FY2017 3Q Results

February 8, 2018

1

FY2017 3Q Highlights(in billions of yen)

Revenue

FY20163Q

FY2017
3Q

Change(%)

93.4

110.2

16.8(18.0%)

Operating profit

9.3

12.5

3.2(33.8%)

Profit before income tax

9.1

12.6

3.4(37.4%)

Profit attributable toowners of parent

7.3

9.5

2.2(30.1%)

FY2017 3Q vs. FY2016 3Q• Revenue increased on volume
growth across all segments,
particularly in Advanced Materials• Higher operating profit driven byAdvanced Materials, Specialty
Chemicals and Specialty Plastics• Profit before income tax increasedon higher operating profit• Profit for the period increased onhigher profit before income tax

2FY2017 3Q Highlights
Segment Variance: FY2017 3Q vs. FY2016 3Q(billions of yen)

Revenue
35.1…FY16 3Q
…FY17 3Q

32.1

30.8
22.0
18.1

OperatingProfit

6.0
4.2
3.1

19.6
9.2

1.9

12.3 11.9 12.4

1.8
0.6 0.6

0.7
Advanced
Materials

Specialty
Chemicals…FY16 3Q
…FY17 3Q

Specialty
Plastics

Construction

OtherOperations

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

1.1

1.4

OtherOperations

Factors for FY2017 3Q segment operating profit (vs. FY2016 3Q)
Advanced Materials: Higher volumes of advanced plastics and carbon products
Specialty Chemicals: Higher agrochemical volume and improved margin for industrial chemicals more thanoffsetting pharmaceutical volume decline
Specialty Plastics:
Volume growth for home products, synthetic fiber and packaging materials
Construction:
Lower profit in engineering businesses, despite profit increase in construction
Other Operations:
Volume gains in industrial waste treatment

3

FY2017 3Q Highlights(billions of yen)

FY2016 3Q

Advanced Specialty
Materials Chemicals

Revenue

22.0

18.1

SpecialtyPlastics

Construction

32.1

9.2

Other
Segment
Adjustment
Operations
Total

11.9

93.4

1.1

8.4

Elimination
Other income
Other expenses
Operating profit*Includes ¥1bn subsidy income*Includes ¥0.2bn loss on retirement of non-current assets

0.7

1.8

4.2

0.6

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

35.1

12.3

Finance income
Finance costs-----0.0
1.2
0.3
1.0
0.5
0.7

Profit before income tax

Profit for the period

FY2017 3Q
Revenue

30.8

19.6

Other
Segment
Adjustment
Operations
Total

12.4

110.2
----------------

13.0

-0.5
0.6
0.5

12.5
----------12.6
9.5

Finance income
Finance costs
Profit before income tax

Profit for the period*Includes ¥0.4bn environment-related expenses and ¥0.4bn loss onretirement of non-current assets

1.9

3.1

6.0

0.6

1.4

Total

-----0.2
0.2
0.9

Other income

Operating profit

93.4---------------9.3----------9.1
7.3

110.2

Elimination
Other expenses

Total4

Segment Performance:
Advanced Materials(billions of yen)

FY20163Q

FY2017
3Q

Change%FY2017 3Q vs. FY2016 3Q
Revenue

Advanced Materials
Advanced plastics

13.9

17.9

29%

Carbon products

3.2

3.7

17%

Revenue: Kureha Co.

17.1

21.6

27%

Revenue: Subsidiaries

17.5

21.4

22%

Elimination

-12.5

-12.2

--

Kureha-G Revenue

22.0

30.8

40%

Kureha-G Operating Profit

0.7

1.9

183%

Operating Profit• Advanced plastics revenue and profit
increased on higher volumes for
PVDF (LiB binder applications), PPS(automotive) and PGA (oil/gas
exploration applications)• Carbon products returned togenerating profit due to sales growthof carbon fiber and carbon materialproducts

5Segment Performance:
Specialty Chemicals(billions of yen)

FY20163Q

FY2017
3Q

Change%FY2017 3Q vs. FY2016 3QRevenue

Specialty Chemicals
Agrochemicals

4.5

6.648%

Pharmaceuticals

4.5

3.4-26%

Industrial chemicals

6.3

7.0

10%

Revenue: Kureha Co.

15.3

17.0

11%

Revenue: Subsidiaries

5.0

4.7-6%

Elimination-2.2-2.0--

Kureha-G Revenue

18.1

19.68%

Kureha-G Operating Profit

1.8

3.1

67%

Operating Profit• Agrochemicals revenue and profit
increased on higher fungicidevolumes• Pharmaceuticals declined due tolower Kremezin (therapeutic agent forchronic kidney disease) volume• Industrial chemicals improved onhigher volumes in both organic andnon-organic chemical businesses

6Segment Performance:
Specialty Plastics(billions of yen)

FY20163Q

FY2017
3Q

Change%FY2017 3Q vs. FY2016 3Q
Revenue

Specialty Plastics
Home products

15.6

16.77%

Packaging materials

5.5

4.9-11%

Revenue: Kureha Co.

21.2

21.62%

Packaging materials

8.2

9.616%

Fiber products

2.8

3.2

16%

Others

5.1

5.58%

Revenue: Subsidiaries

16.1

18.314%

Elimination-5.2-4.8--Kureha-G Revenue

32.1

35.1

9%

Kureha-G Operating Profit

4.2

6.0

43%

(outside Japan)

Operating Profit• Home products continued to improveon steady sales growth of NEW
Krewrap (plastic wrap) and Seaguar(fishing lines)• Packaging materials revenue andprofit increased due to volume growthof heat-shrink multilayer film in Japanand global markets

7

Segment Performance:
Construction & Other Operations(billions of yen)

FY20163Q

FY2017
3Q

Change%RevenueConstruction
Construction

14.3

17.2

20%

Elimination-5.1-4.9--

Kureha-G Revenue

9.2

12.3

34%

Kureha-G Operating Profit

0.6

0.6-5%

Other Operations
Environmental engineering

FY2017 3Q vs. FY2016 3Q
Operating Profit• Construction segment profit decreased
despite revenue growth, due to weakengineering business more thanoffsetting construction growth

Revenue

Operating Profit

Logistics
Hospital operations
Others

7.2
6.4
2.7
1.3

8.0
6.3
2.7
1.4

11%
-2%
-2%
2%

• Environmental engineering grew onhigher volumes in industrial waste
treatment business

Revenue: Subsidiaries

17.7

18.3

4%

Elimination-5.8-5.9--• Logistics profit improved on lower cost,
despite a decline in revenue

Kureha-G Revenue

11.9

12.44%

Kureha-G Operating Profit

1.1

1.434%• Lower revenue and profit in hospital
operations

8

Balance Sheet
Assets(billions of yen)

Liabilities and Equity
Mar. 31 Dec. 31
Change2017
2017

Mar. 31 Dec. 31
Change2017
2017

Cash and cash equivalents

6.2

6.2

-0.1

Trade and other payables

20.4

21.3

0.9

Trade and other receivables

29.4

33.5

4.1

Interest-bearing debt

71.0

50.8

-20.2 *

Inventories

36.5

36.8

0.3

Provisions

6.1

5.1-1.0

Other current assets

3.2

2.1

-1.1

Other liabilities

11.4

15.1

3.6

Total current assets

75.3

78.5

3.2

Total liabilities

108.9

92.3

-16.7

Property, plant and equipment

115.9

115.8

-0.1

Shareholders’ equity

12.5

18.1

5.7 *

Intangible assets

1.4

1.4

0.0

Capital surplus

9.4

15.2

5.8 *

Investments and other assets

42.3

50.3

7.9

Less: Treasury stock

-4.5

-0.7

3.8 *

Retained earnings

101.7

108.8

7.1

Other components of equity

5.1

10.4

5.2

Non-controlling interests

1.7

1.80.2

Total non-current assets

159.6

167.5

7.9

Total equity

126.0

153.8

27.8

Total assets

234.9

246.0

11.1

Total liabilities and equity

234.9

246.0

11.1

*For ¥15 billion convertible bonds with stock acquisition rights issued (due March 2018), 99.7% bondholders
have elected to convert their bonds into shares as of the end of December 2017. As a result, with shareconversion partly settled by the company’s treasury shares , the number of shares issued at the end ofDecember 2017 was 20,796,171.

9FY2017 Full-Year Forecast (Revised)
Kureha’s FY2017 full-year forecast has been most recently revised on February 8, 2018.
The previous forecast, which was announced in November 2017, is indicated in blue below.
(billions of yen, except per-share values)

FY2016FY2017e

Change (%)

FY2017e vs. FY2016

132.3

Revenue
Operating profit

9.3

Profit before income tax

9.0

Profit attributable toowners of parent

7.0

145.0

12.7 (9.6%)

145.0

0 (0%)

12.5

3.2 (35.0%)

12.0

0.5 (4.2%)

12.5

3.5 (39.2%)

12.0

0.5 (4.2%)

9.6

2.6 (37.1%)

9.3

0.3 (3.2%)

Dividend per share
InterimYear-end¥5.5¥55.0*

¥55.0
¥55.0

• Revenue expected to increase on
volume growth for Advanced
Materials and Specialty Plastics• Operating profit to rise on strong
gains in Advanced Materials andSpecialty Plastics, despite adecline in Construction• Profit before income tax to improveon higher operating profit• Profit for the period to improve onhigher profit before income tax

Note: FY2017 operating profit forecast is nearly the same amount of FY2017 3Q
cumulative operating profit (¥124bn). While our businesses will generate steady revenuesduring 4Q, we expect to appropriate other expenses associated with sales andadministrative operations and losses on retirement of non-current assets for the period.

*Kureha conducted a ten-to-one shareconsolidation on October 1, 2016.

10FY2017 Full-Year Forecast (Revised)
Segment Variance: FY2017 projection (revised Feb. 2018) vs. FY2016(billions of yen)

Revenue
42.8

40.5

Operating
Profit45.0

6.3…FY16…FY17e Revised

33.4
25.9 27.0

3.2
13.9

2.5

16.0 16.3 16.5

1.7 1.7

1.6

1.0 0.7

0.1
Advanced
Materials

Specialty
Chemicals…FY16…FY17e Revised

5.0

Specialty
Plastics

Construction

OtherOperations

AdvancedMaterials

Specialty
Chemicals

Specialty
Plastics

Construction

OtherOperations

Factors for FY2017e segment operating profit (vs. FY2016)
Advanced Materials: Continued growth for PPS, PVDF and carbon products, combined with improved sales
PGA despite a delay in product launch by new US venture
Specialty Chemicals: Higher agrochemical volume and improved margin for industrial chemicals more thanoffsetting a decline in pharmaceuticals affected by generic competition
Specialty Plastics:
Continued growth of home products and synthetic fiber businesses
Construction:
Higher labor and raw materials costs partially offset by volume gains
Other Operations:
Performance on par with previous year

11FY2017 Full-Year Forecast (Revised)(billions of yen)
Advanced Specialty
Materials Chemicals

FY2016
Revenue

33.4

Specialty
Plastics

Construction

42.8

13.9

25.9

OtherSegment
Adjustment
Operations
Total

16.3

132.3

Elimination
Other income
Other expenses
Operating profit*Includes ¥1bn subsidy income*Includes ¥1.9bn business withdrawal and restructuring costs, ¥0.5bn loss onretirement of non-current assets

0.1

2.55.01.0

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.0

16.0

1.7

10.4

Finance income
Finance costs-----0.1
1.4
2.6

132.3
----------------

-1.1
0.6
0.9

9.3
----------9.0
7.0

Profit before income tax

Profit for the period

FY2017e Revised(Feb. 8, 2018)
Revenue

40.5

27.0

OtherSegment
Adjustment
Operations
Total

16.5

145.0

Elimination
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before income tax

Profit for the period*Includes ¥1bn loss on retirement of noncurrent assets, ¥0.4bn environmentrelated expenses

1.6

3.2

6.3

0.7

1.7

13.5

TotalTotal-----0.0
0.4
1.4

145.0
----------------

-1.0
0.6
0.6

12.5
----------12.5
9.6

12

FY2017 Full-Year Forecast(Current vs. Previous Projection)
Segment Variance: FY2017 Projection, Current (Feb. 2018) vs. Previous (Nov. 2017)(billions of yen)
…FY17 Previous Projection…FY17 Current Projection

Revenue…FY17 Previous Projection…FY17 Current Projection

OperatingProfit
6.3

45.0 45.0
41.5 40.5

5.5
27.0 27.0

3.1 3.215.0 16.0 16.5 16.5

2.3

1.5 1.7

1.6
0.6 0.7

Advanced
Materials

SpecialtyChemicals

SpecialtyPlastics

Construction

OtherOperations

AdvancedMaterials

Specialty
Chemicals

Specialty
Plastics

Construction

Factors for FY2017e segment operating profit (vs. previous projection)
Advanced Materials: Delayed business expansion for PGA by new US venture
Specialty Chemicals: (No change from previous projection)
Specialty Plastics:
Robust sales growth of home products and lower cost
Construction:(No change from previous projection)
Other Operations:
Volume growth in industrial waste treatment business and lower cost

OtherOperations13FY2017 Full-Year Forecast(Current vs. Previous Projection)(billions of yen)

FY2017e Previous(Nov. 2017)
Revenue

Advanced Specialty
Materials Chemicals

41.5

27.0

Specialty
Plastics

Construction

45.0

15.0

OtherSegment
Adjustment
Operations
Total

16.5

145.0

Elimination
Other income
Other expenses

Operating profit*Includes ¥1bn loss on retirement of non-current assets, ¥0.4bn environmentrelated expenses

2.3

3.1

5.5

0.6

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.0

16.0

1.5

13.0

Finance income
Finance costs-----0.00.41.4145.0----------------

-1.0
0.5
0.5

12.0
----------12.0
9.3

Profit before income tax

Profit for the period

FY2017e Current(Feb. 2018)
Revenue

40.5

27.0

OtherSegment
Adjustment
Operations
Total

16.5

145.0

Elimination
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before income tax

Profit for the period*Includes ¥1bn loss on retirement of non-current assets, ¥0.4bn environmentrelated expenses

1.6

3.2

6.3

0.7

1.7

13.5

Total

Total

-----0.0
0.4
1.4

145.0
----------------

-1.0
0.6
0.6

12.5
----------12.5
9.6

Disclaimer•

These materials are supplied to provide a deeper understanding of ourcompany, and are not intended to as a solicitation for investment or otheractions.

•These materials have been prepared by our company based on theinformation available at this point in time. However, actual performance
may produce results that differ from the plan due to unforeseeable eventsand factors.

•Please utilize these materials using you own judgment and responsibility.