Financial Results
The 1st Quarter of FY 2020
(From Apr. 1 to Jun. 30)

July 31, 2020

Index■Main points in 1Q of FY 2020

P. 2

■Summary of businesses

P. 3■Business environment

P. 4■Summary of 1Q-FY 2020 performance

P. 5■Summary of P/L

Elastomer business

P. 8



Specialty materials business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/F

P. 22■Forecast of 1H - FY 2020

P. 24

■Future actions

P. 25
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Main points in 1Q of FY 2020
The result of 1st quarter of FY 2020 was harsh due to the deterioration of theglobal economy by the languishing US-China trade friction, the spread ofCovid-19, etc., and the market weakening of raw materials and products.
There is no impact on procurement and production by Covid-19.

Elastomers: Both sales and operating income drastically decreased YoY
due to the sluggish demands in the automobile and general industries andthe market weakening.

Specialty Materials: Sales increased but the operating income decreasedYoY.
• The demands for Specialty chemicals and Electronic materials weresteady. Toner and Energy materials demand were dropped.
• Both sales and operating income were same level as 1Q of FY 2019 inSpecialty Plastics.
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Summary of business situation
Segment

Elastomers

Specialty
materials

OthersBusiness

1Q-FY 2020

Rubbers

Weak in auto industry and general industry

Latexes

Steady for the medical gloves, weak in general industry

Chemicals

Sales volume was same level as 1Q-FY 2019, but themarket weakened

Specialty
chemicals

Sales for Fragrances were steady (esp. for hand-soap)

Electronics
materialsSteady in the semiconductor industry

Toner

The demand in office / home-printing shrunk

Energymaterials

Sluggish in EV. Steady in consumer use. Decreased in thisbusiness total.

Specialtyplastics

Almost same level of sales of 1Q-FY 2019 (varies to theend-products)

Trading, etc.

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3

Business Environment【Exchange rate】【Raw materials】

1Q-FY2019 4Q-FY2019 1Q-FY2020

JPY/US＄JPY/€
Naphtha (JPY/KL)Asian Butadiene（US$/MT)¥110.8¥123.6¥45,400
US$1,035¥109.4¥121.0¥44,800
US$822¥107.8¥118.2¥25,000
US$358YoY

QoQ-3%-4%-1%-2%-45%-65%-44%-56%
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Summary of 1Q-FY 2020 performance (3 months)(Unit : JPY100m)

1Q
FY20194Q
FY20191Q
FY2020YoY

QoQ

Net Sales

824

794695-129-99

Operating Income

834643-40-3

Ordinary Income

8752

51-36-2

Net Income

613536-25+0 Both net sales and operating income decreased YoY due to the deteriorationof the global economy by the spread of Covid-19, etc. and the marketweakening.
 Net sales and operating income decreased also QoQ (compared to 4Q-FY2019)
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Summary of 1Q-FY 2020 performance (by segments)(Unit : JPY100m)

1Q
FY20194Q
FY20191Q
FY2020

Elastomer BusinessSpecialty Materials Biz.
OthersEliminations, etc.
Net sales (consolidated)

471
223
136-5
824

434
239
127-6794

371
223
106-5695

Operating Income

1Q
FY20194Q
FY20191Q
FY2020

3551
4-683

1141
4-1046-1
48
2-643Net Sales

Elastomer BusinessSpecialty Materials Biz.
OthersEliminations, etc.
Op. Income (consolidated)

YoY-100+1-30
0-129
YoY-36-2-20-40

QoQ-63-15-220-99
QoQ-12+7-2+4-3

 Elastomers: Both net sales and operating income decreased significantly.
 Specialty Materials: Almost the same level in YoY, but in QoQ, the sales
decreased and the operating income increased.
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Index■Main points in 1Q of FY 2020

P. 2

■Summary of businesses

P. 3■Business environment

P. 4■Summary of 1Q-FY 2020 performance

P. 5■Summary of P/L

Elastomer business

P. 8

Specialty materials business

P. 13



OthersP. 19■Summary of B/SP. 21■Summary of C/F

P. 22■Forecast of 1H - FY 2020

P. 24

■Future actions

P. 25
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Summary of P/L: Elastomer Business【Naphtha price vs. Sales of Elastomer biz.】（JPY/KL）【Net sales and volume of Rubbers】（Kton）(JPY 100m)

 Net sales of Elastomer biz. are linked to the raw material prices.
 Sales volume of Rubbers dropped suddenly in 1Q-FY 2020.
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Summary of P/L: Elastomer Business(Unit : JPY100m)

1Q-2019 4Q-2019
Sales volume (thousand tons)
147
150
Rubbers
85
88
Latexes30
28
Chemicals
32
34
Net sales
471
434
Rubbers
328
292
Latexes
4540
Chemicals
92
90
Others/Eliminations
712
Operating income
35
11Operating income ratio

7%3%

1Q-2020
128
65
28
35
371
245
33
81
13-1

YoY-19-21-2
4-100-83-12-11
7-36

YoY (%)-13 %-24 %-8 %11 %-21 %
-25 %
-27 %
-12 %
100 %
-103 %QoQ
QoQ (%)-23-15 %-23-27 %00%
13%-63-14 %-47-16 %-7-18 %
-10-11 %111 %-12-111 %0% Rubbers: Declined demands in automobile and general industry. Sales prices
declined linked to the falling prices of raw material.
 Latexes: Declined demands in cosmetics and general industry. Sales prices
declined linked to the falling prices of raw material.
 Chemicals: Maintained the sales volume, but the sales prices dropped due tothe weak market situation.
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Elastomers: Operating income variance (3 mo./YoY)(Unit : JPY100m)• Raw material /sales price formula• Market downturn-1335-32• Price decrease of raw material +28• Manufacturing fixed cost increase dueto the volume decrease -23-１+8-4
1QFY 2019

Qty.

Price+5Raw
Exchange materialRateprices

SG&A

1QFY 2020-36

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Elastomer: Rubbers (Volume, index)【General purpose】

1QFY 2019

4QFY 2019【Specialty】

1QFY 2020

1QFY 2019

4QFY 2019

1QFY 2020

Index: Volume for 1Q-FY 2019=100

Both general purpose rubbers (mainly for tires) and specialty rubbers (forautomobile industries and general industrial products) are drasticallydecreased
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Index■Main points in 1Q of FY 2020

P. 2

■Summary of businesses

P. 3■Business environment

P. 4■Summary of 1Q-FY 2020 performance

P. 5■Summary of P/L

Elastomer business

P. 8



Specialty materials business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/FP. 22■Forecast of 1H - FY 2020

P. 24

■Future actions

P. 25
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Summary of P/L: Specialty Materials(Unit : JPY100m)

Net sales

1Q-2019 4Q-2019
223
239

Specialty chemicals
Specialty plastics
Medical devices, etc.
Operating income
Operating income ratio

1Q-2020223

YoY
1

YoY (%)
0 %QoQ-15

QoQ (%)
-6 %

67142
1476
147
1670141
12

4-1-2

6 %
-0 %
-15 %

-6-6-3-8 %
-4 %
-22 %

514148-2-5 %

718 %

23%

17%

22%

 Specialty chemicals:
Steady business in Specialty chemicals (mainly in flavor / fragrance) andElectronics materials, but the sales declined in Toner and Energy materials
due to Covid-19 impact, etc. Net sales increased YoY.
 Specialty plastics:
The demands for both Optical plastics and Films were steady. Sales was on
the same level of 1Q of FY 2019, because of the shipment control due to theregular power stoppage.
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Specialty Materials: Operating income variance (3 mo./YoY)(Unit : JPY100m)• Raw material price decreased• Manufacturing fixed costdecreased+1-2

Increased R&D and trial
manufacturing cost of opticalfilms+4-4-251
1QFY 2019

48-2
Qty.

PriceRaw
Exchange material
Rateprices

SG&A

1QFY 2020
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Situation in Specialty Materials: Specialty chemicals (volume)
YoY

QoQ

Flavor / Fragrance

151%

107%

Specialty solvents

148%

75%

Total

150%

89%

 Summary:Sales volume was significantly increased YoY. (There was the regular plantmaintenance in the main manufacturing site in 2019) Flavor / fragrance:
Steady QoQ Specialty solvents:
QoQ decrease was due to the plant regular shutdown. The demand is steady.
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Situation in Specialty Materials: Energy materials (volume)
YoY

QoQ

77%

89%

58%

99%

Consumer use, etc.

123%

141%

Total

90%

104%

EV
Shipment to China

 EV:
The demand was decreased by the Covid-19 effect.
The variance in the shipment to China was because of the last-minutedemand due to the tax breaks in 1Q-FY 2019.
 Customer use, etc.:
Demand increased for the mobile devices (increase in telework).
ESS (Energy storage system) demand increased by the promotion measures
for the introduction of renewable energy.
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Situation in Specialty Materials: Optical films (volume)
YoY

QoQ

For small-to-medium size

93%

101%

For large size FPD

95%

94%

Total

95%

95%

 For small-to-medium size:
YoY: the shipment for smartphone was sluggish, but the demand for the PC
and mobile devices for telework supported the business. The sales wassteady QoQ.
 For large size FPD:
The volume was slightly declined both YoY and QoQ, due to the shipment
control from the regular power stoppage in the main plant area in March.
Demand itself is steady (same level as 1Q of FY 2019).
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Situation in Specialty Materials: COP (volume)
YoY

QoQ

Optical use

84%

75%

Medical use, etc.

126%

99%

Total

115%

93%

 Optical use:
Controlling the shipment to prepare the construction to expand the production
capacity and the regular maintenance in 2021. (plans to complete in July2021)
 Medical use, etc.:
The demand is steady, and the supply is tight.

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Summary of P/L: Specialty Materials(Unit : JPY100m)

136

127
【Year-on-year】
Net sales ︓-3 billion yen
Operating income: -0.2 billion yen

106

Decline in Trading and RIM businessdue to the Covid-19 effect.

442

1Q-FY 2019 4Q-FY 2019 1Q-FY 2020
Net sales

Operating income
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Index■Main points in 1Q of FY 2020

P. 2

■Summary of businesses

P. 3■Business environment

P. 4■Summary of 1Q-FY 2020 performance

P. 5■Summary of P/L

Elastomer business

P. 8



Specialty materials business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/F

P. 22■Forecast of 1H - FY 2020

P. 24

■Future actions

P. 25
20
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Summary of B/S(Unit : JPY100m)
Year-on-year variance is in ( )【Current assets】 -156

Total assets
3,937 (-114）【Current liabilities】 -150
 Account payable -127

 Cash and deposits -62
 Account receivable -70• Current ratio: 204%
• On-hand liquidity ratio:
1.1 month（-150）（-13）（-156）【Total net assets】 +48
 Net income +36• Retained earnings +22【Fixed assets】 +42

 Financial indicators

 Capital expenditures +27
 Depreciation & Amortization-37（+42）（+48）• Interest-bearing debt 210 (-)• Equity ratio 66.6％ (+3.1％)• D/E ratio 0.08 (-)

 Investment securities +59

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Summary of C/F(Unit : JPY100m)

1Q-2019 1Q-2020

63

31-20-34-50-53

1Q-FY 2019

1Q-FY 2020

CF from Operatin Act.
CF from Financing Act.

CF from Operating Act.

6331

CF from Investing Act.

-50-53

Free CF13-22

CF from Financing Act.

-20-34CF-7-56

 CF from Operating act: -32• Decrease of earnings before tax -34
 CF from Investing act: -3• Increase of capital investment -14(Optical film facility, etc.)
 CF from Financing act: -14

CF from Investing Act.
22
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Index■Main points in 1Q of FY 2020

P. 2

■Summary of businesses

P. 3■Business environment

P. 4■Summary of 1Q-FY 2020 performance

P. 5■Summary of P/LElastomer business

P. 8Specialty materials business

P. 13



OthersP. 19■Summary of B/SP. 21■Summary of C/FP. 22■Forecast of 1H - FY 2020

P. 24

■Future actions

P. 25
23
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Forecast of 1H - FY 2020
Forecast of net sales &operating income (Unit : JPY100m)

Dividend (Unit : JPY) Forecast of 1H-FY 2020: Net sales 130 billion yen
Operating income 7 billion yen
 Interim dividend is ¥11.00/share (±0 from previous year’s result)
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Future actions
The anxiety factors to the global economy (such as the spreadof Covid-19 and the US-China tense situation) cannot be wiped
out. “Emergency response headquarters” will take the initiativein continuing to respond to contingencies.
We continue to implement infection prevention measures at all
business sites globally and maintain the supply chain andensure the health and safety of employees and their families.
The forecast of FY2020 performance and dividend have notbeen determined, because to calculate rational business
forecast is difficult. We will announce it as soon as we cancalculate it.
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Reference: Capital Expenditures, Depreciation & Amortization
and R&D Expenses(Unit : JPY100m)

2019 Actl.
291

2019 Actl.
174

2020
Forecast
200

2020
Forecast
205

2019 Actl.
153
2020
Forecast
160

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Zeon’s plans, forecasts, and other data appearing in this presentation were calculated
based on information which was currently available and therefore includes risks anduncertainties. Actual results may differ depending on various factors.

Next Announcement of Financial Statements

The 2nd quarter ofFY 2020Oct. 30 th, 2020
Subject to change without noticeThis document is a translation of the original Japanese-language and is provided for convenience only.
In all cases, the original Japanese version shall take precedence.
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