Business Results for theThird Quarter of the Fiscal Year Ending
December 31, 2023 (Unaudited)

November 9, 2023
KURARAY CO., LTD.

November 9, 2023
KURARAY CO., LTD.

Consolidated Earnings Report for the Third Quarter of the Fiscal Year Ending
December 31, 2023
Name of listed company:
Stock code:
Stock exchange listing:
URL:

KURARAY CO., LTD.
3405
Tokyo Stock Exchange, Prime Market
https://www.kuraray.com/

Representative:
Title:
Name:

Representative Director and President
Hitoshi Kawahara

Contact:
Title:

Senior Manager, Corporate Communications Department, Corporate
Management Planning Office
Shinichi Takizawa+81-3-6701-1070

Name:
Tel:

Preparation of supplementary documentation for the quarterly earnings report: Yes
Holding of quarterly earnings results briefing: Yes (for securities analysts and institutional investors)(Millions of yen rounded down unless otherwise stated)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending
December 31, 2023 (January 1, 2023 to September 30, 2023)(1) Consolidated Operating Results(Percentage changes displayed for net sales, operating income, ordinary income and net income attributableto owners of the parent are comparisons with the corresponding period of the previous fiscal year.)(Millions of yen)
Net Sales

Fiscal 2023 3Q
Fiscal 2022 3Q

(%)
3.8%
―

574,374
553,150

Note: Comprehensive income:Net Income per
Share (Yen)
Fiscal 2023 3Q
Fiscal 2022 3Q

Operating Income

109.00139.6461,702
70,846(%)(12.9%)―For the fiscal 2023 third quarter:
For the fiscal 2022 third quarter:

Ordinary Income

57,75370,078(%)(17.6%)―Net Income
Attributable to Ownersof the Parent(%)(22.7%)
36,487―47,174¥102,575 million (−25.7%)¥137,969 million (―)

Fully Diluted Net
Income per Share(Yen)
108.92139.53

Note: The Company adopted the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29;
March 31, 2020) from January 1, 2022. Therefore, year-on-year percent changes from the figures for the third
quarter of fiscal 2021, which predates the adoption of the standard, are not presented.

(2) Consolidated Financial Position(Millions of yen)
As of September 30, 2023
As of December 31, 2022

Total Assets
1,271,568
1,221,533

Net Assets
754,599
668,534

Equity Ratio (%)
57.6
52.9

[Reference] Equity attributable to owners of the parent:
As of September 30, 2023: ¥732,219 million
As of December 31, 2022: ¥646,750 million

2. Dividends(Yen)
Record Date
Fiscal 2022
Fiscal 2023
Fiscal 2023
(Forecast)Mar. 31――

Cash Dividends per ShareJun. 30
Sep. 30
Dec. 31
21.00
23.00
―
25.00
―

Annual
44.00

25.00

50.00

Note: Revisions to cash dividend forecast during this period: No

3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending December
31, 2023 (January 1, 2023 to December 31, 2023)(Percentage changes displayed for net sales, operating income, ordinary income and net income attributableto owners of the parent are comparisons with the corresponding period of the previous fiscal year.)(Millions of yen)
Net Sales

Full Fiscal Year

770,000(%)
1.8

Operating
Income78,000Ordinary
Income(%)(10.5) 73,000

Net Income
Attributable to
Owners of the Parent(%)(%)(13.2)
45,000(17.1)Net Income
per Share(Yen)
134.43

Note: Revisions to forecasts of consolidated financial results during this period: Yes[Reference](1) Changes in Important Subsidiaries during the Period (Changes in Special
Subsidiaries Involving Changes in the Scope of Consolidation)
No(2) Adoption of Special Accounting Practices in the Preparation of Quarterly
Consolidated Financial Statements
No(3) Changes in Accounting Principles, Procedures and Presentation Methods inConnection with the Preparation of Quarterly Consolidated Financial
Statements
1. Changes following revision of accounting standards: No
2. Changes besides 1. above: No
3. Changes in accounting estimates: No
4. Restatement: No(4) Number of Shares Issued and Outstanding (Common Shares)
1.

Number of shares issued and outstanding (including treasury stock) as of the period-end:
As of September 30, 2023
354,863,603 shares
As of December 31, 2022
354,863,603 shares

2.

Number of treasury shares as of the period-end:
As of September 30, 2023
20,106,297 shares
As of December 31, 2022
20,171,061 shares

3.

Average number of shares for the period (cumulative):
As of September 30, 2023
334,736,132 shares
As of September 30, 2022
337,836,766 shares

Note: It is not required that this type of earnings report be audited.

Cautionary Statement with Respect to Forecasts of Consolidated BusinessResults(Cautionary note regarding forward-looking statements)
The results forecasts presented in this document are based upon currently available
information and assumptions deemed rational. A variety of factors could cause actual
results to differ materially from forecasts. Please refer to “1. Qualitative Information
regarding Business Results (3) Basis for the Revision in Forecasts, Including Consolidated
Operating Results Forecasts” on page 6 of the Attachment for the assumptions used.

Index of the Attachment
1. Qualitative Information regarding Business Results ...................................................

2(1) Overview of Consolidated Business Results ............................................................

2(2) Overview of Financial Position .................................................................................

6(3) Basis for the Revision in Forecasts, Including Consolidated Operating Results
Forecasts ...................................................................................................................

6

2. Quarterly Consolidated Financial Statements and Notes ...........................................

7(1) Quarterly Consolidated Balance Sheets ...................................................................

7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated
Statements of Comprehensive Income ....................................................................

9(3) Notes regarding Quarterly Consolidated Financial Statements ...............................

11

Notes regarding Going Concern Assumptions .........................................................

11

Notes regarding Material Changes in Shareholders’ Equity .....................................

11

Additional Information ...............................................................................................

11

Segment Information, etc..........................................................................................

111

1. Qualitative Information regarding Business Results(1) Overview of Consolidated Business Results
In the third quarter of fiscal 2023 (January 1, 2023–September 30, 2023), theworld economy gradually recovered due in part to the resolution of supply chain
disruptions and the easing of supply limitations that had been caused by asemiconductor shortage, but the pace was slow and lacked robustness.
Moreover, the outlook remained unclear due in part to economic stagnation
caused by continued financial tightening in Europe, slowing growth caused
mainly by stagnation in the real estate market in China, and such geopoliticaltensions as the Russia-Ukraine situation, for which there seems to be no
offramp.
Amid these circumstances, consolidated operating results for the third quarter offiscal 2023 are as follows: net sales increased ¥21,224 million (3.8%) year on
year to ¥574,374 million; operating income decreased ¥9,143 million (12.9%)
year on year to ¥61,702 million; ordinary income decreased ¥12,324 million(17.6%) year on year to ¥57,753 million; and net income attributable to ownersof the parent decreased ¥10,687 million (22.7%) year on year to ¥36,487
million.
Regarding the civil lawsuits related to the fire that occurred at a U.S. subsidiaryin May 2018, we reached settlements with the remaining plaintiffs in April 2023,
except for one for which a motion to dismiss was expected to be granted.
Accordingly, in the third quarter, we recorded an extraordinary loss of ¥7,675
million as loss on litigation related to the lawsuits, etc. The motion to dismiss theindividual’s lawsuit was granted in July 2023. The lawsuits have therefore been
resolved.
(Millions of yen)
FY2022 3Q

FY2023 3Q

Consolidated Period

Consolidated Period

Net sales

OperatingincomeNet sales

OperatingincomeChangeNet sales

OperatingincomeVinyl Acetate

285,641

58,987

302,782

63,773

17,1404,785

Isoprene

48,717

4,145

46,833(4,066)(1,883)(8,211)

Functional Materials

123,720

6,493

139,645

8,125

15,924

1,632

Fibers and Textiles

48,6306,580

44,946

1,741(3,684)(4,838)

Trading

43,7783,926

44,760

3,740

982

(186)

Others37,633

1,938

33,989581(3,643)(1,357)(34,972)(11,226)(38,583)(12,194)(3,611)(968)

553,150

70,846574,374

61,702

21,224(9,143)Elimination &Corporate
Total

2

Results by Business Segment
Vinyl Acetate
Sales in this segment were ¥302,782 million (up 6.0% year on year), andsegment income was ¥63,773 million (up 8.1%).

(1) The sales volume of PVOH resin was impacted by receding global demand,
but we further promoted a shift to high value-added products. Shipments of
optical-use poval film recovered favorably due to inventory adjustments for
LCD panels returning to normal. As for Advanced Interlayer Solutions,although demand for PVB film showed signs of receding for construction
applications, demand for automotive applications remained firm. Shipmentsof water-soluble PVOH film decreased mainly for use in unit dose detergent
packets in Europe due to inflation-driven belt tightening and other effects.
(2) As for EVAL™ ethylene vinyl alcohol copolymer (EVOH resin), althoughsales for automotive applications remained firm, sales volume decreased
due to weak sales for food packaging applications.
Isoprene
Sales in this segment were ¥46,833 million (down 3.9% year on year), andsegment loss was ¥4,066 million (operating income in the same period ofprevious fiscal year was ¥4,145 million). In addition, a new plant in Thailand
began operations in stages from February.

3(1) Results for isoprene chemicals and elastomer were affected by intensifying
competition in addition to lower demand, which began in the latter half ofthe previous year.
(2) The sales volume of GENESTAR™ heat-resistant polyamide resin
decreased due to inventory adjustments for electric and electronic devices
despite demand for automobile applications being on a recovery track.
Functional Materials
Sales in this segment were ¥139,645 million (up 12.9% year on year), andsegment income was ¥8,125 million (up 25.1%).

(1) In the methacrylate business, results were affected by higher raw material
and fuel prices in addition to a decrease in sales volume due in part toinventory adjustments for electric and electronic devices.
(2) In the medical business, sales of cosmetic dental materials, mainly inEurope and the United States, remained favorable.
(3) In the environmental solutions business, demand increased for drinking
water and industrial applications in North America, and sales of activatedcarbon remained steady.
Fibers and Textiles
Sales in this segment were ¥44,946 million (down 7.6% year on year), andsegment income was ¥1,741 million (down 73.5%).

4

(1) Shipments of CLARINO™ man-made leather decreased due to the effects oflower demand for luxury applications despite signs of a recovery in sports
applications.
(2) In fibers and industrial materials, sales of KURALON™ were weak inEurope, but sales of VECTRAN™ remained stable.
(3) In consumer goods and materials, demand for KURAFLEX™ in therestaurant industry was weak.
Trading
Sales in this segment were ¥44,760 million (up 2.2% year on year), andsegment income was ¥3,740 million (down 4.7%).

(1) In fiber-related businesses, the materials business struggled, but sales ofsportswear applications remained firm.
(2) Demand for resins and chemicals in Asia was on a recovery track despite
being weak up to the second quarter.
OthersSales in this segment were ¥33,989 million (down 9.7% year on year), andsegment income was ¥581 million (down 70.0%).

5

(2) Overview of Financial Position
Total assets increased ¥50,035 million from the end of the previous fiscal year to¥1,271,568 million despite a ¥10,589 million decrease in cash and deposits,
which were offset by a ¥26,404 million increase in property, plant and equipment
and a ¥23,009 million increase in inventories. Total liabilities decreased ¥36,029
million to ¥516,969 million due to factors that included a ¥43,031 million decrease
in interest-bearing debt.
Net assets rose ¥86,064 million to ¥754,599 million due in part to an increase inforeign currency translation adjustment. Equity attributable to owners of theparent amounted to ¥732,219 million, for an equity ratio of 57.6%.
(3) Basis for the Revision in Forecasts, Including Consolidated Operating
Results Forecasts
Based on the operating results in the third quarter and the recent businessenvironment, the full- year forecasts of consolidated operating results for fiscal
2023 (January 1, 2023 to December 31, 2023), which were announced on
August 9, 2023, were revised as follows.
Revised Consolidated Operating Results Forecast for Fiscal 2023

810,000
770,000(40,000)(4.9%)

84,00078,000(6,000)(7.1%)

79,00073,000(6,000)(7.6%)(Millions of yen)
Net Income
Attributable to
Owners of the
Parent47,00045,000(2,000)(4.3%)

756,376

87,13984,06054,307

Net Sales
Previous Forecast (A)Revised Forecast (B)Amount Adjusted (B − A)
Percent Adjusted(Ref.)
Fiscal 2022 results

Operating Ordinary
Income Income(Yen)

Net Income
Per Share
140.43134.43161.13

Note: The above forecasts are based on the best information currently
available. Actual operating results may vary significantly due to various factors.

6

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)

December 31, 2022 September 30, 2023
ASSETS
Current Assets
Cash and deposits
Notes and accounts receivable–trade, andcontract assets
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current Assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant, and equipment
Intangible assets
Goodwill
Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total Assets

7

123,724

113,134

157,016

160,024

4,852
145,851
19,07860,104
23,815(510)
533,933

3,553
164,437
19,68363,923
22,864(623)
546,998

94,745219,200
23,264137,424
37,926
512,562

112,353
281,362
22,83378,29944,118538,966

56,05830,432
34,993
121,484

59,43931,607
38,121
129,167

23,19497
2,104
16,71811,458(20)
53,553
687,600
1,221,533

25,568138
2,319
16,902
11,600(94)
56,435724,570
1,271,568

(Millions of yen)
December 31, 2022 September 30, 2023
LIABILITIESCurrent Liabilities
Notes and accounts payable–trade
Short-term borrowings
Commercial papers
Current portion of bonds payable
Current portion of long-term borrowings
Accrued expenses
Income taxes payable
Accrued bonuses
Other
Total current liabilities
Non-current Liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilities
Retirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total Liabilities
NET ASSETS
Shareholders’ Equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated Other Comprehensive Income
Valuation difference on available-for-salesecurities
Deferred gain or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeShare Acquisition Rights
Non-controlling Interests
Total Net Assets
Total Liabilities and Net Assets

852,71734,48010,00010,00030,434
21,075
11,3709,132
42,119221,330

47,81536,525――24,65818,986
9,809
12,53547,986
198,316

60,000179,491
17,27925,626
5,303
43,968331,668
552,998

60,000160,190
17,93428,484
5,628
46,414
318,652
516,969

88,95587,152399,910(25,735)
550,282

88,95587,146420,330(25,653)
570,779

5,769

7,761

611
90,555(468)

277
153,557(156)

96,467

161,440

341
21,443
668,534
1,221,533

341
22,038754,599
1,271,568

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated
Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(Millions of yen)
Fiscal 2022 3Q
Fiscal 2023 3Q(January 1, 2022 –(January 1, 2023 –September 30, 2022) September 30, 2023)
Net sales
553,150
574,374
Cost of sales
369,455
392,686
Gross profit
183,694
181,688
Selling, general and administrative expenses
Selling expenses
34,43630,742
General and administrative expenses
78,412
89,243
Total selling, general and administrative
112,848
119,986
expenses
Operating income
70,846
61,702Non-operating income
Interest income
201
1,231
Dividend income
388
434
Share of profit of entities accounted for using
210
122
equity method
Other
2,191
909
Total non-operating income
2,992
2,699
Non-operating expenses
Interest expenses
1,063
2,028
Foreign exchange losses
―
1,498
Other
2,696
3,120
Total non-operating expenses
3,760
6,648
Ordinary income
70,07857,753Extraordinary income
Insurance claim income
1,178
2,421
Gain on sale of investment securities
2,510
800
Gain on sale of shares of subsidiaries and―715
associates
Total extraordinary income
3,689
3,937
Extraordinary losses
Loss on litigation
1,714
7,675
Loss on abandonment of non-current assets
275
718
Costs related to the suspension of operations
5,429―
Total extraordinary losses
7,419
8,393
Income before income taxes and non-controlling
66,34753,297
interests
Income taxes—current
21,33018,343
Income taxes—deferred(3,195)(1,865)
Total income taxes
18,135
16,478Net income
48,21236,8191,037
332
Net income attributable to non-controllinginterests
47,17436,487
Net income attributable to owners of the parent
9

Quarterly Consolidated Statements of Comprehensive Income(Millions of yen)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxTotal other comprehensive income
Quarterly comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests

10

Fiscal 2022 3Q
Fiscal 2023 3Q(January 1, 2022 – (January 1, 2023 –September 30, 2022) September 30, 2023)
48,21236,819(1,946)

1,993

1,510
89,465(254)
63,704728

312

89,757
137,969

65,756
102,575

135,661
2,308

101,459
1,116

(3) Notes regarding Quarterly Consolidated Financial Statements
Notes regarding Going Concern Assumptions
None
Notes regarding Material Changes in Shareholders’ Equity
None
Additional Information
Regarding the civil lawsuits related to the fire that occurred at a U.S. subsidiary in May
2018, we reached settlements with the remaining plaintiffs in April 2023, except for one forwhich a motion to dismiss was expected to be granted. Accordingly, in the third quarter, werecorded an extraordinary loss of ¥7,675 million as loss on litigation related to the lawsuits,
etc. The motion to dismiss the individual’s lawsuit was granted in July 2023. The lawsuits
have therefore been resolved.
Segment Information, etc.
● Segment Information
I. Third Quarter of Fiscal 2022 (January 1, 2022 to September 30, 2022)
1. Net sales, income and loss by reporting segment(Millions of yen)
Reporting Segment
Vinyl Isoprene Functional
AcetateMaterials

Net sales
Outside274,196
customers
Intersegment
sales and
11,445transfers
Total
285,641
Segment income 58,987

38,725

121,016

9,991

2,703

48,717
4,145

123,720
6,493

FibersandTextiles

Other
Business1
Trading

Total

Adjustment2 Consolidated
Statements
3of IncomeTotal

45,943 42,537 522,420

30,730 553,150―

553,1502,686

1,240 28,068

6,903 34,972(34,972)―

48,630 43,778 550,488
6,580
3,926 80,133

37,633 588,122
1,938 82,072(34,972)(11,226)

553,150
70,846

Notes:
1. The “Other Business” category incorporates operations not included in businesssegment reporting, including engineering business.
2. Adjustment is as follows: Included within segment loss of ¥11,226 million is theelimination of intersegment transactions of ¥1,338 million and corporate expenses of¥9,887 million. Corporate expenses mainly comprise the submitting company’s basic
research expenses.
3. Segment income is adjusted to agree with operating income in the consolidated
statements of income.

11II. Third Quarter of Fiscal 2023 (January 1, 2023 to September 30, 2023)
1. Net sales, income and loss by reporting segment(Millions of yen)
Reporting Segment
Vinyl Isoprene Functional
AcetateMaterials

Net sales
Outside289,374
customers
Intersegment
sales and
13,407transfers
Total
302,782
Segment income 63,773(loss)

37,665

136,694

9,168

2,950

46,833

139,645(4,066)8,125

FibersandTextiles

Other
Business1
Trading

Total

Adjustment2 Consolidated
Statements
3of IncomeTotal

42,133 43,693 549,562

24,812 574,374―

574,374

2,812

1,067 29,405

9,177 38,583(38,583)―

44,946 44,760 578,968

33,989 612,958(38,583)

574,374

581 73,896(12,194)

61,702

1,741

3,740 73,315

Notes:
1. The “Other Business” category incorporates operations not included in businesssegment reporting, including engineering business.
2. Adjustment is as follows: Included within segment loss of ¥12,194 million is theelimination of positive intersegment transactions of ¥293 million and corporate
expenses of ¥12,487 million. Corporate expenses mainly comprise the submitting
company’s basic research expenses.
3. Segment income or loss is adjusted to agree with operating income in the
consolidated statements of income.

12