Financial Information Fiscal year 2022 (from April 1, 2022 to March 31, 2023)

Together with Customers and Business Partners

Utilization of the ESG information sharing platforms
Sakai Chemical Industry has registered with Sedex and EcoVadis,
external evaluation platforms, to seek annual external evaluation ofenvironmental initiatives, labor practices, respect for human rights,
corporate ethics, and procurement, all of which are rapidly becoming
more important in our business activities.
As a result of the latest EcoVadis evaluation, the Company
achieved a “Silver” sustainability rating for its Sakai Manufacturing Site
and a “Gold” sustainability rating for its Onahama Manufacturing Site.
The Company has been using this evaluation service since 2020and has scored as shown in the table below over the past three years.
Although the rating for the Sakai Manufacturing Site has changed
from “Gold” to “Silver,” this does not mean a decline in the quality of
its ESG initiatives, as shown by the trend of the specific scores.
Recently, an increasing number of users of this platform haverequested that our scores be shared with them. This fact has reminded

us that we are more strictly required to pay full consideration to thesustainability of the global environment and society as a whole invarious aspects of our business operations, in parallel with conducting
appropriate business activities in our main businesses. Therefore, as amanufacturer, we must not only provide products but also respond to
all risks and opportunities associated with manufacturing. If thepurpose of our efforts to improve our internal initiatives were raising ourratings in external evaluation, it would mean that we are mistaking themeans for the end. We hope to utilize such objective evaluation toenhance our daily operations.

FY2020Period of status

FY2021

Labor andAssessment Overall score Environment human rights

Gold677070

Ethics6050

Gold718070

Ethics60

Ordinary profit

Profit attributable to owners of parent

83.8 billion yen

4.4 billion yen

4.8 billion yen(increased by 4.6%year on year)(decreased by 41.2%year on year)(decreased by 45.1%
year on year)

2.3 billion yen

2.6 billion yen
ROE:

Depreciation:

2.9％

Net sales
10050

FY2021

FY2022Gold

6870706060Gold72807060

60

FY2022

FY2023

Silver

68

70

7060

60

Gold

7280

70

60

60

89.5

87.1

84.9

80

860

6

4.9

40

4

4.4

202

2020.32021.32022.302023.3

Profit attributable to owners of parent

7.5

ROE

8.7

（％）

10.0

6.0

8.0

4.5

6.0

4.6
3.3

3.0
1.5

3.6

2.9

2.5

6.7

2.3

4.0
2.0

-2.0

-3.6
2019.32020.3-4.0
2021.32022.32023.3

Capital investment and depreciation

The future society we envision can be described as a “healthy andcomfortable society where abundant nature and convenienttechnology are in harmony.” We will work to solve problems in thefollowing three fields in order to “Solve Social Issues through
Manufacturing,” one of our issues of materiality we have identified
toward the fulfillment of our future vision.
1) Life science and healthcare (including the food and waterbusinesses)
2) Environment and energy3) Electronic materials and information communication network
We have defined the Smart Material® initiative as making a positive
contribution to these three fields through products and services andpowder processing technology. Based on this definition, theSustainability Committee examines and assesses each product andtechnology in terms of its level of contribution and certifies those thatmeet the criteria as “Smart Material®.” The Smart Material®
assessment is conducted through comprehensive comparison withconventional products or technologies from two perspectives:contribution to the fulfillment of our future vision and contribution toour technology. Importance is placed not only on contribution to thepursuit of profitability but also on contribution to solutions toenvironmental and energy issues and the reduction of28 2023 Environmental & Social Report

5.3

6.0

4.3

4.4

4.02.02019.32020.32021.32022.32023.30Total assets and equity ratio
Total assets

Equity ratio

150

90（％）

100

120.0

121.6

123.0

64.3

64.4

61.6

123.9

63.6

128.0
80

62.9

60

60

40

30

20

100

2019.32020.32021.32022.32023.30

Shareholder return (dividend per share and dividend payout ratio)
Capital investment(Billion yen)

Depreciation

Dividend payout ratio （％）

Dividend per share(Yen)

100

9.5

51.8

8.4
880

60
48

6.8
5.9

64

3.1

3.6

4.2

60

4.4

4.3

036

23.8

26.5

402417.2

2.62

The development of
Smart Materials® will lead
to Chemistry for a
Friendly Future ! Let s
create an Exciting
Company together!

4.0

5.1

0-3.0

Cheetan, tell me what “Smart Materials ” are!

4.6

(Billion yen)120®

Simply put, “Smart Materials ” embody
Sakai Chemical’s development policy.

8.0

7.4

2019.3

10.0

9.4

83.8

80.1

-2.8

manufacturing-involved energy consumption and waste. The
certification criteria will be revised as needed according to changes
in our management strategy and the external environment. In
FY2023, we will initiate preliminary screening of pre-launch R&D
products to discover candidates for Smart Materials®.
Through Smart Materials®, we hope to contribute to solutions toissues in the three fields, thereby realizing both Sakai Chemical’s
corporate growth and our future vision.

Operating profit margin （％）

Operating profit

10-1.5®

128.0 billion yen

51.8％(Billion yen)

0VoiceTotal assets:(decreased by 65.2%
year on year)

Operating profit and operating profit margin(Billion yen)(Billion yen)

Sustainable materialsourcing

4.4 billion yen

Dividend payout ratio:

Profit attributable to owners of parent and ROE

Onahama Manufacturing Site
Sustainable material
Labor andAssessment Overall score Environment human rights
sourcing

Operating profit

Capital investment:

0Sakai Manufacturing Site
Period ofevaluation work

Net sales

20

2019.32020.32021.32022.32023.3

0

1250

40

15

7075

2019.32020.32021.32022.32023.30* The dividend per share for FY2018 includes 10 yen added to celebrate thecentenary of Sakai Chemical Industry’s founding.
* For FY2020, only an interim dividend per share of 15 yen was paid.

Fire accident at the Onahama Manufacturing Site
On March 30, 2023, we caused a fire at the titanium dioxide manufacturing factory of our Onahama Manufacturing Site (Iwaki City, Fukushima
Prefecture). We would like to sincerely apologize for the accident.
The fire broke out in a wet dust collector (mist Cottrell), which processes combustion exhaust gas, in the factory. However, the equipment wascompletely destroyed by fire, so the direct cause has not yet been determined. From the operating conditions at the time, we infer that the insideof the mist Cottrell had dried out, thereby producing sparks.
The accident occurred when we were implementing safety measures based on the lessons from the Yumoto Factory explosion two years ago.
We have renewed our determination to devote all-out efforts to implementing and enhancing our safety measures with a sense of tension.

2023 Environmental & Social Report29