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

August 12, 2021
Kuraray Co., Ltd.

August 12, 2021
Kuraray Co., Ltd.

Consolidated Earnings Report for the Second 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
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 Second Quarter of the Fiscal Year Ending December
31, 2021 (January 1, 2021 to June 30, 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

Fiscal 2021 2Q
Fiscal 2020 2Q

Operating Income
(%)
15.4
(8.8)

302,296
262,006

Note: Comprehensive income:

(%)
55.0
(29.8)

28,496
17,638(%)
61.6(28.5)For the fiscal 2021 second quarter: ¥36,011 million (―%)
For the fiscal 2020 second quarter: (¥504 million) (―%)

Net Income per
Share (Yen)
Fiscal 2021 2Q
Fiscal 2020 2Q

30,398
19,611

Ordinary Income

34.04
26.64

Fully Diluted Net
Income per Share
(Yen)
34.02
26.62

(2) Consolidated Financial Position(Millions of yen)
As of June 30, 2021
As of December 31, 2020

Total Assets
1,045,867
1,051,584

Net Assets
545,858
515,481

Equity Ratio (%)
50.5
47.4

[Reference] Equity attributable to owners of the parent: As of June 30, 2021:¥527,708 million
As of December 31, 2020: ¥498,798 million

Net Income Attributableto Owners of the Parent
11,710
9,160

(%)
27.8
(30.9)

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 Sales

Full Fiscal Year

610,000(%)
12.6

Operating Income

66,000(%)
48.8

Ordinary Income

61,000Net Income Attributable Net Income per
to Owners of the Parent
Share (Yen)
(%)
(%)
53.5
33,000(―)
95.93

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 June 30, 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 June 30, 2021
10,857,091 shares
As of December 31, 2020
10,940,270 shares

3.

Average number of shares for the period (cumulative):
As of June 30, 2021
343,968,281 shares
As of June 30, 2020
343,835,380 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 fromforecasts. Please refer to “(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 ofComprehensive Income ...........................................................................................................................

9(3) Quarterly Consolidated Statements of Cash Flows .............................................................................

12(4) Notes regarding Quarterly Consolidated Financial Statements ........................................................

14

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

14

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

14

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

141

1. Qualitative Information regarding Business Results(1) Overview of Consolidated Business Results
In the second quarter of fiscal 2021 (January 1, 2021–June 30, 2021), the world economy
was still feeling the effects of the COVID-19 pandemic, and the outlook remained unclear;
however, with the United States and China in the lead, some nations and regions began tomake progress on recovery. However, soaring raw material and fuel prices, material supply
shortages, and rising logistics costs are pushing down corporate profits. Consequently,
consolidated operating results for the second quarter of fiscal 2021 are as follows: net salesrose ¥40,290 million, or 15.4%, compared with the previous fiscal year to ¥302,296
million; operating income increased ¥10,787 million, or 55.0%, to ¥30,398 million;
ordinary income increased ¥10,858 million, or 61.6%, to ¥28,496 million; and net income
attributable to owners of the parent increased ¥2,549 million, or 27.8%, to ¥11,710
million.
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. In fiscal
2021, we 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.
(Millions of yen)
FY2020 2Q

121,809

Operating
Income16,92424,720Difference

148,426

Operating
Income24,644

26,617

Operating
Income
7,720

2,116

30,462

3,210

5,741

1,094

59,143

1,054

64,721

3,042

5,578

1,988

28,224

1,656

29,890

1,992

1,665

336

60,037

2,078

69,137

2,326

9,100

247

22,155

206

21,754

20

(401)

(186)

(54,085)(4,425)(62,096)(4,839)(8,011)(413)

262,006

19,611

302,296

30,39840,29010,787

Net Sales

Vinyl Acetate
Isoprene
Functional
Materials
Fibers andTextilesTrading
OthersElimination &Corporate
Total

FY2021 2Q
Net Sales

Net Sales

Results by Business Segment
Vinyl Acetate
Sales in this segment increased 21.9% year on year to ¥148,426 million, and segment
income rose 45.6% year on year to ¥24,644 million.
2(1) Sales of PVA resin increased as global demand began to recover, but production wasaffected by the cold wave that hit the southern United States in February 2021. Salesof optical-use poval film were brisk due to an increase in demand for LCD panels,
especially large displays, from the second half of the previous fiscal year. The sales
volume of PVB film rose on the back of a recovery in demand for both construction
and automotive applications. Sales of water-soluble PVA film steadily expanded foruse in unit dose detergent packets, including for laundry and dish detergents.
(2) The sales volume of EVAL™ ethylene vinyl alcohol copolymer (EVOH resin)increased as demand for gas tank applications recovered, but production was affectedby the cold wave in the southern United States.
Isoprene
Sales in this segment increased 23.2% year on year to ¥30,462 million, and segment income
rose 51.7% year on year to ¥3,210 million.

(1) The sales volume of isoprene chemicals and SEPTON™ thermoplastic elastomer
increased due to a demand recovery.
(2) Sales of GENESTAR™ heat-resistant polyamide resin remained brisk for electric andelectronic device applications and automotive applications amid growing demand.
3

Functional Materials
Sales in this segment increased 9.4% year on year to ¥64,721 million, and segment income
rose 188.6% year on year to ¥3,042 million.

(1) In the methacrylate business, sales of spatter-blocking barrier panels and displays
increased. In addition, market conditions recovered.
(2) In the medical business, the dental materials business saw brisk sales, mainly in Europe
and the United States, with contributions from the launch of new products.
(3) In the environmental solutions business, there were signs of a recovery for industrial
applications, and sales of activated carbon remained steady.
Fibers and Textiles
Sales in this segment rose 5.9% year on year to ¥29,890 million while segment income
increased 20.3% year on year to ¥1,992 million.

(1) Sales of CLARINO™ man-made leather remained brisk amid a recovery in demand
for shoe applications and luxury good applications.
(2) In fibers and industrial materials, sales volume for KURALON™ increased due to arecovery in demand for cement reinforcement and rubber materials applications.
(3) In consumer goods and materials, as for KURAFLEX™, demand for counter cloths
for the restaurant industry was weak.
4

Trading
In fiber-related businesses, sales for material applications were stable, but clothing
applications were affected by a downturn in the market. Sales of resins and chemicals
remained brisk due to an increase in demand in Japan and Asia, including China. As aresult, segment sales increased 15.2% year on year to ¥69,137 million, and segment income
rose 11.9% to ¥2,326 million.

OthersIn other business, due to weak sales of domestic affiliates, segment sales declined 1.8% year
on year to ¥21,754 million, and segment income fell 89.9% to ¥20 million.

5(2) Overview of Financial Position
Total assets decreased ¥5,717 million from the end of the previous fiscal year to ¥1,045,867
million mainly because of a ¥41,536 million decrease in cash and cash deposits and a ¥5,159
million decrease in short-term investment securities, despite a ¥15,598 million increase inconstruction in progress, a ¥11,952 million increase in notes and accounts receivable—trade,a ¥3,416 million increase in inventories, a ¥3,281 million in other current assets, a ¥1,895
million increase in other investments and assets, and a ¥1,513 million increase in goodwill
due to the effects of foreign exchange rates. Total liabilities decreased ¥36,094 million to¥500,009 million due to factors that included the redemption of commercial paper totaling¥20,000 million, the redemption of bonds totaling ¥10,000 million, and a ¥18,948 million
decrease in other current liabilities accompanying mainly a decrease in other accounts payable,
despite a ¥6,012 million increase in notes and accounts payable–trade.
Net assets rose ¥30,377 million to ¥545,858 million. Equity attributable to owners of theparent amounted to ¥527,708 million, for an equity ratio of 50.5%.
(3) Basis for the Revision in Forecasts, Including Consolidated Operating Results
Forecasts
Although the COVID-19 pandemic is still ongoing, demand for our mainstay applications,
including automobiles, displays, and electronic and electric devices, remained brisk due tostrong economic recovery centered in the United States and China. From the consolidated
third quarter on, sales are expected to stay firm.
The forecast of consolidated operating results for the fiscal year ending December 31, 2021
(January 1, 2021 to December 31, 2021) is as shown below.
Revised Consolidated Operating Results Forecast for Fiscal 2021
Net Operating
Sales
IncomeOriginal Forecast (A)570,000
55,000
Revised Forecast (B)610,000
66,000
Amount Adjusted (B − A) 40,000
11,000Percent Adjusted
7.0
20.0
Ref: FY2020 Results
541,797
44,341(Millions of yen)
Ordinary Net Income Attributable to
IncomeOwners of the Parent
50,00030,00061,00033,00011,000
3,000
22.0
10.0
39,740
2,570

(Yen)

Net Income
Per Share
87.23
95.93
―
―
7.48

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)
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

December 31, 2020

June 30, 2021

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

142,782
129,124
2,765
86,353
15,22534,46722,877(524)
433,071

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

85,392200,897
22,559113,049
24,604
446,504

51,10528,80031,143111,049

52,61829,411
32,024
114,055

25,477140
2,097
14,652
7,597(24)
49,941
590,382
1,051,584

26,182138
2,297
14,1499,492(24)
52,235
612,795
1,045,867

(Millions of yen)
LIABILITIESCurrent Liabilities
Notes and accounts payable–trade
Short-term loans payable
Commercial paper
Current portion of bonds payable
Current portion of long-term loans 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

June 30, 2021

36,161
34,48020,00020,00029
17,956
6,621
6,745
202
52,856
195,053

42,17434,480―10,00055,013
18,686
9,443
5,925
167
33,908
209,799

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

60,000155,606
12,430385
700
26,972
4,571
29,542
290,209
500,009

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

88,95587,166341,226(15,884)
501,463

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

7,493
(53)
24,003(5,198)26,245414
17,734545,858
1,045,867

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements ofComprehensive Income
Quarterly Consolidated Statements of Income(Millions of yen)
Fiscal 2020 2Q
Fiscal 2021 2Q(January 1, 2020 –(January 1, 2021 –June 30, 2020)
June 30, 2021)
Net sales
262,006
302,296
Cost of sales
182,449
208,258
Gross profit
79,557
94,038Selling, general and administrative expenses
Selling expenses
15,457
18,427
General and administrative expenses
44,48845,212
Total selling, general and administrative expenses
59,946
63,640Operating income
19,61130,398Non-operating income
Interest income
156
64
Dividend income
325
292
Equity in earnings of affiliates
58
137
Other
598
622
Total non-operating income
1,138
1,116
Non-operating expenses
Interest expenses
651
759
Foreign exchange loss
194
―
Other
2,265
2,258
Total non-operating expenses
3,111
3,018
Ordinary income
17,63828,496Extraordinary income―
Subsidy income
510―
Compensation for transfer
422―
Gain on sale of investment securities
201―
Insurance income
393―
Gain on reversal of share acquisition rights
285
Total extraordinary income
679
1,134
Extraordinary loss
Loss on litigation
2,422
3,422
Disaster loss―
3,222
Loss on disposal of tangible fixed assets
508
862
Loss on tax purpose reduction entry of non-current―
423
assetsCosts related to the suspension of operations
2,122―
Total extraordinary loss
5,053
7,931
Income before income taxes and noncontrolling interests
13,264
21,699
Income taxes—current
5,478
8,695
Income taxes—deferred(1,796)708
9

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

3,681
9,582
422
9,160

10

9,403
12,295585
11,710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 2Q(January 1, 2020 –June 30, 2020)
9,585

Fiscal 2021 2Q(January 1, 2021 –June 30, 2021)
12,295(2,014)(275)(8,127)329(10,087)
(504)

646
437
22,507
123
23,71536,011(637)
132

35,334676

(3) Quarterly Consolidated Statements of Cash FlowsNet cash provided by (used in) operating activities
Income before income taxes and noncontrollinginterests
Depreciation and amortization
Loss (gain) on sale of investment securities
Loss on litigation
Loss on disposal of tangible fixed assets
Decrease (increase) in notes and accounts receivable –trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable –trade
Other, net
Subtotal
Income taxes (paid) refund
Loss on litigation paid
Other, net
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net decrease (increase) in time deposits
Net decrease (increase) in short-term investment
securities
Purchase of tangible fixed assets and intangible fixed
assetsPurchase of investment securities
Proceeds from sale and redemption of investment
securities
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Net (decrease) increase in commercial paper
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Cash dividends paid
Proceeds from stock issuance to noncontrollinginterests
Other, net
Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash and Cash
Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
12

Fiscal 2020 2Q(January 1, 2020 –June 30, 2020)(Millions of yen)
Fiscal 2021 2Q(January 1, 2021 –June 30, 2021)

13,264

21,69931,026―2,422
508

28,801
(201)
3,422
862

9,712

(8,479)

378

1,191

(7,911)

5,206(1,987)47,414(4,269)(31,303)252
12,093(2,496)50,007(5,624)(22,840)(412)
21,128(2,360)

(842)

3,625

6,000

(46,937)(37,447)

(85)

(8)

156

777

(1,372)(46,973)(1,114)(32,635)340
36,00079,261(16)
30,000―(7,562)―(20,000)
3,870
(23)
―
(10,000)(6,534)

2,211

924

(1,153)139,081(1,021)(32,785)(1,150)2,754

103,050(41,538)

Cash and Cash Equivalents, Beginning of the Period
Increase in Cash and Cash Equivalents from Newly
Consolidated Subsidiaries
Cash and Cash Equivalents, End of the Period

13

75,967

182,084228―

179,246

140,545(4) Notes regarding Quarterly Consolidated Financial Statements
Notes regarding Going Concern Assumptions
None
Material Changes in Shareholders’ Equity
None
Segment Information, etc.
● Segment Information
I. Second Quarter of Fiscal 2020 (January 1, 2020 to June 30, 2020)
1. Net sales, income and loss by reporting segment(Millions of yen)
Reporting Segment
Vinyl Isoprene Functional Fibers and Trading
AcetateMaterials Textiles

Net sales(1) Outside
102,466
customers(2) Intersegment
sales and
19,343transfers
Total
121,809
Segment income
16,924(loss)

Total

Other
Business1

Total Adjustment2 Consolidated
Statements3of Income

13,38750,466

21,29958,593 246,212

15,793 262,006

11,333

8,677

6,925

1,444

6,362

24,72059,14328,22460,037 293,936

2,116

1,054

1,656

2,078

47,72323,829—262,006

54,085(54,085)—

22,155 316,091(54,085)

262,006(4,425)

19,611

206

24,036

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 ¥4,425 million is the elimination ofintersegment transactions of ¥1,044 million and corporate expenses of ¥5,470 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.

14

II. Second Quarter of Fiscal 2021 (January 1, 2021 to June 30, 2021)
1. Net sales, income and loss by reporting segment(Millions of yen)
Reporting Segment
Vinyl Isoprene Functional Fibers and Trading
AcetateMaterials Textiles

Net sales(1) Outside
124,039
customers(2) Intersegment
sales and
24,386transfers
Total
148,426
Segment income
24,644(loss)

Other
Total Business1

Total Adjustment2 Consolidated
Statements3of Income

15,86854,98322,351

68,076 285,320

16,976 302,296

14,594

9,737

7,538

1,061

4,777

30,46264,721

29,89069,137 342,639

3,201

3,042

1,992

2,326

57,31835,216—302,296

62,096(62,096)—

21,754 364,393(62,096)

302,296(4,839)30,39820

35,237

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 ¥4,839 million is the elimination ofintersegment transactions of ¥910 million and corporate expenses of ¥5,749 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.

15