RIKEN TECHNOS CORPORATION
Financial and Management Results
Briefing for Second Quarter of Fiscal
Year Ending March 2023
November 16, 2022

Overview offinancial results
Contents

Segment overview
Medium- and LongTerm Initiatives

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

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

2

Overview of financial
results

1. Overview offinancial results

Segment overview

Medium- and Long-Term
Initiatives

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

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

3

Summary of consolidated financial results for ｜ 1. Overview of financial results
the first half of the year ending March 2023
(Unit: million yen)
Actual results forthe first half of theyear ended March
2022

Actual results forthe first half of theyear ending March
2023

Year on Year (YoY)changeNet sales

50,96559,527+8,562+16.8％

Gross profit

9,064

9,870

+806

+8.9％

Operating profit

3,076

3,498

+422

+13.7％

Ordinary profit

3,307

4,040

+733

+22.1％

Profit attributable toowners of parent

2,137

2,377

+240

+11.2％

Basic earnings per share

33.90

37.64

+3.74

+11.0％

6.0

5.9

▲0.1

-

(Yen/kl)

50,60083,75033,150+65.5％

Average exchange rate (Yen/USD)

107.76123.1815.42+14.3％ROS (%)
Naphtha priceYoY percentagechange➢a decline in the automobile market due to the shortage of semiconductors, the lockdown in➢Despite
半導体不足による海外での自動車市場落込み、上海ロックダウンの影響、インドネシア国でのインフラ工事遅れ
Shanghai,and delays in infrastructure construction in Indonesia, revenue and profit increased due toがあるも、原材料価格上昇分の製品価格への転嫁および円安効果もあり増収
measures to pass on raw material price hikes to product prices and the effects of yen depreciation.
➢ Net sales and all profit measures in the first half of the fiscal year set all-time highs.

4

Net sales by region
Net sales for the first half of theyear ending March 2023

400

84
495
65
(13.2%)

148
300

97

106

80

(17.9%)

405
49(12.2%)

11774(14.6%)

167

197

60

(33.3%)(32.9%)

40

237

265

287

(58.8%)(52.2%)(48.5%)

1H FY2019

1H FY2020

1H FY2021

1H FY2022

43.7%

41.4%

48.0%

51.6%

(56.4%)

Other
その他
North America
北米

Asia excl. Japan
アジア
Japan
日本

(29.0%)

278
0Overseas
sales ratio

100

595

509

(30.0%)

200

100

103

100

600
500

billion yen

8.5 billion yen increase from the same term of previous year
(16.8% increase)

Change in sales volume, with volume for the first half of fiscal year ended March, 2020 set to 100(100 million yen)

700

59.5

｜ 1. Overview of financial results

200➢ Overseas sales ratio exceeded the medium-term business plan target of 50%.

5

Net sales by segment
Net sales for the first half of theyear ending March 2023
(100million yen)

59.5

｜ 1. Overview of financial resultsbillion yen

8.5 billion yen increase from the same term of previous year
(16.8% increase)

Change in sales volume with volume for the first half of fiscal year ended March 2020Other
set to 100

103

100

97

700

84

595

600
500

119
400
300

200
100

509

495
405
99
(24.4%)

121(23.8%)

120

101(20.2%)(19.8%)(21.7%)

83116(20.5%)

130116(25.7%)(23.5%)(30.2%)

0
1H FY2019

104

162

40

(27.2%)

155

176(30.6%)(29.7%)

1H FY2021

1H FY2022(25.8%)

1H FY2020

60

Electronics
Energy, telecommunications, ITequipment marlets, etc.

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

20(28.8%)

149

135

80

Building & Construction
Housing, buildings, construction
materials, etc(22.8%)(24.0%)

107

100

Transportation
Automobile, railroad, ship market, etc

06Analysis of factors underlying YoY change
in operating profit｜ 1. Overview of financial results(Unit: million yen)

Delay in passing on
raw material pricehikes to productpricesYen depreciation
effects

Manufacturing
cost reductions
effects

SG&A reductions
effects

Increase inlogistics costs

Increase inelectricity rates

Decrease in sales
volume

5,000

4,000

309

264

153

207

244
382

529
3,000

2,000

3,076

Profit increase of 422 million yen

3,498

1,000

0
1H FY2021

1H FY20227

Consolidated balance sheet｜ 1. Overview of financial results(Unit: million yen)March 31,2022

September
30, 2022

65,11873,522

Cash and deposits

20,702

Trade receivables
Inventories

Increase/decrease

March 31,2022

September
30, 2022

8,404 Liabilities

37,19242,497

5,305

23,576

2,874

Current liabilities

31,40936,444

5,035

26,344

28,126

1,782

Non-current liabilities

5,783

6,053

270

17,40421,0093,605 Net assets

65,44869,767

4,319

668

810

142

Share capital

8,514

8,514

0

37,522

38,742

1,220

Capital surplus

6,597

6,597

0

Property, plant, andequipment

25,13627,332

2,196

Retained earnings

38,20039,861

1,661

Intangible assets

2,106

2,239

133

4,449

5,869

1,420

Investments andother assets

10,2799,170▲1,109

7,686

8,924

1,238

Total assets

102,641

112,2659,624

102,641

112,265

9,624

Current assets

Other
Non-current assets

Other
Non-controllinginterests
Total liabilities and net
assetsIncrease/decrease➢Increase in cash and deposits due to increase in operating CF➢Increase in trade receivables, inventories, and trade payables due to higher raw material
prices➢Decrease in investments and other assets due to decline in stock prices

8Consolidated statement of cash flows ｜ 1. Overview of financial results(Unit: million yen)First half of the year First half of the year
ended March 2022
ending March 2023

Increase/Decreasea. Cash flows from operating activities

1,915

4,491

2,576

b. Cash flows from investing activities▲1,072▲1,685▲613

Purchase of property, plant, andequipment▲1,161▲1,663▲502

Purchase of intangible assets

▲121

▲83

38

211

60

▲151

843

2,805

1,962

▲1,532

▲712

820

247

780

533

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

▲441

2,873

3,314

Cash and cash equivalents at end of period

20,63923,551

2,912

Other
c. Free cash flow (a + b)
d. Cash flows from financing activities
e. Other➢Cash and deposits increased due to the generation of operating cash flow significantly
exceeding investments.

9

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

Actual results
for year ended
March 2022

Initial earnings
Revisedforecasts for year earnings forecast
endingfor year ending
March 2023
March 2023

Compared to previous
forecast

Compared to previous
year

Difference

Difference

Growth rate

Growth rate

109,923

125,000

125,000

0

0.0%

15,077 13.7%

Operating profit

6,292

6,500

7,100

600

9.2%

808 12.8%

Ordinary profit

6,889

6,500

7,600

1,100 16.9%

711 10.3%

Profit attributable toowners of parent

3,941

3,300

4,000

700 21.2%

59

1.5%

Basic earnings per
share

62.47

52.26

63.28

11.02 21.1%

0.81

1.3%

ROS (%)

5.7

5.2

5.7

0.5

-

0.0

-

ROE (%)

7.1

5.6

6.8

1.2

-

▲0.3

-

Naphtha price(Yen/kl)

56,62582,00082,0000-25,375-

Average exchange
rate (Yen/USD)

109.86117.00132.40

15.40

-

22.54

-

Net sales➢Net sales and all profit measures are forecast to set all-time highs.
➢Profit growth in the second half of the year is expected to be constrained by the slowdown
in the US economy and rising electricity prices.

10Analysis of factors underlying change inoperating profit for year ending March 2023
(forecast)｜ 1. Overview of financial results(Unit: million yen)
Delay in passing on
raw material pricehikes to productpricesYen depreciation
effects

Manufacturing
cost reductions
effects

SG&A reductions
effects

Increase inelectricity rates

Increase inlogistics costs

Decrease in sales
volume10,000
9,000
8,000

489

7,000

434

253

414

419
771

1,235

6,000
5,000

4,000
3,000

6,292

Increase of 808 million yen (+12.8%)

7,100

2,000
1,000
0
FY 2021

FY 2022(revised forecast)11

Overview of financial
results

2. Segment overview

Segment overview

Medium- and Long-Term
Initiatives

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

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

12

Transportation

Wire Harnesses

Molded Parts for Automobiles

13

Transportation
Actual results for the
first half of the year
ending March 2023

｜ 2. Segment overview

2,074 million yen revenue increase (+13.3%)
522 million yen profit increase (+43.4%)

Forecast for the fiscal
year ending March
2023

6,243 million yen revenue increase (+19.2%)
663 million yen profit increase (+24.2%)(Unit: million yen)

20,0003,000

17,661
15,587(Unit: million yen)

50,00042,50038,70040,00032,457

15,000
2,000

4,000

30,000

3,400

1,726

10,00020,000

3,600

2,737

2,000

1,000

1,203

10,000

5,000

0
0

0
1H FY2021

Domestic sales

6,000

0
FY2021

1H FY2022
Overseas sales

Segment profit◼ Domestic automobile production remained flat. However, sales
increased as raw material price hikes were passed on to productprices.
◼ Overseas sales increased due to sales expansion, despite theimpact of automobile production cutbacks attributable tosemiconductor shortages, the Shanghai lockdown, and other factors.
◼ Segment profit grew due to expanding sales in Japan and overseas.

Domestic sales

FY2022(forecast)

Overseas sales

FY2024(plan)

Segment profit◼ Domestic market sales are forecast to increase due to growth insales of sealing parts and functional parts.
◼ Overseas sales are forecast to increase due to recovery in the wire
harness market and growth in sales of sealing parts.
◼ Segment profit is forecast to grow due to expanding sales in Japanand overseas.

14

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 of compounds forwire harnesses

Production of Japanese automakers and our sales of compounds for automotive molded parts(100 million yen)(100 million yen)

(1,000 t)

300
250

100

85
206

24

18
39

100
50
0

99
First
Half 79

101

2,247

(10K vehicles)

2,576 2,500 Market Growth:+8%
Net Sales: +16%

13
20

60

North America
China

40
20

61
3

1

4

FY2021

FY2022(forecast)

FY2024(plan)

0

1,500

90
First
Half
47

ASEAN
Japan

128

2,000

115

2H forecast

2H forecast(total)

51
First
Half
95

135

80

194
162

150

2,430

180

90

78

200

Market Growth: +9%
Net Sales: +20%

45

Actual results for the first half of the year ending March 2023
• Despite the impact of the Shanghai lockdown and the shortage of semiconductors,
sales expanded for heat-resistant thin-walled wire harness compounds for India
and wire harness compounds for non-Japanese companies in China.

Measures for the second half of the year ending March 2023
• Secure Japanese customers (for the growing markets of ASEAN countries andIndia).
• Boost sales of materials for thin-walled electric wires.
• Bring cost-competitive materials to market.
• Expand sales to non-Japanese customers.

141

1,000

Number ofvehicle

500

53
0

0
FY2021

Sales ofcompound100

Compound usage* Research by RIKENTECHNOS based on
figures published by
Japanese
automakers

62

FY2022(forecast)

FY2024(plan)

produced.
* Based on figures
published by
Japanese
automakers

Actual results for the first half of the year ending March 2023
• Domestic sales expanded among sealing materials and functional materials
such as exterior parts, rubber substitutes, etc.
• Overseas sales grew for materials for sealing parts in Thailand and China.

Measures for the second half of the year ending March 2023
• Boost sales for molding and sealing materials (expand adoption by major
Japanese customers and pursue overseas development).
• Boost sales of functional materials; promote material conversion and rubber
substitution; pursue overseas development.

15

Daily Life&
Healthcare
Medical (PVC)

Rubber Substitutes

Environmentally Friendly
Materials

16

Daily Life & Healthcare
Actual results for the
first half of the year
ending March 2023

3,122 million yen revenue increase (+23.8%)510 million yen profit decrease (▲50.7%)｜ 2. Segment overview

Forecast for the fiscal
year ending March
2023

3,512 million yen revenue increase (+11.4%)
356 million yen profit decrease (▲19.2%)(Unit: million yen)

20,0002,000(Unit: million yen)

40,00034,20016,21915,00035,4006,000

30,68813,09730,0004,000

10,000

1,000

1,008

2,500

20,000
1,856

5,000

10,000497

00
1H FY2021

Dometic sales

1H FY2022

Overseas sales

Segment profit◼ Domestic sales increased due to expanded sales of elastomer
compounds and increased sales of small roll wraps based on recovery
in demand for restaurant and home meals.
◼ Overseas sales increased due to growth in sales of medical-use PVC
compounds in ASEAN countries.
◼ Segment profit decreased due to delays in passing on raw material
price hikes to product prices for food wrapping materials.

2,000

1,500

0

0
FY2021

Domectis sales

FY2022(forecast)

Overseas sales

FY2024(plan)

Segment profit◼ Domestic sales are forecast to increase due to expanded sales ofelastomer compounds and recovery in demand for food wrapping
materials for restaurants and home meals.
◼ Overseas sales are forecast to increase due to higher sales of PVC
compounds for medical, lifestyle and industrial materials in ASEAN
countries.
◼ Segment profit is forecast to double in the second half from the first half
due to expanding sales of medical compounds in ASEAN countries.
However, due to first half results, overall profit is forecast to decline.

17

Daily Life & Healthcare
Focus Area ① Medical (PVC)

Focus Area ② Rubber Substitutes

Global dialysis circuit sales and our sales of medical compounds

Domestic medical and industrial rubber consumption and our sales of rubber substitutecompounds(100 million yen)120

｜ 2. Segment overview(Million sets)

433

367

Market Growth: +6%
Net sales: +39%

81

79

300

(10K tons/year)

35

450

346

90

(100 million yen)

2H forecast (total)

21

30

20.4

20

25

20 Market Growth: +2%
Net sales: +36%
15

19

20
Overseas sales

60

30

56

54

40
First
Half
26

First
Half
38

15
78

150

10
volume*02

1

FY2021

FY2022(forecast)

3
FY2024(plan)

0

First
Half
8

Domestic sales
Dialysis circuit

37* Source: 2019 Medical Life Science,
Fuji Chimera Research Institute

Actual results for the first half of the year ending March 2023
• Sales increased due to increased demand from Japanese customers in ASEAN
countries and passing on of raw material price hikes to product prices.
• Expanded numbers of non-Japanese customers (from imported materials to
locally procured materials)

Measures for the second half of the year ending March 2023
• Boost sales of PVC compounds to Japanese customers in ASEAN countries anddevelop new non-Japanese customers.

5

2H forecast

10

29

10

5

14
9

0
FY2022(forecast)

Medical andindustrial rubber
comsumption

0
FY2021

Net sales

FY2024(plan)* Source: The Japan Rubber
Manufacturers Association

Actual results for the first half of the year ending March 2023
• Domestic sales increased due to growth in sales of elastomer compounds for
medical use and food.
• Overseas sales increased due to growth in sales of elastomer compounds forlifestyle and industrial materials.

Measures for the second half of the year ending March 2023
• Boost domestic sales of high-performance compounds for food, lifestyle, andmaterials applications.
• Overseas, expand sales of elastomer compounds in ASEAN countries.

18

New Product Introduction｜ 2. Segment overview

Focus Area ③ Environmentally Friendly Materials
Environmentally friendly ACS resin

Natural RIKEBIO®

➢ Developed tin-free ACS
compounds with high flame
resistance, high weather resistance,and excellent electrical properties.
➢ Evolved into environmentallyfriendly ACS compounds consistent
with green procurement objectives.

➢ Compounded discarded natural
resources using our originalcompounding and processing technology.
➢ Contributed to waste reduction andresource savings by utilizing discarded
resources as raw material for processing
and re-merchandising.
➢ Efforts are underway in collaboration withvarious customers.

Compounding with our original
formulations and manufacturing
technologies
19Electronics

Electric Power and Industrial
Wires

Telecommunications

Optical Films
20

Electronics
Actual results for the
first half of the year
ending March 2023

｜ 2. Segment overview

1,919 million yen revenue increase (+19.0%)336 million yen profit increase (+163.5%)

Forecast for the fiscal
year ending March
2023

3,407 million yen revenue increase (+15.9%)661 million yen profit increase (+150.6%)(Unit: million yen)

15,0001,000(Unit: million yen)

40,0004,000

12,022
10,00029,00030,00010,102

24,900542

21,493500

20,000

1,300

5,000

439

0

0
1H FY2021

Domestic sales

1,100

10,000205

2,000

1H FY2022

Overseas sales

Segment profit◼ Domestic sales increased due to higher sales of PVC compounds forelectric power and industrial wires market and telecommunications market.
◼ Overseas sales increased due to higher sales of PVC compounds, mainly
in ASEAN countries and expanded sales of automotive thermal barrier
films in ASEAN countries and China.
◼ Segment profit grew due to higher sales both domestically and overseas.

00
FY2021

Domestic sales

FY2022(forecast)
Overseas sales

FY2024(plan)
Segment profit◼ Domestic sales are forecast to increase due to first half results, despite
unfavorable market conditions for electric power and industrial wires andtelecommunications.
◼ Overseas sales are forecast to increase due to expanded sales ofautomotive thermal barrier films, mainly in Asia, in addition to increased
sales of PVC compounds.
◼ Segment profit is forecast to grow due to higher sales both domesticallyand overseas.

21

Electronics｜ 2. Segment overview

Focus Area ① Electric Power and Industrial
Wires
Domestic electric power and construction electricity market and our salesof compounds(100 million yen)

210

343

(1,000 t)

348

Focus Area ③ Optical films

Domestic telecommunications market and our sales of compounds

Optical film market and our sales of optical films(100 million yen)

120

365
2Hforecast

165
7

230

109
4

electricalmaterials

200

2

180

17

39 First 19

135

First
Half
32

100
Marketvolumefor30

0
FY2024(plan)* Source: The JapaneseElectric Wire & Cable
Makers’ Association

90

18
52

0

0
FY2021

FY2022(forecast)

225

20

16

FY2024(plan)

Marketvolumefortelecommunicatio

45

250

RoboticsandFA

telecommunicatio

10

15

ns.

* Source: The JapaneseElectric Wire & Cable
Makers’ Association

Market Growth: +5%
Net sales: +7%

30

nsandmobility

27

construction
electricity

Half
45

50

Electricpowerand0
FY2022(forecast)

71

270

227

216
下期予想計

67

industrialwires

49
FY2021

60
ElectricalpowerandFirst
First 59
Half 158
Half
51
105 49

40

247

84

90
Componentaround111

Growth: +2%
270 Market
Net sales: +25%

234

(Million m2)(100 million yen)

(1,000 t)

225

300

140

70

Market Growth: +1%
Net sales: +2%

Focus Area ② Telecommunications

First
Half
7

30

8

180

2Hforecast

135

Opticalfilm(Total)

90

Automobile
windowsmarket

45

8
0

0
FY2021

FY2022(forecast)

FY2024(plan)*Sources: Current Status and Future
Prospects of Advanced
Electronic Materials 2022
 Current Status and Future
Prospects of Display-RelatedMarkets 2021
 Current Status and Future
Prospects of Functional Polymer
Films 2019
Fuji Chimera Research Institute Global EV Sales
Yano Research Institute

Actual results for the first half of the year ending March 2023

Actual results for the first half of the year ending March 2023

Actual results for the first half of the year ending March 2023

• Expanded domestic market share in the electric power andconstruction electricity fields.
• Expanded overseas sales of wires for electric power andconstruction electricity in ASEAN countries.
• Established tin-free ACS formulation and initiated marketingin domestic and ASEAN markets.

• Launched sales of materials for EV charging cable for the
North American and European markets.
• Launched sales of FFC for EV vehicles.
• Achieved the goals of the final year of the three-year
medium term business plan in year one due to sales
growth in the domestic robotics and FA market.

• Sales of automotive thermal barrier films doubled from lastyear as adoption progressed among new automakers,
mainly in ASEAN countries and China.
• Sales of semiconductor films declined due to global
weakness in the mobile market.

Measures for the second half of the year ending March 2023

Measures for the second half of the year ending March 2023

Measures for the second half of the year ending March 2023

• Develop applications for automotive high-performancefilms and coaxial cables and films for telecommunications
equipment.

• Boost sales of resin windows to markets beyond
automotive applications, including construction materials
and home electronics.
• Expand sales channels for automotive thermal barrier
films to the Middle East and Africa.
22• Boost domestic sales in the electric power andconstruction electricity fields.
• Boost foreign sales for materials for electric power andconstruction electricity in ASEAN countries.

Building&Construction
Construction Films

Housing and Building
Materials

23

Building & Construction
Actual results for the
first half of the year
ending March 2023

1,447 million yen revenue increase (+11.9%)
69 million yen profit increase (+11.6%)｜ 2. Segment overview

Forecast for the fiscal
year ending March
2023

1,946 million yen revenue increase (+7.7%)
131 million yen profit decrease (▲11.6%)(Unit: million yen)

15,0001,000

13,58140,0004,000

12,13330,00010,00027,10028,000

3,000

1,400

2,000

668

598

500

20,0005,000
10,00000
1H FY2021

Domestic sales

25,154

1H FY2022

Overseas sales

Segment profit◼ Domestic sales of films declined due to weak housing market
while sales of PVC compounds for resin sashes increased dueto the spread of ZEH, resulting in increased sales.
◼ Overseas sales increased due to expanding sales of PVC
compounds in ASEAN countries and in the US and expanding
sales of films in North America.
◼ Segment profit grew due to expanding sales of compounds
both domestically and overseas.

1,131

1,000

FY2021

FY2022(forecast)

1,000

0

0

Domestic sales

Overseas sales

FY2024(plan)
Segment profit◼ Domestic sales of PVC compounds for resin sashes is forecast
to increase due to the spread of ZEH, resulting in increased
sales.
◼ Overseas sales are forecast to increase due to growth in salesof PVC compounds in ASEAN countries.
◼ Segment profit is forecast to decrease due to reduced volume
attributable to the slowing US economy.
24Building & Construction｜ 2. Segment overview

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 (Trillion yen)

125
100
75

44

46

85

75

48
93
10

79

10

50

Market Growth: +5%(100 million yen)

2H forecast

180(Million m2) Net sales: ▲7%(100 million yen)

50

39
6

First
Half
40

40

Overseas sales

135
103

Domestic sales

20

34

Floor area of new

FY2024(plan)

71
6

62

60

123

50

First
Half
72

18

45
40

29

55

50

0
* Sources:
Research Institute ofConstruction andEconomyFY2022(forecast)

ASEAN

40
30
20

Japan

10

Construction

0
FY2021

2H forecast

North america

37

domestic non-housing

0
FY2022(forecast)

13

First
Half
51

50

construction

0
FY2021

90

83
10

25

60

59

143

30
First
Half
43

Market Growth: +2%
Net sales: +39%

FY2024(plan)

market investment* Source:
Construction Economic Report
NO. 73 ©RICE

Actual results for the first half of the year ending March 2023

Actual results for the first half of the year ending March 2023

• Domestic sales declined due to weak housing market, despite progress in design
development in the non-housing market.
• Overseas, films sales increased in North America. Design matching withdecorative melamine board met with success.

• Domestic sales grew for PVC compounds for resin sashes due to the spread of
ZEH, resulting in increased sales.
• Overseas sales increased due to progress in passing on raw material price hikes
to product price of PVC compounds in ASEAN countries and in the US.

Measures for the second half of the year ending March 2023

Measures for the second half of the year ending March 2023

• Boost sales in the well-performing market of non-residentials, focusing on
products for commercial and retail use.

• Domestically, leverage demand for resin sashes as ZEH spreads; expand
sales of elastomer compounds.
• Boost sales of PVC compounds in ASEAN countries.

25

Overview of financial
results

Segment overview
3. Medium- andLong-Term Initiatives
Medium- and Long-Term
Initiatives

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

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

26

Three-year Medium-term
Business Plan

｜ 3. Medium- and Long-Term Initiatives(Unit: 100 million yen)
ROS

Management
Policy

1,350

1400
1200
1000
800

ROE

1,250

120

1,099
8.0%
7.1%

6.3%
5.7%

5.7%

Four Strategies

63200

Take on the challenge toward new
businesses and products
Contribute to solving environmental andsocial issues

85

71
39

40

FY2021

FY2022(forecast)

40

50

0

20
0

Intensify Global Management and Generate
Synergies
Stay ahead of customers’ expectations

80
60

400
Aiming to become the leading provider of comfort for all living spaces

100

6.8%

600

Challenge for Innovation

140

Net sales

Operating profit

FY2024(plan)Net profit

Assumptions
Plan for fiscal year ending March 2025
Naphtha price: 61,000 yen
Exchange rate: 114 yen/USD
27

Three-year Medium-term
Business Plan

｜ 3. Medium- and Long-Term Initiatives

Strategy 1: Intensify global management andgenerate synergies.

Strategy 2: Stay ahead of customers’ expectations.

◼ Boost sales of medical compounds in ASEAN
countries.
◼ Expand business with local non-Japanese companies.
◼ Expand Ice-µ business to the Middle East, Africa, etc.
◼ Reinforce the global production system (Thailand,
Vietnam, North America).
◼ Overseas sales ratio: 51.6%◼ Accelerate the establishment of optimal formulations
by introducing materials informatics.

Strategy 3: Take on the challenge toward new
businesses and products.

Strategy 4: Contribute to solving environmental andsocial issues.

◼ Establish a Start-up Office for New Business
Development.
◼ Enhance the R&D system (strengthen formulation
technology by integrating compound and film
development).
◼ Introduce new film prototype machines to accelerate
development speed.

◼ Establish quality control system upon stabilization of
DR (Design Review) operations.
◼ Improve responsiveness to film customers by
establishing a Film Business Unit.

◼ Establish and launch operations of Sustainability Committee.
◼ Disclose climate change-related information based on TCFD
recommendations.
◼ Develop and expand sales of environmentally friendly
products.
▷ Market launch of RIKEBIO®
▷ Expand adoption of rubber substitute elastomers.
◼ Implement career development seminars for employees incareer track positions.
◼ Implement social contribution activities (e.g., support fordisaster-affected areas, donation of disaster prevention
items).
28

Investment (numerical planning)
Capital and System investment
Major Projects
FY ending
March
2023
(forecast)

Expansion of facilities in ASEAN countries
Reinforcement of facilities in Japan
Facility maintenance in Japan and overseas

FY ending
March
2024
(forecast)

Expansion of facilities in ASEAN countries
Expansion of facilities in the US
Expansion and reinforcement of facilities inJapanMoving to achieve carbon neutrality in Japan
Facility maintenance in Japan and overseas

FY ending
March
2025
(forecast)

Expansion of facilities in the US
Expansion and reinforcement of facilities inJapanMoving to achieve carbon neutrality in Japan
Facility maintenance in Japan and overseas
Introducing next-generation core system

Total｜ 3. Medium- and Long-Term Initiatives

Three-year medium-term business plan:
19.5 billion yen

TotalamountDomestic

Overseas

50

35

85

(Unit: 100 million yen)

Initial Plan

Depreciation

15

48

33

49

36

77

38

60

44

16

70

38

195

128

67

195

109

✓ Forecast to exceed initial plan in Year 1, with capital investment focusing on ASEAN countries.
✓ Capital investments to be made in the next fiscal year and beyond to reduce CO2 emissions
29

Investments
Expanding production
facilities at RIKEN(THAILAND) CO., LTD.

｜ 3. Medium- and Long-Term Initiatives

Expanding production
facilities at RIKEN
VIETNAM CO., LTD.

Expanding production
facilities at RIKEN
ELASTOMERSCORPORATION《Progress》《Progress》《Progress》✓

Completed construction for Warehouse
No. 4 (July 2022)✓ Expansion plans approved in October
2022✓

Began construction of Plant No. 6 (newbuild) (May 2022-)✓ Expected to be pushed back roughly
one year from original plans due todelays in obtaining permission✓✓

To be completed in February 2023, newline to start operation in June 2023
Investment: Approximately 1.5 billion yen✓ Currently working toward the start ofoperations in August 2024
✓ Investment: Approximately 1.5 billion
yen✓ Scheduled to start operations in
December 2024
✓ Investment: Approximately 1.5 billion
yen30Research and Development｜ 3. Medium- and Long-Term Initiatives

Enhancements of the R&D System
Creating high value-added products by integrating compound and film development.

Film-formation and manufacturing
technology

Expand R&D centers.
Add research personnel.
Practice open innovation.

Enhancements of
the research system

Compound formulations andkneading technology✓ Enhance added value by establishing an integrated
research system from compounds to film-formation.
✓ Improve development speed.
✓ Refine design via use of extensive research facilities.

Introduce prototype machine similar to final machines.
Strengthen foundational technologies.
Introduce materials informatics.

Investment ofapproximately
2 billion yen

IP Strategy
Creating IP through in-housedevelopment◼ Reinforce strengths through R&D center
restructuring.
◼ Begin operating a system to encourage patentapplications.

Utilization of IP information
Conduct analysis incorporating IP information
with business information.

Practice IP landscape31Sustainability Measures｜ 3. Medium- and Long-Term Initiatives(Climate Change Initiatives)

2030 Targets (Scope 1 and 2 on a non-consolidated basis)

46.2% reduction from FY2019(24,139 t)*FY2019 base value 44,868 t

2050 Targets (RIKEN TECHNOS GROUP)

CO2 emissions reduction targets(1,000 t)
Non-consolidated basis

Group-wide

46.2%
46.2%減reduction

Achieve carbon neutrality(FY)

Future RIKEN TECHNOS GROUP initiatives to reduce mid- to long-term CO2 emissions◼ Renovate facilities at production sites (e.g., air conditioning, production equipment).
◼ Switch from heavy oil boilers to natural gas boilers.
◼ Create energy roadmaps.
◼ Expand the introduction of renewable energy.
◼ Expand lineups and sales of RIKEBIO® series.
◼ Expand Scope 3 disclosure.
32

Sustainability Measures(Human Capital, Governance)｜ 3. Medium- and Long-Term Initiatives

Human capital
Fostering a corporate culture and building a system that allows diverse human talent to play
active roles.
 Establish a global human resource development training system; strengthen recruitment of foreign
nationals.
 Strengthen hiring of experienced personnel (through efforts such as referral hiring), review employee
training, and strengthen employee development.
 Implement career development training and strengthen awareness among managers of the need topromote diversity.
Percentage of women, non-Japanese, and mid-career employees in management positions(End of March 2022)(End of September 2022) (Target for end of March 2025)
 Women
2.0%
1.9%
7.0%
 Non-Japanese
0.7%
1.3%
3.0%
 Mid-career employees
30.5%
31.0%
40.0%

Governance Enhancement
 Establish and launch operations of Sustainability Committee (April 2022).
 Disclose climate-related financial information (TCFD) (June 2022); further expand disclosure in the
future.
 Appoint female directors; add one outside director (June 2022).
 Review training for directors (e.g., holding board meetings at plants/laboratories).
 Strengthen subsidiary governance/risk management.
 Strengthen response to risks; review the risk management process.

33

Sustainability Measures (contributing ｜ 3. Medium- and Long-Term Initiatives
to society through our core business)

Development of materials that contribute to recycling, resource savings, and energy savings in existing businesses• PVC Resin: Environmentally Friendly
Approximately 60% of PVC is derived
from salt, a natural substance.

Raw materials for PVC

SaltPetroleum

Sashes for interior windows made of
PVC are crushed, mixed with virginmaterials, and recycled into molding
materials.

Additives improve durability, processability, andrecyclability. Other functions can be added according to
the intended use, including flame retardance andweather resistance.

• Elastomer: Useful as a rubber substitute material
EPDM (ethylene propylene rubber) substituteOlefin-type TPV ACTYMER®G
Performance equivalent to oil resistant rubber

Highly oil resistant TPV ACTYMER®K

Material offering both rubber-likecharacteristics and good molding
processability
CO2 emissions during molding are lower than forconventional rubber due to the elimination of thevulcanization process. The material is lighter, reducing
vehicle weight, improving fuel efficiency, andcontributing to energy savings.
34

Shareholder Returns - Dividends - ｜ 3. Medium- and Long-Term Initiatives
Dividend Policy  Consolidated dividend payout ratio revised from 30% to 35%
Annual Dividend Annual dividend increased by 4 yen from previous year’s 19 yen to 23 yen(4 yen increase from initial forecast)

Dividend payout ratio and dividend trend

Dividend Policy

40.0%

40

36.3%

33.3%

35.0%

31.2%
28.8%

30.0%
25.0%

24.0%

30

30.4%

29.5%

11

12

14

16

19

Initial forecast 19

20.0%
15.0%

25

23

16

35

10.0%

20

15
10
5
0

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

We will strive to achieve a
consolidated dividend payout ratioof around 35% and to pay stabledividends, duly accounting for
future business investment andcapital adequacy.

Dividend for current FY
InitialInterim: 9 yen, year-end:
10 yen, annual dividend 19 yenInterim: 9 yen, year-end:
14 yen, annual dividend 23 yen
35

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

THE RIKEN TECHNOS WAY

MissionWe are a challenger
that harnesses the power of scienceto improve the quality of lifeand create a safe, affluent society.
We continuously provide new value andsatisfaction to people, companies and society
through our original and superior formulations
and manufacturing technologies of multiple
resins.

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

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

37

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

1,919 consolidated employees and
792 non-consolidated employees
separately (As of Sep. 30, 2022)

Head Office

Waterras Tower, 2-101, Kanda-Awajicho,
Chiyoda-ku, Tokyo 101-8336 JAPANAiming to become the leading provider of comfort for all living spaces

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

38

Global Network
RIKEN TECHNOS CORPORATION
Domestic subsidiaries• RIKEN CABLE TECHNOLOGY CO., LTD.
• RIKEN CHEMICAL PRODUCTS CO., LTD.
• KYOEI PLASTIC MFG CO., LTD.
• RIKEN TECHNOS INTERNATIONAL CORPORATION• IMI Co., LTD.

⚫ Production Companies⚫ Sales Companies

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

RIKEN (THAILAND)
CO., LTD.

RIKEN AMERICASCORPORATIONRIKEN ELASTOMERS(THAILAND) CO., LTD.

RIKEN VIETNAM
CO., LTD.

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

PT. RIKEN INDONESIA

RIKEN ELASTOMERSCORPORATION

Copyright Ⓒ 2022 RIKEN TECHNOS CORP. All Rights Reserved.

39