RIKEN TECHNOS CORPORATION
Financial and Management Results
Briefing for Second Quarter of Fiscal YearEnding March 2024
November 15, 2023

1. Overview of
Financial Results

Contents

2. Segment Overview
3. Medium- and LongTerm Initiatives

1. Overview of
Financial Results

1. Overview of
Financial Results
2. Segment Overview
3. Medium- and LongTerm Initiatives

Summary of Consolidated Financial Results for｜ 1. Overview of financial results
the First Half of the Year Ending March 2024
(Unit: million yen)
Actual results forthe first half of theyear ended March
2023

Actual results forthe first half of theyear ending March
2024

Year on Year
YoY
(YoY)
percentagechangechangeForecasts forthe first half of theyear ending March
2024

59,527

61,397

1,870

3.1%

61,000Gross profit

9,870

10,076

206

2.1%

-

Operating profit

3,498

3,621

123

3.5%

2,900

Ordinary profit

4,040

4,202

162

4.0%

3,000

2,377

2,507

130

5.4%

1,700

37.64

39.62

1.98

5.3%

26.87

5.9

5.9

0.0

-

4.8

Net sales

Profit attributable toowners of parent
Basic earnings per
share
ROS(%)

Naphtha price in the first half of the year ending March 2024: 65,550 yen/KL; average exchange rate: 135.99 yen/USD

Revenue and profit increased due to measures to pass on raw material price hikes to
product prices and the effects of yen depreciation.
Net sales and all profit measures of the first half of fiscal year set all-time highs.

4

Net Sales by Segment
Net sales for the first half of theyear ending March 2024
(Unit：100million yen)

100

500

99
(24.4%)

116

135(22.8%)

101

120(20.2%)(19.8%)

162
130

104
(25.8%)+2(19.9%)

100

80

169

Electronics
Energy, telecommunications, ITequipment marlets, etc.

60

40

Daily Life & Healthcare
Medical, materials for daily life, foodpackaging markets,etc.

(25.7%)

155(30.6%)

176(29.7%)

+9

185

20

(30.2%)00
1H FY2020

Building & Construction
Housing, buildings, construction
materials, etc

122(27.7%)(27.2%)(28.8%)

100(22.2%)

+7

120

136

+1

121
(23.8%)

83(20.5%)

200

613

595
509

300

117

115

405

1.8 billion yen increase from the same term of previous year
（3.1% increase）

Change in sales volume with volume for the first half of fiscal year ended March 2021 set to 100

600

400

billion yen

123

800
700

61.3

｜ 1. Overview of financial results

1H FY2021

1H FY2022

Transportation
Automobile, railroad, ship market,
etc.
* Percentages in parentheses on the bar graphindicate each segment’s share of overall results

1H FY2023

5

Net Sales by Region
Net sales for the first half of theyear ending March 2024

61.3

｜ 1. Overview of financial resultsbillion yen

1.8 billion yen increase from the same term of previous year
（3.1% increase）(Unit：100 million yen)
613

595

600
509
500

106

▲9

97
(15.9%)(17.9%)

Other

74
400
300

405

(14.6%)

49

197(12.1%)(33.2%)

117

167

+1

198
(32.3%)(32.8%)

200
100

237

287

+29

316
(51.5%)(52.0%)(48.4%)

1H FY2020

1H FY2021

1H FY2022

1H FY2023

41.4%

48.0%

51.6%

48.5%

(58.6%)* Percentages in parentheses on
the bar graph indicate eachsegment’s share of overall results

0
Overseas
sales ratio

Asia excl. JapanJapan(29.0%)

265

North America

Overseas sales ratio was 48.5% due to increase in domestic sales
6Analysis of Factors Underlying YoY Change
in Operating Profit｜ 1. Overview of financial results（Unit: million yen）

Yen
depreciation
effects

Increase in
selling prices

SG&A
reductioneffects

Increase insales volume

5,000
248
4,000

75

Increase inpersonnel
expenses48

Increasein R&D
costs

94

140

Decrease in sales
in China and U.S.
markets

Increase in electricity
cost and othermanufacturing costs

400

854

467

3,000
2,000

Profit increase of 123 million yen

1,000
0

3,621

3,498

1H FY2022

1H FY2023
7

Analysis of Factors Underlying Change
in Operating Profit for the First Half of theYear Ending March 2024
(Initial Forecast vs. Actual Result)
Manufacturing
cost reductions
effects

SG&A
reductions
effects

Increase in
selling prices

4,000
190

3,500

77

｜ 1. Overview of financial results（Unit: million yen）

Yen
depreciation
effects77

Decrease in sales in China
and U.S. markets

178

556

3,000
2,500
2,000
1,500

3,621
2,900

1,000

Profit increase of 721 million yen

500
0 1H FY2023（Initial Forecast)

1H FY2023（Actual Result）
8

Consolidated Balance Sheet｜ 1. Overview of financial results（Unit: million yen）

March 31,2023

September
30, 2023

March 31,2023

September
30, 2023

Increase/
Decrease

71,66773,767

39,83740,816979

Cash and deposits

23,481

22,497984

33,87634,437561

Trade receivables

28,49530,928

2,433

5,961

6,378

417

Inventories

18,734

19,395661 Net assets

72,16576,419

4,254

956

946

10

Share capital

8,514

8,514

-

40,334

43,4693,135

Capital surplus

6,597

6,597

-

Property, plant, andequipment

27,077

28,833

1,756

Retained earnings

41,46342,931

1,468

Intangible assets

2,286

2,314

28

6,621

8,911

2,290

Investments andother assets

10,97012,321

1,351

Non-controllinginterests

8,969

9,465

496

Total assets

112,002117,236

5,234

Total liabilities andnet assets

112,002117,236

5,234

Current assets

Other
Non-current assets

Increase/
Decrease

2,100 Liabilities
Current liabilities
Non-currents liabilities

Other

Dividends increased using cash and deposits
Increase in trade receivables, inventories, and trade payables due to higher raw material
pricesInterest-bearing debt: 10,883 million yen

9Consolidated Statement of
Cash Flows｜ 1. Overview of financial results（Unit: million yen）

First half of the year
ended March 2023

First half of the year
ending March 2024

a.Cash flows from operating activities

4,491

3,099

1,392

b.Cash flows from investing activities

1,685

2,435

750

Purchase of property, plant, andequipment

1,663

2,372

709

Purchase of intangible assets

83

105

22

Other

60

42

18

2,805

663

2,142

d.Cash flows from financing activities

712

2,114

1,402

e.Other

780

465

315

2,873

984

3,857

23,551

22,4701,081

c.Free cash flow (a + b)

Net increase/decrease in cash and cash
equivalents (c + d + e)

Cash and cash equivalents at end of period

Increase/Decrease

Increase in capital investment and dividends
10Consolidated Earnings Forecast for the｜ 1. Overview of financial results
Year Ending March 2024

（Unit: million yen）

Initial earnings Revised earnings Compared to previous Compared to previous
Actual results forforecasts for year forecast for year
forecast
year
year ended March
endingending2023
March 2024
March 2024
Difference Growth rate Difference Growth rate

123,497

128,000

128,000

-

0.0%

4,503

3.6%

Operating profit

7,506

7,600

8,400

800

10.5%

894

11.9%

Ordinary profit

7,964

7,800

9,000

1,200

15.4%

1,036

13.0%

Profit attributable toowners of parent

4,557

4,500

5,200

700

15.6%

643

14.1%

Basic earnings per
share（yen）

72.11

71.14

82.14

11.00

15.5%

10.03

13.9%

ROS（%）

6.1

5.9

6.6

0.7

-

0.5

-

ROE（%）

7.5

7.0

7.9

0.9

-

0.4

-

Net sales

Projected domestic naphtha price: 72,700 yen/KL; projected exchange rate: 137.68 yen/USD

Each level of incomes exceed initial forecasts and reach record highs11Analysis of Factors Underlying Change in Operating｜ 1. Overview of financial results
Profit for Year Ending March 2023 (Forecast)（Unit: million yen）
Increase in
selling prices

Increase insales volume

Yendepreciation
effects

10,000
323

9,000
8,000

203

Increase inpersonnel
expenses42

Increase in
Logistics cost

66

Increase in electricity
cost and othermanufacturing costs

Increase in
R&D costs

280

1,400

644

7,000
6,000
5,000
4,000
3,000

8,400

Increase of 894 million yen (＋11.9％)

2,000
1,000
0

Year ended
March 2023
(Actual Result)Year ending
March 2024
(Revised Forecast)121. Overview of
Financial Results

2. Segment Overview

2. Segment Overview
3. Medium- and LongTerm Initiatives

Transportation
Wire Harnesses

Molded Parts for
Automobiles

Transportation
Actual results for the
first half of the year
ending March 2024

｜ 2. Segment overview

868 million yen revenue increase (+4.9%)374 million yen profit decrease (△21.7%)

Forecast for the fiscal
year ending March
2024

1,910 million yen revenue increase (+5.0%)
458 million yen profit decrease (△11.8%)(Unit: million yen)

3,000

25,00020,00017,661

18,52915,58750,00040,0002,000

15,000(Unit: million yen)

38,090

1,352

1,203

1,000

30,0005,000
020,00042,50032,457

4,000
3,858

1,726
10,00040,000

6,000

3,400

3,600

2,737

2,000

10,0001H FY2021

Domestic sales

1H FY2022

Overseas sales

1H FY2023

0

Segment profit

Domestic sales increased due to recovery in the automobile market
and increased sales of elastomer compounds.
Overseas sales decreased due to the downturn in production ofJapanese auto manufacturers in China market.
Segment profits decreased due to overseas sales declined due to thedownturn in Japanese automotive production in China market, andincreased costs in North America.

0

FY2021

Domestic Sales

FY2022

FY2023(forecast)

Overseas Sales

FY2024(plan)

0

Segment profit

Domestic sales increase due to recovery in the automotive market
and sales of elastomer compounds increase .
Overseas sales increase for the full year due to recovery of
production of Japanese auto manufacturers in the second half of theyear, despite the impact of downturn in production of Japanese auto
manufacturers in China market in the first half year.
Segment profits decrease for the full year due to the result of first half.

15

Transportation｜ 2. Segment overview

Focus Area ① Wire Harnesses

Focus Area ② Molded Parts for Automobiles

Regional compound use by Japanese wire harness manufacturers and our sales ofcompounds for wire harnesses

Japanese automobile production and sales of compounds for automotive molded parts(1,000 t)(100 million yen)

100

300
90

87
250

78

Market Growth: ＋7%
Net Sales: △1%

3,000
180

※FY2022 vs FY2023

81(10K vehicles)(100 million yen)

2,488
2,325

2,247

80

200

18
39

100

50

24

26

162
150

191

2,500

First
Half
95

First
Half
79

101

123

104

First
Half
87

China

13
13

40

First
Half
47

3

2

4

FY2021

FY2022

FY2023（forecast）

FY2024(plan)

0

•

1,000

45

* Research by RIKENTECHNOS based on
figures published by
Japanese automakers

Sales decreased due to lower selling prices accompanying falling raw material
prices.
Wire harness compounds for non-Japanese companies has started in China and
ASEAN.

500

62

0

0
FY2021

FY2022

FY2023(forecast)

FY2024(plan)

Japanese
automobile
production** Based on figures
published by Japanese
automakers

Actual results for the first half of the year ending March 2024

Actual results for the first half of the year ending March 2024
•

First
Half
53

Compoundusage*

3

1,500

65

90

ASEAN

20

59
0

Compound sales

99

Japan
128

2,000

112

60

51

40

127

135

North America※FY2022 vs FY2023

141

206
192

2,574

Market Growth:+7%
Net Sales: +13%•••

Measures for the second half of the year ending March 2024

Started selling to major Japanese sealing parts manufacturers in Japan, ASEAN, China,
India, etc.
Expanded sales of materials for functional parts implemented by customers in Japan tooverseas.
Progressed on evaluating and securing new deals for functional parts (parts andmaterials for exterior INJ and EVs).

Measures for the second half of the year ending March 2024•

Capture market growth in response to recovery of production of Japanese auto
manufactures.

••

Boost sales of wire harness compounds for non-Japanese companies in China
and ASEAN.

Boost sales of materials for molding and sealing (expanding adoption by major
Japanese customers and pursuing overseas development).

•

Boost sales of functional materials and pursue overseas development; promotematerial conversion and rubber substitution.

16

Daily Life&

Healthcare
Medical (PVC)

Rubber Substitutes

Daily Life & Healthcare
Actual results for the
first half of the year
ending March 2024

765 million yen revenue increase (+4.7%)708 million yen profit increase (+142.6%)｜ 2. Segment overview
Forecast for the fiscal
year ending March
2024

1,308 million yen revenue increase (+3.9%)
1,123 million yen profit increase (+76.0%)(Unit: million yen)

(Unit: million yen)

20,00016,21915,00016,9843,000

30,68833,492

1,000

497

Domestic sales

6,000

4,000

1,205

1,008

1H FY2021

35,4002,000
20,0005,000

34,80030,00013,097

10,000040,0001H FY2022

Overseas sales

1H FY2023

0

Segment profit

Domestic sales grew due to expanded sales of small roll wraps (foodwrapping materials) driven by restaurant market recovery.
Overseas sales decreased due to lower sales of PVC compounds inconsumer goods markets in Thailand and North America.
Segment profits increased due to the optimization of sales prices andincrease in sales of small roll wraps.

2,600
1,856

10,0000

FY2021

Domestic sales

2,500
2,000

1,477

FY2022

FY2023(forecast)

Overseas sales

FY2024(plan)

0

Segment profit

Domestic sales increase due to expanded sales of food wrapping
materials despite the impact of sluggish sales of compounds inconsumer goods markets.
Overseas sales decrease due to sluggish sales of compounds inconsumer goods markets in Thailand.
Segment profits increase due to the optimization of sales prices andincrease in sales of food wrapping materials driven by restaurant market
recovery.

18

Daily Life & Healthcare｜ 2. Segment overview

Focus Area ① Medical (PVC)

Focus Area ② Rubber Substitutes

Global dialysis circuit sales volumes and our sales of medical PVC compounds

Domestic medical rubber production and our sales of rubber substitute compounds(100 million yen)

433

120
397
372
100

346
80

(100 million yen)

(Million sets)

7.0

40
400

Market Growth: +7%
Net Sales: +2%

350※FY2022 vs FY2023

6.2

6.1
35

300

6.2
6.0

5.5

5.0

Overseas sales

Market Growth: +2%
Net Sales: △12%
※FY2022 vs FY2023

29

30

81

80

80

(10K tons/year)

Net sales

25
60

250

56

40
54

First
Half
26

77

First
Half
39

First
Half
38

200
78

150
100

20

0

Domestic sales

41

38
2

3

1

3

FY2021

FY2022

FY2023(forecast)

FY2024(plan)

Dialysis circuit
volume** Source: Medical Life
Science, Fuji Chimera
Research Institute

4.0
20
15

5

0

0

Actual results for the first half of the year ending March 2024
• Sales grew due to stronger sales of medical PVC compounds in ASEAN.

17

3.0

14
First
Half
9

First
Half
8

10

50

17

9

2.0

Medical and industrial
rubber comsumption** Source: The Japan Rubber
Manufacturers Association

1.0
8
0.0
FY2021

FY2022

FY2023(forecast)

FY2024(plan)

Actual results for the first half of the year ending March 2024
• Domestic sales decrease due to lower sales of elastomer compounds for
medical, consumer goods and industrial materials.

Measures for the second half of the year ending March 2024

Measures for the second half of the year ending March 2024

• Boosting sales for Japanese customers make net sales maintained despite
decline in selling prices due to lower raw material prices.
• Deploy marketing activities to develop new non-Japanese customers andboost sales.

• Boost domestic sales of elastomer compounds for medical, consumer
goods, and industrial material.
• Overseas, continuing marketing activities to cultivate new sales of elastomer
in consumer goods markets.

19Electronics
Electric Power andIndustrial Wires

Telecommunications

Optical Films

Electronics
Actual results for the
first half of the year
ending March 2024

｜ 2. Segment overview

224 million yen revenue increase (+1.9%)
45 million yen profit decrease (△8.3%)

Forecast for the fiscal
year ending March
2024

874 million yen revenue increase (+3.5%)
304 million yen profit increase (+30.5%)(Unit: million yen)

1,000

15,00012,02229,00030,00012,246

24,626(Unit: million yen)

4,000

25,50021,493

10,102
10,00020,000

542

497

2,000

500
10,000

5,000

1,300

1,300

FY2023(forecast)

FY2024(plan)

996

205
439
0

1H FY2021
Domestic sales

1H FY2022
Overseas sales

1H FY2023

0

Segment profit

Domestic sales increased due to progress on new sales of functional film

0

FY2021
Domestic sales

FY2022

Overseas sales

0

Segment profit

products, despite lower sales of PVC compounds in the downturn market.

Domestic sales decline due to a slight downturn in the electric power,
industrial wires and telecommunications markets.

Overseas sales decreased due to lower sales in North America and China.

Overseas sales increase due to progress on sales of PVC compounds.

Segment profits fell due to lower sales in North America and China.

Segment profits increase due to higher sales in overseas and expanding
export of EV charging cable materials.

21

Electronics｜ 2. Segment overview

Focus Area ① Electric Power and Industrial
Wires
Domestic electric power and construction electricity market wire copper
volumes and our sales of compounds
Market Growth:(100 million yen)
(1,000 t)△1%
Net Sales: +2%
365
200

343

346

349

350

165

109

250

125

123

50

300

7

150

100

400

200

5

4

※FY2022 vsFY2023Component
aroundelectricalmaterials2
Electrical
power andindustrial
wires

Focus Area ③ Optical films

Domestic telecommunications market wire copper volumes and oursales of compounds

Automotive glass substitute film demand and our sales of optical films(100 million yen)

66
158

150
100

2

50

57
0

Marketvolume forElectric
power and
construction
electricity*

0
FY2022

FY2023(forecast)

FY2024(plan)* Source: The JapaneseElectric Wire & Cable
Makers’ Association

Actual results for the first half of the year ending March 2024

• Expanded domestic sales by switching materials fromcompetitors and in-house products of customers to ourcompounds.
• Expanded sales of electric power wires in Indonesia.
• Launched sales of electric power and industrial wires for
non-Japanese makers in China.
Measures for the second half of the year ending March 2024

• Boost domestic sales for the electric power, construction,and electronics sectors.
• Boost overseas sales of electric power and industrial
wires in ASEAN, especially Indonesia and Thailand.

(1,000 t)

140

235

232

247

250

230
120
200

98

100

80

71

67
17

40

First
Half
32

50

First
Half
45

150

51
19

100

17
52
52

20

50

30

0

0
FY2021

FY2022

FY2023(forecast)(100 million yen)

Market Growth:△1%
Net Sales: +13%

(Million m2)

35
250※FY2022 vsFY2023

250

238

30

227

200

FY2024(plan)

Robotics andFA

Market volume
fortelecommunicat
ions** Source: The JapaneseElectric Wire & Cable
Makers’ Association

16

15

Opticalfilm(Total)

100

Automobile
windows market

30

15

10

150

18

20
telecommunicat
ions andmobility

Market Growth:+5%
Net Sales: +13%
※FY2022 vsFY2023

216
25

87

35
60

First
First
Half
Half
105
118 5149

FY2021

Focus Area ② Telecommunications

First
Half
7

First
10
Half
8

50

8

5

0

* Source: Research
by RIKENTECHNOS0
FY2021

FY2022

FY2023(forecast)

FY2024(plan)

Actual results for the first half of the year ending March 2024

Actual results for the first half of the year ending March 2024

• Compounds for EV charging cables for overseas market.
were adopted by customers and launched mass production.

• Sales of semiconductor use increased slightly due toincreased adoption by customers.
• Sales of automotive thermal barrier films were flat due todecline in sales to Indonesia.

• FFC market research for EV batteries.
• Sales promotion of robotic factory automation cable for nonJapanese customers in China.
Measures for the second half of the year ending March 2024

• Launch of FFC materials for EV charging batteries.
• Boost sales of compounds for robotic factory automation
cable for non-Japanese customers in China.

Measures for the second half of the year ending March 2024

• Launch sales of functional films of semiconductor use
which is in development stage for China and South Korea.
• Expansion of sales network and countries for automotive
thermal barrier films.

22

Building&Construction
Construction Films

Housing and Building
Materials

Building & Construction
Actual results for the
first half of the year
ending March 2024

33 million yen revenue increase (+0.2%)
131 million yen profit decrease (△19.5%)｜ 2. Segment overview
Forecast for the fiscal
year ending March
2024

414 million yen revenue increase (+1.5%)
50 million yen profit decrease (△4.8%)(Unit: million yen)

15,00013,614

13,581

1,000(Unit: million yen)

40,0004,000

12,133
10,00030,000668
598

25,15428,00020,000

3,000

2,000

1,131

5,000

10,00000

Domestic sales

27,600537
500

1H FY2021

27,186

1H FY2022

1H FY2023

Overseas sales

Segment profit

Domestic sales increased thanks to stronger sales of films for the nonresidential market and PVC compounds for the residential market.
Overseas sales decreased due to lower sales of PVC compounds to
the residential and construction markets in the U.S. and Thailand.
Segment profits decreased due to lower sales of compounds, mainlyin the U.S..

1,400
1,050

1,000

1,000

0

0
FY2021

FY2022

Domestic sales

FY2023(forecast)

Overseas sales

FY2024(plan)
Segment profit

Domestic sales increase on a full-year basis, despite demand forcompounds for PVC windows calms down.
Overseas sales decline due to sluggish housing markets, especially in
the U.S..
Segment profits decline due to lower overseas sales.

24Building & Construction
Focus Area ① Construction Film

Focus Area ② Housing and Building Materials

Floor area of new domestic non-housing construction and our sales of
construction films

Construction market investment and our sales of compounds for housing andbuilding materials(100 million yen)

(Million m2)
48.0

140

80

44.3

40

36.1
85

Market Growth:△18%
Net Sales: ＋10%(100 million yen)
180
59

93

81

10

75

46
First
Half
40

71

First
Half
43

3

120

30

20

10

FY2023(forecast)50

FY2024(plan)

First
Half
51

66

20

First
Half
72

59

First
Half
67

123

50

18

40

55

48

FY2021

FY2022

34

50

Actual results for the first half of the year ending March 2024
• Domestic sales increased due to stronger sales at major customers.
• Overseas sales decreased due deteriorating market conditions, mainly in North America.

10

Construction market
investment*

FY2023(forecast)

FY2024(plan)* Source:
Construction Economic Report
NO. 73 ©RICE

Actual results for the first half of the year ending March 2024••

Measures for the second half of the year ending March 2024
• Introducing new design construction film to the market and expanding adoption bycustomers in Japan.
• Promote overseas expansion of films with excellent printing characteristics.

Japan

0

0
* Sources:
Research Institute ofConstruction andEconomy

30
20

28
40

ASEAN
North america

540
Floor area of newdomestic non-housing
construction*

0
FY2022

11

13

83

0
FY2021103

80

Domestic sales

60

40

Market Growth:＋2%
Net Sales: ＋1%※FY2022 vs FY2023

Overseas sales

20

125

126

60

※FY2022 vs FY2023

100
First
Half
43

60

61

62

160

10

60

(Trillion yen)

140

89

10

40

50

44.1

120
100

｜ 2. Segment overview

Domestic sales increased thanks to increased sales of PVC compounds for window
frames attributable to the Japanese government's campaign to promote energy
conservation in homes in 2023.
Overseas sales decreased due to the lower progress in sales expansion of compounds to
the residential and construction markets In ASEAN and North America.

Measures for the second half of the year ending March 2024••

Capture of increased sales of PVC compounds for window frames through campaign topromote energy conservation in homes that has been budgeted for the next year.
Uncovering potential demand and expanding sales of PVC compounds in ASEAN and
North America.
25

3. Medium- and LongTerm Initiatives

1. Overview of
Financial Results
2. Segment Overview
3. Medium- and LongTerm Initiatives

Medium- to Long-Term Vision｜ 3. Medium- and Long-Term Initiatives

The long-term vision is based on the RIKEN TECHNOS Group mission.
The new Medium-term Business Plan was launched in FY2022 to achieve the long-term
vision.
RIKEN TECHNOS’ strengths
and business model
The capacity to meet the needsof leading global customers
Strong technical capabilities- Formulation design technology- Kneading technology- Film manufacturing andprocessing technology

Mission(reason forexistence)

We are a challenger that harnesses the power of science to improve thequality of life and create a safe, affluent society.
We continuously provide new value and satisfaction to people,
companies and society through our original and superior formulations
and manufacturing technologies of multiple resins.

Long-term
visionAiming to become the leading provider of comfort for all living spaces

Basic strategies of the Medium-term Business Plan
RIKEN TECHNOS’ (medium- tolong-term) business environment
Plastic reduction movement

1

2

3

4

Intensify Global
Management andGenerate Synergies

Stay ahead ofcustomers’ expectations

Take on the challenge
toward new businesses
and products

Contribute to solving
environmental andsocial issues

Growing environmental
awareness

Strategies to grow strengths of businesses

Digitalization trend

Strategies and measures to support the above strategies

Progress with EVs
Shrinking domestic market

DX Investments
Capital investments/manufacturing

Strategies for future growthIntellectual property (R&D) investments
Human resources investments

Governance

Growth in Asia
27

Three-year Medium-term Business Plan
Management
Policy｜ 3. Medium- and Long-Term Initiatives（Unit: 100 million yen）

1,400

1,234

1,200

1,099

1,000

7.1%

800

5.7%

7.5%

1,280

1,350

140

8.0%

120

7.9%

100
6.1%

6.6%

6.3%

60

600
400

Four Strategies
Intensify Global Management and Generate
Synergies
Stay ahead of customers’ expectations
Take on the challenge toward new
businesses and products
Contribute to solving environmental andsocial issues

200

45

39

85

84

75

62
Challenge for Innovation
Aiming to become the leading provider of comfort for all living spaces

80

52

40
50

20
0

0
FY2021
actualROS

Net sales

FY2022
actualFY2023
forecast

Operating profit

Net profit

ROE

FY2024planned (final
year ofMedium-term
Business
Plan)※Assumptions for Formulating the Medium-Term Management Plan
Plan for fiscal year ending March 2025
Naphtha price: 61,000 yen/KL Exchange rate: 114 yen/USD

28

Three-year Medium-term Business Plan
｜ 3. Medium- and Long-Term Initiatives(Results for the first half of the year ending March 2024 ）Strategy1:: Intensify global management andgenerate synergies

Strategy2:
Stay ahead of customers’ expectations

Boost sales of new customers and regions in ASEAN

Began introduction of SFA/CRM

Planning of procurement strategies in China and ASEAN led
by the Global Procurement Dpt.

Training of materials-informatics(MI) human resources andbegan full-scale operation of MI in the R&D division

Completed construction of new factory and began operation at
new line in Thailand

Completed next-generation manufacturing pilot-line of rubbersubstitute TPV compound

Made decision to expand new elastomer line in Mie Factory inJapanStrengthen formulation technology by integrating compoundand film development

Appointment of regional executive officers in the U.S. and
ASEAN

Strategy3:Take on the challenge toward new
businesses and products

Strategy4:Contribute to solving environmental
and social issues

Promote the exploration of themes through Start-up Office for
New Business Development

Identify materiality topics and KPIs

Promote industry-academia and industry-industry partnerships(Currently collaborating with four research institutions)

Develop and expand sales of environmentally-friendly
products:

Develop new markets for functional materials / functional films

Expansion of RIKEBIO ® series
Development of modification materials for recycled rigid PVC

Extracting and proposing new product development themes
based on IP landscapeEstablishment of the Women's Empowerment Promotion
Project
Formulation of RIKEN TECHNOS Group Human Rights Policy

29

Financial Strategies Under
the Medium-term Business Plan

｜ 3. Medium- and Long-Term Initiatives

Achieve a balanced cash allocation with shareholder returns centered on growth investments
Strengthen portfolio management and concentrate management resources on priority markets
Out.

BS streamlining

In

Out

Ability to reduce
cash and deposits

Strategic
investment

Make energetic efforts to study technological investments, equity
investments, and M&A activities, targeting new businesses.

Reduction ofTrade receivables

Acquisition ofown shares

Acquisition of own shares as shareholder return

Sale ofinvestment
securities

Dividends
3.1 billion yen
R&D
investment
5.7 billion yen(2.4 billion yen
overseas)
Capitalinvestment
12.4 billion yen(10.0 billion yen
in Japan)Previous Medium-term
Business Plan
Actual（FY2019-FY2021）

Operatingcash flow
26.0 billionyen.

P.34-35
Dividends

Increase dividend payout ratio to 35%.（from the fiscal year ended March 2023）

R&D
investment
6.2 billion yen

Enhance R&D system and reinforce IP strategies.
• Expand R&D Center, adopt state-of-the-art prototype machines,
enhance staffing, etc.
• Generate IP through in-house development; leverage IP information

P.33(6.7 billion yen
overseas)

Shareholder
Returns

Overseas investments
Capitalinvestment
19.5 billion yen(12.8 billion yen
in Japan)This Medium-term Business Plan
Planned（FY2022-FY2024）

P.31-32

Implement capital investments centered on ASEAN (up 4.3 billion
yen from previous Medium-term Business Plan).
Enhance equipment at facilities in ASEAN and North America, etc.

Domestic investment
Accelerate capital investments to reduce CO2 emissions from the next
year and beyond (up 2.8 billion yen from previous Medium-term
Business Plan).
Invest in equipment enhancement and streamlining.
Carbon neutral initiatives
Computer-system investment, etc.

30

Investment (results and forecasts)｜ 3. Medium- and Long-Term Initiatives

Three-year Medium-term Business Plan:
19.5 billion yen

Capital and System investment(Unit:
100 million yen)

Major Projects

FY2022 results

Expansion of facilities in ASEAN countries
Reinforcement of facilities in Japan
Domestic and overseas investment in streamlining

FY2023
forecasts

Expansion of facilities in ASEAN and the US
Expansion and reinforcement of facilities in Japan
Domestic and overseas carbon neutral initiatives
Domestic and overseas investment in streamlining
Domestic and overseas IT systems investments

FY2024
forecasts

Total

Expansion of facilities in ASEAN and the US
Expansion and reinforcement of facilities in Japan
Domestic and overseas carbon neutral initiatives
Domestic and overseas investment in streamlining
Domestic and overseas IT systems investments(Unit: 100 million yen)TotalamountOverseas
Depreciation
ratio

Domestic

Overseas

47

33

14

30%

31

67

38

29

44%

35

83

55

28

34%

36

197

126

71

36%

102
31

Investments｜ 3. Medium- and Long-Term Initiatives

RIKEN TECHNOS (Mie Factory)
Thermoplastic elastomer compound
Expansion of the production facilities
Decided to expand new lines in existing buildings
Increase production capacity of elastomers, which areeco-friendly materials in various aspects compared torubber<Progress>
2023 Resolution to expand production facilities in
July
Scheduled start of operations in 3Q in 2025
Investment: Approximately 1.0 billion yen

DX Investment
Introduction of R&D data management system
Renovation and integration of group ERP systems of U.S.
subsidiaries
Investment: Approximately 0.5 billion yen

Expanding PVC compound production facilities
at RIKEN ELASTOMERS CORPORATION

Expanding PVC compound production facilities
at RIKEN VIETNAM CO., LTD.
Constructing a new plant building, setting up
a new production line, and expanding warehousefacilities<Progress>
Construction permit obtained in October 2023
Scheduled to start operationsin November 2024
Investment: Approximately 1.5 billion yen

Adding a new line in the existingbuilding<Progress>
Scheduled to start operationsin December 2024
Investment: Approximately 1.5
billion yen

32

R&D

｜ 3. Medium- and Long-Term Initiatives

Research and development results
New Product Development and Research Initiatives
Developed modification material for recycled rigid PVC
・Adding the modification material (compound) that we have developed
improves the formability of recycled rigid PVC materials
Expansion of Biomass Plastic RIKEBIO ® series
・Developed biomass-adhesive grades in TPE related RIKEBIO
Utilization of MI aimed at streamlining and increasing speed ofprescription designs
・Introduced e-learning to train researchers capable of practicing
and guiding MI(FY2024 Target: 9 internal MI specialists)
・Actual operation in formulation design and development ofcompounds and films

Examples of Open Innovation Initiatives
Joint research with university
・University of Tokyo: Conducted joint research on a method for layering two-dimensional materials such asgraphene using vinyl chloride film
・Waseda University: Started joint research on useful metal recovery technology from waste metal compounds
using chlorine-containing plastics

33

Shareholder Return(Acquisition of own shares)｜ 3. Medium- and Long-Term Initiatives

The Company has resolved, at a meeting of the Board of Directors held on
October 30, 2023, the matters concerning the acquisition of own shares, inorder to exercise agile management of capital policy corresponding to any
changes of business environment, improve capital efficiency and enhanceshareholder returns.
Details of matters related to acquisition(1)

Class of shares to be acquired

Common shares(2)

Total number of shares to be acquired
8.5 million shares(13.4% of the total number of issued shares (excluding treasury shares))(3)

Total amount of shares acquisition cost

7 billion yen(4)Acquisition period

November 10, 2023 to January 31, 2024

(5)

Acquisition funds

Allocate own funds

All acquired shares are planned to be cancelled
34

Shareholder Returns (Dividends)｜ 3. Medium- and Long-Term Initiatives

Maintain a consolidated dividend payout ratio of around 35% which wasraised in FY 2022
Dividend payout ratio and dividend trend
(Yen)

40

40%
Dividend per share

Payout ratio

35%

34.7%

33.3%

35.1%

35
30

30%

28.8%

28.4%

31.2%

30.4%

25

29.5%

28.0%

20

25%
24.0%

24.1%

15

20%
15%
10%

25

9

9

10

11

12

14

16

16

19

25
10
5
0

35

Reducing Cross-shareholdings｜ 3. Medium- and Long-Term Initiatives

Determined policy to reduce the balance of cross-shareholdings to reach less than 10%of consolidated net assets
Cash generated by reduction will be utilized for growth investment
Changes in Cross-shareholdings(Unit: Billions of yen)
200

15.0%

180

13.3%

12.7%

12.1%

12.2%

160
140

10.2%
10.0%

120

9.0%

101

100
80
60

79

77
57

88
5.0%

52

40
20
0

0.0%
FY2018FY2019FY2020

FY2021

Cross-shareholding balance(Billions of yen)

すべての生活空間に快適さを提供するリーディングカンパニーを目指して

FY20222023/9/30

FY2024

Ratio to consolidated net assets(%)

36

Non-Financial Strategies

1

2

3

4

｜ 3. Medium- and Long-Term Initiatives

Enhancement of relationships withshareholders and investors(Accelerate proactive
communication with shareholders
and investors)

Implement SR interviews• Implement proactive individual IR for participants in SR interviews.
Enhance means of dialogue with shareholders and investors• Published Blue Challenge Report (Integrated Report)• Include non-financial information in securities reports, business reports, etc.
• Enhancing the communication of financial and non-financial information,
including English-language disclosure

Strengthening HR strategies

Implementing HR strategies based on succession planning• Recruitment, development, and reassignment of high-growth humanresources• Establishment of the Women's Empowerment Promotion Project
Active investment in human capital• Examining the introduction of a share-based compensation plan for
employees

Reexamination of compensation
plan for officers

Reviewing the details and weight of performance-linked indicators in thecompensation plan for officers
Reviewing the introduction of a mid- to long-term performance-linked
compensation and expand the use of stock-based compensation

Responding to Sustainability Issues

Formulation of RIKEN TECHNOS Group Human Rights Policy
Implementation of various in-house training programs to raise employees'
awareness of sustainability

37

Initiatives Related to Dialogue with
Shareholders and Investors｜ 3. Medium- and Long-Term Initiatives

The content of the previously published sustainability report has been revised as the“Integrated Report”.
Providing an overview of our group’s value creation aimed at sustainable corporate value
growth, as well as related initiatives.
Enhancing financial and non-financial information on topics such as management strategies
and sustainability.

Added content
•
•
•
•
•
•

Financial information
Message from the CEO
Message from the CFO
Value creation process/our strengths
Materiality topics, KPIs
Messages from Outside Directors, etc.

38

Sustainable Growth andEnhancement of Corporate Value｜ 3. Medium- and Long-Term Initiatives

By steadily implementing each strategy, aim to achieve a ROE8.0%,
PBR1.0 time or above in FY2024

ROE8.0% or above for the final year of
the current medium-term businessplan (ending March 31, 2025)

Changes in ROE, PBR(%)（times）
1.50

8
1.25

7.5
7.1
6

6.4

6.2

6.3

1.00

0.75

4
0.72
0.61

0.60
2

0.59
0.50

0.49

PBR1.0 or above in the final year of thecurrent medium-term business plan(fiscal year ended March 31, 2025)

0

0.50

0.25

0.00

ROE（％）

すべての生活空間に快適さを提供するリーディングカンパニーを目指して

PBR (Times)

39

Disclaimer
Plans, projections, strategies, and other statements that are not historical facts presented in thisdocument constitute forward-looking statements based on information available at the time of
preparation and involve various risks and uncertainties. Actual results may differ significantly
from these projections due to changes in the business environment and other factors.
Furthermore, information presented in this document concerning companies other than the
Company or its group companies is based on publicly available information. The Company does
not guarantee the accuracy of such information.

For inquiries, please contact:
webmaster@rikentechnos.co.jp

Corporate Planning Department/Accounting Department

Corporate Profile

Company Name

RIKEN TECHNOS CORPORATION

Date of Establishment March 30, 1951
Capital Stock

8,514 million yen

Representative

Kazuaki Tokiwa
Representative Director, President & CEO

Number of Employees 1,914 consolidated employees and

797 non-consolidated employees(As of September 30, 2023)
Head Office

Waterras Tower, 2-101, Kanda-Awajicho,
Chiyoda-ku, Tokyo 101-8336 JAPAN41

Management Philosophy: The RIKEN TECHNOS Way
The spirit of venture, which has been passed down since our founding days, represents the very strength of RIKEN TECHNOSCORPORATION and its “RIKEN TECHNOS-ness.” The RIKEN TECHNOS Way, our corporate philosophy, was formulated based on this
“RIKEN TECHNOS-ness.”
The word “challenger” used in our mission statement is meant to convey two meanings−a manufacturer that produces high-quality
products and an organization that takes on challenges to create new value and satisfaction for people, companies, and society. To makefurther advances into the future, we will continue taking on new challenges.

Mission “Mission and Purpose”
We are a challenger that harnesses the power of science to improve the quality of life and create a safe, affluent society.
We continuously provide new value and satisfaction to people, companies and society through our original and superior formulations
and manufacturing technologies of multiple resins.

Core Value “Fundamental Values”
We establish a bond of trust
and work for the mutual benefit all.
We create new value.
We continually push ourselves to achieve more.
We enjoy our work and love what we do.
We work together to find solutions
and produce the best results for everyone.

Basic Action “Specific Action Guidelines”
Lead without fear.
Take charge and enjoy your work.
Build a team by trusting and helping one other.
Listen attentively and speak sincerely.
Come with smile and leave with smile.
Stay ahead of customers' expectations.
Seek new things and ways.
Be a real professional through self-improvement.
Set goals and achieve on time.

42

Business Areas
Based on our three main product lines—compounds, films, and food packaging, all grounded in extensive
technologies related to compound resin processing—we supply products to a wide range of industries and engage
in business in Japan and around the world essential to various applications.
Segments
Major
products

Overview

Compounds

Compounds are composite materials withnew properties created by mixing several
different additives with a base resin. They
are used primarily for extrusion molding
and injection m olding. W e develop,
manufacture, and sell polyvinyl chloride
resins as well as thermoplastic elastomers
and functional compounds.

Films

We manufacture high-quality films using
manufacturing methods adapted to thecharacteristics of the compounded resin.
We also develop, manufacture, and sellfilm products that contribute to design
freedom and functionality by layering
multiple films and applying functional
coatings to surfaces.

Food
Packaging

As a pioneer that developed Japan’s
first polyvinyl chloride resin wrap, RIKENTECHNOS pursues high-quality andfunctional wraps for food packaging forhousehold and commercial applications
and develops, manufactures, and sells
wraps suitable for foods, automatedpackaging machines, and so on.

Transportation

Daily Life &Healthcare

Electronics

Building &Construction

43

Contributing to The Environment
Through Our Businesses
We will help protect the environment by boosting sales of products aimed at energy conservation,
resource conservation, and recycling into our traditional PVC and elastomer businesses.

Resin

Properties
About 60% of PVC comes from the natural
material of salt.

PVC• Conserves resources through durability
that enables long-term use.
• Consumes less than one-half* the energy
resources of other resins consisting
mainly of hydrocarbons from petroleum(e.g., polyethylene and polypropylene).
* Polyethylene and polypropylene: 45.6-46.5 MJ/kg
PVC: 21.3 MJ/kg

In various ways, elastomer materials are
more eco-friendly than rubber.

Elastomers• They help reduce CO2 emissions during
manufacturing processes by shortening
mold cycle times.
• Their low specific gravity helps reduce
vehicle weights and fuel consumption.
• They are recyclable.

* Source: Vinyl Environmental Council website

Examples of environmental contributions madethrough our products
PVC resin interior window sashes① Energy conservation② Recycling

Industrial wires and cables① Durable materials② Control of chemical substances

CO2 reduction
effect vs. aluminumsashes:Approx. 40%**
Under the zero-emission home (ZEH) initiative
promoted by the Ministry of Economy, Trade andIndustry and the Ministry of the Environment, use ofresin sashes is advancing as part of efforts to improve
the thermal insulation efficiency of existing home
windows. Strong demand is expected to continue.

Highly oil-resistant TPV ACTYMER®K
offers features equivalent to those ofoil-resistant rubber.

Highly durable PVC is used in industrial wires and cables andother products intended for long-term use.
We control chemical substances by designing formulations
that meet the legal standards of individual countries.

TPV ACTYMER®G is a substitutefor vulcanized rubber, and has
outstanding rubberlike features.

We expect the continuation of trends toward material changes intended toreduce vehicle weight and fuel consumption and toward use of rubber
substitutes.

** Source: Resin Sash Industry Association

44

Global Network
Production Companies
Sales Companies

RIKEN TECHNOS CORPORATION
Domestic subsidiaries- RIKEN CABLE TECHNOLOGY CO., LTD.
- RIKEN CHEMICAL PRODUCTS CO., LTD.
- KYOEI PLASTIC MFG CO., LTD.
- IMI Co., LTD.

RIMTECCORPORATIONRIKEN U.S.A.
CORPORATIONRIKEN TECHNOS (JIANGSU)CORPORATIONSHANGHAI RIKEN TECHNOSCORPORATIONRIKEN TECHNOSINTERNATIONAL KOREACORPORATIONRIKEN TECHNOSINDIA PVT. LTD.

RIKEN AMERICASCORPORATIONRIKEN (THAILAND)
CO., LTD.

RIKEN ELASTOMERS(THAILAND) CO., LTD.

RIKEN VIETNAM
CO., LTD.

PT. RIKEN INDONESIA

RIKEN ELASTOMERSCORPORATION

45

Value Creation History
Since our founding in 1951, we have continued to broaden our range of products while expanding our
network across Japan and around the world.
Net sales(million yen)Founding,
early years

Building
organizationalfoundations

120,000

Building domestic business foundations

Building overseas business foundations(1995)- Opened production facility
in Indonesia.
- Established subsidiary in
the US.

: Main facility expansion / new subsidiary: Launch of main manufacturing/sales activities
100,000(1990)
Opened production
facility in the US.

80,00060,00040,00020,000(1956)
Captured top position in PVC
compounds production in
Japan and the world’s thirdhighest position.
(1955)
Plant acquired in Kamata
Transferred and expanded
compounding equipment(1973)- Opened Osaka
Sales Office.
- Operations begin at
Mie Plant.

0
FY1950Founded as RIKEN
VINYL INDUSTRY CO.,LTD.
(1951)FY1960Listed on Second
Division, Tokyo
Stock Exchange(1961)(2001)
Opened production
facility in China.

(2014)
Opened production facility in
Vietnam.
(2007)
Made Kyoei Plastic Manufacturing Co.,
Ltd., Kanekon Co., Ltd., and Shinko
Electric Wire Co., Ltd. subsidiaries.

(1994)
Began sales of thermoplastic
elastomers.

(1966)Developed Japan’s first
PVC food wrapping
material

FY1980(2012)
Made Mitsui Chemicals
Fabro, Inc. a subsidiary.
(2011)
Opened production
facility in Thailand.

(1979)
Opened Nagoya Sales
Office.

FY1970(2018)
Made IMI Co., Ltd. a
subsidiary.

(1989)
Opened first overseas production
facility (Thailand).

(1968)
Operations begin at Okabe
Plant (Saitama).

(1951)
Began manufacturing PVC
compounds.

Intensifying global
management

FY1990FY2000FY2010

FY2020Listed on First Division,
Renamed RIKEN TECHNOSHead office Listed on the Tokyo
Tokyo Stock Exchange
CORPORATION
relocated Stock Exchange Prime
and Nagoya Stock(2001)(2015)
MarketExchange(2022)(1974)* Sales figures for FY1999 and later represent consolidated net sales; consolidated settlement of accounts began that year.

46

Measures to realize management that is consciousof the cost of capital and stock price<Financial Strategy>
Strengthen shareholder returns (share buybacks and dividends)
Reduction of strategic stockholdings

Timely disclosure on Oct. 30<Growth Strategy>
Completion of Three-Year Medium-term Business Plan
「Challenge Now for Change New 2024」
Expansion of investment for growth<Non-Financial Strategy>
Enhancement of IR and SRStrengthen HR strategy
Reexamination of compensation plan for officers

Aiming to increase corporate value through initiatives linked toThree-Year Medium-term Business Plan
すべての生活空間に快適さを提供するリーディングカンパニーを目指して

47