FY2022 Financial Results
Spiral-up 2024

SEKISUI KASEI CO., LTD.
(TSE Prime Code: 4228)
May 10, 2023

1

Table of Contents
1

Summary of FY2022 Financial Results
the Medium-Term Management Plan

2
3

Outlook for “Spiral-up 2024”

SEKISUI KAEI GROUP

Partial revision of Vision of the 100th Year

2

Table of Contents
1

Summary of FY2022 Financial Results
the Medium-Term Management Plan

2
3

Outlook for “Spiral-up 2024”

SEKISUI KAEI GROUP

Partial revision of Vision of the 100th Year

3

Spiral-up 2024

Summary of FY2022 Financial Results
FY2021
Full-year(Unit: billions of yen)

FY2022Full-year

Year on year

Vs. forecasts announced
August 2, 2022

(C)-(B)

ActualForecasts
announced
August 2, 2022

Actual

(A)

（B）

（C）

(C)-(A)Net sales

117.6

125.0

124.7

7.08

106%

-0.32

100%

Operating income

1.46

0.95

0.79

-0.67

54%

-0.16

83%

<Operating income ratio><1.2%><0.8%><0.6%>

Ordinary income

1.40

1.08

0.70

-0.70

50%

-0.38

65%

Net income attributable toowners of the parent

-5.92

0.10

0.45

6.37

ー

0.35

453%

• On YoY, increased in net sales and decreased in income.
Net sales:

Increase due to successfully passing on higher raw material prices to product prices.

Operating income:Decrease due to lower volumes resulting from market downturn and impact ofSekisui kasei Oita fire.

Net income:

Increase due to the disappearance in FY2022 of extraordinary losses posted in theprevious fiscal year associated with European subsidiary.

4

Spiral-up 2024

FY2022 Recurring Income Analysis (YoY)
10.66

Increase

Unit sales
pricesDecrease
Total

Profit difference

+0.86

Cost
reductions
Sales
volume¥1.40
bn

FY2021Results(0.82)(8.53)
Raw
material
prices0.77(1.28)
Energycosts(0.22)
Oita
transfercosts(0.13)
China
lockdown

Difference in recurring income ¥(0.7) billion(1.11)(0.33)

Fixed
costs,
etc.

Nonoperating
income/expenses¥0.70
bn

FY2022
Results

5

Spiral-up 2024

FY2022 Industry Segment Results(Unit: billions of yen)

FY2021
ActualYear on year

FY2022
Actual

(A)

1H

2H

(B)

(B) - (A)Net sales

68.0

35.3

36.8

72.1

4.0

106%

Operatingincome(1.33)(0.13)

0.04(0.10)

1.23

ー(Operating income ratio)ーー<0.1%>ー

Ordinary income(1.78)(0.34)(0.06)(0.40)

1.38

ー● Sales
Electronics:

Demand for use in LCD panels were hit by inventory adjustments, and recorded lower sales YoY

Mobility:

Automotive production recovered gradually, resulting in higher sales YoY

Medical/Healthcare: Both ST-gel and ELASTIL recorded higher sales YoY* Overall sales in the segment increased YoY, partly due to successfully passing on higher raw material prices to
product prices.
● Profit

Lower sales in Electronics led to lower profit, and despite the trend of recovery in Mobility (excluding someregions e.g. Southeast Asia), this was not enough to cover the losses in the Proseat business, resulting inlosses for the Industry segment as a whole6

Spiral-up 2024

FY2022 Human Life Segment Results(Unit: billions of yen)

FY2021
ActualFY2022
ActualYear on year

(A)

1H

2H

(B)

(B) - (A)Net sales

49.53

25.6

27.0

52.6

3.1

106%

Operating income

3.38

0.70

1.88

2.58

-0.8

76%

(Operating income ratio)<6.8%><2.7%><7.0%><4.9%>

ecurring income

3.38

0.67

1.92

2.59

-0.79

77%

● Sales
Food:

Despite the impact of lower volumes for both beads and sheets, higher sales were achieved bypassing-on of price increases
Housing/Energy: Civil engineering was weak, but construction performed strongly, leading to higher sales* Overall sales in the segment increased YoY, partly due to successfully passing on higher raw material prices to
product prices.
● Profit

Lower profit due to decrease in volumes resulting from market downturn and impact of Sekisui Kasei Oita fire●Volumes
Sheets: Although take-out container demand was strong, there was a lull in fresh food tray demand for supermarkets,
etc., which in addition to a decline in instant noodle-related demand resulted in flat volumes overall YoY
Beads: Demand in mainstay agriculture/fishery applications was weak, and combined with a slowing of demand forcushion beads, which had been strong in the previous fiscal year, this resulted in an overall decline

7

Spiral-up 2024

FY2022 Financial Position(Unit: billions of yen)

FY2021

FY2022(Ａ)（Ｂ）

Year on year

Total assets

143.3

145.2

+1.8

Net assets

58.2

58.5

+0.2

Equity ratio

40.1%

39.8%

(0.3)%Net assets per share¥1,272.86¥1,275.00¥2.14(Ref.) Equity capital

57.5

57.7

+0.2

Cash and deposits

10.5

11.1

+0.6

Short-term loans

16.3

13.0

(3.2)

Long-term loans

13.9

18.1

+4.2

Bonds

7.0

7.0

±0

Interest-bearing debt

37.1

38.1

+1.0

D/E ratio (times)

0.65

0.66

＋0.01

• Interest-bearing debt increased ¥1.1 billion due to the impact of forex rates• There were no major changes in the financial position

8

Table of Contents
1

Summary of FY2022 Financial Results
the Medium-Term Management Plan

2
3

Outlook for “Spiral-up 2024”

SEKISUI KAEI GROUP

Partial revision of Vision of the 100th Year

9

Medium-Term Management Plan “Spiral-up 2024”

Spiral-up 2024

▮ Basic policy
To contribute to a sustainable society, and to achieve the sustainable enhancement ofour corporate value, we will establish a resilient earnings base based on ESG management.

▮ Key issues
1. Strengthen the earnings structure1) Restructuring the business portfolio (5 priority fields)
Food, Electronics, Mobility, Medical/Healthcare, Housing/Energy2) Constructing a highly profitable structure in the Proseat business
3) Strengthening cost competitiveness through innovations in production4) Rapidly generating profits from developed products
2. Shift to businesses that solve environmental and social issues5) Expanding Sustainable Star Products through recycling-based business
6) Striving to achieve carbon neutrality
3. Reinforce our management foundations
7) Strengthening efforts to address materiality (key management issues)8) Enhancing financial health* Three key issues, eight themes

10

Spiral-up 2024

Market trends and outlook
Domestic naphtha prices (¥/kL)

EPS beads (total industry volume)

LCD displays (surface area basis)*Percentage change relative to FY19FY19Actual

FY20
ActualFY21
ActualFY22(Forecast)

FY23/FY24(Plan)

Prices have peaked, but forecast to stay highFocus on trends in geopolitical risk, etc.

FY19
Actual

FY20
ActualFY21
ActualFY22
ActualFY23(Plan)*Percentage change relative to FY19

FY24
(Plan)

Due in part to flows of people recovering, expect YoY growth in FY23
In mainstay fishery, despite farmed-fish increase, weak overall

Forex rates (rate for year-end settlement of accounts)

PSP sheets (total industry volume)

FY19
Actual

FY20
ActualFY21
ActualFY22
ActualFY23(Plan)

FY24(Plan)

Demand recovering after bottoming in FY22, market togrow following increase in panel size

Global automotive production (units)*Percentage change relative to FY19

*Percentage change relative to FY19

JPY/EUR
JPY/USD

FY19
Actual

FY20
ActualFY21
ActualFY22
ActualFY23(Plan)

FY24(Plan)

Highly uncertain due to monetary policy of individual countries,
etc., so plan set at recent level

FY19
Actual

FY20
ActualFY21
ActualFY22
ActualFY23(Plan)

FY24(Plan)

Strong despite slowing of home-cooked and ready-made meals
Increase in demand for recycling and reuse

FY19
Actual

FY20
ActualFY21
ActualFY22
ActualFY23(Plan)

FY24(Plan)

Despite trend of gradual worldwide recovery, degree of
improvement varies by region

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Spiral-up 2024

Medium-Term Management Plan, “Spiral-up 2024”▮ Consolidated forecasts
Spiral-up 2024

Previous mid-term plan

FY2021
ActualFY2022
ActualFY2023
Forecast(Initial plan)

FY2024
Forecast(Initial plan)¥117.6 billion¥124.7 billion()（）(¥125.0 billion)

Operating income¥1.46 billion¥0.79 billion¥2.0 billion¥4.0 billion()（）(¥1.8 billion)（）(¥5.0 billion)¥0.70 billion¥1.7 billion¥3.7 billion(¥1.6 billion)（）(¥4.8 billion)

Net sales

Ordinary income()¥1.40 billion¥130.0 billion¥135.0 billion(¥135.0 billion)

Net income(5.92) billion¥0.45 billion¥0.5 billion¥2.4 billion（）（）(¥0.9 billion)（）(¥3.0 billion)

ー

0.8 %

1.0 %

3.0 %

（1.5%）（）（3.0 %）

ROE（）

Having taken into account forecasts for the market and the delayed recovery at Proseat Group,
we have revised our performance targets for FY2024, the final year of the mid-term management plan

12

Spiral-up 2024

Earnings outlook for “Spiral-up 2024”▮ Performance by Segment
FY2022 Results

FY2023 (forecast)

FY2024(Forecast)

YoY(Unit: billions of yen)

Full-year
ChangeFull-year
Change
(%)

130.0

5.3

104%

135.0

38.0

76.0

3.9

105%

79.0

26.0

28.0

54.0

1.4

103%

56.0

2.6

1.3

2.9

4.2

1.6

160%

6.9

3.0%

2.1%

2.0%

4.4%

3.2%

(0.1)

0.0

0.0

0.0

1.5

1.5

1.5

ー

3.8

0.7

1.9

2.6

1.3

1.4

2.7

0.1

105%

3.1

(0.9)

(0.8)

0.0

(1.1)

(1.1)

0.0

0.0

ー

(2.9)

1H

2H

60.9

63.8

Industry

35.3

Human Life

Operating income

Net sales(Operating income ratio)

Industry
Human Life
Head office costs

Full Year

1H

2H

124.7

64.0

66.0

36.8

72.1

38.0

25.6

27.0

52.6

(0.3)

1.9

ー

*Head Office costs include DX and other system costs

Full Year

Full Year

5.1%

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Spiral-up 2024

FY2023 Ordinary Income Analysis (YoY)
Unit
sales
pricesIncreaseRawmaterial
pricesDecrease

0.2

Total

0.5

Sales
volume1.1

Proseatbusiness
1.4(0.48)
Energycosts(0.2)
Non-operating
income/expensesProfit difference +0.22

¥0.7
bn

FY2022
Results

Of whichforex rates differences(14.3)(1.52)

billion
¥1.7
yen
bn

Fixed
costs, etc.

Difference in recurring income +1.0 billion yen

FY2023Full-year
forecast

14

Spiral-up 2024

FY2023 Industry Segment Forecast(Unit: billions of yen)

FY2022
Results

FY2023 forecast

(A)

1H

2H

Year on year
(B)

FY2024
forecast(B) - (A)Net sales

72.1

38.0

38.0

76.0

3.9

105%

79.0

(Core business)(Proseat business)

40.7
31.3

20.6
17.4

21.6
16.4

42.2
33.8

1.5
2.4

104%
108%

44.0
35.0

Operating income

(0.1)

0.0

1.5

1.5

1.6

ー

3.8

(Core business)

2.9
(3.0)

1.4
(1.4)

1.6
(0.1)

3.0
(1.5)

0.2
1.5

106%
ー

3.8
0.0

(Proseat business)

Both the core business and the Proseat business to record higher sales YoY and improvements to bottom line

Electronics

Mobility

Mobility

Light diffusion agents
Packaging materials

Automotive components
parts packaging materials

Proseat business

Medical/Healthcare
Conductive gelshoe materials(PIOCELAN, EPS)TECHPOLYMER, PIOCELANPIOCELAN, EPS

ST-gel, ELASTIL

15

Spiral-up 2024

FY2023 Industry Segment (Core business) Forecast(Unit: billions of yen)

FY2022
Results

FY2023 forecast

Year on year

FY2024
forecast

(A)

1H

2H

(B)

(B) - (A)Net sales

40.7

20.6

21.6

42.2

1.5

104%

44.0

Operating income

2.9

1.4

1.6

3.0

0.2

106%

3.8

(Operating income ratio)<7.1%><7.0%><7.4%><7.2%>ーー<8.6%>

Higher sales and profit YoY due to demand recovery in target markets
Electronics

Mobility

Medical/Healthcare● TECHPOLYMER
Higher sales due to demand recovery inmainstay application of LCD displays● Automotive components
Higher sales following recovery inautomotive production volumes*“ST-Eleveat” being used in automotive
seat cores for first time

● ST-gel
While demand is increasing, sales to beflat YoY due to reconfiguring productmix to further improve profitability● PIOCELAN packaging materials
Higher sales due to demand recovery inmainstay application of LCD displays● Parts packaging materials
Lower sales due partly to shift to local
procurement of parts● ELASTIL
Higher sales due to increase in demand
driven by greater health consciousness

16

Spiral-up 2024

FY2023 Industry Segment (Core business) Growth Strategy

Pursuing global growth through differentiated strategy using PIOCELAN and ST-Eleveat, expansion ofbusiness area using TECHPOLYMER, and development of new business using ST-gel and ELASTIL
Electronics
エレクトロニクス
・Packaging materials:
PIOCELAN

ピオセラン

further strengthen competitive advantage using high-expansion
rate 高倍品により、競合優位性を再強化
PIOCELAN 2.0
・梱包：ピオセラン2.0
Launch ReNew+, begin shift to resource-recycling business
ReNew⁺の市場投入、資源循環型ビジネスモデルへの転換
model

Net sales
Initial plan

Actual/forecast¥18.0 billion¥16.9 billion¥15.5 billion(18.0)

・液晶ディスプレイ光学用途における競合優位性の維持・強化

・ Maintain and strengthen competitive advantage in optical applications for LCD displays

テクポリマーTECHPOLYMER
・電子材料分野など新規領域への展開
・ Develop
into new business areas, such as electronic materials
Mobility
モビリティ

・ Components: using PIOCELAN 2.0 and our technical design capabilities we will further
・部材：ピオセラン2.0と設計技術力で、競合優位性を再強化
PIOCELAN
strengthen
competitive advantage
ピオセラン・ Packaging materials: launch ReNew+, begin shift to resource-recycling business model
・梱包：ReNew⁺の市場投入、資源循環型ビジネスモデルへの転換
・ Utilize varied line-up to accommodate diverse development needs for next-generation
・多彩なラインアップで、次世代モビリティの多様な開発ニーズに対応
mobility
ST-Eleveat
ST-Eleveat・ Forming an applications development team to leverage the Proseat development route,・Proseatの開発ルートを活かす用途開発チームを立ち上げ、採用を加速
and accelerating recruitment

Net Sales (Including Proseat)
Initial plan

¥55.0 billion¥52.7 billion¥49.8 billion(50.0)

Medical/Healthcare
医療・健康Net sales
Initial plan

・生体センサーやウェアラブル領域にオープンイノベーションで複合素材展開
・ Develop
composite materials via open innovation in the biosensor and wearable
ST-gel テクノゲル
technology
area
・AIを活用したゲルパックを武器に、拡大するスキンケア需要を取り込み
・ Leverage gel packs equipped with AI to capture expanding demand for skincare
・ Expandsales in shoe material applications, while promoting development of new
エラスティル・シューズ部材用途の拡販と、新規用途開発を並行して推進

ELASTILapplications in parallel

Actual/forecast

Actual/forecast¥5.0 billion¥3.7 billion¥4.0 billion

(6.0)

17

Spiral-up 2024

FY2023 Industry Segment (Proseat business) Forecast
FY2022
Results(Unit: billions of yen)

FY2023 forecast

(A)

1H

2H

FY2024
forecast

Year on year(B)(B) - (A)Net sales

31.3

17.4

16.4

33.8

2.4

108%

35.0

Operating income

(3.0)

(1.4)

(0.1)

(1.5)

1.5

ー

0.0

ー

ー

ー

ー

ー

ー

(Operating income ratio)ーDespite forecasting higher sales and a smaller loss year on year, profit not expected until FY2024
Net sales (million Euro)

Automotive production volume in Western
and Central Europe (thousand units)
18,577
17,774300

Spiral-up 2024

13,584

12,828 13,347

14,464

15,246

Spiral-up 2024

276
210

224

232

250

254

21
21

22
22

23
23

24
24

not expected to recover to FY2019 level

FY18
18

19
19

20
20

21
21

22
22

23
23

24
24

18
FY18

19
19

20
20

18

Spiral-up 2024

FY2023 Industry Segment (Proseat business) Forecast■ Implement across-the-board improvements in sales, productivity, procurement, labor costs, and other aspects■ Reform business structure by withdrawing from low-profitability businesses and transforming management systems■ Implement decisive measures for each of the LWC, Trim, and Foam divisions

Pass on energy and component prices, revise productprices+(Improvements)

Profitability
improvement
plan

Improvements in productivity, reductions in procurement
costs, cuts to labor and other expenses+¥3.1 billion

Profitability improvement from higher sales(YoY)

Increases in personnel expenses, depreciation, etc.
(Increased
burden)¥(1.7) billion
Expenses for restructuring head office/factory employees

Total+¥1.4 billion*LWC = Light Weight Components

19

FY2023 Industry Segment (Proseat business) Growth Strategy

Spiral-up 2024

Enter the market for weight-saving components and materials used around the battery, mostly for
BEVs, to escape from commoditized areas and transform into a high-profitability business

Strategy

LWC Division■ Use ST-Eleveat and other new materials to win orders for use in new parts■ Use light-weight compound materials consisting of foam and other substances to win
orders for new parts☞ Aim to create de facto standards for BEV materials as technology moves from
Europe to the world

Trim Division■ Pursue the best possible cost at integrated new factory■ Shift orders from products for general use to high value-added products

Foam
Division

Goal(Competitive advantage)■ Renegotiate passing-on to sales prices of higher energy and component costs, etc.
■ Raise the ratio of customers at which it is possible to secure profits■ Withdraw from low-profitability programs

Respond to increasingly sophisticated requirements of European OEMs by
providing solutions differentiated by using both SEKISUI KASEI’s materials
development capabilities and Proseat’s development proposal capabilities

20

Spiral-up 2024

FY2023 Human Life Segment Forecast(Unit: billions of yen)

Net sales

FY2022
ActualFY2023
forecast

Year on year

(A)

1H

2H

(B)

(B) - (A)

52.6

26.0

28.0

54.0

1.4

103%

FY2024 for
ecast

56.0

Operating income

2.6

1.3

1.4

2.7

0.1

105%

3.1

(Operating income ratio)<4.9%><5.0%><5.0%><5.0%>ーー<5.5%>

Higher sales and profits YoY as a result of declining raw material prices and increases in sheet business volumes

Food (sheets)

・ Higher sales due to recovery inproduction capacity at Sekisui Kasei
Oita, and increased sales of ESLEN
Sheet RNW and other Sustainable Star
Products

Food (beads)

・ Higher sales due to demand recovery,
as well as increased sales of ESLEN
Beads RNW and other Sustainable Star
Products

Housing/Energy

・ Higher sales due to progress inconstruction projects delayed fromFY2022, as well as increased sales of
ESLEN Beads RNW and otherSustainable Star Products

21

Spiral-up 2024

FY2023 Human Life Segment Growth Strategy

Respond rapidly to market changes in the Food area, creating an unshakable source of profits while
expanding into new areas (promising areas) such as prevention and mitigation of disasters, and energy
Food
食Sheets
シート

ビーズ
Beads

・ Expand sales of foam sheets to accommodate customers’ need to reduce theiruse of plastic and CO2 emissions
・お客様のプラ使用量削減やCO2削減ニーズに応える発泡シートの拡販
・ Expand business in Sustainable Star Products, such as ESLEN Sheet RNW and・エスレンシートRNWやインターフォームBIOなど、環境貢献製品の事業拡大
INTERFOAM BIO
・Promote proposals of materials tailored to the needs of new markets such as
・テイクアウト・宅配・EC市場など、新市場ニーズに応じた素材提案の推進
take-out, delivery, and e-commerce
・サプライチェーン強靭化(SCM、販売伸長に合わせた生産能力拡大)・Increase supply chain resilience(SCM, expansions in production capacity tosupport growth in sales)・
Expand sales of ESLEN Beads RNW・エスレンビーズRNWの拡販
・ Roll out recycled products using our proprietary technology, and promote related
・当社独自技術によるリサイクル製品の展開および、関連投資の推進
investments
・Expand into aquaculture applications and applications for exports of agricultural
・水産養殖向け用途や、農産物輸出向け用途への展開
produce

Net sales
Initial plan

¥45.7
billion

Housing/Energy
住環境・エネルギー

Housing
住環境

エネルギー
Energy・ Roll out unique products for preventing and mitigating disasters, and developing
・防災・減災・インフラ整備などで独自製品を展開
infrastructure(E.g. measures to address torrential rain = Aquaroad; disaster recovery など）= EPS（ゲリラ豪雨対策＝アクアロード、災害復旧=EPS工法・EPSスロープ
method/EPS slope)・再生可能エネルギー施設向け資材の拡販展開
・ Roll out and expand sales of materials aimed at renewable energy facilities（水上ソーラーフロート、他新規開発中案件など）(floating solar panels and other projects under development)

Actual/forecast¥47.0
billion¥48.5
billionNet sales
Initial plan

Actual/forecast¥7.5 billion¥6.9 billion¥6.3 billion

22

Spiral-up 2024

Capital Investment
FY2019FY2020

FY2021

FY2022

FY2023

ActualActualActualActualPlannedCapital expenditures

5.3

5.4

3.8

3.7

6.0

Depreciation

6.1

6.2

6.2

5.7

6.3

(Unit: billions of yen)

● FY2022: investments were reduced in view of the earnings situation, the need to assess achanging market environment, and other factors● FY2023: invest in expanding capacity, labor-saving and energy-saving facilities, theenvironment, DX, and R&D● Main components of capital expenditure

FY2022 Results

FY2023 Plan

・Production capacity expansion (TECHPOLYMER)・Energy-saving / labor-saving facilities
・Environmental investments (renewable energy)
・Information systems investments
etc.

・Restoration/expansion of production capacity(Oita PSP production facilities)

・Energy-saving / labor-saving facilities
・Environmental investments (recycling facilities)
・Information systems investments (DX-related)
・R&D investments(evaluation/analysis, facilities for new development)

etc.
22

23

Shareholder Returns (Dividend)

Spiral-up 2024

FY2019FY2020

FY2021

FY2022

FY2023

ActualActualActual(Planned)(Forecast)

Net income per share (yen)

5.13

2.49

-13.101.00

1.22

Dividends per share (yen)

3.0

2.1

1.2

1.0

1.2

59%

84%

－

120%

99%

14.15

－

Dividend payout ratio(consolidated)
Acquisition of treasury stock(millions of yen)

－

－

－

Total retum ratio (consolidated)

59%

97%

－

120%

99%

ROE

3.6%

1.6%

－

0.8%

1.0%

Disposal of treasury stock(million shares)

－

－

－

－

－

● Dividend policy
Targeting a dividend payout ratio of 30-40%, with the decision to be made in accordance with the trend in consolidated
results, and after taking a comprehensive view of the balance between dividend stability and internal reserves

FY2022: 12 yen/share (planned) *interim dividend of 3 yen/share (already paid) + year-end dividend of 9 yen/share (planned)
FY2023: 12 yen/share (forecast) *interim dividend of 3 yen/share + year-end dividend of 9 yen/share● Acquisition of treasury stock

In February 2021 we acquired treasury stock24

Spiral-up 2024

Shift to businesses that solve environmental and social issues
Progress toward 2030 target of “Create and expand Sustainable Star Products”

Number of Products
Registered

Ratio of Net Sales
FY203050%

FY2030100

FY2022
FY202248

17%(Actual)(Forecast)

42
60

Actual40

Plan

ActualPlan

23

Percentage of net sales and number of products registered proceeding more or less in line with plan

25

Spiral-up 2024

Shift to businesses that solve environmental and social issues
Progress toward 2030 target of “Reduced CO2 emissions”
FY2022(Forecast)
CO2 emissions (ton-CO2)

23%
reduction

27%
FY2018 BM

reductions
by FY2030

Achieve carbon
neutrality by 2050

CO2 reduction plan

FY2018(Reference
value)FY2020

FY2022

FY2024FY2030FY2050

Solar power generation facilities at Sekisui Kasei
Kanto (Shimodate)

Proceeding ahead of plan due to improvements in production efficiency and introduction ofrenewable energy, etc.
Implementing information disclosure in line with TCFD recommendations, and working to further improve disclosure going forward

26

Spiral-up 2024

Shift to businesses that solve environmental and social issues
Target a recycled and biomass ratio of at least 50% by 2030
FY2022Grossproduction(Forecast)

16%

2018

2024

2027

2030

Production ratio of recycled products such as ESLEN Sheet increased, resulting in progressin line with plan
In FY2023 we aim to expand sales of recycled ESLEN Beads and PIOCELAN products

27

Spiral-up 2024

Shift to businesses that solve environmental and social issues

Strengthening our lineup of products that help increase environmental value
PIOCELAN 2.0 (polystyrene/polyolefin hybrid resin foam)
PIOCELAN RNW
Environmental solutions
Lower weight/returnable/recyclable

By recovering used PIOCELAN from customers and remanufacturing it as“PIOCELAN RNW” we enabled resource recycling.

PIOCELAN LW (Light Weight)
By increasing the foam expansion ratio to 45x for automotive
components we achieved a weight reduction of approx. 30% comparedto the previous product (with a foam expansion ratio of 35x)
PIOCELAN HS (High Strength)
To respond to the need for returnable packaging used for heavy items,
we increased the strength of products mainly using foam expansion ratiosof 5-10x by 20-30%.

Polystyrene

・ Superior durability
・ Easy to obtain highfoam ratio・ Superior insulation

Polyolefin

・ Superior shock resistance・ Superior resistance tochemicals・ Superior abrasion
resistanceIntroduced new grades to address need for resource recycling and further weight reductions

28

Spiral-up 2024

Shift to businesses that solve environmental and social issues

Brand for product categories utilizing recycled materials

ESLEN Beads RNW (Recycled polystyrene foam beads)
We developed ESLEN Beads RNW by recycling used fish boxes
Virgin raw
materials

Recycled raw
material ratio
Up to 50%

Conversion to raw
materials

Used EPS

Recycling ofmaterials
Foam molding
products

Recovery
Used fish boxes

By identifying the odorous element of fish boxes andproceeding with investigations into its elimination, we
blended our proprietary recycling techniques withpolymerization technology to establish a new technology
for the previously difficult task of recycling expanded
polystyrene fish boxes.

ESLEN Beads RNW derived from fish
boxes

Molding

By enabling a recycled ratio of up to 50% for raw materials
derived from fish boxes, we are able to offer performanceequivalent to that of EPS using virgin raw materials.
Initially we expect this to be adopted for materials used inindustrial logistics materials, construction materials, andcivil engineering applications.

29

Spiral-up 2024

Shift to businesses that solve environmental and social issues

Product category brands that utilize biodegradable or biomass raw
materials

RETONA FOAM BIO (biodegradable foam material)
This is a biodegradable foam that has excellent workability and design performance compared toprevious foam resins⚫ The foam is derived from biodegradable resins such as PLA and PBS.
⚫ It is broken down into water and carbon dioxide through the action of
microorganisms that exist in the natural world, such as those found in compost.

⚫ Example of use, in display applications its flexibility and formability enables it toadhere to curved surfaces to create three-dimensional shapes.
The material’s flexibility and formability on curved
services also makes 3D shapes possible

Has been adopted for use as an environmentally friendly and biodegradable material for displays
Going forward, we will move forward with application development in a wide range of fields, including
electronic parts packaging in the area of Electronics, and various packaging materials in the field of Food

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Spiral-up 2024

Reinforce our management foundations■Strengthening efforts to address materiality
By putting an Officer in charge of each category of materiality identified, and using KPI management,
we are working to sustainably enhance corporate value
Category

Materiality

Issues to promote

Environment

Creating Sustainable Star Products
and expanding businessResponding to climate change
Reducing environmental impact

Promoting SKG-5R (expanding of Sustainable Star Products)
Promoting SKG-5R (utilizing energy-saving technology and renewable energy toachieve carbon neutrality)
Appropriate management of atmosphere, water, waste, and hazardous substances

Innovation

Business model resilience
Promoting DX

Open innovation, initiatives for external cooperation and collaboration
Production innovation, operational innovation, marketing innovation

Human resources

Diversity
Workstyle reform
Work engagement

Active participation by diverse human resources (women, seniors, non-Japanese)
Promotion of health management, various systems for work-life balance, and diverseand flexible workstyles
Personnel systems designed to encourage personal development of workers

Quality/Security anddisaster prevention

Providing safety and security

Promote zero accidents and zero quality complaints

Governance

Strengthen corporate governanceCompliance
Risk management

Improve the effectiveness of the Board of Directors, enhance Group governancePrevent problems before they occur, improve reporting systems
Promote BCP initiatives

31

Spiral-up 2024

Reinforce our management foundations■Strengthening efforts to address materiality (Social)
Certified in the Health & Productivity Management Organization Recognition Program 2023
(Large Enterprise Category)
As a “human capital management” initiative, we are enhancing mechanisms to enable participation by employees with ambition and ability

We have made “human resources” one of the categories in materiality (S: Social), and are proceeding withthe following initiatives
・Diversity (participation by women and seniors, development of global management personnel)
・Workstyle reforms (promotion of health management, work-life balance, and diverse and flexible workstyles)
・Work engagement (measuring engagement, designing personnel systems to improve engagement)

32

Spiral-up 2024

Reinforce our management foundations■Strengthening efforts to address materiality (Governance)
We are working to address supplementary principles, etc. required for listing on the TSE Prime Market
under the Corporate Governance Code of Japan
1-2 ④

Platform for exercising voting rights

Done

3-1 ②

Information disclosure in English

Done

3-1 ③

Disclosure based on TCFD standards(Aiming to enhance further)Completed on April 27, 2023
(Aiming to enhance further)

4-8

Independent Outside Directors toaccount for at least one-third of total

4-10 ①

Nomination and Remuneration
Committee

Done(Of a total of eight, three are Independent Outside Officers)

Established as a non-statutory committee(Going forward we will work to enhance disclosure related toremuneration systems for officers, and status of Committee activities)

33

Spiral-up 2024

Reinforce our management foundations■ Enhancing financial healthThrough initiatives undertaken with an awareness of capital efficiency, we aim to improve ROE(to 8% or more by 2030)● Proseat profit reforms
Implement drastic innovation by rethinking management systems, and speed up improvements in profits● Restructuring the business portfolio

Enhancingprofitability

Reallocate resources to 5 priority areas with growth and profit potential● Strengthening cost competitiveness through innovations in production
Achieve drastic innovations in production processes by introducing innovative technology and DX● Rapidly generating profits from developed products
Speed up development by focusing on research transformation (RX)● Withdrawal from unprofitable businesses
Shift assets from low profitability businesses

Improve capitalefficiency● Reduce inventories
Production innovations using DX, etc. (SCM and others)● Verification of strategic shareholdings

34

Table of Contents
1

Summary of FY2022 Financial Results
the Medium-Term Management Plan

2
3

Outlook for “Spiral-up 2024”

SEKISUI KAEI GROUP

Partial revision of Vision of the 100th Year

35
SEKISUI KAEI GROUP

Revising Vision of 100th year

Vision of the 100th year

Partially revised Vision of the100th Year for its 100th year in 2059, defined a philosophy system,
and revised Corporate Vision and Code of Conduct.
*Announced January 4, 2023

Our reason for existence as company
The highest-level concept that is basically immutable

Corporate ideal and goal, based on our philosohy(Corporate ideal and goal for our 100th year)

Actions to take and awarenessto have in order to realize ourphilisophy and vision

We, SEKISUI KASEI, practice “Zen-in Keiei” basedon respect and mutual trust. We are always innovatingin our aim of “new happiness.”

A new chemical solutions company that cares
for people and the planet as it creates new value(Consolidated Sales Revenue of ¥500 Billion or more)

Entrepreneurship
Honesty
Harmony

36

Vision of the 100th year

SEKISUI KAEI GROUP

Revising Vision of 100th year

Established “Target 2030,” our business diretcion for 2030 in conjunction with the vision revision.

■Positioning of “Target 2030”“Target 2030” is our business direction for 2030 to realize the Vision.
”Spiral-up 2024,” is our mid-term management plan to achieve “Target 2030.”

Target 2030
FY2059Goal

Spiral-up 2024

FY2030Goal

FY2022SEKISUI KASEI GROUP
Vision of the 100th Year

37

Target 2030

Our business direction for 2030

38

Target 2030

Our business direction for 2030
Quantitative Targets

FY2030 Targets

Financial
Targets

Environmental
Targets

Net sales¥160 billion or more( ¥110 billion in 2019)

Operating income¥13 billion or more(¥3.7 billion in 2019)

Operating income ratio

8% or more

(3% in 2019)

ROE

8% or more

(3% in 2019)

Sustainable Star Products as percentage ofnet sales

50% or more

(11% in 2019)

Percentage reduction in CO2emissions

27% or more

(Versus 2018)*Financial targets use the pre-COVID-19 results of 2019 as a benchmark

39

The forward-looking statements such as result forecasts contained in this document are
based on information that is currently available to the Company and certain assumptions
that the Company judges to be reasonable. Actual results may differ materially due tovarious factors.
★ For inquiries regarding the contents, please contact:
Corporate Communications DeptE-mail : ir_pr@sekisuikasei.com★ Please also visit our website: http://www.sekisuikasei.com/

40