FY2019 Second Quarter
Financial Results
November 6, 2019
Sekisui Plastics Co., Ltd.

(Securities code: 4228; 1st Section, TSE)

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Outline of Today’s Briefing
1

FY2019 1H Financial Results

2

FY2019 2H Plan

3

Key Measures for FY2019

1

Outline of Today’s Briefing
1

FY2019 1H Financial Results

2

FY2019 2H Plan

3

Key Measures for FY2019

2

FY2019 1H Financial Results - Outline
FY2018FY2019FY20191H results

1H plan

1H results

(A)

(B)

(C)

Net sales

54.57

70.30

69.96

15.39

128%

(0.34)

100%(Overseas sales)

10.03

25.22

26.83

16.80

267%

1.61

106%

0.14

107%

0.46

129%

(Unit: billions of yen)(Overseas sales ratio)

18.4%

35.9%

Operating income

1.92

1.60

(Operating income ratio)

3.5%

2.3%

YoY
(C)-(A)

Vs Plan% of (A)(C)-(B)% of (B)

38.4%

2.06
2.9%

Recurring income

1.95

1.60

1.78

(0.17)

91%

0.18

111%

Net income attributable toowners of the parent

1.31

1.10

1.19

(0.12)

91%

0.09

108%

● Higher sales and higher operating income year on year. Profits exceed plan.
• Sales:increased due to inclusion of Proseat Group• Profits: operating income rose, but recurring income and net income fell due to the impact of foreignexchange and other factors
Human Life segment recorded a year-on-year recovery
Industry segment posted lower profits partly due to higher depreciation expense*Includes the Jan-Jun 2019 results of Proseat Group, which had acquired during the previous fiscal year
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FY2019 1H Recurring Income Analysis (YoY)
Increase

Decrease

Raw material priceincrease

Total

Impact of natural
disasters

Sales difference(volume, etc.)

Difference in
fixed costs

Non-operating account
Product prices

Difference in forex -0.18 billion yen
Other -0.15 billion yen

Difference in margin
0.33 billion yen

billionyen

Difference in recurring income-0.17 billion yen

FY2018 1H
Resultsbillionyen

FY2019 1H
Results
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FY2019 1H Results: Industry Segment
FY2018FY2019FY20191H results

1H planResults

(A)

(B)

(C)

(C)-(A)% of (A)Net sales

23.48

40.60

40.97

17.49

175%

0.37

101%

Operating income

1.15

0.82

1.06

(0.09)

92%

0.24

129%

(0.24)

79%

0.27

144%

(Unit: billions of yen)

4.9%

(Operating income ratio）

Recurring income

1.10

2.0%

0.60

Vs PlanYoY(C)-(B)% of (B)

2.6%

0.87

● Despite increase in sales, rising depreciation led to a fall in profits• Home appliances/IT field
PIOCELAN: Demand grew in Northeast Asia applied to transport materials for LCD panels etc.
TECHPOLYMER: Demand sluggish due to the continued impact of inventory adjustments.
• Automobile field

PIOCELAN: Adoption for automotive components expanded globally.
• Medical and health care field
ELASTIL: Demand for used in the midsole of running shoes, increased.
ST-gel: Demand has been sluggish due to the impact of trade friction.
• Increases in capital investments for strengthening development resulted in higher depreciation.

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FY2019 1H Results: Human Life Segment
FY2018FY2019FY20191H results

1H planResults

(A)

(B)

(C)

Net sales

31.09

29.70

28.98

(2.11)

93%(0.72)

98%

Operating income

1.26

1.64

1.59

0.33

126%

(0.05)

97%

0.35

129%

(0.06)

96%(Unit: billions of yen)

(Operating income ratio）

Recurring income

4.1%

1.21

5.5%

1.62

YoY
(C)-(A)

Vs Plan% of (A)(C)-(B)% of (B)

5.5%

1.56

● Sales declined due to reflection of lower raw fuel prices in product prices, and review of lowprofitability products. Profitability recovered due to resolution of delay in passing-on of prices inprevious fiscal year, as well as thorough cost-cutting program.
• ESLEN Sheet sales were sluggish, with volumes flat year on year.
• ESLEN Beads sales and volumes were both flat year on year.
• In food containers, general-purpose food containers were strong.
• Construction materials/civil engineering-related was flat overall, despite robust demand forembankment applications• Although agriculture-related business was strong, fishery-related demand remained sluggish• Efforts were made to improve productivity, save energy, and cut costs

6Outline of Today’s Briefing
1

FY2019 1H Financial Results

2

FY2019 2H Plan

3

Key Measures for FY2019

7

FY2019 2H Plan - Outline
FY2019(Unit: billions of yen)

FY20191H results

2H plan(A)(B)

Net sales

70.0(Overseas sales)

FY2018Vs 1H

FY2019Annual results

Annual plan

YoY

(B)-(A)% of (A)（C）（D）(D)-(C)% of (A)

75.0

5.1

107%

112.6

145.0

32.4

129%

26.8

26.7

(0.2)

99%

20.4

53.5

33.1

262%

(Overseas sales ratio)

38.3%

35.5%

18.4%

36.9%

Operating income

2.1

2.9

4.8

4.9

0.1

103%

(Operating income ratio)

2.9%

3.8%

4.3%

3.4%

Recurring income

1.8

2.9

1.1

159%

4.8

4.8

0.0

100%

Net income attributable toowners of the parent

1.2

2.0

0.8

169%

3.1

3.2

0.1

103%

0.8

139%

● Expect to achieve the initial plan
• Expand sales primarily by gaining benefits from 1H development themes
Grow TECHPOLYMER, PIOCELAN and functional food containers• Control cost increases by implementing thorough cost reductions in the production andadministration divisions

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FY2019 2H Plan: Industry Segment
FY2019(Unit: billions of yen)

FY20191H results

2H plan(A)(B)

Net sales

41.0

Operating income

FY2018Vs 1H

FY2019Annual results

Annual plan

YoY

(B)-(A)% of (A)（C）（D）(D)-(C)% of (D)

43.0

2.1

105%

47.7

84.0

36.3

176%

1.1

1.8

0.7

165%

2.6

2.8

0.2

109%

(Operating income ratio)

2.6%

4.1%

5.4%

3.4%

Recurring income

0.9

1.5

2.5

2.4

(0.1)

98%

0.7

177%

● Reliably win orders for PIOCELAN. Recovery of TECHPOLYMER.
In terms of profits, contribution from start-up of highly profitable products, primarily ID-themed
products• Home appliances/IT field
PIOCELAN: Demand for use in application to transport materials will be to continue growing inNortheast Asia.
TECHPOLYMER: Demand will recover for optical applications.
• Automobile field.
PIOCELAN: In component applications, expansion of demand in Japan and overseas.
• Medical and health care field
Expansion in ELASTIL and recovery in TECHPOLYMER.
• Expansion of customer base for existing products, start-up of new products and early gaining of

the benefits.
• Cost reductions through improved productivity.
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FY2019 2H Plan: Human Life Segment
FY2019(Unit: billions of yen)

FY20191H results

2H plan(A)(B)

Net sales

29.0

Operating income

FY2018Vs 1H

FY2019Annual results

Annual plan

YoY

(B)-(A)% of (A)（C）（D）(D)-(C)% of (D)

32.0

3.0

110%

64.9

61.0

(3.90)

94%

1.6

2.0

0.4

126%

3.5

3.6

0.1

102%

(Operating income ratio)

5.5%

6.3%

5.5%

5.9%

Recurring income

1.6

2.0

3.5

3.6

0.1

102%

0.4

127%

● Functional sheets expect to recover as they enter demand season.
Continue to review of low-profitability products.
• Increase in-store shares with existing customers for beads and sheets• Expand sales of functional food containers (containers able to withstand microwave heating,and freezing)• Be reliably winning orders for agricultural and fishery-related products in Japan.
• Implement energy-saving and productivity-improvement actions and thorough cost cuts10Capital Investments(Unit: billions of yen)

1H results

FY2018FY20192H results Total annual 1H results

2H planAnnual plan

YoY

Capitalinvestments

4.6

2.8

7.4

3.0

3.3

6.3

(1.1)

Depreciation

2.1

2.4

4.5

2.9

3.2

6.1

1.6

● Capital investments implemented after detailed investigations of content[1H] Capital investments completed[2H] Capital investments to be completed• Molding machine facilities added• Additional molding machine facilities• Equipment upgrades/repairs• Equipment upgrades/repairs• Investment in information systems

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FY2019 Dividends
Unit: Yen/share

FY2018InterimYear-end

13.0

17.0

FY2019Total

30.0

Consolidated dividend payout ratio: 43.4%

InterimYear-end(planned)

Total(planned)

13.0

17.0

30.0

Consolidated dividend payout ratio: 42.5%● FY2019 interim dividend per share is to be 13 yen.
No change to projected year-end dividend.
Treasury StockIn FY2016, 875,000 treasury shares were acquired, resulting in a total payout ratio of 54%.
In FY2017, 568,000 treasury shares were acquired, resulting in a total payout ratio of 54%.

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FY2019 1H Financial Position(Unit: billions of yen）
FY2018March 31,2019

FY2019 1H
September 30,
2019

ChangeTotal assets

15,349.1

14,959.3(389.8)

Net assets

6,696.0

6,697.4

1.4

Equity ratio

42.5%

43.7%

1.2%

1,439.43 yen

1,441.75 yen

2.32 yen(Reference) Shareholders’ equity

6,519.3

6,529.7

10.4

Short-term loans payable

1,769.0

1,251.5(517.5)Long-term loans payable

1,754.0

2,194.3

440.3Interest-bearing debt

3,523.0

3,445.8(77.2)

Debt-to-equity ratio

0.54

0.53

(0.01)Net assets per share● No major changes to such components of the financial position as
equity ratio, interest-bearing debt, debt-to-equity ratio

13Outline of Today’s Briefing
1

FY2019 1H Financial Results

2

FY2019 2H Plan

3

Key Measures for FY201914

Mid-Term Management Plan
Basic Policy

Promote business portfolio transformation and execution of strategies to strengthen earnings structure
while solidifying position as leading environmental company

Promote and strengthen Make Innovations 60 transformation and work on further improvement of corporate value
・Promote to get contribution from M&A Activities in MI60
・Work to bring about actual results early with MI60 development projects
・Promote further Business Portfolio Transformation
・Strengthen group management foundation and implement efforts that further emphasize the environment

1. Evolution of business portfolio
Accelerate growth with three business domains
and two key products☆Automobile structural☆PIOCELAN
material field☆TECHPOLYMER☆High functional foodcontainer field☆Medical/Health Care field

2. Strengthening groupmanagement foundation☆Improvement of organizational
capabilities☆Improvement of productivity☆Improvement of capabilities ofhuman resources

New Mid-Term Plan
Make Innovations Stage-II

3. Contribution to sustainable
society☆Evolution of existing products☆Development of new materials☆Business activities that do notplace a burden on society

Culture vision: Bring about human and corporate growth through management with the
involvement of all employees of the Sekisui Plastics Group15

Evolution of Business Portfolio
ID theme-driven A: Business Domains●Automobile structural
material●Functional food containers●Medical / Health Care

PolicyPolicy1. Increased use of environmentally

1. Capture market for heat-resistant food

PolicyMedical: Provision of advanced medical
materials
Cosmetics: Increase in-store share ofcustomers
Health: Expand highly-functional
products globallyfriendly vehicles
2. Expansion of use globally*New functions and new materials
PIOCELAN, ST-LAYER
ELASTIL, ST-Eleveat

containers
2. Provision of value-added products*Develop functional containers to enrichfood culture, and enter new markets
globally*Roll-out of high value-added products
Expand business by using proprietary
technology to capture markets

16Evolution of Business Portfolio
ID theme-driven B: Key Products● PIOCELAN
Measure 1. Expansion of market share - automotive-related products, IT/home appliance packaging, and capturing of new markets
2. Embodying of market needs - imparting functionality such as flame retardancy, or heat-resistant raw materials*Expand target markets using light weight and high strength ⇒ enhancing competitiveness, including raw material
modification / development and establishing of production
sites
Automobile
Home appliances/IT● TECHPOLYMER
Policy 1. Expansion of market share in display field - accelerate development of composite polymers to meet customer needs
2. Expand in global markets - accelerate roll-out of high value-added products in preparation for expansion of new domains*Acquire first-mover advantage by releasing new products ⇒ aim to double new developments as a percentage of the total
PaintsCosmetics

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Strengthening Group Management Foundation /Contributing to Sustainable Society
CSR priority issues
Focus Area

Key Points
Contributing through our businessto the preservation and improvementof the global environment

E(Environmental)

1.
Environment

PolicySpecific Initiatives (Direction, examples)

Business activities based on
the SKG-5R* concept

Providing sustainable products, goods and services

Evolving existing products

Expanding application products and improving the functionality of
products that reduce weight and enhance thermal insulation

Creating practical uses from new materials

Developing products making use of biodegradable and biomass
plastics

Activities that do not place a burden on society

Promote recycling, improve energy efficiency of production,
administration and management activities

Management
Contributing to the environment in cooperation
with out stakeholders

2.
Safety, security
and healthS(Social)3.
Quality4.
Community

Providing safe business activities and work
environment

Contributing to safe cities and healthy lives
Providing products and services of the highest
quality

Achieving co-existence and mutual prosperity
withlocal communities and employees

Creating a company where transactions
are conducted with confidenceG(Governance)

5.
Governanceimproving the environmental management system and compluingwith all laws and regulations

Addressing international issues

Compiling and releasing information in cooperation with industry andgovernment

Preseving biodiversity

Participating in Green Wave and Satoyama Conservation Activities

Achieving zero accidents

Strengthening efforts to eliminate accidents and realize zero
occupational accidents

Contributing to the prevention and mitigation of Developing products that are ccontribute to the advancement ofdisasters, and the advancement of green
green energy
energyDeveloping gels for use in medical, cosmetics, and sports related
Promoting improved healthproducts
Complying with product characteristics

Maintaining and improving product quality

Reflecting customer feedback

Enacting measures to incorporate customer feeback into
management

Concluding disaster prevention agreements,
etc.

Cooperating with local governments

Promoting local volunteer activities

Participating in community clean-up activities, disaster relief
operations

Promotion workstyle reforms and diversity

Promoting flex-time, working-at-home, telecommuting for employees
Promoting diversity and the development of human resources
Strengthening the global management system

Strengthening the global governance systems
Sincere efforts to comply with the Corporate
Governance Code

Implementing steady manegement, including advisory committees

Strengthening compliance and risk
management measures

Improving quality in management systems and methods*SKG-5R: Reduce, Reuse, Recycle, Replace, Re-create18

Become Environmental Leading Company
Sekisui Plastics Group Expanding Our Dreams for People and the EarthEnvironmentally friendly
foaming technology

The energy saving effectRaw beads material
prior to foaming

Goals of Sekisui Plastics Group

Environmental
contribution
New
Materials
Contributing through new,environmentally friendly materials,
such as biodegradable material
and biomass plastics.

After foaming

Light weight

Preserving freshness
through temperature
management

Improving fuel economy by
reducing weight ofcomponents

Reducesfood loss

Reduces
CO2 emissions

Contributing
through technology
We will continue tocontribute to theenvironment by making
products lighter andmore insulated.

Manufacturing
Plastics is only

ThermalInsulation

Contributing throughenvironmentally friendly
manufacturing and recycling

A high recycling rate

Air accounts for
98% of volume

of volume

Recycling rate
(Expanded polystyrene, 2018)

Resource Saving* In the case an expansion ratio is 50 times

Contribution to recycling-based society
Contribution to sustainable society

Data source: JEPSA

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Topics●Formula SAE Japan 2019

●New-look website

The 2019 competition was won by Nagoya Institute ofTechnology, of which Sekisui Plastics is a supporter.

● Exhibiting at K2019
October 16-23, 2019 (Germany)

August 27-31, 2019 (Shizuoka Prefecture)
Sekisui Plastics provided molds to form thewing and nose cone parts.

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you for listening.
★ Please also refer to the Company website.
★Inquiries
concerning this material:
URL: http://www.sekisuiplastics.co.jp/

Call our IR and Public Relations Department at+81-3-3347-9711.

Forecasts
andourotherforward-looking statements appearing in this★Also visit
website.
document are based on currently available information and
URL: http://www.sekisuiplastics.co.jp/
assumptions considered by the Company to be reasonable.
Actualresults may differ significantly due to various factors.
Forecasts and other forward-looking statements appearing in this document are based on
currently available information and assumptions considered by the Company to be reasonable.
Actual results may differ significantly due to various factors.

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