Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
<Under Japanese GAAP>
October 31, 2019

Company Name:
Stock Listings:
Code Number:
URL:
Representative Director:
Inquiries:

Sekisui Plastics Co., Ltd.
Tokyo Stock Exchange4228
https ://www.sekisuiplastics.co.jp
Mr. Masato Kashiwabara, President
Mr. Katsumi Sasaki, Director, Managing Executive Officer,
General Manager of Corporate Strategic Headquarters+81-3- 3347-9618
November 14, 2019
December 4, 2019
Yes

TEL:
Scheduled date for submission of quarterly financial statement:
Scheduled date for payment of dividends
Quarterly earnings supplementary explanatory documents:
Quarterly earnings results briefing:

Yes (For securities analysts and institutional investor fund managers)(Figures rounded down to the nearest million yen)
1. Consolidated Business Results for the Second Quarter FY 2019 (April 1, 2019 to September 30, 2019)(1) Consolidated Business Results(% change from the previous year)
Net Income
Net Sales
Operating Income
Recurring Income
Attributable to
Owners of the Parent
millions of yen%

millions of yen%

millions of yen%

millions of yen%

2nd Q of FY 201969,956
28.2
2,057
7.2
1,780
-8.6
1,187
-9.7
2nd Q of FY 2018
54,570
-0.2
1,918
-29.7
1,947
-28.7
1,315
-26.7
(Note) Comprehensive Income: September 30, 2019: 778 million yen ( -30.2 %) September 30, 2018: 1,115 million yen ( -64.0 %)2nd Q of FY 2019
2nd Q of FY 2018

Net Income
Attributable to
Owners of the Parent
per Share
yen
26.22
29.05

Net Income
Attributable to
Owners of the Parent
per Share (Diluted)
yen-(2) Consolidated Financial Position
Total Assets

Shareholders'Equity Ratio

Net Assets

millions of yen
2nd Q of FY 2019
149,593
FY 2018
153,491(Note) Shareholders’ Equity: June 30, 2019: 65,297 million yen

millions of yen
66,974
66,960March 31, 2019: 65,193 million yen

%
43.7
42.5

2. Dividend Status
Dividend per Share
(Date of Record)Year-end

Full year

At the end of 1st Q

At the end of 2nd Q

At the end of 3rd Q

yen
-

yen
13.00
13.00

yen
-

yen
17.00

yen
30.00

-

17.00

30.00

FY 2018
FY 2019
FY 2019 (forecast)
Note: Recent revision of dividend estimates: No

3. Consolidated Forecast for FY2019 (April 1, 2019-March 31, 2020)
Net Sales

Operating Income

millions of%
millions ofyenyenFull Year
145,000
28.8
4,900
Note: Recent revision of consolidated forecast: No(% change from the previous year)%

millions of
yen
4,800

2.4

1

Net Income
Attributable to
Owners of the
Parent per ShareNet Income
Attributable to
Owners of the Parent

Recurring Income%
0.5

millions of
yen
3,200

%
2.3

yen
70.65

Sekisui Plastics (4228) Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020

Note:(1) Significant change of subsidiary companies during the term (change of specified subsidiaries that affected the scope of consolidated
reporting): No(2) Application of simplified accounting methods or specialized methods for quarterly consolidated financial statements: No(3) Changes in accounting principles, methods or reporting methods affecting the production of the consolidated financial statement(fundamental changes in main reported item for the production of the consolidated financial statement)a) Changes caused by revisions to accounting principles: Yesb) Changes other than a) : Noc) Amendments to accounting estimates: Nod) Restatements: No(4) Number of shares outstanding (common stock)a) Number of shares outstanding at year-end (including treasury stock)
2nd Q of FY2019 46,988,109 shares
FY201846,988,109 sharesb) Treasury stock at fiscal year-end
2nd Q of FY2019
1,697,493 shares
FY2018
1,696,864 sharesc) Average number of shares outstanding during the current term (quarterly consolidated cumulative total)
2nd Q of FY2019 45,290,905 shares
2nd Q of FY2018 45,291,761 shares

Note: The Quarterly Financial Report is not subject to the quarterly review.
Note: Explanation about appropriate use of performance forecast, other items(notes on future-related statements etc.)
The earnings forecasts and other forward-looking statements presented in this report are based on information available at the timeof the report and on certain assumptions that the Company considers reasonable. Forward-looking statements in no capacity
represent a guarantee that the Company will achieve the stated amounts. Various factors can cause actual results to differ materiallyfrom the forecasts. For important matters regarding the conditions associated with the assumptions of the forecasts and theappropriate use of the forecasts, please see “ 2. Revision to the consolidated results forecast and other forward-looking information"
on page 3 of the Quarterly Financial Report (Supplementary Material).

2

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020

1. Qualitative Information and Financial Review(1) Consolidated Business Results
The outlook for the global economy remained uncertain during the consolidated cumulative second quarter under review (April 1,
2019 to September 30, 2019) due to factors such as deceleration of the Chinese economy, the intensification of trade friction between
the United States and China, heightened geopolitical risks in the Middle East, and the prolongation of the Brexit issue. The Japanese
economy continues to show a gentle recovery as the employment and income environment improves despite continued weakness inexports and production. Japan’s foam plastics industry faced ongoing difficulty of business conditions due to trends in oil prices andrising logistics costs. There is also concern about the impact of a series of natural disasters, including large-scale typhoons, and theimpact of the increase in the consumption tax on the consumer mindset.
It was in this management environment that the Group formulated its three-year mid-term management plan “Make Innovations
Stage-II” starting in FY2019 to further strengthen the reforms implemented in the previous mid-term management plan, and we will
advance “business portfolio transformation” and “execution of strategy aimed at strengthening our earnings structure,” in addition tosteadily implementing measures to cement our position as the environmental leading company.
Furthermore, the results for the six months from January 1 to June 30, 2019 of the Proseat Group acquired last fiscal year werereflected in the financial results for the consolidated second quarter under review. As a result, we recorded net sales of 69,956 million
yen (up 28.2% year on year), operating income of 2,057 million yen (up 7.2%), recurring income of 1,780 million yen (down 8.6%)
and net income attributable to owners of the parent of 1,187 million yen (down 9.7%).
Business results for each segment are described below.
<Human Life Segment>
Net sales in the Human Life segment reached 28,982 million yen (down 6.8% year on year), with segment profit of 1,556 million yen(up 28.7%).
In food containers, there has been a lack of vigor in demand from supermarkets, convenience stores, and others since the latter half ofthe first quarter. While business was steady in agriculture, demand in fishery continued to slump due to decreased catches. Meanwhile,
construction materials/civil engineering performed well due to the contribution of projects acquired mainly in the Tokyo Metropolitanarea, such as sporting facilities and associated construction and roadwork continuing on.
The sales volume of ESLEN Sheet, our mainstay product, was steady for general-purpose food containers, but the growth inheat-resistant food containers enabling heating in a microwave oven and containers for noodles that performed well last period ran its
course, and volume was the same level as the same period of the previous fiscal year. Sales volume of ESLEN Beads remained at thesame level as the same period of the previous fiscal year despite strong demand for embankment applications due to other demand
generally being low.
Profit increased as a result of cost reductions and pricing revision compared to the same period of the previous fiscal year, when profit
decreased significantly due to a delay in the timing of pricing revisions resulting from the impact of steeply increased raw material
prices.
Civil engineering material AQUAROAD is a structural material used in resin storage infiltration tanks to temporarily store rainwater
under roads and other structures during localized heavy rains. We have actively showed it at exhibitions, including Sewage Works
Exhibition ’19 Yokohama held in August 2019, and will contribute to mitigation of flooding and flood damage during heavy rains anddisaster measures such as those designed to prevent river flooding.
<Industry Segment>
Net sales in the Industry segment reached 40,974 million yen (up 74.5% year on year), while segment profit was 866 million yen(down 21.4%).
In the home appliances and IT fields, sales of transport materials for LCD panels using PIOCELAN (polystyrene/polyolefin hybrid
resin foam) and other materials grew in Northeast Asia and exceeded the level in the same period of the previous fiscal year.
Meanwhile, sales of TECHPOLYMER (organic polymer particles) fell below the same period of the previous fiscal year due to thecontinued impact of inventory adjustment in light diffusion applications mainly for LCD panels.
In the automotive field, components using PIOCELAN and other products expanded globally while performing strongly in Japan. In
the medical and health care fields, sales of ST-gel (a functional polymer gel) were weak due to the impact of factors such as trade
friction, ELASTIL (a thermoplastic elastomeric bead foam) sales grew with the launch of mass production of midsoles for runningshoes and its adoption in new models as well. The performance of the Proseat Group was weak due to the impact of poor sales by
European auto manufacturers.
In the automotive and transportation equipment markets, there is demand for resins that can be used as structural components tocontribute to higher heat resistance, higher strength, and weight reduction in order to save energy and reduce carbon dioxide
3

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
emissions. The Company is working to develop foam that satisfies these requirements and has established mass production
technology for foam that is heat resistant to 120°C, surpassing the heat resistance of conventional bead foam, which is between 80°C
and 100°C. Moving forward, the Company will develop this foam under the ST-Eleveat brand, put it to practical use in parts thatreach high temperatures, and expand the lineup to offer at least 120°C heat resistance.
With the aim of resolving the issue of plastic pollution of oceans, which is a new global environmental problem, the Company has
been conducting development of plastics with excellent biodegradability, and developed the TECHPOLYMER EF series ofbiodegradable microparticles that are broken down in the natural environment. Sekisui Plastics will make an active contribution as theenvironmental leading company including application to a variety of uses such cosmetics and paint from the perspective of protecting
the natural environment.
(2) Description of Financial Position
Total assets as of the end of the second quarter consolidated fiscal period under review reached 149,593 million yen (a drop of 3,898
million yen from the end of the previous consolidated fiscal year). Current assets fell by 6,931 million yen due mainly to a decrease in
cash and deposits, and notes and accounts receivable. In addition, due mainly to an increase in property, plant and equipment,
non-current assets increased by 3,033 million yen. In liabilities, a decrease in notes and accounts payable and the repayment ofshort-term loans were main causes of a 9,863 million yen drop in current liabilities, but long-term liabilities increased by 5,951
million yen due mainly to an increase in long-term loans. Net assets increased by 14 million yen, to 66,974 million yen, due mainly to
an increase in retained earnings, with an equity ratio of 43.7%.
With regards to cash flow in the consolidated cumulative second quarter under review, cash flows from operating activities saw
proceeds decreased by 599 million yen year-on-year, resulting in 1,733 million yen in net cash provided by operating activities, due
mainly to the impact of the change in notes and accounts payable. Cash flow from investment activities saw expenses decrease by
1,590 million yen, resulting in 2,509 million yen in net cash used in investing activities, due mainly to decreased outlays for purchasesof property, plant and equipment. Cash flows from financing activities saw expenses increase by 4,884 million yen due mainly to theimpact of the net change in short-term loans and an increase in repayment of long-term loans, resulting in 2,735 million yen in net
cash used in financing activities. As a result, the balance of cash and cash equivalents as of the end of the second quarter consolidated
fiscal period under review fell by 3,842 million yen, to 7,428 million yen.
(3) Description of Consolidated Results Forecast and Other Forward-looking Information
There is no change in the consolidated forecast for the fiscal year ending March 31, 2020 previously announced on April 24, 2019.

4

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020

2. Consolidated Financial Statements and Notes to Consolidated Financial Statements (Second Quarter, Fiscal Year 2019)(1) Consolidated Balance Sheets(Millions of Yen)
End FY2018

End 2nd Quarter, FY2019

As of March 31, 2019

As of September 30, 2019

Cash and deposits

11,278

7,436(Assets)
Current assets
Notes and accounts receivable, trade32,91529,869

Electronically recorded monetary claims

3,541

3,752

Merchandise and finished goods

7,937

8,048

Work in process

1,840

2,181

Raw materials and supplies

4,094

3,745

Other current assets

3,279

2,915

Allowance for doubtful accounts

(60)

(54)

64,82657,895

Buildings and structures

17,34817,083

Machinery, equipment and vehicles

16,556

17,352

Land

21,17621,183

Total current assets
Non-current assets
Property, plant and equipment, net

Other

5,183

7,283

Total property, plant and equipment, net

60,26562,902

Goodwill

1,585

1,447

Other

2,325

2,211

Total intangible assets

3,911

3,658

Investments in securities

17,65318,156

Assets for retirement benefits

5,163

5,325

Other

Intangible assets

Investments and other assets

1,726

1,707

Allowance for doubtful accounts

(55)

(52)

Total investments and other assets

24,48825,137

88,66591,698

153,491

149,593

Total non-current assets
Total assets

5Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
(Millions of yen)

(Liabilities)
Current liabilities
Notes and accounts payable, trade
Electronically recorded obligations
Short-term debt
Accrued income taxes and other taxes
Allowance for bonuses to employees
Allowance for bonuses to directors and audit andsupervisory board members
Other
Total current liabilities
Long-term liabilities
Long-term debt
Liabilities for retirement benefits
Allowance for product compensation
Other
Total long-term liabilities
Total liabilities(Net assets)
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:Unrealized holding gain on securities
Unrealized gain on land revaluation
Translation adjustments
Retirement benefits adjustments
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

End FY2018

End 2nd Quarter, FY2019

As of March 31, 2019

As of September 30, 201919,153
8,346
17,690990
1,056

16,357
7,348
12,515
508
1,030

29

13

8,997
56,264

8,625
46,40017,540
3,212
190
9,323
30,266
86,531

21,943
3,317
166
10,79036,21882,618

16,533
16,532
22,560(1,425)54,20016,533
16,532
22,985(1,426)54,625

8,799
1,479
190
524
10,992
1,766
66,960
153,491

9,156
1,479
(362)
398
10,672
1,676
66,974
149,593

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
(2) Consolidated Statement of Income and Statement of Comprehensive Income
Consolidated Statement of Income and(Consolidated Cumulative Second Quarter)(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Foreign exchange gain, net
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Foreign exchange loss, net
Other
Total non-operating expenses
Recurring income
Extraordinary income
Gain on sales of investments in securities
Total extraordinary income
Extraordinary loss
Loss on disaster
Loss on devaluation of investment in securities
Total extraordinary loss
Income before income taxes
Income taxes
Net income
Non income attributable to:Non-controlling interests
Owners of the parent

7

2nd Quarter of FY2018

2nd Quarter of FY2019(From April 1, 2018
to September 30, 2018)
54,57041,946
12,624
10,705
1,918(From April 1, 2019
to September 30, 2019)69,95654,633
15,323
13,266
2,057

2
169
33
51
257

3
171
－
85
260

89
0
－
138
228
1,947

195
6
147
187
536
1,780

79
79

－
－

31
－
31
1,995
678
1,316

－
8
8
1,771
626
1,145

1
1,315

(42)
1,187

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
Consolidated Statement of Comprehensive Income(First Half, Fiscal Year 2019)(Millions of yen)

Net income
Other comprehensive loss
Unrealized holding (loss) gain on securities
Translation adjustments
Retirement benefits adjustments
Total other comprehensive loss
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests

8

2nd Quarter of FY2018(From April 1, 2018
to September 30, 2018)

2nd Quarter of FY2019(From April 1, 2019
to September 30, 2019)

1,316

1,145

(79)
72
(193)
(200)
1,115

357
(597)
(126)
(366)
778

1,114
1

775
3

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
(3) Consolidated Statement of Cash Flows

Operating activities:
Income before income taxes
Adjustment for:
Depreciation and amortization
Amortization of goodwill
Decrease in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Equity in earnings of affiliates
Decrease in allowance for bonuses to employees
Decrease in allowance for product warranty
Decrease in liabilities for retirement benefits
Loss on sales of investments in securities
Gain on devaluation of investments in securities
Gain on sales and retirement of property, plant and equipment
Increase in notes and accounts receivable
Decrease in inventories
Decrease in notes and accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Proceeds from insurance claims
Income taxes paid
Net cash provided by operating activities
Investing activities:
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investments in securities
Proceeds from sales of investments in securities
Increase in short-term and long-term loans receivableCollection of short-term and long-term loans receivable
Other
Net cash used in investing activities
Financing activities:
Decrease in short-term debt, net
Proceeds from long-term debt
Repayment of long-term debt
Cash dividends paid
Cash dividends paid to non-controlling interests
Expenses resulting from acquisition of subsidiary not
associated with change in scope of consolidation
Decrease in other long-term liabilities
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of term
Cash and cash equivalents at the end of team9

2nd Quarter of FY2018(Millions of yen)
2nd Quarter of FY2019(From April 1, 2018
to September 30, 2018)(From April 1, 2019
to September 30, 2019)

1,995

1,771

2,100
10
(3)
(172)
89
0
(49)
(41)
(410)
(79)
－
33
2,335
(394)
(1,632)
(539)
3,243
172
(109)
2
(975)
2,332

2,934
85
(6)
(175)
195
6
(26)
(24)
(234)
－
8
22
2,371
(292)
(3,289)
(782)
2,564
175
(251)
8
(762)
1,733

(4,276)
23
(2)
125
(3)
18
13
(4,099)(2,986)
12
(4)
－
(0)
430
37
(2,509)(1,185)
6,952(2,766)(677)(2)(2,559)5,966(3,894)
(769)
(2)

(58)

－

－
(112)
2,149
26
409
5,117
5,527

(1,246)(230)(2,735)(331)(3,842)
11,271
7,428

Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
(4) Notes to Consolidated Financial Statements(Notes regarding the premise of a going concern)
No significant changes during the term under review.
(Significant Change in Shareholder Equity)
No significant changes during the term under review.
(Changes in Accounting Policies)(Adopted IFRS No.16 “Leases”)
Overseas subsidiaries applying International Financial Reporting Standards have applied International Financial Reporting Standard
No.16 “Leases” (hereinafter referred to as “IFRS No.16”) from the consolidated first quarter. As a result, the lessee in leases isrequired, in principle, to recognize all leases as assets and liabilities on the balance sheet. In accordance with transitional
agreements to apply IFRS No.16, the cumulative effect of the change in the accounting policy has been recognized underretained earnings at the start of the consolidated first quarter.
As a result, property, plant and equipment increased by 2,792 million yen, current liabilities increased by 378 million yen andlong-term liabilities increased by 2,434 million yen as of the end of the consolidated second quarter under review. The impact
on profit and loss during the consolidated cumulative second quarter under review is minor. Furthermore, the impact onretained earnings at the start of the consolidated second quarter under review is minor.
(Business combinations, etc.)
Finalization of provisional accounting treatment for business combinations
In the previous consolidated fiscal year, the business combination with the Proseat Group of February 19, 2019 was accounted forprovisionally, but the treatment has been finalized in the consolidated second quarter under review.
In conjunction with the finalization of this provisional accounting treatment, the comparative information included in the quarterly
consolidated financial statements for the consolidated cumulative second quarter under review has been revised to reflect a significant
change to the allocation of the acquisition cost, and part of the amount recorded as goodwill has been reclassified.
As a result, the provisional goodwill amount of 2,100 million yen has been reduced by 566 million yen to 1,533 million yen.
Additionally, other intangible assets increased by 1,213 million yen, other long-term liabilities increased by 457 million yen, andnon-controlling interests increased by 188 million yen as of the end of the previous consolidated fiscal year.

10Sekisui Plastics (4228)
Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 Ended March 31, 2020
(Segment Information, etc.)(Segment Information)
1. Consolidated 2nd Quarter of FY2018 (April 1, 2018 to September 30, 2018)
Information as to sales and income (loss) on each reportable segment
Reportable Segments
Human Life

Industry

Total

Adjustments andeliminations (*1)(Millions of yen)
Quarterly
consolidated
statement of income
amount (*2)

Net sales:
Sales to third parties
31,09023,48054,570－54,570Intersegment sales and transfers
1,696
684
2,381
(2,381)－
Total
32,787
24,16556,952(2,381)
54,570
Segment income (loss)
1,209
1,102
2,311
(364)
1,947
(Notes)Adjustments and eliminations in the preceding table were as follows:
Segment income in the amount of (364) million yen includes elimination of inter-segment transactions in the amount of (6) million
yen and unallocated corporate expenses of (357) million yen.
Segment income was adjusted for recurring income in the quarterly consolidated statement of income.
Names of major products belonging to each segment
Human Life Segment:
ESLEN Beads, ESLEN Sheet, ESLEN Wood, INTERFOAM, other foamed / molded products.
Industry Segment:
PIOCELAN, LIGHTLON, NEOMICROLEN, CELPET, TECHPOLYMER, ST-gel, TECHEATER, ELASTIL, ST-LAYER, otherfoamed/molded products.

2. Consolidated 2nd Quarter of FY2019 (April 1, 2019 to September 30, 2019)
Information as to sales and income (loss) on each reportable segment
Reportable Segments
Human Life

Industry

Total

Adjustments andeliminations (*1)(Millions of yen)
Quarterly
consolidated
statement of income
amount (*2)

Net sales:
Sales to third parties
28,982
40,97469,956－
69,956
Intersegment sales and transfers
333
81
414
(414)
－
Total
29,316
41,05570,371(414)
69,956
Segment income (loss)
1,556
866
2,423
(642)
1,780
(Notes)Adjustments and eliminations in the preceding table were as follows:
Segment income in the amount of (642) million yen includes elimination of inter-segment transactions in the amount of (0) million
yen and unallocated corporate expenses of (642) million yen.
Segment income was adjusted for recurring income in the quarterly consolidated statement of income.
Names of major products belonging to each segment
Human Life Segment:
ESLEN Beads, ESLEN Sheet, ESLEN Wood, INTERFOAM, other foamed / molded products.
Industry Segment:
PIOCELAN, LIGHTLON, NEOMICROLEN, CELPET, TECHPOLYMER, ST-gel, TECHEATER, ELASTIL, ST-LAYER, otherfoamed/molded products.

11