Business Results for theFiscal Year Ended March 31, 2023
(April 1, 2022 – March 31, 2023)
May 19, 2023

1１．Business Results for the FY 2022
２．Projection for the FY2023

３．Future Outlook

2

External Environment• Inflation accelerated worldwide due to the recovery from the COVID-19 disaster and the invasion to Ukraine.
• Naphtha price soared 2.5 times in 2 years. Although resource prices have peaked out, it remains high.
• Electricity rates have doubled in two years and continue to rise.
(¥/kwh)Naphtha Prices(¥/KL)

100,000

2.5 times ¥86,100/KL
in 2 years¥80,000/KL

80,00060,00025.00

Electricity Unit price2 timesin 2 years

20.00¥21.6/kwh¥18.3/kwh

15.00

40,00010.00

20,0000

FY2020

FY2021

FY2022Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42020

2021

2022

5.00

FY2020

FY2021

FY2022Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42020

2021

2022

Source: EIC, Amerex Energy Com.

3Semiconductor / Display Markets• CY2021: Demand, including inventory piling up demand, expanded due to stay-at-home demand and logistics
turmoil due to the COVID-19 pandemic.
• CY2022: Declining demand due to slowdown in consumption and optimization of inventory levels. However,cutting-edge semiconductors remained firm.
• CY2023: Moderate recovery trend after bottoming out in April-June.
(billion $)Semiconductor Market Trend

160

FY2021(M m2)FY202280

Display Area Demand Trend
LCD

FY2021

FY2022

OLED

14060

120
100

4080
2060
Q2

Q32021Q4Q1Q2Q32022

Q4Q12023

Q2

Q32021

Q4Q1

Q2

Q32022Q4Q12023

Source: WSTS, DSCC

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Financial Results for the FY2022• Sales increased 1.01 billion yen YOY due to strong demand for advanced semiconductor materials amid aslowdown in demand for general products.
• Profit reached a highest record as higher fixed costs were absorbed by expanded sales of high-value-added
products and improved productivity.
• Compared to the earnings forecast, both ordinary income and net income exceeded although the sales fell shortof the forecast.

(Million yen)

FY2021 Results

FY2022
Projections

FY2022 Results

YoY

Comparison with Forecasts

Change%ChangeYoY

Net sales

33,14435,00034,156+1,012+3%(843)(2%)

Operating profit

4,624

5,150

4,968+344+7%(181)(4%)

Ordinary profit

4,794

5,000

5,122+327+7%+122+2%Profit

3,457

3,500

3,827+369+11%+327

+9%

EPS

435

440

482

Interim Dividends

30

40

40

¥112/$¥138/$¥135/$FX Rate (USD)

5

Quarterly Sales & Operating profit Trend• The average annual growth rate for the last three years is +12.1%, and demand continues to expand.
• Amid a decline in demand after peaking in Q1, average annual sales achieved +3% YOY.
• Both sales and profits decreased YOY in Q4.

Quarterly Sales & Operating profit Trend

Electronic materials are strong.

Average Sales ¥8.53 billion（CAGR+12.1%）

Inventory Adjustmentsin the Market

Continued high prices of raw materials, fuel and transportation cost

6

Variance Analysis: Operating profit• An increase in sales of high-value-added products offset soaring prices of raw materials and fuels as well as anincrease in fixed costs, resulting in ＋340 million yen.

+770+1,661
FX(Million yen)

+115

(90)

Operation
improvement

Inventory
revaluation(1,158)
Soaring prices ofraw materials, fuel,transportation costand electricity.

(954)

Increase in expenses fortechnology development
and production capacity
expansion.

4,624

4,968+344

Sales growth,effect of increased
production

FY2021
Operating profit

FY2022
Operating profit

7

Photosensitive Materials Segment
Net sales & Operating profit(billion yen)25

Net sales

14.21

12.61

105

1.56

1.05

20.85

20.57

Operating profit

2015(billion yen)

15.97

3.30

3.29
1.82

0FY2018

2019

5.06

2020

2021

5.16

5.76 5.51

4.58

1.00
0.75

0.86

0.99

4.97 4.930.90

0.67

22022
5.44

(YoY +¥0.28 billion, +1.4％)• Strong demand for logic semiconductor
applications is expanding.
• Demand for photosensitive materials for displays
remained weak due to inventory adjustments.
• Demand for general products declined.

1.5

Operating profit: ¥3.30 billion
0.82

0.58

1.0
0.5

00.0

Q1

Net sales: ¥20.85 billion(billion yen)(billion yen)

4

4

206

6Q2Q3

FY2021Q4Q1Q2Q3

FY2022

Q4(YoY +¥8 million, +0.3％)• Maintained the level of the previous fiscal year byabsorbing the increase in costs associated withtechnological development and production capacity
enhancement.
8

Chemicals Segment
Net sales & Operating profit(billion yen)(billion yen)

15
12Net sales
Operating profit

10.36

12.56
11.18

10.23

1.32

• Expanding demand for cutting-edge semiconductors.
• Progress is being made in reflecting rising raw material
0.8
costs in selling prices.
0.4 • Demand for general electronic materials and aroma
chemicals declined due to inflation.

300.0
FY201820192020(billion yen)

43

3.51

3.24
0.49

2.81

3.72

3.00
0.430.46

2021

0.20

2022
(billion yen)

3.35

3.26

0.8
2.96

0.47
0.38

2
10.33

0.20

0Q1Q2

Q3

FY2021Q4Q1Net sales: ¥13.30 billion

1.2

0.61

0.50

2.0

1.66 1.6 (YoY+¥0.73 billion, +5.8%)

1.11

96

13.30

Q2

Q3

FY2022

Q40.6• In the logistics business, the tank contract rate
remained high despite a decrease in cargo
movement due to lower automobile production andother factors.

0.4

Operating profit: ¥1.66 billion

0.2(YoY+¥0.33 billion, +25.3%)

0.0• The sales composition ratio of high value-added
products increased.
9

FY 2022 Income Statement• Net sales increased by 1.01 billion yen (+3%) thanks to increased sales of high value-added products despite the decline indemand for general products.
• Gross profit increased by 640 million yen, absorbing higher raw material, fuel costs and higher fixed costs, then the gross profit
margin improved by 1.1pt to 26.4%.
• Operating profit +344 million yen (+7%), ordinary profit +327 million yen (+7%), profit +369 million yen (+11%).
(Million yen)

FY2021

FY2022

Change%33,144

34,156+1,012+3%

24,75425,123+368

+1%

8,390

9,033

+643

+8%

3,766

4,065

+298

+8%

4,624

4,968

+344

+7%

Non-operating income

323

305

(18)

(6%)

Non-operating expenses

153151

(2)

(2%)

4,794

5,122+327+7%

(57)

(66)

(8)

ーProfit before income taxes

4,736

5,056+319+7%

Income taxes

1,279

1,228

(50)

(4%)

Profit3,457

3,827+369+11%

Net sales
Cost of sales
Gross profit
SG&A expenses
Operating profit

Ordinary profit
Extraordinary income & lossesGross profit margin
improved by 1.1pt to 26.4%.
foreign exchange gain
FY2021:¥215 million
FY2022: ¥219 million

Ordinary profit Margin:
15.0％

10FY2022 Balance sheet• Accounts receivable decreased by 1.48 billion yen due to the shortening term of payment as well as the decrease in sales in 4Q.
• Inventories increased by 3.67 billion yen due to the normalization of inventory levels and the rise in unit prices amid rising raw material costs.
• Tangible fixed assets increased by 2.26 billion yen due to capital investment to increase production capacity.
• Interest-bearing debt remained at 17.8 billion yen, the same level as the end of the previous fiscal year.
• Shareholders' equity increased by 3.54 billion yen thanks to the increase in net income. The equity ratio also hit a record high of 38.4% (+4.2pt from theend of the previous term).
Mar. 2022
ended

Mar. 2023
ended

Change19,766

21,685+1,918Cash and deposits

3,681

3,252(428)

Notes and accounts
receivable – trade

7,402

5,912(1,489)

Inventories

8,080
602
27,11911,758761
29,420+3,678+158+2,300

25,376

27,639+2,263

511

607

+96

1,231

1,172(58)46,886

51,105+4,219(Million yen)
Current assets

OtherFixed assets
Property, plant andequipment
Intangible assets
Investments and otherassets
Total assets

Mar. 2022
ended

Mar. 2023
ended

Change30,824

31,463

+639

5,010

4,943(66)

17,81917,893+74

Other

7,993

8,625+631

Net assets

16,061

19,641+3,58016,007

19,556+3,549

Valuation and translation
adjustments

5485+30

Liabilities and net assets

46,886

51,105+4,219(Million yen)
Liabilities
Notes and accounts payable –trade
Interest-bearing debt

Shareholders’ equity

11FY2022 Statement of Cash flows• Operating CF: ¥3.65 billion Income before income taxes remained steady.
Decreased YOY due to normalization of inventories and loss of preferential tax
treatment.
• Investing CF: (¥3.27 billion) Continue capital investment to increase production capacity.
(Million yen)

FY2021

FY2022

ChangeCash flows from operating activities

5,808

3,659

(2,149)Profit before income taxes

4,736

5,056+319

2,579

2,797+218(2,015)

1,489+3,504(1,096)(3,678)(2,582)

1,526

(62)

(1,589)77(1,942)(2,020)(3,415)(3,274)

+141

2,392

385

(2,007)(2,563)(406)+2,15656

4(52)Net increase (decrease) in cash and cash equivalents

(113)

(16)

+96

Cash and cash equivalents

3,269

3,252

(16)

Depreciation
Decrease (increase) in trade receivables（+: decrease）
Decrease (increase) in inventories（+: decrease）
Increase (decrease) in trade payables（+: increase）
Other
Cash flows from investing activities
FCF
Cash flows from financing activities
Effect of exchange rate change on cash and cash equivalents

12１．Business Results for the FY 2022
２．Projection for the FY2023

３．Future Outlook

13

Outlook for Business Environment in FY2023• The IMF expects economic growth for 2023 slowing down in almost all countries.
• Economic recession due to slowdown in consumption amid rising prices and continued policy interest rate hikes.
• Although there are risks such as financial instability, the economy is expected to recover gradually from 2024.

4%

Growth Projections (Real GDP)
3.4%

2.8%

3%
2%

3.0%

3.2%
Global Economy

2.7%
Advanced Economies
1.8%

1%

1.3%

1.4%

2023

2024

0%
2022

2025
Source: IMF

14Semiconductor / Display Markets in FY2023• Gartner predicts that the semiconductor market in 2023 will decrease by 11% YOY.
The production adjustment phase due to the optimization of inventory levels and the slowdown in consumption, but
recovery is expected from the second half.
• Demand for FPD on an area basis will decrease slightly in 2023 amid the impact of the economic slowdown.
Expecting for recovery from 2024.

Semiconductor Market Forecast

Display Area Demand Forecast(Growth)(billion $)（Mm2）(Growth)20%

30010%

250

4500%

200

5.0%

350

-10%

150

0.0%

18.5%

650

550
0.2%

-20%
2023

2024

15.0%

Growth

10.0%

-3.5%

250

OLED

7.7%

-11.2%
2022

LCD

-2.0%

100

-5.0%
2022

2023

2024
Source: Gartner, DSCC

15Forecast for the FY2023• In the first half, amid deepening concerns about an economic recession, demand will decline due to supplydemand adjustments.
In the second half, a gradual recovery is expected mainly on cutting-edge products.
• Investment will continue as there is no change in the trend of increasing demand over the medium term.

(Million yen)

FY2022 Results FY2023 Forecasts

Change%Net sales

34,15634,500+343+1%Operating profit

4,968

2,600(2,368)(48%)

Ordinary profit

5,122

2,500(2,622)(51%)

profit3,827

1,600(2,227)

(58%)

EPS

¥482

¥201

¥135/$¥130/$FX Rate (USD)

16

Variance Analysis: FY2023 Operating profit• Expenses increase YOY by ¥1.4 billion for technology development and production capacity
enhancement as well as increases in fuel, electricity, and production costs are expected.
(Million yen)

(1,100)

4,968
Sales growth(1,400)
Increases in Fuel,Electricity and Production
Costs

2,600
Technology Development
and Production Capacity
Enhancement

FY2022

FY202317

FY2023 Fixed cost increase forecast• Continue to increase production capacity to achieve Beyond 500(Net sales ¥50 billion, Operating profit ¥8 billion ~FY2026).

Expansion of photosensitive materials
manufacturing facilities
Amount of Investment: Approx. ¥12 billion
Completion scheduled for Jul. 2024.

Fixed cost increase forecast+¥0.9 billion+¥0.5 billion

New development and analysis buildingAmount of Investment: Approx. ¥3 billion
Completion scheduled for Apr. 2024.
*rendering images

Assumed fixed cost increase of 1.4 billion yen from theprevious year
(Increase in headcount, facility expansion, technologydevelopment)18

Shareholder Returns• Based on a stable dividend and expecting medium-term growth, an annual dividend of 40 yen stay thefiscal year ending March 31, 2024.

(¥)

Annual Dividends Per Share50
40402022

2023(Plan)

3030
20
1040

2020

2019

2020

100FY2018

2021

19

１．Business Results for the FY 2022
２．Projection for the FY2023

３．Future Outlook

20Market Environment from 2020 to 2030
• Semiconductors support the evolution of social infrastructure, and the market is expected to double from 2020 to 2030.
• With the progress of miniaturization and the spread of new technologies such as next-generation EUV/metal resist, there is ademand for even higher quality photosensitive materials/solvents.

Technology Roadmap

Current

Global Semiconductor Market

5nm
3nm
Shipment amount(trillion yen)

2nm
EUV MP
1.5nm
1nm

3D-Packaging
High-NA
Metal Resists
Beyond500

Beyond500
2020

Source: METI "Strategy for Semiconductors and the Digital Industry"

0.7nm
0.5nm

2022

Source: IRDS 2022

2024

2026

2028

2030

2032

2034

2036
21Photoresist Market Forecast for Semiconductors• Demand for advanced resists (EUV, ArF) is expected to expand 1.8 times from 2022 to 2028.
• Continued growth in all areas.

Photoresist Market Forecast(1,000 gal)

2,500

KrF

ArF

CAGR (21-28)

1.8 times

EUV

EUV 30%

2,000

1,500

ArF 7%

1,000

KrF 7%

500
02022
見込

2023

2024

2025
Forecast予測

2026

2027

2028
Source: Fuji Chimera Research Institute, Inc22

Display Market Forecast• Moderate growth is expected to continue after a slight decrease in demand on an area basis in 2023.
• Demand for photosensitive materials/high-purity solvents is expanding thanks to the increasing size ofTVs, the increase in smartphones equipped with organic EL, and the spread of high-definition products.

Demand forecast for display area
CAGR +4%(M m2)

350
300
250

LCD

OLED

252

247

2022

2023

266

282

298

312

200
150
100

500
2024

2025

2026

2027
Source: DSCC

23

Investment to achieve the "Beyond 500" medium-term management plan• The semiconductor market will return to high growth from 2024 after production adjustment in 2023.
• Decided to expand production facilities for photosensitive materials to quickly respond to the expected expansion ofdemand.
• To strengthen the R&D and analytical capacity amid increasingly technical difficulties, the construction of adevelopment analysis building is decided.

FY2023

FY2022<PhotosensitiveMaterials>

Chiba Plant

Expanded production capacity by 1.8 times
Infrastructureenhancements

Expansion of No. 4 photosensitive materials
plantCapacity up at existing
facilities<Chemicals>

FY2024

Qualification

Operation StartConstruction of Development andAnalysis Building

New distillation column addedat Awaji Plant* rendering images

Awaji Plant
Expansion of highpurification facilities

facility enhancement

24

CAPEX, Depreciation & R&D Plan
• In the FY2023, capital investment is planned to be approximately 11.7 billion yen, with investment mainly on the expansion ofphotosensitive material manufacturing facilities.
• Enhancing the infrastructure to meet the growing demand for electronic materials.
• In research and development, continuing to strengthen the manufacturing technology capabilities (analysis/analysis, processdevelopment, trial production line) to improve productivity and quality.

CAPEX, Depreciation & R&D Plan

Average CAPEX

Beyond 500

25

Individual Development, to the global Chemical（見通しに関する注意事項）
本資料の業績予想は、現時点において見積もられた見通しであり、これまでに入手可能な情報から得られた判断に基づいております。
従いまして、実際の業績は、様々な要因やリスクにより、この業績予想とは大きく異なる結果となる可能性があり、いかなる確約や保証を行うものではありません。

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