【TSE 4401】

ADEKA Group Mid-Term Management Plan

ADX 2026
FY2024-2026
ADEKA COPORATION

Contents

1. Review of the previous Mid-Term Management Plan ADX 2023 ･･･ P3
2. Overview of the New Mid-Term Management Plan ADX 2026･･･ P7・Positioning／Fundamental policy
・Target／Recognition of the External Environment
・Key strategies／Performance Targets by Segment- “Transition to a high profitability structure”- “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”- “Establish a resilient management foundation”

・Capital Investment Plan
・Dividend policy

FY2024-2026 Mid-Term Management Plan ADX 2026

2

Review of the previous Mid-Term
Management Plan ADX 2023

3

Review of the previous Mid-Term Management Plan ADX 2023

Trends in financial results
US-China
friction

Sales(100 million yen)

2,993

(100million yen)

• Lockdown• Rapid digitalization• Limitations on supply• Soaring raw material and resource prices• Inventorybuildup• Inbound demand disappears• Inflation and the weakening of the yen

3,270

3,612

4,033

3,997

9.9

ROE

8.5
7.3

300

8.4

7.5

266

225

289

10
8
6

6.6

200
100

Ukraine crisis
Middle East crisis• Logistics congestion Interest rate differential(%)

Operating profit
400

3,041

COVID-19

340

323

354

4
2
0

0

FY2018FY2019BEYOND 3000

FY2020

FY2021

FY2022
ADX 2023

FY2023

FY2024-2026 Mid-Term Management Plan ADX 2026

4

Review of the previous Mid-Term Management Plan ADX 2023

Summary of Management Indicators
Pursuing both social and economic value, the ADEKA Group achieved its first operating profit of over 30 billion yen.
FY2023（the fiscal year ended March 31, 2024）
FY2023 Results

Before revision

Revised(in April, 2021)(in August, 2022)

JPY 35 billion

JPY 42 billion

JPY 35.4 billion(Net sales: JPY 380 billion)(Net sales: JPY 430 billion)(Net sales: JPY 399.7 billion)

9％

9％

8.4 ％

Unachieved

Capital investment
amountJPY 50 billion

JPY 50 billion(3 years)*1(3 years)*1

JPY 55.7 billion

Achievement

Dividend policy

30% or more*2

30% or more*2

40.0 ％

Achievement

Operating profit

Ｒ

Ｏ

Ｅ

(Dividend payout ratio)*1*2

Unachieved

Includes environmental investments for the achievement of carbon neutrality.
Based on our comprehensive consideration of appropriate shareholder returns, maintaining stable dividends as our policy.
FY2024-2026 Mid-Term Management Plan ADX 2026

5

Review of the previous Mid-Term Management Plan ADX 2023

Progress and Results of Key Strategies
Mostlyas planned

Key strategies “Transforming the earnings structure”

Achievement

Strategic products(100 million yen)

Sales expansion of strategic products and eco-friendly products.

(100 million yen)

◎ Polymer Additives

Introduction of six automation technologies
to improve manufacturing efficiency.

1,531

1,522

Key strategies “Achieving sustainable growth with new domains”
ResultResultPlan

New product development fell short of the plan, while , thefields of semiconductors, PBF, batteries, etc. are creating new
products and advancing development.
PBF : plant-based foods

MovingforwardStrengthening of business through alliances and restructuringof subsidiaries (streamlining and improving efficiency).

Key strategies “Reinforcing Group management”

Action against
climate change

Work-style reforms
DE&I

Promotion ofdigitization◎ Functional Chemicals◎ Polymer Additives◎ Food products

444

521

Plan

ResultResultNew product development and commercialization

Active Material for
the Next Gen. Batteries“ＳＰＡＮ”

Successful demonstration of
the world’s lightest cell using
an original ADEKA test cell

Expansion and optimization of business portfolio

Implementing measures under the slogan “Transformation” toadapt to the new social environment.
Governance

Eco-friendly products

Achieving a strong
financial baseChemical Products

Food ProductsLife Sciences

Conversion into
a subsidiary(acquisition of shares)

Restructuring ofdomestic subsidiaries(merger)Conversion into
a subsidiary(acquisition of shares)

Graphene

Food materials

Biologicalpesticides etc.

FY2024-2026 Mid-Term Management Plan ADX 2026

6

Overview of the New Mid-Term
Management Plan ADX 2026

7

Positioning

ＡＤＸ２０２６A three-year period forcarrying out continued
transformation◼ 2nd stage toward the attainment of ADEKA VISION 2030
◼ A three-year period for increasing earnings strength witha focus on profit and efficiency◼ Carrying out continued transformation a view towards
achieving ADEKA Group's vision for 2030

Back cast

ADX 2026
ADX 2023
Social Value + Economic Value

Pursue a growth strategy ofpromoting sustainability initiatives
FY2024-2026 Mid-Term Management Plan ADX 2026

8

Fundamental policy

Promoting sustainability initiatives for
greater social value and continuous– Earnings power, sustainability and a resilient management foundation –• Enhancing earnings power to achieve continued
growth with a focus on profit.
• Carry out efforts for sustainability andimplement growth strategies to capture
opportunities for solving social issues.
• Establish a resilient management foundation totake swift actions in a highly uncertain
environment.

FY2024-2026 Mid-Term Management Plan ADX 2026

9

TargetFinancial
indicators

Operating profit(FY2026)(Net sales: JPY 500 billion)

ROE

11.0 %

ROIC

10.5 %

Sales ofEco-friendly products(2.5 folds the FY2019 level)

GHG emissions

199 thousand t-CO2e *2

Ratio of women in
managerial positions

6 % or more

(FY2026)

Sustainability
indicators*1

JPY 53 billion

JPY 115 billion(13% reduction the FY2013 level)(non-consolidated)

Capital investment amountJPY 75 billion

Dividend policy (Dividend payout ratio)

40 % or more *3(3 years)*1 Indicators associated with the ADEKA Group Sustainability Priority Issues*2 A unit for indicating different GHG emissions in a uniform manner by converting them into CO 2 equivalent amounts.
*3 Based on our comprehensive consideration of appropriate shareholder returns, maintaining stable dividends as our policy.
FY2024-2026 Mid-Term Management Plan ADX 2026

10

Recognition of the External Environment (FY2024-2026)
Target markets outlook

Social environment

Major changes in industry structure, including
post-COVID-19, decarbonization, and digital
ChanceGrowth of the semiconductor market
Carbon neutrality

Risk

Geopolitical tension■ Chemical Products

Palm oil

70＄/around 1 barrel (in 2026)

Increase in automotive
production volume
Increase in EVs

Expansion of generative AI
Growing demand for logic ICs

Food (Bread market)

Agrochemical

World population growth &Consumption growth inChina and India

Efficient food production &Economic dev in emerging countries
Expansion of demandin LATAM and Asia

■ Resin production

Global growth forecast of just over 2% per year

■ Display

Increase in area terms, Decrease in monetary
terms
Increased use of dairy alternatives from healthand environmental perspectives■ Plant-based foods

JPY138／$
JPY149／€■ Others

Semiconductor

Declining trend from soaring prices in 2022

Exchange rate assumption■ Life Sciences

Automotive

Raw materials and exchange rate
Naphtha■ Food Products■ Lithium-ion battery

Growth in demand for LiB for xEVs and batteries

FY2024-2026 Mid-Term Management Plan ADX 2026

11

Key strategies
Key strategies１⚫ Enlarge electronics and IT materials⚫ Restructure underperforming businesses

Transition to a high profitability structure⚫ Expand strategic products*1⚫ Promote new products*２ and implement new businesses

Key strategies２

Increase Eco-friendly products andreduce of GHG emissions throughbusiness structure transformation
Key strategies３

Establish a resilient managementfoundation
*1
*2
*3

⚫ Increase capital efficiency⚫ Expand and create Eco-friendly products⚫ Reduce GHG＊3 emissions with a view towards carbon neutrality⚫ Address ADEKA Group’s priority sustainability issues⚫ Strengthen supply chains⚫ Enhance human capital⚫ Promote DX

25 groups of products with potential for development into growth drivers and with positive impacts on operating profit and net sales
Determined according to predetermined standards, such as selling period and revenue standard not based on a single year.
GHG：Greenhouse gas

FY2024-2026 Mid-Term Management Plan ADX 2026

12

Performance Targets by Segment
Exchange rate
assumption

FY2026 Plan

138JPY／$
149JPY／€(Unit：JPY 100 million)

Net sales

OperatingprofitFY2023 Results
OPM

Net sales

OperatingprofitOPM

ADEKA Group Total

5,000

530

10.6%

3,997

354

8.9%

Chemicals

2,763

364

13.2%

2,041

236

11.6%

Polymer Additives

1,332

109

8.2%

1,004

79

8.0%

Electronics and IT
materials

626

153

24.4%

390

97

25.1%

Functional chemicals

805

102

12.7%

646

59

9.1%

928
1,200
106

62
97
5

6.7%

840

4.9%

8.1%

1,030

4.7%

86

41
59
17

Food productsLife Science
Other

5.7%
19.9%

* Figures are expressed in units of 100 million yen and have been rounded off.
FY2024-2026 Mid-Term Management Plan ADX 2026

13

Key strategies “Transition to a high profitability structure”

Chemicals｜Enlarge electronics and IT materials ① Domain expansion
Plan to focus on semiconductor materials and aggressively invest in facilities,
including construction of a new research building in Kuki R&D center.
ADX 2023

ADX 2026
Construction of a new research building
at Kuki R&D center【Capital investment amount】

DeviceSales targets

Manufacturing
process
Target areas

Approx. 12 billion yen

MemoryFront-end process
Japan・Korea
Taiwan・U.S.・China

15.8 billion yen ＋ Approx. 10 billion yen

MemoryLogic IC

Front-end process
Back-end process
Japan・Korea・Taiwan
U.S.・China
FY2024-2026 Mid-Term Management Plan ADX 2026

14

Key strategies “Transition to a high profitability structure”

Chemicals｜Enlarge electronics and IT materials ② Strategic products
ADX 2023

ADX 2026

Leading cutting-edge semiconductors with SOZAI* to realize Society 5.0, which supports a sustainable society*SOZAI: Our Excellent Value; products, technologies and services.

• Increased capacity ofmaterials for advanced
DRAM• Relocation and expansionof the R&D center in Korea
semiconductor

Completion of a new ALD
materials plant in Taiwan
Increased capacity andoperation of photoacid
Generators in Chiba
Decision to construct
a new research buildingin Kuki R&D center

Front-end
process

DRAM
Logic IC

ALD materials(high-k materials)

ALD materials(wiring and others)

・Sales expansion of High-k materials the capacity ofwhich increased
・Sustainable development of key materials
・Operation of a new plant in Taiwan and sales
expansion・Response to structural changes in transistors(development of new materials)

Photoresists

Photoacid generator＋peripheral
materials

・Sales expansion of materials for advanced resists
the capacity of which increased
・Development of materials for next-generation
resists and building of a mass production system

Semiconductor
Back-end
package etc.
process

Wiring･sealing･
connecting+α・Material development in response to highintegration, etc.
・Market development with multiple materials
2024-2026 Mid-Term Management Plan ADX 2026

15

Key strategies “Transition to a high profitability structure”

Chemicals｜Enlarge electronics and IT materials ③ Area strategy and Measures
Maintaining market share of ALD materials andstrengthening technological development
Full-scale operation of and continued investment
in advanced materials invested in under
the previous mid-term management plan

▲ ADEKA KOREA R&D center(Relocated and opened in March 2023)

Building of logic semiconductor business
Operation of a new plant and continued
investment for the next generation

Development of market in the United States
Full-scale operation of the sales office inOregon State established in the fall 2023

▲ High-purity hydrogen peroxide
Strategic
equipment in Fuji Plant
Center (Scheduled to start operations in July 2024)

Leading-edge research and production technology
development + Response to domestic• Sales expansion of photoacid generators and continued
investment• Decision to construct a new research building in Kuki
(Completion: January 2026 plan)• Increased capacity of high-purity hydrogen peroxide2024-2026 Mid-Term Management Plan ADX 2026

16

Key strategies “Transition to a high profitability structure”

Chemicals｜Polymer Additives ① Strategies and Targets
Aiming for a business with a global presence that combines socialand economic value by strengthening business foundations
Business strategy
Sale expansion of
eco-friendly products

Sales targets

Markets

Target areas

Cultivation and strengtheningof top-share products andexpansion of business domains

Increasing profitability throughintegration of types of products
and cost reduction

ADX 2023

ADX 2026

Automobiles, Construction Materials,
Infrastructures, home appliances,
Medical care, Food packages ･･･

Recycled resins,
Agriculture, Environment

Continued

Asia, North America, Europe,
Middle East etc.
FY2024-2026 Mid-Term Management Plan ADX 2026

17

Key strategies “Transition to a high profitability structure”

Chemicals｜Polymer Additives ② Focus products and Measures
Expand sales of Eco-friendly products

Cultivation and strengthening of top-share products
Expansion into new business domains

Making plastics flame retardant(curbing generation of hazardous substances, CO and smoke)"ADK STAB FP series"
Current

Expansion

Launch of new products

X ＥＶ (electric vehicles)

Home appliance housings

Further expansion of applications

Establish production andsupply systems for earlymarket introduction

Supporting the development of the polymer industry by contributing
to realizing a recycling-oriented society*Not disclosed at this time.

“ADK CYCLOAID series”

Mobility

Agricultural films
Outdoor sheets
Outdoor roofings

Capital investment plans

Environment-Friendly polymer additives
ＵＡＥ

Bio-based polymeric plasticizer

Application developmentof light stabilizers

ADX 2023

3rd line equipment for
one-pack granule additives

ADX 2026“New products”
Maintenance and renewal ofequipment and CN*-related* Carbon neutrality
18

FY2024-2026 Mid-Term Management Plan ADX 2026

Key strategies “Transition to a high profitability structure”

Chemicals｜Functional Chemicals ① Strategies and Targets
Concentration of management resources on mobility, electronics and GX-related businesses
and business structure reform
Business strategy

Aiming for top share in global nichemarkets by strategically promoting
overseas expansion

Reform of the business structure
Response to carbon neutrality
Creation of
new businesses

ADX 2023
Sales targets

Markets

Rebuilding of
low-profit businesses

ADX 2026

Next-generation automobiles,
Sanitary, Cosmetics,
Infrastructures etc.

Mobility,
Electronics, GX ** Green Transformation

Continued

Target areas

Asia, North America, Europe
FY2024-2026 Mid-Term Management Plan ADX 2026

19

Key strategies “Transition to a high profitability structure”

Chemicals｜Functional Chemicals ② Focus products and Measures
Mobility

Environment ･GX

Improvement in automobile fuel efficiency andreduction in CO2e emissions“ADEKA Sakura-Lube series” Expansion
Our products
already adopted

Response to carbon neutrality (～ 2 0 3 0 )Use of CN* -compatible raw
materials and renewable energy

Optimization of production
processes(reduction of emission intensity)

Unadopted■■ Factory fill oil
Market cultivation in China
and the United States

Potential market(Lubricant Additives)

Grasping the trends of domestic industry
restructuring, and building a robust supply chain
Capital investment plans

Unadopted■■After Market oil
Development of prescription
packages to expand adoption

ADX 2023
Fuji Plant

High-purity
hydrogen peroxide
Mie Plant

ADX 2026
Maintenance and renewal ofcarbon neutral related equipment

Epoxy resin adhesives* carbon neutrality
FY2024-2026 Mid-Term Management Plan ADX 2026

20

Key strategies “Transition to a high profitability structure”

Food products ① Strategies and Targets
Accelerate global expansion centered on competitive strategic products, and improve overseas operating profit ratio

Business strategy
Expansion of highperformance products andeco-friendly products

Expansion of overseas markets
Expansion to target domains

Building of efficient production
systems(Carbon neutrality, automation, etc.)

Sales targets

ADX 2023

ADX 2026

Markets

Breads, Confectionery,
Pastries, Desserts etc.

Restaurant industry

Target areas

Japan, China,
Malaysia, Singapore etc.

(Hotel・Restaurant・Café)

Europe, North America,
India, Oceania, Middle East
FY2024-2026 Mid-Term Management Plan ADX 2026

21

Key strategies “Transition to a high profitability structure”

Food products ② Focus products and Measures
High Performance Products
Eco-friendly products

Overseas

Functional oils that help maintain the deliciousness of bread, etc.
and reduce food waste“Marvelous series”

Expansion

Plant-based foods that take into consideration food diversity
and the environment“Deli-PLANTS series”

Utilization of bases in China, Malaysia, and Singapore＋

Establishedin April 2024

Building of efficient production systems～ Towards a business resilient to change～

Review of
products and Utilization ofprocesses
fabless(Reduction of
GHG emissions)

Specialized organization fordeveloping overseas markets

Capital investment plans(Sales + Development)
ADX 2023• Building and reinforcing a supply chain including
ingredients• Development of sales channels in Europe, the UnitedStates, India, etc.
• Selection of collaboration partners who can produce
and sell the products and building of bases

Accelerate
automation

No large investments
Kashima Food,
Akashi Plants

Impairment loss on
non-current assets

ADX 2026“Processed fats and oils”(Japan・Malaysia)
Carbon neutral-related, automationand maintenance and renewal ofequipment
FY2024-2026 Mid-Term Management Plan ADX 2026

22

Key strategies “Transition to a high profitability structure”

Life Science ① Strategies and Targets
Utilizing existing bases to expand sales in Asia and Latin America, where markets are experiencing rapid growthBusiness strategy

Expansion ofbusiness and profits

Development of
new revenue sources
ADX 2023
Continued

Sales targets

Markets

Agrochemical(Pillar of revenue)

Target areas

Solidifying thebusiness foundation
ADX 2026

New revenue • Pharmaceuticals,sourcesAnimal health care products (pets)• Biopesticides,
Crop protection materials• Smart agriculture, Sanitary pest

Americas, Japan, the Asia-Pacific, Europe
FY2024-2026 Mid-Term Management Plan ADX 2026

23

Key strategies “Transition to a high profitability structure”

Life Science ② Focus products and Measures
Development of new business and new revenue sources

Expansion of business and profits

Expansion of
Key items andnew businesses

Cost reduction

Marketexpansion
based onarea strategy

Agrochemical
Animal healthcare products

Expansion・ Insecticides for paddy rice

・Asia-Pacific・ Insecticide for gardening

・ Central and SouthAmerican regions

・ Field herbicide

Biopesticides etc.

Development and commercializationof new insecticides
Continuation of joint research oncompound selection, etc.
(ADEKA× NIHON NOHYAKU)

Expansion of use of Interagromaterials + Self development
Capital investment plans

ADX 2023

ADX 2026
Focus

A plan to notably increase
insecticides for paddy rice “Orchestra”(Benzpyrimoxane)

India

Sales expansion of drugs
containing Benzpyrimoxan

Multi-purpose plant for
manufacturing active ingredientssuch as wet-paddy insecticides

Capital investment・
DX investment etc.

FY2024-2026 Mid-Term Management Plan ADX 2026

24

Key strategies “Transition to a high profitability structure”

Expand strategic products and new products
Sales of New products

Sales of strategic products (25 Product Groups)(Unit：JPY 100 million)

Polymer Additives
One-pack granule additive etc.
･･･７Product Groups

Plan

2,125
(CAGR 12.7％ or higher)

Electronics and IT materials
ALD precursors for Semiconductor etc.

A plan to expand sales significantly in Electronics and IT
materials and in Food products, among other areas(Unit：JPY 100 million)･･･５Product Groups

Functional chemicals
Lubricant and fuel additives etc.

1,483*

Oils and fats for the bakery industry etc.

Electronics and IT materials

590

Semiconductor materials(CAGR 22.8％ or higher)･･･４Product Groups

Food products

Plan

Food products
Functional oils and fats

318*･･･４Product Groups

Life Science
FY2023

FY2026

Result(Final year)

Herbicides for farmland etc.
･･･５Product Groups

FY2023

FY2026

Result(Final year)* The result for FY2023 represents the figure after revision for both strategic products and new products.
* Figures are expressed in units of 100 million yen.
FY2024-2026 Mid-Term Management Plan ADX 2026

25

Key strategies “Transition to a high profitability structure”

Increase capital efficiency■ ＲＯＩＣ (Return On Invested Capital)
Electronics
and IT
materials

6％Life Science

3%

Debt
reduction

ADEKA Group Total ：8.3 ％*FY2023 Results
Polymer
Additives

Strengthening asset management related
to business activities, and promoting
initiatives to improve capital efficiency

13 ％Functional
Chemicals

Foodproducts

6％

5％

Cash

“ADX 2026”

FY2026 Plans

ADEKA Group Total : 10.5 ％Current assets

Improving profitability

Electronics andIT materials

Aiming for high level while
actively investing

Shareholders’equityTightening of control

Fixed assets

Invested capital

Polymer Additives
Functional Chemicals
Food productsLife Science

Interest-bearing
liabilities

Justification of
Cross-Shareholdings* ROIC (Return On Invested Capital)：Operating profit×(１－ Effective tax rate) ÷ Invested capital (Average at beginning and end of period)
FY2024-2026 Mid-Term Management Plan ADX 2026

26

Key strategies “Increase Eco-friendly products and reduce of GHG emissions
through business structure transformation”
Reviewing sustainability priorities, “KPIs in 2030”, to realize “ADEKA VISION 2030”
Sustainability Priority Issues

E

KPIs in 2030

* non-consolidated

Conserving the global environment

Gather ideas from all members of ADEKA to achieve carbon neutrality by 2050
2030: Reduce CO2 emissions by 46% from 2013 (Scope 1+2)

Supply of eco-friendly products

Net sales of eco-friendly products: Increase to triple the level of 2019

Creating value that meets society’s
expectations

Number of ADEKA Innovative Value (AIV) certifications: twice the number in 2019

Conduct Dialogue with stakeholders

Maintaing and improving healthy relationships with stakeholder

Respect for human rights

Sophistication of human rights initiatives
Promoting human rights due diligence／Establishment and operation of grievance handling mechanism／
Promoting human rights education and awareness activities

S
Expand opportunities for utilizing
human resources

Promoting Diversity, equity
and inclusion (DE&I)

Obtain certification for
Health & Productivity

Enhance Group governance and risk

G management

Promoting diversity inmanagement positions• Ratio of female managers: 10%*• Ratio of foreigners/experienced people hired for
managerial positions：• Equivalent to each employee ratio*

Develop Climate

Improving employee engagement*

Management Outstanding Organization (White 500) Domestic ADEKA Groups• Aiming to disseminate the ADEKA Code of Conduct globally• Building and operating a group-wide risk management system for normal times and emergencies
FY2024-2026 Mid-Term Management Plan ADX 2026

27

Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Expand and create Eco-friendly products
ADX 2026 Eco-friendly products

ADX 2026 (Final year)

Sales of Eco-friendly products(Unit：JPY 100 million )

2,014
Plan

1,150
768

*

FY2023ResultFY2024FY2025Plan

FY2026

FY2030Target* The result for FY2023 represent figures after revision (addition) of Eco-friendly products.
* Figures are expressed in units of 100 million yen.

■ Lead free stabilizers■ Nucleating agent for automotives
Polymer additives■ Intumescent-type flame retardant■ Environment-Friendly Polymer Additives NEW
Electronics & IT materials■ UV curable materials■ Recycled materials for circuit production
processNEW■ ALD precursors for SemiconductorNEW■ Semiconductor related materials■ Water-based coating materials
Functional chemicals■ Bonding materials■ Lubricants for the reduction of friction■ Materials for the reduction of SOx■ Products with RSPO and other certifications■ Products for the reduction of food waste Food productsLife Science■ Plant-based foods■ Nursery box application agents for paddy rice NEW
Other■ Battery materials
FY2024-2026 Mid-Term Management Plan ADX 2026

28

Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Reduce GHG emissions with a view towards CN ① Roadmap
Roadmap

Gather ideas for achieving carbon neutrality by 2050 from all ADEKA,

2050：Achieving Carbon Neutrality
2030：Reduce CO2e emissions by 46% compared to FY2013 (Scope 1+2)Plan
GHG emissions(Unit：thousand t–CO2e)

13 % reduction(Compared to FY2013)

46 % reduction

ADX 2026 (Final year)Plan

199 thousand t-CO2e

227(Compared to FY2013)

199
123

(13% reduction the FY2013 level)
FY2013Results

FY2026(Final year)

FY2030TargetFY2024-2026 Mid-Term Management Plan ADX 2026

29

Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Reduce GHG emissions with a view towards CN ② Promotion strategy
Reduce GHG*1 emissions
Review the product mix(thousand t-CO2e)

Reduce energy consumption
per ton of products

Functional Chemicals＋50

FY2013△ 79
Business growth

Introduce renewable energy● Main action plans of promotion of energy conservation

GHG emissions

227

Develop environmentallyfriendly technologies

Promote energy
saving andintroduce
renewable energies

Fuel conversion fromheavy oil to LNG(Soma Plant, etc.)

199
FY2026

Plan▲ Soma Plant (ADEKA Sakura-Lube etc.)

Polymer Additives

Optimization of the
product mix

Food products

Optimization of
production processes■ Promotion of visualization of GHG emissions (improvement of GHG management accuracy, CFP *2 calculation, introduction of ICP *3)■ Execution of carbon neutral-related investments (total in three years: 8.6 billion yen)
*1 GHG：greenhouse gas *2 CFP: Carbon Footprint (to convert the amount of GHG emissions associated with products and services into a carbon dioxide amount and display it)*3 ICP: Internal Carbon Pricing (a mechanism in which a carbon price is independently set inside a company to encourage low-carbon investments and measures)
30
FY2024-2026 Mid-Term Management Plan ADX 2026

Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Address ADEKA Group’s priority sustainability issues ① Respect for human rights

Work to reduce human rights risks across the Group andrespect human rights in the supply chain
Establishment of
Human Rights Policy

ADX 2023
Established
ADEKA Group
Human Rights Policy
in February 2022

Promoting human rights due diligence

Remedy・Correction

ADX 2026① Assessment of impacts on human rights② Implementation of measures to prevent andmitigate negative impacts③ Monitoring⑤ Building and operation ofcomplaint-handling mechanisms

Establishment of a global grievance mechanism for handling human rights complaints(Utilization of JaCER “the Engagement and Remedy Platform”)④ Disclosure of information
Promotion of human rights education andawareness-raising activities for employees

FY2024-2026 Mid-Term Management Plan ADX 2026

31

Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Address ADEKA Group’s priority sustainability issues ② Promote DE&I
Promote DE&I* to embrace diversity and ensure fairness in the exercise of talent,
thereby contributing to the growth of the Company*Diversity, equity and inclusion

Expand opportunities for utilizing diverse human resources

Launched the projectADX 2023

ADX 2026

DE&I Project
Aim to increase the ratio of
female managers to more than 6 %* in 2026
Formulated and launched
nine measures
Spread understanding of DE&I, and foster a culture(in 2022)*non-consolidated

ADEKA
Total

FY2023

FY2026Plan

FY2030Target

5.4％

6%

10%

Respond to job group-specific issues
Promote measures to ensure fairness
Create and promote self-career plans
Expand promotion of DE&I to the entire Group with a focus on the promotion Women’sParticipation and Advancement, and promote measures to make the most of diverse attributes
FY2024-2026 Mid-Term Management Plan ADX 2026

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Key strategies “Increase Eco-friendly products and reduce of GHG emissions through business structure transformation”

Address ADEKA Group’s priority sustainability issues ③ Corporate Governance
Establish effective corporate governance, and make swift and decisive decisions
based on a strong management foundation
Reform of ourmanagement structure

Sophistication of Corporate Governance

ADX 2026

ADX 2023• Introduced a delegated executive officer system① Strengthening the functions of ② Promoting dialogue with shareholders• Changed chairperson of the Nomination & Remuneration
the Board of Directors and◼ Enhancing dialogue between institutional
Committee to independent outside director.
increasing its effectivenessinvestors and outside directors• Introduced the officer remuneration system using non◼ Promoting separation of supervision③ Strengthening functions of outside
financial indicatorsand execution
directors◼ Deliberating on more importantof outside directors: 50◼ Formulation of succession plan for theagenda items
10 Directors Ratio
Ratio of female directors: 10
president and CEO◼ Continuation of analysis and evaluation◼ Participation in DE&I and various projects
Internal directors: 5
Outside directors: 5of the effectiveness of the Board of◼ Holding of the Board of Directors meetings at
Directors
production bases and research centers
Male
FemaleAudit & Supervisory Committee Members:3

Aim to enhance corporate value by enriching discussions on the major directionof management, including sustainability and corporate strategy
FY2024-2026 Mid-Term Management Plan ADX 2026

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Key strategies “Establish a resilient management foundation”
Increase the resilience of the management foundation to take swift actions
in a highly uncertain environment
Measures for establishment ofa resilient management foundation

Politics

Struggle for supremacy
between the United State and China( economic security )Geopolitical risks( emergency measures )EconomyIndustry reorganization• post-COVID 19• decarbonization• Digital etc.

Climate change and extreme weather( disaster risk and prevention )Society
New social environment( changing values )Strengthen
supply chains
Initiatives forenhance human capital

Technology
Technological advances( innovation／digital )Promote DX

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Key strategies “Establish a resilient management foundation”

Strengthen supply chains
Ensuring business continuity even in the face of drastic changes in the external environment,
and creating a resilient supply chain
R&D

Purchasing

Manufacturing

Shipping anddistribution

Sales

Research and procurement of carbon-free raw materials in line with business strategies
Strategic product lines
・Identification and procurement of key raw materials
・Identification of the country of origin of upstream (processing site)

Response to supply chain disruption
・Promoting the securing of procurement routes for
specific raw materials

Establishing a risk management system
Establishing a risk management system in anticipation of emergencies
・Building a system for Information collection and analysis ・Formulation of policies & guidelines ・Formulation of contingency plans

Response to industry reorganization starting from CN
Response to industrial complexes in Japan・Information gathering and its reflection on business strategies

Response to regulations and industry standards
・CFP calculation including the Group companies
in Japan and overseas
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Key strategies “Establish a resilient management foundation”

Initiatives for enhance human capital
Promoting the allocation and development of human resources, our greatest
management resource, leading to the sustainable growth of the Group
Achieving the right people atthe right time and in the rightplace
Strengthening of the global
human resources
development system⚫Thorough implementation of job- and role-focused human resource management,
including for the elderly⚫Utilization of a talent management system and consideration of implementing an
open recruitment system⚫Definition of requirements for global human resources andimplementation of training programs⚫Introduction of a new incentive plan for the Group employees

Increased investment in
human resources andstrengthening of engagement⚫Implementation of engagement surveys and setting and improvement of KPIs
⚫Promotion of health and productivity management(in cooperation with health insurance society)FY2024-2026 Mid-Term Management Plan ADX 2026

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Key strategies “Establish a resilient management foundation”

Introduction of incentive plan
Introduced two incentive plans utilizing the stock system (the Company shares) for
employees of the Company and some of the Group companies

Employee Stock Benefit Trust( J-ESOP )Employees are awarded points based on their level ofcontribution, position, etc., and when certain conditions are met,
they receive the Company shares or other benefits equivalent to
the points they have earned.

special incentive scheme for
the Employee Stock
Ownership Association( Special Incentive Scheme )Employees who are members of the employee
shareholding association and agree to this scheme will be
granted the Company shares as a special incentive.

Strive to further enhance corporate value by raising employees’ sense of participationin management and motivation and morale to improve the share price and businessperformance
FY2024-2026 Mid-Term Management Plan ADX 2026

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Key strategies “Establish a resilient management foundation”

Promote DX
Accelerate company-wide digital strategy and promote continuous business transformation,using a new core system
ADX 2023
・Establishment of DX basewith a new core system
・Improvement of a remote
work environment

ADX 2026
Introduction of optimal digitaltechnology that contributes
to strengthening businesscompetitiveness and promotion
systemFutureBusiness transformation using
digital technologies◼ Establishment of Promotion StructureManage and execute digital investment themes at stage gates to promote company-wide DX
Sales DX

Advancement ofbusiness management

Research DX

Operational process
efficiency improvement

Production DX

Strengthening ofdigital governanceBack-office DX
Human resource
development and strengtheningof organizational power
FY2024-2026 Mid-Term Management Plan ADX 2026

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Capital Investment Plan
AmountTotal amount (Three-year period)

750

Polymer Additives

62

Electronics andIT materials

158

Plant
investment

Functional chemicals

44

Food products

101Life Science

42

Other

50

Research investment*1

197

Common and others

92(general, sales, systems, etc.)

Japan-overseas ratio (%)

Japanoverseas

82.1%

17.9%

・Expenses for the construction of a new research building at Kuki and,・Including expenses for maintaining and replacing equipment

A plan to proactively introduce management
resources to the domain of electronics and IT materials
Materials for advanced • New materials for DRAMs• Logic semiconductor materials etc.
semiconductors*1 Including expenses for the construction of a new research building in the Kuki R&D Laboratory (approx. 10 billion yen).
*2 Figures are expressed in units of 100 million yen.
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Dividend policy
ADX 2026 Dividend policy
Dividend payout ratio

Maintained More than
140

40 %

20

32.5%

30.2%

¥70

23.4% 23.5%

¥30

¥35

¥39

40.0% (Plan)¥45

STEP 3000-Ⅱ

¥48

¥48

FY2026

40%

35%

30.5%

26.1% 27.1%

40

45%

A payout ratio
maintained 30％ level

Line: Dividend payout ratio
Bar: Dividend per share

80

60

42.9%

Based on our comprehensive consideration of appropriate
shareholder returns, maintaining stable dividends as our policy.

120

100

A payout ratio over 40%

¥90

¥90

30%

Plan

Dividend
forecast

25%¥70【We Planned】■Dividend payout ratio

20%

Maintained More than 30％

15%

BEYOND 3000

ADX 2023

ADX 2026

0

10%

FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023

FY2026FY2024-2026 Mid-Term Management Plan ADX 2026

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Notice on Forecast Performance and Business Plans

The forecast performance and business plans specified in this document

have been prepared based on information available
as of the date of publication, as well as on various prerequisites;

therefore, the actual results may differ from these forecasts or plans
depending on various factors that may arise hereafter.
In the event of any discrepancy between the Japanese original and thisEnglish translation, the Japanese original shall prevail.
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