Financial Results for FY2021 and

New Mid-Term Management Plan (FY2022 - FY2024)
Spiral-up 2024
Explanatory Documents

Sekisui Kasei Co., Ltd.
(TSE Prime Code: 4228)

May 11, 2022

1

Table of Contents

1

Summary of FY2021 Financial Results2

Summary of Previous Mid-Term Management Plan

3

New Mid-Term Management Plan

2

Table of Contents

1

Summary of FY2021 Financial Results2

Summary of Previous Mid-Term Management Plan

3

New Mid-Term Management Plan

3

Make Innovations Stage-Ⅱ

Summary of FY2021 Financial Results
FY2020Full-year(Unit: Billions of yen)

FY2021
Full-year

Year-on-year

Vs. forecast

ActualMost recent
forecast

Actual

(A)

(B)

(C)

(C) - (A)Net sales*

ー

116.0

117.8

ー

ー

1.8

102%

(Old standard basis)(118.9)(127.6)(130.1)(11.3)(109%)(2.5)(102%)

Operating income

2.09

0.70

1.46

-0.63

70%

0.76

209%

＜Operating income ratio＞<1.8%><0.6%><1.2%>

Recurring income

1.96

0.50

1.40

-0.56

72%

0.90

280%

Net income attributable toowners of the parent

1.13

-6.60

-5.92

-7.04

ー

0.68

ー

(C) - (B)* The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) is being applied from FY2021.

⚫ While both net sales and income exceeded forecasts, income fell sharply year-on-year. (Netsales were 109% year-on-year, based on the same accounting standards.)⚫ Despite efforts to enhance productivity and reduce fixed costs, soaring raw material and fuelprices and the deteriorating profitability of Proseat in Europe had an impact.
⚫ A significant loss was recorded due to the Proseat Group's impairment loss, particularly withrespect to the bottom line.

4

Factors Contributing to an Increase or Decrease in
Recurring Income for FY2021 (Year-on-Year)
Increase

Decrease Total

Make Innovations Stage-Ⅱ[Unit: Billions of yen]

Product prices

4.49

ForeignexchangedifferenceSales
difference(volume, etc.)

Fixed costs
Cost difference
reduction
0.15

1.22

0.36

Other
Proseat

0.30

-0.05

-1.33

-5.69

1.96
¥ billion

Raw material & fuel prices
Income ratio difference-1.20

FY2020full-year results

Recurring income difference (¥-0.56 billion)

1.40¥ billion

FY2021full-year results

5

Performance of the Industry segment in FY2021

Make Innovations Stage-Ⅱ

FY2020
ActualFY2021
Actual(A)(B)(B) - (A)

ー

68.3

ー

ー

(Old standard basis)(65.4)（72.2）（6.8）（110%）

Operating income

-0.69

-1.33

-0.63

ー

Recurring income

-0.96

-1.78

-0.82

ー

(Unit: Billions of yen)

Net sales*

Year-on-year* The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) is being applied from FY2021.

⚫ Sales:

Sales recovered to a certain degree from the impact of COVID-19 in the previous fiscal year.
* 110% year-on-year, based on the same accounting standards

However, the recovery of automotive-related sales was slower than expected due to thesemiconductor shortage.
⚫ Income: Despite efforts to enhance productivity and reduce fixed costs, income declined sharply due
to soaring raw material prices and supply chain disruptions.
Automotive

Sales recovered year-on-year in automotive components, but declined slightly in packaging materials.
Income decreased significantly due to higher costs, as a result of soaring raw material prices and rapid
cutbacks in automotive production.
(In particular, sales for Proseat in Europe fell by approximately ¥1.3 billion year-on-year.)

Home Appliance/IT

Performance was strong overall, with favorable sales of TECHPOLYMER for LCD-related
products, despite weak sales of PIOCELAN packaging materials in the second half of the year.

Medical/Healthcare

Sales significantly exceeded those of the previous year due to a recovery in demand (ST -gel,
TECHPOLYMER for cosmetics, ELASTIL).

6

Performance of the Human Life segment in FY2021

Make Innovations Stage-Ⅱ

FY2020
ActualFY2021
Actual(A)(B)(B) - (A)

ー

49.5

ー

ー

(Old Standard Basis)(53.5)（58.0）（4.5）（108%）

Operating Income

3.86

3.38

-0.49

87%

Recurring Income

3.75

3.38

-0.38

90%

(Unit: Billions of yen)

Net Sales*

Year-on-year* The “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) is being applied from FY2021.

⚫ Sales:

Sales in the fisheries-related business were weak, while food container and construction materialrelated sales were strong. In addition, higher unit sales prices due to higher raw material prices
also had an impact.
* 108% year-on-year, based on the same accounting standards⚫ Income: Despite efforts to enhance productivity and reduce fixed costs, income decreased due to soaring
raw material prices and other factors.
Food Containers

Sales were strong due to a recovery in demand for laminated containers and higher unit sales prices.

Agriculture/Fisheries

While agricultural product-related sales were firm, fisheries-related sales were slightly lower year-onyear, due to continued sluggishness in fish catches and demand from the food service industry.

Construction Materials/ Sales were steady as a result of large orders for lightweight embankment blocks, etc.
Civil Engineering
Sheets Volume

While demand for home-cooked and ready-made meals has stabilized since last year, sales havecooled and were down slightly, year-on-year.

Beads Volume

Although volumes decreased in agriculture and fisheries-related products, sales were strong due toincreases in applications in light electric appliances, civil engineering, and life goods.

7

Make Innovations Stage-Ⅱ

Capital Expenditures in FY2021
FY2016FY2017FY2018FY2019FY2020

FY2021

ActualActualActualActualActualActualCapital expenditures

5.8

7.8

7.4

5.3

5.4

3.8

Depreciation and amortization

3.6

4.1

4.5

6.1

6.2

6.2

(Unit: Billions of yen)

⚫ In FY2021, we curbed expenditures after assessing the earnings situation and changes in themarket environment.

Shareholder Returns (Dividends) in FY2021
ActualActualActualActualActual(Planned)

Net income per share (yen)

73.03

75.33

69.09

51.29

24.86

-130.99

Dividends per share (yen)

24

27

30

30

21

12

Dividend payout ratio (consolidated)

33%

36%

43%

59%

85%

－

Acquisition of treasury stock (millionsof yen)

718.5

621.2

－

－

141.5

－

54%
5.7%

54%
5.5%

43%
4.8%

59%
3.6%

97%
1.6%

－
－

－

－

－

－

－

Total return ratio (consolidated)
ROE
Disposal of treasury stock (million
shares)1⚫ We plan for an interim dividend of ¥5/share and a year-end dividend of ¥7/share, for an annual
dividend of ¥12/share.

8Make Innovations Stage-Ⅱ

Financial Position in FY2021(Unit: Billions of yen)

FY2019FY2020

FY2021Year-on-year

(A)

(B)

(C)

(C) - (B)

Total assets

149.1

158.4

143.3

-15.1

Net assets

67.2

70.7

58.2

-12.4

44.1%

44.2%

40.1%

-4.1%

1,450.32

1,549.84

1,272.86-276.98(Ref.) Equity capital

65.7

70.0

57.5

-12.5

Cash and deposits

9.5

12.5

10.5

-2.0

Short-term loans

6.5

9.2

16.3

+7.1

Long-term loans

22.2

20.9

13.9

-7.0

Bond

7.0

7.0

7.0

±0.0

Interest-bearing debt

35.7

37.1

37.1

±0.0

D/E ratio (times)

0.54

0.53

0.65

+0.12

Equity ratio
Net assets per share(yen)⚫ Both net assets and the equity ratio decreased due to the recording of a net loss forthis fiscal year, while the D/E ratio increased.
⚫ We have no concerns regarding our financial situation.

9

Table of Contents

1

Summary of FY2021 Financial Results2

Summary of Previous Mid-Term Management Plan

3

New Mid-Term Management Plan

10

Summary of the Previous Mid-Term Management Plan

Make Innovations Stage-Ⅱ▮ Consolidated financial results

Both sales and income fell far short of the initial plan
Initial plan

[Unit: Billions of yen]（145.0）（150.0）（155.0）

118.9

117.8

136.2
Net sales

112.1

112.6

（7.8）

102.4
Initial plan
Operatingincome

5.4

5.3

（6.5）
（4.9）

4.8
3.7

Operatingincome ratio

2.1

1.5

Make Innovations Stage-Ⅱ

11Make Innovations Stage-Ⅱ
Summary of the Previous Mid-Term Management Plan (Results)▮ Performance by segment

Large deviations from the plan, especially in the Industry segment
Deviated significantly from the plan globally, especially in automotive-related products, due to the impact
of COVID-19 and semiconductor supply issues, etc.
▮ Industry segment▮ Human Life segment[Unit: Billions of yen]

Initialplan(93.0)(84.0)
65.4

47.7

64.9

58.1
(5.9)

Initialplan

2.6(61.0)(62.0)

78.1

Net sales

Operatingincome

68.3

(3.6)

53.5

49.5
(3.8)

(2.8)
3.5

1.4
-0.7

3.4

3.9

3.4

-1.3

Make Innovations Stage-Ⅱ

Make Innovations Stage-Ⅱ12Summary of the Previous Mid-Term Management Plan

Make Innovations Stage-Ⅱ▮ Priority policy 1: “Evolution of business portfolio”

While some results were achieved for portfolio evolution in the Industry segment
and globally, important development themes showed sluggish growth▮ Net sales ratio
in the Industry segment▮ Global net sales ratio
Plan: 37% ≦ Actual: 40%▮ ID theme net sales*
Plan: ¥37.7 billion > Actual: ¥31.5 billion

Plan: 60% ≧ Actual: 58%(37.7)

29.8

Human Life

Industry■ JapanGlobal31.5* Figures in parentheses are the values for the initial plan

* ID themes (Important Development themes): 107% in TECHPOLYMER and the high functional food container field, 75% in the automotive field,
and 54% in the medical/healthcare field, compared to the plan.

13

Summary of the Previous Mid-Term Management Plan

Make Innovations Stage-Ⅱ▮ Priority policy 2: “Strengthening group management foundation”
Progress made in enhancing the organizational structure and human resources through reorganization
Strengthening group management foundation

Results

Improvement of ourorganizational capabilities

Reorganization

Reorganization of Group companies andconsolidation of the three centers in the head
office, to improve our organizational strength

Improving the capabilitiesof our human resources

Promoting workstyle reforms and diversity

Introduction of a working-from-home system
Female adoption rate: 21% (> target 17%)

▮ Priority policy 3: “Contribution to sustainable society”
Achieved our FY2021 targets and made steady progress toward achieving FY2030 targets
Contribution to sustainable society

Results

Evolution of existing products
Development of new materials

Creation of Sustainable Star Products(Target: 40 registrations, 12% of net sales)

Creation of Sustainable Star Products(Results: 42 registrations, 16% of net sales)

Business activities that do notplace a burden on society

Reduction of CO2 emissions(Target: -2% compared to FY2018)

Reduction of CO2 emissions(Results: -5% compared to FY2018)

14

Table of Contents

1

Summary of FY2021 Financial Results2

Summary of Previous Mid-Term Management Plan

3

New Mid-Term Management Plan

15

Spiral-up 2024
Positioning of the New Mid-Term Management Plan
Aiming for a V-shaped recovery of earnings for renewed growth
ENS 2000-Challenge

ENS 2000

Make Innovations
60[Unit: Billions of yen]

135.0

136.2
118.9 117.8
109.9

101.6 102.4

Net sales

Proseat M&A

Great East Japan
Earthquake

5.1

4.9
3.9
2.3

2.1
1.2

Operatingincome ratio

125.0

112.1 112.6

113.7

101.4 101.4 101.8

OperatingincomeSpiral-up
2024

Make Innovations
Stage-Ⅱ

5.4

COVID-19

5.3

5.0

4.8

3.7
2.1
1.5

1.8

16

Spiral-up 2024
Overview of the New Mid-Term Management Plan
▮ Name of the plan

▮ Basic policy

Spiral-up 2024
In addition to the PDCA cycle, we are committed to creating a virtuous cycle
between the challenge of “realizing a sustainable society” and the “sustainableenhancement of our corporate value.”

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.

▮ Quantitative targets
FY2021
ActualFY2022Plan

FY2024Plan

3-year avg.
growth rate

Net sales¥117.8 billion¥125.0 billion¥135.0 billion

5%

Operating income¥1.5 billion¥1.8 billion¥5.0 billion

50%

Recurring income¥1.4 billion¥1.6 billion¥4.8 billion

50%

Net income¥-5.9 billion
ー¥0.9 billion¥3.0 billion

ー

1.5%

3.0%

ー

ROE

17

Spiral-up 2024
New Mid-Term Management Plan
▮ Quantitative targets by segment
FY2021 Actual

FY2022

FY2024(Unit: Billions of yen)

1H

2H

Full-year

1H

2H

Full-year

Full-year

Net sales

59.4

58.4

117.8

60.0

65.0

125.0

135.0

Industry

35.6

32.7

68.3

34.6

36.4

71.0

75.0

Human Life

23.8

25.7

49.5

25.4

28.6

54.0

60.0

Operating income

0.65

0.81

1.46

0.40

1.40

1.80

5.00

(Operating income ratio)

1.1%

0.1%

1.2%

0.7%

2.2%

1.4%

3.7%

Industry

-0.55

-0.78

-1.33

-0.20

0.90

0.70

3.90

Human Life

1.53

1.84

3.38

1.30

1.40

2.70

3.40

Head office costs

-0.33

-0.26

-0.59

-0.70

-0.90

-1.60

-2.30

* The segment breakdown has been partially revised in the new mid-term plan.
* Head office costs include digital transformation (DX) and other system costs.

18

Spiral-up 2024
New Mid-Term Management Plan
▮ Capital expenditure
Moving from curbing investment due to market conditions, such as the spread of COVID-19,
to strengthening investment for growth, including environmental and DX-related investments
180% increase
compared to the previous
mid-term management plan

¥220
22.0 億円
billion
OthersDX

Investment(3-year cumulative total)¥12.3 billion

Development

Renewal/repairRationalization/
labor saving
Expansion of capacity

Previous mid-term
management plan
FY19 – FY21

New mid-term
management plan
FY22 – FY24

* Environmental investment:
・Previous plan = ¥0.6 billion
・New plan = ¥2.5 billion

19

Spiral-up 2024
Key Issues in the New Mid-Term Management Plan
1. Strengthen the earnings structure(1) Restructuring the business portfolio (5 priority fields)
Food

Electronics

Mobility

Medical/Healthcare

Housing/Energy(2) Constructing a highly profitable structure in the Proseat business(3) Strengthening cost competitiveness through innovations in production(4) Rapidly generating profits from developed products

2. Shift to businesses that solve environmental and social issues(5) 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

Total: 3 issues, 8 themes

20

Spiral-up 2024
Key Issues in the New Mid-Term Management Plan

1. Strengthen the earnings structure(1) Restructuring the business portfolio (5 priority fields)
Food

Electronics

Mobility

Medical/Healthcare

Housing/Energy(2) Constructing a highly profitable structure in the Proseat business(3) Strengthening cost competitiveness through innovations in production(4) Rapidly generating profits from developed products

21

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (1) Restructuring the business portfolio
Reallocation of resources to areas with growth potential
Food

Core area

Electronics

Focus areas

Launch Sustainable Star Products in markets, and assist inproviding food safety/security and reducing food loss, tocontribute to solving environmental and social issues
Aim for high profitability through differentiated products, suchas advanced materials and Sustainable Star Products, tocontribute to the diffusion and advancement of digitaltechnologies

Mobility

Contribute to the technological innovation of next-generation
mobility such as EVs, by maximizing synergies with Proseat,and developing new materials and applications

Medical/Healthcare

Provide new value globally, by meeting the needs of the
medical and healthcare fields through advanced proprietaryproducts

Expected areas
Housing/Energy

Contribute to sustainable urban development by launchingproducts for disaster prevention, disaster mitigation, andinfrastructure development* Industry segment = Mobility, Electronics, Medical/Healthcare; Human Life segment = Food, Housing/Energy

22

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure
Net sales
50.0(billions of yen)▮ (1) Restructuring the business portfolio

Food

Launch Sustainable Star Products in markets, and assist inproviding food safety/security and reducing food loss, tocontribute to solving environmental and social issues

45.0
44.0

2021

Environment

New markets

Market launch of Sustainable Star Products⊳ Foam products using recycled plastic⊳ Foam products using biodegradable and biomass plastics
Product development and stable supply in response to changes
in demand structure⊳ Respond to needs in new markets, together with container
manufacturers* Home-cooked and ready-made meals markets, home-delivery markets, etc.

Logistics

Proposals for products and technologies that support food safety
and security⊳ Propose logistics containers that maintain freshness, using
our product temperature analysis technology⊳ Contribute to the production and logistics efficiency of ourcustomers in Japan and overseas

2022

2024

23

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (1) Restructuring the business portfolio

Net sales(billions of yen)

18.0

Electronics

Aim for high profitability through differentiated products, such asadvanced materials and Sustainable Star Products, to contributeto the diffusion and advancement of digital technologies

Electronicmaterials

Stable growth and area expansion in the electronic materials field⊳ Maintain a dominant position in display applications⊳ Meet the challenge of expanding into the high-speed
communications field

Packagingmaterials

Transition to a recycling-based business⊳ Launch Sustainable Star Products in markets⊳ Improve the recycling system and develop recycling-based
business

Structuralcomponents

Provision of structural components that support high-speed
communications technology⊳ Develop applications for FRP + high-strength foamcomposite structures(e.g., exterior structural materials for antennas and basestations)

16.0

16.2

2021

2022

Form

2024

24

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (1) Restructuring the business portfolio

Net sales(billions of yen)

50.0

48.5

Mobility

Contribute to the technological innovation of next-generation
mobility such as EVs, by maximizing synergies with Proseat,and developing new materials and applications
Expansion of adoption in next-generation mobility, such as EVs

Automotive
components⊳ Propose further weight reduction by increasing the expansion rate of
PIOCELAN⊳ Advance the development of next-generation vehicle components
through synergy with Proseat⊳ Achieve results for ST-Eleveat

Sales expansion by leveraging our strengths (design know-how +environmental responsiveness)
Components
logistics⊳ Strengthen proposal activities for components that will increase with theshift to EVs⊳ Launch Sustainable Star Products in markets⊳ Improve the recycling system and develop resource-recycling business

Improvement of competitiveness via thorough cost reductions
Enhancementofcompetitiveness⊳ Establish a system that can enhance production efficiency and reduce
fixed costs for Proseat, and respond more quickly to fluctuations indemand⊳ Introduce cost planning to model plants, and expand it across the Group

43.0

2021

2022

2024

25

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure

Net sales(billions of yen)▮ (1) Restructuring the business portfolio

6.0
4.0

Medical/Healthcare

4.7

Provide new value globally, by meeting the needs of the medical
and healthcare fields through advanced proprietary products
2021

SportsExpansion of ELASTIL applications⊳ Develop new applications (sports and health products, etc.)⊳ Expand applications for shoes beyond sports shoe soles

Skin care

Expansion of sales channels to the skin care market⊳ Propose biodegradable and naturally derived microparticles
to the market⊳ Expand sales of ST-gel (AI-Fit) using AI technology

Biologicalsensing

Expansion of ST-gel into new areas⊳ Lifestyle-related diseases, infant biomonitoring, etc.
⊳ Healthcare areas such as TENS, EMS, wearable devices, etc.

2022

2024

26

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure

Net sales(billions of yen)▮ (1) Restructuring the business portfolio

10.0
8.0

Housing/
Energy8.9

Contribute to sustainable urban development by launchingproducts for disaster prevention, disaster mitigation, andinfrastructure development
2021

Disasterprevention/
mitigation

Expansion of sales of products that support the “Fundamental
Plan for National Resilience”⊳ Countermeasures against torrential rains and earthquakes⊳ Disaster recovery

Housing
improvement

Expansion of sales of products for infrastructure development⊳ Expansion of green infrastructure⊳ Improve social infrastructure

Environment/
energyExpansion of sales of products that contribute to a sustainable
society⊳ Launch Sustainable Star Products in markets⊳ Renewable energy (water, solar, and offshore wind power)

2022

2024

27

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (2) Constructing a highly profitable structure in the Proseat business

Mega trends in the European automotive market
Decarbonization in the automotive industry is essential for 2050 EU carbon neutrality
Conventional gas vehicles

Electric vehicles
Major automakers’ trends and purposes in Europe up to 2030

Transition

Conventional gas vehicles* 2020 share in Western Europe

CO2 Emissions per vehicle in Europe will be reduced
by 40% vs. 2018
50% or more of new vehicles sold will be EVs andhybrids
50% of vehicles sold worldwide will be EVs
More than half of vehicles sold in Western Europe will
be zero emission vehicles

Common factor

Cutting-Edge EVs
End of new car sales in 2035

Increased sophistication of required items

Withdrawal +complete EV transition

Material development and development proposal
capabilities
Heat resistance,
flame retardance, thermal insulation, ＋複合技術
light weight, safety +耐熱性・難燃性・断熱性・軽量性・安全性
composite technology

28

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (2) Constructing a highly profitable structure in the Proseat business
Differentiation strategy leveraging Group synergies

Materialdevelopment
capability

The European automotive industry’s vision

Complete EV transition

Development
proposal
capability

Maximize Group synergies and provide differentiated solutions to the increasingly sophisticatedrequirements of European OEMs

～ Status of new developments through Group synergies ～・New applications of lightweight structural components⇨ Orders already received
・New environmentally friendly materials such as ST-Eleveat BIO⇨ Several joint development projects with European OEMs in progress

29

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (2) Constructing a highly profitable structure in the Proseat business
Growth strategies for each of the three business segments
・Develop cutting-edge components that maximize the strengths of bothcompanies, with clear differentiation from competitors

LWC
Dept.

・Propose hybrid solutions for PU foam, foam, and metal・Develop modularization concepts to reduce the number of components
・Enter non-automotive markets by leveraging Sekisui Kasei’s channels* LWC: Light Weight Component

Foam
Dept.
Trim
Dept.

・Proactively develop the seat functions required for next-generation
vehicles and automated driving* Comfort, safety, light weight, antibacterial, low noise, anti-vibration, etc.

・Review the product line-up, and develop high-performance and highvalue-added parts to respond to the shift to OEM luxury vehicles
・Promote rationalization by withdrawing from the UK site and integratingAll
Depts.

sites in Eastern Europe・Continue to improve production efficiency and reduce fixed costs
・Establish a system that can respond quickly to fluctuations in demand

30

Spiral-up 2024

Key Issue 1: Strengthen the earnings structure▮ (2) Constructing a highly profitable structure in the Proseat business
Withdrawal from the UK site and integration of sites in Eastern Europe(1) KG (Headquarters) in Germany
Mörfelden(2) KG Plant in Germany
Espelkamp(3) SW Plant in Germany
Schwarzheide

(7)

(2)

(4) SP Plant in Spain

(3)

(1)
(6)

(8)
(5)

Santpedor(5) CZ Plant in the Czech Republic
Mladá Boleslav(6) FR Plant in France
Trilport(7) UK Plant in UK
Manchester

Withdrawn(8) PL Plants in Poland(4)

Bielsko Biała
Czechowice-Dziedzice

Integrated

30

31

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (2) Constructing a highly profitable structure in the Proseat business
Demand is expected to recover moderately from 2022 onward, but will be significantly below theforecast at the time of M&A.
Automotive production
in Western and Central Europe

Business performance(Unit: 10,000 vehicles)(Unit: Billions of yen)

Forecasts at the time of M&A
Net sales

36.0

33.0

Down 35%

27.0

33.0

29.0

Actual results and most recent forecasts

Previous mid-term plan

New mid-term plan

Actual results in theprevious mid-term plan

Planned values in the
new mid-term plan

Structural Reforms(1)

Reduction of fixed costs and labor costs: Cost reduction effect = ¥-1.2 billion, employees = -10% * FY2022 vs. FY2021(2)

Site reorganization: Withdrawal from the UK site and integration of production sites in Eastern Europe are underway.

(3)

Productivity improvement: Rationalization through automation and consolidation is being promoted.

32

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (3) Strengthening cost competitiveness through innovations in production

Continue to promote production innovation including utilization of technology, andstrengthen capabilities for monozukuri (creation of things)
1.
2.
3.
4.
5.

New production technologies and new equipment
technologies
Enhanced competitiveness through improved
productivity
Streamlining and optimization of production sites
Stable operation of production sites
Transfer and reinforcement of basic technicalcapabilities

Proactive Use of Technology
DX, AI, IoT,
Big data utilization,
RPA, Process innovation,
VR/AR, Remote control,
Numerical analysis, Image analysis,
Robotization, Automatic control,
Simulation

FY2024 Targets

8%
reduction of
output/unit
consumption¥2.0
billionreduction of

reduction of

CO2 emissions

costs

10%

33

Spiral-up 2024
Key Issue 1: Strengthen the earnings structure▮ (4) Rapidly generating profits from developed products
Embody the research transformation (RX) concept
Target for profit from products under development: 10% or more of Company-wide operating income in FY2024
Commercialization
study

Materials informatics(Fusion of real and digital)

Prototyping

・Machine learning
・Simulation
・Experiment database

R&D
Feasibility verification

Search of prior technology
・Use of chemical substance database
・Use of AI

Idea generation
Problem identification

External technologies

Social value

Future value creation
Core technologies

Priority areas

Pre-marketing(Fusion of real and digital)
・MA, CRM, SFA
・Hypothesis proposal
・Digital exhibitions

Open innovation
・University
・NEDO
・Cross-industry collaboration

34

Spiral-up 2024
Key Issues in the New Mid-Term Management Plan

2. Shift to businesses that solve environmental and social issues(5) Expanding Sustainable Star Products through recycling-based business(6) Striving to achieve carbon neutrality

35

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues
External environment
Active worldwide movement to solve environmental and social issues
ESG
Sustainability
Carbon neutrality
SDGs

Climate change
Recycling
Biodegradability

Food loss issue

Resource recycling

Greenhouse gas reduction

Circular economy

Paris Agreement

Biomass

Ethical consumption

Marine plastic waste issue

COP 26

Renewable energy
TCFD
Product life cycle

Our corporate direction“Balance environmental and social value with economic value”
Shift to a business structure that is centered on the circular economy
Achieve carbon neutrality by 2050

The newly established “GX Development Department” is leading the entire Company* Established on April 1, 2022

36

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (5) Expanding Sustainable Star Products through recycling-based business
Progress toward 2030 targets [create and expand Sustainable Star Products]
Ratio of net sales

Number of products
registered

ActualActualPlannedPlanned

120

100

90
60

30

23

0
(Ref. year)

60

42(Ref. year)

40

37

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (5) Expanding Sustainable Star Products through recycling-based business

Brands in the product category utilizing biodegradable or biomass raw materials

ST-Eleveat BIO

TECHPOLYMER BIO
Biodegradable
microparticles

ELASTIL BIO

LIGHTLON BIO

Biomass-derived
elastomer foam

Biomass-derived
foamed polyethylene
sheet

Biomass-derived
high heat-resistantlightweight foam

We will continue to expand our product lineup.

38

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (5) Expanding Sustainable Star Products through recycling-based business

Brands in the product category utilizing recycled raw materials

ESLEN Beads RNW

ST-Eleveat RNW

Recycled expandable
polystyrene beads

Recycled
high heat-resistantlightweight foam

ESLEN Sheet RNW

LIGHTLON RNW

Recycled foamed
polystyrene sheet

Recycled foamed
polyethylene sheet

We will continue to expand our product lineup.

39

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (5) Expanding Sustainable Star Products through recycling-based business

Shift to a business structure that is centered on the circular economy
Procurement
Reduce dependency⚫ Use of biomass and biodegradable raw materials⚫ Procurement of renewable energy

Development and Design⚫ Expansion of Sustainable Star Products⚫ Resource saving, more returnable products, andlonger product lives⚫ Ease of sorting and mono-materialization

Production⚫ Energy saving and higher efficiency⚫ Use of renewable energy

Collection⚫ Improve the collection rate (industry-government
cooperation)

Recycling
Reduce waste⚫ Expansion of recycled products⚫ Chemical recycling⚫ Separation technology

40

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (5) Expanding Sustainable Star Products through recycling-based business

Recycling + biomass ratio: aim for 50% or more by 2030

Total production
volume

2018

2024

2027

2030

41

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (6) Striving to achieve carbon neutrality

Aim for carbon neutrality in 2050
Minimize CO2 emissions frombusiness activities✕

Reduce CO2 emissions by creating new value
through technology, products, etc.

Expansion of
Sustainable Star
Products

Energy saving
Higher efficiency

Use of renewableenergyExpanded use ofrecycled raw materials

Creation of energy
reduction technologies

42

Spiral-up 2024
Key Issue 2: Shift to businesses that solve environmental and social issues▮ (6) Striving to achieve carbon neutrality
Progress toward the 2030 target [CO2 emission reduction]
Targets

Reduce FY2050 CO2 emissions to virtually zero
Reduce FY2030 CO2 emissions (Scope 1+2) by 27% compared to FY2018

Main
policies

Rationalization of production processes and promotion of energy saving
Decarbonization of fuels and switching to renewable energy sources
Development of new processes, and introduction of new production facilities
through the use of environmental investment quotas
Creation and business expansion of Sustainable Star Products

FY2021: -5% (forecast)

Emissions benchmark * Ref. year: FY2018

FY2024: -10%
FY2030: -27%
FY2050
Achieve carbon neutrality
ActualPlanned43

Spiral-up 2024
Key Issues in the New Mid-Term Management Plan

3. Reinforce our management foundation(7) Strengthening efforts to address materiality (key management issues)(8) Enhancing financial health44

Spiral-up 2024
Key Issue 3: Reinforce our management foundations▮ (7) Strengthening efforts to address materiality (key management issues)
Reinforce our management foundations through thorough PDCA management of identified
material issues

E

S

G

Category

Materiality

Environment

Creation and expansion of sustainable star products
Responding to climate change
Reduction of environmental impact

Innovation

Business model resilienceDX

Human resources

Diversity
Workstyle reform
Work engagement

Quality / Security anddisaster prevention

Providing safety and security

GovernanceCorporate governanceCompliance
Risk management

45

Spiral-up 2024
Key Issue 3: Reinforce our management foundations▮ (8) Enhancing financial health
Shift from “PL-oriented management” to “capital efficiency-oriented management,” toimprove ROE
Focus on cash flow improvement and working capital turnoverStable cash flow generation, and its
maintenance and improvement in eachbusiness segment

Proper balance sheet management
Appropriate control of financial leverage

ROE

Increase in profit level by improving
business efficiency

improvement

Transformation of the business portfolio
and business model

Effective use of capital
Focused allocation of management resources
to growth areas
Strategic investment in digital and advanced
technologies, etc.

46

The forward-looking statements such as result forecasts contained inthis document are based on information that is currently available to theCompany and certain assumptions that the Company judges to bereasonable. Actual results may differ materially due to various factors.

★ For inquiries regarding the contents, please contact:
Investor and Public Relations Dept., Corporate Strategic HQ.
E-mail : ir_pr@sekisuikasei.com★ Please also visit our website: http://www.sekisuikasei.com/