FY2018 3Q Results

February 7, 2019

1FY2018 3Q Overview(in billions of yen, except where stated otherwise)

FY2018 3Q vs. FY2017 3Q

FY2017 3Q FY2018 3Q

Change (%)

Revenue

110.2

110.8

0.6 (0.5%)

Operating profit

12.5

13.9

1.4 (11.2%)

Profit before income tax

12.6

14.2

1.6 (13.0%)

Profit attributable toowners of Kureha Corp.

9.5

11.1

1.6 (16.7%)• Revenue growth driven primarily
by Advanced Materials, partially
offset by a volume decrease inConstruction• Higher operating profit supported
by Advanced Materials more thanoffsetting declines in othersegments• Profit before income tax increased
due to higher operating profit andlower financial expenses• Profit for the period increased due
to higher profit before income tax

2FY2018 3Q Overview
FY2018 3Q Segment Performance (vs. FY2017 3Q)
Revenue
30.8

35.1 35.3

34.3…FY2017 3Q…FY2018 3Q(billions of yen)

OperatingProfit
3.6

19.6 20.4
12.3

7.8

12.9
12.4

1.9

6.0 5.9

3.1…FY2017 3Q…FY2018 3Q

2.7
1.4 1.4
0.6

0.3

Advanced
Materials

Specialty
Chemicals

Specialty
PlasticsConstruction

OtherOperations

3Q total: ¥110.2bn(FY17); ¥110.8bn(FY18)

AdvancedMaterials

SpecialtyChemicals

SpecialtyPlastics

Construction

OtherOperations

3Q segments total: ¥13.0bn(FY17); ¥13.8bn(FY18)

Factors attributing to operating profit (vs. FY2017 3Q)
Advanced Materials: Increased profit gains for advanced plastics and carbon products
Specialty Chemicals: Lower gains for pharmaceuticals and agrochemicals
Specialty Plastics:
Higher costs for home products partially offset by increased gains for packagingmaterials
Construction:Fewer construction projects in private sector
Other Operations:
Lower service unit price in environmental business partially offset by improved
hospital operation3

FY2018 3Q Overview(billions of yen)

FY2017 3QRevenue

Advanced Specialty
Materials Chemicals

30.8

19.6

Specialty
Plastics

Construction

35.1

12.3

OtherSegment
Adjustment
Operations
Total

12.4

110.2

Elimination
Other income
Other expenses
Operating profit*Environment-related expenses: ¥0.4bn, Loss on retirement of non-current
assets: ¥0.2bn, Impairment loss for non-current assets: ¥0.2bn

1.9

3.1

6.00.6

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

35.3

7.8

1.4

13.0

Finance income
Finance costs-----0.2

110.2------

0.2
0.9-----------

-0.5
0.6
0.5

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

Profit before income tax

Profit for the period

FY2018 3Q
Revenue

34.3

20.4

OtherSegment
Adjustment
Operations
Total

12.9

110.8

1.4

13.8

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

Profit for the period*Loss on retirement of non-current assets: ¥0.2bn

3.6

2.7

5.9

0.3Total-----0.1
0.3
0.3
0.1
0.6
0.3

Total

110.8
---------------13.9----------14.2
11.1

4

Segment Performance:
Advanced Materials(billions of yen)

FY20173Q

FY20183Q

Change%FY2018 3Q vs. FY2017 3Q
Revenue

Advanced Materials
Advanced plastics

17.9

20.1

12%

Carbon products

3.7

4.06%

Revenue: Kureha Co.

21.6

24.0

11%

Revenue: Subsidiaries

21.4

23.8

11%

Elimination

-12.2

-13.6

--Kureha-G Revenue

30.8

34.3

11%

Kureha-G Operating Profit

1.9

3.6

84%

Operating Profit

Advanced plastics:
Operating profit increased due to higher
sales volumes of PVDF (LiB binderapplication) and PGA (oil/gas fieldapplication) compensating for weak
PPS performance
Carbon products
Operating profit improved on higher
carbon fiber volume5

Segment Performance:
Specialty Chemicals(billions of yen)

FY20173Q

FY20183Q

Change%FY2018 3Q vs. FY2017 3Q
Revenue

Specialty Chemicals
Agrochemicals

6.6

6.4

-3%

Pharmaceuticals

3.4

3.6

6%

Industrial chemicals

7.0

7.6

9%

Revenue: Kureha Co.

17.0

17.64%

Revenue: Subsidiaries

4.7

5.3

12%

Elimination-2.0-2.4--

Kureha-G Revenue

19.6

20.44%

Kureha-G Operating Profit

3.1

2.7-13%Operating Profit

Agrochemicals
Operating profit declined due to lower
fungicides volumes
Pharmaceuticals
Operating profit decreased due largely
to the impact of NHI drug price revisions,despite higher sales volume ofKremezin (therapeutic agent for chronic
kidney disease)
Industrial chemicals
Operating profit remained flat despite
revenue growth as higher prices offset
higher costs

6

Segment Performance:
Specialty Plastics(billions of yen)

FY20173Q

FY20183Q

Change%FY2018 3Q vs. FY2017 3QRevenue

Specialty Plastics
Home products

16.7

16.91%

Packaging materials

4.9

4.7-4%

Revenue: Kureha Co.

21.6

21.70%

Packaging materials

9.6

9.71%

Fiber products

3.2

3.45%

Others

5.5

5.0-10%

Revenue: Subsidiaries

18.3

18.1-1%Elimination-4.8-4.4--Kureha-G Revenue

35.1

35.3

1%

Kureha-G Operating Profit

6.0

5.9-1%

Operating Profit

Home products
Operating profit decreased on higher
costs, despite volumes growth for NEW
Krewrap (plastic wrap) and Seaguar(fishing lines)
Packaging materials
Operating profit increased due toimproved unit manufacturing cost inEurope, despite a decline in ML shrink
film volume

7Segment Performance:
Construction & Other Operations(billions of yen)

FY20173Q

FY20183Q

Change%RevenueConstruction
Construction

17.2

13.0

-24%

Elimination-4.9-5.2--

Kureha-G Revenue

12.3

7.8-36%

Kureha-G Operating Profit

0.6

0.3-56%

Other Operations
Environmental engineering

FY2018 3Q vs. FY2017 3Q

Construction
Operating profit declined due to fewer
construction projects in private sector
more than offsetting a volume increasein public sector

RevenueLogistics
Hospital operations
Others

8.0
6.3
2.7
1.4

8.6
6.2
2.8
1.4

8%
-1%
3%
5%

Revenue: Subsidiaries

18.3

19.0

4%

Elimination-5.9-6.1--

Kureha-G Revenue

12.4

12.9

4%

Kureha-G Operating Profit

1.4

1.4-3%

Operating Profit

Operating Profit

Environmental Engineering
Operating profit decreased due to lower
unit service price for industrial waste
treatment despite volume growth
Logistics
Operating profit remained flat on lower
revenue
Hospital Operations
Operating profit increase on higherrevenue

8Financial Position
Assets(billions of yen)

Liabilities and Equity
Mar.31
2018

Dec.31
Change2018

Mar.31
2018

Dec.31
Change2018

Cash and cash equivalents

6.5

7.8

1.3

Trade and other payables

21.5

21.0

-0.5

Trade and other receivables

32.7

30.6

-2.0

Interest-bearing debt

48.1

47.8

-0.3

Inventories

36.0

36.4

0.3

Provisions

6.6

5.2

-1.4

Other current assets

1.8

5.1

3.3

Other liabilities

14.0

13.8

-0.2

Total current assets

77.0

79.8

2.9

Total liabilities

90.2

87.8

-2.4

Property, plant and equipment

114.2

115.6

1.3

Shareholders’ equity

18.2

18.2--

Intangible assets

1.3

1.2

-0.2

Capital surplus

15.3

15.0

-0.2

Investments and other assets

49.7

47.2

-2.6

Less: Treasury stock

-0.7

-3.7

-3.0 *

Retained earnings

108.7

117.6

8.9

Other components of equity

8.7

7.2

-1.6

Non-controlling interests

1.8

1.6

-0.3

Total non-current assets

165.3

163.9

-1.4

Total equity

152.0

155.9

3.9

Total assets

242.3

243.7

1.4

Total liabilities and equity

242.3

243.7

1.4

*Kureha has repurchased its own shares valued at approximately¥3 billion over a period from November to December 2018.

9FY2018 Full-Year Forecast(billions of yen, except for dividends)

FY2017
Revenue

147.3

FY2018e150.0

ChangeYOY (%)

2.7

FY2018Initial mid- FY2018e vs. FY2017
term plan

160.0(1.8%)

Operating profit

13.0

15.5 *

2.5

14.0(19.5%)

Profit before income tax

12.7

15.5 *2.8(22.2%)

Profit attributable toowners of Kureha Corp.
Dividend per share(Interim)(Year-end)* Forecast revised on Feb. 7, 2019

9.7

12.0 *2.3(23.7%)

¥55.0
¥70.0

¥70.0
¥70.09.0• Revenue to increase due tovolume growth mainly in AdvancedMaterials• Higher operating profit supported
by Advanced Materials (improvedoperating loss for PGA; higherPVDF volume) and fewer ‘otherexpenses’ more than offsettingvolume declines and higher costs
in other segments• Profit before income tax to improveon higher operating profit• Profit for the period to improve onhigher profit before income tax

10FY2018 Full-Year Forecast
Segment Performance: FY2018e vs. FY2017
Revenue
41.6

47.5

45.4 45.5

Specialty
Chemicals

OperatingProfit

3.9

26.2 27.5

AdvancedMaterials…FY2017…FY2018e(billions of yen)

17.4

Specialty
Plastics

16.8 17.0
12.5

Other
Construction Operations

Total: ¥147.3bn (FY2017); ¥150.0bn (FY2018e)

6.96.5

3.4 3.2

1.7

Advanced
Materials…FY2017…FY2018e

1.0
Specialty
Chemicals

Specialty
Plastics

1.8 1.80.5

Other
Construction Operations

Segments total: ¥14.9bn (FY2017); ¥15.9bn (FY2018e)

Factors attributing to FY2018e operating profit (vs. FY2017)
Advanced Materials: Higher PVDF volume; improved operating loss for PGA; lower profit gains for PPS
Specialty Chemicals: Lower agrochemicals volumes; impact of NHI drug price revisions onpharmaceuticals more than offsetting volume growth of new Kremezin tablets
Specialty Plastics:
Higher promotion cost for home products
Construction:
Decreased revenue
Other Operations:Improved hospital operation offsetting a decline in competitiveenvironmental business11

FY2018 Full-Year Forecast(billions of yen)
Advanced Specialty
Materials Chemicals

FY2017
Revenue

41.6

26.2

Specialty
Plastics

Construction

45.4

17.4

OtherSegment
Adjustment
Operations
Total

16.8

147.3

Elimination
Other income
Other expenses
Operating profit*Subsidy income: ¥0.3bn*Loss on retirement of non-current assets: ¥1.3bn, Loss on non-current asset
impairment: ¥0.7bn, Environment-related expenses: ¥0.4bn

1.7

3.4

6.9

1.0

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.5

12.5

1.8

14.9

Finance income
Finance costs-----0.2
0.5
2.6

147.3
----------------

-1.9
0.6
0.9

13.0
----------12.7
9.7

Profit before income tax

Profit for the period

FY2018e (revised Feb.7)
Revenue

47.5

27.5

OtherSegment
AdjustmentOperationsTotal

17.0

150.0

1.8

15.9

Elimination
Other income
Other expenses

Operating profit
Finance income
Finance costs
Profit before income tax

Profit for the period*Loss on retirement of non-current assets: ¥0.5bn

3.9

3.2

6.5

0.5

Total

-----0.0
0.3
0.7
-0.4
0.6
0.6

Total

150.0
---------------15.5----------15.5
12.0

12FY2018 Full-Year Forecast
FY2018 Forecast: Present (2/7) vs. Previous (End 2Q)
Revenue
47.0 47.5

46.0 45.5…Previous forecast…Present forecast(billions of yen)

OperatingProfit

27.53.9
16.5 17.0

2.9

6.2 6.5…Previous forecast…Present forecast

3.2
1.7 1.8

13.0 12.5

0.5
AdvancedMaterials

Specialty
Chemicals

Specialty
Plastics

Construction

Total: ¥150.0bn (Unchanged)

OtherOperations

AdvancedMaterials

Specialty
Chemicals

Specialty
Plastics

Construction

Other
Operations

Segments total: ¥14.5bn  ¥15.9bn

Factors attributing to FY2018e operating profit (vs. previous forecast)
Advanced Materials: Better-than-expected performances of PVDF, carbon products and PPS; slower
volume growth for PGA
Specialty Chemicals: (no change from previous forecast)Specialty Plastics:
Higher volume and lower costs in home products; a slightly lower profit
gain expected for packaging materials
Construction:(no change from previous forecast)Other Operations:
Higher volume in industrial waste treatment business13

FY2018 Full-Year Forecast
Previous Forecast(at end 2Q)
Revenue(billions of yen)
Advanced Specialty
Materials Chemicals

47.0

27.5

Specialty
Plastics

Construction

46.0

13.0

OtherSegment
Adjustment
Operations
Total

16.5

150.0

1.7

14.5

Elimination
Other income
Other expenses

Operating profit*Loss on retirement of non-current assets: ¥0.5bn2.93.2

6.2

0.5

Advanced Specialty
Materials Chemicals

Specialty
Plastics

Construction

45.5

12.5

Finance income
Finance costs-----0.0
0.2
0.7
-0.5
0.6
0.6

Profit before income tax

Profit for the period

Present Forecast(revised on Feb. 7)
Revenue

47.5

27.5

OtherSegment
Adjustment
Operations
Total

17.0

150.0

1.8

15.9

Elimination
Other income
Other expenses

Operating profit
Finance income
Finance costs
Profit before income tax

Profit for the period*Loss on retirement of non-current assets: ¥0.5bn

3.9

3.2

6.5

0.5

-----0.0
0.30.7
-0.4
0.6
0.6

Total

150.0
---------------14.0----------14.0
10.5
Total

150.0
---------------15.5----------15.5
12.0

Supplemental Information• Update on PGA business development• Iwaki Factory Capacity Enhancement

Update on PGA Business Development

14(PGA Frac Plugs for Shale Oil & Gas Drilling)
Application of PGA frac plugs is expanding to full-bore use in more oilfields…
(Before)Non-degradable frac plugs are used for thefracturing process of horizontal well

2kmThe length of a horizontal well islimited due to technologicaldifficulties to drill out frac plugs
after use(Jan. 2018—)
Degradable PGA frac plugs are used for an
extended ‘toe’ part of horizontal well

Market expansion is now focused on
Permian and Eagle Ford regions

3km
(Toe)
(In Future)
Degradable PGA frac plugs are used for an
entire horizontal well (and completely eliminatethe drillout process)

3km

PGA degradable frac plugs
 Currently adopted by 12 field operators (4 moresince last Nov.) in wider oilfields
 Used for full-bore application by major
operators; aggressive promotion ongoing Improvements on ultra low-temp degradable
grade completed, awaiting field tests

Iwaki Factory Capacity Enhancement
Polyvinylidene fluoride(PVDF)
Electrification of vehicles(EV, PHEV, HEV)PVDF demand growing for
LiB binder
New PVDF plant in Iwaki Factory (Japan)

 Commercial production begins at a new Iwaki plant (2000tpa, capex ¥4.7bn) inJanuary 2019
 Kureha’s total PVDF production capacity reaches 11,000tpa (6,000 tons inJapan/ 5,000 tons in China), with further expansion under study All plants continue to run at high operating rate in response to strong demand
from LiB makers

15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.