains by the second quarter.
In addition, we revised upward the forecast of profit attributable to owners of a parent by ¥1.9 billion from the initial
estimates to ¥6.8 billion, and an increase in profit has been further expanded. This is due to the recording of gain on thesale of investment securities associated with the sale of cross-shareholdings that are currently being promoted. This gainon sale is scheduled to be recorded in the third quarter. As a result, we plan to secure profit attributable to owners ofparents at the same level as the previous year. Anyway, we recognize that recovery of profitability and return to thegrowth track of both chemicals and housing materials operations, our core businesses, are the most critical management
issues.

Capital Investment and Depreciation
Capital investment is carried out without any change from the initial plan.

100 million yen

90.2
4.0

[Major capital investment for the year that ended December 2022]• 1.23 billion yen for the construction of a new plant for NEO-CHLOR (NEO2022) (total of 4.68 billion yen for 3 years,

11.6

合計
Other
その他
Housing Materials Operations
建材事業
Chemicals Operations
化学品事業

74.6

34.9

completed)• 500 million yen for the reorganization of the Tokushima plant (relocation of production facilities for interior finishes, exterior
finishes, and paving materials)• 140 million yen for additional investment in a new plant to produce the advanced and speciality chemicals (TAP-4)[Major capital investment plan for the year ending December 2023]• 4.09 billion yen for the construction of a new plant for insoluble sulfur• 1.25 billion yen for construction to accommodate increased production of NEO-CHLOR• 190 million yen to add a solar power generation facility to the Marugame plant
41.1

39.3

3.3

36.0

3.3

4.2

1.4

23.2
16.3

2.4
2.6

1.2
1.9

18.2
13.2

投資
（INV)

償却
（DEP）

FY2017FY2017

20.7
2.0
2.6

16.1

投資
（INV)

22.8
2.2
2.5

19.6
0.8
2.4

21.9
1.9
2.6

18.1

16.4

17.4

償却
（DEP）

投資
（INV)

償却
（DEP）

FY2018FY2018FY2019FY2019

18.4
34.5

1.8
2.3

投資
（INV)

償却
（DEP）

FY2020
FY2020

20.9

21.1

2.1
2.6

1.1
2.3

28.6

投資
（INV)

29.8

28.2
17.7

16.2

14.3

2.0
3.2

6.8

6.0

償却
（DEP）

FY2021
FY2021

投資
（INV)

償却
（DEP）

FY2022
FY2022

投資
（INV)

償却
（DEP）

FY2023（計画）FY2023(Plan)

Next, let’s move to the capital investment plan and depreciation.
Capital investment for the fiscal year ending December 2023 is planned to be ¥9 billion in total, and there is no change
from the initial plan. We are proceeding as planned as an investment to expand our core business.

12Dividend and Share Buy-Back Trends
Enhancement of shareholder returns: We implemented a share buyback in May and decided to increase dividend by 2 yen.

[Shareholder Return Policy]

100 million yen

65.6•The Company aims to achieve “a payout ratio of 30% and a total
payout ratio of 50% based on consolidated financial results”
under the “Challenge 1000” long-term vision for 2030.

Total payout ratio[Shareholder Return Policy for the Fiscal Year Ending
December 2023]

56.6

54.9
51.1

54.1

44.6

Total return

30.4

Share buy-back

37.8
31.8

29.4

27.0
24.7

18.6

10.9
10.8
FY2016

17.9

19.5

23.8

12.9

12.9

12.9

12.9

13.9

13.4

13.0

13.8

14.2

FY2017FY2018FY2019FY2020

FY2021

FY2022(plan)FY2023（予）

16.1

13.3

Total
dividends

 Dividends equaled ¥28 per share (interim 14 yen, year-end 14yen), an increase of 2 yen from the initial plan. This is thesecond consecutive year of increase in dividend payouts.
 On May 31, 2023, the Company repurchased 3.04 bn yen of its
shares through ToSTNeT-3.
 A total return (estimated), including dividends (¥ 1.42 bn). iscurrently ¥ 4.46 bn, and the total payout ratio (estimated) is
65.6%, calculated based on projected financial results for thecurrent fiscal year.

[Share buybacks] As a top priority, the Company has been working with ten
companies since FY2019 using ToSTNeT-3 to eliminate crossshareholding relationships.
 This has resulted in a 13% decrease in outstanding shares —from 58,948 thousand to 50,870 thousand — and improved
earnings per share.
 Shares held by the Company (investment securities) will also
be sold at an appropriate time, and the proceeds will be used toinvest in growth and return profits to shareholders.

13

Next, dividend forecast and share buy-back trends. During the "Challenge 1000" long-term vision for fiscal year 2030, we
set a basic policy for shareholder return targeting "dividend payout ratio of 30% and total return ratio of 50%, based on
consolidated financial results.”
In accordance with this policy, we have decided to increase the annual dividend by ¥2 to ¥28 because the financial
forecast is expected to exceed the initial plan.
Furthermore, we repurchased our own shares of ¥3.04 billion this May, and by combining with the total estimateddividends of ¥1.42 billion, the total returns are currently ¥4.46 billion, and the total return ratio calculated from the financial
forecast will be 65.6%.
As you can see from this graph, the Company has significantly increased the total return ratio through repurchasing its
own shares via ToSTNeT-3 in TSE since fiscal 2019, achieving over 50% at all times, while the dividend amount remained
unchanged. This is because the Company has set the elimination of cross-shareholding relationships as a top priority ofcorporate governance reform and repurchased all of its shares that counterparties sold due to the elimination of such
relationships. We have invested ¥10.2 billion in repurchasing our own shares of 7.88 million shares over five years, withan average purchase price of below ¥1,300. So, taking into account the current stock price level, we evaluated that ourtransactions were favorable for the existing shareholders.
In addition, a 13% decrease in the number of shares outstanding from 2020 has raised EPS, and reduced retained
earnings have resulted in the improvement of ROE. As such, various financial indicators have improved.
In the future, we will focus on the return with dividends as soon as there is hope that we can eliminate cross-shareholding
relationships. We are also promoting the sale of shares of counterparties under cross-shareholdings, to which we have no
choice but to sell them to the market as appropriate, and we will strive to reduce assets.

3. Action to Implement Managementthat is Conscious of Cost of Capitaland Stock Price

14

Next, I will explain the current understanding and policy to realize management conscious of the capital cost and stock
price required by TSE.
Since our PBR is always below one, we recognize that the capital market has assessed the Company as low. Hence, wehave to accept it sincerely.

Analysis of current situation and Policies for the present
Since the ROIC of the business is high enough at present, we can achieve
an ROE level that exceeds the cost of shareholders' equity by reducing
excess capital.
In accelerating the current direction, consider and carry out various
capital policies.

[Future earnings to beacquired (FCF)](Shareholder return)
Cary out promptly, targeting 50%
of Profit(Internal reserves)
Prioritize investments in growthand human capital as risk
capitalConsolidated Balance Sheet (estimated as of 6/30/2023)[Financial assets][Excess capital]

Cash and deposits
Securities (short-term bonds)
Investment securities (longterm bonds)
Investment securities (crossshareholdings)(Risk buffer retention
policy) Retain 1/3 ofannual net sales

Approx. ¥65 bn[Group capital invested](Allocable funds)
Consider shareholder returns,
with the amount excluding risk
buffers as the capital that canbe reduced.
In particular, the reduction incross-shareholdings isprioritized.

[Business assets][Investment capital]

Trade receivables
Inventories
Property, plant, andequipment/Intangible assets(Profit indicator to becompared) Operating profit
after tax by business-> ROIC by business(Profit indicator to becompared)
After tax (operating profit +financial revenue)-> Group ROIC
(Target WACC)
Aiming for 6% or less byleveraging(Profit indicator to becompared) Profit -> ROE(Assumed cost ofshareholders' equity) 6-8%
(Target ROE)
Set to 8% as a hurdle rate in
the short term, and aim to
exceed 10% in the future
through a capital reduction

Approx.

Maintain ROE and net asset
levels that exceed the costof capital at all times
through balance sheet
management to secureboth aggressive growthstrategies and capitalefficiency.
In addition, consider capital
policies that enhance theattractiveness of sharevalue from perspectives
other than profitability(increased liquidity,
preferential treatment) andincentive plans that makeemployees and management
more aware of share value.

¥ 83.6 bn
ROE 8% level[Interestbearing debt]

Chemicals businessApprox.
level)[Net assets in carrying
amount][Future net assets](Basic Policy on Leverage)
・Actively utilize low-cost funds tothe extent that the credit rating
can be maintained・Set D/E ratio to the 30% level¥ 32 bn (ROIC 13%

Housing Materials businessApprox. ¥ 9 bn (ROIC 10% level)

Total approx.
Chemicals: Approx. ¥ 45 bn
Housing Materials:
Approx. ¥ 15 bn

Total approx.

¥ 6０ bn¥

41 bn¥ 106 bn

Approx.
ROIC 6% level

Approx.

¥ 22.3 bn[Business liabilities]
Trade payable
Labor liabilities and provisions

15

This chart reconstructs the Company’s balance sheet as of the end of June 2023. As the Company transferred to a holding
company structure, the chemicals operations and the housing materials operations were divided into an operating company,
which allows us to understand more accurate figures of assets, liabilities, and invested capital of each business without using
proportional distribution or allocation. Consequently, we can efficiently perform balance sheet management and ROIC analysis
for each business. We consider this as one of the major benefits of the holding company system.
According to the balance sheet as of the end of June, which was measured under the holding company structure, total assets
invested in the business are approximately ¥65 billion. The main assets are operating receivables such as accounts receivabletrade, inventories, and property, plant, and equipment, such as production facilities. Investment capital was approximately ¥41
billion, calculated by deducting operating liabilities such as accounts payable-trade, labor liabilities, and business-related
liabilities such as provisions from the total assets. Of which, ¥32 billion is for the chemicals operations, and ¥9 billion is for the
housing materials operations. Profit to be compared with the invested capital is operating profit after tax, which is currently
reported and managed at the management meeting, and the board of directors as ROIC by business. Both the chemicals
operations and the housing materials operations achieved an annual ROIC of more than 10% in the first half, and we believethat we can secure the minimum profitability for the present.
Meanwhile, the Company has cash and deposits, which have been accumulated as internal reserves from the past, andsecurities, etc., which are a different form of these cash and deposits. However, these assets are not included in the calculationof ROIC by business. Still, they are included in the invested capital in the calculation of group ROIC as they are also our capital.
Since these excess assets have a lower yield than business assets, we recognize that this is a cause of reducing group ROIC.
Concurrently, group ROIC is around 6% on an annual basis.
However, excess assets and corresponding capital are expected to become a risk buffer in case of sudden changes in thebusiness environment, such as the failure of Lehman Brothers. Therefore, we cannot reduce them to zero. Hence, we set arough indication of necessary excess assets as one-third of annual sales, and we will consolidate any surplus preferentially.
Specifically, as I explained earlier, we have been actively working on reducing cross-shareholdings from the perspective ofcorporate governance, and we continue to follow the same policy.
Next, regarding the point from group ROIC to ROE, the Company currently has an interest-bearing debt of more than ¥20 billion,
showing a certain level of leverage effect. Specifically, group ROIC is 6%, but ROE has improved to about 8%. In the current
interest rate environment, we consider active use of interest-bearing debt as low-cost funds, and we will leverage with a target
D/E ratio of about 30%, which is a level that we assume to maintain the current rating of A- and not increase the liability costs.
With this, ROE will maintain the level at which we can constantly achieve 8%, which is assumed to be our capital cost and aim
for 10% or more.
In addition, from a viewpoint other than capital efficiency, we will consider and carry out initiatives to improve liquidity andenhance stock price incentives through stock grants to employees and management.

4. Review of the First Half

16

Finally, I will explain the progress and activities in the first half of this year in our long-term vision, "Challenge 1000."

Progress of 'Challenge 1000'◆Inorganic chemicals

100 million yen

Desired state in 2030

・Improve manufacturing technology and

Toward "one- step-ahead, proposal" company
with Dokusouryoku (creativity)

Financial
Goals

Net Sales
100 billions of yen

Pillars for
Strategy

Business Reform
PolicyYONPO- YOSHI(Contributions to Shareholders)Operating Income
15 billions of yen
Companywide
Reform Policy

Customers Employees

160◆Housing materials
・Establish a high-efficiency production system
・Expand business domains by introducing new

Solve social issues with creative ideas, leading the progress of the world

products in response to changes in customer
needs

275

800

・Advanced and specialty chemicals: Work to bring to fruition the early

Proactive
Investment

Achievementof SDGs

Shareholders Society

expansion of the performance of semiconductor process materials
・Develop new applications for resin curing agents and resin modifier・Glicoat-SMD: Expand sales by differentiating from other companies based
1000.0 on the superior quality we offer
・GliCAP: Aim for the adoption and achievement of optimal use of server
board and package board applications
Present
position（FY２０２３～
FY2025)

614.8

520.5

494.3

528.0

14.2

30,880

38.5%

7.3

15.0

OPM
Target level

10.0

8.9

8.8

15.0

15.0

12.3

308.8

ROE %

80,000New
business
sales

16.4
14.5

400.0

Net sales

800.0

600.0

Net sales

ROE
Target level

10.0

10.0

7.8

7.6

5.0

200.0

Operating profit

ROE

12,000

3,786

31.5%

10%

7.8%

ー

Operatingprofit
0.0

25.0

50

20.0

14.8

FY2023 2Q

100 million yen

1000.025
OPM %million yen

STAGE 2
FY 2023 2Q
Progress ratio

・Expand production bases andincrease production capacity
・Enhance the products that belong
to our brand and strengthenmarketing activities

120

800.0

「STAGE ２」
Target◆Organic chemicals

180◆Fine chemicals

ROE10%

establish a mass production system toexpand sales
・Expand sulfur-driven business domains

77.0
1-12

1-12
2019
2019

71.7
1-12

1-12
2020
2020

86.7
1-12

1-12
2021
2021

87.0
1-12

1-12
2022
2022

STAGE 1

120.0

150.0

Stage2目標
STAGE
2 Target
FY2025
FY2025

Stage3目標
STAGE
3 Target
FY2029FY2029

37.9
1-6

1-6
2023
2023

0.0

STAGE 2STAGE 3

* In the graph, performance in prior years is adjusted to the same period in FY2023 (January to December).

17

The long-term vision "Challenge 1000" is a backcasting-type, long-term management plan that draws a desired state forthe entire group and each business in 2030 and then schedules how to achieve such vision chronologically.
We have divided ten years, from April 2020 to December 2029, into three stages: STAGE 1, STAGE 2, and STAGE 3. And
STAGE 2 has just started this year.
The current progress against STAGE 2 final financial targets is as described in the slide. I will briefly explain what wehave tackled within the first half of the next slide. The details of "Challenge 1000" are described on Slide 51 and later.
Please see it later.

Activity information
The new "Shikoku Chemicals Group" has been launched. We promote corporate growth by realizing "Management
participation from all."
M&A/Sharebuyback

 Take initiatives to enhance corporate value

YONPO- YOSHI(Contributions toShareholders) Contribute to shareholders in various ways

 Executed M&A deal of one company each from Chemicals andHousing Materials business Placed an advertisement of WASHMANIA at Tokyo Station (Keiyo
Line passageway) (Chemicals) Execute share buybacks and reduce cross-shareholdings

 Signed an "Agreement on Acceptance of Stranded People inDisaster" with Marugame City Chemicals

 Housing Materials

 Main sponsor of "Kagawa Marugame
International Half Marathon," to beheld in February 2024

 Ad at Tokyo Station(WASHMANIA)

 Increased dividend by ¥ 2 pershare per year (¥ 28/year)

Change bytransitioning HD

 Start multifaceted activities for "Management
participation from all" S-CAN* Establishment of a satellite laboratory
for the R&D divisionGroup
companies

 Aim for further growth by expanding businessareas Boned Chicken Kitchen Car, e-commerce (Shikoku Foods & Trading Company)
 Waste collection and recycling business(Shikoku Environmental Business Company)

 Reorganization of the Housing
Materials business' sales base

 Boned Chicken Kitchen Car

 Asbestos analysis business Holding of Group President Meetings(Shikoku Analytical Laboratories) Direct dialogue between management
and employees (S-CAN)
 Initiatives for employees(Improvement of benefit programs,
declaration of work environment
improvement)* Shikoku Challenge And Next Generation

18(M&A/Share buyback)First, regarding M&A, we added two new small companies to our group, one for the chemicals operations and one for the
housing materials operations. In the chemicals operations, a new company has strengths in manufacturing heterocyclic
compounds containing nitrogen, and we expect it to utilize as a new production and development base for functional materials.
In the housing materials operations, a new company manufactures resin-processed products, which produce parts for our
exterior products. Since both companies already have a business relationship with us as contract manufacturers, their inclusion
in our group has little impact on consolidated financial results. We will create synergy through their effective utilization in the
future.
(Change by establishing HD)
Next, as a change after transitioning to a holding company structure, we have promoted the reorganization of business bases inboth operating companies in response to the post-pandemic era. Chemicals business companies are reviewing what theirbusiness bases should be in Japan and overseas from scratch without being caught in the current situation. Recently, a satellite
laboratory for the R&D division was opened in Kanagawa Prefecture. In 2021, following the pandemic, housing materials
business companies temporarily reorganized and abolished sales bases. However, as face-to-face sales activities resumed, werebuilt our bases mainly in the Kanto area to strengthen sales capabilities.
In terms of in-house initiatives, with the philosophy of "Employee First," we are promoting investment in human capital, such as
the establishment of the environment and provision of opportunities for reskilling, to encourage employees to challenge andgrow.
As we have mentioned many times through various opportunities, the greatest objective of shifting to a holding company
structure is to transfer powers boldly to each operating company to speed up decision-making and further integrate and tighten
the organization to implement consistent strategies. At present, we are aware of the activation of discussions and theimplementation of autonomous strategies at each operating company, and we have evaluated that their business operations are
generally progressing smoothly.
(YONPO-YOSHI)I will introduce our activities of “YONPO⁻YOSHI" outlined in "Challenge 1000." We will pass out "WASHMANIA," a washing tub
cleaner that has been launched in BtoC in the organic chemicals business, to you present at this venue, and we would
appreciate it if you would use it. The product has been well received by general consumers, and in order to increase
opportunities to come into contact with more people, we placed an advertisement for WASHMANIA at Tokyo Station (Keiyo Linepassageway). If you have any opportunities, please see it.
In addition, we entered into an agreement with Marugame City, our home city, to use the Marugame Plant as a preliminary
shelter to temporarily accept people who are unable to go home in the event of a disaster. We also decided to continue as themain sponsor of "Global Half Marathon, Marugame, Kagawa Prefecture,” and we intend to contribute to a wide range ofstakeholders through various activities in the future.
(Group companies)
Our group companies have also begun new initiatives, and I will introduce some of them. Shikoku Foods & Trading Company
took advantage of its in-store management know-how and began to sell "Boned Chicken," a local dish of Marugame City, ourhometown, on a kitchen car and via the Internet on the EC site. For new businesses, Shikoku Analytical Laboratories launched
the asbestos analysis business, and Shikoku Environmental Business Company began the waste collection and recycling
business. We will work to grow these businesses to the third pillar as our environmental business.

Thank you for your attention!

19

This concludes my explanation.
Thank you for your continued understanding and cooperation with our group.
Thank you for your attention.

SHIKOKU KASEI HOLDINGS CORPORATION
Q&A session on Investor Briefing for the first half of the fiscal year ending December 2023 (August 4, 2023)

Q1. You have explained that the housing materials operations are expected to recover in the second half ofthe year. Do you expect the business to move back into the black in the second half?
A.

Despite the price revision in January, the backlash from last-minute demands before the price hike and anincrease in expenses to hold various exhibitions caused a drop in profit. We expect this to be normalized in
the second half.

Q2. Please explain the status of fine chemicals (Glicoat-SMD, GliCAP, semiconductor process materials) in
the first half.
A.

Regarding Glicoat-SMD, the recovery of electronics market conditions is far behind our expectations. In
addition, inventory adjustment in the distribution has an impact on sales more than actual demand. On theother hand, GliCAP is now used for boards for servers by more than one company. It is also used for
package boards, which are continuously evaluated according to the semiconductor manufacturer’s plan.
Semiconductor process materials are being evaluated for EUV in the years ahead. Since EUV has notbeen launched on a full scale, our materials are also under evaluation. Despite this, sales are increasing.

Q3. For package board applications, GliCAP seems to be a product that will contribute to low delay inpackages, for example, in parts related to generative AI and graphic processors. Please tell us the status ofsuch initiatives.
A.

GliCAP is being evaluated for GPU for generative AI, and one of these projects for which evaluation has
progressed is scheduled to launch trial mass production next year. We believe that GliCAP will be further
valued in the future as the market is expected to move toward the direction of micro-fine etching andeventually etchingless.

Q4. Do you plan to maintain a total return ratio of 50% in the future? In addition, regarding the risk buffer
policy for excess capital in Slide 15, what assets will you hold for one-third of annual sales?

A.

We will maintain the policy of the total return ratio of 50%. The risk buffer is basically prepared for a suddenchange in the business environment, and we plan to maintain it mainly in cash. With regard to short-term andlong-term bonds, and cross-shareholdings other than those mentioned above, our policy is to reduce them
preferentially as a rough category of capital that can be reduced.

Q5. You have explained that the profitability of insoluble sulfur has deteriorated due to intensified competition. Will
you invest in equipment as planned?
A.

Capital investment will be made as scheduled. The global supply-demand balance is excess of supply, andwe have a sense of crisis for reduced profit ratio. However, this sense of crisis is not only a matter ofquantity. Notably, the quality of insoluble sulfur is always an issue, and we are working on improving it. We
must make a fundamental change in the manufacturing method to improve the quality, but it is not possible
with the current production facilities. We will learn about the new manufacturing method at a new plant thathas started construction, leading to further quality improvement.

Q6. What is your outlook for insoluble sulfur in the second half?

A.

The demand for insoluble sulfur is affected by the production and sales of automobiles, and automobile
production and new vehicle sales are recovering. So, we expect it to recover in the second half.

Q7. What is the level of operating margin usually?
A.

We originally wanted to achieve about 15%. While the operating margin was 12.5% in the first half, the recovery of
the housing materials operations and highly profitable fine chemicals are expected to contribute in the second half.
We want to achieve consistently, at least in the mid-10% level.

Q8 . In Slide 15, if you appropriate approximately ¥40 billion, excluding risk buffer for shareholder returns, the total return
ratio may exceed 100% nominally. Is that right?
A.

Although it is possible theoretically, we recognize that the reduction of cross-shareholdings will not proceed in ashort period due to the convenience of the other. The level we promise you is the total return ratio of 50%.

Q9 . Why have you formulated and disclosed a detailed capital policy, as shown in Slide 15, and how do you plan to use
excess capital?
A.

Disclosure is requested. And we are fully aware that we have too many financial assets, and we need theassumption about how to eliminate cross-shareholdings and its consequence in our ongoing initiatives. Anotherreason is that shifting to a holding company structure allows us to calculate ROIC by business precisely. As anadvantage of becoming a holding company, we believe that each business will operate taking into account its
assets, which may speed up business. Off course, we will reduce excess capital. But, in "Challenge 1000," weinitially laid out an active investment of ¥50 billion over ten years, and our financial strategies for the past few
years were to increase interest-bearing debt by leveraging our cash position to generate funds to be allocated forsuch investment. In the future, we will consider the reduction of excess capital flexibly while carefully monitoring
funding needs such as capital investment and M&A. We recognize that funding needs in business strategy are amatter of top priority, and the next is how to treat excess capital.

Q10. I believe it is the right strategy for companies to invest in expanding their business. Is there any change indiscovering such projects or decision-making speed due to a shift to a holding company?
A.

There are various investments. We had focused on capital investment as a manufacturer, but investment in humanresources and R&D is also an important strategy. R&D investment in terms of money, such as the ratio to R&D
expenditure and investment in creating a pleasant working environment for our researchers, has been relatively
small. In addition, especially for the chemicals operations, we have accelerated discussions on investment in the
optimum production and sales environment from a global perspective, such as the concept of raw material location,
due to the spin-off.

End5. Appendix

21

Corporate Profile

22

Corporate Profile
As of June 30, 2023

◼Company name
◼Code number

SHIKOKU KASEI HOLDINGS CORPORATION
4099 (Tokyo Stock Exchange Prime Market )Industry：Chemicals◼Incorporated◼Head office◼President◼Capital

October 10, 1947

Marugame, Kagawa Prefecture
Mitsunori Watanabe
6,867 million yen◼Number of employees 1,290（Consolidated）
46,566 million yen (Consolidated FY2022/12)◼Net sales
23

Our Business
Chemicals （SHIKOKU CHEMICALS CORPORATION）

Inorganic
Chemicals
Raw materials for tires, etc.

Organic
Chemicals

Housing Materials （SHIKOKU KASEI KENZAI CORPORATION ）Interior,
Exterior Finishes
andPaving Materials

Interiors

For swimming pool andseptic tank disinfectants

Exterior
Products
Fine
Chemicals

Exterior Products(carports, gates, etc.)
Chemicals for electronic
components(for printed wiring boards,
resin modifiers, etc.)24

History

Apr 2015
Apr 2017
Jul 2021

Established in Marugame, Kagawa Prefecture with a capital of 2 million yen as a producer of carbon disulfide(=> inorganic chemical products)
No. 1 Tokushima Plant (now Tokushima Plant's Yoshinari location) was constructed and began operations in the
production of sodium sulfate (=> inorganic chemical products)
No. 2 Tokushima Plant (now Tokushima Plant's Kitajima location) was constructed
The Company's shares were listed on the Second Section of the Tokyo Stock Exchange
Japan's first operations to produce chlorinated isocyanurates (=> organic chemical products) were launched at No. 2
Tokushima Plant
The Company began production of OSP (Organic Solderability Preservative) (which was later called Glicoat-SMD(=> Fine Chemicals) for PWBs (Printed Wired Board) and other electronic components
The Company began production in the field of housing materials, launching production of interior finishes (JULUX)
at No. 2 Tokushima Plant
The Company began production and sales of accordion gates (=> Exterior Products)
The Company moves its share listings from the Second to First Sections of the Tokyo Stock Exchange and Osaka
Securities Exchange
Tadotsu Plant was constructed in Tadotsu, Kagawa Prefecture
Full-scale production of imidazole (=> Fine Chemicals) began at No. 2 Tokushima Plant (test production began in
1968)
The Company opened a representative office in Los Angeles (which later became an overseas subsidiary as SIC in
1985)
Production of insoluble sulfurs (=> Inorganic Chemicals) began at Marugame Plant
The Research Center (now R&D Center) was constructed in Utazu, Kagawa Prefecture
Ranzan Plant was constructed in Ranzan, Saitama Prefecture
Shikoku (Shanghai) Co., Ltd. was established in Shanghai
The Company began sales of a roughening agent for PWBs (=> Fine Chemicals), and constructed a new plant for
Glicoat-SMD at Marugame Plant
Tokushima Advanced Chemicals Plant-3 (TAP-3) facility was constructed at Tokushima Plant
Converted Nippon Ryutan Kogyo Co., Ltd., the only carbon disulfide production company in Japan, into a
consolidated subsidiary
Offices were established in Taiwan and Singapore
Converted Nippon Koki Co., Ltd. into a subsidiary
Tokushima Advanced Chemicals Plant-4 (TAP-4) facility was constructed at Tokushima Plant

Apr 2022

Moved to the prime market following the TSE's market reclassification

Apr 2022

New chlorinated isocyanurates production facilities (NEO2022) constructed at Tokushima Plant

Jan 2023

The Company converted to a holding company structure and changed its name to SHIKOKU KASEI HOLDINGSCORPORATION. Chemicals and Housing Materials business, and the shared service division spun off.

Oct 1947
Oct 1957
Jun 1962
Oct 1962
May 1964
Dec 1969
Sep 1970
Jun 1972
Mar 1975
Jul 1975
Nov 1975
Jun 1981
Jul 1984
Sep 1992
Oct 1995
Jul 2006
2008
Aug 2013
Sep 2014

25

History and Sales Trends
2022
Net Sales

Moved to Tokyo Stock
Exchange Prime Market

1975

Moved to Tokyo Stock
Exchange Section 1
19622016 GliCAP

Listed on Tokyo Stock
Exchange Section 2

2008
2004
1991

1947
Establishment

1984
1972
1970
1968
1964
1957

1947

Microetching solution
for PWBs

Advanced Materials

Glicoat-SMD
Insoluble Sulfur
Exterior Products

Wall Materials
Imidazoles
Chlorinated Isocyanurates
Sodium Sulfate
Carbon Disulfide
26

Chemicals Operations

27

Chemicals Operations

Inorganic Chemicals

28

Inorganic Chemicals

million yen

Inorganic
Chemicals[Major products]□ Carbon Disulfide …Essential materials for chemical
fiber rayon□ Insoluble Sulfur…Rubber vulcanization agent□ Sodium Sulfate…Warm bath effect accelerator forbath additives
Synthetic detergent cleaning aid

6,785 (21.9％)

FY2023 2Q
Consolidated
Cumulative
Net Sales
20,83029

Insoluble Sulfur -Product Introduction□
□
□

□

□

□
□

Application: Vulcanizing agent for rubber
Main customers: Domestic and overseas tire manufacturers
The raw material rubber is hard, and it acquires the characteristic to extend and contract by adding sulfur
and heating (vulcanizing).
When normal sulfur is used in the production process of radial tires, sulfur blooming (deposition) occurs
on the surface of rubber and cause poor adhesion of rubber.
Since insoluble sulfur is dispersed in the material rubber, it can be used to suppress blooming.
For production of insoluble sulfur, polished handling technique for the company foundation product “carbon
disulfide” is required.
High quality is demanded in insoluble sulfur by tire manufacturers.
The production capacity is planned to be increased by about 1.2 times by the expansion of the new plant in 2024.
■ Insoluble Sulfur■ Manufacturing processes for insoluble sulfur (schematic diagram)Heating
450°C

Gaseous sulfur
Slow coolingRapid cooling(using carbon disulfide)
n=400-1,200nNormal sulfur

Insoluble Sulfur

30

Chemicals Operations

Organic Chemicals

31

Organic Chemicals

million yen

FY2023 2Q
Consolidated
Cumulative
Net Sales
20,830Organic
Chemicals[Major products]□ Chlorianted Isocyanurates（NEO-CHLOR）… for swimming pool and septic tank disinfectantsfor sanitary products□ HIPOLKA… Wastewater/sludge treatment agent

9,796 （31.7％）

32

Chlorinated Isocyanurates -Product IntroductionApplications: Sanitizing agent for swimming pools and septic tanks, chlorine-based sanitizing agent for spas andhome baths□ Main customers: Swimming pool operators, schools, general consumers (U.S.)□ Main component: Chlorinated Isocyanurates□ Compared to other disinfectant agents for swimming pools, “NEO-CHLOR” is characterized by longer duration in
outdoor pools and little quality deterioration even after a long period of storage, as it undergoes little degradation
caused by ultraviolet rays.
□ It delivers strengths in “NAPIX,” an automatic chlorine feeder for swimming pools and business baths.
□ Utilizing the strong oxidation, bleaching, and cleaning power of chlorine, we are developing various fields ofapplication such as industrial and home sanitary field, ballast water (seawater used as weight on the bottom of
the ship) treatment, drinking water application, and sanitation management applications in various facilities.
□ In October 2022, we launched our own branded washing tub cleaner "WASHMANIA," and expanded
our business area to the BtoC market.
□■ NEO-CHLOR product group■ Image of ballast water sanitization

Filter

Sanitization■ WASHMANIA

Neutralization

Mixing
Sea water
injection
Backwash

ChlorinatedIsocyanurates

Ballast tank
Sea water
discharge

NEO-CHLOR MARINE

33

Chemicals Operations

Fine Chemicals

34

Fine Chemicals

million yen

FY2023 2Q
Consolidated
Cumulative
Net Sales
20,830Fine Chemicals
4,249 （13.7％）[Major products]□ Glicoat-SMD… Water-soluble rust preventive agent for
printed wiring boards (OSP)□ Advanced & Specialty Chemicals…
Imidazoles (curing agent of epoxy resin)
Resin modifier, raw material for drug
□ THEIC… Raw material for heat-resistant wire varnish□ Solder resist

35

OSP: Organic Solderability Preservative
Application: Water-soluble rust preventive agent for printed wiring boards
OSP: Organic Solderability Preservative]□
Main customers: Printed wiring board manufacturers all over the world□
By forming an organic coating on the copper circuit of the printed wiring board to prevent oxidation of the
exposed copper circuit, it ensures good soldering performance in the implementation process, andcontributes to reliable electronic component manufacture.
□
The main component of OSP is imidazole, which has a property to selectively undergo chemical reaction withcopper. Our strength is that we are also an imidazole manufacturer and can synthesize the main ingredient to suit
the required properties of OSP.
□
While rust preventive agents for printed circuit boards include metal plating in addition to OSP, the percentage of
OSP is still increasing.
□Glicoat-SMD has acquired a lot of material designations from major electrical manufacturers, and has become anindustry standard.
□
By increasing the environmental performance ahead of other companies, we are increasing the adoption results forautomotive electrical components and semiconductor package boards.
■ Printed wiring boards going throughGlicoat-SMD treatment tank

■ Treatment with Glicoat-SMD (schematic diagram)
Substrate
Coppercircuit

Solder resist

Glicoat-SMD coating

O2

O2

36

Focused Products (Printed Wiring Boards Agents)■ GliCAP®

Adhesion improving agent between copper circuit and resin on printed wiring boards.
Conventionally, unevenness was formed on surface by roughening (etching) the copper
so that the adhesion to resin was improved by “mechanical bonding” (anchor effect).
□
As the performance of semiconductors is improved, it is becoming more difficult to roughen thecopper on package boards implementing high performance semiconductors, with the copper circuit width
decreasing to ultrafine level.
□ Copper circuits with smooth surface are required for high-frequency server boards for which further
acceleration is being demanded to achieve practical application of the 5th generation mobile communication system(5G), since transmission loss is caused by the unevenness of the copper surface in the high-frequency range.
□ GliCAP® has both properties to “strongly bind to resin” and “strongly bind to copper,” and can improve
the adhesion “chemically” without roughening the copper surface.
□□□

GliCAP® has already been adopted for high-frequency server boards, and evaluation for adoption and mass
production has progressed for the package boards as well. We are including applications other than those forprinted circuit boards in future.
Resin

Conventional method(roughening)

GliCAP®
(smooth)

Resin

Resin

CopperCopperStrong bonding with resin

Strong bonding with copper
Copper37

Advanced & Specialty Chemicals –Imidazoles
□
□
□

□

□

□

Application: Curing agent and curing accelerator for epoxy resin*, raw material for drugs
Main customers: Resin material manufacturers and drug manufacturers
Imidazole is used in a wide range of applications, including curing agent for epoxy resin and urethane resin, rawmaterial of drugs and agricultural chemicals, and raw material of various industrial chemicals such as rustpreventive agents.
The majority of our company sales come from application as an epoxy resin curing agent.
Epoxy resin which used imidazole as a component has optimal properties for electrical and electronic
component applications.
We have a lineup of various imidazoles to support the diverse curing speeds and properties demanded by theusers.
In the fields where competitive products (non -imidazole products) were strong, there is amovement for customers to newly adopt imidazole to improve the product performance.

*Epoxy resin:

A collective term for resin-like compounds with epoxy groups that readily react at the ends of a molecule, and thermosetting synthetic resinsthat are formed by polymerizing the compounds with curing agents. Used in printed circuit boards, paints, etc. in addition to adhesives.
■ Electronic part using epoxy resin (example)■ Applications of imidazoles from our company
Polyurethane
Drugs and agricultural chemicals
Automobiles

others･ Rubber applications･ Adhesive forstructures

Industrial paintN

NH

Imidazole

Electrical and electronic
insulating materials
38Advanced & Specialty Chemicals -Imidazoles
Engine CPU

Car navigation system[Laminated plate, sealing agent,solder resist ink]

[Liquid crystal sealing material]

Engine hood
[CFRP (reinforcedcarbon fiber)]Frame structure[Adhesive for structures]Electric motor

Tires [Tire grip improving agent][Insulating powder paint]

Air hose[Acrylic rubber agent]
39

Focused Products (semiconductor process materials)◼ Advanced materials□ Advanced materials at our company refer to the products (compounds) that can improve various functions by blending
them as materials for electronic parts such as semiconductors that are used in electronic devices, etc.
□ Demands for improvement in the properties of resin materials to be used (heat resistance, electrical properties, etc.) are
increasing as electronic devices evolve, and there are increasing opportunities to consider the functional materials of ourcompany.
□ The range of examination for the functional materials of our company is quite wide, and examinations are being madeeven with carbon fiber reinforced plastics (CFRPs) that are used as structural materials for automobiles and aircrafts
with a purpose to improve heat resistance and strength.
□□

Semiconductor process materials, which have been focusing on development in recent years, arebecoming increasingly difficult to synthesize as semiconductors become ultra -microcircuits, but they aresteadily acquiring new projects.
The new plant「TAP-4」 was constructed in anticipation of increased demand foradvanced materials, and it started operation in July 2021.
The 「TAP-4」 is equipped for high quality control, such as low metal management.

■ TAP-4□ Using the various organic synthesis technologies we have cultivated,
we are committed to conducting research and development related to
new and functional material products such as low dielectric materials thatwill contribute to high-speed and high-capacity infrastructure and 5G.
40

Advanced & Specialty Chemicals -Product Introduction◼

Benzoxazine
A resin with excellent heat resistance, flame resistance and electrical properties.
□ Examination is being made as a semiconductors sealing agent and carbon fiber reinforced plastics (CFRPs) .
◼ A new isocyanuric acid derivatives□ We developed this material by utilizing isocyanuric acid synthesis technology we have accumulated.
□ It has excellent heat resistance, light resistance, and transparency, and is used as a modifier for sealing agent, etc.
□◼

Glycoluril derivatives
A multi-functional resin modifier with transparency and high heat resistance.
It has 4 functional groups and is expected to form hardened materials with a high crosslinking density.
□ Products having a thiol groups (-SH) as a functional group will rapidly cure with epoxy resin at a low temperature.
Compared to the conventional modifiers, cured resin has excellent
heat resistance, moisture resistance, acid resistance, alkali resistance, and hardness, and it can significantly improve
the resistance to heat and moisture, which had been a problem.
□ It has been adopted in the field of electronic materials that continue to advance in performance andminiaturization.
□◼

New adhesion improver
A resin modifier that improves adhesion to inorganic materials such as metals through addition to the resin. Since it delivers
adhesion equivalent to the conventional modifiers while having no sulfur content, it can improve the metal corrosivity, which
was a problem with the conventional product.

We are developing its application in a wide range of resin materials including epoxy system commonly used in electronicparts, acrylic system, urethane system and polyimide system.



41

Housing Materials
Operations

42

Housing Materials Operations

4. Interior, Exterior Finishes and Paving Materials

43

Interior, Exterior Finishes and Paving Materials

million yen[Major products]□□□

Interior materials (silicate walls, natural material walls)
Plastered wall materials with moisture control
function and harmful chemical substance anddaily odor adsorption/decomposition function
Exterior materials
Wet exterior material for housing
Paving materials
Natural stone paving materials,
recycled glass paving materials
Rubber chip paving materials

FY2023 2Q
Consolidated
Cumulative
Interior,
Net Sales
Exterior
Finishes and 9,570
PavingMaterials
633 （2.0％）44Interior, Exterior Finishes and Paving Materials□

Interior materials□ The business started with “JULUX,” the first industrial product for plastered wall material in Japan, which
was developed for in-house chemical glue CMC application.
□ It is difficult to handle Juraku wall, traditional Japanese wall, but with our wall materials, uniform quality
can be maintained only by mixing a specified amount of water. Our plastered wall material is freshly
drawing attention because of its property of high adsorption of chemicals that cause sick building syndrome
such as formaldehyde as well as odor.
□ We are deploying the products characterized by high designability to our target market of commercial andpublic space design and custom-designed houses. Colors and expressions are brought to a space by threedimensional and various patterns that can be only achieved with thick coating.

■ Interior materials

45

Interior, Exterior Finishes and Paving Materials□

Exterior and paving materials□ We also expand our business to “exterior” to cover the outside of buildings and exterior parts, and “paving” tocover the surfaces of roads and approaches.
□ Our exterior materials come in wide variations including colors and can create subtle expressions as they are finishedmanually to the texture of the surface. As paving materials, we offer materials such as natural stone, natural sand, andrubber chips.
□ For exterior materials and paving materials, we create synergistic effects by making use of our sales channels forexterior products.

■ Paving materials

46

Housing Materials Operations

5. Exterior Products

47

Exterior Products

million yen[Major products]
Home Exterior Products□ Gates, fences, carports, and decks□ Accordion gatesFirst product in(expansion type gates)industry
which was□ Art Walldeveloped by our(aluminum system fence)company
Decorative Exterior Products□ Large gates, fences, pathway shelters,
bicycle parking spaces□ Garbage accumulation storage (first product in industry
which was developed by our company)□ Green roof, etc.

Exterior
Products
8,937 （28.9％）

FY2023 2Q
Consolidated
Cumulative
Net Sales
9,570

48

Home Exterior Products
In 1972, when the motorization was rapidly progressing, we devised an “accordion gate,” which canbe easily opened and closed with an expansion mechanism, and which can respond to the residential
situation with limited space in Japan, and it became the standard for gates in front of the car shed.
□ Since then, we have continued to add to the product lineup for general gates, car sheds (car ports),
fences, deck materials, terraces, etc.
□ We also devote our efforts in design, in addition to our focus on functions, and won the first “G mark”(current Good Design Award) in the exterior industry in 1984.
□‘Fun roof,’ our terrace roof with a sample design which harmonizes to the house using flat, wood like ceiling materials received the 2019 Good Design Award.
□■ Terrace■ Carport■Accordion gate

49

Decorative Exterior Products■ Pathway shelter■ Bicycle parking space■ High strength car stops■ Garbage accumulation storage50

Efforts in Housing Materials BusinessWe are adding to the lineup of high-strength exterior products that are resistant to wind and snow and promoting
sales expansion, based on the fact that large-scale disasters such as typhoons have been recently happening
one after another over the country.
□ We deploy the strength standards and quality cultivated in the decorative area to all products and are developing
products with high quality and strength.
□ As parts of the lineup of high-strength products, we have commercialized fences for detached houses, andindependent terraces in addition to the large fences, archways, Large fences, and car ports.
□■ Fences■ Shelter■ Gate■ Car port

■ Terrace

51

Long-term Vision Challenge 100052

Outline of ‘Challenge 1000’

STAGE 3STAGE 2STAGE 1start

present

2020

2022 2023

goal

2029

2025 2026

Desired state in 2030

Toward “one- step-ahead, proposal” company with Dokusouryoku (creativity)
Solve social issues with creative ideas, leading the progress of the world

YONPO- YOSHI

Financial Goals

Pillars for Strategy

Net Sales

Business Reform Policy

Customers

Companywide
Reform Policy

Employees

Proactive Investment

Shareholders

Achievement of SDGs

Society(Contributions to Stakeholders)

100 billions of yen
Operating Income
15 billions of yen
ROE10％

53

Business Reform Policy

Chemicals
Operations

Continue to develop and advance for the sake of the world

Accumulate sulfur handling and synthesis
reaction evaluation technologies

Deliver cleanliness topeople across the globe by protecting theenvironment and ensuring sanitation

Anticipate customer needs based on social issues such as
the water environment and sanitation and make optimal
proposals concerning sterilization and cleaning with our unique
technologies and services

Fine

Inorganic

Strategic Scenario

Organic

Desired State
Make use of materials
which are difficult to handle in a recyclingoriented manner and contribute totechnological innovation and environmental
preservation around the world

Contribute to technological advancement
by providing highly functional products
based on unique technologies
Create global standards with our new
technologies

Create new value starting from making use of
sulfur and expand the business domain

Set unique themes by anticipating needs and establish technologies incooperation with prosperous customers
Develop highly functional products based on accumulated unique
technologies
Set themes with an eye on market trends and develop products drawing
on our strengths
Strive to propose comprehensive solutions from the point of view ofcustomers
54

Business Reform Policy

Housing Materials
Operations

Design a new lifestyle in the future and contributeto the community development around the world for everyone’s happinessHousing
Materials

Desired state
建材

Design a new lifestyle in the future
and contribute to the community
development around the world
for everyone’s happiness

Process to provide value
Attract and acquire human resourcesand engineers in Japan and overseas, withoriginal products placing focus on the design
and functionality
Promote alliance and extend operations
globally with our unique product categories

55

Companywide Reform Policy◼ Set six companywide reform policies toward realization of the desired state in 2030 and push forward with themmobilizing group-wide efforts.
Desired statein 2030

Companywide
reformpolicyToward “one- step-ahead, proposal” company with Dokusouryoku (creativity)
Solve social issues with creative ideas, leading the progress of the world❶Creation of values❷Creation of reserve energy❸Creation of operational bases

Increase brand value andtake on challenges
for new business

Improve efficiency to secureresources for reforms

Gain a foothold into the world andaccelerate global businessexpansion⚫ Improvement of SHIKOKU QUALITY⚫ Establishment of a framework thatmakes it easier for everyone to propose
and take on challenges for new
businesses and ideas for suchbusinesses⚫ Elimination of inefficiencies and⚫ Formulation of companywide operational
simplification and standardization ofbase strategy
operations⚫ Efficiency improvement by making use of ⚫ Optimization of domestic production,
development and sales operational bases
technology such as IT⚫ Optimal allocation of personnel and work ⚫ Optimization of overseas production,
development and sales operational basesstyle reforms❹Creation of organizations❺Creation of company climate❻Creation of human resources

Establish a group governancestructure to realize the vision

Foster company climate whichembraces diversity andencourages challenges

Build a framework to encourage
individuals to take on challenges
and evaluate individuals fairly⚫ Spread of “proposal-based styles”
among employees⚫ Fostering of company climate to develop“proposal-based styles”⚫ Establishment of a working environment
which accommodates diverse work
styles⚫ Establishment of a framework forrecruitment which attracts desired
human resources⚫ Creation of opportunities for growth
where each individual is respected⚫ Revision to and strengthening ofmanagement of the evaluation system⚫ Building of an optimal group governancestructure⚫ Establishment of a group governancestructure in keeping with the businessexpansion overseas

56

Progress on Companywide Reform Policy■

We are working to build a foundation that can accommodate diverse work styles, fostering a sense of self-improvement,
and creating a framework for change, and we are generally making progress as planned.
Item

TopicsCreation ofvalues◆ Enhance brand value (Formulation of SHIKOKU QUALITY)◆ Strengthen environmental initiatives (Issue CSR report)◆ Implement measures to create new businesses(Implement internal recruitment)

Creation ofreserve energy◆ Promotion of telework and other initiatives to improve work efficiency
・ Promote telework, which allows employees to work efficiently regardless of their
physical location

Creating ofoperational bases◆ Consolidation of sales bases
・ Moved interior, exterior finishes and paving materials production base to
Yoshinari location of Tokushima Plant

Creation oforganization◆ Start discussion to determine the organizational structure to be pursued
・ Transition to a holding company structure

Creation ofcompany climate◆ Dissemination of long-term vision and exchange activities to eliminate
barriers between divisions
・ Hold workshops, roundtable discussions, and other events

Creation ofhuman resources◆ Create an environment in which employees can actively tackle challenges
・Review the evaluation system, including the introduction of challenge goals witha point system
57

YONPO-YOSHI – Contributions to Stakeholders –Customers“One-step-ahead”
values
We will provide new values with ourunique, state-of-the-art products andservices.

Employees

Society

Challenges andgrowthA better tomorrow
We will contribute to the resolution ofsocial issues and to realize aprosperous living environment.

We will support a fulfilling life with asense of real growth through various
ways of working and through taking
on challenges.

Shareholders
Shareholders return
policyWe will aim to achievea total return ratio of 50% on
a consolidated basis.

58

Transition to Holding company■ Group Management System after January 1, 2023

Shikoku Kasei Holdings Corp.
Shikoku Kasei Corporate
Service CO., LTD.

Shikoku Chemicals Corp.

Shikoku Kasei Kenzai Corp.

Group companies
related to Chemicals

Group companies
related to Housing Materials

Other group companies

化成/Kasei
Meaning:
１ change for the better
２ transform to another３ change to another by combining
４ achieve growth59

Disclaimer

 This material is intended to help shareholders, investors, etc., understand pertinent information such as the Company’s
management policy, plans, and financial status, and it does not solicit investment such as purchasing or selling stocks in the
Company.
 The information contained in this document has been presented with the utmost care, but there is no guarantee as to whether
the content is accurate or currently up to date. Additionally, the Company assumes no responsibility for any damage ordisability arising out of or in connection with this document, such as published information or errors, regardless of the reason.
 Among the Company’s current plans, forecasts, and strategies as presented in this material, those that are not historical facts
are forward-looking statements or projections based on the judgment of the Company’s management according to theinformation that was available at the time of the relevant decision; hence, risks and uncertainties are involved. Actual
performance and business results may differ greatly from these prospects due to various factors.
 If you understand the above and are interested in exploring investment opportunities, please peruse additional materials suchas the Company’s securities report and make your investment decision at your own discretion.

Contact information
SHIKOKU KASEI HOLDINGS CORPORATION, Corporate Planning Dept.
TEL: +81-(0)877-21-4119
https://www.shikoku.co.jp

60