FY2020 3Q Results

February 5, 2021

1Contents

I. Highlights

3II. FY2020 3Q Results• FY2020 3Q overview• Segment results• Financial position

5-7
8-1213

III.FY2020 Full-Year Outlook• FY2020 forecast

15-19

IV.Supplementary• PGA business updates• PGA business updates

2122

2I.

Highlights

3Highlights
 FY2020 3Q results (year-on-year analysis)• Delivered core operating profit of ¥14.6bn (+12.1%, ¥1.6bn) driven by PVDF (LiB binder applications),
agrochemicals, home products, fishing lines and environmental businesses; lower fuel and raw materials
cost; and fewer SG&A expenses• Operating profit decreased to ¥14.6bn (-43.5%, ¥11.2bn) for the absence of other income such as a gainfrom land sales✓ Limited impact of the coronavirus pandemic on sales and production operations✓ Advanced Materials: continued demand for PVDF in automotive LiB binder applications in EU andChina; PGA frac plug volumes improved with new flexible prices while shale fracking activities gradually
returned with crude oil prices going over $50/bbl✓ Specialty Plastics: continued robust sales of home products and fishing lines; slower demand for
multilayer shrink film in EU; negative effects of business divestment related to blow bottles

 FY2020 full-year outlook• Upgraded FY2020 guidance based on higher sales volumes expected in Advanced Materials andenvironmental businesses and less-than-expected SG&A expenses
Current guidancePrevious guidance

ChangeRevenue¥140.0bn¥138.0bn+1.4%

Operating profit¥16.5bn¥14.5bn+13.8%

Profit attributable to owners of Kureha¥13.3bn¥11.5bn+15.7%

Basic profit per share¥681.42¥589.194II. FY2020 3Q Results(Period April 1, 2020 – December 31, 2020)

5

FY2020 3Q Overview(in billions of yen except per-share values)

RevenueCore operating profit

FY20193Q

FY20203Q

ChangeYOY

105.4

105.7

0.2

13.0

14.6

(0.2%)

1.6(12.1%)

Adjustments
Other income
Other expenses

-0.0

0.0

0.1

13.1
0.3

0.5
0.6

-12.6

Operating profit

25.8

14.6

Financial income
Financial expenses

0.5

0.5

0.4

0.2

Profit before income tax

25.9

14.9

Profit for the period
attributable to ownersof the Company20.711.8

Basic profit per share

1,041.10

603.640.3-11.2(-43.5%)

-0.0
-0.2
-11.0
(-42.5%)-8.9(-43.1%)

Vs. FY2019 3Q• Revenue improved primarily due to higher
sales volumes in Other Operations, partially
offset by Specialty Plastics• Core operating profit grew in all segments
except Advanced Materials• Operating profit decreased due largely to fewer
non-operating income such as a gain from landsales
• Profit attributable to the Company decreased
as a result of lower operating profit and lower
profit before taxes

6FY2020 3Q Overview(in billions of yen)Segment results
FY19 3Q

Revenue31.4 31.2

34.0 32.7

FY20 3Q

FY19 3Q

Operating profit

FY20 3Q

6.55.717.3 17.6

13.2 14.9
9.5 9.3

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
Advanced
Operations
Materials Chemicals Plastics

3.6

3.3

1.9

機能製品
Advanced
Materials

1.5

2.01.9

化学製品
Specialty
Chemicals

0.6 0.7
Other
樹脂製品 Construction
建設関連 その他関連
Specialty
Operations
Plastics

Factors attributing to operating profit (vs. FY2019 3Q)
AM: Lower profit led by PPS, PGA and carbon products, partially offset by improved PVDF performance
SC: Higher profit driven by agrochemicals and pharmaceuticals despite a decline in industrial chemicals
SP: Higher profit driven by home products and fishing lines despite a decline in packaging materials
CO: Profit even with prior year due to project cancellations/postponements in private sector offsetting higher
civil engineering volumes
OO: Higher profit driven by volume growth related to low-level PCB waste treatment and 2019 typhoon disaster
wastes in Fukushima in the environmental engineering business7

FY2020 3Q Overview(in billions of yen)

FY2019 3QAMSCSPRevenue

31.4
3.3

17.3
1.5

34.0
5.7

Segment operating profit

CO9.5
0.6

OO

Total

13.2
2.0

105.4
13.0
-0.0
13.1
0.3
25.8
0.5
0.4
25.9
20.7

Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costs

Profit before income tax
Profit for the period

FY2020 3QAMSCSPRevenue

31.2
1.9

17.6
1.9

32.7
6.5

Segment operating profit
Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before income tax
Profit for the period

CO9.3
0.7

OO

Total

14.9
3.6

105.7
14.6
0.0
0.5
0.6
14.6
0.5
0.2
14.9
11.8

(Notes)(FY2019 3Q)- Other income includes gains fromsales of non-current assets (¥10.2bn),bargain business purchases (¥1.5bn),business divestments (¥1.2bn), etc.

8Segment Results: Advanced Materials
Vs. FY2019 3Q(billions of yen)

FY20193Q

FY20203Q

Change%Advanced Materials
Advanced plastics

20.4

20.1-2%

Carbon products

4.4

3.8-14%

Other6.6

7.3

+11%

Segment revenue

31.4

31.2-1%Segment operating profit

3.3

1.9-41%

Revenue

Operating Profit

Advanced plastics
PPS: Profit declined on lower sales volumes
for automobile applications and lower
equity income in affiliates
PVDF: Higher profit driven by volume growthfor LiB binder applications, partially
offset by declines in other applications
PGA: Profit down due to declined sales offrac plugs and stock shapes, althoughshale drilling activities gradually
returned in 3Q
Carbon products
Lower profit led by slower carbon fiber sales
for automobile and furnace insulation
applications
OtherProfit improved on higher adhesive volumes

9Segment Results: Specialty Chemicals
Vs. FY2019 3Q(billions of yen)

FY20193Q

FY20203Q

Change%Specialty Chemicals
Agrochemicals

3.6

5.6+53%

Pharmaceuticals

3.6

3.1-15%

Industrial chemicals

5.2

4.3

-17%

Other

4.9

4.6-5%

Segment revenue

17.3

17.6+1%

Segment operating profit

1.5

1.9+29%

Revenue

Operating Profit

Agrochemicals
Higher profit driven by fungicides volume
growthPharmaceuticals
Profit improved on lower expenses, despitesales negatively affected by mandatory drug
price revisions
Industrial chemicals
Profit down due to slower demand fororganic and inorganic chemicals amid
COVID-related slump

10Segment Results: Specialty Plastics
Vs. FY2019 3Q(billions of yen)

FY20193Q

FY20203Q

Change%Specialty Plastics
Home products

16.9

17.5+3%Fiber products

2.2

2.9+28%

Packaging materials

10.9

8.7-20%

Other

3.9

3.5-10%

Segment revenue

34.0

32.7-4%

Segment operating profit

5.7

6.5+14%

Revenue

Operating Profit

Home products / Fiber products
Profit growth driven by higher homeproducts and ‘Seaguar’ fishing lines volumesPackaging materials
Sales and profit declined due to slower
demand for heat-shrink multilayer film formeat packaging in EU under the pandemic,
coupled with negative effects of the blowbottle business divested in prior year

11Segment Results: Construction
Vs. FY2019 3Q(billions of yen)

FY20193Q

FY20203Q

Change%Construction
Construction

15.3

14.5-5%

Elimination(Intercompany sale)-5.8-5.2--Segment revenue

9.5

9.3-2%

Segment operating profit

0.6

0.7

+14%

Revenue

Operating Profit

Construction
Revenue declined and profit remained on
par with prior year as higher civilengineering sales volumes offset thecancellation and postponement of privatesector construction

12Segment Results: Other Operations
Vs. FY2019 3Q(billions of yen)

FY20193Q

FY20203Q

Change%Other Operations
Environmentalengineering

9.0

10.9+21%

Logistics

6.1

5.8-5%

Hospital
operations

3.0

3.0-2%

Others1.6

1.8+10%-6.6-6.5--

Segment revenue

13.2

14.9+13%

Segment operating profit

2.0

3.6+82%Elimination(Intercompany sale)

Revenue

Operating Profit

Environmental engineering
Profit increased on higher volumes of lowlevel PCB wastes and 2019 typhoonrelated disaster wastes in Fukushima
Logistics
Revenue and profit remained at prioryear’s levels
Hospital operations
Revenue and profit decreased

13

Financial Position
Assets(billions of yen)

Liabilities and Equity
Mar. 312020

Dec. 31
Change2020

Mar. 312020

Dec. 31
Change2020

Cash and cash equivalents

7.3

11.8

4.5

Trade and other payables

19.4

19.0

-0.5

Trade and other receivables

28.3

29.9

1.6

Interest-bearing debt

37.3

31.7

-5.6

Inventories

38.2

36.8

-1.5

Provisions

7.8

6.1

-1.7

Other current assets

5.2

3.6-1.6

Other liabilities

15.7

14.9

-0.9

Total current assets

79.0

82.1

3.1

Total liabilities

80.3

71.6

-8.6

Property, plant and equipment

119.8

120.3

0.5

Shareholders’ equity

18.2

18.2

-

Intangible assets

0.8

1.9

1.1

Capital surplus

15.0

15.0

-

Investments and other assets

47.3

46.9

-0.3

Less: Treasury stock

-8.7

-8.7

-0.0

Retained earnings

135.9

151.8

15.9

Other components of equity

4.6

1.6-3.0

Non-controlling interests

1.6

1.7

0.0

Total non-current assets

167.9

169.2

1.3

Total equity

166.6

179.6

13.0

Total assets

246.9

251.2

4.3

Total liabilities and equity

246.9

251.2

4.3

14III. FY2020 Full-Year Outlook(Period April 1, 2020 – March 31, 2021)

15

FY2020 Forecast*FY2020 guidance was updated on February 5, 2021
(in billions of yen except par-share values)

FY2019Results

FY2020
Guidance

142.4

140.0

16.0

16.7

Adjustments
Other income
Other expenses

0.0
13.4
11.4

0.0

-0.0

0.8
1.0-12.6

Operating profit

18.0

16.5

Financial incomeFinancial expenses

0.5
0.6

0.7
0.2

Profit before income tax

17.9

17.0

RevenueCore operating profit

Profit attributable toowners of theCompany
Basic profit per share

13.7

13.3

¥692.61¥681.42

ChangeYOY-2.4(-1.7%)+0.7(+4.3%)-10.4-1.5(-8.5%)

+0.2
-0.4
-0.9
(-5.3%)-0.4(-3.1%)

Vs. FY2019• Revenue expected to decrease due to:- Slower demand for PGA in the shale market- Effects of the bottle business divestment- Slower demand for industrial chemicals
partly offset by- Higher PVDF volume for LiB binder applications- Sales expansion in the environmental business• Core operating profit to increase on volume growth ofvalue-added products such as PVDF andenvironmental services, partially offset by declines inPGA, packaging materials and industrial chemicals• Operating profit to decline primarily due to theabsence of other income such as a gain from landsales• Profit before taxes to decrease on lower operatingprofit• Profit attributable to the Company to decrease onlower profit before taxes

16

FY2020 Forecast(in billions of yen)Segment performance forecastRevenue
41.8 43.5

43.5 41.0

FY2019FY2020e

14.5 13.5

18.3 19.0

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

FY2020e: 140.0bn

FY2019FY2020e6.3 6.3
3.7

24.3 23.0

FY2019: ¥142.4bn

Core
operatingprofitCore operating
profit

4.2
3.3

2.7

2.1 2.2

1.1
Advanced
機能製品
Advanced
Materials
Materials

Specialty
化学製品
Specialty
Chemicals
Chemicals

0.7

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

FY2019: ¥16.0bn

FY2020e: 16.7bn

Factors attributing to operating profit (vs. FY2019)
AM: Operating loss for PGA, partially offset by higher PVDF volume
SC: Improved demand for agrochemicals after prior year’s inventory adjustments
SP: Higher fishing line sales volume offset by volume declines in packaging materials
CO: Fewer high-margin projects, intensified market competition
OO: Higher treatment volumes related to low-level PCB wastes and Fukushima’s typhoon disaster wastes

17

FY2020 Forecast(in billions of yen)

FY2019AMSCSPCOOO

TotalRevenue

41.8
3.7

24.3
2.1

43.5
6.3

14.5
1.1

18.3
2.7

142.4
16.0
0.0
13.4
11.4
18.0
0.5
0.6
17.9
13.7

Segment operating profit
Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costs

Profit before income tax
Profit for the period

FY2020e(updated on Feb. 5)

AMSCSP

COOO

TotalRevenue

43.5
3.3

23.0
2.2

41.0
6.3

13.5
0.7

19.0
4.2

140.0
16.7
0.0
0.8
1.0
16.5
0.7
0.2
17.0
13.3

Segment operating profit
Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costsProfit before income tax
Profit for the period(Notes)(FY2019)- Other income for FY2019 includes
gains from sales of non-current assets(¥10.2bn), bargain business purchases(¥1.5bn), business divestments(¥1.2bn), etc.
- Other expenses for FY2019 include
business restructuring costs (¥10.6bn),
etc.

18

FY2020 Forecast(in billions of yen)

FY2020 Guidance: Previous vs. Current
Revenue
43.5

PreviousCore operating profit
6.0 6.3

Current

42.0

PreviousCurrent

4.2
18.5

Advanced
機能製品
Materials

19.0

OtherSpecialty 樹脂製品
Specialty Construction
化学製品建設関連 その他関連
Operations
Chemicals Plastics

Previous: ¥138bn

Current: ¥140bn

3.5

3.3
2.6

Advanced
機能製品
Materials

Specialty
化学製品
Chemicals

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

Previous: ¥15.0bn

Current: 16.7bn

Factors attributing to operating profit (vs. previous guidance)
AM: Higher PVDF volumes for automotive LiB binder applications; no change for PGA
SC: (No change)
SP: Improved product mix for home products and lower expenses
CO: (No change)
OO: Higher treatment volumes of low-level PCB wastes and Fukushima typhoon disaster wastes

19

FY2020 Forecast
FY2020 guidance(previous)
Revenue
Segment operating profit(in billions of yen)
AMSCSPCOOO

Total

42.0
2.6

23.0
2.2

41.0
6.0

13.5
0.7

18.5
3.5

138.0
15.0
0.0
0.5
1.0
14.5
0.5
0.5
14.5
11.5

AMSCSPCOOO

Total

43.5
3.3

23.0
2.2

41.0
6.3

13.5
0.7

19.0
4.2

140.0
16.7
0.0
0.8
1.0
16.5
0.7
0.2
17.0
13.3

Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costs

Profit before income tax
Profit for the period

FY2020 guidance(current)
Revenue
Segment operating profit
Intersegment adjustment
Other income
Other expenses
Operating profit
Finance income
Finance costs
Profit before income tax
Profit for the period

20

IV. Supplementary

21

PGA Business Updates
Quarterly business revenue
1.5

PGA frac plugs sales(by Kureha Energy Solutions)(¥ billion)(Number of frac plugs)
10,000

1.0
8,000
6,000

0.5

4,000

0

2,000
PGA frac plugs

FY2017

PGA stock shapes

FY2018FY2019- Recent monthly sales -• Shale oil and gas production decreased sharply
during 2020, but drilling and fracking operations
are gradually returning in key markets• Kureha’s sales expansion strategy:- Increase sales volumes of PGA frac plugs byoffering flexible prices in mid- and hightemperature well areas- Introduce and expand sales of non-PGA
dissolvable frac plugs in extremely low
temperature areas (currently under field trials)

1,500

FY2020e(Number of frac plugs)

1,000500-

Apr May2020

JunJulAug

SeptOctNovDec22

PVDF Business Updates
Business revenue FY2016 – FY2020e20020(¥ billion)• Kureha maintains a roughly 40% share inthe automotive LiB cathode binder market;
supplies to major South Korean andChinese lithium-ion battery (LiB) makers

15150• After COVID-related disruption for LiBproduction in early 2020, the market is
rapidly recovering on the back of tighter
environmental regulations and economic
stimulus policies

10100
550

• Kureha’s China plant started production
and shipment of specialty binder grade ofPVDF in May 202000
FY2016FY2017FY2018

LiB binder application

FY2019Other applications

FY2020e• Studies for a new PVDF plant under review(delayed due to the pandemic):- To be located in China- Outlines of the new plant to beannounced by Spring 2021
- Will start commercial production inFY2024

23Disclaimer•

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.