Business Results for theFirst Quarter of the Fiscal Year Ending
December 31, 2021 (Unaudited)

May 12, 2021
Kuraray Co., Ltd.

May 12, 2021
Kuraray Co., Ltd.

Consolidated Earnings Report for the First Quarter of the Fiscal Year Ending December 31, 2021
Name of listed company:
Stock code:
Stock exchange listing:
URL:

Kuraray Co., Ltd.
3405
Tokyo, first section
https://www.kuraray.com/

Representative:
Title:
Name:

Representative Director and President
Hitoshi Kawahara

Contact:
Title:

Senior Manager, Corporate Communications Department, Corporate Management
Planning Office
Fumio Uegaki+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 First Quarter of the Fiscal Year Ending December 31,
2021 (January 1, 2021 to March 31, 2021)(1) Consolidated Operating Results(Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of theparent are comparisons with the corresponding period of the previous fiscal year.)(Millions of yen)
Net Sales
(%)
5.5
(3.3)

144,398
136,927

Fiscal 2021 1Q
Fiscal 2020 1Q

Note: Comprehensive income:

16,786
11,971(%)
40.2(18.2)For the fiscal 2021 first quarter:
For the fiscal 2020 first quarter:

Net Income per
Share (Yen)
Fiscal 2021 1Q
Fiscal 2020 1Q

Operating Income

15.36
19.50

Ordinary Income
16,26811,306(%)
43.9(11.6)¥28,547 million (―%)(¥2,205 million) (―%)

Fully Diluted Net
Income per Share
(Yen)
15.35
19.48

(2) Consolidated Financial Position(Millions of yen)
As of March 31, 2021
As of December 31, 2020

Total Assets
1,048,707
1,051,584

Net Assets
538,312515,481

Equity Ratio (%)
49.6
47.4

[Reference] Equity attributable to owners of the parent: As of March 31, 2021:¥520,151 million
As of December 31, 2020: ¥498,798 million

Net Income Attributableto Owners of the Parent
5,282
6,705

(%)
(21.2)
10.2

2. Dividends(Yen)
Record Date
Fiscal 2020
Fiscal 2021
Fiscal 2021
(Forecast)Mar. 31――

Cash Dividends per ShareJun. 30
Sep. 30
Dec. 31
21.00
19.00
―

20.00

―

20.00

Annual
40.00

40.00

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

3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending December 31, 2021
(January 1, 2021 to December 31, 2021)(Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of theparent are comparisons with the corresponding period of the previous fiscal year.)(Millions of yen)
Net SalesInterim Period
Full Fiscal Year

290,000
570,000

Operating
Ordinary
Net Income Attributable Net Income per
IncomeIncometo Owners of the Parent
Share (Yen)
(%)
(%)
(%)
(%)
39.25
10.7 30,000
53.0 29,000
64.4
13,50047.4
5.2 55,000
24.0 50,000
25.8
30,000―87.23

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)
Added: No companies

Excluded: No companies(2) Adoption of Special Accounting Practices in the Preparation of Quarterly Consolidated
Financial Statements
No(3) Changes in Accounting Principles, Procedures and Presentation Methods in Connection
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 March 31, 2021
354,863,603 shares
As of December 31, 2020
354,863,603 shares

2.

Number of treasury shares as of the period-end:
As of March 31, 2021
10,919,633 shares
As of December 31, 2020
10,940,270 shares

3.

Average number of shares for the period (cumulative):
As of March 31, 2021
343,929,902 shares
As of March 31, 2020
343,781,244 shares

Note: It is not required that this type of earnings report be audited.
Cautionary Statement with Respect to Forecasts of Consolidated Business Results(Cautionary note regarding forward-looking statements)
The results forecasts presented in this document are based upon currently available information andassumptions 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 ..............................................................................................................

5(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 ofComprehensive Income ...........................................................................................................................

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

12

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

12

Material Changes in Shareholders’ Equity ............................................................................................

12

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

121

1. Qualitative Information regarding Business Results(1) Overview of Consolidated Business Results
In the first quarter of fiscal 2021 (January 1, 2021–March 31, 2021), the world economy isstill feeling the effects of the COVID-19 pandemic, and the outlook remains unclear. Amidthese circumstances, the Group’s business results continued to recover owing to anincrease in demand for at-home consumption due to the pandemic and an increase inautomotive-related demand. Consequently, consolidated operating results for the firstquarter of fiscal 2021 are as follows: net sales rose ¥7,470 million, or 5.5%, compared withthe previous fiscal year to ¥144,398 million; operating income increased ¥4,814 million, or
40.2%, to ¥16,786 million; ordinary income increased ¥4,962 million, or 43.9%, to¥16,268 million; and net income attributable to owners of the parent decreased ¥1,422
million, or 21.2%, to ¥5,282 million. Furthermore, in the first quarter, we recorded a loss
on litigation of ¥3,054 million related to a fire that occurred at our U.S. subsidiary in May
2018. We also recorded a disaster loss of ¥3,016 million due mainly to the suspension of
production for some equipment at our U.S. subsidiary caused by a severe cold wave in thesouthern United States in February .
The Group’s long-term vision for its 100th anniversary coming up in 2026, Kuraray Vision
2026, is to become a “Specialty Chemical Company, growing sustainably by incorporating
new foundational platforms into its own technologies.” We will continue striving to
optimize our business portfolio by steadily taking specific measures based on the threebasic policies of Kuraray Vision 2026: pursuing competitive superiority, expanding new
business fields and enhancing comprehensive strength of the Kuraray Group. We
formulated a single-year management plan for fiscal 2021 and will focus on safe and stable
operations amid the pandemic as well as thoroughly implement various measures decided
on during the period of the previous medium-term management plan “PROUD 2020.” At
the same time, we will move ahead with formulating the next medium-term management
plan, which is set to start in fiscal 2022.
In the Functional Materials segment, due to an organizational reform on January 1, 2021,
we integrated the Calgon Carbon Division and Carbon Materials Division, whose coreproducts are activated carbon, into the Environmental Solutions Division.
(Millions of yen)
FY2020 1Q
Net sales

FY2021 1Q

Operating

Net sales

incomeChangeOperatingincomeNet sales

OperatingincomeVinyl Acetate

63,866

8,387

72,175

13,415

8,309

5,027

Isoprene

13,1623,140

14,894

3,046

1,731

(94)

Functional Materials

30,766

1,268

30,294

1,061

(471)

(207)

Fibers and Textiles

14,467916

13,721

435

(746)

(480)

Trading

29,771961

32,972

1,074

3,200

113

Others

11,661

43

10,251(136)(1,410)(180)

Elimination & Corporate(26,769)(2,745)(29,912)(2,110)(3,143)

635

Total

136,927

11,971

144,398

16,786

7,470

4,814

2

Results by Business Segment
Vinyl Acetate
Sales in this segment increased 13.0% year on year to ¥72,175 million, and segment income
rose 59.9% year on year to ¥13,415 million.

(1) Sales of PVA resin increased as global demand began to recover though overallbusiness was affected by the U.S. cold wave. Sales of optical-use poval film were brisk
due to an increase in demand for LCD panels, especially large displays, from thesecond half of the previous fiscal year. The sales volume of PVB film rose on the backof a recovery in demand for both construction and automotive applications. Sales ofwater-soluble PVA film steadily expanded for use in unit dose detergent packets,
including for dish detergents, as more customers stay at home due to the COVID-19
pandemic.
(2) The sales volume of EVAL™ ethylene vinyl alcohol copolymer (EVOH resin)increased as food packaging applications remained firm and demand for gas tankapplications recovered, but overall performance was affected by the U.S. cold wave.
Isoprene
Sales in this segment increased 13.2% year on year to ¥14,894 million, and segment income
fell 3.0% year on year to ¥3,046 million.

(1) The sales volume of isoprene chemicals and SEPTON™ thermoplastic elastomer
increased by a demand recovery mainly in China and the rest of Asia, but performance
was affected by higher raw material and fuel prices.
3

(2) Sales of GENESTAR™ heat-resistant polyamide resin remained brisk for electric andelectronic device applications and automotive applications amid growing demand.
Functional Materials
Sales in this segment decreased 1.5% year on year to ¥30,294 million, and segment income
fell 16.3% year on year to ¥1,061 million.

(1) In the methacrylate business, sales for sign applications were weak despite an increasein sales of spatter-blocking barrier panels and displays.
(2) In the medical business, the dental materials business saw brisk sales, mainly in Europe
and the United States.
(3) In the environmental solutions business, shipments decreased, especially for industrial
applications.
Fibers and Textiles
Sales in this segment fell 5.2% year on year to ¥13,721 million while segment income
decreased 52.4% year on year to ¥435 million.

(1) Sales of CLARINO™ man-made leather remained stable amid signs of a recovery indemand, especially for shoe applications in Asia and luxury good applications in Europe.
(2) In fibers and industrial materials, sales of KURALON™ were lower than the previous
year despite a recovery in demand, which had fallen in the second half of the previous
year.
(3) In consumer goods and materials, the sales volume of KURAFLEX™ decreased as
4demand for counter cloths for the restaurant industry remained weak despite anincrease in sales volume for mask-related applications.
Trading
In fiber-related businesses, sales stagnated, especially for sports clothing. Sales of resins andchemicals remained favorable due to an increase in demand in Japan and Asia, including
China. As a result, segment sales increased 10.8% year on year to ¥32,972 million, andsegment income rose 11.8% to ¥1,074 million.

OthersIn other business, due to weak sales of domestic affiliates, segment sales declined 12.1%
year on year to ¥10,251 million, and segment loss was 136 million (compared to segment
income of 43 million in the first quarter of the previous fiscal year).

(2) Overview of Financial Position
Total assets decreased ¥2,877 million from the end of the previous fiscal year to ¥1,048,707
million mainly because of a ¥30,184 million decrease in cash and cash deposits and a ¥5,794
million decrease in short-term investment securities, despite a ¥6,845 million increase inconstruction in progress, a ¥5,067 million increase in notes and accounts receivable-trade, a¥4,615 million increase in inventories, a ¥4,608 million increase in machinery, equipment
and vehicles, a ¥3,314 million in other current assets accompanying mainly an increase inother accounts receivable, and a ¥2,410 million increase in goodwill due to the effects offoreign exchange rates. Total liabilities decreased ¥25,709 million to ¥510,394 million due
to factors that included the redemption of commercial paper totaling ¥20,000 million and a¥11,684 million decrease in other current liabilities accompanying mainly a decrease in other5

accounts payable, despite a ¥3,626 million increase in notes and accounts payable–trade.
Net assets rose ¥22,831 million to ¥538,312 million. Equity attributable to owners of theparent amounted to ¥520,151 million, for an equity ratio of 49.6%.
(3) Basis for the Revision in Forecasts, Including Consolidated Operating Results
Forecasts
In the consolidated first quarter, shipments in many of Kuraray’s businesses increased due
to growth in demand, including for mainstay applications for automobiles, displays, andelectronic and electric devices. We assume that demand will remain firm in the second
quarter as well. Based on these circumstances, the forecast of consolidated operating results
for the second quarter of fiscal 2021 (January 1, 2021 to June 30, 2021) is as shown below.
The revised cumulative consolidated operating results forecast for the second quarter ofthe fiscal year ending December 31, 2021 (January 1, 2021 to June 30, 2021) is as follows.
Furthermore, although we recorded an extraordinary loss in the consolidated first quarter
related to the litigation over the fire at the U.S. subsidiary, the litigation is still ongoing.
Net
Operating
Sales
IncomeOriginal Forecast (A)280,000
25,000
Revised Forecast (B)290,000
30,000
Amount Adjusted (B − A) 10,000
5,000Percent Adjusted
3.6%
20.0%

(Millions of yen)
Ordinary Net Income Attributable
Income to Owners of the Parent
22,50013,50029,00013,500
6,500
28.9%
-

(Yen)

Net Income
Per Share
39. 25
39. 25

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

ASSETS
Current Assets
Cash and cash deposits
Notes and accounts receivable–trade
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent Assets
Tangible fixed assets
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total tangible fixed assets
Intangible fixed assets
Goodwill
Customer-related assets
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit assets
Deferred tax assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total Assets

7(Millions of yen)

December 31, 2020

March 31, 2021

184,319
117,172
7,924
86,555
14,10531,96819,596(439)
461,202

154,135
122,2392,130
89,46915,52732,247
22,910(467)
438,193

84,604200,152
22,20497,451
24,978429,391

85,570204,760
22,517104,296
25,038442,182

51,10528,80031,143111,049

53,51530,10632,479116,10225,477140
2,097
14,652
7,597(24)
49,941
590,382
1,051,584

27,251
143
2,221
14,636
7,998(24)
52,228610,513
1,048,707

(Millions of yen)
LIABILITIESCurrent Liabilities
Notes and accounts payable–trade
Short-term loans payable
Commercial paper
Current portion of bonds payable
Accrued expenses
Income taxes payable
Provision for bonuses
Other provision
Other
Total current liabilities
Noncurrent Liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for directors’ retirement benefits
Provision for environmental measures
Net defined benefit liabilities
Asset retirement obligations
Other
Total noncurrent liabilities
Total Liabilities
NET ASSETS
Shareholders’ Equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated Other Comprehensive Income
Valuation difference on available-for-sale securities
Deferred gain or losses on hedges
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription Rights to Shares
Noncontrolling Interests
Total Net Assets
Total Liabilities and Net Assets
8

December 31, 2020

March 31, 2021

36,161
34,50920,00020,00017,956
6,621
6,745
202
52,856
195,053

39,78834,523－20,00017,871
5,881
8,458
156
41,172
167,852

60,000206,881
11,218375
3,364
25,4494,383
29,376
341,050
536,103

60,000209,137
11,522388
998
26,585
4,467
29,440342,541
510,394

88,95587,178336,050(16,006)
496,177

88,95587,176
334,798(15,976)494,953

6,847
(376)
1,470
(5,321)
2,620
328
16,354515,481
1,051,584

8,031
(166)
22,728(5,396)25,197414
17,746538,312
1,048,707

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income
Quarterly Consolidated Statements of Income(Millions of yen)
Fiscal 2020 1Q
Fiscal 2021 1Q(January 1, 2020 –(January 1, 2021 –March 31, 2020)
March 31, 2021)
Net sales
136,927
144,398
Cost of sales
94,22996,998Gross profit
42,69747,399Selling, general and administrative expenses
Selling expenses
7,824
8,570
General and administrative expenses
22,901
22,042
Total selling, general and administrative expenses
30,72530,613Operating income
11,971
16,786
Non-operating income
Interest income
71
34
Dividend income73
44
Equity in earnings of affiliates
42
75
Foreign exchange gain
41
139
Gain on extinguishment of debts
163
－
Other
269
392
Total non-operating income
661
686
Non-operating expenses
Interest expenses
315
382
Other
1,012
822
Total non-operating expenses
1,327
1,204
Ordinary income
11,306
16,268Extraordinary income
Subsidy income―
510
Gain on sale of investment securities―
154
Insurance income
334―
Total extraordinary income
334
665
Extraordinary loss
Loss on litigation
145
3,054
Disaster loss―
3,016
Loss on disposal of tangible fixed assets
438
838
Loss on tax purpose reduction entry of non-current―
423
assetsCosts related to the suspension of operations
489―
Total extraordinary loss
1,073
7,333
Income before income taxes and noncontrolling interests
10,567
9,600
Income taxes—current
5,610
4,739
Income taxes—deferred(2,062)(789)
Total income taxes
3,547
3,950
Net income
7,019
5,649
9

314
6,705

Net income attributable to noncontrolling interests
Net income attributable to owners of the parent

10

366
5,282

Quarterly Consolidated Statements of Comprehensive Income(Millions of yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Quarterly comprehensive income
Comprehensive income attributable to:
Owners of the parent
Noncontrolling interests

11

Fiscal 2020 1Q(January 1, 2020 –March 31, 2020)
7,019

Fiscal 2021 1Q(January 1, 2021 –March 31, 2021)
5,649(2,863)464(7,160)335(9,224)(2,205)

1,185
333
21,454(74)
22,89828,547(2,331)
126

27,859688

(3) Notes regarding Quarterly Consolidated Financial Statements
Notes regarding Going Concern Assumptions
None
Material Changes in Shareholders’ Equity
None
Segment Information, etc.
● Segment Information
I. First Quarter of Fiscal 2020 (January 1, 2020 to March 31, 2020)
1. Net sales, income and loss by reporting segment(Millions of yen)

Net sales(1) Outside
customers(2) Intersegment
sales andtransfers
Total
Segment income(loss)

Reporting Segment
Vinyl Isoprene Functional Fibers and Trading
AcetateMaterials Textiles

Total

54,212

7,293

26,141

11,17729,084

127,910

9,017 136,927

9,653

5,869

4,624

3,290

687

24,124

2,644

63,866

13,16230,766

14,467

29,771

152,034

8,387

3,140

1,268

916

961

14,673

Other
Business1

Total Adjustment2 Consolidated
Statements3of Income—

136,927

26,769(26,769)—

11,661 163,696(26,769)

136,927(2,745)

11,97143

14,717

Notes:
1. The “Other Business” category incorporates operations not included in business segment
reporting, including the environmental business and engineering business.
2. Adjustment is as follows: Included within segment loss of ¥2,745 million is the elimination ofintersegment transactions of ¥574 million and corporate expenses of ¥3,319 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 ofincome.

12II. First Quarter of Fiscal 2021 (January 1, 2021 to March 31, 2021)
1. Net sales, income and loss by reporting segment(Millions of yen)

Net sales(1) Outside
customers(2) Intersegment
sales andtransfers
Total
Segment income(loss)

Reporting Segment
Vinyl Isoprene Functional Fibers and Trading
AcetateMaterials Textiles
60,523

7,916

25,462

10,185

11,652

6,977

4,832

3,536

72,175

14,89430,294

13,721

13,415

3,046

1,061

435

Other
Total Business1

32,448 136,536

Total Adjustment2 Consolidated
Statements3of Income—

144,398

29,912(29,912)—32,972 164,059

10,251 174,310(29,912)

144,398

1,074

(136)

(2,110)16,786523

27,522

19,0337,861 144,398
2,389

18,897

Notes:
1. The “Other Business” category incorporates operations not included in business segment
reporting, including the environmental business and engineering business.
2. Adjustment is as follows: Included within segment loss of ¥2,110 million is the elimination ofintersegment transactions of ¥492 million and corporate expenses of ¥2,602 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 ofincome.

13