Financial Results
The 1st Half of FY2020(Apr. 1 - Sep. 30, 2020)

October 30, 2020

Index■Main Points in 2Q/FY2020

P. 2■Business confidence by segment

P. 3■Business environment

P. 4■Summary of performance

P. 5■Summary of P/LElastomer Business

P. 8



Specialty Materials Business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/F

P. 22■Forecast for FY2020

P. 24■Actions for 2H-FY2020

P. 25©ZEON CORPORATION. All rights reserved.

1

Main points in 2Q of FY 2020
Both net sales and operating income decreased YoY due to thedeterioration of the global economy by the languishing US-China trade
friction, the spread of Covid-19, etc. There is no impact on
procurement and production by Covid-19.
Elastomers: The prices of main raw materials have bottomed out.
Demand for the automobile industry and general industrial products
varies depending on the application, but overall it is still weak and themarket recovery is slow.
Specialty Materials:• Energy materials for EV is still sluggish.
• Specialty Chemicals was QoQ flat.
• Optical films were firm (both small-to-medium and large sized),sales volume exceeded 1H of FY 2019.
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2

Business confidence by segment (YoY, QoQ)
Segment

Elastomers

Specialty
materials

BusinessYoY

QoQ

QoQ market situation

Rubbers

Demand for tires is returning. Specialty rubber is slow torecovery.

Latexes

Steady for the medical/sanitary gloves. Still weak ingeneral industry

Chemicals

Demand is steady, but the market condition is weakSpecialty
chemicals

Demand for household cleaning and sanitary products
are steadyElectronics
materials

Demand in the semiconductor industry is flat

Toner

The demand in the office / home-printing are still weak

Energymaterials

EV sales are recovering. Steady in consumer use.

Specialtyplastics

Steady in both optical and medical use

Optical films

Steady in both small-to-medium and large size
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3

Business Environment【Raw materials】【Exchange rate】

2Q-FY2019 1Q-FY2020 2Q-FY2020

JPY/US$JPY/€
Naphtha (JPY/KL)Asian Butadiene (US$/MT)¥107.6¥120.4¥40,200$1,210¥107.8¥118.2¥25,000$358©ZEON CORPORATION. All rights reserved.

¥105.9¥123.6¥30,100$586

YoY

QoQ-2%-2%+0%+5%-25%+20%-52%+64%4Summary of Performance(Unit : JPY100m)

1H
FY20191H
FY2020-16

1,634

1,374-259-11+13150

99-51

59-15+8160

109-5146-9+10116

82-34

2Q
FY20191Q
FY20202Q
FY2020Net Sales

809

695679-130

Operating Income

674356

Ordinary Income

7451

Net Income

5536

YoY

QoQ

YoY

Due to the deterioration of the global economy by the spread of Covid-19, bothnet sales and operating income decreased.
 YoY (in 3 mo.) : Net sales: -13B JPY, operating income: -1.1B JPY
 QoQ:Net sales: -1.6B JPY, operating income: -1.3B JPY

 YoY (in 6 mo.) : Net sales: -25.9B JPY, operating income: -5.1B JPY* April-June 2020 results of overseas subsidiaries are consolidated in Q2 result.
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5

Summary of Performance (by segments)(Unit : JPY100m)

Net Sales
Elastomers
Sp. Materials
Others
Net sales

Operating Income

2Q
FY20191Q
FY20202Q
FY2020448232129809371223
10069534224296679

2Q
FY20191Q
FY20202Q
FY20202541
167-148-443

949-356

Elastomers
Sp. Materials
OthersOp. income

YoY-106+10-33-130
YoY-16+8-4-11

QoQ-29+19-4-16
QoQ+11+1+1+13

1H
FY20191H
FY2020919455260
1,634713
465
196
1,374

1H
FY20191H
FY20206092-1150

897-799

YoY-206
10-64-259
YoY-51
5-6-51

 Elastomers: Both net sales and operating income decreased YoY (in 3 mo.), but netsales decreased and operating income increased in QoQ. OP increased due to falling ofraw material prices, etc.
 Specialty Materials: Both net sales and operating income increased YoY (in 3 mo.) andQoQ. Reached OP record as half-year result.
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6

Index■Main Points in 2Q/FY2020

P. 2■Business confidence by segment

P. 3■Business environment

P. 4■Summary of performance

P. 5■Summary of P/LElastomer Business

P. 8

Specialty Materials Business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/F

P. 22■Forecast for FY2020

P. 24■Actions for 2H-FY2020

P. 25©ZEON CORPORATION. All rights reserved.

7

Summary of P/L: Elastomer Business【Naphtha price vs. Sales of Elastomer biz.】（JPY/KL）(JPY100m)【Net sales and volume of Rubbers*】
19/Q1=100* Index: Sales/volume for 19/Q1=100

 Japanese naphtha price rose in Q2, but the effect on net sales was limited.
 General-purpose rubber (mainly for tires) shows signs of recovery, butSpecialty rubber (for automobile and general industry) market is slow to recover.
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Summary of P/L: Elastomer Business(Unit : JPY100m)

2Q-2019 1Q-2020 2Q-2020
Sales volumne (K ton)
150
128
146
Rubbers90
65
82
Latexes3128
31
Chemicals
30
35
33
Net sales
448
371
342
Rubbers
321
245
218
32
Latexes4233
Chemicals
78
81
79
Others/eliminations
71313
Operating income
25-19
Operating income ratio

5%0%

YoY-4-803-106-103-10
1

YoY (%)
-3 %
-9 %
1 %
8 %
-24 %
-32 %
-24 %
1 %

QoQ
18
173-3-29-27-1-2-16-63 %11QoQ (%)
14 %
27 %
12 %-8 %-8 %-11 %-2 %-2 %3%

 Rubbers: Sales volume recovered QoQ, but net sales declined.
 Latexes and Chemicals: Both net sales and volume were flat QoQ.
Sales volume is same level of 2Q-2019.

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9

Elastomers: Operating income variance (QoQ)(Unit : JPY100m)

Sales volume from subsidiaries*
outside of Japan decreased dueto the Covid-19 effects.

+1+41-22
20/Q1-1Effects fromraw material price andinventory valuation-9-1+11Exchange
Rate

Rawmaterial
prices* April-June 2020 results of overseas subsidiaries are consolidated in Q2 result.
©ZEON CORPORATION. All rights reserved.

20/Q2910

Elastomers: Operating income variance (3 mo./YoY)(Unit : JPY100m)• Raw material /sales
price formula• Market downturn

Effects fromraw material price-23
Decreased due
to Covid-19

19/Q225+10+43-44-16
Exchange
Rate©ZEON CORPORATION. All rights reserved.

Rawmaterial
prices20/Q2911Index■Main Points in 2Q/FY2020P. 2■Business confidence by segment

P. 3■Business environment

P. 4■Summary of performance

P. 5■Summary of P/LElastomer Business

P. 8



Specialty Materials Business

P. 13



OthersP. 19■Summary of B/S

P. 21■Summary of C/F

P. 22■Forecast for FY2020

P. 24■Actions for 2H-FY2020

P. 25©ZEON CORPORATION. All rights reserved.

12Summary of P/L : Specialty Materials(Unit : JPY100m)

Net sales

2Q-2019 1Q-2020 2Q-2020
232
223
242

YoY
YoY (%)104%

QoQ QoQ (%)
199%

Sp. Chemicals
Sp. Plastics

75143
1470
141
1267
163
12-820-2-11 %
14 %
-17 %

-3220-5 %16 %-2 %Operating income

4148

49820 %

12%

18%

22%

20%

Medical devices, etc.
Operating income ratio Specialty Chemicals: Battery Materials is still sluggish. Toner demand had
decreased by the effect of Covid-19. Specialty Chemicals kept same level as
Q2. Net sales decreased within this segment total.
 Specialty Plastics: Optical Films had steady business. Net sales increased
within this segment total.

©ZEON CORPORATION. All rights reserved.

13Specialty Materials: Operating income variance (QoQ)(Unit : JPY100m)• Factory utilization• Raw material price+8

Sales volume
increased+6-3-1-10• Increased R&D and trial manufacturing cost of optical films• Increased the freight and packaging cost due to theincreased shipment

20/Q148

20/Q249+1
Exchange
Rate©ZEON CORPORATION. All rights reserved.

Rawmaterialprices
14Specialty Materials: Operating income variance (3mo./YoY)(Unit : JPY100m)• Factory utilization• Raw material priceSales volume
increased+13+4

19/Q241-3-6-0

20/Q249+8
Exchange
Rate©ZEON CORPORATION. All rights reserved.

Increased the freight andpackaging cost due to theincreased shipment

Rawmaterialprices
15

Situation in Specialty Materials: Energy materials (volume)

YoY

QoQ

78%

92%

164%

98%

Consumer use, etc.

105%

119%

Total

88%

102%

EV
Shipment to China

 EV:
The demand of completed automobile is recovering, but the shipment is
not recovered yet because of the inventory within the supply chain andthe self-manufacture movement in Europe.
 Customer use, etc.:
Steady demand for the mobile devices (by remote working) and power
tools (e.g. home cleaner). ESS (Energy storage system) demand is alsosteady.
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16

Situation in Specialty Materials: COP (volume)
YoY

QoQ

Optical use

99%

110%

Medical use, etc.

89%

67%

Total

93%

79%

 Optical use:
Controlling the shipment to prepare the construction to expand theproduction capacity (plans to complete in July 2021). and the shut-down
for regular maintenance in 2021. Demand itself is steady.
 Medical use, etc.:
Shipping dropped QoQ because of the local inventory, but the demanditself is steady, and the supply is tight as optical use.

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17

Situation in Specialty Materials: Optical films (volume)
YoYQoQ

For small-to-medium size

127%

128%

For large size FPD

109%

109%

Total

103%

114%

 For small-to-medium size:
Steady demand for the mobile devices (by remote working).
 For large size FPD:
Despite the demand decrease due to the postponement of the Olympics/
Paralympic games, the shipments exceeded YoY due to the “stay-athome demand” by Covid-19 and the growth in the Chinese market.

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18

Summary of P/L: Others(Unit : JPY100m)

270【First half /Year-on-year】
Net sales ：-6.4 billion yen
Operating income: -0.7 billion yen

206

Decline in Trading and RIM businessdue to the Covid-19 effect.

125

1H-FY2019

1H-FY2020

Net Sales

Operating Income©ZEON CORPORATION. All rights reserved.

19

Index■Main Points in 2Q/FY2020

P. 2■Business confidence by segment

P. 3■Business environment

P. 4■Summary of performance

P. 5■Summary of P/L
P. 8

Elastomer BusinessSpecialty Materials Business P. 13



OthersP. 19■Summary of B/SP. 21■Summary of C/FP. 22■Forecast for FY2020

P. 24■Actions for 2H-FY2020

P. 25©ZEON CORPORATION. All rights reserved.

20

Summary of B/S(Unit : JPY100m)( )=Variance with the figures at the end of Mar., 2020

Total assets
3,953 (-98)

【Current assets】 -156
 Cash and deposits +34
 Account receivable -113
• Current ratio: 212%
• On-hand liquidity ratio:
1.5 month

Current assets
1,989【Fixed assets】 +58（-156）

Fixed assets
1,965 Capital expenditures +86（+58）

【Current liabilities】 -186
 Account payable -150

Current liabilities
938 （-186）
Long-tern liabilities 316 （-8）

Total netassets
2,699（+95）

【Total net assets】 +95
 Net income +82• Retained earnings +68
 Financial indicators• Interest-bearing debt 210 (-)

 Depreciation & Amortization-78• Equity ratio 67.5％ (+4.0％)• D/E ratio 0.08 (-)

 Investment securities +56©ZEON CORPORATION. All rights reserved.

21

Summary of C/F(Unit : JPY100m)

233

112

1H-2019

1H-2020

CF from Operating Act.

112233

CF from Investing Act.

-106-177

556

CF from Financing Act.

-24-36

CF-18

20

Free CF-36-24
1H-FY2019

1H-FY2020-106-177
CF from Operating Act
CF from Financing Act

CF from Investing Act

 CF from Operating act: +121
• Working capital: +64
 CF from Investing act: -71• Increase of capital investment: -62(Optical film facility, etc.)
 CF from Financing act: -12©ZEON CORPORATION. All rights reserved.

22

Index■Main Points in 2Q/FY2020

P. 2■Business confidence by segment

P. 3■Business environment

P. 4■Summary of performance

P. 5■Summary of P/LP. 8

Elastomer Business

Specialty Materials Business P. 13



OthersP. 19■Summary of B/SP. 21■Summary of C/FP. 22■Forecast for FY2020

P. 24■Actions for 2H-FY2020

P. 25©ZEON CORPORATION. All rights reserved.

23

Forecast for FY2020
Forecast of net sales &operating income (Unit : JPY100m)

Dividend (Unit : JPY)

3,220
2,750

1,376

1,374261
FY2019(actual)99
1H-2020(actual)

Net sales

160

61
2H-2020(forecast)

FY2020(forecast)

Operating income Forecast of FY2020: Net sales 275 billion yen, Operating income 16 billion yen
 Dividend forecast: Interim ¥11, year-end ¥10/share (±0 from previous year’s result)©ZEON CORPORATION. All rights reserved.

24

Actions for 2H-FY2020

The anxiety factors to the global economy (such as the second
wave of Covid-19 and the US-China tense situation) cannot be
wiped out. “Emergency response headquarters” continues totake the initiative in continuing to respond to contingencies.
We continue to implement infection prevention measures at all
business sites globally and maintain the supply chain andensure the health and safety of employees and their families.

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25

Zeon’s plans, forecasts, and other data appearing in this presentation werecalculated based on information which was currently available and therefore
includes risks and uncertainties. Actual results may differ depending on
various factors.

Next Announcement of Financial Statements

The 3rd quarter ofFY2020

Jan. 29 th , 2021
Subject to change without noticeThis document is a translation of the original Japanese-language and is provided for convenience only.
In all cases, the original Japanese version shall take precedence.
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26

Reference: Capital Expenditures, Depreciation & Amortization
and R&D Expenses(Unit : JPY100m)

2019 Actl.
291

2019 Actl.
174

2020
Forecast
180

2020
Forecast
1852019 Actl.
153
2020
Forecast
145©ZEON CORPORATION. All rights reserved.

27