Kureha Corporation Reports Interim Results
April – September 2017 (IFRS)Tokyo, Japan, November 8, 2017 – Kureha Corporation (“Kureha”), a leading global
supplier of specialty chemicals and plastics, has reported earnings for the first half of theyear ending March 2018 (FY2017). On a consolidated basis, revenue increased 15.4% to69.5 billion yen year-on-year while operating profit rose 60.7% to 7.2 billion yen. Profit
before income tax rose sharply by 101.3% to 7.2 billion yen. Profit attributable to theowners of Kureha climbed 88.8% to 5.8 billion yen.
The positive results were driven by growth in sales volumes and revenues in all segments.
Kureha also saw robust operating profit increases across the board except in construction
businesses. This healthy growth was underpinned by continued market demand for
Kureha’s differentiated products and solutions, as well as the group’s ongoing work to
maximize competitiveness.
Advanced Materials made a particularly solid recovery. Revenues and operating profit inthis segment rose due to higher volumes for polyvinylidene fluoride (PVDF) for lithium-ion
battery (LiB) binder applications, PPS resin for automotive applications, and Kureha’s
polyglycolic acid (PGA) solutions for shale oil/gas exploration. Importantly, the carbon
products business returned to profitability due to successful cost management.
Specialty Chemicals and Specialty Plastics also saw good momentum. In the former,
Kureha recorded larger volumes of fungicides and improved margins for industrial
chemicals, more than offsetting slow performance in the pharmaceuticals business. In thelatter, volumes grew for consumer products and heat-shrink multilayer film.
Yutaka Kobayashi, President and Chief Executive Officer, said, “We are pleased to bringthese results to our investors. In fact, as announced today, the strong performance inAdvanced Materials and Specialty Plastics means we will exceed our initial full-year growthforecasts. We are now focused on achieving our FY2018 targets of 160 billion yen inrevenue and operating profit of 14 billion yen.”
Mr. Kobayashi added, “FY2018 is the final year of our mid-term plan, Kureha’s Challenge
2018, which has been positioned as a period to lay the foundation for Kureha’s future
expansion. We are making important headway in differentiating our products and creating
new businesses, which are the central tenets of the plan.”“In the PGA business in North America, we have begun to capture demand for innovative
frac plug solutions. Although field testing of our PGA-based degradable downhole tools
have revealed issues to resolve that have slowed our market expansion, we are confident
we can turn this business into a profit driver. Another key trend is the exceptional demandfor PVDF, driven by the growing market for electric and plug-in hybrid vehicles, especiallyin China. Supplying high-grade PVDF to this market will be a key focus for Kureha, andproduction capacity enhancements are now underway in Iwaki, Japan. We are also
studying ways to raise capacity at our China plant.”
Consolidated interim results(Billions of yen, except where stated)
Sept. 2017
Revenue
69.5
Operating profit
7.2
Profit before income tax
7.2
Profit attributable
5.8
to owners of Kureha
Dividend per share (yen)*
55.0*Kureha conducted a ten-to-one share consolidation on October 1, 2016.

Sept. 2016

Change (%)

60.2
4.5
3.6
3.1

15.4
60.7
101.3
88.8

5.5

-

Page 1 of 6

Consolidated interim results by segment(Billions of yen)Segment
Advanced materials
Specialty chemicals
Specialty plastics
Construction
Other operations

Sept. 2017

Sept. 2016

Change (%)

Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit

19.8
1.4
12.6
1.9
22.2
3.3
7.2
0.2
7.6
0.6
-0.2

14.7
0.6
11.2
0.8
21.0
2.3
5.9
0.4
7.5
0.4
0.2

35.1
144.9
12.9
150.6
5.9
46.5
22.7
-44.9
1.3
68.7

Revenue
Operating profit

69.5
7.2

60.2
4.5

15.4
60.7

Adjustments
Total

Performance by Segment
Advanced Materials
Major product areas: advanced plastics (PPS, PVDF, PGA), carbon materials
In the first-half period, revenue in the Advanced Materials segment increased by 35.1% to19.8 billion yen from 14.7 billion yen. Operating profit rose sharply by 144.9% to 1.4 billion
yen. These results were primarily driven by higher sales volumes in the advanced plastics
business.
Advanced plastics: Strong demand drives growth
Revenues from advanced plastics returned to a growth trajectory, rising 27% to 11.6 billion
yen. Key contributing factors included positive momentum in Kureha’s PGA business inNorth America, firm demand for PVDF for use as LiB binder material driven by the rapid
market growth of electric and plug-in hybrid electric vehicles, particularly in China, as wellas higher volumes of PPS for automotive applications.
Carbon products: Back in profit territory
The carbon products business continued its recovery from the operating loss seen in theprevious first half. Revenues rose 19% to 2.6 billion yen on the back of stronger demand forheat-insulating materials used in the manufacturing process of silicon ingots forsemiconductors. Operating profit also improved due to Kureha’s ongoing group-wide effort
to reduce costs and raise operating efficiency.
Outlook: Segment revenue for the full fiscal year is projected to be 41.5 billion yen, up
24% from 33.4 billion yen in the previous period. Operating profit is expected to risesignificantly to 2.3 billion yen, firmly returning this segment to a path of growth.
This forecast is primarily based on higher sales volumes for PVDF for LiB binder
applications and for PPS for automotive applications. In the PGA business in North
America, Kureha expects to see continued positive momentum and a narrowing of theoperating loss, with revenues projected to increase more than twofold to 4 billion yen yearon-year. In carbon products, margins are forecast to continue to improve alongside volume
gains in molded heat-insulation products.

Page 2 of 6

Specialty Chemicals
Major product areas – industrial chemicals, agrochemicals, pharmaceuticals
In the first-half period, the Specialty Chemicals segment recorded revenue of 12.6 billion
yen, an increase of 12.9%, and operating profit of 1.9 billion yen, up 150.6%. Higher sales
volumes for agrochemicals and improved margins for industrial chemicals more than offset
a fall in sales volumes in the pharmaceutical business.
Agrochemicals: Continued strong market demand boosts fungicide sales volumes
Sales volumes rose for Kureha’s fungicide Metconazole on the back of front-loadeddelivery and higher market demand. Business results also benefited from positive foreign
currency effects.
Pharmaceuticals: Negative impact of competition from generics
Kureha recorded a decrease in the sales volume of Kremezin, a therapeutic agent forchronic kidney disease, due to competition from generic alternatives.
Industrial chemicals: Higher prices improve sales margins
The industrial chemicals business was positively affected by a combination of higher
demand and higher prices. Kureha’s ongoing cost reduction efforts also contributed towardhigher margins.
Outlook: Segment revenue for the full fiscal year is projected to rise moderately by 4%
from 25.9 billion yen to 27.0 billion yen, while operating profit will climb by 22% to 3.1 billion
yen. Agrochemicals will continue to see good momentum driven by factors including
customer destocking and favorable currency effects. Industrial chemicals are expected to
improve due to higher pricing, leading to increased margins. The growth of these
operations will more than offset the impact of competition from generic drugs on thepharmaceuticals business, which will adversely affect Kremezin sales.

Specialty Plastics
Major product areas – food packaging materials, household products
In the first-half period, revenue increased 5.9% to 22.2 billion yen from 21.0 billion yen
while operating profit was up 46.5% from 2.3 billion yen to 3.3 billion yen. These results
were driven by robust growth in the consumer goods and packaging materials businesses.
Consumer goods: Continued solid growth in revenue and profit
In consumer goods, NEW Krewrap household-use wrapping and Seaguar fishing lines
continued to record solid gains in both sales and operating profit, making a strong
contribution to Kureha’s overall results for the first half of the fiscal year.
Packaging materials: Return to growth on strong heat-shrink film performance
In commercial-use food packaging materials, revenue from heat-shrink barrier film
increased, enabling this business to recover from the operating loss seen in the previous
fiscal year. Effective cost-cutting measures also contributed to the positive result.
Outlook: Segment revenue for the full fiscal year is expected to increase slightly from 42.8
billion yen to 45.0 billion yen. Operating profit is projected to rise by 10% to 5.5 billion yen.
In consumer goods, Kureha forecasts continued volume gains for the popular NEW
Krewrap household-use wrap and Seaguar fishing lines. The packaging materials businessis also expected to see improved performance on the back of higher sales volumes
propelled by aggressive marketing campaigns for value-added products, including heatshrink multilayer film. Kureha will also continue its effective cost-efficiency measures.

Page 3 of 6

Construction / Other Operations
Major product areas – construction and engineering, environmental engineering, logistics,
trading related businesses
Construction: Profit down on slower engineering performance
Kureha’s construction businesses recorded revenue growth on the back of continued postearthquake demand, which led to an increase in both private and public sector construction
projects. However, higher labor and raw material costs, as well as slower performance inthe engineering business, offset sales volume gains. As a result, revenue from construction
businesses as a whole rose 22.7% to 7.2 billion yen, while operating profit fell 44.9% to 0.2
billion yen from 0.4 billion yen.
Other operations: Increases in both revenue and profit
In the environmental business, revenue and operating profit rose on the back of stronger
performance in the industrial waste treatment business. In the transportation business,
operating profit rose due to effective cost reductions, helping to offset a decline in sales.
The performance of the two aforementioned businesses outweighed a decline in thehospital business. As a result, while revenue from other operations remained nearly
unchanged from the previous year, rising by 1.3% to 7.6 billion yen, operating profit rose
68.7% to 0.6 billion yen from 0.4 billion yen.
Outlook: In construction businesses, Kureha foresees continued growth in the number ofprivate and public sector construction projects. However, rising wage and material costs
are likely to impact profitability. While revenue is projected to increase 8% to 15.0 billion
yen, operating profit is expected to fall 42% to 0.6 billion yen.
In other operations, Kureha forecasts that the industrial waste treatment business willcontinue to grow due to strong demand in the earthquake-affected areas of Japan.
However, the segment overall will continue to face intensifying competition, which will
negatively affect operating profit. To compensate, Kureha will continue its successful costcutting and efficiency-raising measures. While revenue is projected to remain stable,
increasing slightly by 1% to 16.5 billion yen, operating profit will fall 13% to 1.5 billion yen.

Capex, Depreciation, R&D and Debt
(Billions of yen)

Capital expenditure
Depreciation
R&D
Interest-bearing debt

Sept. 2017

Sept. 2016

4.0
4.9
2.3
56.0

4.8
5.1
2.2
77.8

March 2018
(forecasts)
12.5
10.0
5.3
54.1

Capital expenditure during the first-half period decreased from 4.8 billion yen to 4.0 billion
yen. However, for the full fiscal year, Kureha expects to allocate 12.5 billion yen, a 21%
increase year-on-year. Key aims with the increased capital expenditure include raising
PVDF production to meet intense demand for LiB binder materials for electric vehicles, andenhancing new business creation initiatives.
R&D expenditure rose slightly to 2.3 billion yen in the first half, but for the full year the
allocation is projected to rise from 4.7 billion to 5.3 billion yen. As per the mid-term
management plan, Kureha’s Challenge 2018, Kureha will continue to focus R&D on
enhancing existing products and processes, as well as on developing next-generation
products through collaboration with companies, universities and other organizations. A key
step forward was made in October 2017 with the establishment of a new facility dedicatedto studying ways of enhancing production processes.

Page 4 of 6

Interest-bearing debt decreased from 77.8 billion yen to 56.0 billion yen in the first half.
This notable decrease is primarily due to the conversion of 15.0 billion yen in convertible
bonds due in 2018. For the full fiscal year, interest-bearing debt is projected to reach 54.1
billion yen.

Outlook for the Full Fiscal Year
(Billions of yen, except where stated)
March 2018
(Revised
forecasts)
145.0
12.0
12.0
9.3

March 2017

Change (%)

Revenue
9.6
132.3
Operating profit
29.6
9.3
Profit before income tax
33.6
9.0
Profit attributable
32.8
7.0
to owners of Kureha
Profit per share (yen)493.25407.38Yearly dividend per share (yen)*
110.0
110.0
* Kureha conducted a ten-to-one share consolidation on October 1, 2016. The yearly dividend per sharefor the year ended March 2017 was calculated on a post-consolidation basis for comparison reasons.
(Billions of yen)Segment

Advanced materials
Specialty chemicals
Specialty plastics
Construction
Other operations
Adjustments
Total

Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit
Revenue
Operating profit

March 2018
(Revised
forecasts)
41.5
2.3
27.0
3.1
45.0
5.5
15.0
0.6
16.5
1.5
-1
145.0
12.0

March 2017

Change
(%)

33.4
0.1
25.9
2.5
42.8
5.0
13.9
1.0
16.3
1.7

24
4
22
5
10
8
-42
1
-13

-1.1

132.3
9.3

9.6
29.6

Kureha foresees continued sound growth in the second half of the fiscal year, with revenue
increases in all segments. With the exception of construction businesses and otheroperations, where profits will be impacted by various factors, operating profit will risesteadily across Advanced Materials, Specialty Chemicals and Specialty Plastics. This inturn will enable continued growth in profit before income tax and profit attributable to theowners of Kureha.
The two notable performance drivers will be Advanced Materials and Specialty Plastics. In
the former, Kureha will continue to capture demand for high-grade PVDF and PPS while
also gradually expanding its market presence in North America for innovative PGA-based
solutions for shale oil/gas exploration. In the latter, consumer goods are expected to see
continued volume gains on the back of continued strong demand.
Overall consolidated revenue for FY2017 is forecast to rise by 9.6% to 145.0 billion yen,while operating profit will climb 29.6% to 12.0 billion yen. Profit before income tax is
expected to rise 33.6% to 12.0 billion yen. As a result, profit attributable to the owners ofKureha is forecast to increase 34.6% to 9.3 billion yen for the full fiscal year.

Page 5 of 6

Condensed balance sheets
As of 30 September and 31 March, 2017
(Millions of yen)Sept. 2017

Mar. 2017

AssetsCurrent assets
Cash and cash equivalents
Noncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total assets

74,978
5,829
164,124
115,584
1,324
47,213
239,10275,272
6,222
159,634
115,911
1,395
42,326234,907

Liabilities and net assets
Current liabilities
Short-term borrowings
Fixed liabilities
Corporate bonds and long-term borrowings

58,70026,21235,06629,06180,672
46,68928,261
23,561

Total liabilities
Net assets
Shareholders’ equity
Minority interest
Total net assets

93,766108,934

143,566
1,769
145,335

124,297
1,674
125,972

Total liabilities and net assets

239,102

234,907

Sept. 201769,497
49,975
13,051
7,249
7,177
1,400
5,763

Sept. 2016
60,22843,472
13,163
4,512
3,564
469
3,052

Condensed interim income statement
As of 30 September 2017 and 2016
(Millions of yen)
Revenue
Cost of goods soldSelling, general and administrative expenses
Operating profit
Profit before income tax
Taxes and minority interest adjustments
Profit attributable to owners of Kureha*****

For further information, please contact:
KUREHA CORPORATION
Public and Investor Relations Department
Tel. +81-3-3249-4651

Page 6 of 6

Fiscal 2017 Interim Results(Period April 1 – September 30, 2017)

November 8, 2017

1

Contents
1. FY2017 Half-Year Results
3-7• FY2017 1H Highlights• Segment Performance
8
Advanced Materials
9
Specialty Chemicals
10
Specialty Plastics
Construction & Other Operations 11
12• Balance Sheet
13• Cash Flow

2. FY2017 Full-Year Outlook• FY2017 Full-Year Forecast
15-19• Segment Outlook
Advanced Materials
20
Specialty Chemicals
21
Specialty Plastics
22
Construction & Other Operations 23• Key Indicators
24• Cash Flow25

3. Consolidated Companies

27-28

2

1. FY2017 Half-Year Results(April 1, 2017 – September 30, 2017)

3

FY2017 1H Highlights
Note: Figures indicated in blue are initialprojections announced in May 2017

(in billions of yen, except where stated otherwise)

FY2016
1H
Revenue

60.2

Operating profit

4.5

Profit before income tax

3.6

Profit attributable toowners of parent

3.1

Profit per share*
Profit per share attributableto owners of parent*
Ratio of profit attributableto owners of parent torevenue

Dividend per share*

FY2017
1H

Change (%)

69.5

9.3 (15.4%)

66.0

3.5 (5.3%)

7.2

2.7 (60.7%)

5.0

2.2 (45.0%)

7.2

3.6 (101.3%)

5.0

2.2 (43.5%)

5.8

2.7 (88.8%)

4.0

1.8 (44.1%)¥177.61¥325.46¥6,799¥7,257

50.7%

60.0%

¥55.0

¥55.0

FY2017 1H vs. FY2016 1H• Revenue increased on volume
growth across all segments,
particularly in Advanced Materials• Higher operating profit driven by
Advanced Materials, Specialty
Chemicals and Specialty Plastics• Profit before income tax
increased on higher operating
profit• Profit for the period increased onhigher profit before income tax

Mar. 31, 2017

Sept. 30, 2017

ChangeTotal assets

234.9

239.1

4.2

Assets attributable toowners of parent

124.3

143.6

19.3

*Kureha conducted a ten-to-one shareconsolidation on October 1, 2016. Per
share values are represented on thispost-consolidation basis forcomparison purpose.

4

FY2017 1H Highlights
Segment Variance: FY2017 1H vs. FY2016 1H
Revenue
21.0

19.8…FY16 1H
…FY17 1H

22.2

(billions of yen)

OperatingOperatingprofitProfit

2.3

14.7

11.2

1.9

12.6
1.4
5.9

Advanced
Materials…FY16 1H
…FY17 1H

3.3

Specialty
Chemicals

Specialty
Plastics

7.2

Construction

7.5 7.6
0.6

Other
Operations

Advanced
Materials

0.8

Specialty
Chemicals

Specialty
Plastics

0.6

0.4 0.2

0.4

Construction

Other
Operations

Factors for FY2017 1H segment operating profit (vs. FY2016 1H)
Advanced Materials: Higher volumes in 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 in home products, synthetic fiber and heat-shrink multilayer film
Construction:
Lower engineering volume partially offset by construction growth
Other Operations:
Higher volume in environmental business5

FY2017 1H Highlights(billions of yen)

FY2016 1H

Advanced Specialty
Materials Chemicals

Revenue

Specialty
Plastics

Construction

Other
Segment
Adjustment
Operations
Total

14.7

11.2

21.0

5.9

7.5

60.2

0.6

0.8

2.3

0.4

0.4

4.4

Elimination
Other income
Other expenses
Operating profit

Finance income
Finance costs*Foreign exchange loss of ¥0.9bn-----0.0
0.2
0.1
0.2
0.3
1.2

Profit before income tax

Profit for the period

FY2017 1H

Advanced Specialty
Materials Chemicals

Revenue

19.8

12.6

Specialty
Plastics

Construction

22.2

7.2

7.6

69.5

0.2

0.6

7.5

Other
Segment
Adjustment
Operations
Total

Elimination
Other income
Other expenses
Operating profit
Finance income

Finance costs
Profit before income tax

Profit for the period*¥0.4bn for environment-related expenses

1.4

1.9

3.3

-----0.1
0.2
0.5
-0.2
0.3
0.4

Total

60.2
---------------4.5----------3.6
3.1
Total

69.5
---------------7.2----------7.2
5.8

6FY2017 1H Highlights(vs. Initial Projection)
Segment Variance: FY2017 1H vs. Initial projection
Revenue

18.0

21.0 22.2

19.8…FY17 1H Projection…FY17 1H

(billions of yen)

Operating
Profit…FY17 1H Projection…FY17 1H

3.3

2.2
1.9

12.0 12.6
7.0 7.2

8.0 7.6

1.4
1.1

1.2
0.2 0.2

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

Other
Operations

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

0.4

0.6

Other
Operations

Factors for FY2017 1H segment operating profit (vs. initial projection)
Advanced Materials: Higher PPS and carbon products volumes more than offsetting lower PGA volume
Specialty Chemicals: Higher agrochemical volume due to front-loaded delivery
Specialty Plastics:
Robust growth of home products and synthetic fiber
Construction:
Performed as planned
Other Operations:
Enhanced cost management compensating slow logistics
and environmental businesses

7

FY2017 1H Highlights(vs. Initial Projection)
FY2017 1H
Initial Projection
Revenue(billions of yen)
Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

Other
Segment
Adjustment
Operations
Total

18.0

12.0

21.0

7.0

8.0

66.0

1.1

1.2

2.2

0.2

0.4

5.1

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

22.2

7.2

7.6

69.5

0.2

0.6

7.5

Elimination

Other income
Other expenses
Operating profit

Finance income
Finance costs-----0.1
0.1
0.3
-0.1
0.3
0.3

Profit before income tax

Profit for the period

FY2017 1H
Revenue

19.8

12.6

Other
Segment
Adjustment
Operations
Total

Elimination
Other income
Other expenses
Operating profit
Finance income

Finance costs
Profit before income tax

Profit for the period*¥0.4bn for environment-related expenses

1.4

1.9

3.3

-----0.1
0.2
0.5
-0.2
0.3
0.4

Total

66.0
---------------5.0----------5.0
4.0
Total

69.5
---------------7.2----------7.2
5.8

8

Segment Performance:
Advanced Materials(billions of yen)

FY20161H

FY2017
1H

Change%FY2017 1H vs. FY2016 1H
Revenue

Advanced Materials
Advanced plastics

9.1

11.6

27%

Carbon products

2.2

2.6

19%

Revenue: Kureha Co.

11.2

14.1

26%

Revenue: Subsidiaries

12.2

14.0

15%

Elimination

-8.8

-8.3

--

Kureha-G Revenue

14.7

19.8

35%

Kureha-G Operating Profit

0.6

1.4

145%

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 robust salesof carbon fiber and carbon material
products

9Segment Performance:
Specialty Chemicals(billions of yen)

FY20161H

FY2017
1H

Change%FY2017 1H vs. FY2016 1H
Revenue

Specialty Chemicals
Agrochemicals

1.9

4.0

115%

Pharmaceuticals

3.2

2.2

-32%

Industrial chemicals

4.2

4.8

14%

Revenue: Kureha Co.

9.3

11.0

18%

Revenue: Subsidiaries

3.2

3.0

-6%

Elimination

-1.3

-1.4

--

Kureha-G Revenue

11.2

12.6

13%

Kureha-G Operating Profit

0.8

1.9

151%

Operating Profit• A sharp rise in Agrochemicals
revenue and profit due to higher
fungicide volume• Pharmaceuticals declined on lower
Kremezin (therapeutic agent forchronic kidney disease) volume• Industrial chemicals improved onhigher volumes in both organic andnon-organic chemicals

10

Segment Performance:
Specialty Plastics(billions of yen)

FY20161H

FY2017
1H

Change%FY2017 1H vs. FY2016 1H
Revenue

Specialty Plastics
Home products

10.1

10.6

5%

Packaging materials

3.6

3.2

-11%

Revenue: Kureha Co.

13.7

13.7

0%

Packaging materials

5.3

5.9

12%

Fiber products

1.8

2.2

20%

Others

3.4

3.5

3%

Revenue: Subsidiaries

10.4

11.5

10%

Elimination

-3.1

-3.0

--

Kureha-G Revenue

21.0

22.2

6%

Kureha-G Operating Profit

2.3

3.3

46%

Operating Profit• Home products grew on steady
volume gains for NEW Krewrap(plastic wrap) and Seaguar (fishinglines)• Packaging materials revenue andprofit increased overall due to heatshrink multilayer film growth11

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

FY20161H

FY2017
1H

Change%RevenueConstruction
Construction

9.6

10.4

8%

Elimination

-3.7

-3.2

--

Kureha-G Revenue

5.9

7.2

23%

Kureha-G Operating Profit

0.4

0.2

-45%

Other Operations
Environmental engineering

FY2017 1H vs. FY2016 1H
Operating Profit• Construction profit even with prior-year
period, despite higher sales in public
and private sectors• Engineering business profit declined

Revenue

Operating Profit

Logistics
Hospital operations
Others

4.3
4.2
1.8
0.9

4.6
4.1
1.8
0.9

7%
-2%
-2%
3%

• Environmental Engineering revenue
and profit increased on higher volume
in industrial waste treatment business

Revenue: Subsidiaries

11.3

11.5

2%

Elimination

-3.8

-3.9

--

• Logistics profit improved on efficient
cost management, despite lower sales

Kureha-G Revenue

7.5

7.6

1%

Kureha-G Operating Profit

0.4

0.6

69%

• Hospital Operations revenue and profit
both declined

12Balance Sheet
Assets(billions of yen)

Liabilities and Equity
Mar. 31 Sept. 30
Change2017
2017

Mar. 31 Sept. 30
Change2017
2017

Cash and cash equivalents

6.2

5.8

-0.4

Trade and other payables

20.4

18.5

-1.9

Trade and other receivables

29.4

30.4

1.0

Interest-bearing debt

71.0

56.0

-15.0 *

Inventories

36.5

36.4

-0.1

Provisions

6.1

6.2

0.1

Other current assets

3.2

2.4

-0.8

Other liabilities

11.4

69.1

57.7

Total current assets

75.3

75.0

-0.3

Total liabilities

108.9

93.8

-15.2

Property, plant and equipment

115.9

115.6

-0.3

Shareholders’ equity

12.5

16.3

3.8 *

Intangible assets

1.4

1.3

-0.1

Capital surplus

9.4

13.3

3.9 *

Investments and other assets

42.3

47.2

4.9

Less: Treasury stock

-4.5

-0.7

3.8 *

Retained earnings

101.7

105.9

4.1

Other components of equity

5.1

8.8

3.6

Non-controlling interests

1.7

1.8

0.1

Total non-current assets

159.6

164.1

4.5

Total equity

126.0

145.3

19.4

Total assets

234.9

239.1

4.2

Total liabilities and equity

234.9

239.1

4.2

*For ¥15 billion convertible bonds with stock acquisition rights issued (due March 2018), 75% bondholders
have elected to convert their bonds into shares as of the end of September 2017. As a result, with shareconversion partly settled by the company’s treasury shares , the number of shares issued at the end of
September 2017 was 19,932,440.

13

Cash Flow(billions of yen)

FY20161H

FY2017
1H

ChangeCash flow from operating activities

3.6
5.1
-0.6
8.0

7.2
4.9
-1.3
10.8

3.6
-0.2
-0.7
2.7

Cash flow from investing activities

-5.6

-5.9

-0.2

Cash flow from financing activities

-3.1

-5.3

-2.1

Effect of exchange rate changes on cash and cash equivalents

0.2

-0.0

-0.2

Increase/decrease in cash and cash equivalents

-0.6

-0.4

0.2

Cash and cash equivalents at beginning of period

6.7

6.2

-0.5

Cash and cash equivalents at end of period

6.1

5.8

-0.3

Profit before income tax
Depreciation
Other

14

2. FY2017 Full-Year Outlook(April 1, 2017 – March 31, 2018)

15

FY2017 Full-Year Forecast (Revised)
Note: Figures indicated in blue are initialprojections announced in May 2017(billions of yen, except where stated otherwise)

FY2016

132.3

Revenue

9.3

Operating profit

Profit before income tax

9.0

Profit attributable toowners of parent

6.9

FY2017e

ChangeYOY (%)

145.0

12.7 (9.6%)

142.0

3.0 (2.1%)

12.0

2.7 (29.6%)

11.0

1.0 (9.1%)

12.0

3.0 (33.6%)

11.0

1.0 (9.1%)

9.3

2.4 (34.6%)

8.4

0.9 (10.7%)

FY2017e vs. FY2016• Revenue is expected to increaseon volume gains in Advanced
Materials and Specialty Plastics• Operating profit to rise on strong
Advanced Materials growth,
despite lower profit in Construction
and Other Operations

Profit per share¥407.38¥493.25• Profit before income tax to improveon higher operating profit

Profit per share attributableto owners of parent¥7,233¥7,284• Profit for the period to improve onhigher profit before income tax

Dividend per share
Interim¥5.5 *¥55.0

Year-end

¥55.0

¥55.0

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

16

FY2017 Full-Year Forecast
Segment Variance: FY2017 projection (revised) vs. FY2016…FY16…FY17 projection (revised)

Revenue
42.8

41.5(billions of yen)
…FY16
…FY17 projection (revised)

Operating
Profit
5.5

45.0
5.0

33.4
25.9 27.0

3.1
2.3

16.5
13.9 15.0 16.3

2.5
1.0

0.1
Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

Other
Operations

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

1.7 1.5
0.6

Construction

Other
Operations

Factors for FY2017e segment operating profit (vs. FY2016)
Advanced Materials: Continued growth for PPS, PVDF and carbon products, combined with improved sales
and lower operating loss for 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 due to 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:
Intensified market competition

17

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

FY2016
Revenue

33.4

25.9

Specialty
Plastics

Construction

42.8

13.9

Other
Segment
Adjustment
Operations
Total

16.3

132.3

-----0.1
1.4
2.6

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

10.4

-1.1
0.6
0.9

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

Elimination
Other income
Other expenses
Operating profit¥1bn subsidy income¥1.9bn business withdrawal and restructuring costs, ¥0.5bn loss onretirement of noncurrent assets

0.1

2.5

5.0

1.0

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.0

15.0

1.7

Finance income
Finance costs
Profit before income tax

Profit for the period

FY2017e Revised
Revenue

41.5

27.0

Other
Segment
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¥1bn loss on retirement of noncurrent assets, ¥0.4bn environment-related
expenses

2.3

3.1

5.5

0.6

1.5

Total

13.0

Total

-----0.0
0.4
1.4

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

-1.0
0.5
0.5

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

18

FY2017 Full-Year Forecast(Revised vs. Initial Projection)
Segment Variance: FY2017 Projection Revised vs. Initial(billions of yen)
…FY17 Projection (initial)…FY17 Projection (revised)

Revenue

41.0

43.0

41.5

Operating
Profit…FY17 Projection (initial)…FY17 Projection (revised)

5.5

45.0
4.1

26.5 27.0

3.1

3.0
14.5

15.0 17.0 16.5

2.3

2.6

1.2 1.5
0.6 0.6

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

Other
Operations

Advanced
Materials

Specialty
Chemicals

Specialty
Plastics

Construction

Other
Operations

Factors for FY2017e segment operating profit (vs. initial projection)
Advanced Materials: PPS and carbon products growth more than offset by lower PGA volume due to belated
market expansion by new US venture
Specialty Chemicals: Positive currency effect and improved margins for industrial chemicals
Specialty Plastics:
Continued growth for home products and synthetic fiber businesses
Construction:(To perform as planned)
Other Operations:
Robust industrial waste treatment business and cost
reduction efforts more than offsetting logistics decline

19

FY2017 Full-Year Forecast(Revised vs. Initial Projection)(billions of yen)

FY2017e Initial
Revenue

Advanced Specialty
Materials Chemicals

41.0

26.5

Specialty
Plastics

Construction

43.0

14.5

Other
Segment
Adjustment
Operations
Total

17.0

142.0

1.2

11.5

Elimination
Other income
Other expenses
Operating profit*¥0.8bn loss on retirement of noncurrent assets

3.0

2.6

4.1

0.6

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.0

15.0

Finance income
Finance costs-----0.1
0.2
0.8
-0.5
0.5
0.5

Profit before income tax

Profit for the period

FY2017e Revised
Revenue

41.5

27.0

Other
Segment
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*¥1bn loss on retirement of noncurrent assets, ¥0.4bn environment-related
expenses

2.3

3.1

5.5

0.6

1.5

13.0

Total

142.0
---------------11.0----------11.0
8.4
Total

-----0.0
0.4
1.4

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

-1.0
0.5
0.5

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

20

Segment Outlook:
Advanced Materials(billions of yen)

FY2016FY2017e
RevisedChange%FY2017e vs. FY2016
Revenue

Advanced Materials
Advanced plastics

19.7

25.5

29%

Carbon products

4.1

4.5

9%

Revenue: Kureha Co.

23.9

30.0

26%

Revenue: Subsidiaries

24.3

31.0

28%

Elimination

-14.8

-19.5

--

Kureha-G Revenue

33.4

41.5

24%

Kureha-G Operating Profit

0.1

2.3

2811%

Operating Profit• Advanced plastics expected to
improve on higher volumes for PVDF
(LiB binder), PPS (for automotive)
and PGA (oil/gas exploration
applications); operating loss to narrow
for PGA• Carbon products expected to turnprofitable with continued margin
improvement and volume gains inmolded insulation products

21

Segment Outlook:
Specialty Chemicals(billions of yen)

FY2016FY2017e
RevisedChange%FY2017e vs. FY2016
Revenue

Specialty Chemicals
Agrochemicals

7.2

9.0

25%

Pharmaceuticals

5.6

4.3

-23%

Industrial chemicals

8.8

9.2

5%

Revenue: Kureha Co.

21.5

22.5

4%

Revenue: Subsidiaries

6.9

7.0

2%

Elimination

-2.5

-2.5

--

Kureha-G Revenue

25.9

27.0

4%

Kureha-G Operating Profit

2.5

3.1

22%

Operating Profit• Agrochemicals expected to improveon volume growth after customer
destocking• Pharmaceuticals to continue declining
due to generic competition• Industrial chemicals expected to
improve on higher prices

22

Segment Outlook:
Specialty Plastics(billions of yen)

FY2016FY2017e
RevisedChange%FY2017e vs. FY2016
Revenue

Specialty Plastics
Home products

19.5

20.9

7%

Packaging materials

7.0

6.1

-12%

Revenue: Kureha Co.

26.5

27.0

2%

Packaging materials

11.1

12.8

16%

Fiber products

3.7

4.1

10%

Others

6.9

7.5

9%

Revenue: Subsidiaries

21.6

24.4

13%

Elimination

-5.4

-6.9

--

Kureha-G Revenue

42.8

45.0

5%

Kureha-G Operating Profit

5.0

5.5

10%

Operating Profit• Home products to improve on volume
gains for NEW Krewrap (plastic wrap)
and Seaguar (fishing lines)• Packaging materials to improve onhigher volumes for heat-shrink
multilayer film; limited impact ofcompound business terminated in
FY2016

23

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

FY2016FY2017e
RevisedChange
%

21.2

22.0

4%

Elimination

-7.2

-7.0

--

Kureha-G Revenue

13.9

15.0

8%

Kureha-G Operating Profit

1.0

0.6

-42%

FY2017e vs. FY2016
Revenue

Operating Profit

Construction
Construction

FY2017e vs. FY2016

Other Operations
Environmental engineering• Rise in labor and raw materials costs
likely to push down profit, despite higher
volumes in public and private sectors

Logistics
Hospital operations
Others

10.2
8.5
3.6
1.8

10.6
8.3
3.6
1.7

4%
-2%
0%
-4%

Revenue: Subsidiaries

24.1

24.2

0%

Elimination

-7.8

-7.7

--

Kureha-G Revenue

16.3

16.5

1%

Kureha-G Operating Profit

1.7

1.5

-13%

Revenue

Operating Profit• In Other Operations, Environmental
Engineering expected to grow onstrong demand for industrial waste
treatment, however overall segment
profit to decrease due to intensified
market competition for otherbusinesses

24

Key Indicators(billions of yen)

FY20161H

2H

FY2017Full-year

1H

2H
Full-year
Estimate Estimate

ChangeYOY(%)

Capital expenditure

4.8

5.5

10.3

4.0

8.5

12.5

2.2 (21%)

Depreciation

5.1

5.1

10.2

4.9

5.1

10.0

-0.2 (-2%)

R&D expenses

2.2

2.5

4.7

2.3

3.0

5.3

0.6 (13%)Interest-bearing debt

77.8

71.0

71.0

56.0

54.1

54.1

-16.9 (-24%)

Average¥105.2¥111.5¥108.3¥111.0

110.0

110.0

End of period¥101.1¥112.2¥112.2¥112.7

110.0

110.0

Average¥118.0¥119.5¥118.7¥126.3

125.0

125.7

End of period¥113.4¥119.8¥119.8¥132.9

125.0

125.5

Average

¥15.9

¥16.3

¥16.1

¥16.4

16.0

16.2

End of period

¥15.1

¥16.3

¥16.3

¥17.0

16.0

16.0

Currency exchange rates
1USD:
1EUR:
1CHY:

25

Cash Flow(billions of yen)

FY2016FY2017e

ChangeYOY

Cash flow from operating activities

9.0
10.2
-6.8
12.4

12.0
10.0
-5.3
16.7

3.0
-0.2
1.5
4.4

Cash flow from investing activities

-1.1

-12.6

-11.6

Cash flow from financing activities

-11.7

-4.2

7.6

Effect of exchange rate changes on cash and cash equivalents

-0.0

0.0

0.0

Increase/decrease in cash and cash equivalents

-0.5

-0.1

0.4

Cash and cash equivalents at beginning of year

6.7

6.2

-0.5

Cash and cash equivalents at end of year

6.2

6.2

-0.1

Profit before income tax
Depreciation
Other

26

3. Consolidated Companies

27

Revenues & Assets(billions of yen)

FY2016 1H

FY2017 1H

ChangeRevenue Total assets Revenue Total assets Revenue Total assets
Kureha Corporation
Kureha Trading Group (2)Kureha Corporation
Kureha Trading Group (2)Kureha Extron Co.
Kureha Extech Co.
Kureha Battery Materials Japan Co.

Advanced Kureha GmbH
Materials Kureha America Group (5)Kureha (Shanghai) Carbon Fiber
Materials Co.

Kureha China Group (2)Consolidation adjustments
Total
Kureha Corporation
Specialty Kureha Trading Co.
Chemicals Consolidation adjustments
Total
Kureha Corporation
Kureha Trading Co.
Kureha Gohsen Co.
Kureha China Group (2)Specialty
Kureha America Group (5)Plastics
Kureha Europe Group (3)Kureha Vietnam Co.
Consolidation adjustments
Total

28.6
7.7
11.2
4.1
0.8
1.2
-0.7
2.9
0.7

188.3
12.2
--1.9
1.7
0.2
1.0
24.4
2.0

32.3
8.6
14.1
5.3
0.9
1.1
-0.9
3.3
0.4

191.1
13.9
--2.0
1.6
-0.7
28.7
1.6

3.8
0.9
2.9
1.1
0.1
-0.1
0.2
0.4
-0.2

2.9
1.7
--0.1
-0.2
-0.2
-0.3
4.3
-0.3

1.9
-8.8
14.7
9.3
3.2
-1.3
11.2
13.7
2.3
1.8
0.2
0.9
3.9
1.4
-3.1
21.0

12.6
--------3.4
-0.7
5.6
3.6
---

2.2
-8.3
19.8
11.0
3.0
-1.4
12.6
13.7
2.5
2.2
0.1
0.9
4.2
1.7
-3.0
22.2

11.2
--------4.6
-0.8
7.5
3.8
---

0.3
0.4
5.1
1.7
-0.2
-0.0
1.4
0.1
0.2
0.4
-0.1
-0.0
0.4
0.3
0.1
1.2

-1.3
--------1.1
-0.1
1.9
0.2
---

28

Revenues & Assets(billions of yen)

FY2016 1H

FY2017 1H

ChangeRevenue Total assets Revenue Total assets Revenue Total assets
Kureha Nishiki Group (4)Construc- Kureha Engineering Co.
tion
Consolidation adjustments
Total
Kureha Ecology Management
Co.
Kureha Special Laboratory Co.
Kureha Unyu Group (2)Kureha Trading Co.
Other
Kureha Service Co.
Operations
Kureha-Kai Medical
Corporation
Kureha Staff Service Co.
Consolidation adjustments
Total
Kureha Group Total
Number of consolidated subsidiaries
and equity- method affiliates

7.8
1.9
-3.7
5.9
3.8

9.7
2.6
--8.3

9.3
1.0
-3.1
7.2
4.0

10.9
2.3
--8.0

1.5
-0.8
0.6
1.3
0.2

1.2
-0.3
---0.3

0.6
4.2
0.0
0.3
1.8

0.5
6.2
-0.9
3.8

0.6
4.1
0.0
0.3
1.8

0.5
5.9
-1.0
3.5

0.1
-0.1
-0.0
-0.0
-0.0

0.0
-0.3
-0.0
-0.3

0.6
-3.8
7.5

0.7
---

0.6
-3.9
7.6

0.6
---

0.0
-0.1
0.1

-0.0
---

60.2

--

69.5

--

9.3

--

41

*Parenthesized numbers indicate the number of consolidated companies for each group.

32

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.