FY2023 Interim Report:
1H Results & Progress in New
Mid- to Long-Term Management Plan

November 9, 2023

1

Contents

FY2023 Performance Overview ∙ ∙ ∙2

IV. Progress of Initiatives under the New Mid- to Longterm Management PlanI.

• Management policy ∙ ∙ ∙ 28

FY2023 Half-Year Results• 1H FY23 Financial summary ∙ ∙ ∙ 4-6• PVDF business ∙ ∙ ∙29-32• Segment performance ∙ ∙ ∙ 7-10

• PGA business ∙ ∙ ∙33• Cash flow ∙ ∙ ∙ 11

• Shareholder Returns ∙ ∙ ∙34• Financial position ∙ ∙ ∙12• Environmental Impact Reduction Targets ∙ ∙ ∙ 35
• Strengthening the management base ∙ ∙ ∙ 36

II. FY2023 Full-Year Outlook• FY23 Financial forecast ∙ ∙ ∙ 14-16• Synergism between Company and Employees ∙ ∙ ∙ 37

• Segment forecast ∙ ∙ ∙ 17-20

V. Initiatives to Improve Cost of Capital and Stock Price• Cash flow ∙ ∙ ∙ 21

• Current Situation Regarding Stock Price and PBR ∙ ∙ ∙ 39

• Key indicators ∙ ∙ ∙ 22-24• Initiatives to achieve a PBR above 1x∙ ∙ ∙ 40

• Cash Allocation (FY2023-2025) ∙ ∙ ∙ 41
III. 10-year Progress of Kureha Group• Kureha Group: 10-Year Growth Trajectory∙ ∙ ∙ 26

2

FY2023 Performance Overview

FY23 Half-Year Results & New Full-Year Forecast(in billions of yen)
1H
FY23

1H
FY22

1H
Changes
YoY

FY23
FY22
New
ActualForecast

Advanced
Materials

34.0

47.3

-13.3

69.0

82.7

-13.7

Specialty
Chemicals

17.1

17.5

-0.4

33.2

31.8

+1.4

Specialty
Plastics

23.4

23.8

-0.3

46.6

46.8

-0.2

Construction

5.4

4.2

+1.1

13.5

11.3

+2.2

Other

8.6

8.9

-0.3

17.7

18.7

-1.0

Revenue
Segment Total

88.5

101.8

-13.3

180.0

191.3

-11.3

Advanced
Materials

2.8

9.0

-6.2

5.1

10.1

-5.0

Specialty
Chemicals

0.8

1.6

-0.9

0.7

1.8

-1.1

Specialty
Plastics

4.3

4.3

+0.0

6.9

8.6

-1.7

Construction

0.2

0.3

-0.1

0.8

0.9

-0.1

Other

1.1

1.4

-0.3

2.0

2.8

-0.8

Core Operating.
Profit Total

9.2

16.6

-7.4

15.5

24.3

-8.8

Adjustments

0.0

-0.2

+0.2

-1.5

-2.0

+0.5

Operating Profit

9.1

16.7

-7.6

14.0

22.4

-8.4

Profit attributable
to Kureha

6.8

12.2

-5.4

10.5

16.9

-6.4

Changes
YoY

Half-year revenue and profits declined on a year-on-year
basis• PVDF, a binder material for automotive LiBs, saw a drastic
shift from its exceptional growth driven by the rapid
expansion of electric vehicles a year ago-- sharp declines inrevenue and profits led by lower sales volume and lower
pricing due to slower market conditions and customer
destocking• A decrease in equity in earnings from a PPS-related affiliate• Revenue and profits improved for PGA
Full-year outlook & background vs 1H• PVDF volume for 2H will likely remain unchanged at 1H
and 2H/FY22 levels as a market recovery for EVs and
LiBs is expected to delay into FY24. Business profits willfurther decrease due to a lack of income from inventory
revaluations recorded in 1H and lower pricing for primarycustomers.
• Equity in PPS-related affiliate’s earnings will improve but
fall below our initial projection due to a delay in pricing
action• PGA business profit to increase substantially owing toinventory revaluation• A decrease in ‘Other Expenses’ expected due to theabsence of an impairment loss related to packaging
materials recorded in FY22, partially offset by expenses
required for Iwaki Factory PVDF capacity enhancement

3

I. FY2023 Half-Year Results(April 1, 2023 through September 30, 2023)

4

1H FY2023 Financial Summary (1)(in billions of yen)

1H
FY23

1H
FY22

Changes
Changes
1Hvs.
vs.
Forecast
1H FY22
Forecast

Revenue

88.5

101.8

-13.3
(-13.0%)

96.0

-7.5
(-7.8%)

Core operating
profit

9.2

16.6

-7.4
(-44.6%)8.0+1.2(-14.8%)Operating profit

9.1

16.7

-7.6
(-45.3%)8.0+1.1(+14.4%)+1.9
8.0(+23.2%)
5.3

Profit before taxes

9.9

17.4

-7.5
(-43.3%)

Profit attributableto owners ofKureha

6.8

12.3

-5.5
(-44.6%)

Basic profit
per share (¥)¥355.29 ¥624.60(Currency exchange rates)
1USD=
1EUR=
1CNY=

I¥134.0¥138.8¥19.9¥141.1¥153.5¥19.8¥135.0¥140.0¥19.0+1.5(+28.3%)Vs. 1H FY22
• Revenue fell primarily due to weakening in
PVDF (LiB binder) and agrochemicals• Operating profit decreased largely on
slower PVDF performance, a decrease inequity in earnings from a PPS-related
affiliate and lower agrochemical volume
Vs. 1H Forecast• Revenue: Slower-than-expected PVDF
performance, agrochemical sales partly
postponed to 2H• Operating profit: Impact of PGA-related
inventory revaluation (initially scheduled for
2H), partially offset by declines in PVDF
sales and equity in earnings from a PPSrelated affiliate

5

1H FY2023 Financial Summary (2)(in billions of yen)

Revenue & Operating Profit by Segment (vs. 1H FY22)
1H FY22

RevenueCore operating profit

1H FY2347.3

1H FY221H FY239.0

34.0
23.8 23.4

4.3 4.3

17.5 17.1

2.8
4.2 5.4

8.9 8.6

Advanced
Other
機能製品 Specialty
化学製品 Specialty
樹脂製品 Construction
建設関連 その他関連
Materials Chemicals Plastics
Operations

1.6

0.8

Advanced
機能製品 Specialty
化学製品
Materials Chemicals

0.3 0.2

1.4 1.1

Other
Specialty
樹脂製品 Construction
建設関連 その他関連
Operations
Plastics

Factors affecting operating profit
Advanced Materials:
Specialty Chemicals:
Specialty Plastics:
Constructions:
Other Operations:

Declines in PVDF and other functional products sales partially offset by expansion of PGA and PPS
Lower agrochemical and pharmaceutical sales
Sales expansion of home products offset by a decline in packaging materials
Higher private construction volume
Slower logistics and hospital operation partially offset by higher industrial treatment volume

6

1H FY2023 Financial Summary (3)Revenue & Operating Profit by Segment (vs. Forecast)
Revenue(in billions of yen)
1H Forecast
1H ResultsCore operating profit
4.3

1H Forecast
1H Results

39.0

34.0
19.0

2.6

23.8 23.4

17.1
6.0 5.4

1.5

8.2 8.6

Other
Advanced
Specialty 樹脂製品
Specialty Construction
機能製品 化学製品
建設関連 その他関連
Operations
Materials Chemicals
Plastics

3.0

2.8

1.1

0.8
0.2 0.2
Advanced
機能製品
Materials

Specialty
化学製品

Chemicals

Other
Specialty Construction
樹脂製品
建設関連 その他関連
Plastics

Factors affecting operating profit
Advanced Materials:
Specialty Chemicals:
Specialty Plastics:
Construction:
Other Operations:

0.7

Impact of PGA-related inventory revaluation (+¥2.1bn)
Shipment of some agrochemicals postponed to 2H
Sales expansion and delayed spending of expanses in home products
partially offset by slower packaging materials sales
Performed as forecast
Higher industrial waste treatment volume

Operations

7

Segment Performance:
Advanced Materials(in billions of yen)

1H
FY23

1H
FY22

Change%Advanced Materials
Advanced plastics

25.0

36.5

-11.6

-32%

Carbon products

3.9

3.5

0.4

+12%

Other

5.1

7.3

-2.2

-30%

Revenue

34.0

47.3

-13.3

-28%

Operating profit

2.8

9.0

-6.2

-69%

Vs. 1H FY22

Revenue ➘Operating profit ➘Advanced plastics revenue and profit down:- Expansion of sales of PPS and PGA- PVDF (LiB binder) demand weakened in theslower EV market and due to customer
inventory adjustments
Carbon products revenue and profit up:- Higher carbon fiber insulation sales forhigh-heat furnace applications

8

Segment Performance:
Specialty Chemicals(in billions of yen)

1H
FY23

1H
FY22

ChangeVs. 1H FY22%

Revenue ➘Agrochemicals & Pharmaceuticals revenue andprofit down:- Part of agrochemicals sales postponed to 2H- Impact of mandatory drug price revisions

Specialty Chemicals
Agrochemicals

4.9

6.6

-1.7

-26%

Pharmaceuticals

1.7

2.0

-0.3

-16%

Industrial
chemicals

5.8

4.7

1.2

+25%

Other

4.6

4.2

0.4

+10%

Revenue

17.1

17.5

-0.4

-2%

Operating profit

0.8

1.6

-0.9

-54%

Operating profit ➘Industrial chemicals revenue and profit up:- Higher pricing to reflect higher raw material cost
- Improved profit margins enabling the businessto recover from an operating loss

9

Segment Performance:
Specialty Plastics(in billions of yen)

1H
FY23

1H
FY22

ChangeVs. 1H FY22%

Revenue ➘Home products & Fishing lines revenue and profit up:- Higher pricing for food wrap film (continually
carried out in and after 2H FY22)

Specialty Plastics
Home products

12.2

11.8

0.5

+4%

Fishing lines

2.5

2.4

0.1

+2%

Packagingmaterials

7.0

7.4

-0.5

-6%

Other

1.7

2.2

-0.4

-19%

Revenue

23.4

23.8

-0.3

-1%

Operating profit

4.3

4.3

0.0

+1%

Operating profit ➙Packaging materials revenue down, profit flat:- Sales declines in heat-shrink multilayer film and
PVDC film- Fewer expenses

10

Segment Performance:
Construction(in billions of yen)

1H
FY23

1H
FY22

ChangeVs. 1H FY22%

Revenue ➚Construction

Revenue

5.4

4.2

1.1

+27%

Operating profit

0.2

0.3

-0.1

-22%

- Profit remained flat despite higher volume forprivate construction

Revenue ➘Other Operations

Operating profit →Operating profit ➘Environmental
engineering

5.4

5.2

0.2

+4%

Logistics

0.8

1.3

-0.5

-38%

Hospital
operations

2.1

2.1

-0.0

-1%

Others

0.3

0.3

-0.0

-3%

Logistics revenue and profit down

Revenue

8.6

8.9

-0.3

-4%

Operating profit

1.1

1.4

-0.3

-22%

Hospital Operations revenue down, operating loss
widenedEnvironmental engineering revenue up, profit down:- Higher industrial waste treatment volume,
including low-level PCB waste- Higher expenses

11Cash Flow(in billions of yen)

1H
FY23

1H
FY22

Increase/
Decrease

Profit before income tax

9.9

17.4

-7.5

Depreciation

5.7

5.7

-0.0

Other

-8.3

-14.4

+6.1

Cash flow from operating activities

7.2

8.7

-1.4

Cash flow from investing activities

-7.6

-4.9

-2.7

-0.3

3.8

-4.1

Cash flow from financing activities

-3.4

-6.8

+3.4

Effect of exchange rate changes on cash and cash equivalents

1.4

1.5

-0.1

Increase/decrease in cash and cash equivalents

-2.3

-1.5

-0.8

Cash and cash equivalents at beginning of period

32.2

30.6

+1.6

Cash and cash equivalents at end of period

29.9

29.1

+0.7

Free cash flow

12

Financial Position(in billions of yen)

AssetsLiabilities and Equity
Sept. 30
2023

Mar. 312023

Increase/
Decrease

Sept. 30
2023

Mar. 312023

Increase/
Decrease

Cash and cash equivalents

29.9

32.2

-2.3

Trade and other payables

26.5

27.7

--1.2

Trade and other receivables

34.3

31.9

+2.4

Interest-bearing debt

32.7

26.3

+6.4

Inventories

50.5

52.0

-1.5

Provisions

8.1

8.5

-0.4

Other current assets

4.3

4.9

-0.6

Other liabilities

17.5

17.2

+0.3

Total current assets

119.0

121.0

-2.0

Total liabilities

84.8

79.6

+5.1

Property, plant and equipment

122.6

117.4

+5.2

Shareholders’ equity

18.2

18.2

--

Intangible assets

4.7

4.5

+0.3

Capital surplus

14.7

14.7

--

Investments and other assets

59.7

53.5

+6.2

Less: Treasury stock-6.1(*1)

-8.7

+2.6

Retained earnings

174.8(*2)

179.0

-4.1

Other components of equity

18.0

12.1

+5.9

Non-controlling interests

1.6

1.6

+0.0

Total non-current assets

187.0

175.4

+11.6

Total equity

221.2

216.8

+4.5

Total assets

306.0

296.4

+9.6

Total liabilities and equity

306.0

296.4

+9.6

Note Kureha amortized of 1,280,000 treasury shares on June 30, 2023, which affects the following items.
(*1) Treasury stock (Less): Treasury shares disposed (+¥9.1bn), Treasury shares acquired (-¥6.5bn)(*2) Retained earnings: Treasury shares disposed (-¥9.1bn), Net income (+¥6.8bn); Dividend payment (-¥2.8bn), etc.

13

II. FY2023 Full-Year Outlook(April 1, 2023 through March 31, 2024)

14

FY2023 Financial Forecast (1)Vs. FY22(in billions of yen)

ChangeChange FY23
vs.
vs.
Previous
2H
New
Previous
Results FY22 Forecast
Forecast
Forecast• Core operating profit down in all segments
-11.3
-10.0
91.5
180.0 191.3 (-5.9%) 190.0 (-5.3%) Vs. Previous Forecast• Revenue and profit to fall below previous
-8.8
-6.5
6.3
forecast levels due to weakening in
15.5
24.3 (-36.2%) 22.0 (-29.5%)
Advanced Materials, including PVDF and
PPS
-8.4
-8.0
4.9
14.0
22.4 (-37.4%) 22.0 (-36.4%) Operating profit changes from 1H to 2H

FY23

1H

• Revenue to increase in Specialty Chemicals
and Construction and decrease in Advanced
Materials, Specialty Plastics and Other
Operations

FY22

Revenue

88.5

Core operating
profit9.2

Operating profit

9.1

Profit before
taxes

9.9

5.1

15.0

23.0 (-34.8%)

Profit attributableto owners ofKureha

6.8

3.7

10.5

16.9 (-37.8%)

-8.0

-6.4

-7.0

22.0 (-31.8%)-5.0

15.5 (-32.3%)• Sales volume in the PVDF business is
expected to remain unchanged, but profit isexpected to fall in the 2H due to the absenceof revaluation profit (approx. 1 billion yen)and price drop to major customers.
•

Basic profit per share (¥)¥550.04¥864.30¥819.35[Currency exchange rates and sensitivity]
FY22
ActualFY23
Initial estimate

1H FY23
Actual2H FY23
New estimate

Forex sensitivity*Impact of an one-yen depreciation
on operating profit per 6-month period

1USD=¥135.5¥135.0¥141.1¥141.0An increase of ¥0.06bn

1EUR=¥141.0¥140.0¥153.5¥153.0An increase of ¥0.03bn

1CNY=

¥19.8

¥19.0

¥19.8

¥19.5

An increase of ¥0.09bn

Temporary cost increases are expected due
to equipment trouble at the Iwaki Factoryand company-wide adjustments, such as thecost of removing existing facilities (over 1
billion yen) in preparation for the expansionof the PVDF plant.

15

FY2023 Financial Forecast (2)Segment Revenue & Operating Profit Forecast (vs. FY22 Results)
Revenue

FY22 Results
FY23 New Forecast

82.7(in billions of yen)Core operating profit

FY22 Results
FY23 New Forecast

10.1

8.6

69.0

6.9
46.8 46.6
31.8

5.1

33.2
18.7
11.3 13.5

17.7

Other
Advanced
機能製品 Specialty
化学製品 Specialty
樹脂製品 Construction
建設関連 その他関連
Operations
Materials Chemicals Plastics

2.8

1.8

0.7

0.9 0.8

2.0

Other
Advanced
Construction
Advanced
機能製品 Specialty
化学製品
樹脂製品 Construction
建設関連 その他関連
Specialty Specialty
Specialty
Operations
Materials
Materials Chemicals
Chemicals Plastics
Plastics

Factors affecting operating profit
Advanced Materials:
Specialty Chemicals:
Specialty Plastics:
Construction:
Other Operations:

Slower PVDF performance and a decrease in equity in earnings from PPS-related
affiliate partially offset by PGA sales expansion
Impact of drug price revisions, higher R&D expenses for agrochemicals
Slower sales for packaging materials and other plastic products
Higher construction material cost partially offset by higher sales in private
construction
Lower low-level PCB waste treatment sales, higher cost

16

FY2023 Financial Forecast (3)Segment Revenue & Operating Profit Forecast (vs. Previous Forecast)
RevenueCore operating profit

Previous Forecast
New Forecast

79.0(in billions of yen)

13.0

Previous Forecast
New Forecast

69.0
47.1 46.6
34.6

33.2

5.1

17.3 17.7
12.0 13.5
Other
Advanced
Specialty Specialty Construction
機能製品 化学製品
建設関連 その他関連
Operations
Materials
Chemicals 樹脂製品
Plastics

5.6
1.2

Advanced
機能製品
Materials

0.7

Specialty
化学製品
Chemicals

6.9
0.5 0.8

Other
Specialty
樹脂製品 Construction
建設関連 Operations
その他関連
Plastics

Factors affecting operating profit
Advanced Materials:
Specialty Chemicals:
Specialty Plastics:
Constructions:
Other Operations:

1.7 2.0

Lower PVDF sales, a decrease in equity in earnings of PPS-related affiliate
Slower agrochemicals and industrial chemicals sales
Expansion of food wrap film partially offset by weakening in packaging
materials
Higher private construction volume
Higher industrial waste treatment sales

17

Segment Forecast:
Advanced Materials(in billions of yen)
FY23
New
Forecast

FY22
Results Change

Vs. FY22%

Revenue ➘Advanced plastics revenue and profit down:- PGA sales expansion- Slower PVDF sales in the automotive LiB market- A decrease in equity in earnings of PPS-related
affiliate

Advanced Materials
Advanced plastics

48.5

63.0

-14.5

-23%

Carbon products

7.5

6.9

0.6

+8%

Other

13.0

12.7

0.3

+2%

Revenue

69.0

82.7

-13.7

-17%

Operating profit

5.1

10.1

-5.0

-50%

Operating profit ➘Carbon products revenue and profit up:- Higher carbon fiber sales used for high-heat
furnace insulation
Vs. Previous Forecast[Previous Forecast: Revenue ¥79.0bn, Ope. Profit ¥13bn]

Revenue ➘Operating profit ➘- Weaker PVDF sales due to the slow EV market,
impact of customer destocking- Slower global demand for PPS

18

Segment Forecast:Specialty Chemicals(in billions of yen)
FY23
New
Forecast

FY22
Results Change

Vs. FY22%

Specialty Chemicals
Agrochemicals

9.5

9.3

0.2

+2%

Pharmaceuticals

4.0

3.8

0.2

+4%

Industrial
chemicals

10.5

9.9

0.6

+6%

Other

9.2

8.7

0.5

+6%

Revenue

33.2

31.8

1.4

+4%

Operating profit

0.7

1.8

-1.1

-62%

[Previous Forecast: Revenue ¥34.6bn, Ope. Profit ¥1.2bn]

Revenue ➚Operating profit ➘Agrochemicals & Pharmaceuticals revenue up,
profit down:- Higher pharmaceutical sales partially offset by lower
price (impact of mandatory drug price revisions on
Kureha therapeutic agent for chronic renal failure)- Higher pricing for agrochemicals to reflect higher
raw material cost partially offset by lower sales- Higher R&D expenses for the development of new
agrochemicals
Industrial chemicals revenue and profit down:- Higher pricing for organic and inorganic chemicals- Higher expenses
Vs. Previous Forecast

Revenue ➘Operating profit ➘- Lower agrochemical volume- Lower industrial chemical volume

19

Segment Forecast:Specialty Plastics(in billions of yen)
FY23
New
Forecast

FY22
Results Change%

Specialty Plastics
Home products

23.0

22.5

0.5

+2%

Fishing lines

5.0

4.7

0.3

+5%

Packagingmaterials

15.0

15.3

-0.3

-2%

Other

3.6

4.2

-0.6

-14%

Revenue

46.6

46.8

-0.2

-0%

Operating profit

6.9

8.6

-1.7

-20%

[Previous Forecast: Revenue ¥47.1bn, Ope. Profit ¥5.6bn]

Vs. FY22

Revenue ➘Operating profit ➘Home products revenue up, profit flat:- Higher pricing for food wrap film (for and after Oct.
2022 shipment)- Lower wrap film volume
Fishing lines revenue up, profit down

Packaging materials revenue and profit down:- Slower PVDC film sales in the South East Asia market- Higher fuel and raw material costs

Vs. Previous Forecast

Revenue ➘Operating profit ➚- Lower packaging materials volumes- Better-than-expected demand for food warp
film in the post-pandemic market

20

Segment Forecast:
Construction(in billions of yen)

Vs. FY22

FY23
New
Forecast

FY22
Results

Revenue

13.5

11.3

2.2

+19%

Operating profit

0.8

0.9

-0.1

-9%

Change%Construction: Revenue ➚ Operating profit ➘- Higher construction volume in the private sector

Construction[Previous Forecast: Revenue ¥12.0bn, Ope. Profit ¥0.5bn]

Other Operations: Revenue ➘ Operating profit ➘Environmental engineering revenue up, profit down
- Higher expenses
Logistics revenue and profit down
Hospital Operations revenue up, operating loss narrowed

Other Operations
Environmental
engineering

11.5

11.3

0.2

+1%

Logistics

1.5

2.6

-1.1

-43%

Hospital
operations

4.3

4.1

0.2

+4%

Others

0.4

0.6

-0.2

-33%

Revenue

17.7

18.7

-1.0

-5%

Operating profit

2.0

2.8

-0.8

-29%

Vs. Previous Forecast

Construction: Revenue ➚ Operating profit ➚- Higher private construction volume[Previous Forecast: Revenue ¥17.3bn, Ope. Profit ¥1.7bn]

Other Operations: Revenue ➚ Operating profit ➚- Higher industrial waste treatment volume

21

Cash Flow(in billions of yen)

FY23
New
Forecast

FY22
Results

ChangeProfit before income tax

15.0

23.0

-8.0

Depreciation

11.2

11.6

-0.4

Other

-3.8

-11.9

+8.1

Cash flow from operating activities

22.4

22.7

-0.4

Cash flow from investing activities-40.2 *

*
-11.1

-29.1

Free cash flow

-17.9

11.6

-29.5

Cash flow from financing activities

17.3

-10.5

+27.8

Effect of exchange rate changes on cash and cash equivalents

0.0

0.4

-0.4

Increase/decrease in cash and cash equivalents

-0.6

1.6

-2.1

Cash and cash equivalents at beginning of period

32.2

30.6

+1.6

Cash and cash equivalents at end of period

31.6

32.2

-0.6

* Includes our investment of approximately ¥20bn in expanding PVDF production at the Iwaki Factory

22

Key Indicators (1)(in billions of yen)

11.4

10.3

6.0
5.4

5.5
4.8

Capital investment

9.8
5.8
4.0

13.2

14.9

14.3

14.3

7.4

8.2

8.2

7.6

5.8

6.7

6.1

6.7

16.5

28.8 *

10.3

10.2

9.9

10.3

5.4

5.1

5.0

5.4

5.0

5.1

4.9

5.0

6.7
9.8

10.9

2015 2016 2017 2018 2019 2020 2021 2022 2023
1H

Depreciation expenses

39.7

4.9
2.6
2.3

4.7

5.0

2.5

2.7

2.2

2.3

5.3

5.6

3.1

2.8

2.9

2.9

2.5

2.7

11.6

11.6

11.2

6.1

5.9

5.9

5.9

5.5

6.0

5.8

5.7

5.7

5.7

1H

*Includes ¥20bn for PVDF capacity
expansion at the Iwaki Factory

estimate

2H

Interest-bearing debt

R&D expenditures
6.0

11.7

2015 2016 2017 2018 2019 2020 2021 2022 2023

estimate

2H

12.1

5.6
3.0
2.6

6.5
3.5
3.0

7.6
4.4
3.2

81.2

71.0

59.0

48.1

39.0 37.3

29.5 28.5

26.3

2015 2016 2017 2018 2019 2020 2021 2022 2023
1H

2H

estimate2015 2016 2017 2018 2019 2020 2021 2022 2023
estimate

23

Key Indicators (2)ROE
10%9.0% 8.4%
7.1%

8%
6%

ROIC
8%

7.7% 7.4% 8.1%

5.8%

4.9%

4.1%

4.9%
2.9%

3.5%

7.0%

4.0%

2%

2%

0%

0%
2015 2016 2017 2018 2019 2020 2021 2022 2023

2015 2016 2017 2018 2019 2020 2021 2022 2023

estimate

estimate

ROA
10%7.1% 7.3% 7.0% 7.6%

8%

5.3%

6%
4%

6%
4%

4%

6.3% 6.5% 6.1% 6.6%

2.7%

3.8%

7.9%

4.8%

2%
0%

2015 2016 2017 2018 2019 2020 2021 2022 2023
estimate

24

Key Indicators (3)Equity Ratio

Net D/E Ratio
1

100%

0.63

0.52

0.5

0.28

75%

0.21 0.18

0

0.06

0.13
-0.01 -0.03-0.5
2015 2016 2017 2018 2019 2020 2021 2022 2023

D/E Ratio
1

0.5

0.57
0.32

0.24 0.23

0.16 0.14 0.12

49%

72% 70% 73%

66%

53%

50%

estimate

0.69

62%

65% 67%0.27

02015 2016 2017 2018 2019 2020 2021 2022 2023 estimate

25%
2015 2016 2017 2018 2019 2020 2021 2022 2023
estimate

25

Ⅲ ．10-year Progress of Kureha Group

26

Kureha Group: 10-Year Growth Trajectory(in billions of yen)

150
15

17.2

100
10

14.6

18.0

20.1
200
20

17.3
14.0

13.0

12.6

11.9
505

250
25

22.4

9.3

8.5

150
15
100
10
50
5

00

Advanced

1
Materials
Specialty

2
Chemicals
Specialty
3
Plastics
Construction &4

Other operations

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023
Estimate

00

5
Total
(Right-hand scale)-5-50・Significant growth in Advanced Materials segment
・Interest-bearing debt reduced by more than 40 billion yen during this period・Corporate restructuring (impairment and structural reform): 30 billion yen
・Cost reduction effect: 14.6 billion yen (simple cumulative amount for the period of
Corporate Reform PJ activities from FY2013 to FY2022)

-50
-5

27

IV．Progress of Initiatives under the New
Mid- to Long-term Management Plan

28

Management Policy
Objectives
Continuous enhancementof economic value
Contribution toward
resolving social issues
Contribution toward
reduced environmental
impact

Revive Kureha’s
technologydriven focus

Priority
measures

Strengthen the
management
base

Synergismbetweencompany andemployees

To realize the Kureha Vision, we have established a Management Policy
consisting of three objectives and three priority measures and we have carried itout since April 2023.

29

PVDF Business (1)PVDF sales volume trends

Market environment and future outlook

FY2024 onwards:
European market recovery
North American market expansion

100• The European EV market, which Kureha istargeting, is currently stagnant due to slumping
consumption and other factors. As a result, LiB
manufacturers' inventory adjustments formaterials and batteries took longer than expected.
A high proportion of our binders are used forEuropean EVs, and we are affected by thisslowdown.
• Customer inventory adjustments are expected tobe completed in 2H FY2023. Orders for materials
are forecast to recover from FY2024, due to therecovery of the European market and the rise of
the North American market.

50

0
2022年度FY2022

1H
上期

2022年度FY2022
2H
下期

2023年度FY2023

1H
上期

2023年度FY2023
2H
下期見込
outlook

Sales volume (index), with 1H FY2022 set as 100.

• From FY2024, expansion in the North American
LiB market is expected to contribute to businessexpansion.
• Based on the above, demand for our PVDF
binder is expected to continue to expand
sustainably. Our growth scenario of mid- to longterm expansion of this business in line with the
EV market’s expansion is unchanged.

30

PVDF Business (2)LiB manufacturers’ expansion plans
In August 2023, Kureha announced a plan toincrease capacity by 8,000 ton/year at the Iwaki
Factory (to be completed March 2026).
Including debottlenecking of existing facilities,
the production capacity in FY2026 will beapproximately 20,000 ton/year, which will be
doubled from 11,000 tons in FY2022.

LiB factory constructionplans in North America

The background is that many existing andtarget customers are progressing with their LiB
factory construction plans, with operations
scheduled to begin in FY2024. This isparticularly noticeable in North America, wheremost of the products are ternary LiBs, and our
special polymers have a high share for the typeof LiBs.
In response to the US Inflation Reduction Act,
we are already on track to procure raw
materials to meet demand through FY2026. We
are also considering procurement for FY2027
and beyond, and are building a stable supply
chain by expanding procurement sources.

*Will be completed in and after FY2024, according toKureha research.
Expansion plans are underway in many regions outside ofNorth America, including Europe.

31

PVDF Business (3)PVDF production capacity
Iwaki
capacity
expansion

120
115
110

20,000 tons
from FY2026

105
Bottle
neck

100
95

FY2022

FY2023

FY2024FY2025

Production capacity (index), with 1H FY2022 set as 100.

PVDF inventory Increase Decrease Total

Inventory at FY2026 start is
expected to approximateyear-end FY2022 level

Production equipment• Kureha will meet market growth by debottlenecking
existing equipment and inventory until March 2026,
when the Iwaki Plant capacity expansion iscompleted.
R&D / Technology development• We will accelerate the study of molecular design
and additive combinations to develop highperformance grades for ternary LiBs, which is our
top priority, and develop competitive grades for
LFPLiB. We will also consider collaborating withexternal research institutions that have cutting-edge
technology. To raise productivity, Kureha will work
to develop both formulation and equipment
perspectives.
• Until now, technological developments related to
PVDF have been attained by multiple departments
such as R&D, manufacturing, engineering, andprocess development. However, to unify our
resources, a new department (PVDF Technology
Project) has now been established. Under thissystem, we will speed up technologicaldevelopment.
• We will accumulate technologies to ensure that the
PVDF expansion at the Iwaki Factory serves as a"model facility" as the number of locations increases
in the future.

32

PVDF Business (4)Regarding PFAS regulations in Europe

PFAS Chart

Five European countries—Denmark, Germany, theNetherlands, Sweden, and Norway—have submitted
draft regulations targeting PFAS (organofluorinecompounds including PVDF).

High

Expert meetings are proceeding with the goal of
adopting a draft text for submission to the European
Commission (EC). If the EC votes on the proposed
regulation, it could come into effect as early as 2025.
Regulations without a grace period could enter into
force in 2027.
The European Chemicals Agency (ECHA) has beensoliciting public comments on this draft regulation since
March, receiving over 5,600 comments from countries,
companies, organizations, and individuals by thedeadline September 25.
The proposed regulation would, in principle, collectively
regulate more than 10,000 types of PFAS, each ofwhich has different toxicity and risks. Kureha believes
this is an excessive measure that lacks scientific basis.
We believe fluoropolymer resins, including PVDF,
should be exempted from this proposed regulation, andare working accordingly with industrial and chemicalindustry organizations in Japan and the EU.

This diagram does not represent anexact proportional relationship.

3 substancegroupsSpecific PFAS 1
Substances underconsideration forregulation under thePOPs Convention
Long chain PFCAs (C9C21) etc.

More thanEnvironmental
toxicity

10,000
Unregulated other
PFAS

types

PTFE, PFA, PVDF etc.
Fluorine resin, fluorine rubber2, etc.

Low
Note 1: Specific PFAS
Substances that have been confirmed to be persistent, bioaccumulative, long-distance mobile,and toxic, and are regulated by the Stockholm Convention on Persistent Organic Pollutants(POPs Convention) ⇒ PFOS, PFOA, PFHxS, and related substances. The number of such
substances may increase depending on future regulations.
Note 2: Fluororesins and fluororubbers
These are chemically and biologically stable and meet the OECD standards for polymers of
low concern, meaning they are non-bioaccumulative and non-toxic.

33

PGA BusinessBusiness environment update• The number of completed shale oil and gas wells is about 80% of the pre-coronavirus level. The number of gas wells in areas
where we have a high market share is expected to recover with the growth of LNG and export terminals in the U.S.
• The ratio of "full bore" wells, in which our PGA resin processed products (frac plugs) are used throughout the wells, has recently
reach to a record of approximately 75%. Short-sized plugs are now on sale. The use of sensors that measure well temperature
has facilitated the collection and analysis of logs, increasing the reliability of using frac plugs and driving increased sales. New
products for low-temperature wells are undergoing field tests. Our scenario under the new mid- to long-term business plan isunchanged.
• Until the end of this fiscal year, we will not produce PGA resin, placing priority on maintaining inventory at an appropriate level.
Production is scheduled to resume in FY2024.
• Through the U.S. technology center, which is close to the market, we will develop low-temperature to ultra-low temperature grade
frac plugs and explore new applications.

Reached profitability
without accounting
treatment or otherirregular factors

PGA profit and loss

PGA plug sales volume (index)
1000%

Full-scale launch of
products for lowtemperature wells

500%

2022

2023

2024

Towards
stableprofitability forthis business2025

Use of temperature sensors
Introduction of short-sizedplugs

Actual base

0%
20/3

21/3

22/3

March 2020 is set as 100%.

23/3

24/3
forecast

26/3
plan

Illustration of actual
profit and loss value(Profit and loss excluding
accounting treatment, etc.)

Accounting
base

34

Shareholder Returns• Kureha’s basic policy is to maintain stable dividends while increasing internal reserves for future business development,with a target dividend payout ratio of 30% or more.
• Aiming for a total return ratio of 50% or more, we will acquire treasury stock of approximately 10 billion yen in fiscal 2023 andapproximately 20 billion yen over the three years to the end of fiscal 2025.
• The dividend payout ratio for the fiscal year ending March 2024 is expected to rise temporarily as the business environment of
the PVDF business goes through an adjustment phase.

• The acquisition of treasury stock carried out this fiscal year is positioned as a key measure to achieve the target equity ratio.
Full year
forecast

Annual dividend and dividend
300
payoutratio trends

270

75%

210

200

165

53.4%

100

260

100

110

120

110

110

170

2H forecast

170

50%
130

125

25.7%

22.4%

25.7%

27.0% 24.6%

2014/3

2015/3

2016/32017/3

46.4%

24.3%

24.5%

24.6%

2019/32020/32021/3

28.9% 31.2%

1H results
25%

130

0

0%
2013/3

2018/3

Treasury stock acquisition
Total return ratio¥3 billion ¥5 billion
47.5%
60.8%

2022/32023/32024/3
Forecast¥10 billion
142.1%

As of October 1, 2016, the number of common shares was consolidated from 10 shares to 1 share. Figures before that have been converted and presented.
Japanese GAAP was used until the fiscal year ending March 2016, and IFRS was adopted from the fiscal year ending March 2017.
We acquired treasury stock worth ¥3 billion in the fiscal year ending March 2019 and ¥5 billion in the fiscal year ending March 2020.

Annual dividend
年間配当(¥/share)（円/1株）

配当性向
Dividend payout ratio
(%)
（％）

35

Environmental Impact Reduction Targets
Zero waste emission ratio

CO2 emission reduction
30% or more

1.5％

(vs. FY2013 results)

・Achieve zero waste emission ratio 1.5% in FY2025

Based on the assumption of achieving carbon
neutrality by FY2050, we will promote the use of・Although the waste is expected to increase in line

CO2-free self-generated energy and CO2-freewith the increase in production of our main products,

electricity to achieve our energy-derived CO2

but we will maintain a zero emission ratio of 1.5% inemission reduction target for FY2030.

FY2030 by developing technologies to reduce andrecycle this waste.

Energy-derived CO2 emissions compared to FY2013

Carbonneutrality≧30%
reduction

FY2013

FY2019FY2020

FY2021…

FY2030…

FY2050FY2050Target36

Strengthening the Management BaseIntroduction of a stock compensation

Strengthening the sustainability organization• We will continue to share value with shareholders andstrengthen the link between the company's
performance and director remuneration, giving
incentives for directors other than outside directors tocontinuously improve the company's corporate value.
For clarity, we have introduced a stock compensation
system.

• On April 1, 2023, we established the Sustainability
Promotion Committee, which is responsible foroverseeing and promoting sustainability activities.

Appointment of a female outside director• The regular general shareholders meeting in June 2023
approved the appointment of one new female outside
director. By involving directors with diverse
backgrounds and perspectives, we aim to make thedecision-making process more comprehensive andbalanced.
Director composition

Internal

External

Female director
1 person selected• The committees for Compliance, CSR, Information
Management and Risk Management, and theirsubordinate committees, have been abolished andreorganized as organizations (subcommittees)
directly under the Sustainability Promotion
Committee. This structure enables us to unify
Kureha’s sustainability management and promote it
throughout the company.

Consolidating our business portfolio• To build an optimal business portfolio, we willcontinue to consider and implement measures toconcentrate resources into businesses that are truly
necessary for the Kureha Group.

37

Synergism between Company and Employees
Employee engagement• Conducted employee engagement surveys from FY2023 onwards. Analyzing the results will enable
us to understand issues and create a PDCA cycle for improvement.
• Improve engagement by disseminating the management vision, promoting engagement initiatives in
offices through autonomous activities, creating a safe and comfortable working environment, andpromoting health management.

Utilize and develop diverse human resources• Secure human resources necessary to accelerate management, business, and researchstrategies, and reinforce production technology capabilities, by strengthening recruitment of midcareer employees with diverse expertise.

• Further promote the active participation of female employees through training, reassignment andactive promotion, and improve key indicators such as the percentage of female managers.
• Systematically develop human resources that will contribute to the acceleration of management,
business, and research. (Next-generation management human resources, digitally skilled humanresources, technical human resources, global human resources, and others)）

38

V．Initiatives to Improve Cost of Capitaland Stock Price

39

Current Situation Regarding Stock Price and PBR
As profits have grown, the share price has risen above TOPIX.
On the other hand, the P/B ratio has been below 1x for a period of time, and measures will be taken toachieve a P/B ratio above 1x.
Kureha’s Challenge
2018¥/shareKureha’s Challenge
2020

Kureha’s Challenge
2022

New mid- tolong-term plan

Stock price trend
10,000
8,000
6,000
4,000
2,000
16/4

17/4

18/4

19/4

17/4

18/4

19/4

PBR Trend

Stock
株価
price

20/4
TOPIX

21/4

22/4

23/4

20/4

21/4

22/4

23/4

1.2x
1.0x
0.8x
0.6x
0.4x
16/4

40

Initiatives to achieve a PBR above 1x
We work to improve both ROE and PER.
Operating profit plan

(Unit: ¥ billion )35
billion or more

17.2

18.0

20.1

25.0

22.4

17.3
14.0

13.0

• In addition to the PVDF business, we are
steadily expanding existing businesses andimproving profitability of them, such as
household goods and the PGA business.

9.3

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

ROE

8.4%

7.1%

7.7%

7.4%

FY25

FY30

• As profit growth until 2025 is limited, we willachieve ROE exceeding the cost of capitalby using financial leverage to maximize
On abovecapital efficiency through growth
9%以上9％
investments and shareholder returns.

Equity ratio/ROE trend
9.0%

8.1%

• We set an equity ratio of around 60% (net
D/E ratio of 0.3).

5.8%
4.9%
Equity ratio

62.0%

64.9%

66.8%

71.6%

70.5%

72.6%
66%

Around60％
60%程度<Initiatives to Improve ROE>

FY30

• Foster expectations by clarifying the growthstory, sending out to the market and promote
understanding.

52.9%

FY16

FY17

FY18

FY19

FY20

FY21

• Expanding profits is a key to improving ROE.
We will complete construction of a new
PVDF facility at the Iwaki Factory by the endof FY2025, laying the foundation for
expanding profits from FY2026 onwards.

FY22

FY23

41

Cash Allocation (FY2023-2025)
Cash-In
Operatingcash flow(Approx. ¥80
billion)Bank loans, etc.
(Approx. ¥75
billion)Cash-Out

Capital investment plan (FY2023–FY2025)• Manufacturing capital investment (PVDF capacity
expansion, maintenance and renewal investment, etc.)

Capitalinvestment(Approx. ¥120
billion)• R&D, new business investment(new business development, M&A, etc.)

Approx. ¥5 billion• Environmental investment (carbon neutrality,
waste reduction, etc.)

Approx. ¥5 billion• Investment into digitalization (ERP system, etc.)

Approx. ¥5 billion

Shareholder returns(Approx. 35 billion
yen or more)

FY2022 Balance Sheet

Total ¥120 billion

Target Balance Sheet
Liquidity on hand

Liquidity on hand

Total assets¥296.4 billion

Approx. ¥105 billion•

Effective use of debt for capital
investment•

Appropriately control liquidity on hand by
regularly reviewing cross-shareholdings
and controlling excess cash and deposits

Capital•Equity ratioaround 60%

Maintain an appropriate capital structure
by utilizing financial leverage•

While prioritizing capital allocation to
growth investments, we will also
implement shareholder returns to achieve
an appropriate equity ratio.

External
procurement

Liabilities

Liabilities¥79.7 billion
Total assets
Capital¥216.8 billion

Net D/E ratio 0.342Disclaimer• This presentation material is intended to provide you with abetter understanding of our company and is not intended as asolicitation of any investment or other activity.
• This material has been prepared by our company based on
information available as of the date of the presentation. Actual
results may differ materially from those presented in thismaterial as a result of various factors.
• Please use this material at your own discretion andresponsibility.